CES International Trade Regulations & Laws 2 — Questions and Answers
Question 1: Under the Export Administration Regulations (EAR), which classification system is used to determine whether a commercial item requires an export license?
- Harmonized Tariff Schedule (HTS)
- Export Control Classification Number (ECCN) (Correct answer)
- Schedule B Number
- North American Industry Classification System (NAICS)
Correct answer: Export Control Classification Number (ECCN)
The ECCN is the alphanumeric code used in the Commerce Control List (CCL) to classify dual-use items under the EAR.
Question 2: Which U.S. government agency administers the International Traffic in Arms Regulations (ITAR)?
- Bureau of Industry and Security (BIS)
- Office of Foreign Assets Control (OFAC)
- Directorate of Defense Trade Controls (DDTC) (Correct answer)
- U.S. Customs and Border Protection (CBP)
Correct answer: Directorate of Defense Trade Controls (DDTC)
DDTC within the Department of State administers ITAR, which controls the export of defense articles and services.
Question 3: A U.S. exporter ships EAR99 items to a foreign party listed on the Entity List. Which statement is correct?
- No license is required because EAR99 items are always license-free
- A license is required because the end-user restriction overrides the item classification (Correct answer)
- Only OFAC approval is needed for Entity List parties
- The shipment is legal as long as ITAR doesn't apply
Correct answer: A license is required because the end-user restriction overrides the item classification
An Entity List designation imposes a license requirement regardless of ECCN or EAR99 status due to end-user controls.
Question 4: What is the purpose of a Denied Persons List (DPL) check in export compliance?
- To verify tariff rates for exported goods
- To identify individuals and companies prohibited from participating in U.S. exports (Correct answer)
- To confirm the country of origin of imported materials
- To check whether a foreign buyer qualifies for preferential trade terms
Correct answer: To identify individuals and companies prohibited from participating in U.S. exports
The DPL maintained by BIS lists parties denied export privileges, and U.S. exporters must screen against it before shipping.
Question 5: Under OFAC regulations, which term describes a transaction that is automatically authorized without requiring a specific OFAC license?
- General License (Correct answer)
- Specific License
- Blanket Authorization
- Deemed Export Waiver
Correct answer: General License
A General License authorizes a class of transactions without requiring individual applications, unlike a Specific License which covers a single transaction.
Question 6: Which document is the primary export control document that an exporter files electronically with U.S. Customs prior to export?
- Bill of Lading
- Electronic Export Information (EEI) via AES (Correct answer)
- Commercial Invoice
- Shipper's Export Declaration (SED) via paper form
Correct answer: Electronic Export Information (EEI) via AES
The EEI filed through the Automated Export System (AES) replaced the paper SED and is required for most export shipments valued over $2,500 per Schedule B number.
Question 7: What does the 'de minimis' rule under EAR determine?
- The minimum shipment value requiring a Shipper's Export Declaration
- The threshold of U.S.-controlled content in a foreign-made product that subjects it to EAR jurisdiction (Correct answer)
- The dollar value below which no export license is ever required
- The minimum number of employees a company must have before ITAR applies
Correct answer: The threshold of U.S.-controlled content in a foreign-made product that subjects it to EAR jurisdiction
The de minimis rule sets the percentage of controlled U.S. content (typically 25%, or 10% for embargoed countries) in a foreign product that triggers EAR jurisdiction.
CES International Trade Regulations & Laws 2
Under the Export Administration Regulations (EAR), which classification system is used to determine whether a commercial item requires an export license?