USA Export Controls

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Essential Components of US Export Control Compliance

1. Understand what it is that you are selling/ buying - "know the product or service"

2. Understand the needs of your customers or suppliers overseas - "know your partners"

3. Understand and keep up-to-date with laws and regulations -"know your regulator"

4. Know what responsibilities you have with regard to USA extra-territoriality controls 

Inter-Company Teamwork

International trade involves a complex web of suppliers, shippers, packers, finance, carriers, freight forwarders, customs authorities, etc, but at the end of the day, it is your business, your reputation and your relationship with customers, suppliers and the authorities that is at stake. The whole business, led by management statements and awareness, must buy in to the fact that compliance is not the role of someone else: it affects everyone.

Penalties for non-compliance range from annoyed or unhappy customers, delayed shipments, missed deadlines, re-working and storage costs or commercial penalties in the form of liquidated damages, to official fines and financial penalties, loss of reputation and (for certain transgressions) imprisonment for individuals involved or their management who should have known better.

We don't want to put fear and dread into companies, though, or dwell too much on the worst side of non-compliance (eg sending goods illegally to an embargoed country) at lot of non-compliances are ERRORS, MISTAKES often caused by lack of awareness, understanding or by trying to short-cut procedures to save time and/or money. It is the role of the management of a company to ensure that, even if such non-compliances occur, there was adequate training and procedures in place to show that the individual didn't follow standard procedures. For individuals - find out what certain things mean and know the rules - don't feel you are pressurised internally or externally to "short-cut" or issue a statement or form because "we've always done it that way!"

 

International Trade Compliance

Areas to consider

Export controls - both UK and USA (ITAR complaince and EAR): big problems at the moment are companies not understanding the following:

  1. controls when we ship goods specially designed for military purposes - even into another EU country
  2. export licences required for the transfer of not just goods - it also relates to technology transfer (even emails or what is on laptops)
  3. re-export regulations on ITAR and EAR goods/ technology originating in the USA
  4. current embargoed and sanctioned countries

This is only an indication of challenges in this area of customs compliance and international trade compliance

 

Ignorance is no defence

One of the difficulties with regulations is that it is not easy to find out about them. New regulations are imposed, or regulations change, without any prescribed timetable. Whereas you can pin a commercial organisation down to make changes in its commercial terms only at pre-agreed dates, public bodies are not so accountable. Also, as the political situation of the world changes, trade in products and services that was acceptable in the past might become illegal, or new controls introduced in the suppliers', or even the customers' countries.

 

Training

We do most of our USA export control compliance training in-house because of commercial confidentiality purposes but we have two interactive events running in both Manchester and London

ITAR Reform Update: Executive-Level Briefing and Workshop on US Export and Re-Export Control Reforms

Trading with the USA: Defence/Imports & Exports

Here are some links to UK Government websites that have "Trader Alert" services or should be checked on a regular basis:

HM Revenue & Customs

Export Control Joint Union: ECJU Mailing List and "Notices to Exporters"

http://www.bis.doc.gov/policiesandregulations/ear/738_supp1.pdf- ECCN Country Control Lists

http://www.bis.doc.gov/policiesandregulations/ear/ccl5_pt1.pdfUSA EAR dual-use list

http://www.bis.doc.gov/policiesandregulations/basis_of_ccl_controls.htmUSA EAR reason for controls

 

Strong & Herd LLP also offer a twice-a-month update service (called Did You Know - DYK) with our international trade helpline packages, we keep up-to-date so you have only one place to go - for more information click HERE

 

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