Export Compliance

1. Export Control Overview

Controlled Dynamics Inc. products may be subject to United States export control laws and regulations, including but not limited to:

• Export Administration Regulations (EAR) - 15 CFR Parts 730-774 (Administered by Bureau of Industry and Security)
• International Traffic in Arms Regulations (ITAR) - 22 CFR Parts 120-130 (if applicable)
• Office of Foreign Assets Control (OFAC) Sanctions - 31 CFR Chapter V
• Antiboycott Regulations - 15 CFR Part 760

2. Buyer Responsibilities

By purchasing products for export from the United States, Buyer acknowledges and agrees to:

2.1 Compliance Obligation

• Comply with all applicable U.S. export control laws and regulations
• Obtain all necessary export licenses, permits, and authorizations
• Conduct proper screening of end-users and destinations
• Maintain accurate export documentation and records
• Not re-export products to restricted destinations or parties

2.2 Due Diligence Requirements

Buyers must:

• Screen all parties against U.S. government restricted party lists
• Verify end-use and end-user information
• Ensure products will not be used for prohibited purposes
• Report suspected violations to appropriate authorities

3. Restricted Destinations

3.1 Embargoed Countries

Products shall not be exported, re-exported, or transferred to countries subject to comprehensive U.S. sanctions, currently including (but not limited to):

• Cuba
• Iran
• North Korea
• Syria
• Crimea, Donetsk, and Luhansk regions of Ukraine

Note: Sanctions lists change frequently. Buyers must verify current restrictions at export.gov/sanctions.

3.2 Restricted Territories

Certain products may be subject to additional restrictions for specific countries or regions based on national security or foreign policy concerns. Contact our Export Compliance team for country-specific guidance.

4. Restricted Parties Screening

Products shall not be sold to or transact with parties appearing on U.S. government restricted party lists:

4.1 Key Restricted Party Lists

• Denied Persons List (DPL) - Individuals/entities denied export privileges
• Entity List - Parties requiring licenses for specific items
• Specially Designated Nationals (SDN) List - OFAC sanctions list
• Unverified List (UVL) - Parties whose bona fides could not be verified
• Military End User (MEU) List - Chinese and Russian military end users

4.2 Screening Tools

Buyers can screen parties using the Consolidated Screening List at:
https://www.export.gov/csl-search

5. Prohibited End Uses

Products shall not be used in connection with or support of:

• Nuclear Activities: Design, development, production, or use of nuclear weapons or nuclear explosive devices
• Missile Technology: Development, production, or use of missiles or unmanned aerial vehicles
• Chemical/Biological Weapons: Development, production, stockpiling, or use of chemical or biological weapons
• Military Intelligence: Military intelligence activities by foreign governments
• Human Rights Violations: Activities supporting human rights abuses or oppression

6. Red Flags and Warning Signs

Buyers and sellers must be alert to warning signs that may indicate illegal export activity:

7. Export Classification

7.1 ECCN Determination

Products are classified under the Export Administration Regulations (EAR) with Export Control Classification Numbers (ECCNs). Standard structural aluminum products are generally classified as EAR99 (not specifically controlled) but may require licenses based on destination, end-use, or end-user.

7.2 License Requirements

Even EAR99 items may require export licenses if:

• Exported to embargoed countries
• Sold to restricted parties
• Intended for prohibited end-uses
• Subject to temporary denial orders

8. License Exception and NLR Shipments

8.1 No License Required (NLR)

Many shipments to non-restricted destinations may qualify as "No License Required" but still require:

• Proper export documentation (commercial invoice, packing list)
• Accurate ECCN or classification statement
• Destination control statement
• Electronic Export Information (EEI) filing via ACE/AES if value exceeds $2,500

8.2 License Exceptions

Certain license exceptions may apply (e.g., LVS for low-value shipments to certain countries). Buyers must verify eligibility and comply with all conditions.

