What is an Export License Exception?

Export Administration Regulations (EAR) Part 740 gives extensive details of license exceptions and authorizations. An authorization takes the place of a license and in most cases needs no further paperwork or requests like a regular license would. License exceptions are typically allowed and presented through examining country groupings.

Supplement 1 to Part 740 gives a list of country groups and notes which country groups have exceptions for particular types of exports. Generally, it is important to thoroughly check exceptions not only for their country group application, but also to specifically see what the codified regulation says as they may be very specific in their application but not seem as such on their face. The titles of popular license exceptions are given below, but if any are applicable the regulation should be read in its entirety. The exceptions are typically referred to and filed by their three letter notations which are given at the end of each.

The ten general prohibitions which are found in EAR part 736.2 may overrule an exception which would prompt the need for a special license to fulfill the transaction. This can be very confusing as some of the exceptions may seem to directly conflict with the general prohibitions. For this reason, it is important that the entirety of both are read while also keeping in mind the country grouping for the end destination. Furthermore Part 740.2 gives a list of twenty-two additional restrictions which reference very specific situations in which exceptions do not apply. If confusion persists, you may contact our office for assistance. 

Popular License Exceptions

List Based

740.3 Shipments of Limited Values (LVS)

740.4 Shipments to country Group B countries (GBS)

740.6 Technology and software under Restriction(TSR)

Transaction Based

740.7 Computers (APP)

740.9 Temporary Imports, exports, reexports and transfers (TMP)

740.10 Servicing and Replacement of parts and equipment (RPL)

740.11 Government (GOV)

740.12 Gift Parcels and Humanitarian Donations (GFT)

740.13 Technology and Software unrestricted (TSU)

740.14 Baggage (bag)

740.15 Aircraft, vessels and spacecraft (AVS)

740.16 Additional permissive Reexports (APR)

740.17 Encryption Commodities, Software and Technology (ENC)

740.18 Agricultural Commodities (AGR)

740.19 Consumer Communications Devices (CCD)

740.20 License Exception Strategic Trade Authorization (STA)

740.21 Support for the Cuban People (SCP)

As noted above, the exceptions may be based on list based entities or may be granted for particular transactions. Some of the transaction-based exceptions also relate to list based entities such as, 740.21- Support for the Cuban People, so the instructions written into the exception may mention special processes to avoid receiving a penalty for ignoring a list designation. Each exception may also include a scope, eligible destinations, restrictions, reporting requirements or further subsections that specify exactly how and when the exception should be used.

Have questions related to anything you've read above? Feel free to connect with us using the Contact form at the bottom of the Home page.