Nearly all goods and services exported from the United States are subject to export classification. Goods must be assigned export control classification numbers (ECCNs) which are reported to the U.S. Census Bureau for tracking. Failing to properly classify exported goods could mean trouble.
First-time exporters often find the classification system complicated, according to Ohio-based Vigilant Global Trade Services. Vigilant provides export classification services designed to mitigate classification mistakes among experienced and first-time exporters alike.
Vigilant advises that first-time exporters can determine ECCNs in one of three ways:
1. Assign the Number In-House
The first option is to assign the number in-house. Almost all goods requiring a special export license and an ECCN are found on the government’s Commerce Control List (CCL). The first-time exporter can look through that list to find the appropriate number.
Unfortunately, this process is not as easy as it sounds. The CCL divides goods into ten different categories, each of which is identified by the first four digits of the subsequent ECCN. Choosing the right category often requires having a solid technical understanding of the product being exported. Knowledge of product structure and format also helps.
The CCL does include an index that can help exporters navigate the list more efficiently. Still, first-time exporters should expect a steep learning curve. Getting it right might require reviewing numerous classifications to find the one that most closely matches the exporter’s understanding of the goods at hand.
2. Contact the Manufacturer
In cases where the exporter is not the originator of the goods in question, contacting the original manufacturer may solve the problem very quickly. The manufacturer should already have an ECCN for any product that has been exported previously. However, there are no guarantees.
Some manufacturers never actually export their own goods. They sell them to domestic customers who may, or may not, export them. Additionally, manufacturers who have not exported a particular product in the recent past may have an old, outdated number that no longer appears on the CCL.
3. Request a Number from the BIS
The U.S. Census Bureau administers export classification through the Bureau of Industry and Security (BIS). First-time exporters unable to determine a product’s ECCN using either of the two previous methods can request a number from the BIS.
Note that requests can only be made online by way of an electronic Simplified Network Application Process – Redesign (SNAP-R) form. It is also important to note that exporters must establish an account and obtain a Company Identification Number (CIM) in order to submit a request.
A Note About EAR99 Goods
It is possible to exhaust all three options and still come up empty. In such cases, it is a pretty safe bet that the exporter is dealing with EAR99 goods. These are goods that are either:
- Subject to Export Administration Regulations (DAR), but for which no ECCN has been issued; or
- Can be exported under the No License Required (NLR) designation.
In both cases, the NLR exemption can be claimed to export such goods without an ECCN. However, three additional conditions must be met:
- Goods cannot be shipped to a sanctioned destination.
- Goods cannot be shipped to a sanctioned person, sanctioned entity, or prohibited end user.
- Goods must not have a specific end use subject to higher controls.
If you are a new exporter and all of this is confusing to you, welcome aboard. The complicated nature of satisfying global trade regulations is the very reason export classification services exist. They might be worth paying for until you become more comfortable with the ECCN system.