9. Documentation Requirements

For all international shipments, required documentation includes:

9.1 Commercial Invoice

• Complete product descriptions and ECCN classifications
• Accurate values and currency
• Country of origin (typically U.S.)
• Harmonized Tariff Schedule (HTS) codes

9.2 Destination Control Statement

"These commodities, technology, or software were exported from the United States in accordance with the Export Administration Regulations. Diversion contrary to U.S. law is prohibited."

9.3 Shipper's Letter of Instruction

Provides freight forwarder with necessary export information and authorization.

10. Recordkeeping Requirements

Parties involved in exports must maintain records for five (5) years from date of export, including:

• Export licenses and license exceptions
• Commercial invoices and packing lists
• Bills of lading and air waybills
• Electronic Export Information (EEI) confirmations
• Correspondence related to transactions
• Restricted party screening results
• End-use/end-user statements

11. OFAC Sanctions Compliance

11.1 Sanctions Screening

All transactions must be screened against Office of Foreign Assets Control (OFAC) sanctions programs. This includes:

• Specially Designated Nationals (SDN) List
• Sectoral Sanctions Identifications (SSI) List
• Foreign Sanctions Evaders (FSE) List
• Non-SDN designations for specific sanctions programs

11.2 50% Rule

Entities owned 50% or more (individually or in aggregate) by one or more SDNs are themselves considered blocked, even if not explicitly listed.

12. China Export Controls

12.1 Military End User Rule

Licenses required for exports to Chinese military end users, including entities on the Military End User List.

12.2 Entity List Additions

Numerous Chinese entities added to Entity List in recent years. Verify current status before each export.

13. Russia and Belarus Export Controls

Following Russia's invasion of Ukraine, extensive new controls apply:

• License requirement for most items to Russia or Belarus
• Expanded Entity List designations
• Industry sector sanctions (SSI List)
• License review policy of denial

14. Deemed Export Controls

"Deemed exports" occur when controlled technology or source code is released to foreign nationals in the U.S. Technical assistance to foreign persons may require authorization even within the U.S.

15. Antiboycott Compliance

U.S. persons must not participate in or cooperate with foreign boycotts not sanctioned by the U.S., particularly the Arab League boycott of Israel. Prohibited activities include:

• Refusing to do business with boycotted countries or blacklisted companies
• Providing information about business relationships with boycotted countries
• Implementing discriminatory hiring or business practices

Receipt of boycott-related requests must be reported to the Department of Commerce.

16. Encryption and Technology Controls

If products incorporate encryption or cryptographic technology, additional controls may apply under EAR Part 740, Supplement No. 3 (Encryption Review Requirements). Classification requests may be submitted to BIS.

17. Violations and Penalties

17.1 Civil Penalties

• Up to $364,992 per violation (adjusted annually for inflation)
• Denial of export privileges
• Seizure and forfeiture of goods

17.2 Criminal Penalties

• Fines up to $1,000,000 per violation
• Imprisonment up to 20 years
• Both criminal and civil penalties may be imposed for same violation

17.3 Voluntary Self-Disclosure

Violations should be reported via Voluntary Self-Disclosure (VSD) to BIS or OFAC, which may result in reduced penalties.

18. Seller Assistance and Resources

18.1 Export Compliance Support

Controlled Dynamics Inc. provides:

• ECCN classifications for products
• Destination control statements on invoices
• Guidance on export documentation requirements
• Assistance with license applications (when required)

18.2 Buyer's Independent Obligation

While we provide assistance, buyers remain solely responsible for export compliance. Our guidance does not constitute legal advice. Consult qualified export counsel for compliance questions.

19. Useful Government Resources

20. Updates and Changes

Export control laws and regulations change frequently. Buyers must stay informed of current requirements. Controlled Dynamics Inc. will update this page as material changes occur, but buyers bear ultimate responsibility for compliance.

21. Contact Our Export Compliance Team

For export classification information, license application assistance, or compliance questions: