The International Trade Blog 
Export Compliance
A Simple Explanation of the Export Administration Regulations (EAR)
On: October 27, 2025 | By: 
David Noah |
23 min. read
Picture this: You’re an innovative engineer who has developed a smart sensor in your garage that helps farmers save water—and a company in Singapore wants to buy it. Congratulations, you’re officially an exporter!
Before you ship that first box, though, you need to know whether your sensor—or the software that drives it—requires permission from the U.S. government. That’s where the Export Administration Regulations (EAR) come in. They set the rules for what can be shared abroad, who can receive it, and when an export license is required.
In this article, we’ll walk beside our Garage Inventor to see how a simple international sale triggers real-world compliance steps: figuring out what counts as an export, finding an ECCN on the Commerce Control List (CCL), checking the Commerce Country Chart, and understanding new updates like the BIS 50% Rule. By the end, you’ll see how even small exporters can confidently navigate the EAR.
What Is an Export?
Our Garage Inventor emails her customer the latest firmware update for the sensor. No customs paperwork, no shipping label—yet that act alone is an export under the EAR.
An export includes sending or transmitting an item—hardware, software or technology—from the United States to a foreign destination by any means. It also includes a “deemed export,” the release of technology or source code inside the U.S. to a foreign person, which is treated as an export to that person’s home country.
Dual-Use Items
The sensor was built for farms, but with a few tweaks it could be used by a foreign military to patrol borders or scout territories. That’s the kind of dual-use potential that catches BIS’s attention.
According to 15 CFR § 730.3, dual-use items have both civilian and military or WMD-related applications. That’s why correctly classifying your product is one of the most important steps to staying compliant with the EAR. The EAR, however, cover more than just dual-use goods—they also include purely commercial items and certain military-related items not controlled by the ITAR, such as those in the 600-series of the Commerce Control List.
The CCL, ECCNs and EAR99
Our Inventor’s next task is to classify her sensor. She searches the CCL and finds it listed under a specific Export Control Classification Number (ECCN).
Each ECCN describes the item and lists one or more Reasons for Control—for example, national security (NS) or anti-terrorism (AT). If her product isn’t found anywhere on the CCL, it’s designated EAR99.
EAR99 items are generally low-technology consumer goods that usually don’t require a license. But “usually” is the key word: destination, end use and end user can all change the answer.
Commerce Country Chart: Do You Need an Export License?
With her ECCN in hand, the Inventor turns to the Commerce Country Chart (Supplement No. 1 to Part 738). Each column corresponds to a Reason for Control. If there’s an “X” in the box where her ECCN’s control reason meets the destination country, a license is required—unless a license exception applies.
For Singapore, there’s no “X” under her ECCN’s control columns, so her first sale doesn’t require an export license based on the ECCN classification. However, when another inquiry arrives from a customer in China, that same chart shows an “X,” meaning she’ll need to apply for an export license before shipping.
Need help visualizing this step? Download our free guide, How to Determine If You Need an Export License.
Restricted Party Screening: Check End Users
Even if it turns out your product doesn’t need a license to export to certain countries, there are still people and organizations with whom you must not—or may not—do business without authorization. Therefore, the Inventor needs to check the government’s various restricted-party and denied-party lists to ensure that none of the parties in the export transaction appear on any of those lists.
There are many reasons a person or company may be added to a restricted-party list. They may pose a risk to national or international security, have violated export-control laws, or be involved in activities like terrorism or money laundering.
Pro Tip: Tools like Shipping Solutions Export Compliance Module make this step easier by automatically checking all parties against consolidated U.S. and international lists—and documenting the results for your audit trail.
New In 2025: The BIS Affiliates Rule (also called the BIS 50 Percent Rule)
When the Inventor hears from a Malaysian distributor eager to represent her product, she runs a restricted party screening and finds no match. However, with a little digging she learns that the distributor is owned by two companies that appear on BIS’s Entity List. It turns out that both of the listed companies own 30 percent of the distributor—together, that’s 60 percent.
Under the new Affiliates Rule, effective September 29, 2025, BIS now treats any entity 50 percent or more owned (directly or indirectly, including in the aggregate) by listed parties as subject to the same license requirements as the listed company itself. This mirrors OFAC’s long-standing 50 Percent Rule and significantly expands due-diligence obligations for exporters.
Why it matters: Even if your customer isn’t named on a list, you must look upstream. Ownership ≥ 50 percent triggers the same export restrictions and presumptions of denial.
Watching for Red Flags
Red flags are defined by the EAR as "any abnormal circumstances in a transaction that indicate that the export may be destined for an inappropriate end-use, end-user or destination." For the Inventor, even though her sensor's ECCN may not require an export license and her customer may not appear on any "bad-guy" lists, she must keep an eye open for any unusual circumstances that require her to pause her export and conduct further research to ensure everything is above board.
Read more about red flags in our blog post, No Bull: Export Compliance Means Watching for Red Flags.
SNAP-R at a Glance
If the Garage Inventor determines she needs to apply for an export license, she heads to SNAP-R, BIS’s online portal for license applications and commodity-classification requests. After creating a company profile and obtaining a CIN (Company Identification Number) through the SNAP-R portal, she submits the necessary information—ECCN, destination, end user and end use—along with a short Letter of Explanation.
That’s the simplified picture; for a full walkthrough, watch for our upcoming blog post: How to Apply for an Export License Using SNAP-R.
Creating an Export Compliance Program (ECP)
As her business grows, the Inventor decides to formalize her export processes with an Export Compliance Program (ECP).
According to BIS, an ECP builds individual compliance steps—like screening, classification and recordkeeping—into one organized system. A strong ECP helps prevent violations and can reduce penalties if something goes wrong.
- It creates a clear plan to audit procedures and address issues before they surface.
- It documents that the company routinely follows its written policies—something BIS views as a mitigating factor in enforcement.
For a step-by-step guide, download How to Create and Implement an Export Compliance Program.
Common Pitfalls for New Exporters
- Assuming EAR99 means no license. Always verify destination, end use and end user.
- Ignoring ownership links. The new BIS 50% Rule extends restrictions to affiliates.
- Overlooking deemed exports. Giving a foreign national access to controlled technology inside the U.S. may require a license.
- Forgetting documentation. Keep records for at least five years; OFAC now requires 10.
Learn from others’ mistakes in BIS’s publication Don’t Let This Happen to You!—it’s full of real enforcement stories.
Where to Find Assistance with Export Regulations
- Submit a classification request through BIS's Simplified Network Application Process - Redesign (SNAP-R).
- Contact your local Export Assistance Center for one-on-one guidance.
- Use Shipping Solutions export software to automate restricted party screening, license determinations and compliance recordkeeping. Request a free, no-obligation demo here, or watch this video to see it in action:
In addition, Shipping Solutions has published a variety of free guides that explain the export compliance process in more detail, including:
- What You Need to Know about Export Compliance
- How to Determine If You Need an Export License
- Export Procedures and Documentation: An In-Depth Guide
Bringing It All Together
By the time our Garage Inventor ships her first crate overseas, she’s confident—not because she memorized every section of the EAR, but because she learned how to ask the right questions:
- Is my product listed on the Commerce Control List?
- Does the Commerce Country Chart show a license requirement?
- Are any customers or their affiliates on any restricted party lists?
If you can answer those same questions for your own exports, you’re already well on your way to building a compliant, globally competitive business.
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This article was first published in August 2018 and has been updated to include current information, links and formatting.
