Export licenses and customs clearance on a shipment

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1. The general rule and the exception that swallows it

Items on the United States Munitions List cannot leave the country without permission. The manual states the rule and its main carve-out together: "Export of USML items, including certain services and technical information, requires a license unless it is done via FMS" (SAMM C3.3.1).

That exception belongs to the sale, not to the seller. It is written into 22 CFR 126.6, and it applies only where a signed offer document authorizes the transfer.

Marketing is outside it. "If marketing efforts involve the disclosure of technical data or temporary export of defense articles, the contractor must obtain the appropriate export license" (SAMM C3.3.1). A company can therefore need a license to pursue a program and no license at all to deliver it.

2. What the exemption actually covers

The regulation sets conditions rather than granting a blanket permission. Five of them matter in practice.

• The article, technical data or defense service must be specifically identified in an executed offer document signed by authorized representatives of both governments.
• Transfers "may take place only during the period which the FMS Letter of Offer and Acceptance (LOA) and implementing USG FMS contracts and subcontracts are in effect", after which other authorization is required.
• The person responsible for the transfer must keep records of all transfers.
• For articles and data, the transfer must be made by the purchasing country's diplomatic mission or by a freight forwarder registered with the Directorate of Defense Trade Controls.
• For services, a contract with the government must define the scope, name the case identifier, name the foreign recipients and set a duration.

Classified hardware carries an extra condition. It must have the requisite security clearance and transportation plan, and move in accordance with the industrial security manual (22 CFR 126.6(c)(5)).

The manual makes the same point about follow-on support in blunter terms. The offer document and the contract must be specific about the exporter, the service or information, subcontractors, intermediate consignees, the end use and the end user. "Failure to fully document this information may result in program delays and requirements for obtaining additional export authorizations by the supporting contractor" (SAMM C3.3.2).

3. Two ways a shipment leaves, and who clears it

The manual splits shipments into those sponsored by the Department and those sponsored by the purchaser. The paperwork differs, and so does the party holding the obligation.

For departmental shipments moving through the military distribution network, export information is entered into the Automated Export System, and one field is annotated to identify the materiel as an export under the program (SAMM C3.3.3.1). Those movements are reported monthly to the Census Bureau by the implementing agency.

Even then, the far end belongs to the buyer. "The purchaser is responsible for obtaining overseas customs clearances and for all actions and costs associated with customs clearances for deliveries of FMS materiel using DTS, including any intermediate stops or transfer points" (SAMM C3.3.3.2). The distribution network itself is described in the Defense Transportation System and delivery documents.

For purchaser-sponsored shipments the position is similar in substance and different in form. "An export license is not required when FMS materiel is transferred to the purchaser within the United States", but Customs and Border Protection must already hold current data for the case, including amendments and modifications, supplied electronically from the security cooperation information portal (SAMM C3.3.3.4.1).

The filing duty does not disappear with the license. "A license is not required, but the purchaser must file EEI at the time of export in AES" (SAMM C3.3.3.4.1). A purchaser acting as its own forwarder must register with the Directorate of Defense Trade Controls and file a statement of compliance.

4. Classified cargo and the named individual

Classified materiel is not released to an organization. It is released to a person. "Classified materiel may be released only to a person who has been designated by the purchasing government in writing as its Designated Government Representative (DGR) or as its transfer agent" (SAMM C3.3.3.4.4.2).

Forwarders approved to handle classified shipments are verified through the address directory. The identity of the transfer agent, the carrier and the representative is recorded in the transportation plan or in the notice of availability for an individual shipment, and each entity holding custody signs for it (SAMM C3.3.3.4.4.2).

Where the purchaser takes possession inside the United States, the export exemption is still available (SAMM C3.3.3.4.4). The transportation plan requirement, and the responsibilities for writing it, must appear in the offer document. Those requirements are set out in transportation plans for classified and explosive cargo.

5. Bringing equipment back

Sustainment eventually means return shipments, and those are separately regulated. The manual gives one piece of drafting advice worth taking seriously. Where it is known at negotiation that items will return to the United States, the offer document, the contract and the original transportation plan must all provide for it (SAMM C3.3.4).

The instruments are these. A temporary import license on Form DSP-61 covers unclassified defense articles unless an exemption applies. Classified articles being temporarily imported and re-exported travel on Form DSP-85 unless exempted (SAMM C3.3.4.1 and C3.3.4.2). The four application forms are listed in 22 CFR 123.1.

The exemption most often used for repair work runs "for a period of up to 4 years" and covers unclassified United States origin items that are serviced and returned, or that are approved for import under an executed offer document (22 CFR 123.4(a)). Servicing means inspection, testing, calibration or repair. It does not extend to modification or upgrade.

There is a trap in the conditions. If the foreign exporter requires documentation of government approval for the temporary import, the exemption cannot be claimed and a license is needed instead (22 CFR 123.4(c)(4)).

Permanent imports are a different regime altogether. They are regulated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives under 27 CFR part 447, and normally require a permit on an approved Form 6 (SAMM C3.3.4.6).

Key terms

USML	United States Munitions List, the list of articles and services controlled for export.
EEI	Electronic export information, filed in the Automated Export System at the time of export. SAMM C3.3.3.4.1.
DGR	Designated Government Representative, the named person to whom classified materiel may be released.
DSP-61	Temporary import license for unclassified defense articles. 22 CFR 123.1.
DSP-85	The equivalent form for classified exports and temporary imports.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Customs clearance at the far end is the purchaser's responsibility, and it is usually the point where a delivery stalls. Sentfore supports movement beyond that point, providing secure transport, protective security and site support for defense programs in difficult environments. Requirements can be sent through the contact page.