Have you ever wondered why moving American-made products from one country to another can be so complicated? If you’re involved in international trade, you’ve probably encountered the maze of U.S. re-export regulations.
Whether you’re a small business owner importing U.S. components or a multinational corporation dealing with complex supply chains, understanding re-export rules is crucial for staying compliant and avoiding costly penalties. if you already have U.S. export license, everything will be much easier for you.

What Is Re-Export Meaning in Customs?

Let’s start with the basics. According to the U.S. Bureau of Industry and Security, a re-export is simply the shipment or transmission of an item subject to Export Administration Regulations (EAR) from one foreign country to another foreign country.

Imagine you’re running a manufacturing company in Germany, and you import American-made computer chips. If you then want to send those chips (or products containing them) to your facility in Japan, that’s a re-export. You’re taking something of U.S. origin and moving it from one country (Germany) to another (Japan).

But here’s what makes it interesting – re-exports don’t just apply to physical goods. They also cover:

• Technology transfers
• Software releases to foreign nationals in other countries
• Digital transmissions of controlled information

Important to remember: If an item needed an export license to leave the U.S. originally, it will still need authorization to be re-exported to another country. The regulations follow the product wherever it goes!

Discover more: Documents Required for Import Customs Clearance in USA

What Is the Role of EAR vs. ITAR in U.S. Re-Export Regulations?

When dealing with U.S. re-export regulations, you’ll encounter two main regulatory frameworks. Let’s break them down:

Regulation	Full Name	Governing Agency	What It Covers	Example Items
EAR	Export Administration Regulations	Bureau of Industry and Security (BIS)	Dual-use and commercial goods	Computer processors, telecommunications equipment, certain software
ITAR	International Traffic in Arms Regulations	Directorate of Defense Trade Controls (DDTC)	Military and defense items	Weapons, military aircraft, certain encryption technology

The EAR covers the majority of commercial products and dual-use items (things that can be used for both civilian and military purposes). If your business deals with American technology, electronics, or software, you’re likely dealing with EAR-controlled items.
What is a control list? how does it affect your re-export or export process? Every item under EAR gets an Export Control Classification Number (ECCN) or falls under the general category EAR99. Think of this as a product’s “regulatory passport” – it tells you exactly what rules apply to that specific item.

ITAR is much stricter and covers items on the U.S. Munitions List (USML). If you’re dealing with anything remotely related to defense or military applications, ITAR likely applies. Here’s something crucial: if you incorporate even a small ITAR-controlled component into your product, your entire finished product becomes subject to ITAR regulations!

What is the De Minimis Rule?

The De Minimis rule is like a threshold that determines whether your foreign-made product containing U.S. parts falls under U.S. export control regulations. It’s based on the percentage value of controlled U.S. content in your finished product.
Here’s how it works:

Destination Countries	De Minimis Threshold	What This Means
Group D:1 Countries (Cuba, North Korea, Syria, Sudan, Iran)	10%	If controlled U.S. content exceeds 10% of product value, entire product becomes subject to EAR
All Other Countries	25%	If controlled U.S. content exceeds 25% of product value, entire product becomes subject to EAR

A Re-Export Example of De Minimis Rule?

Let’s say you’re manufacturing smartphones in South Korea, and you use American-made processors worth $50 in a phone that costs $200 to produce. The U.S. content represents 25% of your product’s value.

• If you’re shipping to European markets: You’re right at the 25% threshold, so your product becomes subject to EAR
• If you’re shipping to Iran: You’ve exceeded the 10% threshold, so EAR applies

What Happens When You Exceed the De Minimis Threshold?

So, what do you do if your product exceeds these thresholds? Don’t panic! Here’s your step-by-step action plan:

Step 1: Classify Your Product

First, you need to determine the proper classification for your foreign-made product. This involves understanding what category your finished product falls into under the export control system.

Step 2: Determine the ECCN

Find the correct Export Control Classification Number for your product. This can be complex, but there are software tools available to help simplify this process.

Step 3: Check for License Exceptions

Look into whether any license exceptions apply to your specific situation. These exceptions can save you time and money by allowing certain exports without a full license.

Step 4: Obtain Authorization if Necessary

If no exceptions apply, you’ll need to get proper authorization (a license) before re-exporting your product.

When Do You Need a Re-Export License?

The million-dollar question: when exactly do you need permission to re-export? Here are the key factors:
Prior License Requirement: If the original export from the U.S. required a license, the re-export will too. It’s that simple.

