Reexports, retransfers and end use assurances

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1. The destination on the license is the destination of use

A commercial export license is granted for a stated destination, end-user and end-use, and the regulations hold the exporter to all three. The country named as the country of ultimate destination on a license application, or in the Electronic Export Information filing where an exemption is claimed, "must be the country of ultimate end-use" (22 CFR 123.9(a)). A transit country or a regional distributor’s home country does not qualify if the article will be used somewhere else.

The exporter must settle those facts before applying. "Exporters must determine the specific end-user, end-use, and destination prior to submitting an application to the Directorate of Defense Trade Controls or claiming an exemption under this subchapter" (22 CFR 123.9(a)). A note sets the standard of inquiry: a person is expected to review all readily available information, including public information and information available from other parties to the transaction (22 CFR 123.9(a)).

2. Anything else needs written approval first

Once the article has left, the license still governs it. Written approval from the Directorate of Defense Trade Controls must be obtained before the article is resold, transferred, reexported, retransferred, transshipped or disposed of to any end-user, end-use or destination other than the one stated. The only exception is an exemption in the regulations that explicitly authorizes that movement without approval (22 CFR 123.9(a)).

The same principle runs through government sales, where it is called third-party transfer. That route, and the consent it needs, is described in third party transfer and retransfer consent. This piece covers the commercial license side.

3. What travels with the goods

The restriction is passed down the chain in writing. The exporter, whether American or foreign, must tell the end-user and every consignee that the articles are subject to United States export laws and regulations (22 CFR 123.9(b)). For shipments, retransfers and reexports in tangible form, the commercial invoice must carry four items: the country of ultimate destination, the end-user, the license or approval number or exemption citation, and a prescribed control statement (22 CFR 123.9(b)(1)).

The statement says the items are authorized for export only to that destination and those end-users, and may not be passed on without government approval, whether in original form or after incorporation into other items. Where Commerce-controlled items travel on a State Department license, the exporter must also give the end-user and consignees each item’s classification under the Export Administration Regulations, including its Export Control Classification Number or EAR99 designation (22 CFR 123.9(b)(2)).

4. Asking for approval to move an article on

A request to reexport, retransfer or change the end-use, end-user or destination can come from an American or a foreign person. It must include all the documentation required for a permanent export license, plus four further items (22 CFR 123.9(c)):

• The license, written authorization or exemption under which the article or service was first exported.
• A precise description, quantity and value of the article or service.
• A description and identification of the new end-user, end-use and destination.
• For items first exported under the Australia or United Kingdom treaty exemptions, the request route set out in those sections.

Commerce items can be covered too. The Directorate may authorize the reexport or retransfer of an item subject to the Export Administration Regulations on three conditions. It must first have been exported under a State Department license or approval, and it must be for end-use in or with a defense article. The documentation requirements must also be met for it and for the associated defense article (22 CFR 123.9(d)).

5. A standing authorization for components in allied equipment

One exemption removes the prior approval step for a common case. American-origin components incorporated into a foreign defense article may be reexported or retransferred to NATO, its agencies, a NATO government or five other named governments without prior written approval, if four conditions are met (22 CFR 123.9(e)).

The components must have been authorized for export in the first place, other than under the Australia or United Kingdom treaty exemptions. They must not be significant military equipment or missile technology items, and the sale must fall below set contract values: $25 million for major defense equipment and $100 million for defense articles or services (22 CFR 123.9(e)(2)). The original license must not have prohibited use of the exemption (22 CFR 123.9(e)(4)). Finally, the person reexporting must notify the Directorate in writing within 30 days. "The notification must state the articles being reexported and the recipient government" (22 CFR 123.9(e)(3)).

6. The nontransfer and use certificate

For the most sensitive exports, the promise is taken before the license issues. A nontransfer and use certificate, Form DSP-83, is required for the export of significant military equipment and classified articles, including classified technical data, except under two exemptions in part 126 (22 CFR 123.10(a)).

The form is a condition of the license itself. "A license will not be issued until a completed Form DSP-83 has been received by the Directorate of Defense Trade Controls" (22 CFR 123.10(a)). "This form is to be executed by the foreign consignee, foreign end-user, and the applicant" (22 CFR 123.10(a)). By signing, the foreign parties undertake not to reexport, resell or dispose of the equipment outside the country of end-use, or to any other person, without prior written approval from the Department of State.

The Directorate may require the certificate for any other defense article or service as well (22 CFR 123.10(b)). Where the end-user is not a government, it may also require the government of the destination country to sign (22 CFR 123.10(c)).

7. What this means for an exporter

These sections turn a license into a continuing obligation that follows the goods. The invoice statement and classification data put later holders on notice, and the certificate for sensitive items makes the foreign parties sign up to the same limits. Knowing the true destination at the outset is the requirement everything else rests on. License types themselves are covered in export licenses and customs clearance.

Key terms

Country of ultimate destination	The country named on the license or filing, which must be the country of end-use.
Retransfer	A change of end-user or end-use for an article already exported, which needs prior approval.
Form DSP-83	The nontransfer and use certificate required for significant military equipment and classified articles.
Control statement	The prescribed invoice wording telling later holders that the items may not be passed on without approval.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Equipment that must stay with its approved end user needs controlled handling after delivery too. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.