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Special Comprehensive License Authorization for Exports Eliminated

Wednesday, August 26, 2015
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has issued a final rule removing the special comprehensive license authorization from the Export Administration Regulations. This rule is effective as of Sept. 24, but all SCLs still in effect as of Aug. 26, the publication date of this rule, will not expire until Sept. 26, 2016.

The SCL authorizes, among other things:

- exports and reexports of multiple shipments of all items subject to the EAR, with the exception of items prohibited by statute or regulation (e.g., items controlled for missile technology and short supply reasons) and items identified as being of significant strategic and proliferation concern;

- exports and reexports of multiple shipments of items to all destinations, except to embargoed and terrorist supporting and countries that BIS may designate on a case-by-case basis;

- possible authorization by prior approved consignees abroad of servicing, support services, stocking spare parts, maintenance, capital expansion, scientific data acquisition support, reselling and reexporting items in the form received, and other activities, on a case-by-case basis;

- exports and reexports of items for a period of four years; and

- exports and reexports by an SCL holder to approved consignees and directly to the consignees’ customers, the end-users (known as drop shipping).

However, BIS has concluded that the SCL has outlived its usefulness to the exporting public since recent changes to the EAR permit exporters to accomplish similar results using individual licenses and without undertaking the more onerous SCL application.

BIS will no longer accept new SCL applications or amendments to outstanding SCLs, including renewals. SCL holders may choose to apply for four-year individual licenses for exporting and reexporting items under the EAR or use available license exceptions. In addition, as with all transactions subject to the EAR, the applicable recordkeeping requirements under 15 CFR part 762 will continue to apply to SCL transactions until the applicable retention requirements are fulfilled.

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