The type of export licensing you will need will depend on what you are exporting, where it is going, who will receive it, and the use of the export product. Once you know all of this information, you can consult the Commerce Control List (CCL) that will state your license requirements.
Federal Export Regulations
The Bureau of Export Administration (BXA) maintains the (CCL) within The Electronic Code of Federal Regulations e-CFR—better known as Export Administration Regulations (EAR). The CCL includes many items such as software, commodities, and technology, which are subject to the export licensing authority of the BXA. The BXA is there to help you in your export business. Their role is to prevent exports and re-exports contrary to the national security and foreign policy interests of the United States.
The e-CFR is divided into several sections or parts. Part 732, contains a step-by-step guide to general license obligations. Parts 738 and 774 will tell you the code for the country group your destination falls into. See Supplement No. 1 to Part 738 of the e-CFR for comprehensive instructions on using the Country Chart, along with a detailed example.
Making an Accurate Export Product Classification
The referenced Parts and numbering system from the EAR to the e-CFR can change and be re-classified at any given time. Be sure to check with responsible parties to ensure you are taking the appropriate steps for accurate classification. Don't let the numbers and abbreviations scare you. Once you find the e-CFR, getting to the right section isn't terribly difficult.
You should check with the Department of Commerce to determine the export control commodity number (ECCN) that has been assigned to your type of product. If they do not have your product listed, check Part 748 in the e-CFR to find it yourself.
For items subject to the e-CFR but not listed on the CCL, the proper classification is EAR99. This number—which appears at the end of each category in the CCL—is a "melting pot" classification for items not specified under any CCL entry.
Once again, go to the ECCN listings in Part 774 of the e-CFR. This time you are looking for the destination country to see if it requires a Validated License (VL). If your country of destination is not listed there, you do not need a Validated License, unless your commodity meets one of the technical exceptions noted within the ECCN. As an example, your product may be subject to short supply control.
You can also contact your Department of Commerce (through their Office of Exporter Services) to go over these steps, as they can sometimes assist you over the phone. If not, do the research on your own, then visit one of the DOC counselors to confirm your findings.
A Brief Alert
Various requirements of the e-CFR depend upon your knowledge of the end-use, end-user, ultimate destination, or other details of the export transaction. If you can discuss your transaction in good conscience and with complete confidence, then there should not be any cause for an agency alert.
However, if you cannot explain to whom you are selling your product, why the customer is buying it in the first place, or what they will do with it once it is purchased, you've may have a problem. You should refrain from pursuing the transaction, advise the BXA, and wait.
Import License Requirements
Your customer is responsible for an import license. If you have secured payment with them, for example, with an Irrevocable Letter of Credit, your customer must take appropriate measures to determine whether they need an import license.
If the importer needs a license and neglects to apply—and you ship anyway against the L/C—you are still entitled to payment because you took care of things at your end. However, your customer will not be able to clear the product at the port of entry until they resolve the licensing problem.
If, on the other hand, your customer fails to get an import license and you ship on an open account, you may not get paid until weeks or months later. In either case, you should find out from your customer if an import license is needed. The import license is not your responsibility to arrange but it will help to secure payment whether the license is needed or not.
Importing Country Standards and Requirements
It's important to be aware of the standards and regulations of the importing country. Ideally, your customer will be knowledgeable about possible barriers to entry. However, it helps to be aware of shipping restrictions and documentation requirements yourself.
For example, if you are exporting food, medical, or electrical goods your customer may not be able to import these items until they conduct an inspection to see that the goods meet local standards.
Most developed nations have organizations comparable to the U.S. Food & Drug Administration (FDA) that monitors product safety. So, before your customers can accept the import, they will have to check with their FDA-equivalent to make sure the product can be imported. Once you've made sure that there is no reason why your product should be barred from entry, you may be ready to ship.
Shipping Under a General License
Once you've checked the e-CFR and confirmed with your Department of Commerce that you do not need a VL, you can proceed with your shipment under a general license without having to make a formal license application. The good news is that the majority of products exported are covered by a general license.
You should check to see, however, if your shipment requires a shipper's export declaration (SED), which helps U.S. Customs to monitor shipment licensing.