Many exporters are unaware of the amount and nature of export
regulations. It is a trap for the unwary, and post 9-11, an
aggressively pursued area of the law. The U.S. Department of Commerce
is primarily responsible for administering and enforcing export
controls called "Export Administration Regulations" (EAR) which
provides controls on, types of export licenses required, types of
commodities, technical data under export control, U.S. person
activities, and anti boycott laws or country restrictions. The
definition of "export" under the EAR is far broader than the standard
dictionary definition of export. The definition includes not only the
actual shipment but also the transmission of items electronically out
of the U.S; and includes rules on the release of certain technology or
software subject to the EAR to a foreign national.
The Bureau
of Industry and Security (BIS), a division of the United States
Department of Commerce, oversees and enforces the "Export
Administration Regulations" (EAR). It is divided into two branches,
Export Administration and Export Enforcement. There are other
government agencies and departments that get involved in export
controls with overlapping responsibilities. The U.S. Department of
Treasury maintains a "Specially Designated Nationals and Blocked
Persons List," the U.S. Department of Defense maintains a "U.S.
Munitions List," and the U.S. Department of State pursuant to the
authority delegated by the President of the U.S. has the Office of
Defense Trade Controls (ODTC). The State Department’s Bureau of
Political-Military Affairs administers the International Traffic in
Arms Regulations (ITAR). You could be in compliance with BIS on one
category but out of compliance with the U.S. Treasury Department, DOD
or State Department. There are no combined lists. There are a variety
of private businesses that attempt to merge all of these lists
together; daily monitoring is critical and requires detailed records.
Because
"export" under the code is broadly defined, the restrictive lists apply
to not only to the sale of products but to the "activities" involved in
the transactions in and out of the U.S. For example, if an exporter had
a prospective customer in country "A" who would like to come over and
study the product before the purchase, you the host, as the "seller,"
need to check if the visitor/business are on a restrictive list. If
they are on the list and you have given them a grand tour of your
factory, you have just violated the law and could be subject to civil
fines and criminal prosecution. This same restrictive mentality in the
numerous export rules extends to foreign trade shows. The regulations
are to restrict "exports" including the conveying of product and/or
product knowledge.
Exporters should also be mindful of a
significant area of the law that overlaps into export matters, the
"Foreign Corrupt Practices Act", (FCPA). The FCPA contains limitations
on US investments abroad involving payments to foreign government
officials and others for the purposes of obtaining or retaining
business.
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