Trade controls have been an important element of the U.S. Government and other country governments policy since the earliest days. In the U.S., Trading with the Enemy Act and Neutrality Act were the first set of regulations placed to control the trade with other nations. With the enactment of the Export Control Act in 1949 export control policy was refocused, specifically for the reasons of national security, regional stability, human rights, anti-terrorism, missile technology, chemical and biological warfare, as well as the short supply of certain goods. Export Administration Act was passed in 1969 to replace the Export Control Act and this brought a shift in the policy toward less restrictive export controls. In the following years, some further liberalization occurred in the control policy. As a result, the scope of the export control system today is significantly reduced and streamlined while preserving the basic structure of the law.
Applicable U.S. export control restrictions may be in a form of prohibition of the export or in a form of a limitation on export. Prohibitions are typically caused by an embargo, boycott or sanction against certain entities and countries whereas limitations require the exporter to obtain a license from the appropriate U.S. Government authority to pursue the export transaction.
Although many U.S. Government agencies are involved in developing, administering or enforcing export control regulations, product-specific export controls are primarily regulated by the U.S. Department of Commerce and the U.S. Department of State. U.S. Department of State strictly regulates and administers the International Traffic in Arms Regulations (ITAR) and has exclusive jurisdiction over the export of defense items. Under ITAR, articles, services and related technical data are grouped together as defense items and listed in the U.S Munitions List.
On the other hand, U.S. Department of Commerce regulates and administers, through Export Administration Regulations (EAR), the export and re-export of the product and technologies which are predominantly commercial and civilian items. These items are also named as Dual-Use items because of their possible military end-use. Dual-use items are grouped together and listed in the Commerce Control List (CCL) of the EAR. Both U.S. Munitions List and Commerce Control List categorize the products, software, technology, and related technical assistance according to their technical features and functionalities. As such, correct determination of the export control restriction for an item requires a thorough understanding of the item’s technical features and exact end-use application.
In addition, U.S. exporters must have the knowledge of the end-user and the ultimate destination country, and if applicable other entities who will access to the items in transit. Several U.S. Government agencies produce and maintain the lists of prohibited and restricted entities and parties. Before proceeding with an export of a product or a disclosure of a technical data, U.S. exporters are obligated to screen the purchaser, intermediate and ultimate destinations of the products and the recipients of the technology and technical assistance against these lists to ensure the compliance.
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