What Is License Exception ENC?
License Exception ENC (§740.17 of the EAR) authorizes the export and reexport of certain encryption items that would otherwise require a license. ENC provides a streamlined pathway for encryption products that have completed BIS review, and in some cases allows exports without prior review through self-classification provisions.
ENC is divided into several sections covering different types of encryption items and different types of transactions. Understanding which section applies to your specific product and transaction is essential for correct use of this exception.
ENC Eligibility and Sections
ENC §740.17(b)(1) covers mass-market encryption items classified under 5A992/5D992. These items can be exported to most destinations after a one-time self-classification report to BIS. ENC §740.17(b)(2) covers non-mass-market encryption items that have been reviewed by BIS and approved for ENC treatment.
ENC §740.17(b)(3) covers encryption source code and certain technology. Each section has different notification and reporting requirements, and certain destinations remain excluded from ENC eligibility regardless of the product classification.
Reporting Requirements
Most encryption items exported under ENC require either a self-classification report or a formal classification review submission to BIS. Self-classification reports (for mass-market items) are submitted via email to BIS and the ENC Encryption Request Coordinator. They include basic product information, classification, and a description of the encryption functionality.
Semi-annual sales reports may also be required, detailing encryption exports by product, destination, and quantity. Maintaining accurate records of ENC-eligible exports is essential for compliance with reporting obligations.