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BIS Issues Opinion on Prohibited Party Screening for Downloads of Publicly Available Software

Wednesday, December 04, 2013
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security recently released an advisory opinion on the requirements for screening prohibited parties and embargoed destinations for the download of time-limited EAR99 software available on a public Web site. The opinion responds to a request outlining a scenario in which EAR99 software is made freely available for download for a 30-day trial period, following which the software ceases to function until the customer purchases an unlock code. The requester inquired as to whether it may perform all screening for embargoed destinations and prohibited parties at the time the user purchases the unlock code rather than when the users download the software for the 30-day trial.

BIS states that in general the posting of software on a public Web site for free and anonymous download makes that software publicly available and therefore not subject to the Export Administration Regulations. If, however, as in this situation, the software is time-limited or otherwise restricted to a trial period, it is not publicly available under Section 734.7 of the EAR. Because the presence of the time restriction drastically limits the ability of the public to use the software for free, BIS states, the software is not “generally accessible” as contemplated by Section 734.7(a). Consequently, the software would be subject to the EAR during the 30-day free trial as well as when it is downloaded after purchase of the unlock code.

BIS adds that although the software is subject to the EAR, posting it to a public Web site would not itself result in a violation of the prohibition against knowingly entering into transactions with prohibited persons or individuals in embargoed destinations without the appropriate authorization from BIS. Publishing EAR99 software to a public Web site where it may be anonymously downloaded free of charge by anyone does not establish knowledge or raise any red flags regarding downloads by prohibited persons or individuals in embargoed destinations. BIS emphasizes that this safe harbor applies only if the download is free and anonymous, meaning at a minimum that no registration is required and that the provider does not engage in IP address tracking or other electronic tracking of the download recipients.

If, however, the provider knows (as defined in Part 772 of the EAR) that a prohibited party or individual in an embargoed destination will download the EAR99 software, the provider could be in violation of the EAR if the download subsequently occurs without the required BIS license. The provider may also be in violation of the EAR if it sells the unlock code to a prohibited party or individual in an embargoed destination. Additionally, such activity may require approval from the Office of Foreign Assets Control.

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