For products containing U.S. components, you need to:

1. Classify the U.S. origin parts according to EAR
2. Determine if these parts are controlled content
3. Calculate if the controlled U.S. content exceeds the De Minimis thresholds

Destination Matters: Some countries have stricter requirements than others. Always check the specific rules for your destination country.

What Is the Process of Re-Exporting?

Understanding the re-exporting process is essential for anyone involved in international trade. Here’s how it typically works:

Step	Description	Example
1. Initial Import	Goods are imported from Country B to Country A	Electronics imported from Japan to Germany
2. Processing/Testing	Items may undergo testing, modification, or temporary use in Country A	Quality testing of electronic components
3. Re-Export	Goods are then exported from Country A to Country C	Shipping tested components from Germany to Brazil

The 8 Key Steps for Successful Re-Exporting

Successfully navigating re-export requirements involves a systematic approach. Here are the essential steps every business must follow:

1- Classification of Goods

The first and most crucial step is properly classifying your goods using the Commerce Control List (CCL). This isn’t just paperwork – it’s the foundation of legal compliance.
Every US item must be compared against the CCL through a technical analysis. If your item’s specifications match descriptions in the CCL, it gets assigned an Export Control Classification Number (ECCN). If not, it’s classified as EAR99 (unlisted bulk goods).

Pro tip: Items listed in Annex I of the EU Dual-Use Regulation No. 2021/821 are also found in the CCL, which can help streamline your classification process.

2- Screening Against Restricted Lists

Before you can ship anything, you must screen your business partners against several BIS-maintained lists. This isn’t optional – it’s a legal requirement that can save you from serious violations.

List Name	Purpose	Consequence of Violation
Denied Persons List (DPL)	Lists individuals/companies banned from US item trade	Complete trade prohibition
Entity List (EL)	Organizations requiring special licenses	License required for trade
Unverified List (UL)	Parties requiring extra caution	Enhanced due diligence needed
Military End-User List (MEUL)	Military entities from specific countries	License required for certain ECCNs

3- Critical End-Use and Destination Checks

This step requires you to examine whether your goods might be used for prohibited purposes. You need to check if items are destined for:

• Military end-uses
• Human rights violations
• Countries under total embargo (Iran, North Korea, Syria, Cuba)

For ECCN-classified items: Use the Commerce Country Chart (CCC) to determine if your destination requires a license based on the item’s “Reasons for Control.”

4- General Prohibitions

All US items – whether ECCN-classified or EAR99 – must be checked against General Prohibitions 4-10 of § 736.2 EAR. These are broad restrictions that can apply regardless of your item’s classification.

5- Licensing

Based on your classification, destination, end-user, and end-use analysis, you’ll determine if a license is required. But here’s the good news: you might qualify for a license exception under § 740 EAR, which could eliminate the need for a formal license application.

6- Accurate Master Data and Documentation

Export controls require meticulous record-keeping. Your master data must clearly show:

• Which products are US items subject to EAR
• How each item is classified under the CCL
• Complete documentation of all compliance checks

7- Consider Other Regulations

Remember, US re-export controls are just one piece of the puzzle. You must also comply with:
• EU export controls
• National regulations in your country of operation
• Local import/export requirements

8- Implement an Internal Compliance Program (ICP)

Setting up a robust ICP isn’t just recommended – it’s essential for avoiding violations. This program should cover all relevant jurisdictions and become routine practice in your organization.

