Export Trade Compliance Tips for Contract Manufacturers

Contract Manufacturers have turned out to be an inevitable part of the production divisions in a number of companies. This is because they help in reducing supply chain cost and create flexibility in production operations because of the outsourcing of the manufacturing. U.S. department of Commerce Export Administration Regulations (EAR) along with US Department of the State International Traffic in Arms regulations (ITAR) have their guidelines set for the exporters. They are required to comply with them but if we talk about CMs, there are certain facts that they are supposed to know. They should have proper knowledge about the jurisdiction of the products whether they come under ITAR or EAR.

• CMs should have a complete knowledge about U.S. Munitions List which comes under ITAR jurisdiction and comprises of items like ammunitions, military vessels, missiles, aircrafts, training equipments, explosives, military electronics, protective personnel equipments and optical guidance and control equipments.
• Commerce Control List includes the items that come under EAR jurisdiction. Items like software, commodities and technology are subject to US Department of Commerce and further to Bureau of Security, comprising of “dual use” items that are the commercial and military use items.
• The items that are specially controlled for export by different departments or even by the agency of the US Government do not come under CCL. Certain entries in CCL will always refer to such other controls by a different department or by the agency of US Government.

If the CMs are not sure about the export jurisdiction in which the particular item or service falls under, then the determination of commodity jurisdiction has to be requested and this is done from the DDTC, US Department of State, Director of Defense State Control. By following these guidelines for export trade compliance, Contract Manufacturers can avoid major troubles and function smoothly.