New Harmonized EAR and ITAR Destination Control Statement Requirements Take Effect Today
Today is the effective date of the final BIS and DDTC rules implementing the new harmonized EAR and ITAR Destination Control Statement (DCS) and making changes to other shipping requirements. The text of the final rules published by DDTC and BIS on August 17, 2017 can be found here (ITAR) and here (EAR).
As a result, the following language must now be included on the Commercial Invoice associated with items on the Commerce Control List (CCL) or US Munitions List (USML) that are exported from the United States:
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.
This new DCS language only has to be included on the Commercial Invoice and no longer needs to be included on the shipping documents, such as the bill of lading or airwaybill, as in the past. While we have had a number of clients express concerns that this language exceeds the size fo the current DCS field on invoices generated in their ERP system, BIS and DDTC have stated that this language cannot be shortened or modified.
While this language only has to be included on the commercial invoices for items actually on the CCL (i.e., those items with an ECCN and not classified as EAR99), BIS has stated that it is permissible to include this DCS language on commercial invoices associated with the export of EAR99 goods, if the exporter chooses to do so.
In addition to including the new DCS language on the commercial invoices, the following additional requirements also take effect today:
While this language only has to be included on the commercial invoices for items actually on the CCL (i.e., those items with an ECCN and not classified as EAR99), BIS has stated that it is permissible to include this DCS language on commercial invoices associated with the export of EAR99 goods, if the exporter chooses to do so.
In addition to including the new DCS language on the commercial invoices, the following additional requirements also take effect today:
Exports of ITAR controlled goods on the USML – New section 123.9 of the ITAR requires the commercial invoice associated with the shipment of ITAR controlled defense articles to include the following additional information:
- name of country of ultimate destination;
- name of the end-user; and
- license or other approval number or exemption citation
Exports of "600" series and 9x515 Controlled Goods – The BIS final rule also modifies section 758.6 of the EAR to require the commercial invoice to include the ECCN(s) for any goods that are classified in the "600 Series" on the CCL (military parts and components) or items that are classified in ECCNs 9x515 (i.e., ECCNs 9A515 and 9B515 covering spacecraft and commercial satellites) that are exported from the US. The ECCN of other items not included in these classifications does not have to be included on the Commercial Invoice, but it is useful to include them.
The purpose of the DCS and other informational requirements "is to ensure that [the export control information regarding the item] reaches the ultimate consignee and/or end user(s) that will be in a position to make a subsequent reexport or transfer (in-country), so they are aware the item in question is subject to U.S. reexport controls."
It is important to note that the EAR does not require the DCS to be included on the Commercial Invoice associated with the reexport or transfer of US export-controlled items from one country to another.
However, section 123.9 of the ITAR requires the DCS to be included on the commercial invoice when ITAR-controlled are "transferred".
The purpose of the DCS and other informational requirements "is to ensure that [the export control information regarding the item] reaches the ultimate consignee and/or end user(s) that will be in a position to make a subsequent reexport or transfer (in-country), so they are aware the item in question is subject to U.S. reexport controls."
It is important to note that the EAR does not require the DCS to be included on the Commercial Invoice associated with the reexport or transfer of US export-controlled items from one country to another.
However, section 123.9 of the ITAR requires the DCS to be included on the commercial invoice when ITAR-controlled are "transferred".
|posted by Douglas N. Jacobson| Permalink 
