What an export license authorizes

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1. What a license authorizes

Under the Export Administration Regulations (EAR), a license covers what the application described (15 CFR 750.7(a)(1)). It authorizes the export, reexport or in-country transfer of the items, end-uses and parties named in the application and in any explanatory letters, unless a license condition limits it (15 CFR 750.7(a)(1)). The applicant must tell the other parties named on the license, such as ultimate consignees and end users, about its scope and the conditions that apply to them.

The Bureau of Industry and Security (BIS) grants licenses in reliance on the applicant’s representations in the application, letters of explanation and other documents (15 CFR 750.7(a)(2)). A license obtained through a false or misleading representation, or by falsifying or concealing a material fact, is void as of the date of issuance. All licenses are also subject to revocation without notice, and other sanctions may follow a violation.

A license to release technology to an entity also covers some of its staff (15 CFR 750.7(a)(3)). It authorizes release of the same technology to the entity’s foreign persons who are permanent and regular employees of the facilities on the license and are not proscribed persons (15 CFR 750.7(a)(3)). That does not apply where a license condition limits release to foreign persons of specific countries or country groups.

2. How licenses are issued

BIS may issue a license electronically through its Simplified Network Application Processing system (SNAP-R), on paper, or both (15 CFR 750.7(b)). Each license has a license number shown on it. For commodities, unlike software and technology, the license sets a quantity and a dollar value (15 CFR 750.7(f)). Quantity is stated in the unit commonly used in trade, the total value rests on the unit price, and the authorization is limited by both, subject to the shipping tolerances.

3. Changes that need no notice

Some non-material changes need neither a replacement license nor notice to BIS (15 CFR 750.7(c)(1)). Any other change needs a replacement license. The listed changes include a decrease in unit price or total value, and a price increase within the shipping tolerances. A price increase justified by changes in delivery point or port of export, or by transport costs, drayage, port charges, warehousing or currency movements, is also covered.

Setting a price under a license price statement based on market price plus a markup is covered (15 CFR 750.7(c)(1)(iv)). So is a change in intermediate consignee to one located in the country of ultimate destination, except for consolidated shipments (15 CFR 750.7(c)(1)(v)). A change of address for the purchaser or ultimate consignee within the same country is covered (15 CFR 750.7(c)(1)(vii)). A change in Export Control Classification Number (ECCN) made only to conform to an official revision of the Commerce Control List is covered, and so is a change in the wording of the item description (15 CFR 750.7(c)(1)(viii)). It does not cover a real change in the item or an increase in total price or quantity.

4. Transshipment and approved end users

A shipment may be unloaded at a port in a Country Group B country outside the destination country without naming an intermediate consignee, on conditions (15 CFR 750.7(c)(1)(vi)). It must be only for transfer to another vessel, barge or vehicle for onforwarding to the destination, and must move on a through bill of lading. The carrier must not be registered in, owned or controlled by, or chartered or leased to a Country Group D:1 or E:2 country or its national. The carrier must keep custody until delivery, and the original bill of lading or air waybill must travel with the shipment.

Direct exports, reexports or transfers to and among the approved end users and ultimate consignee on a license are allowed if they are listed by name and location (15 CFR 750.7(c)(1)(ix)). Reexports and transfers among approved end users may be further limited by license conditions. This does not apply if the license has conditions specific to the ultimate consignee that an end user cannot meet, such as a reporting duty. Release of minimum necessary missile technology software or technology under the missile licensing policy is also permitted (15 CFR 750.7(c)(1)(x)). Adding a new six-digit Harmonized Tariff Schedule (HTS-6) code for divesting or moving items within Russia or Belarus for reexport is allowed in limited circumstances. They include that the license has not expired and the shipping tolerance or authorized units are not exceeded (15 CFR 750.7(c)(1)(xi)).

5. Name changes on a license

BIS may authorize changing the name of a person on a license, if that person has not changed ownership, merged, been acquired or otherwise changed legal status since issuance (15 CFR 750.7(c)(2)). BIS must have approved the change in response to an advisory opinion request on the licensee’s letterhead. The request lists the affected license numbers, the old and new names and when they change, any background, and a statement on changes in ownership or legal status (15 CFR 750.7(c)(2)(i)). The licensee also confirms it will share BIS’s response with the other parties, who must keep it.

BIS responds in writing whether or not it approves (15 CFR 750.7(c)(2)(ii)). If BIS denies the request, or there has been a material change such as a change in ownership, a new license application should be submitted. Guidance on exporting against a license with an approved name change is in the export clearance part (15 CFR 750.7(c)(2)(iii)). The same applies where the licensee itself determines there has been a material change (15 CFR 750.7(c)(2)(iv)).

6. The licensee’s responsibility

The licensee is the person to whom the license is issued (15 CFR 750.7(d)). In export transactions the exporter must be the licensee and is responsible for proper use of the license and all its terms, except those directed at another party. In reexport or routed transactions, a U.S. agent for a foreign principal party in interest may be the licensee, and both share that responsibility. The licensee communicates the specific conditions in writing to the parties they apply to and, where the license requires, obtains written acknowledgment. Validity and later changes are covered in license validity, transfers and revocation.

Key terms

Scope of a license	What the application and its letters of explanation describe.
Void license	A license obtained through misrepresentation, void from issuance.
Replacement license	A new license needed for changes beyond the listed ones.
Through bill of lading	A bill covering carriage to the destination.
Licensee	The person to whom a license is issued and who answers for its use.

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

License conditions travel with the goods. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.