Effective November 15, 2016, an exporter must incorporate the new harmonized “Destination Control Statement” (DCS) as an integral part of the commercial invoice for tangible exports, reexports, and re-transfers of items controlled under either the International Traffic in Arms Regulations (ITAR) or the Export Administration Regulations (EAR). The DCS reads as follows:
Destination Control Statement
“These items are controlled by the U.S. Government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations”.
The State and Commerce regulations were published in the Federal Register on Aug 17, 2016, Volume 81, Number 159 (links below).
Note the final rules remove the requirement for stating the DCS on other transportation documents such as the bill of lading, air waybill, or other shipping documents and clarifies the DCS is only required on items exported in tangible form. The DDTC Final Rule also makes revisions to the ITAR providing guidance on license exemptions.
For additional information on the DCS and additional updates included in DDTC’s Final Rule, we strongly recommend you review both Federal Register Notices.
Although there are exceptions and exemptions to this requirement, as a good business practice, OCEANAIR recommends exporters include the DCS on ALL commercial invoices, including “routed transactions”. If OCEANAIR receives an export which does not have a DCS on the invoice, the shipment will be HELD to determine from the exporter if a DCS is required, and, if so, a new invoice will be required if a DCS is required. EAR penalties range from $11,000 to 120,000 per violation. State Dept penalties go up to $500,000.