When most people think of exporting, they picture shipping crates, customs paperwork and goods crossing international borders.
But here’s the thing: under U.S. export regulations, you can be considered an exporter even if you never send a single package overseas.
If you give a foreign national access to certain types of controlled technology or source code—right here in the United States—it’s called a deemed export. And it carries the same legal obligations as physically shipping products out of the country.
In this article, we’ll walk through what a deemed export actually is, why it matters and what steps you should take to avoid costly compliance mistakes.
Under the Export Administration Regulations (EAR), a deemed export happens when controlled technology or source code is shared with a foreign person in the United States.
Even though nothing is physically shipped, it’s still considered an export because the knowledge is transferred. That means it may require an export license, just like a traditional shipment.
Here's how the EAR defines it:
Any release in the United States of "technology" or "source code" to a foreign person is a deemed export to the foreign person's most recent country of citizenship or permanent residency.
EAR Part 734.15 says technology and source code is "released" when:
Part 772 defines "technology" as:
Information necessary for the 'development,' 'production,' 'use,' operation, installation, maintenance, repair, overhaul, or refurbishing (or other terms specified in ECCNs on the CCL that control 'technology') of an item.
Put simply, if a foreign person has access to controlled blueprints, design specs, software, technical data or engineering know-how—even by just viewing or hearing about it—that can be a deemed export.
And if that technology is listed on the Commerce Control List (CCL), you may need a license before sharing it, even inside the U.S.
You don’t have to cross a border to be an exporter. You don’t even have to leave your couch! Here are a few major examples:
Institutions of higher education are a major category of deemed exporters. Something as simple as hosting a tour of a laboratory that uses controlled technology or telling someone how to use that technology may be considered a transfer.
Companies working in biotech, aerospace, advanced manufacturing, cybersecurity, electronics and similar sectors frequently handle technologies listed on the Commerce Control List (CCL) that require a deemed export license.
You’ve almost certainly checked social media, read a blog or opened an email in the last 10 minutes, so you know just how powerful the internet’s current of information is. It’s called the web for a reason.
The internet makes it incredibly easy to share information—and that’s exactly the problem. Uploading controlled technical data to a cloud server accessible by foreign nationals, sending an email with sensitive files or even allowing remote desktop access to a system with controlled software can all count as a “release.”
Even unintentional sharing—like forgetting to restrict cloud access—can create a compliance risk.
Traveling with a laptop that contains controlled software or technical specs? Giving a presentation that includes EAR-controlled information?
These scenarios may require a license or specific precautions. That includes:
Just crossing a border with the wrong data can unintentionally violate export regulations.
Today, it’s critical to understand that even the slightest exposure of controlled technology or information to a foreign national in the U.S. may be considered a deemed export under U.S. export regulations. That means your company could violate the law—even without physically shipping anything overseas.
These kinds of violations can lead to civil and criminal penalties, including significant fines and, in some cases, imprisonment for employees involved. (See our previous article on this topic.)
Deemed exports are complex and require special attention. There’s no one-size-fits-all solution. However, the Deemed Exports section of the Bureau of Industry and Security (BIS) website includes valuable guidance if you have questions.
We've also published several related articles to help you better understand and manage deemed export risks:
If one or more of your products is controlled under the EAR and an export license would be required to ship those goods to the country of a foreign person, you also need an export license before you can share that technology with them even if they are located in the United States. The BIS website includes instructions for applying for an export license through its SNAP-R page.
In September 2024, BIS issued additional guidance for applying for a deemed export or deemed reexport license. Key updates include:
You risk harsh penalties if you transfer deemed exports without a license: criminal penalties can reach 20 years imprisonment and fines of $1 million per violation. Administrative monetary penalties can reach up to $300,000 per violation or twice the value of the transaction, whichever is greater. And violators can be denied future export privileges.
So, don’t risk it! Make sure you do your research, follow each regulation and seek assistance when needed. Shipping Solutions is designed specifically to help U.S. exporters and importers stay compliant with these kinds of regulations. Here’s how it supports you:
Reach out to learn more or to schedule a free demo.
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This article was first published in September 2014 and has been updated to include current information, links and formatting.