License Exception Eligibility: Quick Reference

BIS published 2,847 updates to the Export Administration Regulations in 2025. Seventeen directly affected license exception eligibility for at least one ECCN category (Federal Register, 2025). For compliance teams processing 50–200 shipments monthly, tracking which exceptions apply to which items has turned into a puzzle that resets every few weeks. Just when you think you've got it figured out, another Federal Register notice lands.

We see it constantly: company correctly classifies an item, finds the right exception in the CCL, ships — and six months later receives a letter from BIS asking about a consignee statement nobody thought to request. Or the shipment technically met the exception, but nobody ran Part 744 screens. Penalty range in 2025 starts at $35,000 per violation and reaches $356,579 for civil cases (31 CFR 501.701). One missed checkbox, six figures.

Key Takeaways:

• License exceptions under EAR Part 740 split into two types: transaction-based (TMP, RPL, GOV, STA) and list-based (LVS, GBS, CIV, TSR) — the type determines your eligibility check sequence (BIS.gov, 2025)
• LVS dollar limits vary by ECCN — $1,500 for 600 series items, $5,000 for most Category 1, up to $50,000 for some Category 3 electronics (15 CFR 740.3)
• STA covers approximately 40 allied destinations in Country Groups A:5 and A:6 but requires written consignee statements for reexports (BIS STA FAQ, 2025)
• Part 744 end-use restrictions override all license exceptions — a clean ECCN evaluation means nothing if the consignee triggers a red flag
• BIS routinely audits STA shipments; missing consignee documentation results in enforcement action regardless of whether the underlying export was otherwise compliant

How Do Transaction-Based and List-Based Exceptions Differ?

Transaction-based exceptions authorize exports based on shipment circumstances — temporary use, government end-users, replacement of previously exported equipment. List-based exceptions authorize exports based on what the CCL says about your specific ECCN. Practical difference: for transaction-based, check Part 740 first; for list-based, check your ECCN entry first and then verify whether the stated exception applies to your destination and end-user.

Getting the sequence wrong creates false confidence. A compliance analyst who sees "LVS-$5,000" under their ECCN and stops there has missed half the analysis. List-based exceptions require destination eligibility verification through Country Groups, while transaction-based require meeting specific operational conditions that have nothing to do with what's written in the CCL.

GBS illustrates the trap. License Exception GBS authorizes exports to Country Group B destinations when the Commerce Country Chart shows a license requirement for national security reasons only and the ECCN includes "GBS—Yes" on the CCL. Sounds straightforward. But GBS explicitly excludes Sudan and Ukraine regardless of what the CCL states (§ 740.4, September 2025). An exporter who checked the ECCN, confirmed "GBS—Yes," and shipped to a Ukrainian customer without reviewing § 740.4 committed a violation. The CCL said yes. The regulation said no. Guess which one BIS cares about.

LVS value calculations create similar problems. Net value excludes shipping charges but includes container value unless containers would ship separately as NLR. A calculation error of $500 can push a shipment over the limit, converting an exception-eligible export into an unlicensed one. We've seen companies lose LVS eligibility because someone included pallet costs that should have been excluded — or excluded packaging costs that should have been included.

Which Exceptions Apply to Replacement Parts and Temporary Exports?

License Exception RPL (§ 740.10) and TMP (§ 740.9) cover scenarios that create the most operational friction — field service, demo equipment, trade show samples, defective component replacement. Both authorize exports that would otherwise require licenses, but their conditions diverge significantly.

RPL covers one-for-one replacement of parts, components, accessories, and attachments for previously lawfully exported equipment. Key constraint: the replacement item must be functionally equivalent. You cannot use RPL to upgrade a customer's system, even if the upgraded component carries the same ECCN. New component must replace a specific defective or worn part, not improve capability. Field service teams hate this. Customer asks for a new controller version, old one is discontinued, and RPL won't let you ship an upgraded replacement without a separate license evaluation. "But it's the same ECCN!" doesn't matter.

TMP works differently. Temporary exports under TMP can include items for exhibition, demonstration, or beta testing — activities where the item returns to the exporter rather than transferring ownership. Baseline return period is one year, but exporters can request extensions up to four years through BIS. Items must remain under "effective control" of the exporter or an employee throughout the temporary export period.

Effective control isn't a formality. BIS interprets it literally. If your sales rep left a demo unit with a potential customer "for a couple weeks of testing" and flew home, effective control is lost. Item must either return with the rep or remain under direct supervision of the exporter's employee. No exceptions, no workarounds. We've watched companies scramble to retrieve equipment from overseas customers after realizing their "informal demo arrangement" violated TMP conditions.

600 series items add another layer. Both RPL and TMP include special recordkeeping requirements for 600 series commodities (§ 743.4), including semi-annual reporting to BIS. Missing these reports creates compliance exposure even if every other exception element was properly executed.

What Disqualifies an Export From STA Eligibility?

License Exception STA (§ 740.20) generates more eligibility questions than any other exception — partly because it covers a broad ECCN range, partly because disqualification triggers scatter across multiple EAR sections. Three categories of disqualifiers matter most.

First, destination. STA divides eligible countries into two groups: Country Group A:5 (approximately 40 close allies) for most controlled items, and broader Country Group A:6 for items controlled only for NS, CB, NP, RS, CC, or SI reasons. If your ECCN carries any reason for control beyond those listed, A:6 eligibility disappears. One MT reason. One AT reason beyond the standard set. Gone.

Second, item exclusions. CCL includes items explicitly marked "STA: Paragraph (c)(2) of § 740.20.a" — eligible only for Country Group A:5, not A:6. Other items carry "STA: N/A" or list specific paragraphs excluding certain uses. Reading past the ECCN header into the License Exception section matters. Most people don't.

