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September 22, 2016

BIS, State Harmonize Destination Control Statement

One of the purposes of the Export Control Reform (ECR) Initiative is to harmonize provisions between the Export Administration Regulations (“EAR”) and the International Traffic in Arms Regulations (“ITAR”), where warranted.  On August 17, 2016, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and the U.S. Department of State published companion final rules harmonizing the Destination Control Statement (“DCS”) in the EAR and ITAR.[1] Both sets of regulations have a mandatory DCS that must be included on specific shipping documentation in certain situations.  Many exporters and freight forwarders automatically include a DCS on all export shipments regardless of whether required or not.  Having two different DCSs has previously caused confusion among exporters as to which statement to include on mixed shipments, that is, shipments containing both EAR- and ITAR-controlled items.  The harmonization of the DCS statements is intended to help ease the regulatory burden for exporters, particularly those who export mixed shipments, which is more common after the implementation of ECR.  Both rules become effective November 15, 2016.

New Harmonized DCS

These items are controlled by the U.S. government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations.

The new DCS adopts common text that can be used under the EAR and the ITAR.

Important Changes under the EAR

Important Changes under the ITAR

It is important to note that exporters must review the changes included in the Commerce and State Department’s companion rules to determine the context in which they are intended to be applied, as well as to review other associated requirements.

To view the Commerce rule, please click here.
To view the State companion rule, please click here.

For specific questions, please contact us.

[1] The DCS is a statement required on certain documents that accompany shipments of items subject to the EAR, the ITAR, or both.