License Exception Documentation: What BIS Actually Requires

Your compliance team tells you license exceptions are handled. They've been shipping under TMP, LVS, RPL for years. Process is solid. Everything's documented.

Then BIS sends a records request. Not for the export declaration—they already have that from AES. They want the analysis. Why did you claim TMP? What made you think LVS applied? Where's the end-use statement for STA? Where's the proof that equipment came back within 12 months?

That's when the CFO calls. "We can't find the supporting documents for any of these shipments."

I've sat across from BIS investigators who said the same thing: "We're not questioning whether the exception applied. We're asking how you knew it applied at the time you shipped." If you can't answer that question with documents, you've got a problem that lands on the executive team's desk.

The gap between "we use license exceptions" and "we can prove our license exceptions were valid" costs companies $100K-500K in settlements. Usually for shipments that were probably compliant. The violation isn't the export. It's the missing paper trail.

Key Takeaways

• License exception claims require contemporaneous documentation—records created at or near the time of export showing your eligibility analysis
• The five-year retention period under Part 762 applies to all supporting documents, not just the AES filing
• Different exceptions have different documentation requirements. TMP needs return records. STA needs specific end-use statements. ENC needs classification notifications
• "We always use this exception for this product" isn't documentation. BIS wants the analysis, not the conclusion
• Missing documentation during an investigation shifts the burden to you. If you can't prove eligibility, BIS assumes you weren't eligible
• Voluntary self-disclosures for documentation failures average $75K-200K in penalties—sometimes more than the underlying violation would have cost

What Part 762 Actually Requires (And What Your Team Probably Isn't Doing)

The five-year retention rule? Everyone knows that. What most compliance teams miss: "records" doesn't mean the export declaration. It means everything that went into the decision.

Part 762.2 says you keep documents "pertaining to the transaction." That phrase does a lot of work. For license exceptions, it includes your eligibility determination—the internal analysis showing which exception you claimed and why you believed each condition was met.

Here's the disconnect I see constantly: companies keep the outputs (AES filing, commercial invoice, packing list) but not the inputs (screening results, classification memos, eligibility checklists). When BIS asks for documentation, they want both. The invoice tells them what you shipped. The eligibility analysis tells them whether you had a legal basis to ship it.

A semiconductor equipment company I worked with had beautiful shipping files. Every commercial invoice organized. Every bill of lading. Every AES confirmation. But their license exception claims? Someone had clicked "TMP" or "LVS" on the export form. Nobody documented why.

BIS audit covered three years. Over 400 transactions claimed license exceptions. Zero had contemporaneous eligibility documentation. The company couldn't prove any of those exceptions were properly claimed—even though most probably were.

Settlement: $340,000 plus a compliance agreement requiring complete process overhaul. The COO asked me afterward: "We were shipping the same products to the same customers for six years. Why does BIS care about paperwork?" Because paperwork is how you prove you checked. Without it, BIS has no way to know whether you verified eligibility or just assumed it.

Exception-Specific Documentation Requirements

Different license exceptions have different documentation requirements beyond the standard Part 762 retention. Miss these, and your exception claim is defective even if the underlying eligibility was sound.

• TMP (Temporary Exports): The 12-month return requirement creates a documentation obligation that outlives the export. You need records showing when the item left, where it went, and proof it returned within deadline. Not "we think it came back." Import records. Receiving logs. Chain of custody. I've seen TMP failures where equipment definitely returned on time, but nobody could prove it. Shipping tracked outbound. Nobody tracked inbound. When BIS asked two years later, the company had employee recollections. That's not documentation. That's a violation.
• STA (Strategic Trade Authorization): Requires a specific end-use statement from the consignee before each shipment. Not your generic certificate. A statement that explicitly references STA and commits to STA-compliant reexport practices. The statement has to be in your file before goods ship. Companies sometimes collect these after the fact—backdated during audit prep. BIS investigators know what a post-hoc statement looks like. The timestamp on the email. The creation date that matches the day someone asked about documentation. Don't do this. It turns recordkeeping failure into potential false statement liability.
• ENC (Encryption): Certain encryption items require a classification notification to BIS before the first export. Others require annual self-classification reports. The notification isn't just a formality—it's an element of the exception. Export before notification? The exception wasn't available, regardless of whether the item qualified technically. Your file for ENC shipments needs the notification confirmation. The BIS acknowledgment. The date you were cleared to ship. Without that, you're claiming an exception you hadn't yet activated.
• RPL (Replacement Parts): Documentation of the original legal export. If you sold the original equipment, you need records showing it was properly licensed or shipped under a valid exception. If someone else sold it, you need whatever documentation supports your reasonable belief that the original export was lawful. The standard here is what you could verify at the time of shipment, not what you discover later. If you shipped replacement parts in 2023 without checking whether the original 2019 equipment sale was properly authorized, that's a documentation failure in 2023—even if the 2019 sale turns out to have been clean.
• LVS (Low Value Shipments): Value calculations and consignee tracking. Your records need to show the fair market value of each shipment and the cumulative value to each ultimate consignee during the calendar year. If your system tracks by bill-to instead of ship-to, you need a manual reconciliation showing you verified the right consignee.

The "When Did You Know?" Problem

This is the part that kills companies. Documentation has to exist at or near the time of the export decision. Not afterward. Not during the audit. At the time.

