EAR99 Explained: Understanding Its Importance in U.S. Export Controls

The term EAR99 indicates that an item (could be a physical product, software, or technology) has been subjected to export classification analysis and subsequently accorded the lowest level of concern. Critically, items designated as EAR99 can be exported under the No License Required (NLR) authorization to all countries except those subject to comprehensive sanctions or embargo (e.g., Cuba, Iran, North Korea, Syria, among others).

Understanding EAR99: Exploring the Commerce Control List

The Commerce Control List (CCL), contained within the Export Administration Regulations (EAR), is designed to identify commercial items that would require an export license prior to export. The CCL primarily uses five-digit, alphanumeric codes, such as 5A001, called Export Control Classification Numbers (ECCNs). The first character (a number) represents the category, the second is a letter indicating the product group, followed by a 3-digit numbering system that enables great specificity. The notable exception is EAR99, which is a bucket category for all those items that are not described on the CCL and thus have this designation that signals the lowest level of concern.

The Sequence of Export Classification Resulting in EAR99 Determinations

Export classification is the systematic analysis that determines whether an item (physical product/part, software, technology, or service) is subject to U.S. export controls. Following the Order of Review, you first compare the item against the relevant sections of the U.S. Munitions List (USML). If your item is not described on the USML, you look next to the pertinent parts of the CCL. If the item is also not described on the CCL, it receives the lowest level classification, denoted as EAR99. This is an important determination since it dramatically simplifies the export compliance requirements.

How EAR99 Items Are Treated in SNAP-R

SNAP-R is the electronic licensing system that is administered by the Bureau of Industry and Security (BIS) at the Department of Commerce. Once they set up their account, companies use SNAP-R to apply for, and manage, their export licenses for dual-use items under the auspices of the EAR. The critical aspect of an EAR99 classification is that it signifies "No License Required" (NLR) in most cases. It doesn’t remove all restrictions, but NLR is a significant simplification for exporters.

Assessing Destinations and Compliance: The Impact on EAR99 Classifications Beyond EAR99:

While an EAR99 classification provides the accompanying designation of NLR, that is, No License Required, it doesn’t remove all possible restrictions. Also important is the destination country, as well as the identified end user, which could present obstacles in the form of sanctions, embargoes, and denied party designations. While export controls focus mostly on the items/products being transferred, there are equally serious considerations about the countries, the companies, and the individuals involved in the transactions. Sanctions, embargoes, and denied parties are increasingly prevalent in recent years, forcing companies to screen all the stakeholders to their transactions to avoid inadvertent compliance violations.

Utilizing EAR99 Classifications for Global Trade Success

Understanding the EAR99 classification is pivotal for companies engaged in global trade, as it determines whether goods, software, and technology can be exported without extensive licensing requirements and possible delays. It doesn’t remove the restricted party screening requirements, since they focus on the criteria of countries, companies, and individuals, but the EAR99 designation still conveys a significant benefit. Navigating these complications requires experience and a deep understanding of the U.S. export regulations.

Need assistance with classifications, screening, or other export control challenges? Contact CTP today for expert guidance to streamline your compliance processes and enhance your global trade operations.