The answers can be found in the readings, and the links in the attached files. I want you to take your time and utilize the resources available to you for this these questions. Answer in complete sent
Overview of Export Regulation
Our two primary objectives in this particular segment are to help you:
Achieve a general understanding of U.S. export laws and regulations in the broader context of world trade, and what most nations typically do;
Become aware of all the USG agencies that regulate exports, and particularly with the functions and responsibilities of those with the greatest operational impact on U.S. exports:
Bureau of Industry and Security
U.S. Department of Commerce
International Trade Management Division, Bureau of the Census
U.S. Directorate of Defense Trade Controls
Department of State
U.S. Bureau of Customs and Border Protection
This section is also designed as a foundation for our subsequent coverage on:
US Exports Subject to Controls, Licensing—Covers the determination whether a contemplated export requires an export license or is subject to other export controls, restrictions or reporting requirements (other than an SED).
Export Clearance (Requirements & Procedures at Time of Export)—Provides in-depth coverage of export responsibilities and operational procedures at the time of actual export, including the requirement for a U.S. shippers export declaration (SED), the various forms this may take, and numerous specific information and processing issues using both the paper form and automated (AES) procedures.
Other US Export Requirements/Procedures - Covers operational procedures for cargo exported under various types of CBP control (i.e., cargo under bond) and an overview of goods subject to state laws affecting their exportation.
Forwarder Responsibility for Export Compliance —Provides freight forwarders and other transportation intermediaries with practical tips and recommended procedures to help assure export compliance despite intense operational pressure to move cargo. Coverage includes how to identify and deal with suspicious exporters and how to respond to government inquiries, investigations and enforcement actions.
The USC and CFR
There are a variety of U.S. laws and federal agency publications that communicate prohibitions, restrictions and procedural requirements that apply to the export of goods and services, from the United States. This body of law and regulation is published in two very extensive sets of documents known as the "USC" and the "CFR."
The U.S. Congress passes legislation ("bills") which, upon signature by the President become law. The provisions of each law revise or are added to the published body of U.S. law known as the United States Code ("USC"). The Congress is responsible for publishing the USC The United States Code (abbreviated "USC") is the legislated law of the United States, consolidated and codified by subject matter into 50 "titles." The Office of the Law Revision Counsel of the U.S. House of Representatives prepares and publishes the United States Code.
The USC does not include:
Regulations issued by executive branch agencies and independent agencies needed to implement the USC
Decisions of the Federal courts
Treaties
Laws enacted by state or local governments
Implementation and enforcement of the "law", as documented in the USC, is the responsibility of a designated Executive Branch agency of government, or in a few cases independent federal agencies such as the FMC (Federal Maritime Commission).
In order to implement law, the responsible federal agency must issue or revise its regulations so as to translate the requirements of the law into regulatory policy, procedures, clarifications, etc., so that those who must comply with law (the regulated parties) have practical guidelines and procedures to follow. These regulations are published in the Code of Federal Regulations The CFR is divided into 50 "titles" that align on the USC titles that such agency regulations implement.
Each title is divided into chapters, which generally align on the federal agencies responsible for areas of regulation, and usually bear the name of the issuing agency. Each chapter is further subdivided into "parts" that cover specific regulatory areas. Large parts may be subdivided into subparts. All parts are organized in sections, and most CFR citations consist of only the title number and section to the needed level of detail. For example, 15 CFR 30.1(a), Title 15 being "Commerce," Section 30 being the Foreign Trade Regulations, and 30.1(a) being the first segment of these regulations.
Changes to the CFR must be published in the Federal Register before they can take effect, beginning with a notice of proposed regulations followed by a public comment period, and then concluding with publication of final regulations with a subsequent effective date, usually 90 days following final publication.
If you take the time to read the USC citation on which particular CFR sections are based, which are footnoted throughout the CFR, you will often see that a paragraph from the USC translates into a page or more of implementing regulations, and often in multiple different sections of an agency's regulations, and sometimes in the regulations of more than one agency.
Why they are important to you
The United States actively promotes most exports to all but a very few countries. However, there are certain products and countries for which exports are prohibited or severely restricted, and a growing number of persons, companies and organizations that are subject to sanctions by various agencies which effectively bar any commerce or exchange of funds, whether domestic or international.
Exporters, freight forwarders and indeed any "U.S person" are subject to the export administration regulations and all other U.S. laws and regulations affecting exports. Transportation intermediaries are additionally subject to direct licensing and regulation by the industry specific agencies such as the Federal Maritime Commission. If this myriad of regulations is not understood and fully complied with, violations will occur which may result in significant fines, loss of export privileges and even criminal prosecution.