"Contemporaneous" means the analysis was performed when you decided to ship, and you can prove it. Reconstructing your reasoning two years later during a BIS inquiry isn't documentation. It's explanation. BIS knows the difference.

What good documentation looks like: your compliance person reviews a shipment on March 15, 2025. Determines TMP applies based on Country Group. Confirms no Entity List hits. Verifies the customer's end-use statement is on file. Notes all of this in the system with a March 15 timestamp. When BIS asks about that shipment in 2027, you produce the 2025 record. Done.

What actually happens at most companies: compliance claims TMP on hundreds of shipments throughout 2025. No documentation. In 2027, BIS sends an inquiry. Someone spends three weeks reconstructing the analysis, writing memos that explain why TMP was appropriate. Those memos might be accurate. They're dated 2027. BIS will note that.

The COO of a machinery company told me: "We've been using TMP for trade shows for fifteen years. Why do I need to document it every time?" Because Entity Lists change. Country Groups change. Your customer's end-use changes. The exception that applied to last month's shipment might not apply to this month's. Each shipment is a separate decision. Each decision needs documentation.

What "Supporting Documents" Actually Means

BIS doesn't define exactly what your license exception file should contain. But enforcement history shows what they expect to find:

Companies that survive audits have files that answer: "What did you know, and when did you know it?"

• For every exception shipment: ECCN determination, Country Group verification, eligibility checklist showing which conditions you verified, denied party screening dated near shipment, end-use/end-user confirmation.
• TMP adds: Return deadline tracking, proof of return (import records, receiving logs), extension requests if applicable.
• STA adds: STA-specific end-use statement received before shipment, consignee acknowledgment of reexport restrictions.
• ENC adds: Classification self-assessment, BIS notification confirmation where required, mass-market determination where applicable.
• LVS adds: Fair market value calculation, ultimate consignee identification, calendar-year cumulative tracking.
• RPL adds: Documentation of original export authorization, one-for-one replacement verification.

What Actually Works (And What Doesn't)

The compliance teams that survive audits don't rely on people remembering to document. They build systems where shipments can't leave without documentation attached.

Approaches I've seen work at companies that passed BIS audits:

The goal isn't paperwork for paperwork's sake. It's making sure that when BIS calls—and eventually they will call—you can answer "yes, we checked" and prove it.

• Gate the shipment release. License exception shipments can't clear until someone completes an eligibility checklist in the system. No checklist, no release. The checklist becomes your documentation. Timestamp is automatic. Nobody can skip it because they're busy or because "we always use TMP for this customer."
• Auto-attach screening results. Denied party screening runs, results attach to the shipment record automatically. Screening on March 15, shipment on March 17—the timeline documents itself. No manual step to forget.
• Flag each transaction, not just each product. Yes, your product qualifies for TMP to Country Group B. But each shipment still needs a flag confirming: Entity List status checked, end-use still valid, value within LVS limits if applicable. The flag takes 30 seconds. Recreating the analysis during an audit takes 30 hours.
• TMP calendar with teeth. Every TMP shipment gets a return deadline in a tracking system. Alerts at 9 months, 11 months, 12 months. Return documentation required to close the record. Unresolved items at 12 months escalate to the compliance manager, then to the COO if still open at 13 months.

FAQ

• My compliance team says documentation is handled. How do I verify that? Ask them to pull the eligibility analysis for your last ten license exception shipments. Not the AES filing—the internal documentation showing which exception was claimed and why each condition was satisfied. If they can produce timestamped records within an hour, you're probably fine. If they start explaining why documentation "isn't really necessary for routine shipments," you have a problem.
• What's the actual cost of documentation failures? Settlements for recordkeeping violations typically run $75K-300K depending on volume and whether BIS finds a pattern. But the real cost is the investigation itself: 6-18 months of management distraction, $100K+ in legal fees, and a compliance agreement that requires BIS approval for process changes for 3-5 years. One client told me the settlement was $180K but the total cost including remediation exceeded $600K.
• Can we just apply for licenses instead of dealing with exception documentation? For high-risk destinations or controlled items, sometimes yes. License applications create their own paper trail. But for routine commercial shipments to allied countries, license exceptions exist to move commerce faster. The answer isn't to avoid exceptions—it's to document them properly. That takes minutes per shipment. Investigations take months.
• Is electronic documentation acceptable? Yes, as long as it's timestamped, attributable to a specific person, protected from modification, and reproducible on demand. Most export management systems qualify. The question isn't paper versus electronic. The question is whether the record exists and proves you checked at the time of shipment.

License exception documentation isn't about proving you were right. It's about proving you checked. That distinction is worth six figures when BIS comes calling.

Export platforms—Descartes, SAP GTS, Lenzo—automate screening and attach records to shipments. But they can't make the judgment calls. Someone still has to verify end-use, confirm Entity List status, track TMP returns. That verification needs to be documented. Software creates the framework. Your people create the proof.

The companies that fail BIS audits on documentation usually shipped correctly. They just can't prove it. Eighteen months of investigation, $150K in legal fees, a $200K settlement—for shipments that were probably compliant. The executives I talk to afterward all say the same thing: "If I'd known documentation was this important, I would have made it a priority years ago."

Now you know.