1. What exactly is a re-export and when do U.S. regulations apply?
   A re-export is when you ship U.S.-origin goods or technology from one foreign country to another foreign country. U.S. export controls apply to U.S.-origin products anywhere in the world, regardless of whether a U.S. person is involved in the transaction. This means if you’re a French company selling U.S.-origin software to Haiti, you need to comply with U.S. regulations.
2. Do I need a license for every re-export?
   No. Unless an item is not controlled for that destination or for the end use or end user (referred to as ‘no licence required’ (NLR) or a licence exception applies to the transaction. The requirement depends on your item’s Export Control Classification Number (ECCN), destination country, and end user.
3. What’s the difference between ECCN and EAR99?
   Most products that fall within the scope of the Export Administration Regulations (EAR) are not specifically controlled for export, and are given the classification of EAR99. EAR99 items generally consist of low-technology consumer goods and do not require a license in most situations. An ECCN is a specific five-digit code for controlled items on the Commerce Control List.
4. How do I find my ECCN?
   The ECCN categorizes items based on the nature of the product, such as the type of commodity, technology, or software and its inherent technical parameters. You can self-classify by comparing your item’s characteristics to the ten CCL categories, or request official classification from BIS using the SNAP-R system.
5. What happens if I get my ECCN classification wrong?
   There are no penalties per se for getting the ECCN wrong. However, exporting an item without a license, or exporting to restricted countries due to ECCN misclassification, can result in civil penalties under the EAR for violations. The maximum civil penalty is in excess of $300,000 per violation.
6. What is the de minimis rule and why is it important?
   The de minimis rule governs which products manufactured outside the US but incorporating US content fall within the purview of US export control law. For most destinations, a non-U.S.-made product is subject to the EAR if the value of U.S.-origin controlled content exceeds 25% of the total value. For embargoed countries like Iran and Syria, it’s only 10%.
7. How do I calculate de minimis percentage correctly?
   Only controlled U.S.-origin commodities need to be included in a de minimis calculation. You need to check whether the shipment of US products in their unincorporated state would require a license if exported from the US to the final product’s country of destination. Components that are EAR99 or controlled only for anti-terrorism reasons often don’t count.
8. Can I use license exceptions to avoid getting a full license?
   A license exception is an authorization that allows you to export or re-export items subject to the EAR that would otherwise require a license, provided certain conditions are met. Common exceptions include LVS (Limited Value Shipment), TMP (Temporary), and GBS (Group B Shipments).
9. What’s License Exception TMP and when can I use it?
   The TMP license exception authorizes temporary export/reexport of institution-owned items that will return to the United States within one year. The TMP “Tools of Trade” exception allows you to travel with usual and reasonable quantities of tools of trade to any countries except Cuba, Iran, Syria, and North Korea.
10. Do I need to screen customers before re-exporting?
    Yes. The Consolidated Screening List (CSL) is a list of parties for which the United States Government maintains restrictions on certain exports, reexports or transfers of items. You must check the Entity List, Denied Persons List, and other restricted party lists before any transaction.
11. What are deemed exports and re-exports?
    The term “deemed re-export” is often used to indicate the transfer of controlled U.S. technology to a third-country national overseas. Before transferring controlled technology to a foreign national employee, you’re responsible for obtaining any required deemed re-export licenses as if you were transferring the technology to that person’s home country.
12. How long does it take to get an export license?
    Processing times vary significantly. For exports to China involving missile technology, they can take several months, and you should allow for substantial processing time. Standard applications typically take 30-60 days, but complex cases can take much longer.
13. What’s the difference between EAR and ITAR?
    If your products or services pertain to the military, they may be controlled under the International Traffic in Arms Regulations (ITAR). If they are commercial in nature, your items will be under the Export Control Regulations (EAR). ITAR is simple but strict whereas the EAR is much more nuanced.
14. Do sanctions affect re-export regulations?
    Yes. Under certain rules issued by the Office of Foreign Assets Control, certain exports from abroad by U.S.-owned or controlled entities may be prohibited notwithstanding the de minimis provisions of the EAR. OFAC sanctions can override EAR permissions.
15. What countries have special re-export restrictions?
    There is no de minimis level for foreign-made items that incorporate U.S.-origin content when destined for Country Group E:1 or E:2, Belarus, China, or Russia. Special rules apply for embargoed countries where the de minimis threshold is 10% instead of 25%.
16. Can I re-export encryption products?
    Most encryption products can be exported to most destinations under License Exception ENC, once the exporter has complied with applicable reporting and classification requirements. There is no “unexportable” level of encryption under License Exception ENC.
17. What records do I need to keep for re-exports?
    You must keep records of your export documentations for five years after the license is expired or, in the case of a license exemption, for five years after the transaction is completed. This includes all supporting documentation and correspondence.
18. Do I need to report certain re-exports to BIS?
    The EAR contains various reporting requirements for specific items and destinations. Examples include semi-annual reports for certain thermal imaging cameras, high-performance computers, and items under the Wassenaar Arrangement.
19. What if my foreign-made product contains both U.S. and non-U.S. components?
    If a non-U.S.-made commodity incorporates controlled U.S.-origin commodities, is bundled with controlled U.S.-origin software, or if non-U.S.-made software is commingled with controlled U.S.-origin software, then the foreign-made item is subject to the EAR if the U.S.-origin controlled content exceeds the de minimis thresholds.
20. Where can I get help with complex re-export questions?
    You can contact the Outreach and Educational Services Division of BIS at (202) 482-4811 or the Western Regional Office at (949) 660-0144. BIS can provide guidance over the phone, but can only provide definitive classifications using the SNAP-R form. For complex transactions, consider consulting with export control attorneys or compliance specialists.