{"id":4478,"date":"2021-02-23T08:45:40","date_gmt":"2021-02-23T13:45:40","guid":{"rendered":"https:\/\/diaztradelaw.com\/?p=4478"},"modified":"2021-07-29T12:41:20","modified_gmt":"2021-07-29T16:41:20","slug":"building-a-strong-export-compliance-plan","status":"publish","type":"post","link":"https:\/\/diaztradelaw.com\/building-a-strong-export-compliance-plan\/","title":{"rendered":"Building a Strong Export Compliance Plan"},"content":{"rendered":"

\"\"<\/a>Co-Authored by <\/em>Sharath Patil<\/em><\/a><\/p>\n

Exporting is a Privilege, Not a Right<\/em><\/strong><\/p>\n

Over 95% of the world\u2019s consumers are outside of the United States. Opportunities abound for U.S. companies that export. However, exporting is a privilege and not a right. U.S. exporters have an important responsibility to adhere to U.S. export control laws, including the Export Administration Regulations (\u201cEAR\u201d), the International Traffic in Arms Regulations (\u201cITAR\u201d) the Office of Foreign Assets Control<\/a> (\u201cOFAC\u201d) sanctions laws, and the Foreign Corrupt Practices Act (\u201cFCPA\u201d). Violations of export control laws carry hefty civil and criminal penalties. Exporters can pay hundreds of thousands of dollars in penalties, lose export privileges, and even be imprisoned for violations of U.S. export control laws.<\/p>\n

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The\u00a0EAR\u00a0<\/a>is a set of regulations which governs whether U.S. persons may export or transfer goods, software, and technology outside of the United States or to non-U.S. citizens. The\u00a0ITAR<\/a>, on the other hand, is a set of regulations which governs whether defense or military-related technologies may be exported or transferred to non-U.S. citizens. The purpose of both the EAR and the ITAR is to safeguard U.S. national security interests by ensuring that critical technology does not fall into the wrong hands. The EAR is administered by the Commerce Department\u2019s\u00a0Bureau of Industry & Security<\/a>\u00a0(\u201cBIS\u201d) while the ITAR<\/a> is administered by the State Department\u2019s<\/a>\u00a0Directorate of Defense Trade Controls<\/a>\u00a0(\u201cDDTC\u201d).<\/p>\n

OFAC<\/a> administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United\u200b States. U.S. persons are\u00a0generally prohibited<\/a>\u00a0from engaging in transactions, directly or indirectly, with individuals or entities (\u201cpersons\u201d) on OFAC\u2019s<\/a>\u00a0Specially Designated Nationals and Blocked Persons List<\/a>, other blocked persons, and those covered by comprehensive country or region\u00a0embargoes<\/a>\u00a0(e.g., Cuba<\/a>, the Crimea region of Ukraine, Iran<\/a>, North Korea<\/a>, and Syria<\/a>).<\/p>\n

The FCPA<\/a> was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.\u00a0 The anti-bribery provisions of the FCPA<\/a> have applied to all U.S. persons and certain foreign issuers of securities. The anti-bribery provisions also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a\u00a0corrupt payment<\/a>\u00a0to take place within the territory of the United States.<\/p>\n

Developing or Enhancing Your Export Compliance Plan<\/em><\/strong><\/p>\n

A key foundation of proactive and effective export compliance requires the development of an export compliance plan which establishes a set of procedures for your organization to ensure that everyone is on the same page about how standard processes work, who is responsible for what, how to identify violations, what to do when violations occur, etc. An export compliance plan helps build consciousness in your organization that compliance is critical \u2013 both to avoid costly penalties and also to protect national security. Diaz Trade Law helps exporters create export compliance manuals that help prove you have a process in place to classify your merchandise correctly, vet your customers and ensure you can prove you can take compliance seriously and implement all of the important great weight mitigating factors. Diaz Trade Law has significant experience in developing export compliance plans for organizations without plans.<\/p>\n

Why is Developing a Strong Export Compliance Plan Important?<\/em><\/strong><\/p>\n

A strong export compliance plan is beneficial to your business because it:<\/p>\n