Last week, the State Department’s Directorate of Defense Trade Controls (DDTC) and the Commerce Department’s Bureau of Industry and Security (BIS) harmonized the destination control statements (DCS) required for exports of certain items from the United States. The new rules, which took more than one year to finalize, ease the burden on exporters by requiring the same DCS language for shipments subject to the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR).
Effective November 15, 2016, both sets of regulations will require that the following language be included as an integral part of the commercial invoice when items are shipped abroad in tangible form:
“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.’’
Of course, although BIS and DDTC are only requiring that the language be included on one document (the commercial invoice) and are explicitly limiting this requirement to physical shipments, the agencies did not make everything easier. Companies exporting “600 series” or 9×515 items under the EAR still must include the Export Control Classification Number (ECCN) on the commercial invoice. And, DDTC’s companion rule continues to require:
- incorporation of the DCS for ITAR-controlled exports, reexports, and retransfers;
- inclusion of the country of ultimate destination, end-user, and license or approval number or exemption citation on the commercial invoice; and
- provision of the ECCN or EAR99 designation for any EAR-controlled items exported pursuant to a DDTC license or approval to the end-user and consignees.
So what’s next? Companies should start planning to change the language pre-printed on their commercial invoices so that they are ready on November 15, when the new DCS requirements go into effect.