Why are ECCNs Important?
ECCNs are essential as they determine what licenses are required for the goods being imported/exported based on their characteristics. ECCNs may also give you an indication that certain goods are banned from the destination or reveal blacklisted traders. Since these goods have military implications, incorrectly classifying goods can have severe repercussions.
The Structure of an ECCN
ECCNs are made up of five characters. To break down an ECCN, you need to look at the CLL. The CLL is divided into categories, each consisting of five products.
- The first character is a number between zero and nine (0-9). This indicates the CCL category, with category 10 represented with a zero.
- The second character is a letter referring to the product group and ranges between A and E.
- The final three numerical values in an ECCN number refer to the level of control that applies to that item.
The Difference Between ECCNs and HS Codes
Harmonized System codes or HS codes and ECCNs have similarities but are considered independent. Both HS codes and ECCNs describe the nature of the product and classify them accordingly. That is where the similarity begins and ends.
While ECCNs dictate what licensing is required, HS codes determine the duties and taxes associated with that product. Numerous factors influence the ECCN number and licensing requirements of a particular product. This means one HS code may have several ECCNs and vice versa.