ECR SUBCATEGORIES

Automated Export System

Q: How should items be classified in the Automated Export System (AES) for items transitioning to the CCL but being exported under a legacy State Department authorization? 
A: You should enter the USML category as indicated on your license, not the new ECCN.


Q: If I have an EAR-controlled item on a USML license what are the AES filing requirements for legacy licenses and new licenses? 
A: In both cases, an AES filing is required regardless of the dollar value. For legacy licenses the applicant is not required to file an EAR classification in AES or enter 600 series ECCNs on export control documents that accompany the shipment.

However for licenses under §120.5(b) received after the effective date of a revised category, the applicant must identify the EAR classification(s) in AES in the ECCN field for all EAR items, as well as provide the EAR classification in accordance with §123.9(b)(2).


Q: For an approved shipment that contains both transitioned and non-transitioned items, what Destination Code Statement (DCS) do I use? 
A: Until a “uniform” statement that covers both USML and CCL items is approved, applicants should include both EAR DCS and the ITAR DCS language for all bills of lading, air waybills, and other shipping documents, and the purchase documentation or invoice. However, to distinguish which phrase applies to which commodity, the EAR DCS verbiage should be prefaced by the phrase, “For items subject to the Export Administration Regulations,” while the ITAR verbiage (ref. ITAR §123.9(b)(1)) should be prefaced with, “For items subject to the International Traffic in Arms Regulations.”

Commodity Categorization

Q: Will DDTC authorize the export of an item subject to the EAR under a license whose only USML-controlled articles are controlled in a category that has yet to be revised? Note, the items subject to the EAR will be identified as paragraph (x) of a revised USML category, articles of which are not proposed for export. 
A: No. Only ECR-revised categories allow for the use of paragraph (x). Additionally, items subject to the EAR that are to be designated paragraph (x) on a license must be used in or with defense articles proposed for export, which is controlled in the same category. Note, an item formerly controlled in one USML category but now subject to the EAR may be exported using paragraph (x) in another USML category, provided that item subject to the EAR is to be used in or with the defense articles identified in the license application.


Q: Do I need to amend my DDTC authorizations if they only contain items moving from one USML Category to another? 
A: No. Both agreements and licenses are valid until their expiration. However, if a license is to be amended for reasons unrelated to ECR, then the category designations must be updated as well. For agreements, if a major amendment to an agreement is submitted, category designations must be updated; but if a minor amendment is submitted, category designations do not necessarily need to be updated. Furthermore, during the transition period, when information on an IFO license does not match that which was presented in its parent agreement, the applicant should note the disparities on the cover letter (15.1) for that license. For example: "Gas turbine engines formerly designated USML Category VIII(b) here designated as Cat XIX(a)."


Q: Revised Category XIII(d)(1) contains the same language as unrevised Category IV(f). How will cases for Category IV(f) be handled when received after January 6? Will they be RWAd as controlled under Category XIII(d)(1)?   
A: The Department notes Category XIII(d)(1) controls ablative materials, which are also the subject of the unrevised USML Category IV(f). The Department reiterates the principle provided in the first rule implementing Export Control Reform: where there is overlap in control regarding a particular article, the control of the revised USML category supersedes that of the unrevised USML category. As such, license requests identifying ablative materials as Category IV(f) will be RWAd.


Q: The control text for USML paragraph (x) hardware indicates items subject to the EAR may only be included in a license or agreement if USML hardware in the same USML category as the (x) hardware will also be included in the license or agreement. Is this interpretation correct? 
A: So long as the items subject to the EAR are to be used in or with the defense articles listed in the same authorization request, and the defense articles are controlled in a category that allows for paragraph (x), then paragraph (x) may be used to export items subject to the EAR for the same USML category. An authorization request where the category of the paragraph (x) hardware does not match the category of the USML-controlled hardware on the same request has a strong presumption of RWA. Note, paragraph (x) may not be used to export items subject to the EAR that are to be used with defense articles not listed on the same authorization request.


Q: If my commodity is not called out specifically in the EAR or the ITAR, do I need to submit a CJ? 
A: If you are unable to determine the classification of an item after reviewing the USML and CCL per the Order of Review (see ITAR §121.1(b)), you may submit a commodity jurisdiction determination to DDTC.

Congressional Notifications

Q: Will the value of the paragraph (x) items be used to decrement the authorization or count toward congressional notification threshold? 
A: No, however applicants must include the appropriate value of the Paragraph (x) articles on the license applications. When adjudicating a license request, although the value of the paragraph (x) items is included in the total license value, DTCL will exclude the paragraph (x) value from threshold determinations such as congressional notifications. When the license is approved and the exporter files via AES for a shipment against the license, the exporter must include the declared value of the paragraph (x) items and that value will be decremented in AES against the total value of the license.

Documentation/Recordkeeping

Q: Do TAA Transmittal Letters need to indicate the ECCN for paragraph (x) items? 
A: No, but including ECCNs may speed up processing times.


Q: Does the requirement to supply a purchase order as support documentation for a TAA extend to paragraph (x) items? 
A: Per Part 123.1(b)(1), a purchase order (or the like) must be supplied as support documentation for licenses containing items subject to the ITAR and EAR, whether IFO or not. It is not required for the agreement itself.


