What Tech Exporters Need to Know About License Exception C59

A recent development announced by the Bureau of Industry & Security (BIS) will help facilitate plans to strengthen the United States’ ability to export certain technology items. The recently passed C59 License Exception for Strategic Trade Authorization (STA) will help ease export requirements for qualified products going to authorized destinations.

Export compliance is such a hot topic in our world. We recently received several pieces of information directly from US Census and the BIS regarding a new license exception. Below are some interesting pieces we would like to pass along. There is some information that is helpful for companies looking to take advantage of this exception, and how it affects the international logistics of these goods.

Quote from the U.S. Census Bureau

“Effective immediately, a new License Exception C59 for Strategic Trade Authorization (STA) has been added to the Automated Export System (AES).

The Bureau of Industry and Security (BIS) has created this new exception under §740.20 of the Export Administration Regulations that authorizes the export, re-export, and transfer (in-country) of specified items to authorized destinations that pose relatively low risk. Use of the license exception STA is conditioned upon the creation and exchange by the parties to the transaction of notifications and certifications designed to provide assurance against diversion of such items to other unauthorized destinations. The exception does not alter any of the General Prohibitions in the Export Administration Regulations against unlicensed exports, re-exports, or transfers to proscribed end users, end uses, or destinations. This rule is part of the Administration’s Export Control Reform Initiative, undertaken as a result of the fundamental review of the U.S. export control system that the President announced in August 2009.

United States Principal Parties in Interest and their authorized filing agents (AES filers) must follow the following new reporting requirements when using C59-STA to prevent the return of fatal errors from AES.

• When reporting C59 in the AES License Type field, also report STA in the license number field.
• Export Control Classification Number field is required.  Refer to §740.20 of the Export Administration Regulations for those items that are ineligible for the BIS license exception STA.
• Only destinations identified in §740.20 of the Export Administration Regulations are eligible.
• Report Export Information Codes OS, OI, CH or CI
• Report any mode of transportation, except pipeline”

A complete list of all of the AES License Type codes and reporting instructions for these types can be found at the following link:

https://www.cbp.gov/xp/cgov/trade/automated/aes/tech_docs/aestir/june04_intro/appendices/

(Appendix F describes the License Codes specifically)

For More Information on Goods Classification and Export Regulations

We recommend the link below to find out more about how your goods should be properly classified for export. There are several good references on the BIS site to help you out. You can always speak with someone at LEGACY Supply Chain Services directly as well; we can certainly help guide you in the right direction. You can learn more about our export compliance services, or contact our International Logistics team at 800.361.5028 ext. 2.

https://www.access.gpo.gov/bis/ear/ear_data.html

The current administration’s export reform program initiative looks to free up U.S. manufacturers to sell their technology products to certain areas around the world, while maintaining crucial security measures established post-911. This is a positive step in that direction.