About Sanctions & Export Controls Law
Sanctions and export controls are legal tools governments use to protect national security, prevent proliferation, and advance foreign policy goals. These rules restrict who you can do business with, what you can export, and how information and technology can be shared across borders. Violations can lead to civil penalties, criminal charges, and loss of licensing privileges.
In the United States, the framework combines sanctions programs overseen by the Office of Foreign Assets Control (OFAC) with export controls administered by the Bureau of Industry and Security (BIS) and the Directorate of Defense Trade Controls (DDTC) at the State Department. The Export Administration Regulations (EAR) apply to dual use items, while the International Traffic in Arms Regulations (ITAR) govern defense articles and services.
Understanding how sanctions interact with export controls is essential for any individual or business that imports, exports, or transfers technology, data, or services. A misstep can trigger penalties, shipment delays, or license denials. This guide offers a practical overview to help residents recognize when to seek legal counsel.
Key takeaway: US sanctions and export controls operate through multiple intertwined regimes, each with its own licensing, classification, and violation framework. See official sources for details on EAR, ITAR, and OFAC programs.
Official references: OFAC sanctions programs, EAR - Export Administration Regulations, ITAR - Directorate of Defense Trade Controls.
Why You May Need a Lawyer
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Your company plans to export a dual-use component or encryption software to a sanctioned country or to a foreign national.
A license or exemption may be required, and misclassification or misplacement can trigger penalties. A lawyer helps classify the item, identify licensing paths, and prepare applications accurately.
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You receive an enforcement notice from OFAC, BIS, or ITAR authorities.
A prompt, strategic response is essential to avoid escalation. An attorney can assess the allegations, preserve your rights, and coordinate with regulators.
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You need a license for a proposed export or re-export.
Licensing decisions are fact specific and time sensitive. A lawyer can determine applicable exemptions, compile supporting documentation, and liaise with agencies.
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You must classify items under EAR or ITAR and determine licensing requirements.
Correct classification (ECCN for EAR or USML for ITAR) drives licensing, end-use checks, and screening. Incorrect classification risks delays and penalties.
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You want to implement a sanctions compliance program or respond to a due diligence issue.
A lawyer can help design controls, run audits, and train staff to prevent violations and detect red flags early.
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You are dealing with a deemed export - sharing controlled technology with a foreign national in the United States.
Deemed export rules require careful assessment of the foreign national and the items involved. Legal counsel can map out permissible activities and licensing needs.
Local Laws Overview
International Emergency Economic Powers Act (IEEPA) - This statute grants the President authority to regulate commerce after a national emergency is proclaimed. OFAC actions typically operate under IEEPA to implement sanctions. For general context on U.S. sanctions authority, see OFAC guidance tied to IEEPA underlying powers.
Export Administration Regulations (EAR) - EAR governs export, re export, and transfer of dual use items and technology. The regulations are implemented by BIS and are codified at 15 C.F.R. Parts 730-774, with broad licensing and enforcement provisions. The Export Control Reform Act of 2018 (ECRA) enhances and clarifies the scope of EAR controls for dual use items.
Recent updates and guidance emphasize the expanding reach of export controls to cyber security, encryption items, and emerging technologies. See BIS and OFAC pages for current programs and amendments, including Russia-Ukraine related measures.
International Traffic in Arms Regulations (ITAR) - ITAR regulates defense articles and services listed on the United States Munitions List (USML). ITAR licensing and enforcement are administered by the Directorate of Defense Trade Controls (DDTC) within the U.S. Department of State. ITAR concepts include mandatory licensing, end-use checks, and compliance responsibilities for manufacturers, exporters, and brokers.
Recent trends show increasing scrutiny on defense related exports and tighter controls on foreign parties in defense supply chains. For official ITAR information, refer to the DDTC site.
Official sources for these topics include:
- OFAC sanctions programs
- EAR - Export Administration Regulations
- ITAR - Directorate of Defense Trade Controls
Recent changes and trends: The Russia-Ukraine conflict has driven substantial updates to OFAC and BIS sanctions programs, expanding lists of designated entities and tightening licensing controls. See official pages on the Russia-Ukraine sanctions programs and related BIS guidance.