Q: Can I submit a minor amendment to my existing agreement to make use of paragraph (x) or does this require a full amendment? 
A: A minor amendment is sufficient for updating an agreement to reflect paragraph (x) components. However, during the transition period, it is not necessary to update an agreement to make use of paragraph (x). Authorizations in furtherance of items listed in the agreement may be requested from DOS and/or DOC during this transition phase without amending the parent agreement.


Q: What happens to record-keeping requirements for items that transition to the CCL? 
A: Records must continue to be maintained for a period of five years following the last transaction, regardless of jurisdiction.


Q: Do I need to amend my DDTC authorizations if they only contain items moving from one USML Category to another? 
A: No. Both agreements and licenses are valid until their expiration. However, if a license is to be amended for reasons unrelated to ECR, then the category designations must be updated as well. For agreements, if a major amendment to an agreement is submitted, category designations must be updated; but if a minor amendment is submitted, category designations do not necessarily need to be updated. Furthermore, during the transition period, when information on an IFO license does not match that which was presented in its parent agreement, the applicant should note the disparities on the cover letter (15.1) for that license. For example: "Gas turbine engines formerly designated USML Category VIII(b) here designated as Cat XIX(a)."

Exemptions

Q: If a U.S. company received a part for repair using an exemption (e.g., 123.4(a)(1)) and that part transitions to the 600 series while still under repair in the U.S., can the U.S. company export the repaired part using 123.4(a)(1) or, will the U.S. company need to use the Commerce regulations to export the part? 
A: In such instances, the company may continue to use the exemption authority under which the part was imported for re-export or the company may use an EAR authorization.


Q: If a U.S. company exports a part under §126.5 to a Canadian company, can the Canadian company return the part to the U.S. under the authority of the same exemption? 
A: Yes, the U.S. party may continue to use the exemption authority under which the part was previously exported for re-import.

Grandfathering/Legacy Issues

Q: I have a valid ITAR authorization for the export of items transitioning to the CCL. Do I need a new authorization? 
A: Not immediately. However, the DSP 5 or other authorization may expire more quickly if it has items in it that have transitioned to the CCL. And remember, if you export CCL items under an existing State Department authorization, you continue to be subject to all the provisos and other limitation of the authorization. Also see related FAQs on transitioning from a State Department license to a Commerce License and use of paragraph (x)

The below chart outlines how existing authorizations are affected by transitioned items:

 

Contains only items transitioning to CCL

Contains both transitioning and non-transitioning items

DSP 5

May use for up to 2 years after effective date of transition unless license expires, is otherwise invalidated, or is returned. May amend (through a DSP-6) after effective date on case-by-case basis.

Valid for all items until expiration. May amend (through a DSP-6) after effective date on case-by-case basis.


  1. DSP73

Valid until expiration. May amend (through a DSP 62 or 74) after effective date on case-by-case basis.

Valid until expiration. May amend (through a DSP 62 or 74) after effective date on case-by-case basis.


  1. MLA 
    WDA

May use for up to 2 years after effective date of transition unless agreement expires. May amend after effective date if defense services are being provided and an agreement is necessary.

May use for up to 2 years after effective date of transition unless agreement expires. Agreement may be kept valid beyond the 2 year period by submitting amendment to authorize transitioning items under § 120.5(b).


Q: Do licensing conditions and provisos on existing licenses continue to apply to items that have transitioned to the 600 series? 
A: Yes. All items previously exported under a USML authorization continue to be subject to any limitation, proviso, or other requirement imposed by the authorization. Details on how you transition from a State to a Commerce authorization are below:

  • Inactive/expended authorizations: Provisos continue to be valid, however, re-export/retransfer authorizations will be subject to the EAR and therefore processed by the Department of Commerce.

  • Active legacy authorizations: Provisos continue to be valid, however, if the exporter chooses to no longer use the legacy authorization to export EAR controlled items, the exporter MUST upload a statement into the additional documentation for the USML license in D-Trade. The statement must indicate they will no longer be using the State Department authorization for the following items (identified by their new nomenclature ECCN) and identification of the relevant EAR individual validated license number which replaces the USML license or identification of the applicable EAR license exception to be used for the export.


Q: If an exporter has an approved agreement authorizing IFO licenses for EAR and ITAR commodities, may the exporter choose to later utilize BIS licenses for the EAR commodities instead of utilizing the DDTC IFO licenses? 
A: Yes, you may choose to replace your DDTC IFO license with a BIS license for items that have transitioned to the CCL (See questions on "Do licensing conditions and provisos on existing licenses continue to apply to items that have transitioned to the 600 series" for the means by which you can do this). Applications to BIS for such licenses will generally be processed more quickly if you inform BIS that the application is in furtherance of an existing, identified State authorization.


Q: Can I submit a minor amendment to my existing agreement to make use of paragraph (x) or does this require a full amendment? 
A: A minor amendment is sufficient for updating an agreement to reflect paragraph (x) components. However, during the transition period, it is not necessary to update an agreement to make use of paragraph (x). Authorizations in furtherance of items listed in the agreement may be requested from DOS and/or DOC during this transition phase without amending the parent agreement.


