Summary: On July 12, 2001, the Bureau of Industry and Security (BIS) and the Department of the Treasury's Office of Foreign Assets Control (OFAC) published regulations implementing certain provisions of the Trade Sanctions Reform and Export Enhancements Act of 2000 (TSRA) (Title IX of Public Law 106-387). The regulations went into effect on July 26, 2001 and both agencies have instituted procedures that will allow U.S. exporters and reexporters in other countries to engage in certain transactions that are subject to TSRA. BIS implemented the requirements of TSRA for exports and reexports of agricultural commodities to Cuba. BIS created License Exception Agricultural Commodities (AGR) to permit such exports and reexports to Cuba. Exports and reexports of medicines and medical devices to Cuba are not eligible for AGR, but are eligible for existing BIS license application procedures. OFAC regulates exports of agricultural commodities, medicines, and medical devices to Iran, and Sudan.
Summary of BIS Requirements for Treasury Department authorized Exports to Iran, and Sudan
The Bureau has created a new License Exception Agricultural Commodities (AGR) in section 740.18 of the Export Administration Regulations (EAR) .
License Exception AGR authorizes exports and certain reexports of eligible agricultural commodities that are classified as EAR99 (i.e., not listed on the Commerce Control List) to Cuba, subject to certain criteria and restrictions.
License Exception AGR does not authorize exports or reexports of medicines or medical devices to Cuba.
Exporters must notify BIS and obtain confirmation from BIS that no agency of the U.S. Government that reviews these notifications objects to use of License Exception AGR prior to any export or reexport under authority of License Exception AGR. The proposed export must meet all of the criteria and restrictions listed below.
Exports and reexports must be made pursuant to a written contract and must take place within 12 months of the signing of the contract, unless the shipment is a commercial sample or a donation, in which case the contract requirement does not apply.
No exports may be made to a terrorist entity, including a Specially Designated Terrorist (SDT) or Foreign Terrorist Organization (FTO), a person denied export privileges by the Department of Commerce if the export would violate the terms of the denial order, or for use in weapons of mass destruction (WMD) programs (i.e., biological, chemical, nuclear warfare or missile proliferations activities). The Treasury Department's Office of Foreign Assets Control lists of SDTs and FTOs as part of the list of Specially Designated Nationals and Blocked Persons
No U.S. owned or controlled foreign firm may export or reexport from a third country to Cuba a foreign produced agricultural commodity.
Agricultural commodities are defined in Section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 02).
For purposes of License Exception AGR, agricultural commodities include, but are not limited to, food, feed, fish, shellfish and fish products; beer, wine and spirits; soft drinks; livestock; fiber, including cotton, wool and other fibers; tobacco and tobacco products; wood and wood products, including lumber and utility poles; seeds; and reproductive materials such as fertilized eggs, embryos, and semen.
A list of eligible agricultural commodities [pdf] is available for review at the U.S. Department of Agriculture Web site. If you have questions regarding whether an item is eligible, you should consult the appropriate country or regional contact listed at: http://www.fas.usda.gov/OCRA_contacts.asp.
Vitamins, minerals, food additives and dietary supplements, and bottled water are also considered to be agricultural commodities for the purposes of License Exception AGR.
Some organic and inorganic fertilizers are eligible and some are not. The distinction is as follows:
Dry fertilizers containing 15% or less ammonium nitrate are eligible for License Exception AGR.
Dry fertilizers containing more than 15% ammonium nitrate are classified as Export Commodity Classification Number (ECCN) 1C997 and are not eligible for License Exception AGR.
Liquid fertilizers are eligible for License Exception AGR regardless of the concentration of ammonium nitrate they contain.
Some agricultural commodities are not eligible, such as:
items on the Commerce Control List (CCL), including western red cedar and live horses;
items on the U.S. Munitions List;
items for use in weapons of mass destruction (WMD).
Agricultural commodities do not include furniture even if made from wood; clothing; agricultural equipment (whether hand tools or motorized equipment); pesticides, insecticides, or herbicides; or cosmetics (unless derived entirely from plant materials).
Medicines are drugs as defined in Section 201 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321).
Medicines include prescription medicines and over the counter medicines for humans and animals.
Medical devices include medical supplies, instruments, equipment, equipped ambulances, institutional washing machines capable of sterilizing hospital clothing and bedding, and vehicles with installed medical testing equipment.
If you have questions regarding whether an item meets the definition of medicine or medical device under the Food, Drug and Cosmetic Act, you should consult the Food and Drug Administration (FDA). For medicines, contact the FDA's Office of Drug Information at 301-827-4570 (telephone); 301-827-4577 (fax); or by email. For medical devices, contact the FDA's Division of Small Manufacturers' Assistance at 800-638-2041 (telephone); 301-443-8818 (fax); or by email.
