August 2, 2007
i."T OF CO.
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UNITED STATES DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Washington, DC. 20230
This is in response to your May 14, 2007 request for an advisory opinion on the
application of the foreign direct product rule to exports of encryption technology. In your
request, you presented four fact patterns and requested confinnation of your anal yses of the
the foreign direct product rule to exports made pursuant to sections 744.9,
742.15(b) and 740.17(b) of
the Export Administration Regulations (EAR).
As a threshold matter, section 744.9 sets forth a requirement for a "U.S. person" to ohtain
authorization from the Bureau of Industry and Security (BIS) to provide "technical assistance
(including training) to foreign persons with the intent to aid a foreign person in the development
or manufacture outside the United States of encryption commodities and software that, if of
United States origin, would be controlled for EI reasons under ECCN (Export Control
Classification Number) 5A002 or 50002." "Technical assistance" is generally defined, in part
the EAR, as "technology" that is not in the fonn of
"technical data," and that may take
forms such as instruction, skills training, working knowledge, and consulting services.
"Technical assistance" may involve the transfer of
Using this definition, "technical assistance" for encryption items may he classified as
ECCN 5E992 or 5E002.! However, while section 744.9 requires authorization from BIS fix all
"technical assistance," it only requires a license for "technical assistance" that is controlled under
ECCN 5E002. The requirement for authorization set forth in section 744.9 may he satisfied hy
means of a license, license exception, or if
the EAR provide that no license is required (NLR).
Section 742.15(b) provides authorization for the export of encryption technology classified under
ECCN 5E992 to countries other than those designated