Q: The published transition guidance does not address how DDTC will handle export license requests that are still pending once the transition period has passed. Will DDTC issue these licenses or RWA them? 
A: DDTC will continue to process and issue licenses for applications submitted prior to the effective date as "pre-ECR licenses."


Q: How should items be classified in AES for items transitioning to the CCL but being exported under a legacy State Department authorization? 
A: You should enter the USML category as indicated on your license, not the new ECCN.


Q: We anticipate a number of the articles we manufacture will move to the CCL. As a result, our company would potentially need to prepare nearly 400 minor amendments during 2014 and 2015 to identify the transitioning items with their appropriate (x) subcategory, send them out for signature, and eventually conclude them with DDTC. Given there is no inherent change in the scope of these agreements (the same articles are still included; nothing is being added), it seems that a prudent, less burdensome alternative would be to allow these agreements to remain valid until whichever comes first: expiration or full execution of the next major amendment. 
A: With regard to agreements, DDTC provided the following transition guidance:

"Agreements containing transitioning and non-transitioning items that are issued prior to the effective date of the relevant final rule will remain valid until expired, unless they require an amendment, or for a period of two years from the effective date of the relevant final rule, whichever occurs first, unless otherwise revoked, suspended, or terminated. In order for an agreement to remain valid beyond two years, an amendment must be submitted to authorize the CCL items using the new (x) paragraph from the relevant USML category."

DDTC believes the two-year transition period provides a proper balance of adequate time to amend agreements as necessary without prolonging the adjustment time period.


Q: In the case of an existing agreement where all hardware proposed for export will be transitioning to the CCL, is it DDTC’s practice to continue to allow for technical data exports and defense services but not allow for future DSP-5 licenses in furtherance of the agreement? 
A: Yes. If defense services will continue to be performed and/or technical data will be transferred even though the hardware has transitioned to the CCL, then the agreement is considered a mixed authorization. The agreement is valid until whichever comes first: (1) expiration, (2) amendment to incorporate ECR-related changes; or (3) two years after effective date of relevant final rule. Beyond two years after the effective date of the relevant final rule, the agreement is no longer valid unless it has been amended. During the transition period, defense services may be provided and technical data may be exported under ITAR §125.4(b)(2), but hardware licenses submitted to DDTC would be RWA’d since they would contain only items subject to the EAR.

Jurisdiction (ITAR vs. EAR)

Q: Category VIII(h)(23), reads "Fuel cells specially designed for aircraft controlled in this category or controlled in ECCN 9A610." Was the intent to continue to control ALL fuel cells specially designed for aircraft referenced here despite many of these platforms moving to 9A610?   
A: Yes, all such fuel cells are controlled in Category VIII(h)(23).

Note, as a rule of thumb, fuel cells are devices which convert chemical energy directly into electricity; these differ from storage batteries in that reactants are supplied at a rate determined by electrical load. These do not include items such as fuel bladders or tanks.


Q: Will DDTC issue temporary imports licenses for items that are on ATF's United States Munitions Import List (USMIL) but are not on the USML? 
A: No.


Q: My company has been exporting our items as EAR99 for years. The revised USML now enumerates them. Why is my item now controlled on the ITAR? 
A: Unless you have a Commodity Jurisdiction determination that specifically states your item is subject to the EAR, it may be that it was in fact always ITAR-controlled under a "catch-all" provision and is now specifically enumerated as such. If you believe otherwise, you should submit a Commodity Jurisdiction request consistent with ITAR section 120.4 and the procedures on our website. In addition, if you have exported items subject to the ITAR under EAR authorizations, you should review the ITAR’s provisions pertaining to voluntary disclosures at section 127.12.


Q: What do I do if I need to file a disclosure for paragraph (x) items? 
A: For compliance matters, the paragraph (x) items remain subject to the EAR, however, as they were exported under State Department Authorization, a Voluntary Disclosure related to any violation of the authorization should be submitted to the Department of State’s Office of Compliance (PM/DTCC), in accordance with section 127.12 of the ITAR. They will coordinate with the Department of Commerce, as appropriate.


Q: Will DDTC issue an opinion as to whether an item is "Specially Designed"? 
A: Absent doubt, as described in ITAR section 120.4, this is a determination that the exporter or manufacturer must make. DDTC has provided a tool on our ECR website that will help you make such determinations. DDTC will answer questions concerning the application of the specially designed criteria. Those that desire a formal written response from DDTC on general issues regarding the definition should submit a request for advisory opinion. If there is doubt about the application of the definition to a particular item, then, consistent with the provisions of ITAR section 120.4, one may submit a request for a commodity jurisdiction determination. However, DDTC will not issue CJ determinations that confirm the accuracy of self determinations made pursuant to the Specially Designed criteria in ITAR §120.41.


Q: Are there any items that will become ITAR-controlled that were previously EAR-controlled? 
A: In reviewing and revising the USML, our intent was to avoid inadvertently causing items that are now subject to the EAR to become ITAR controlled. To date, the only EAR-controlled items the Administration has intentionally moved to the USML are certain electric motors described in USML Category XX(b). In the future, other items may be moved from the EAR to the ITAR. If you believe that an EAR item has inadvertently been included within the scope of one of the newly revised USML categories, you should submit a Commodity Jurisdiction request, consistent with the procedures described in ITAR section 120.4 and on our website.


