What are Export Control Classification Numbers?
An Export Control Classification Number (ECCN) is a five-character number with alphanumeric designations used under the Commerce Control List (CCL). This list, which the Department of Commerce recognizes, helps businesses determine whether an export license is required to export goods from the US to other parts of the world.
An ECCN aids in classifying products based on the goods’ nature, type, technical parameters, and the software/technology used.
ECCN is different from the HS (Harmonized System) code. As stated, it is an alphanumeric code governed by the Department of Commerce and falls under the Export Administration Regulations (EAR).
Purposes and Uses of ECCN
An ECCN allows the government to anticipate the level of control required for a particular product, not only during the export process but also after its manufacturing.
Sometimes, an exporter may not require a license at the country of end-use but might need a specific permit because of the product’s end-use and the end-user. So, the primary purpose of an ECCN is to determine whether the exporter should possess an exporter’s license.
For exporters, understanding the cross-referencing with the Commerce Country Chart is also one of the uses of an ECCN. This number lets the government know if they need to provide any unique control before exporting a particular product.
Traders also use the ECCN for the ‘dual-export system.’ Just like exports, it determines whether businesses need a license for re-exported products outside the US.
When do I need an ECCN?
An ECCN is needed when an exporter wants to re-export goods to other parts of the world. As mentioned above, authorities use this number to identify reasons for controlling a particular product for which licensing may be required in case of specific destinations. ECCN is also useful for acquiring information regarding shipment and transaction issues.
Understanding the ECCN Codes
What is a Commerce Control List?
A CCL or commerce control list is a set of documents that help determine whether the exporter needs a license to export a particular type of goods. The control of CCL is with the Bureau of Industry and Security(BIS).
ECCN Code Format
All ECCNs are listed in the Commerce Control List (CCL) which is then divided into ten broad categories, and each category is further subdivided into five product groups. The first character of the ECCN identifies the broader category to which it belongs and the second character identifies the product group.
- Category Group: This group comprises different industries ranging from 0 to 9.
- Product Group: The group simplifies the number into five different product characteristics.
Although the ECCN classification and code format is fairly straightforward to understand, it can be better explained with the help of an example.
For instance, the ECCN code to re-export Riot Helmet is 0A979.
The format starts with the category from the CCL the product falls into. There are 10 categories to choose from; so here ‘0’ represents the category group of nuclear materials, facilities, equipment, and miscellaneous items.
Next we have a letter, which shows the product group. There are 5 different product groups. ‘A’ stands for the product group of system, equipment, and component.
The final 3 characters represent the reasons for licensing control on that particular type of product or item.‘979’ is the type of control that the particular product needs.
How to find ECCN number?
There are three ways of finding the right ECCN code:-
1) Classification from Product Vendor : Get in touch with your manufacturer, producer, and developer to find out about the ECCN code for your product. ECCN code might change periodically and we must be aware of this information Cross-checking is required.
2) Self Classify (Part 738) : This process is tedious in nature as the user might require some technical knowledge of that product. Here, we should be able to identify product group and commerce control list categories as mentioned above.
3) SNAP-R Request: As the ECCN code is governed by the BIS, if we don't have the technical knowledge it's always better to go to a professional and understand the intricacies.
In addition to the above three methods, you can also find the ECCN code for your product by:-
- Cross-checking the nature of the product with BIS and then finding out the ECCN code
- Speaking to an export counselor
What if your Product is not Listed in CCL?
There is rarely an occasion when an ECCN code is challenging to find. But, if a product is not listed, then segment EAR99 comes into the picture keeping in mind it is not controlled by another agency. A better explanation of EAR99 is given further in this article.
Meaning of EAR99
The concept of EAR99 states that a particular item is subject to export administration regulation but is not included in the CCL. The EAR99 items are generally made from low-level technologies and usually don’t require an export license, except when the receiving country is an embargoed country. Here, you should understand another concept associated with EAR99 i.e., NLR authorization. NLR stands for ‘No Licence Required’ Certificate. You may use this NLR certificate 90% of the time for EAR99 items. You can also use it for CCL items.
Difference between Schedule B and ECCN
As an exporter, it is mandatory to know all the import-export terms while entering into a contract with a foreign company. Concepts like HS code, ECCN code, and schedule B are crucial in the import-export of goods.
One common ground between ECCN and schedule B is that the Department of Commerce governs both of them. Other than that, some differences between the two are listed below:-
- The ECCN is managed by the Bureau of Industry and Security, whereas the Census Bureau manages schedule B.
- An ECCN is a five-character number with alphanumeric designations used under the CCL, whereas schedule B is a 10 digit code under the HTS.
- An ECCN code aids in the export of technology and software products. Schedule B code aids in exporting physical goods (in general).
- There is no mandatory rule to submit the ECCN code to AES(Automated Export System). But schedule B codes are a part of the Electronic Export Information (EEI), which the exporters have to submit directly to AES.
- An ECCN code is used while re-exporting products and helps issue a license to the exporter for doing the same. Schedule B is a sub-part of the HTS code and is used by the US to export goods.
- The ECCN has no connection with the HTS code or HSN code while exporting, but schedule B does.
The import-export business is a tedious process, and hence every exporter and importer must understand terms and be well versed with all the documents required for the trade. The US mainly uses the ECCN, but there is globally a lack of knowledge on how to export or re-export goods and the codes associated with the same. New exporters require proper guidance when using the ECCN, as the tiniest of mistakes could cost a company millions.