U.S.Export Controls at LAWDOG®

Export Control Issues Top

Export licensing responsibilities in the United States are shared by Commerce, Energy, State, and the Department of the Treasury, and exporters. License requirements usually involve political considerations like foreign policy, national security, shortages, nuclear proliferation, weapons, or terrorist concerns. When exports do require a license, usually either the U.S. Munitions List (USML), by State Department or the Commerce Control List (CCL), administered by U.S. Commerce Department are involved. As in most trading nations, the majority of export transactions do not require specific approval from government (but try to import). The U.S. Munitions List controls the export of military articles, services, and related technologies. The Commerce Control List regulates the export or reexport of items referred to as "dual-use" because of commercial and possible military applications (MacintoshŽ computers?). The Energy Department controls nuclear technology and nuclear power data. Agencies collectively with Defense (U.S. military) review certain proposed dual-use exports. No, dual-use does not mean military weapon and campaign contribution.

Prohibited Lists Top

The Office of Foreign Assets Control at Treasury currently generally prohibits U.S. persons from exporting to Cuba, Iran, Iraq, Libya, North Korea, Serbia, Sudan, Taliban areas of Afghanistan and certain others, without license. Sometimes licenses are issued for exports of agricultural goods, medicines, and medical equipment to sanctioned countries. Less onerous export restrictions exist for many areas. The same Treasury Office of Foreign Assets Control publishes The Specially Designated Nationals List, individuals and entities blocked by sanctions or found by Office of Foreign Assets Control to be owned or controlled by, or acting on behalf of targeted governments and bad people. SDN includes names of persons and entities found by Office of Foreign Assets Control to be terrorists or narcotics traffickers. If you or your company are named on the BXA Denied Persons List, then you or your company have received a denial order from Commerce Department Bureau of Export Administration (BXA), and U.S. exporters, and that part of the world which cares, cannot buy from you. BXA Entities List is another bad person foreign end-users list. Before you ship that 6000 ton order for weapons grade plutonium in flower crates to Amsterdam, check it out. Ditto for State Department Debarred Parties List, a Who's Who for International Traffic in Arms violations.

Banks, insurance companies, shipping lines, and freight forwarders appear on SDN, and exporters may need to look at these parties in transaction. The exporter has first responsibility for determining licensing requirements and end use of product for proposed transaction. Cutting edge tech products, weapons, shortage materials, dual-use products that have defense, strategic, weapons development, proliferation or law enforcement applications make good suspects for export licenses. Destination and end-use of product or service are important. Starting point for exporter may be classification of Export Control Classification Number for product at BXA.

Deemed Exports Top

Special issues arise with some intellectual property exports. An export of technology or source code (except encryption source code) is "deemed" to take place when it is "released" to a foreign national within the United States. Technology is "released" for export when it is available to foreign nationals for visual inspection (such as reading technical specifications, plans, blueprints, etc.); when technology is exchanged orally; or when technology is made available by practice or application under the guidance of persons with knowledge of the technology. See Sections 734.2(b)(2)(ii) and 734.2(b)(3) of the Export Administration Regulations (EAR). See Deemed exports Frequently Asked Questions from BXA

Trade Statistics Top

Import statistics are initially collected and compiled using approximately 14,000 commodity classifications in the Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes (HTSUSA), an official publication of the U.S. International Trade Commission. The HTSUSA is the U.S. import version of the Harmonized System. See U. S. Census Bureau Foreign Trade Online Every export transaction item originating in the United States is assigned a unique 10-digit identification code, part of a series of progressively broader product categories. Schedule B, a U.S. Census Bureau publication is based on the Harmonized Commodity Description and Coding System (Harmonized System), provides approximately 8,000 different product classifications. The export statistics are collected and compiled in these commodity classifications in Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States. See list of Schedule B export codes

Automated Export System Top

The Automated Export System (AES) is a joint operation by U.S. Customs Service, the Foreign Trade Division of the Bureau of Census at Commerce, Bureau of Export Administration (BXA), the Office of Defense Trade Controls (State), and other Federal agencies. It is a central point to supply export shipment data required by many agencies electronically to Customs, using Electronic Data Interchange (EDI). AES collects information electronically and accurately, and eliminates need for paper copies of the Shippers Export Declaration (SED). The AES is intended to improve compliance and enforcement of export laws, improve trade statistics and customer service, with a stated goal paperless reporting of export information by year 2002. AES Technical Documentation (AESTIR)

Foreign Corrupt Practices Act Top

The Foreign Corrupt Practices Act (FCPA) prevents any person or firm in the United States from making a corrupt payment to a foreign official to obtain or keep business. Any firm, officer, director, employee, agent of the firm, or any stockholder acting on behalf of the firm in the United States must follow provisions of the FCPA. Antibribery provisions of the Foreign Corrupt Practices Act prohibit paying, offering, or promising to pay, or authorizing to pay or offer, money or anything of value, intended to induce recipient to misuse official position to wrongfully direct business to person or firm offering payment. Offering a corrupt payment is sufficient, since the Act does not require that corrupt act be successful.

Penalties
Companies violating Foreign Corrupt Practices Act may be assessed fines of up to $1 million, with individuals acting on behalf of company fined of up to $10,000 and prison terms of up to 5 years. Fines imposed on individuals may not be paid by firm. The government can also seek civil penalties and injunctive relief, and person or firm in violation or indicted, may be barred from doing business with U.S. federal government, and may be ineligible for export licenses.

Guidance from the Government
The Department of Justice has an Opinion Procedure whereby the Attorney General is required to issue an opinion in response to a specific inquiry from a firm within 30 days of receipt of information required to issue opinion. Conduct for which the Department of Justice has issued an opinion that conduct conforms with policy is entitled to a presumption, in any subsequent enforcement action, of conformity with the Foreign Corrupt Practices Act. For information about FCPA Opinion Procedure, contact U.S. Department of Justice, Criminal Division, Fraud Section, (202) 514-0880. U.S. Department of Commerce, Chief Counsel for International Commerce Explanatory Papers

Antiboycott Compliance Top

The antiboycott laws were adopted to prevent U.S. firms from participating in foreign boycotts not sanctioned by the United States government. In effect, U.S. firms are required to follow U.S. policy. See Antiboycott Compliance