Q: If my commodity is not called out specifically in the EAR or the ITAR, do I need to submit a CJ? 
A: If you are unable to determine the classification of an item after reviewing the USML and CCL per the Order of Review (see ITAR §121.1(b)), you may submit a commodity jurisdiction determination to DDTC.


Q: A foreign company is in receipt of a previously exported article (via DSP-5) that has since transitioned to the EAR. The foreign company now wishes to retransfer the item to an entity not included on the license. Must the company seek a GC? 
A: Because the previously shipped item is now controlled under the EAR (i.e., no longer under the jurisdiction of the Department of State), the company must conduct theretransfer in accordance with Department of Commerce regulations. Note, those items not yet shipped remain subject to the terms and conditions of the USML license until received by the end-user.


Q: May a foreign company self-determine that an item previously shipped on a USML license is no longer ITAR controlled? Or must it wait for the U.S. supplier to confirm the change of control in writing? 
A: Foreign persons may self-determine the jurisdiction of the item. There is no requirement for a confirmation in writing. However, if doubt exists on the jurisdiction of an item, then the foreign person should contact the original exporter or manufacturer for clarification.

Paragraph (x)

Q: What is this new paragraph (x) in the USML? 
A: The revised USML Categories will have a new (x) paragraph, the purpose of which is to allow for ITAR licensing for commodities, software, and technical data subject to the EAR, provided those commodities, software, and technical data are to be used in or with defense articles controlled on the USML and are described in the purchase documentation submitted with the application.

Paragraph (x) was created to address concerns raised by the exporting community. The concerns focused on the fact that certain transactions that had once required one license from State would now require two different authorizations from two different agencies. In response to this, paragraph (x) was created.


Q: How do I use paragraph (x)? 
A: When you are submitting an application with paragraph (x) items listed, it must:

  1. Include purchase documentation (e.g., purchase order, contract, letter of intent, or other appropriate documentation) that contains both USML and CCL controlled commodities;

  2. The CCL items must be for use "in or with" a defense article(s) proposed for export; and

  3. Must separately list, with the ECCN, the CCL commodities, software, and technical data on the license application.


Q: Can I obtain an authorization for only paragraph (x) items? 
A: No.


Q: Will DDTC authorize the export of an item subject to the EAR under a license whose only USML-controlled articles are controlled in a category that has yet to be revised? Note, the items subject to the EAR will be identified as paragraph (x) of a revised USML category, articles of which are not proposed for export. 
A: No. Only ECR-revised categories allow for the use of paragraph (x). Additionally, items subject to the EAR that are to be designated paragraph (x) on a license must be used in or with defense articles proposed for export, which is controlled in the same category. Note, an item formerly controlled in one USML category but now subject to the EAR may be exported using paragraph (x) in another USML category, provided that item subject to the EAR is to be used in or with the defense articles identified in the license application.


Q: Will the value of the paragraph (x) items be used to decrement the authorization or count toward congressional notification threshold? 
A: No, however applicants must include the appropriate value of the Paragraph (x) articles on the license applications. When adjudicating a license request, although the value of the paragraph (x) items is included in the total license value, DTCL will exclude the paragraph (x) value from threshold determinations such as congressional notifications. When the license is approved and the exporter files via AES for a shipment against the license, the exporter must include the declared value of the paragraph (x) items and that value will be decremented in AES against the total value of the license.


Q: Do TAA Transmittal Letters need to indicate the ECCN for paragraph (x) items? 
A: No, but including ECCNs may speed up processing times.


Q: How should I account for the value of EAR-controlled items (i.e., paragraph (x) items) in the paragraph (a)(6) table of my TAA? 
A: Items controlled by the EAR should not be included in the valuation of Technical Assistance Agreement or Manufacturing License Agreements. When it becomes necessary to amend your agreement, the (a)(6) table should be "de-valued" accordingly to reflect USML-associated costs only.


Q: Do I need to obtain a re-export/retransfer authorization from State for paragraph (x) items that were previously exported under a State Department authorization? 
A: No. USML reexport/re-transfer controls do not apply to paragraph (x) items. Re-export/retransfer authorizations for paragraph (x) items will be processed by BIS and subject to EAR controls.


Q: Can I submit a minor amendment to my existing agreement to make use of paragraph (x) or does this require a full amendment? 
A: A minor amendment is sufficient for updating an agreement to reflect paragraph (x) components. However, during the transition period, it is not necessary to update an agreement to make use of paragraph (x). Authorizations in furtherance of items listed in the agreement may be requested from DOS and/or DOC during this transition phase without amending the parent agreement.


Q: Does the requirement to supply a purchase order as support documentation for a TAA extend to paragraph (x) items? 
A: Per Part 123.1(b)(1), a purchase order (or the like) must be supplied as support documentation for licenses containing items subject to the ITAR and EAR, whether IFO or not. It is not required for the agreement itself.


