Export Control and Sanctions Clauses in Contracts (2026)

Why contracts need export-control and sanctions clauses If your goods, software, technology or technical know-how can cross a border, or if a counterparty could be a sanctioned party, you need export-control and sanctions clauses. They allocate who classifies the item, who obtains any licence, and who screens for restricted parties, and they give you warranties and remedies if something goes wrong. These are among the highest-penalty compliance areas, and liability can reach re-exports and technology transfers you did not directly make. Several regimes commonly apply together: - United States. The Export Administration Regulations (EAR) cover dual-use items, the International Traffic in Arms Regulations (ITAR) cover defence articles, and the Office of Foreign Assets Control (OFAC) runs economic sanctions, including the Specially Designated Nationals (SDN) list. The Bureau of Industry and Security (BIS) maintains the Entity List and Denied Persons List.

• European Union. Regulation (EU) 2021/821, the recast dual-use regulation, took effect on 9 September 2021 and broadened controls, including on cyber-surveillance items, alongside the EU's own sanctions lists.
• India. SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) is India's dual-use control list under the Foreign Trade (Development and Regulation) Act, 1992, administered by the DGFT. A new Category 7 covering advanced semiconductors, quantum technologies and related software and know-how was reported to take effect on 23 October 2025, so classification and compliance need refreshing. <!-- [VERIFY: SCOMET Category 7 scope and effective date against the DGFT notification] --> Last verified October 2026. This article is general guidance, not legal advice. Check the current official texts (the EAR, OFAC, EUR-Lex and DGFT) and take advice before relying on a clause. ## The clauses to include 1. Compliance warranty, tied to actual activities. Each party complies with applicable export-control and sanctions laws, including the EAR, ITAR and OFAC rules, the EU dual-use regulation and EU sanctions, and India's SCOMET and trade rules, "to the extent each applies to the parties' activities". The "to the extent applicable" limiter avoids promising obligations a party cannot meet.

2. Classification and notice of change. The supplier determines the export classification of the items under the relevant regimes and notifies the buyer in writing of any change. This matters given recent moves such as SCOMET Category 7 and the EU cyber-surveillance scope.
3. Restricted-party screening. Each party screens against the SDN list, the BIS Entity and Denied Persons lists, and the EU consolidated sanctions list, and warrants it is not a sanctioned party, nor owned or controlled by one.
4. End-use and end-user. The buyer provides end-use and end-user information, which licensing (including SCOMET) needs, and promises not to use or divert the items for prohibited end uses.
5. Licences. Allocate responsibility for obtaining any export, re-export or transfer licence, and make performance conditional on licences where needed.
6. Re-export and technology transfer. Restrict re-export and the onward transfer of controlled technology, including to related entities, consistent with the applicable rules.
7. Remedies. Allow suspension or termination without liability if a licence is refused or a party becomes a sanctioned party, plus indemnity for breach. ## Sample clause wording ``` EXPORT CONTROL AND SANCTIONS (a) Compliance. Each party will comply with all applicable export-control and sanctions laws, including the US EAR, ITAR and OFAC regulations, EU Regulation 2021/821 and EU sanctions, and India's SCOMET controls under the Foreign Trade (Development and Regulation) Act, 1992, to the extent each applies to that party's activities. (b) Classification. The Supplier will determine the export classification of the items and notify the Buyer in writing of any change. (c) Screening. Each party warrants it is not, and is not owned or controlled by, a person on the OFAC SDN list, the BIS Entity or Denied Persons lists, or the EU consolidated sanctions list. (d) End use. The Buyer will provide accurate end-use and end-user information and will not use or divert the items for any prohibited end use or to any restricted destination or party. (e) Licences. [Party] is responsible for obtaining any required export, re-export or transfer licence, and performance is conditional on it. (f) Remedies. If a required licence is refused, or a party becomes a sanctioned party, the other party may suspend or terminate without liability and is indemnified for related losses.

- Skipping the classification-and-notice duty. Controls move (SCOMET Category 7, EU cyber-surveillance), so you need notice of changes.
- Screening names once and never again. Lists change, so screening should be ongoing.
- Forgetting end-use and end-user capture, which licensing (especially SCOMET) requires.
- Ignoring re-export and technology-transfer risk, including transfers to affiliates.
- Copying a template without checking it against the current official texts. ## A note on jurisdiction Which regime applies depends on the item, the technology's origin, the destination, the parties and any US or EU nexus. A single deal can engage US, EU and Indian controls at once. Treat "more than one regime may apply, and controls change" as the honest default, name the relevant regimes, and keep the "to the extent applicable" limiter. Last verified October 2026. ## Where a contract workspace helps Drafting the clause is one job. Keeping it current and consistent is another: the same screening, classification and end-use terms across every contract, re-checking classifications when lists change, and tracking which deals depend on a pending licence. One AI workspace tuned to your trade profile can keep this current: drafting the same screening, classification and end-use terms into every contract, reviewing a draft for a missing screening or end-use duty, and tracking which deals depend on a pending licence and when it expires. [Adira](https://adiralaw.com) brings that single-workspace approach to trade-compliance terms. This guide is enough to brief your drafting; a workspace just makes drafting, review and tracking your export and sanctions clauses one connected job.