Medicines on the Commerce Control List are not eligible.
Medical devices do not include general purpose furniture such as desks, tables, or lamps used in hospital offices and waiting rooms.
For Cuba, medicines and medical items are not eligible for License Exception AGR. These may be authorized for export to Cuba according to the provisions of the Cuban Democracy Act under an export license issued by BIS. A BIS export license is valid for two years.
Before making any shipment under License Exception AGR, exporters must submit a notification to BIS and obtain confirmation that no agency has raised an objection to the use of License Exception AGR for the transaction described in the notification. BIS informs exporters within 12 business days from the date the notice is registered in BIS's electronic database whether such objections have been raised. BIS's confirmation that no objections have been raised does not relieve parties to the transaction from the obligation to assure that they meet all of the requirements of License Exception AGR, other requirements of the Export Administration Regulations (EAR), and any other applicable law. The procedures for using this license exception are:
-Exporters must notify BIS prior to any export or reexport.
-Exporters provide this prior notification by submitting a completed BIS Multi-purpose Application Form (BIS-748P) or electronically through BIS's Simplified Network Application Process Redesign (SNAP-R).
Within two business days of the notification's registration in BIS's electronic database system, BIS will refer the notification electronically to the Departments of State, Defense, and other agencies, as appropriate, for review.
Any reviewing agency that objects to the use of License Exception AGR must provide notice of such objection to BIS within nine business days of the referral.
-An agency may object for one or more of the following reasons:
the commodity is not an agricultural commodity;
the items are not EAR99;
the export would violate the terms of a denial order;
the recipient may promote international terrorism; or
the transaction raises nonproliferation concerns.
If any agency objects, BIS will convert the notification into a license application and process it under standard export license application procedures.
An exporter may ship the goods after 12 days if no agency has raised an objection. Applicants may check the status of their notification or application via BIS's System for Tracking Export License Applications (STELA) at 202-482-2752 using the "Z" number on the 748-P form or provided by SNAP. Applicants may not make the export without confirming via STELA that no agency has raised an objection.
BIS also will notify the applicant in writing of the outcome of the interagency review.
Exporters must be sure that they are not attempting to use AGR as authority to export any item that is on the Commerce Control List (CCL). Only items classified as EAR99 are eligible for BIS's License Exception AGR or OFAC's expedited review procedures. EAR99 items are items that are subject to the Export Administration Regulations, but they are not specifically listed on the CCL.
Exporters may need to include, with their notification or application, an official BIS commodity classification to confirm the classification of an item as EAR99, as specified in greater detail below.
BIS is responsible for providing commodity classifications. Exporters may obtain a commodity classification by submitting a completed BIS's Multipurpose Application Form (BIS-748P) or electronically through BIS's Simplified Network Application Process Redesign (SNAP-R) indicating that they wish a commodity classification. See Section 748.3 of the Export Administration Regulations for more information.
BIS has already determined that most items that meet the definition of agricultural commodity are classified as EAR99. This includes most of the items on the Department of Agriculture's Eligible Commodities List (pdf) available from its Economic and Trade Sanctions Web page. This means that items on this list do not require a commodity classification with three exceptions: live horses; western red cedar; and fertilizers.
For these three types of agricultural commodities, BIS and OFAC require a BIS commodity classification for fertilizers, live horses or western red cedar prior to submission of a notification to BIS or a license application to OFAC, as these agricultural commodities may be on the Commerce Control List.
Medicines do not require a BIS commodity classification prior to OFAC review, unless you are unsure whether your item is a medicine (e.g., vaccines and immunotoxins) that BIS has identified on the Commerce Control List and thus on BIS's list of ineligible medicines.
Medical supplies (e.g., syringes, bandages and gauze) and devices require a BIS commodity classification prior to OFAC review, unless BIS has listed the item on the list of EAR99 medical supplies found on BIS's Web site.
OFAC is responsible for authorizing exports of agricultural commodities, medicines, and medical devices to Iran and Sudan. It is also responsible for authorizing reexport of these items by U.S. persons to Iran and Sudan.
If OFAC authorization is needed, exporters must submit an application in writing to OFAC identifying the item they would like to export and the purchaser, any intermediaries, and the end-user involved in the proposed transaction.
OFAC also has expedited procedures for reviewing such applications.
Exporters should check OFAC's Web site for additional information on OFAC's requirements.
Exporters can check the status of their OFAC applications by calling the OFAC Licensing Division at (202) 622-2480 between 9:00 AM and 5:30 PM Eastern time.
As described in the Commodity Classification Requirements summary above, to comply with OFAC regulations, exporters may need a BIS commodity classification.