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<a href="https://www.bis.doc.gov/index.php/documents/regulations-docs/2337-ccl5-pt2-4/file">Category 5, Part 2</a> of the Commerce Control List describes several common “mass-market” items. This includes apps and other software that use standard encryption as well as IoT devices and a broad range of other commercial products. The Export Administration Regulations (“EAR”) release many of these mass-market and other less-sensitive items from export licensing requirements, which may require that some steps be taken by the exporter.

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License Exception ENC describes the situations in which items otherwise controlled under Category 5, Part 2 may be exported without a license. See <a href="https://www.bis.doc.gov/index.php/encryption-and-export-administration-regulations-ear">BIS Encryption and the EAR</a> for general guidance. This briefing focused on items described under License Exception ENC (b)(1) (i.e., 15 C.F.R. § 740.17(b)(1)) which are considered less sensitive.&nbsp; Depending on the level of encryption, this may include wireless local area network software and equipment (WLAN), certain disk/drive encryption devices, and many mass market consumer and mobile app items.

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Exporters may export items described under License Exception ENC (b)(1) without a license but are required to take either of two additional steps:

Annual Self-Classification Reporting Requirements

An encryption self-classification report must include the information outlined in <a href="https://www.ecfr.gov/cgi-bin/text-idx?SID=0b836f9a174edaea080940ce8b2fad32&amp;mc=true&amp;node=pt15.2.742&amp;rgn=div5#ap15.2.742_119.6">Supplement No. 8 to 15 C.F.R. Part 742</a>.&nbsp;

BIS requires that each identified product be reported as it is typically distinguished in inventory, catalogs, marketing brochures and other promotional materials. Volume and details of actual exports are not required to be included in the report.

If no information has changed since the previous annual report, exporters must still send an email stating that nothing has changed since the previous report; or submit a copy of the previous report. No self-classification report is required if no exports or reexports of covered encryption items occurred during the calendar year.

The annual self-classification reports must be sent to both BIS and the ENC Encryption Request Coordinator via email or regular mail.

If you have questions as to whether you are subject to the self-classification reporting requirements or need assistance in preparing and filing your annual self-classification report, please contact a member of our team.

Francesca M.S. Guerrero Partner, International Trade 202.973.2774 <a href="mailto:Francesca.Guerrero@ThompsonHine.com">Francesca.Guerrero@ThompsonHine.com</a>

Samir D. Varma Partner, International Trade 202.263.4136 <a href="mailto:Samir.Varma@ThompsonHine.com">Samir.Varma@ThompsonHine.com</a>

Joyce Rodriguez Associate, International Trade 202.973.2724 <a href="mailto:Joyce.Rodriguez@ThompsonHine.com">Joyce.Rodriguez@ThompsonHine.com</a>

Scott E. Diamond* Senior Legislative &amp; Regulatory Policy Advisor, International Trade 202.263.4197 <a href="mailto:Scott.Diamond@ThompsonHine.com">Scott.Diamond@ThompsonHine.com</a> *Not licensed to practice law

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel. This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2022/04/International_Trade_Update_-_Annual_Self-Classification_Report.pdf

Encryption Exports – Annual Self-Classification Reports Due February 1, 2021

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