Meaning
Provision in the Export Administration Regulations that permits the shipment of hardware and software containing strong encryption to most global destinations. Applying license exception enc simplifies the distribution of connected devices that use standard protocols like tls or ipsec. The rule distinguishes between mass market products and those intended for restricted government end users.
Classification Standard
Determining the correct export control classification number is the necessary first step before a company can use this benefit. A product using license exception enc typically falls under category five part two of the commerce control list. This classification depends on the bit length of the algorithms and the primary function of the device in a network.
Reporting Requirement
Annual submissions to the Bureau of Industry and Security provide the government with data on the types of encryption technology being shipped. When a company utilizes license exception enc for certain categories of products, it must submit a self classification report or a semi annual sales report. These documents ensure that the export of sensitive technology remains transparent and compliant with national security interests.
Technical Review
Specialized items with high throughput or custom cryptographic functions may require a formal commodity classification request. The government performs a review to confirm that the use of license exception enc is appropriate for the level of security the device provides. If the review reveals a unique or non standard implementation, the exporter might be required to apply for an individual license instead.
