News & Noteworthy

Using National Stock Numbers for Commodity Classification

Posted by Bruce Webb on Jun 19, 2018 11:25:00 AM

Compliance practitioners know that commodity classifications are the essential first step in determining export control requirements, responsibilities and risks. However, in situations where the exporter is not the original manufacturer of an item or specific product specifications are unavailable, making an export classification determination can be difficult. One valuable and often overlooked piece of information is the National Stock Number (NSN) but it must be used with caution.

First, a little background. An NSN is a 13-digit numeric code applied to an item that is repeatedly procured, stocked, stored, issued, and used through the federal supply system. Once assigned to an item, additional data elements are added to the NSN entry describing the item, such as the product name, manufacturer’s part number, performance characteristics, etc. The NSN system allows for increased ease in managing the military’s logistics supply chain by accounting for existing inventory, centralizing information on all items managed, standardization of item names and characteristics, and the reduction of the potential for duplication. As a result, everything from aircraft parts to light bulbs and washers can be assigned an NSN.

The need for the NSN concept followed from World War II where it was common to find a single item referred to by various product names depending on what military branch was using the item. When it came to checking a supply inventory, inconsistencies with product names led to surpluses in some areas and depletions in another. The Federal Stock Number (FSN) predated the NSN and was first used in 1949 to identify items in the Joint Army-Navy Catalog System. The NSN replaced the FSN in 1974 and has principally been administered by the Defense Logistics Agency (DLA) within the U.S. Department of Defense since 1998. NSNs are now used by the U.S. government, the North Atlantic Treaty Organization (NATO), as well as governments around the globe.

While the need and usefulness of NSNs are obvious for agencies like the DoD who buy and manage billions of dollars’ worth of supplies on an annual basis, NSN listings can also be helpful for export classification purposes. Typically, the top of the NSN entry is a general description, whereas the body contains technical specifications and useful text descriptions of how and where the item is used. In many situations, the entry may also include information such as whether the item is ITAR-controlled or even the Export Control Classification Number (ECCN). Many NSN entries contain “Original Equipment Manufacturer” (OEM) part numbers, which allows the classifier to search on various publicly available databases to find important technical details.

Another significant and often overlooked aspect of the NSN listing is the DEMIL code. This is a letter code beginning with ‘A’ and running through ‘Q’, with each letter providing varying guidance for DoD or NATO countries for disposing (demilitarizing) items that are no longer serviceable. From a classification standpoint, the letter codes ‘A’ or ‘Q’ indicate that item to be a CCL jurisdiction item. Furthermore, the letter A indicates the item may require an export license to certain destinations but has no DEMIL requirement whereas Q indicates the item is not only subject to DEMIL requirements but also requires export licensing under more stringent Commerce Control List (CCL) requirements. The letters ‘B’ through ‘G’ and ‘P’ formerly indicated that the item was ITAR controlled.

While this information is often helpful, there is an important caveat here. The OEM databases and NSN entries may be out of date, indicating that an item is controlled by the ITAR when, in fact, the item has moved to the 600 series of the Commerce Control List (CCL) as part of the Export Control Reform (ECR) initiative in recent years. Thus, exporters should realize that products may have changed jurisdictions subsequent to the assignment of their DEMIL code.

Although imperfect, the NSN is still a trove of valuable information, particularly in the modern web-driven era when searching on an NSN number will often provide data at a variety of different sites. It is actually advisable to consult more than one site as they often format and feature the information differently, occasionally revealing pertinent facts. In summary, NSN numbers are useful for finding the information necessary to make classification and jurisdiction determinations but users have to double check in this era of export control reform.

Topics: Export Compliance, Commodity Classification