Third, Part 744 controls override everything. If the consignee appears on the Entity List, if the end-use involves activities of concern under § 744.6 (nuclear, missile, chemical/biological), or if red flags suggest military end-use in certain destinations, STA cannot apply regardless of what the ECCN states. This is where STA analysis actually fails. Compliance teams correctly complete ECCN-to-destination-to-country-group analysis but skip the Part 744 overlay. They check the exception. They don't check the parties.

Consignee statement requirement catches another set of violations. For STA shipments that will be reexported or transferred in-country, the exporter must obtain and maintain a written statement from the consignee acknowledging receipt under STA and agreeing to comply with applicable conditions. BIS conducts end-use checks and requests these statements during audits. A shipment that met every technical STA requirement but lacks the consignee statement still generates enforcement risk. BIS STA FAQ states directly: "Any reexport or transfer of an item under License Exception STA without obtaining and maintaining a prior consignee statement is a violation of the EAR." Not "may be" a violation. Is.

What Are the Most Common Eligibility Mistakes?

Compliance audits and BIS enforcement actions reveal recurring patterns. Knowing where others fail helps avoid the same traps.

Mistake 1: Treating EAR99 as blanket authorization. EAR99 items don't require a license for most destinations, but Part 746 sanctions (Cuba, Iran, North Korea, Syria, Crimea) and Part 744 end-user restrictions still apply. An EAR99 shipment to an Entity List party requires a license. Treating classification as the end of analysis rather than the beginning creates violations.

Mistake 2: Confusing "No License Required" with "License Exception." NLR means the Commerce Country Chart shows no license requirement for your ECCN/destination/reason-for-control combination. A license exception means a license is technically required but the exception authorizes export without one. AES filing codes differ (NLR versus specific exception codes like LVS, STA, TMP). Misreporting authorization type on shipping documents is a recordkeeping violation regardless of whether the shipment was legal.

Mistake 3: Assuming license exception eligibility travels with the item. If an item was exported under License Exception STA, the recipient cannot automatically reexport it under STA to another destination. Reexport requires its own STA eligibility analysis — destination, end-user, end-use, consignee statement. Same with RPL. Eligibility attaches to the transaction, not the goods.

Mistake 4: Ignoring annual value limits under LVS. LVS limit isn't just per-order — it's also per-consignee per-year. Total exports under LVS to the same consignee cannot exceed 12 times the applicable ECCN value limit annually. Company shipping $5,000 orders monthly to the same distributor exceeds the $60,000 annual cap by month 12. Thirteenth shipment requires a license. Simple math, but surprisingly few companies track it.

Mistake 5: Skipping § 740.2 restrictions. Section 740.2 lists universal restrictions applicable to all license exceptions — embargoed destinations, certain encryption items, items for surreptitious interception of communications, exports to denied parties. Running through § 740.2 before relying on any exception catches disqualifications that exception-specific sections don't repeat.

How Should You Structure License Exception Evaluations?

Evaluation sequence matters as much as individual checks. Running analyses out of order generates false positives and false negatives.

Step 1: Confirm item classification. License exception eligibility assumes you know your ECCN. Misclassified item analyzed under the wrong ECCN entry produces garbage output regardless of how carefully you evaluate exception availability.

Step 2: Determine license requirement. Use Commerce Country Chart to determine whether a license is required for your ECCN, destination, and reason(s) for control. If no license is required, you don't need an exception — export proceeds under NLR.

Step 3: Check § 740.2 universal restrictions. Before evaluating specific exceptions, confirm none of the universal bars apply — embargoed destination, denied party, communications interception equipment.

Step 4: Evaluate applicable exceptions. For list-based exceptions (LVS, GBS, CIV, TSR), start at the ECCN entry and verify exception notation plus conditions. For transaction-based exceptions (TMP, RPL, STA, GOV), start at the exception section in Part 740 and work through specific authorization criteria.

Step 5: Apply Part 744 end-use/end-user screens. Even if an exception technically applies, Part 744 restrictions may still require a license. Entity List matches, prohibited end-uses, and red flag indicators override exception eligibility.

Step 6: Document the analysis. Recordkeeping under Part 762 mandates five-year retention of export documentation, including the basis for determining license exception eligibility. Analysis should be reproducible from your records.

We at Lenzo automate steps 1–5, integrating ECCN classification, Commerce Country Chart lookup, § 740.2 screening, and Part 744 checks into a single workflow. Understanding what's being checked at each stage remains critical — automation accelerates regulatory logic, it doesn't replace knowing it.

FAQ

Can multiple license exceptions apply to the same shipment?

Technically yes — different items in a single shipment can qualify under different exceptions. But each item must independently meet its claimed exception. You cannot combine value limits across exceptions (claiming part under LVS and the remainder under a different basis to avoid the LVS cap). Each authorization stands on its own.

What happens if BIS changes an exception's eligibility after I ship?

Export authorizations lock at the moment of export. If your shipment was compliant under regulations in effect at export time, subsequent changes don't create retroactive violations. But if you're shipping under a license exception that BIS has proposed modifying, monitor the Federal Register before additional shipments.

Do license exceptions apply to deemed exports?

Some do, some don't. STA explicitly addresses deemed exports and requires specific compliance conditions for foreign nationals. TMP covers only physical items crossing borders. TSR covers technology releases including to foreign nationals in the United States. Exception-specific sections control — no universal deemed export rule exists across Part 740.

Most license exception violations stem from incomplete analysis rather than deliberate circumvention. Eligibility check requires layering multiple EAR sections — ECCN entry, exception-specific provisions in Part 740, universal restrictions in § 740.2, end-use/end-user controls in Part 744. Understanding these layers isn't optional for any compliance function working with controlled items.