Expediting Export: License Exceptions and “600 Series” ECCNs.

We recently had a member ask about the applicability of export license exceptions to the new “600 Series” ECCNs.  Attendees of our workshops, and regular readers of this blog, know that we frequently recommend taking advantage of export license exceptions whenever possible.  Using such exceptions can save money and time, and are particularly important for AOG customers when time is of the essence and waiting for an export license is simply not an option.

As those familiar with export know, a particular article’s ECCN helps us determine when an export license will be required for export to certain countries.  The “600 Series” ECCNs have been created as part of the ongoing Export Control Reform initiative.  These ECCNs control those articles that formerly appeared on the USML and were therefore considered ITAR controlled.  Those ECCNs of most concern to us are ECCN 9A610 “Military aircraft and related commodities, other than those enumerated in 9A991.a” and 9A619 “Military gas turbine engines and related commodities.”  We will use “600 Series” in this post to refer to those two ECCNs.

This shift from State Department control (under the ITAR) to Commerce Department control has been a welcome change for exporters.  However, as the creation of the new “600 Series” ECCNs suggest, these transitioned articles, formerly controlled as defense articles under the ITAR,  warrant some different level of control than those ordinary dual-use parts that were already subject to Commerce Department control.  This makes intuitive sense, as these are military parts that warrant some enhanced level of control, but which do not provide a “critical military or intelligence advantage.”

Given that articles in the “600 Series” ECCNs now occupy a sort of middle ground—subject to the somewhat less-restrictive level of control of the Commerce Department, yet still warranting additional control due to their nature as military parts—we should expect the applicability of commonly used license exceptions to be subject to some limitations.

In our workshops we typically recommend the use three primary license exceptions: Civil End-Users (CIV), Servicing and Replacement of Parts and Equipment (RPL), and Aircraft, Vessels, and Spacecraft (AVS).  We will primarily focus on the applicability of these three exceptions.

The first exception, CIV, can be dispensed with quickly.  CIV is designated on the Commerce Control List (CCL) “600 Series” ECCNs as “CIV: N/A.”  License exception CIV applies to those articles controlled only for National Security (NS) reasons.  Because the articles under ECCNs 9A610 and 9A619 are military articles they are controlled for additional reasons, including Regional Stability (RS) and Missile Technology (MT).  License exception CIV is therefore not applicable to these “600 Series” ECCNs. Strike one.

Skipping over exception RPL briefly, exception AVS can also be dispensed of quickly. License exception AVS permits the export of equipment and spare parts for permanent use on an aircraft and exports to planes of U.S. or Canadian registry and U.S. or Canadian Airlines’ installations or agents.  However, the Export Administration Regulations specifically omit exception AVS as a permissible exception from its list of license exceptions applicable to the “600 Series.”  We can add license exception AVS to our list of exceptions unavailable for use with “600 Series” articles.  Strike two.

Down to our final commonly used license exception, we return to exception RPL.  License exception RPL permits export for the one-for-one replacement of parts, components, accessories and attachments as well as export for servicing and replacement of commodities that are defective or that an end user or ultimate consignee has found unacceptable.

In short, RPL works two ways.  The first way is that a part may be exported to replace a previously legally exported part.  The parts must be identical, and the core must be returned to the exporter or destroyed (and as a best practice proof of such destruction provided). The second way is a return of an article that is either defective or in need of servicing or repair (i.e., the part has been found “unacceptable”).  Upon servicing the part is then returned under exception RPL.

Luckily for us, license exception RPL is permissible for use with “600 Series” articles! Use of this exception can greatly increase an exporter’s ability to service its customer.

Such use is not without limitations though.  Recall again that “600 Series” ECCNs occupy a special in-between zone of export control.  Use of exception RPL is therefore limited with respect to certain countries.  No “600 Series” ECCN article may be exported under license exception RPL to any destination identified in Country Group D:5.  Country Group D:5 countries are those with which the U.S. maintains an arms embargo, and can be located on the Country Group List, Supplement 1 to 15 C.F.R. Part 740.  Although not a grand slam, RPL is a valuable license exception for “600 Series” articles.

Two other less-commonly used exceptions may also be available for export of “600 Series” articles.

The first is Shipments of Limited Value (LVS).  LVS is a list based exception like CIV and therefore appears on the CCL in the ECCN information.  Both 9A610 and 9A619 are limited to shipments valued at less than $1500. This low dollar value makes exception LVS of limited practical application to “600 Series” articles.  It is also forbidden to split or otherwise manipulate or structure a transaction to attempt to evade license requirements using LVS.  Those seeking to use exception LVS should consult their export compliance department.

The second less common exception is exception Strategic Trade Authorization (STA). STA is best suited to those exporters with a regular and recurring shipment of articles requiring a license.  Due to the complexity of exception STA, we will be addressing that exception as it relates to “600 Series” ECCNs in a subsequent blog post.

Available license exceptions are clearly limited in the case of parts listed as ECCN 9A610 or 9A619.  Of the three primary exceptions—CIV, RPL, and AVS—only RPL is permissible, and even then with restrictions.  Knowing the available license exceptions, however, can both help you service your customer and ensure you remain compliant.

The Export Administration Regulations provide a handy cheat sheet listing the license exceptions generally applicable to “600 Series” articles at 15 C.F.R. § 740.2(a)(13).  Unless you are already familiar with the regulations, however, this reference should be used only as a starting point in your inquiry.  You should consult your export compliance officer or legal counsel to ensure full compliance with the regulations when using more complicated license exceptions.

2 Responses to Expediting Export: License Exceptions and “600 Series” ECCNs.

  1. Pingback: Expediting Export: “600 Series” Articles and License Exception STA | ASA Web Log

  2. Pingback: Expediting Export: MT Controlled License Exceptions | ASA Web Log

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