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Even where a product appears to be EAR99 based on a self-classification, there still may be benefit to obtaining a formal CCATS from BIS. First, this could avoid questions from US Customs and Border Protection (“CBP”), which enforces US export control laws at the border and which might question whether the products are described in an ECCN on the CCL. Second, it could be helpful to have a CCATS on hand to provide to other parties involved in the transaction that may want assurances that the export is in compliance with US export control laws, such as banks, intermediaries, and customers.
All of the parties involved in a proposed transaction should be screened against the US restricted parties lists on a transaction-specific basis (such as prior to order acceptance/shipping). Some of the main US restricted parties lists include OFAC’s List of Specially Designated Nationals and Sectoral Sanctions Identifications List, and BIS’ Entity List and Denied Persons List. Depending on which list applies, the involvement of a restricted party could result in the transaction being prohibited or restricted. Also, entities that are 50% or more owned by certain kinds of restricted parties may themselves be restricted, even if not named on a list. Screening should include not only direct counterparties like customers and vendors but also banks, intermediaries, known end-users, etc. Restricted parties can be located anywhere in the world.
Notwithstanding the legality of these products, there continue to be reports of seizures of legal CBD products imported into the United States. This may be due to the difficulty of distinguishing legal (i.e., hemp-derived) CBD from illegal (i.e., marijuana-derived) CBD without extensive laboratory analysis, and/or it could be due to confusion on the part of CBP officials about what is permitted. For example, in a lawsuit filed in US District Court for the Central District of California, a US-based CBD company alleged that CBP had illegally seized four shipments of Spanish-origin hemp between 2015 and 2018. Three of the shipments are alleged to have been destroyed in part because CBP improperly determined the imports contained controlled substances, notwithstanding documentation from the Spanish growers that the hemp had less than 0.3% THC, making it legal under federal law. The lawsuit has since been settled.
As in the export context, all parties to an import transaction should be screened against the US restricted parties lists.
What should you know about US export controls and economic sanctions?
If your business will include cannabis growing or cultivation, then you are probably wondering how to get your hands on weed seeds. legally. Before taking that step, though, make sure your business has the necessary license to operate legally in your state.
In the United States, cannabis seeds cannot cross state lines because marijuana products are still illegal under federal law. Though rare, transporting the products across state lines could result in federal criminal charges. This is true even if you are purchasing cannabis seeds in a state that authorizes it and entering a state that also authorizes it.
First and Foremost: Know Your State Laws
State law governs if and how you can operate your cannabis growing business, and each state takes a slightly different approach. Your state may offer a large number of permits with few prerequisites, a small number of permits with an extensive application process, or something in between.
How much you will pay for cannabis seeds depends on the strain of marijuana you buy. Typically, a pack of 10 or 12 seeds starts at around $40. You can expect to pay up to $500 for high-end strains. Again, it is important to only buy cannabis seeds from a legal and reputable seed bank or dispensary — and only if you know you are abiding by state law.
The same is true for buying cannabis seeds in another country. It may sound like a great idea to buy cannabis seeds while visiting one of the world-renowned marijuana seed banks that exist in places such as the Netherlands or the United Kingdom. But when you re-enter the U.S. with your goods, Customs and Border Protection will seize any seeds they find, even if your plane landed in a state where they are legal. Again, it goes back to marijuana being illegal under federal law.