15 CFR § 738.4 - Determining whether a license is required.

§ 738.4 Determining whether a license is required.

(a) Using the CCL and the Country Chart—(1) Overview. Once you have determined that your item is classified under a specific ECCN, you must use information contained in the “License Requirements” section of that ECCN in combination with the Country Chart to decide whether a license is required. Note that not all license requirements set forth under the “License Requirements” section of an ECCN refer you to the Commerce Country Chart, but in some cases this section will contain references to a specific section in the EAR for license requirements. In such cases, this section would not apply.

(2) License decision making process. The following decision making process must be followed in order to determine whether a license is required to export or reexport a particular item to a specific destination:

(i) Examine the appropriate ECCN in the CCL. Is the item you intend to export or reexport controlled for a single Reason for Control?

(A) If yes, identify the single Reason for Control and the relevant Country Chart column identifier (e.g., CB Column 1).

(B) If no, identify the Country Chart column identifier for each applicable Reason for Control (e.g., NS Column 1, NP Column 1, etc.).

(ii) Review the Country Chart. With each of the applicable Country Chart Column identifiers noted, turn to the Country Chart (supplement no. 1 to part 738). Locate the correct Country Chart column identifier on the diagonal headings, and determine whether an “X” is marked in the cell next to the country in question for each Country Chart column identified in the applicable ECCN. If your item is subject to more than one reason for control, repeat this step using each unique Country Chart column identifier.

(A) If yes, a license application must be submitted based on the particular reason for control and destination, unless a License Exception applies. If “Yes” is noted next to any of the listed License Exceptions, you should consult part 740 of the EAR to determine whether you can use any of the available ECCN-driven License Exceptions to effect your shipment, rather than applying for a license. Each affirmative license requirement must be overcome by a License Exception. If you are unable to qualify for a License Exception based on each license requirement noted on the Country Chart, you must apply for a license. Note that other License Exceptions, not related to the CCL, may also apply to your transaction (See part 740 of the EAR).

(B) If no, a license is not required based on the particular Reason for Control and destination. Provided that General Prohibitions Four through Ten do not apply to your proposed transaction and the License Requirement section does not refer you to any other part of the EAR to determine license requirements. For example, any applicable encryption classification requirements described in § 740.17(b) of the EAR must be met for certain mass market encryption items to affect your shipment using the symbol “NLR.” Proceed to parts 758 and 762 of the EAR for information on export clearance procedures and recordkeeping requirements. Note that although you may stop after determining a license is required based on the first Reason for Control, it is best to work through each applicable Reason for Control. A full analysis of every possible licensing requirement based on each applicable Reason for Control is required to determine the most advantageous License Exception available for your particular transaction and, if a license is required, ascertain the scope of review conducted by BIS on your license application.

(b) Sample analysis using the CCL and Country Chart—(1) Scope. The following sample entry and related analysis is provided to illustrate the type of thought process you must complete in order to determine whether a license is required to export or reexport a particular item to a specific destination using the CCL in combination with the Country Chart.

(2) Sample CCL entry.

2A000: Entry heading.
License Requirements
Reason for Control: NS, NP, AT
Control(s) Country chart
(see Supp. No. 1 to part 738)
NS applies to entire entry NS Column 2.
NP applies to 2A000.b entire entry NP Column 1.
AT applies to entire entry AT Column 1.
List Based License Exceptions (See Part 740 for a Description of all License Exceptions)
LVS: $5,000
GBS: Yes
List of Items Controlled
Related Definition: N/A
Related Controls: N/A

a. Having x.

b. Having z.

(3) Sample analysis. After consulting the CCL, I determine my item, valued at $10,000, is classified under ECCN 2A000.a. I read that the entire entry is controlled for national security, and anti-terrorism reasons. Because my item is classified under paragraph .a, and not .b, I understand that though nuclear nonproliferation controls apply to a portion of the entry, they do not apply to my item. I note that the appropriate Country Chart column identifiers are NS Column 2 and AT Column 1. Turning to the Country Chart, I locate my specific destination, Chad, and see that an “X” appears in the NS Column 2 cell for Chad, but not in the AT Column 1 cell. I understand that a license is required, unless my transaction qualifies for a License Exception. From the License Exception LVS value listed in the entry, I know immediately that my proposed transaction exceeds the value limitation associated with LVS. Noting that License Exception GBS is “Yes” for this entry, I turn to part 740 of the EAR to review the provisions related to use of GBS.

[61 FR 12756, Mar. 25, 1996, as amended at 67 FR 38861, June 6, 2002; 70 FR 54628, Sept. 16, 2005; 73 FR 57503, Oct. 3, 2008; 74 FR 52883, Oct. 15, 2009; 75 FR 36490, June 25, 2010; 78 FR 61901, Oct. 4, 2013; 79 FR 32623, June 5, 2014; 81 FR 64668, Sept. 20, 2016; 83 FR 38020, Aug. 3, 2018; 86 FR 54811, Oct. 5, 2021]