As you will see in the Export violations on the BIS website, exporters and forwarders (including some familiar names) have, in fact, been cited and paid significant fines for export violations. A few exporters and forwarders have also served significant prison terms for export violations. Thus, it is important that every person responsible for deciding on or arranging a U.S. export be properly trained.
| Many violations, particularly on the part of forwarders, consist of "acting with knowledge" that an export violation is about to occur, and proceeding to process the export anyway. |
I recommend you browse through both the USC and CFR in order to have a general idea of how they are structured. For example, you will see that USC Title 19, captioned "Customs Duties," provides the legal authority and direction for CFR Title 19, also captioned "Customs Duties." Similarly, USC Title 22, "Foreign Relations and Intercourse" provides the legal authority and direction for CFR Title 22, "Foreign Relations."
Within the USC Title Sections, you will see Sub-parts which encompass U.S. legislation that has been signed into law by the President, updated as needed based on subsequent legislation. The corresponding CFR titles represent the specific administration and enforcement rules by the executive branch or independent federal agency(s) responsible for implementation of the laws within their purview.
Interpreting the USC is often challenging, requiring both an understanding of what is obvious from the language therein, as well as the legislative history and how appellate court decisions may have influenced application of the law. This is the domain of the legal profession (attorneys.) Understanding and applying the CFRs represents somewhat less of a challenge because these are written to be understood by regulated parties, an audience much wider than attorneys.
Publications
The following are key U.S. government publications (CFR's which play a major role in controlling and processing U.S. exports. You will find these refer to, quoted and linked to throughout our coverage of U.S. export requirements.
Export Administration Regulations (EAR) - these consist of 15 CFR 730-774. The EAR is published by the BIS, an agency under the US Department of Commerce (DOC), and serves as the basis for export controls administered by the U.S. Department of Commerce—that is, what can be freely exported vs. what requires an Export License. These regulations also direct exporters to controls administered by other federal agencies based on the type of product (e.g., military items, nuclear fuel and power generating equipment) and/or based on the party or country of destination.
Information about BIS, the EAR and U.S. export controls is available at www.bis.doc.gov/ (Links to an external site.) (Links to an external site.)Links to an external site.International Traffic in Arms Regulation– Also referred to as the "ITAR," these consist of 22 CFR 120-128. The ITAR is published by the U.S Directorate of Defense Trade Controls (DDTC), under the State Department, and controls the export of military items, as defined by the U.S. Munitions List (USML).
Information about the DDTC, ITAR and U.S. export controls of military items is available at www.pmdtc.org/ (Links to an external site.) (Links to an external site.)Links to an external site.Foreign Assets Control Regulations - Also referred to as "FACR," these consist of 31 CFR parts 500-590. These address a variety of measures to restrict business with and follow the funds and other financial assets of persons, organizations and countries which the U.S. has sanctions in place against. These sanctions and export controls are administered by the U.S Office of Foreign Assets Control (OFAC).
Foreign Trade Regulations - Also referred to as the "FTR," they are listed in 15 CFR 30. These regulations establish the requirement for exporters to report most exports to the USG via transmitting Electronic Export Information (EEI) through the Automated Export System (AES). The FTR is published by the Foreign Trade Division of the Bureau of Census. The FTR is primarily concerned with the gathering of U.S. trade statistics which is a Census responsibility. However, EEI is also used by CBP, BIS and other agencies for export control enforcement purposes.
Information about the FTR and AES systems is available at www.census.gov/foreign-trade/www/ (Links to an external site.) (Links to an external site.)Links to an external site.Schedule B - From the last module, this publication provides the reporting classification codes that the Bureau of Census uses to gather and report U.S. export trade statistics. The Schedule B utilizes the Harmonized Tariff System ("HTS") for the first six digits of the reporting code, then adds 4 U.S.-only digits similar to the HTSUS, which may also be used for EEI (export declaration) purposes for most, but not all, products.
Customs Regulations - These are contained in CFR Title 19, captioned "Customs Duties." While most of these regulations address the importation of goods into the U.S., 19 CFR 192, captioned "Export Control," addresses CBP responsibilities over goods being exported and operation of the AES system.
These are the CFRs that together have the most encompassing effect on U.S. exports, but they are by no means all the regulations which may affect particular exports. Other agencies that regulate specialized types of products may also regulate the export of such products.
All CFR's may be accessed on line at the GPO Access website, eCFR. (Links to an external site.) (Links to an external site.)Links to an external site. Regulations by specific agencies may also be available on the agency's website.
| The EAR, ITAR, FTR, Schedule B and other applicable U.S. regulations contain significant information not included here. Direct referral to these publications is required for their proper understanding, especially when seeking information with respect to actual export transactions and situations. Specific Reasons for Export Controls
Specific Reasons for Control The Commerce Control List (CCL) (15 CFR 774, Supplement 1) identifies a specific reason for control. Per 15 CFR 738.2(d), the reasons for control are:
Items controlled within a particular Export Control Classification Number (ECCN) may be regulated for more than one reason. Explanation of each reason for control is found in the EAR, under 15 CFR 742. All exports under the jurisdiction of the BIS are controlled for one or more of these reasons, based on the high-level control objectives. (national security, foreign policy, nonproliferation and short supply).
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