Q: What do I do if I need to file a disclosure for paragraph (x) items? 
A: For compliance matters, the paragraph (x) items remain subject to the EAR, however, as they were exported under State Department Authorization, a Voluntary Disclosure related to any violation of the authorization should be submitted to the Department of State’s Office of Compliance (PM/DTCC), in accordance with section 127.12 of the ITAR. They will coordinate with the Department of Commerce, as appropriate.


Q: Will DDTC authorize "deemed exports" of EAR technology or software source code? What about deemed reexports? 
A: Use of paragraph (x) is limited to license applications for defense articles where the purchase documentation includes commodities, software, or technical data subject to the EAR. To the extent that this requirement is met, DDTC will authorize "deemed exports."


Q: Our company has foreign person employees inside and outside the U.S. for whom it has obtained DSP-5 technical data licenses. According to Export Control Reform (ECR) transition guidance, these existing licenses allow for the export of USML technical data (related to items transitioning to the 600 series) until their expiration.

Once these have expired, will it be necessary to apply for a BIS export license in addition to the DSP-5 for the same foreign person employee to cover both jurisdictions, or will a DSP-5 suffice for 600 series items under paragraph (x)? 
A: Applicants may use paragraph (x) for foreign person licenses, provided the CCL technical data is to be used "in or with" the USML technical data.


Q: ITAR §123.1(b)(2) states "paragraph (x) items must be for end-use in or with the USML defense article(s) proposed for export." How should exporters interpret "proposed for export"? In other words, if paragraph (x) hardware is for end-use in or with a defense article that is already in the destination country, and not for use in or with USML items on the same license, are we prohibited from using paragraph (x)? 
A: "Proposed for export" refers to those USML articles to be covered under the same authorization as the EAR-controlled items, and not to any defense article shipped under a separate authorization.


Q: The DDTC Agreements Guidelines (ref. Section 20.1.d.3) indicate technical data and software may only be included in paragraph (x) if they would otherwise require a license from BIS. First, does this criterion also apply to hardware? If not, can applicants include under paragraph (x) items that are EAR-controlled but are eligible for No License Required (NLR) to the country of destination? Second, if such an agreement is approved, is the agreement holder then obligated to seek an “in furtherance of” (IFO) license for these NLR items, or can the agreement holder export these items as “NLR”? 
A: DDTC will not RWA a license simply because it includes hardware subject to the EAR that is NLR to the country of destination, provided the license request meets the requirements of ITAR §123.1(b) and §120.5. IFO licenses, however, that contain hardware subject to the EAR that is NLR only will be RWA’d, as DDTC does not have the authority to approve licenses for EAR-controlled items only.


Q: The control text for USML paragraph (x) hardware indicates items subject to the EAR may only be included in a license or agreement if USML hardware in the same USML category as the (x) hardware will also be included in the license or agreement. Is this interpretation correct? 
A: So long as the items subject to the EAR are to be used in or with the defense articles listed in the same authorization request, and the defense articles are controlled in a category that allows for paragraph (x), then paragraph (x) may be used to export items subject to the EAR for the same USML category. An authorization request where the category of the paragraph (x) hardware does not match the category of the USML-controlled hardware on the same request has a strong presumption of RWA. Note, paragraph (x) may not be used to export items subject to the EAR that are to be used with defense articles not listed on the same authorization request.

Registration

Q: My items are currently controlled on the USML; however, due to ECR efforts they will be transitioning to the jurisdiction of the Department of Commerce. May I extend my ITAR registration until the effective transition date? 
A: Registrants (i.e., manufacturers/exporters/brokers) who determine they will no longer be required to register with DDTC after the effective date of the final rule transitioning the registrant’s items to the jurisdiction of the Export Administration Regulations (15 C.F.R. Parts 730-744), who have registration renewal dates that occur after publication of the final rule but before its effective date, may request to have their registration expiration date extended to the effective date of transition and not be charged a registration fee. Registrants should submit a certification letter to DDTC, and will receive a letter confirming extension of their registration.

Retransfer

Q: Our foreign company plans to submit a retransfer request to provide the prime contractor an operations and maintenance manual for a USML-controlled aircraft. However, in addition to containing technical data controlled under the USML, the manual also features technology for items that have moved to the jurisdiction of the Department of Commerce. Will DDTC authorize the transfer of the entire manual, pursuant to an ITAR §123.9 retransfer request? 
A: In general, DDTC will authorize the transfer of the entire manual. However, if the TAA that was used to export this data is still in effect, then a retransfer request pursuant to ITAR §123.9 may not be used. Instead, the TAA scope must be increased via an amendment.


Q: Do I need to obtain a re-export/retransfer authorization from State for paragraph (x) items that were previously exported under a State Department authorization? 
A: No. USML reexport/re-transfer controls do not apply to paragraph (x) items. Re-export/retransfer authorizations for paragraph (x) items will be processed by BIS and subject to EAR controls.


Q: Will DDTC authorize "deemed exports" of EAR technology or software source code? What about deemed reexports? 
A: Use of paragraph (x) is limited to license applications for defense articles where the purchase documentation includes commodities, software, or technical data subject to the EAR. To the extent that this requirement is met, DDTC will authorize "deemed exports."


