Using the Export License Exception STA: Strategic Trade Authorization

The Export Administration Regulations (EAR) govern the export of goods and certain technical data from the United States and to non-U.S. persons. In instances where an export license would typically be required under the EAR, a number of exceptions exist to streamline the process. One such exception, introduced in 2011 by the Bureau of Industry and Security (BIS) as part of broader export control reforms, is the license exception Strategic Trade Authorization (STA).

License exception STA allows for the export, re-export and in-country transfer of specific controlled items to low-risk destinations (a preferred group of about 40 countries). However, it's important to note that using STA comes with specific requirements for exporters (found in the EAR Part 740.20). This article will delve into the eligibility criteria for the STA, its benefits and the steps exporters must take to ensure compliance when using this exception.

Using the License Exception Strategic Trade Authorization (STA)

While STA offers a streamlined export process and is often more cost-effective than obtaining a standard license, it comes with specific requirements for exporters. First you need to determine if your goods qualify:

1. Check the Commerce Control List

Before you can determine if STA will apply to your product, you need to determine the correct Export Control Classification Number (ECCN). An ECCN is a five-digit alphanumeric designation for your items for export control purposes. All ECCNs are listed in the Commerce Control List (CCL). 

Finding the correct ECCN classification for your products can be challenging. The Shipping Solutions Product Classification Software can make this process faster than manually searching through the CCL. You can also learn more in our article, Export Codes: ECCN vs. HS, HTS and Schedule B.

STA is often used for 600 series items (military goods), but it is not limited to them. Be aware that some of the conditions for using STA are specific to 600 series items.

2. Determine the Reason for Control

Once you’ve found the correct ECCN classification, the regulations tell you the reason that item is controlled. (It may be for purposes of chemical and biological weapons, nuclear nonproliferation, national security, missile technology, regional stability, firearms convention, crime control, and terrorism.) The CCL also lists the license exceptions that may be available for a particular ECCN classification and the conditions under which those exceptions apply. You will use the reasons for control in the next step. 

Again, you can use technology to make this process faster and less cumbersome. The Shipping Solutions Export Controls Software will tell you if a license is required for your product based on the ECCN classification and the destination country.  It will also tell you if any license exceptions are available, and the conditions related to those exceptions.

3. Check the BIS Strategic Trade Authorization (STA) Compliance Tool

BIS has a decision tree tool to help you determine if your item is eligible for the specific license exception STA and help you understand if you are prepared to meet the compliance requirements of this license exception. You will need the ECCN and reasons for control for your product to use the tool (STA applies to specific categories of items on the CCL). 

Your Product Is Eligible for STA—Now What?

There are some requirements you must follow when using STA: 

1. Provide the ECCN to the consignee. This is not always the case with other license exceptions.
2. Special Notification: Inform the recipient (consignee) in writing that the shipment is being sent under the STA exception. This notification should specify which items (or the entire shipment) fall under STA. The notice may be electronic or on paper.
3. Prior Consignee Statement: Before exporting, you must obtain a written statement from the consignee confirming they understand the items are being shipped under STA and will not be re-exported to unauthorized destinations. Here is a sample statement from BIS.
4. File each shipment through the Automated Export System (AES). You need to file your Electronic Export Information (EEI) through AES for all STA shipments, regardless of value.

Proposed Updates to License Exception STA

In December 2023, BIS proposed a new rule to encourage and simplify the use of STA for exports to ally and partner countries. However, some proposed restrictions on STA eligibility for certain technologies, like source code and coatings, have caused concern within the export community. BIS is currently considering industry feedback and a final rule is expected this summer.

Important Compliance Considerations

While STA may offer significant advantages if your product qualifies, it's essential to remember it's not a free pass. Here are some key points to keep in mind:

• Compliance Requirements: Even under the STA, exporters are still responsible for ensuring their exports comply with all export regulations. What You Need to Know about Export Compliance explains your responsibilities if you’re unsure.
• Recordkeeping: Exporters using STA must maintain detailed records of their export transactions for a minimum of five years. With specific requirements such as the consignee statement, this is especially important.
• End Use and End User Verification: Exporters have a responsibility to check restricted party lists and verify this information. The Shipping Solutions Restricted Party Screening Software will screen against more than 100 lists, including all the U.S. government lists, to determine if your customer is a restricted end user. This prevents exporters from having to manually search for matches on each list, which can save a lot of time.

Follow all requirements, and STA can be a powerful tool for exporters, streamlining the export process for specific controlled items. But BIS has been known to audit these shipments, so make sure you’re following the regulations!  

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