Urban myths, smart goldfish, and US export controls

Here are a few of my favorite examples of myths that have been debunked:

1. “NASA spent millions to develop a pen that would write in space, whereas Soviet cosmonauts used a pencil”.

2. “Hair and fingernails continue to grow after death”

3. “Goldfish have only a three-second memory”.

It’s interesting that uncertainty often abounds in the export controls community. Many of us working in this area didn’t start our careers here. So, we’re often ‘self-taught’ and learn from each other in the community. Thankfully, there are a lot of really great experts in the industry and excellent information is easily accessible online. But, there are still a few myths that sometimes come up in discussion about US export controls:

Myth 1: I’m not located in the US, so US export control regulations don’t apply to me

US law follows the goods so to speak, and therefore a company does not need to be located in the US to be subject to US export controls. The US government claims worldwide application of US export control laws (extraterritoriality) and seeks to penalise those who breach them, regardless of location.

Myth 2: We do not work in aerospace and defense, so US regulations do not apply to us

Export controls are not just about military goods. Controls are also in place for items, information, and software that are considered to be “dual-use”, i.e. they are primarily commercial or civil in nature, but also have potential military applications. This includes items from a wide variety of industry sectors including telecommunications, electronics, chemicals, and computing, which are categorised in the US in the Commerce Control List (CCL).

Myth 3: US export controls only relate to physical goods movements

The US not only regulates the movement of controlled physical goods, but also the transfer of sensitive “technology” and software not in the public domain. The US government’s definition of “technology” is wide-ranging and can include instructions, blueprints, technical specifications, formulae, design drawings, models, operational manuals, and parts catalogues. In all likelihood, if the physical item itself requires a license, then the export of any corresponding software or technology is also likely to require a license, even if exported independently of the physical item.

Myth 4: I have national licenses already, so I do not need US licenses

The requirement to comply with US re-export controls is in addition to and separate from any national export controls legislation and licensing. A company could, for example, legally ship US controlled goods from the EU only using a valid national/EU license. From a US government perspective however, US re-export controls laws may have been violated given the extraterritorial reach of their regulations. Companies need to ensure they have both national and US authorisations in place before shipping US controlled materials.

Myth 5: I cannot apply for a US license, therefore I don’t need one

It is true that a non-US entity cannot apply for a US export license and would need an authorised US entity or broker to make the license application. An export license typically applies to the export of an article from the US, but consideration needs to be made of how subsequent re-exports outside the US are managed. These also need to be covered by a US license – either under the terms of the original license, or a new authorisation.

There is a lot of really good information available on US government websites such as those of the Bureau of Industry and Security (https://www.bis.doc.gov/) and the Directorate of Defense Trade Controls (https://www.pmddtc.state.gov).

If you have any comments or remarks, I’d be happy to read them in this blog.