Q: How long do Category VIII GCs and TAAs approved prior to October 15, 2013, remain active? 
A: For TAAs, MLAs, or WDAs that contain only items transitioning to the CCL, the applicant may use these for up to 2 years after the effective date of transition, unless the agreement expires prior to that date. The applicant may amend the agreement after the effective date on a case-by-case basis.

For agreements that contain both transitioning and non-transitioning items, the applicant may use these authorizations for up to 2 years after the effective date of transition unless the agreement expires first. However, the agreement may be kept valid beyond the 2-year period by submitting an amendment to authorize transitioning items under ITAR §120.5(b).

GC's are to be treated in the same manner as the above.


Q: A foreign company is in receipt of a previously exported article (via DSP-5) that has since transitioned to the EAR. The foreign company now wishes to retransfer the item to an entity not included on the license. Must the company seek a GC? 
A: Because the previously shipped item is now controlled under the EAR (i.e., no longer under the jurisdiction of the Department of State), the company must conduct theretransfer in accordance with Department of Commerce regulations. Note, those items not yet shipped remain subject to the terms and conditions of the USML license until received by the end-user.

Specially Designed

Q: Will DDTC issue an opinion as to whether an item is "Specially Designed"? 
A: Absent doubt, as described in ITAR section 120.4, this is a determination that the exporter or manufacturer must make. DDTC has provided a tool on our ECR website that will help you make such determinations. DDTC will answer questions concerning the application of the specially designed criteria. Those that desire a formal written response from DDTC on general issues regarding the definition should submit a request for advisory opinion. If there is doubt about the application of the definition to a particular item, then, consistent with the provisions of ITAR section 120.4, one may submit a request for a commodity jurisdiction determination. However, DDTC will not issue CJ determinations that confirm the accuracy of self determinations made pursuant to the Specially Designed criteria in ITAR §120.41.


Q: When can I use the new Specially Designed criteria? 
A: You may only use the criteria when the term is used in an ECR-revised USML category (i.e., Specially Designed applies to USML Categories VIII and XIX as of October 15, 2013) and when the term is used in the control text of a specific USML entry (e.g., Cat. VIII(h)(1): Parts, components, accessories, attachments, and equipment specially designed for the following U.S.-origin aircraft:...). If the USML entry does not use "Specially Designed" in the control text, then §120.41 does not apply. Please note that Specially Designed is not the same as, "specifically designed or modified" so they cannot be used interchangeably. Also, Specially Designed criteria CANNOT be used to remove from the USML those items that are specifically enumerated elsewhere on the ITAR.

Technical Data

Q: Our company has foreign person employees inside and outside the U.S. for whom it has obtained DSP-5 technical data licenses. According to Export Control Reform (ECR) transition guidance, these existing licenses allow for the export of USML technical data (related to items transitioning to the 600 series) until their expiration.

Once these have expired, will it be necessary to apply for a BIS export license in addition to the DSP-5 for the same foreign person employee to cover both jurisdictions, or will a DSP-5 suffice for 600 series items under paragraph (x)? 
A: Applicants may use paragraph (x) for foreign person licenses, provided the CCL technical data is to be used "in or with" the USML technical data.


Q: Our foreign company plans to submit a retransfer request to provide the prime contractor an operations and maintenance manual for a USML-controlled aircraft. However, in addition to containing technical data controlled under the USML, the manual also features technology for items that have moved to the jurisdiction of the Department of Commerce. Will DDTC authorize the transfer of the entire manual, pursuant to an ITAR §123.9 retransfer request? 
A: In general, DDTC will authorize the transfer of the entire manual. However, if the TAA that was used to export this data is still in effect, then a retransfer request pursuant to ITAR §123.9 may not be used. Instead, the TAA scope must be increased via an amendment.


Q: In the case of an existing agreement where all hardware proposed for export will be transitioning to the CCL, is it DDTC’s practice to continue to allow for technical data exports and defense services but not allow for future DSP-5 licenses in furtherance of the agreement? 
A: Yes. If defense services will continue to be performed and/or technical data will be transferred even though the hardware has transitioned to the CCL, then the agreement is considered a mixed authorization. The agreement is valid until whichever comes first: (1) expiration, (2) amendment to incorporate ECR-related changes; or (3) two years after effective date of relevant final rule. Beyond two years after the effective date of the relevant final rule, the agreement is no longer valid unless it has been amended. During the transition period, defense services may be provided and technical data may be exported under ITAR §125.4(b)(2), but hardware licenses submitted to DDTC would be RWA’d since they would contain only items subject to the EAR.

Terminology

Q: For developmental aircraft, and specially designed parts, components, accessories, and attachments therefor, that are under contract or funding authorization dated prior to April 16, 2014, and therefore not captured by USML Category VIII(f), could such items be ITAR-controlled pursuant to a contract amendment dated April 16, 2014, or later? 
A: Yes.

Transition Items/Commodities

Q: Do licensing conditions and provisos on existing licenses continue to apply to items that have transitioned to the 600 series? 
A: Yes. All items previously exported under a USML authorization continue to be subject to any limitation, proviso, or other requirement imposed by the authorization. Details on how you transition from a State to a Commerce authorization are below:

  • Inactive/expended authorizations: Provisos continue to be valid, however, re-export/retransfer authorizations will be subject to the EAR and therefore processed by the Department of Commerce.

