What can I do to ensure that the end user of my export is someone with whom I am permitted to do business?

Exporters should screen all parties involved in an international transaction against the four “Prohibited Parties Lists,” of entities with which an exporter is prohibited from doing business under most circumstances:

The Specially Designated Nationals List, or SDN List

Published by U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) on the Internet, as well as in the Federal Register. SDNs are individuals or entities located throughout the world that are blocked pursuant to various sanctions programs

The Denied Persons List

Contains the names of persons who are subject to a denial order by BIS. In general, U.S. exporters are prohibited from dealing with denied persons in export transactions involving U.S. items. The list is accessible via the BIS website.

The Entity List

Also maintained by BIS, this list is composed of foreign end-users engaged in proliferation activities. Based on these proliferation concerns, exports to these entities may require a license when the export transaction is within the parameters found in Part 744, Supplement 4, of the Export Administration Regulations. This list can be accessed through the BIS Web site.

The Debarred Parties List

Maintained by the State Department. It lists the names of individuals denied export privileges under the International Traffic in Arms Regulations (ITAR). The information can be accessed at the Directorate of Defense Trade Controls web page.

In the aftermath of the September 11 terrorist attacks, President Bush issued Executive Order 13224 which created a new category of Specially Designated Nationals (SDNs), called Specially Designated Global Terrorists (SDGTs), expanding the list of parties with which U.S. companies are not permitted to do business.

Due to the frequency of additions to the SDN list and changes to sanctions programs, U.S. exporters should check the OFAC Web site regularly for updates or subscribe to OFAC’s “What’s New File” to receive e-mail notification whenever changes are made to the SDN list.

What are the penalties for violating export control laws?

Millions of dollars in civil penalties are imposed each year by the federal government for violating export control laws. The BIS Web site contains examples of civil penalties that have been imposed in the past. Civil penalties assessed by OFAC are $11,000 per prohibited transaction for violations of most sanctions programs, but they can exceed $1 million if the transaction involves narcotics kingpins. In cases where criminal intent to violate export control laws is found, criminal penalties can be imposed, resulting in significant corporate or personal fines and/or imprisonment.

What can my company do to make sure we identify and address export controls issues as early as possible?

Educating yourself about the legal and regulatory issues that are most relevant to your company is the first step. You can do this by visiting the Web sites or calling the phone numbers provided above for the various responsible agencies. In addition, company personnel responsible for international trade transactions should consider attending one of the many seminars available.

For any other questions about this article, or about exporting in general, please call the Trade Information Center (TIC) at (800) USA-TRAD(e).