When exporting a commodity, the exporter’s first responsibility is to determine which regulatory body controls their export.

U.S. exports are controlled by three separate regulatory bodies: The U.S. Nuclear Regulatory Commission (NRC), the Department of State’s Directorate of Defense Trade Controls (DDTC), and the Department of Commerce’s Bureau of Industry and Security (BIS). An export may also be controlled by the U.S. Drug Enforcement Administration (DEA) or the U.S. Fish and Wildlife Service (FWS). Unless you are exporting things like nuclear components, chemical precursors, or animal products, it is unlikely that the NRC, DEA, or FWS will control your exports.

This write-up will focus on the two most common regulatory bodies, the DDTC and the BIS, and will help you determine which will control your export. The DDTC enforces the International Traffic in Arms Regulations (ITAR), and the BIS enforces the Export Administration Regulations (EAR). Your export will be controlled by one of these legal jurisdictions.

Commodity Jurisdiction

The legal jurisdiction of your export is very important to get correct because these two regulatory bodies differ in their approach to recordkeeping, authorization, and licensing. Getting the jurisdiction of your exports wrong could create a ripple effect of export violations, which can be avoided with some due diligence.

‘Commodity Jurisdiction’ is a trade term that refers to where an export is regulated. The process of figuring out which regulatory body controls an export is called a commodity jurisdiction determination.

In order to determine the commodity jurisdiction and understand the regulatory requirements of your export, you need to consider the context of each set of regulations and the products being exported.

ITAR

The DDTC’s International Traffic in Arms Regulations (ITAR) control the export of defense goods, services, and technology.

Between the two regimes, the ITAR has the highest control. It requires more input, data, and effort from the exporter. The exporter must first consider if their export is controlled by the ITAR.

The ITAR (22 CFR parts 120-130) governs the manufacture, export, and temporary import of defense articles, the furnishing of defense services, and brokering activities involving items and technology described on the United States Munitions List (USML) (ITAR section 121.1). The USML is the ITAR’s export classification structure, which contains controlled categories of defense articles. The Arms Export Control Act requires that all manufacturers, exporters, temporary importers, and brokers of defense articles and defense services be registered with the DDTC. In almost all circumstances, an export license is required to export a product controlled by the ITAR.

Here are some common signs your product may be considered a defense article controlled by the ITAR:

1. your product is sold for use solely in the defense industry.
2. your product is sold to customers for assembly into defense articles.
3. your product was developed with the help of a U.S. Government entity.
4. your product meets the ITAR definition of ‘specially designed.’

Another important point to mention is that there are defense articles that are now controlled under the EAR. These items were previously subject to the ITAR, determined to be low risk, and are now identified as 500 or 600 series ECCNs under the Commerce Control List (CCL). The 500 and 600 series ECCNs are in the format "xY6zz", with the "5 or 6" indicating a munitions entry, the "x" representing the CCL category, and the "Y" representing the CCL product group. An example of this would be the ECCN 1A613. In these situations, the ITAR will exclude the controlled items and guide you to the appropriate EAR regulations.

Here are some public resources on the ITAR to help you determine your jurisdiction: 22 CFR § 120.41 - Specially designed. , The United States Munitions List.

EAR

The BIS’s Export Administration Regulations (EAR) control the export of civil and dual-use goods and technology.

Once you have determined your products are not controlled under the ITAR, you must consider the control of the EAR. The EAR requires less input, data, and effort from the exporter.

The EAR controls civil products and “Dual-Use” items, software, and technology; “Dual-Use” means that the products have applications in both civilian and defense situations. A GPS system is an example of a “Dual-Use” good. GPS was designed for military applications but is now widely adopted by the civilian market. Both a civilian and soldier would find GPS useful.

The EAR has its own classification structure (the CCL) and a license determination structure that considers factors such as level of control, destination country, end use, and end user. Exports under these regulations may or may not require an export license, depending on the situation.

Here are some common signs your product may be controlled under the EAR:

1. Your product is sold to the public for civil applications.
2. Your product was developed with no help from the government.
3. Your product has no specific end uses that are defense-related.

Here are some public resources on the EAR to help you determine your jurisdiction: § 730.3 “Dual Use", BIS.gov

CJ Request

If needed, a Commodity Jurisdiction Request (CJ) can be submitted to the DDTC through their Defense Export Control and Compliance System (DECCS). This is a formal request to the DDTC for their determination of the jurisdiction of your product or technology. This request requires product information and a proposed product classification with rationale. Luckily, CJs can be drafted by third parties and can be subject to third-party help.

Remember, it is the exporter’s first responsibility to know the jurisdiction of their export. Getting the jurisdiction of your export wrong could create future consequences that all exporters want to avoid. If you are still unsure of your jurisdiction, Tradewin is here to help. Our team of experts has the experience and knowledge to assist you with commodity jurisdiction and to get you on track to exporting the correct way. -Contact Tradewin today and let us help you ensure your exports are compliant within the correct commodity jurisdiction.