  • Active legacy authorizations: Provisos continue to be valid, however, if the exporter chooses to no longer use the legacy authorization to export EAR controlled items, the exporter MUST upload a statement into the additional documentation for the USML license in D-Trade. The statement must indicate they will no longer be using the State Department authorization for the following items (identified by their new nomenclature ECCN) and identification of the relevant EAR individual validated license number which replaces the USML license or identification of the applicable EAR license exception to be used for the export.


Q: How long do Category VIII GCs and TAA’s approved prior to October 15, 2013, remain active? 
A:For TAAs, MLAs, or WDAs that contain only items transitioning to the CCL, the applicant may use these for up to 2 years after the effective date of transition, unless the agreement expires prior to that date. The applicant may amend the agreement after the effective date on a case-by-case basis.

For agreements that contain both transitioning and non-transitioning items, the applicant may use these authorizations for up to 2 years after the effective date of transition unless the agreement expires first. However, the agreement may be kept valid beyond the 2-year period by submitting an amendment to authorize transitioning items under ITAR §120.5(b).

GC’s are to be treated in the same manner as the above.


Q: Are there any items that will become ITAR-controlled that were previously EAR-controlled? 
A: In reviewing and revising the USML, our intent was to avoid inadvertently causing items that are now subject to the EAR to become ITAR controlled. To date, the only EAR-controlled items the Administration has intentionally moved to the USML are certain electric motors described in USML Category XX(b). In the future, other items may be moved from the EAR to the ITAR. If you believe that an EAR item has inadvertently been included within the scope of one of the newly revised USML categories, you should submit a Commodity Jurisdiction request, consistent with the procedures described in ITAR section 120.4 and on our website.


Q: My company has been exporting our items as EAR99 for years. The revised USML now enumerates them. Why is my item now controlled on the ITAR? 
A: Unless you have a Commodity Jurisdiction determination that specifically states your item is subject to the EAR, it may be that it was in fact always ITAR-controlled under a "catch-all" provision and is now specifically enumerated as such. If you believe otherwise, you should submit a Commodity Jurisdiction request consistent with ITAR section 120.4 and the procedures on our website. In addition, if you have exported items subject to the ITAR under EAR authorizations, you should review the ITAR’s provisions pertaining to voluntary disclosures at section 127.12.


Q: I have a valid ITAR authorization for the export of items transitioning to the CCL. Do I need a new authorization? 
A: Not immediately. However, the DSP 5 or other authorization may expire more quickly if it has items in it that have transitioned to the CCL. And remember, if you export CCL items under an existing State Department authorization, you continue to be subject to all the provisos and other limitation of the authorization. Also see related FAQs on transitioning from a State Department license to a Commerce License and use of paragraph (x)

The below chart outlines how existing authorizations are affected by transitioned items:

 

Contains only items transitioning to CCL

Contains both transitioning and non-transitioning items

DSP 5

May use for up to 2 years after effective date of transition unless license expires, is otherwise invalidated, or is returned. May amend (through a DSP-6) after effective date on case-by-case basis.

Valid for all items until expiration. May amend (through a DSP-6) after effective date on case-by-case basis.


  1. DSP73

Valid until expiration. May amend (through a DSP 62 or 74) after effective date on case-by-case basis.

Valid until expiration. May amend (through a DSP 62 or 74) after effective date on case-by-case basis.


  1. MLA 
    WDA

May use for up to 2 years after effective date of transition unless agreement expires. May amend after effective date if defense services are being provided and an agreement is necessary.

May use for up to 2 years after effective date of transition unless agreement expires. Agreement may be kept valid beyond the 2 year period by submitting amendment to authorize transitioning items under § 120.5(b).


Q: How should items be classified in AES for items transitioning to the CCL but being exported under a legacy State Department authorization? 
A: You should enter the USML category as indicated on your license, not the new ECCN.


Q: Can I submit a minor amendment to my existing agreement to make use of paragraph (x) or does this require a full amendment? 
A: A minor amendment is sufficient for updating an agreement to reflect paragraph (x) components. However, during the transition period, it is not necessary to update an agreement to make use of paragraph (x). Authorizations in furtherance of items listed in the agreement may be requested from DOS and/or DOC during this transition phase without amending the parent agreement.


Q: If a U.S. company received a part for repair using an exemption (e.g., 123.4(a)(1)) and that part transitions to the 600 series while still under repair in the U.S., can the U.S. company export the repaired part using 123.4(a)(1) or, will the U.S. company need to use the Commerce regulations to export the part? 
A: In such instances, the company may continue to use the exemption authority under which the part was imported for re-export or the company may use an EAR authorization.


Q: If a U.S. company exports a part under §126.5 to a Canadian company, can the Canadian company return the part to the U.S. under the authority of the same exemption? 
A: Yes, the U.S. party may continue to use the exemption authority under which the part was previously exported for re-import.


Q: If an exporter has an approved agreement authorizing IFO licenses for EAR and ITAR commodities, may the exporter choose to later utilize BIS licenses for the EAR commodities instead of using the DDTC IFO licenses? 
A: Yes, you may choose to replace your DDTC IFO license with a BIS license for items that have transitioned to the CCL (See questions on "Do licensing conditions and provisos on existing licenses continue to apply to items that have transitioned to the 600 series" for the means by which you can do this). Applications to BIS for such licenses will generally be processed more quickly if you inform BIS that the application is in furtherance of an existing, identified State authorization.