Frequently Asked Questions
What is the purpose of sanctions and export controls?
Sanctions and export controls regulate trade to protect national security and foreign policy interests. They restrict transactions with designated persons and restrict exports of sensitive items. Compliance reduces the risk of penalties and disruptions to business operations.
How do I determine if a product is subject to EAR or ITAR?
EAR covers dual use items and technology, while ITAR covers defense articles and services. Start with item classification and the item's end use, destination, and end user. Your company may need a license under one regime or both, depending on the item.
When do I need to apply for an export license?
Licenses are typically required when exporting controlled items to sanctioned destinations or non authorized end users. Some activities may qualify for exemptions or license exceptions; others require a formal license decision from BIS or DDTC.
Where can I find the licensing requirements for EAR or ITAR?
Licensing requirements are published by BIS for EAR items and by DDTC for ITAR items. The BIS EAR page and the DDTC ITAR pages provide guidance, classifications, and contact points for licensing questions.
Why are deemed exports treated as controlled exports?
A deemed export occurs when controlled information is released to a foreign national in the United States. The release is treated as if it were exported to that foreign national's country, triggering licensing and screening obligations.
Can a company be fined for a minor export controls violation?
Yes. Violations can result in civil penalties, criminal charges, and settlement obligations. Penalties depend on the severity, intent, and whether there was willful misconduct or repeated violations.
Should I hire a sanctions and export controls attorney before negotiating a deal?
Yes. Early legal input helps classify items, assess licensing needs, and structure a transaction to minimize risk. An attorney can prepare documentation and liaise with licensing authorities.
Do I need to conduct sanctions screening of customers and suppliers?
Yes. Screening helps identify sanctioned parties and prohibited end users. Implementing ongoing screening is a core element of a compliant trade program.
Is a license under EAR automatically granted or denied?
No. BIS or DDTC evaluate licenses on a case by case basis. Processing times vary, and many factors influence the decision, including end use, end user, and country destination.
How long does it take to obtain an export license and why?
License timelines range from weeks to several months, depending on item classification, destination risk, and agency workload. Early preparation and complete documentation help avoid delays.
What is the difference between EAR and ITAR licensing requirements?
EAR licenses cover dual use items and many commercial products, ITAR licenses cover defense articles and services. The scope, licensing authority, and end use restrictions differ between the regimes.
What resources can I trust for sanctions information?
Use official government sources for authoritative guidance. BIS, DDTC, and OFAC pages provide licensing guidance, classifications, and enforcement notices.
Additional Resources
- OFAC - Office of Foreign Assets Control - Government program that administers and enforces economic and trade sanctions. OFAC sanctions programs.
- BIS - Bureau of Industry and Security - Administers the Export Administration Regulations (EAR) and license processing for dual use items. EAR overview.
- DDTC - Directorate of Defense Trade Controls - US State Department unit that regulates ITAR controlled items. ITAR information.
Next Steps
- Define your sanction and export controls issue clearly - Gather all facts about the product, destination, end user, and intended use. Time estimate: 1-3 days.
- Identify the governing regime and item classification - Determine if EAR, ITAR, or both apply; collect product specs, item numbers, and technical data sheets. Time estimate: 3-7 days.
- Consult a sanctions and export controls lawyer - Choose counsel with experience in licensing, enforcement, and compliance program design. Time estimate: 1-2 weeks to schedule a consultation.
- Prepare and file licensing or exemption requests if needed - Your attorney coordinates with BIS or DDTC; assemble end-use statements and technical data. Time estimate: several weeks to months, depending on complexity.
- Implement a compliance plan and training - Build screening processes, internal controls, and staff training to prevent violations. Time estimate: 2-4 weeks for rollout.
- Monitor ongoing obligations and regulatory changes - Set up alerts for sanctions list updates and licensing policy changes; conduct periodic internal audits. Time estimate: ongoing, with quarterly reviews recommended.
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