Export Controls

Refers to laws designed to control exports of sensitive technologies such as weapons systems, espionage equipment (and equipment useful to prevent espionage) and dual use goods, i.e., goods that have peaceful and weapons manufacturing purposes. Dual use goods are regarded as particularly sensitive when they can be used to make nuclear, biological, and chemical weapons, or missiles. Many high technology exports, licenses of technology, and transfers of technical information are subject to export controls and for this reason, clauses frequently must be included in license agreements to control dissemination of the technology.

U.S. export control law continues to apply to technology of U.S. origin, even after it has been exported to a third country under an export control license. Countries that apply export controls issue various types of export licenses, but there are certain differences: for example, as a technical matter all U.S. goods are, in theory subject to export licensing, but most benefit from a “General License” that means that an export license in unnecessary unless the goods are going to an embargoed country (e.g., North Korea, Cuba, etc.). In other regimes, the term General License or Open License usually applies to dual use goods being exported to a country which is a member of one of the international multilateral export regimes, e.g., the Australia Group, the Nuclear Suppliers Group, the Wassenaar Arrangement, the Chemical Weapons Convention, and the Zangger Committee.

General or Open Licenses do not need to be applied for each shipment of goods or delivery of services. By contrast “Individual Licenses” or “Special Licenses” are usually required for weapons, military equipment, and very-sensitive dual use goods. Export controls are rigorously enforced and usually backed up by criminal sanctions for violators (and their managements) as well as heavy fines. Depending on the nature of high technology a business manufactures, it should familiarize itself with applicable export control laws and the controls applying to its goods and services.