Destination Control Statement

Lately, we’ve been getting a lot of questions about the Destination Control Statement (DCS).  We emphasized the need to place this on commercial invoices subject to export when the rules were modified earlier this year.

The modification harmonized the different Destination Control Statements required by the State Department (for ITAR-controlled exports) and by the Commerce Department (for all other exports).  Now, they both require the same language.  The DCS requirement, however, existed before the recent change.  So the DCS is not a new thing.

The DCS provisions require that exporters include a warning statement on their commercial  invoices (note that the old regulations required the information on other places – so the new regulation reasonably limits our responsibilities).  The DCS statement should look like this:

“These items are controlled by the U.S. Government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations”

The new requirement to place the modified DCS on commercial  invoices went “live” as of November 15.  The regulations requires the DCS on each commercial invoice whenever an items on the Commerce Control List (CCL) is exported in tangible form.  The regulations also require the DCS on each commercial invoice for an ITAR-controlled export.

This does not create any new licensing obligations.  Look at the language at the end of the DCS.  It limits your customer’s resale to situations where they first obtain a license or “or as otherwise authorized by U.S. law and regulations.”  So if no license is required for the transaction in question, then this does not impose a new license requirement.  If a licensing exception is available for use, then this DCS does not change that, either.  And if it was illegal to perform a transaction before the DCS, then that same transaction continues to be illegal after the DCS.

There are some limited exceptions where the DCS is not required.  The DCS is not required on Commerce-Department-regulated exports when the export is shipped under the BAG (baggage) exception or the GFT (gifts and humanitarian aid) exception.  It also does not apply when the article shipped under EAR99.  These exceptions typically do not apply to aircraft parts exports, so exports of aircraft parts will typically include the DCS.


Summary: Placing the DCS on the commercial invoice

For BIS-regulated items on a Commerce Control List (CCL), add this information to the commercial invoice:

  • The DCS – 15 C.F.R. § 758.6
  • Also add the ECCN for any 9×515 or “600 series” item (15 C.F.R. § 758.6(a)(2))

For DDTC-regulated items from the United States Munitions List (USML), add this information to the commercial invoice:

  • Country of ultimate destination (22 C.F.R. § 123.9(b)(1)(i))
  • End-user (22 C.F.R. § 123.9(b)(1)(ii))
  • License or other approval number or exemption citation (22 C.F.R. § 123.9(b)(1)(iii))
  • The DCS (22 C.F.R. § 123.9(b)(1)(iv))

 

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About Jason Dickstein
Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. He represents several aviation trade associations, including the Aviation Suppliers Association, the Aircraft Electronics Association, the Aircraft Fleet Recycling Association and the Modification and Replacement Parts Association.

One Response to Destination Control Statement

  1. Pingback: m Tips for Repair Stations with Foreign Clients - Aviation Maintenance Magazine

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