Export License – Definition

Cite this article as:"Export License – Definition," in The Business Professor, updated November 19, 2018, last accessed November 26, 2020, https://thebusinessprofessor.com/lesson/export-license/.


Export License – Definition

An export license is the authorization issued to exporters by a host country to carry on import-expert activities with individuals from other countries. US export regulations define export as any goods or services sent to foreign countries, individuals, association of individuals and companies.

Export Compliance Requirements

The Export Administration Regulations (EAR) set standards and rules that must be met to send goods to a foreign country. It also applies to re-exporting. Re-export is when goods and services are exported to another country and then subsequently exported to other countries. It’s the responsibility of the producer to ensure that it complies with these regulations.

The Bureau of Industry and Security (BIS) is the branch of US Department of Commerce which is tasked to implement the Export Administration Regulations (EAR). The BIS and related authorities require exporters to obtain and export license.

Followings are the criteria for license:

  • Product technical description – What commodity is being exporting? Does it comply with EAR?
  • Product destination – Countries where they are sending commodities cannot be blacklisted by US government
  • End use – What is the ultimate use of the product? I cannot be an illegal purpose.
  • End user – Who is end user? They cannot have been blacklisted.

The BIS and EAR does not cover all export items. To determine whether enterprises need any license to export goods and services, following factors must be considered:

References for Export License

Academic Research on Export License

Connections between the processing and nuclear export of mRNA: Evidence for an export license?, Cullen, B. R. (2000). Proceedings of the National Academy of Sciences, 97(1), 4-6. In this paper, the question of how do mRNAs receive an export license from the nucleus, is addressed by the Luo and Reed manuscript.

Two sides of the same coin? The legal and illegal trade in small arms, Marsh, N. (2002). The Brown Journal of World Affairs, 9(1), 217-228. This paper analyses the acquiring and sales of illegal weapons in Norway. This paper investigates the distinction between the legal and illegal trade in small arms, and highlights the the methods used to perpetrate illegal arms sales.

China and US Trade: Recent¬†Export¬†Regulations, McKenzie, J. F. (1984). The International Lawyer, 455-464. This paper explores the reclassification of the People‚Äôs Republic of China from Country Group ‚ÄėP‚Äô to Country Group ‚ÄėV‚Äô for export control purpose by the Amendment to the Export Administration Regulations created by the Office of Export Administration in 1983. The paper further discusses the overall effects of this reclassification.

Why is corruption so much more taxing than tax? Arbitrariness kills, Wei, S. J. (1997).¬† (No. w6255). National bureau of economic research. This paper examines the effect of corruption-induced uncertainty on foreign direct” investment. The measure of uncertainty is constructed based on unpublished individual survey” responses on levels of corruption in host countries. Results show that corruption has a negative effect on investment. Emphasis is placed on Singapore and Mexico as case study.

United states export¬†controls–past, present, and future, Berman, H. J., & Garson, J. R. (1967). Columbia Law Review,¬†67(5), 791-890. This paper analyses the change in restrictions of export by the United States Government before and after the World War II.

The Export Administration Amendments Act of 1985, Liebman, J. R. (1986). The International Lawyer, 367-374.

A Road Map to Understanding Export Controls: National Security in a Changing Global Environment, Swan, P. (1992). Am. Bus. LJ, 30, 607.

The internationalization of small high-technology firms, Jones, M. V. (1999). Journal of International marketing, 15-41. This study of 196 small high-technology firms embraces the areas of the internationalization of entrepreneurially led firms and the early stages of the international growth and development of high-technology firms. The author’s conceptual stance is that the early internationalization of small firms should be viewed as an holistic process, that is, one in which interrelated and even integrated decisions and processes combine to accomplish a firm’s individual pattern of internationalization. The study explores firms’ patterns of international development through their establishment of cross-border activity in key value chains and associated service activities.

An examination of barriers to exporting encountered by small manufacturing companies, Rabino, S. (1980). Management International Review, 67-73. The study concentrates on perceptions of small exporting firms in high-technology industries.

Dual-use free trade agreements: The contemporary alternative to high-tech¬†export¬†controls, Klaus, M. D. (2003). Denv. J. Int’l L. & Pol’y,¬†32, 105.

Measuring the restrictiveness of trade policy, Anderson, J. E., & Neary, J. P. (1994). The World Bank Economic Review, 8(2), 151-169. This article provides an introduction to the trade restrictiveness index (TRI), which equals the uniform tariff that is welfare equivalent to a given pattern of trade protection. Unlike standard measures of trade restrictiveness, the TRI has a solid theoretical basis, can incorporate both tariffs and quantitative restrictions, and can be adapted to construct the trade policy equivalent of domestic distortions. The article compares a number of applications and describes procedures for operationalizing the TRI on a personal computer. The authors conclude that the TRI has considerable potential in empirical work.

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