U.S. Export Controls: EAR Amended. Details Here

The U.S. Export Administration Regulations detail how and when U.S. and Non-U.S. companies can export U.S. dual-use goods. When it changes, that change matters to exporters wherever located in the world.

The EAR was amended on 15 September 15, to add clarification regarding software "releases."

Despite being the final regulation, there was no interim rule before this one because BIS classified it as a technical correction/clarification.

Context

The EAR already viewed sharing access credentials for specific software or technologies as an export that might require authorization if the recipient of the credentials uses them in accordance with their nationality or location, or if you are aware that, even if you share your credentials with another party (as is the case with physical exports), someone who requires a licence will eventually gain access to the files.

Clarification

The new rule adds a note to Section 734, where release and access credentials are discussed, that restates the definition of software (which is already in the Definitions section of the EAR, Part 772). This is done to make sure that exporters are aware of the potential problems with sharing access information for either object code or source code. The Federal Register notification states that some exporters might have believed that just source code was protected.

A cross-reference between the section defining release (734.15), which already directly concerns transfers of access information (734.15(b)), and the provision imposing an additional knowledge limitation on the transfer of access information (734.19), is also included in the revised rule:

BIS's Argument

In this final rule, BIS amends the EAR to make a technical correction that also serves to clarify provisions of the EAR that pertain to the release of “software.” On June 3, 2016, BIS published the final rule, Revisions to Definitions in the Export Administration Regulations (81 FR 35568) (June 3 rule). The June 3 rule added provisions to address releases of “technology” and “software” under § 734.15 and transfer of access information under § 734.19. In § 734.15, this final rule clarifies an ambiguity by adding a cross reference to § 734.19. In § 734.19, this final rule adds a new note to the section clarifying that for purposes of transfer of access information, a release of “software” includes source code and object code.

The definition of the term “software” in § 772.1 includes both source code and object code, and “software” is used as a defined term in § 734.19. Accordingly, the note added in this rule will eliminate potential uncertainty that the § 734.15 definition of “release” limits § 734.19 to only controlling transfers of access information that release source code, rather than both source code and object code.

More information and links

https://www.bis.doc.gov/index.php/documents/regulation-docs/412-part-734-scope-of-the-export-administration-regulations/file

https://www.federalregister.gov/documents/2023/09/18/2023-20128/export-administration-regulations-ear-transfer-of-access-information-and-release-of-software-source