Exporting Software: To file or not to file, Part 1

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By: Omari WoodenCD-Software

The Foreign Trade Regulations (FTR) mandates the filing of Electronic Export Information (EEI) in the Automated Export System (AES) for shipments of physical goods. The key word here is “physical.” In order for an item or product to be reported in the AES, you must be able to touch it. So what about exports of software, is this considered a physical good that requires an AES filing? The answer: it depends on whether you’re exporting mass market or customized software.

If you are exporting a shipment of mass market software, EEI must be reported in the AES. Mass market software is defined in the FTR as software that is “generally available to the public, and designed for installation by the user without further substantial technical support by the developer or supplier.” To easily determine if your software is considered mass market, ask yourself if you can purchase it at the local computer store. If your answer is yes, then you have mass market software and the shipment should be filed in the AES prior to export. When reporting the value for this software, report the selling price of the software or the cost of the goods if not sold (FTR 30.1).

Unlike mass market software, exports of customized software are typically exempt from reporting in the AES, unless there is a licensed required. Stay tuned for my next blog where I’ll cover this in more detail.

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4 Responses to Exporting Software: To file or not to file, Part 1

  1. Jessie McCarthy says:

    If the mass marketed software is valued under $2500, could you claim the FTR Exemption 30.37(a)? Does all mass marketed software need to file an EEI, as stated above, or is there cases where another FTR exemption could be used, so an EEI won’t need to be filed?

  2. Global Reach Omari says:

    You are correct… Mass market software, that can be purchased over the counter, valued under $2,500, does not have to be reported in the AES, assuming the product is not licensable. The FTR exemption 30.37(a) would apply.

  3. John G says:

    A twist on the above. What if I were to export a computer loaded with software? The computer has an ECCN but has a license exception The software is 5D992 c and is NLR. Assume the computer is $3000 and the software is $2700. How would I report this on the EEI?
    1.Report simply the Computer at $3000 or $5700?
    2. Which ECCN is reported? The one for the computer or the one for the software?

  4. Christopher C. says:

    Good question…one I recently tackled myself. If the SW is loaded onto the HW that has an ECCN like 5D992, for example, this is the ECCN reported on your EEI. If the SW is encrypted, and was given a CCATS number, and is not a mass market kind, you should be submitting semi-annual reports to BIS with this information. I hope this helps. :->

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