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Direct Product Rule

EAR §736.2 (b)(3) advises companies regarding the circumstances when non U.S. made products will require a Commerce license (called the “direct product rule”). For items that are not 600 series (or 9×515) and are not U.S. made, a license (or use of a license exception) will still be required to export abroad if the U.S. technology requires written assurance to be exported (see Supp. 2 to §748), the item is subject to National Security (NS) controls for export, and the country that the item is being exported to is listed as a Country Group D:1, E:1, or E:2 country.

 

For 600 series or 9X515 items that are not U.S made, a Commerce license or use of a license exception is required for export abroad if the following conditions are met: the item is made from 600 series/9X515 U.S. technology/software and the item is itemized under a 600 series or 9A515 ECCN on the CCL. Additionally, for 600 series/9X515 non US made items, for licensing authority to be required for export abroad the country that the item is being exported to must be a Country Group D:1, D:3, D:4, D:5, E:1, or E:2 country; for 9×515 items, they must be exported to Country Group D:5, E:1, or E:2 countries.  Both rules are also applicable for non U.S. made manufacturing plant or major plant components- made from the respective U.S. technology/software (either 600 series/9X515 or not).

 

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