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What is an Export License?

June 22, 2022 by Keith Jaco

What is an Export License?

An export license is government issued documentation which allows sellers to ship restricted goods. Export licenses are needed for a variety of items. The specifics surrounding the need for one will depend on the country you are trying to ship to.

What is an Export License?

Export licenses allow you to ship items with restrictions legally from one country to another. Every country has its own set of rules and regulations when it comes to imports and exports. Countries with an export ban by the U.S. cannot accept good from exporters. This list includes Syria, Iran, Cuba , North Korea and Sudan. Researching your items and their destination can help prevent any mishaps in the shipping process.

An export license is not the same as an import license, which some countries require in order to bring goods across their borders.

Reasons Why an Exporter May Need One

  • To comply with government regulations: In some cases, the exporting country may have strict regulations that require certain items to have a license in order to go through the exporting process. This is often the case with items that officials could deem dangerous, such as weapons or chemicals.

  • To avoid trade restrictions: Some countries may place restrictions on certain types of goods that you can import. By obtaining an export license, the exporter can bypass these restrictions.

  • To prove the origin of the goods: In some cases, an exporting company may need to prove the origins of their goods in order to obtain a license. This is often the case with items that are subject to trade embargoes or other restrictions.

  • To get a better price for the goods: In some cases, an exporter may be able to get a better price for their goods if they have an export license. This is because shippers can use the license as a way to show that the goods are of high quality and meet all the necessary 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. This is because shippers can use the license as a way of providing proof that they are exporting the goods, making them not subject to taxes in the exporting country.

shipping containers at a port cargo yard

How to Determine If I Need an Export License

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 are free to ship or sell your item to just anywhere or anyone. You should research the item you wish to ship. The ITA is a great resource to use for those with questions regarding export licenses. Most U.S. exports use either the Bureau of Industry and Security (BIS) or the U.S. Department of State’s Directorate of Defense Trade Controls for licensing.

One simple way to determine if you need an export license is to see if your item has an Export Control Classification Number (ECCN). These are five character, alphanumeric codes that help identify duel-use items in accordance with export control. ECCN’s help categorize items based on their uses or functions. ECCNs are available in the Commerce Control List (CCL). The CCL is divided into ten different categories and furthermore five different product groups.

Dual-use items, meaning they have both commercial and military uses, are subject to the Export Administration Regulations (EAR). The EAR deals with exports that relate to a variety of matters including foreign policy, national security and missile technology, among others. 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. And items under control for NS or NP reasons may not be exported without a license to certain countries.

How do I get an Export License?

The first step to obtaining an export license is to register online via the Simplified Network Application Process – Redesign (SNAP-R). Once you register, you will also be able to obtain a Company Identification Number (CIN). Once you’ve got both an account and CIN, you’re ready to submit your request for an export license. You should ensure you are legally able to do business with the individuals or parties you are shipping to. You can check this by visiting the U.S. government’s Consolidated Screening List (CSL).

Who Needs an Export License and Why Are They Important?

The majority of shippers in the U.S. do not need an export license to send their goods. However, there is a select few that will need to know the ins and outs of acquiring a license. This group of shippers include anyone who’s items fall under the International Trafficking in Arms Regulations (ITAR). The ITAR is a set of restrictions set forth by the government in regards to the exportation on military technologies. This can include combat shotguns, firearms, ammunition nuclear materials or any other military data or weapon accessories. In addition, items with a ECCN code that fall under the CCL will also most likely require an export license. Without this license, exporters can be subject to administrative and criminal penalties for violating U.S. law.

You’ve Got Your License, Now Partner with a 3PL

Once you file your application for an export license and receive approval, you’re ready to ship. Partnering with a third-party logistics company (3PL) can help bring down costs and ensure a seamless shipping process. FreightCenter handles any and all shipping needs domestically and internationally every day. So give us a call or run a free instant freight quote today! We help individuals and companies save on their freight shipments by matching them with the best carriers with the cheapest rates for their load.

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