What is an Export License?

How to Determine If I Need an Export License

• Understanding and complying with government regulations is crucial for exporters. In some instances, the exporting country may enforce stringent rules, necessitating specific items to be licensed for export. This is particularly true for potentially hazardous items like weapons or chemicals. Adhering to these regulations is a legal requirement and a critical factor in maintaining smooth business operations. To avoid trade restrictions: Some countries may restrict certain goods you can import. By obtaining an export license, the exporter can bypass these restrictions.

• Proving the origin of goods is a critical aspect of international trade. In some cases, an exporting company may need to confirm the origins of its goods to obtain a license. This is often the case with items subject to trade embargoes or other restrictions. By doing so, exporters can enhance their credibility and trust with international buyers, potentially leading to increased sales and business opportunities. To get a better price for the goods: In some cases, an exporter may get a better price if they have an export license. Shippers can use the license to show that the goods are high quality and meet all the requirements.

• To avoid paying taxes: In some cases, an exporter may be able to avoid paying taxes on their goods if they have an export license. Shippers can use the license to prove that they are exporting the goods, making them not subject to taxes in the exporting country.

According to the International Trade Administration, about 95 percent of item exports from the United States do not require an export license. But this does not mean you can ship or sell your item anywhere or to anyone. You should research the item you wish to ship. The ITA is an excellent resource for those with questions regarding export licenses.

Most U.S. exports use the Bureau of Industry and Security (BIS) or the U.S. Department of State’s Directorate of Defense Trade Controls for licensing.

A straightforward way to determine if you need an export license is to see if your item has an Export Control Classification Number (ECCN). These five-character alphanumeric codes help identify dual-use items by export control and categorize items based on their uses or functions. ECCNs are available in the Commerce Control List (CCL), which is divided into ten categories and five product groups.

Dual-use items for commercial and military use are subject to the Export Administration Regulations (EAR). The EAR deals with exports related to various matters, including foreign policy, national security, and missile technology. Most items subject to the EAR are controlled for anti-terrorism (AT), national security (NS), and nuclear proliferation (NP) reasons. Items under control solely for AT reasons require a license for all destinations. Items under control for NS or NP reasons may not be exported without a license to certain countries.