Export Compliance Clause

Summary

This export compliance clause is intended to for use in connection with the sale of products, deliverables, software, technology and related information (collectively, Deliverables) which are subject to U.S. export control laws and regulations. This template includes practical guidance, drafting notes, and an optional clause. U.S. export control laws include the Export Administration Regulations (EAR) (15 C.F.R. §§ 730.1–774.23) administered by the Commerce Department, the International Traffic in Arms Regulations (ITAR) (22 C.F.R. §§ 120.1–130.17) administered by the State Department, and the regulations of the Treasury Department's Office of Foreign Assets Control (OFAC) (31 C.F.R. §§ 501.101–594.901). The relevant government agencies can prohibit or restrict exports of Deliverables to certain countries or regions, certain individuals or entities, or for certain uses. The prohibitions or restrictions apply to all U.S. persons wherever they are located and, in some cases, to non-U.S. persons. Consequences for not complying with the prohibitions or restrictions are significant and may include fines, loss of export privileges and government contracts and, for individuals, imprisonment. Therefore, the purpose of the clause is to excuse the Seller from its contractual obligation to deliver or export the Deliverables when doing so would be a violation of an export prohibition or restriction. Although export prohibitions or restrictions may exist, the relevant government agencies can authorize export of Deliverables through regulatory exemptions or exception or by approving licenses, permits, or agreements. Thus, optional language is provided below for setting out the obligations of a buyer in a sale of goods or services transaction to comply with U.S. export control regulations, including obtaining necessary export licenses and providing appropriate third-party notifications for the export of the goods or deliverables. Optional language is also provided stating that the Buyer will indemnify the Seller if the Buyer fails to abide by its obligations. For a full listing of related contract clauses, see General Commercial Contract Clause Resource Kit. For additional information, see ITAR, EAR, and FTR Fundamentals, OFAC Regulations Fundamentals, and Export Compliance Programs.