BIS Reviews Export Compliance
BIS Officials Review Export Enforcement Activity, Recommend Compliance Measures
The Bureau of Industry and Security gives an update on the agency’s export enforcement actions and recommendations on ensuring compliance.
More generally, BIS chief Eric Hirschhorn said, in its enforcement efforts BIS is “trying to focus on truly bad actors, not those who have a decent compliance program, make a mistake, and work with us to remedy the situation.”
Compliance Measures
“The best way to ensure you’re not violating the regulations,” Mills said, “is to have a comprehensive internal compliance program in place.” Specific actions exporters should be taking in this regard include the following.
Screening. All transactions should be screened against government lists; a consolidated list is available here.
CCL. All items subject to an export transaction should be classified against the Commerce Control List and sales persons need to understand list-based, end-use and end-user controls.
License Conditions. For items subject to a license, exporters have an obligation to share license conditions with their customers and are highly encouraged to ensure their customers acknowledge their intent to comply, even where such acknowledgement is not otherwise required by BIS. Mills noted that BIS end-use checks over the past year have found significant non-compliance in this area.
STA. For license exception transactions involving Strategic Trade Authorization, exporters should ensure that they obtain before they ship a certification in which the recipient acknowledges that it understands that any subsequent retransfer or reexport requires a similar consignee statement prior to such retransfer or reexport.
Hirschhorn noted that BIS is continuing its layered approach to verifying compliance with license exception STA, that the review of Automated Export System data and exporter and consignee records, as well as some on-site document reviews, has resulted in a high degree of compliance, and that BIS will continue to review STA transactions to guard against misuse.
End-Use or End-User Concerns. For export transactions with end-use or end-user concerns, exporters should obtain end-use certificates and double check potential licensing requirements. “Self-blinding by not inquiring about end-use or not doing due diligence on an end-user is not an acceptable defense,” Mills warned.
Transshipments. For items moving through transshipment locations like Hong Kong, Singapore and the United Arab Emirates, it is important for exporters to understand the foreign export control requirements of those governments in addition to those of the EAR. BIS has published a new best practice encouraging exporters to obtain a copy of their Hong Kong and UAE customers’ import licenses prior to exporting and to ensure that customers in these three transshipment locations are aware of export control requirements for the reexport, transshipment or transit of items exported from the U.S.
Voluntary Self-Disclosures
Mills anticipates that BIS will handle 600-series VSDs (of which only 18 had been filed as of the end of July) “in a manner very similar to that of DDTC [the Directorate of Defense Trade Controls] and that most will result in a warning letter or no action at all, as is the case with most VSDs previously filed under the EAR.”
Serious Violations
Exporters “may expect to see a continuing robust and comprehensive administrative enforcement program at BIS involving cases where aggravating factors are present, apart from cases involving knowledge and willful conduct, whether or not those cases arise in the context of criminal prosecutions. Such factors include inadequate compliance programs, systemic failures in those programs, [and] harm to U.S. national security or foreign policy interests.”
All information derived from Sandler, Travis & Rosenberg Trade Report | August 19,2014
