BIS Issues Advisory Opinion on Classification of Computer System with Information Security Software Eligible for License Exception TSU

The Bureau of Industry and Security has posted an October 14, 2008 advisory opinion on the classification of a computer system described in Export Control Classification Number 4A994 loaded with software described in ECCN 5D002, when such software has been made eligible for License Exception TSU¹ under 15 CFR 740.13(e). According to BIS, the classification of the computer system would remain ECCN 4A994.

ECCN 5D002 Software Eligible for License Exception TSU Did Not Affect Hardware Classification (When Loaded on that Hardware)

BIS states that although the control status of "information security" software is generally determined in Category 5, part 2 of the Commerce Control List even if it is a component of other equipment, when ECCN 5D002 software becomes eligible for License Exception TSU under 15 CFR 740.13(e), it does not affect the classification of hardware (in this case, an ECCN 4A994 computer system) when loaded on that hardware.

License Exception TSU Authorizes Export/Reexport of Certain Code

License Exception TSU authorizes: (i) the export and reexport of source code controlled under ECCN 5D002 that, if not controlled under ECCN 5D002, would be considered publicly available under 15 CFR 734.3(b)(3); and (ii) corresponding object code if both the source code and the object code would be considered publicly available under 15 CFR 734.3(b)(3) if they were not controlled under ECCN 5D002.

License Exception TSU does not authorize knowing exports or reexports to a country listed in Country Group E:1 in Supplement No. 1 to 15 CFR Part 740.

Classification of the ECCN 4A994 Computer with ECCN 5D002 Software Depended on Software's Eligibility for License Exception TSU

BIS generally would classify an ECCN 4A994 computer loaded with ECCN 5D002 software that is not eligible for License Exception TSU as an ECCN 5A002 item.

When that ECCN 5D002 software is eligible for License Exception TSU, BIS would not classify the combined system under ECCN 5A992, because doing such would suggest that the software met the mass market criteria in the Cryptography Note in Category 5, part 2 of the CCL.

However, when the ECCN 5D002 software is eligible for License Exception TSU, BIS recognizes that it would not be reasonable to classify the system as an ECCN 5A002 item, as this would result in more restrictive licensing requirements for the combined system than for either component separately.

Accordingly, when the eligibility requirements of 15 CFR 740.13(e) have been met for ECCN 5D002 software, including the notification requirements in that section, BIS generally would retain an ECCN 4A994 classification for a computer system that loaded such software.

¹Technology and Software - Unrestricted

BIS Advisory Opinion (dated 10/14/08) available at http://www.bis.doc.gov/policiesandregulations/advisoryopinions/oct14_2008_tsu_software.pdf.