Q: The published transition guidance does not address how DDTC will handle export license requests that are still pending once the transition period has passed will DDTC issue these licenses or RWA them? 
A: DDTC will continue to process and issue licenses for applications submitted prior to the effective date as "pre-ECR licenses."


Q: What happens to record-keeping requirements for items that transition to the CCL? 
A: Records must continue to be maintained for a period of five years following the last transaction, regardless of jurisdiction.


Q: Revised Category XIII(d)(1) contains the same language as unrevised Category IV(f). How will cases for Category IV(f) be handled when received after January 6? Will they be RWAd as controlled under Category XIII(d)(1)? 
A: The Department notes Category XIII(d)(1) controls ablative materials, which are also the subject of the unrevised USML Category IV(f). The Department reiterates the principle provided in the first rule implementing Export Control Reform: where there is overlap in control regarding a particular article, the control of the revised USML category supersedes that of the unrevised USML category. As such, license requests identifying ablative materials as Category IV(f) will be RWAd.


Q: In the case of an existing agreement where all hardware proposed for export will be transitioning to the CCL, is it DDTC’s practice to continue to allow for technical data exports and defense services but not allow for future DSP-5 licenses in furtherance of the agreement? 
A: Yes. If defense services will continue to be performed and/or technical data will be transferred even though the hardware has transitioned to the CCL, then the agreement is considered a mixed authorization. The agreement is valid until whichever comes first: (1) expiration, (2) amendment to incorporate ECR-related changes; or (3) two years after effective date of relevant final rule. Beyond two years after the effective date of the relevant final rule, the agreement is no longer valid unless it has been amended. During the transition period, defense services may be provided and technical data may be exported under ITAR §125.4(b)(2), but hardware licenses submitted to DDTC would be RWA’d since they would contain only items subject to the EAR.


Q: ITAR §123.1(b)(2) states "paragraph (x) items must be for end-use in or with the USML defense article(s) proposed for export." How should exporters interpret "proposed for export"? In other words, if paragraph (x) hardware is for end-use in or with a defense article that is already in the destination country, and not for use in or with USML items on the same license, are we prohibited from using paragraph (x)? 
A: "Proposed for export" refers to those USML articles to be covered under the same authorization as the EAR-controlled items, and not to any defense article shipped under a separate authorization.


Q: For agreements where a defense article transitions from one USML category to another, what actions must an applicant take, and what is the timeframe for accomplishing those actions? 
A: For existing agreements that do not contain items transitioning to the EAR, the agreement is valid until its expiration date. Additionally, an amendment is not required solely to correct the USML categories or sub-categories. However, these categories must be amended whenever the applicant submits the next major amendment. Note: if the agreement contains items transitioning to the EAR, then the agreement must be amended within the 2-year transition period to reflect the changes.


Q: May a foreign company self-determine that an item previously shipped on a USML license is no longer ITAR controlled? Or must it wait for the U.S. supplier to confirm the change of control in writing? 
A: Foreign persons may self-determine the jurisdiction of the item. There is no requirement for a confirmation in writing. However, if doubt exists on the jurisdiction of an item, then the foreign person should contact the original exporter or manufacturer for clarification.

Value

Q: Will the value of the paragraph (x) items be used to decrement the authorization or count toward congressional notification threshold? 
A: No, however applicants must include the appropriate value of the Paragraph (x) articles on the license applications. When adjudicating a license request, although the value of the paragraph (x) items is included in the total license value, DTCL will exclude the paragraph (x) value from threshold determinations such as congressional notifications. When the license is approved and the exporter files via AES for a shipment against the license, the exporter must include the declared value of the paragraph (x) items and that value will be decremented in AES against the total value of the license.


Q: How should I account for the value of EAR-controlled items (i.e., paragraph (x) items) in the paragraph (a)(6) table of my TAA? 
A: Items controlled by the EAR should not be included in the valuation of Technical Assistance Agreement or Manufacturing License Agreements. When it becomes necessary to amend your agreement, the (a)(6) table should be "de-valued" accordingly to reflect USML-associated costs only.

USML CATEGORIES

VIII Aircraft and Related Articles

Q: Category VIII(h)(23), reads “Fuel cells specially designed for aircraft controlled in this category or controlled in ECCN 9A610.” Was the intent to continue to control ALL fuel cells specially designed for aircraft referenced here despite many of these platforms moving to 9A610?   
A: Yes, all such fuel cells are controlled in Category VIII(h)(23).

Note, as a rule of thumb, fuel cells are devices which convert chemical energy directly into electricity; these differ from storage batteries in that reactants are supplied at a rate determined by electrical load. These do not include items such as fuel bladders or tanks.

XX Submersible Vessels

Q: If my commodity is not called out specifically in the EAR or the ITAR, do I need to submit a CJ? 
A: If you are unable to determine the classification of an item after reviewing the USML and CCL per the Order of Review (see ITAR §121.1(b)), you may submit a commodity jurisdiction determination to DDTC.