Expediting Export: MT Controlled License Exceptions

We often write in this space about various export license exceptions that can help distributors better service their customers–particularly customers in AOG situations when waiting for an export license approval simply isn’t an option.

In just the past couple weeks, we have had several members ask questions related to the export of avionics controlled for Missile Technology reasons (MT).  Generally, articles controlled for reason MT are not eligible for export license exceptions.  Part 740 (License Exceptions) of the Export Administration Regulations explains that “[y]ou may not use any License Exception if any one or more of the following apply: . . . The item is controlled for missile technology (MT) reasons . . . .” (15 C.F.R. § 740.2(a)(5)(i)).  Generally, then, it is not possible to use export license exceptions to export articles controlled for MT reasons; many businesses simply have a blanket prohibition against using license exceptions for MT articles to avoid running afoul of this restriction.  Obviously this is not compatible with AOG service.

However, the restriction on use of license exceptions for MT-controlled articles then goes on to carve out several specific ECCNs; exceptions to the restriction on exceptions, if you will.  It is this carve-out that can serve to benefit distributors dealing in navigation and avionics equipment.

After stating that items controlled for MT reasons are not eligible for any license exception, 15 C.F.R. § 740.2(a)(5)(i) goes on to offer the following allowances:

“the items described in ECCNs 6A008, 7A001, 7A002, 7A004, 7A101, 7A102, 7A103, 7A104, 7A105, 7B001, 7D001, 7D002, 7D003, 7D101, 7D102, 7E003, 7E101 or 9A515, may be exported as part of a spacecraft, manned aircraft, land vehicle or marine vehicle or in quantities appropriate for replacement parts for such applications under §740.9(a)(4) (License Exception TMP for kits consisting of replacement parts), §740.10 (License Exception RPL), §740.13 (License Exception TSU), or §740.15(b) (License Exception AVS for equipment and spare parts for permanent use on a vessel, aircraft or spacecraft).”

Obviously this is very useful for navigation equipment and avionics exporters.

A quick perusal of the ECCNs listed reveals that many of them control articles such as accelerometers, angular rate sensors, gyros, and nav instruments.

Note, however, that ECCN 7A003, dealing with certain inertial measurement units and systems, is NOT included in the carve out, and therefore not eligible for any export license exception.

License exceptions RPL and AVS are particularly valuable exceptions for the aviation industry, and we spend time discussing them in depth during ASA workshops. If you have determined your MT-controlled article fits one of the above-mentioned ECCNs, you should be sure you understand the requirements of each of those exceptions before you use them.  When you are sure of your ECCN and your use of the appropriate license exception, your company will be able to rapidly service your AOG customers’ needs.

Finally, always remember to consult an export compliance attorney if you have questions.

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