Compliance for Controlled Encryption Exports

October 24, 2013

AES Broadcast #2013085

On October 15, 2013, the Department of Commerce’s Bureau of Industry and Security (BIS) added a new edit in the Automated Export System (AES) to prevent exporters and freight forwarders (AES Filers) from inadvertently reporting electronic export information (EEI) on items of Encryption Commodities, Software and Technology under Export Control Classification Numbers (ECCNs) 5A002, 5B002, 5D002 and 5E002 under the designation of “No License Required” (NLR) or AES license code C33.

Effective November 15, 2013, AES will expand this edit to license code C32. These two new edits will generate a fatal error “ECCN MUST BE FROM APPROVED LIST” because encryption items specifically classified under ECCNs 5A002, 5B002, 5D002 or 5E002 are subject to a license requirement (requires a license or license exception) for National Security (NS) reasons to all destinations except Canada.

AES Filers encountering this fatal error for the reason above should verify that the item is classified correctly and confirm that the correct AES license code was reported. It is common that filers are inadvertently reporting NLR instead of ENC (or AES license code C50). Information on the use of license exception ENC can be found under the EAR §740.17.

AES Filers encountering this fatal error when the export is destined to Canada are reminded that NLR exports to Canada regardless of value are exempt from filing in AES under the U.S. Census Bureau’s Foreign Trade Regulations §30.36. BIS will send a “friendly reminder” letter to these filers reminding them that AES reporting is not required.

Impacted AES Filers should be aware of this edit and make changes, if necessary to internal processes to ensure that your company is in compliance with the EAR. Failure to do so could result in an increase in AES fatal errors and the potential for export violations.

For further information or questions regarding this change, please contact BIS’s Office of Technology Evaluation at (202) 482-4933 or via email at ECR_AES@bis.doc.gov

For further information or questions regarding the reporting of License Codes in AES, please contact the U.S. Census Bureau’s AES Branch at (800) 549-0595 (option 1) or via email at askaes@census.gov

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