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BIS Eliminates Special Comprehensive Licence Authorisation for Exports

The Department of Commerce's Bureau of Industry and Security has issued a final rule removing the special comprehensive licence authorisation from the Export Administration Regulations. This rule is effective as of 24 September but all SCLs still in effect as of 26 August will not expire until 26 September 2016.

The SCL authorises, among other things:

  • exports and re-exports 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 re-exports 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 authorisation by prior approved consignees abroad of servicing, support services, stocking spare parts, maintenance, capital expansion, scientific data acquisition support, reselling and re-exporting items in the form received, and other activities, on a case-by-case basis;
  • exports and re-exports of items for a period of four years; and
  • exports and re-exports 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 licences 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 licences for exporting and re-exporting items under the EAR or use available licence 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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