INTERNATIONAL TRADE LAW
How to Comply with Re-Export Regulations
A re-export is the shipment of a U.S.-origin item from one foreign country to another, and U.S. export controls can require a license for it even though the goods never touch American soil. This surprises many companies abroad: the Export Administration Regulations (EAR) follow U.S.-origin items wherever they go, so the same rules a U.S. exporter follows can bind a foreign distributor, subsidiary, or customer down the line. This guide explains when a re-export needs authorization and how to stay compliant.
What counts as a re-export
A re-export is an export that starts outside the United States. If a U.S.-made item is shipped to Country A and later sent on to Country B, that second movement is a re-export subject to U.S. law. The same logic reaches an in-country transfer (a change of end user or end use within Country A) for some controlled items.
Critically, re-export controls are not limited to physical U.S.-origin goods. They can also reach:
- Foreign-made items that incorporate enough controlled U.S. content (the de minimis rules, below).
- Foreign-made products that are the direct product of certain U.S. technology or software (the Foreign Direct Product Rule).
So a product manufactured entirely abroad can still be “subject to the EAR” because of what is inside it or how it was made.
When a re-export needs a license
The analysis mirrors a regular export. Start with classification — the item’s ECCN on the Commerce Control List, or EAR99 — then pair it with the destination on the Commerce Country Chart. If the item’s reasons for control are checked for the new destination country, a license is presumptively required unless a license exception applies. Layer on the party and end-use checks: a re-export to a restricted party or for a prohibited end use can require a license regardless of the item’s classification, and re-exports to comprehensively embargoed destinations (Cuba, Iran, North Korea, Syria, and the sanctioned regions of Ukraine, as of mid-2026) are tightly restricted.
The de minimis rule
Foreign-made items can shed U.S. jurisdiction if their U.S.-controlled content is small enough — but the threshold depends on the destination. Under EAR Part 734, a foreign-made product is generally not subject to the EAR if its controlled U.S.-origin content is at or below the de minimis level:
| Destination | De minimis threshold for controlled U.S. content |
|---|---|
| Most countries | 25% or less |
| Country Group E (currently Cuba, Iran, North Korea, Syria) | 10% or less |
You calculate the percentage by dividing the value of the controlled U.S.-origin content by the value of the foreign-made item. If the content exceeds the threshold, the foreign item is subject to the EAR and the normal re-export analysis applies. The de minimis rules are technical — there are content types they do not cover, and the calculation has specific requirements — so document your math.
The Foreign Direct Product Rule
Even with little or no U.S. content, a foreign-made item can be caught if it is the “direct product” of controlled U.S. technology or software (or made by a plant that is itself a direct product of such technology). The Foreign Direct Product Rule has been expanded in recent years to target specific end users and sectors. Because its scope shifts with policy, treat any product made with U.S.-origin technology or production equipment as a flag to check the current rule rather than assume you are clear.
How to stay compliant
Re-export compliance is mostly about extending good export discipline past your own loading dock:
- Classify the item and know its ECCN before it leaves — the classification travels with the goods. See our ECCN cheatsheet.
- Screen the downstream parties, not just your direct buyer, against the restricted-party lists. Our guide on denied-party screening covers the mechanics.
- Use contract controls. Put export-control and re-export clauses in distributor and reseller agreements, require destination-control statements, and obtain end-use assurances.
- License when required. If a re-export needs authorization and no exception fits, apply to BIS through SNAP-R — the same process as a domestic export; see how to obtain an export license.
- Keep records for the EAR’s general five-year retention period.
Watch for the deemed export cousin too: releasing controlled technology to a foreign national abroad is itself an export to that person’s country.
FAQ
Do U.S. export rules really apply outside the United States? Yes. The EAR follows U.S.-origin items and certain foreign-made items wherever they go. A shipment between two foreign countries can require U.S. authorization, and foreign companies have faced U.S. enforcement for unlicensed re-exports.
What is the de minimis rule? A rule that excludes a foreign-made item from the EAR when its controlled U.S.-origin content is at or below a threshold — generally 25%, but only 10% for the most heavily sanctioned destinations (Cuba, Iran, North Korea, Syria). Above the threshold, the item is subject to the EAR.
What is the Foreign Direct Product Rule? A rule that can make a foreign-made item subject to the EAR because it is the direct product of controlled U.S. technology or software, even when the item contains little or no U.S. content. Its scope has been expanded for specific end users and sectors, so check the current version.
How is a re-export license different from an export license? The process is the same — classify, check the Country Chart, rule out a license exception, and apply to BIS through SNAP-R if needed. The difference is only that the shipment originates outside the United States.
Shipping U.S.-origin goods through foreign distributors? Reidel Law Firm prepares flat-fee Import/Export Compliance Memos that work through classification, de minimis content, re-export licensing, and downstream screening — with direct access to the trade attorney handling your matter. Request a compliance memo →
