ICYMI: Commerce, Treasury, and Justice Issue Compliance Note on Obligations of Foreign-Based Persons to Comply with U.S. Export Laws

On March 6, 2024, the Department of Commerce, Department of the Treasury, and Department of Justice issued a tri-seal compliance note titled: “Obligations of foreign-based persons to comply with U.S. sanctions and export control laws.”

The note:

  1. Highlights the applicability of U.S. sanctions and export control laws to persons and entities located abroad;
  2. Outlines the enforcement mechanisms that are available for the U.S. government to hold non-U.S. persons accountable for violations of such laws; and
  3. Provides an overview of compliance considerations for non-U.S. companies and compliance measures to help mitigate their risk

Applicability of U.S. Sanctions and Export Control Laws to Foreign-Based Persons

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions, primarily against foreign jurisdictions but also against individuals and entities such as traffickers and terrorists.

The following persons/entities must comply with OFAC regulations:

  • U.S. citizens and permanent resident aliens
  • All persons within the United States
  • All U.S.-incorporated entities and their foreign branches

In certain sanctions programs, foreign entities owned or controlled by U.S. persons also must comply with applicable restrictions – such as engaging in a transaction with the government of Iran. Certain sanctions programs also require foreign persons in possession of U.S.-origin goods to comply.

Non-U.S. persons are also subject to certain OFAC prohibitions. For example, non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions.

Applicability of U.S. Export Control Laws

The compliance […]

By |2024-03-15T13:13:23-04:00March 15, 2024|EAR, Export, U.S. Department of Commerce (DOC), U.S. Department of Justice (DOJ)|Comments Off on ICYMI: Commerce, Treasury, and Justice Issue Compliance Note on Obligations of Foreign-Based Persons to Comply with U.S. Export Laws

BIS Regulatory Updates: 2023 Significant Changes

Diaz Trade Law is enthusiastic to announce Bloomberg Law published another one of our articles! Below is the article reproduced, you can also read here.

The two most important categories of export controls are the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). The vast majority of controlled exports fall under EAR, while the ITAR’s scope is limited to only military and defense-related articles, services, information, and technology. The US Department of Commerce’s Bureau of Industry & Security (BIS) is charged with enforcing EAR under 15 C.F.R. parts 730-774.

This article provides an overview of the significant BIS policy and regulatory changes in 2023, including updates to the voluntary disclosure policy, an update on the semiconductor export control rules, expansion of Russia sanctions, and a human rights amendment to the EAR.

Background on EAR

The purpose of EAR is to safeguard US national security interests by ensuring that certain critical technology does not fall into the wrong hands.

The EAR governs whether a person or entity may:

  • Export an item from the US.
  • Reexport that item from a foreign country.
  • Transfer an item from one person to another.

BIS has repeatedly demonstrated its commitment to enforcing EAR and violations can carry heavy penalties. Civil penalties may be up to $300,000 per violation or twice the value of the transaction, whichever is greater. EAR violations can even result in criminal liability, such as a $1 million criminal penalty per violation or up to 20 years in prison. EAR violations […]

By |2024-01-29T12:30:17-05:00January 24, 2024|Bloomberg, Bloomberg Import, Export, U.S. Bureau of Industry and Security (BIS)|Comments Off on BIS Regulatory Updates: 2023 Significant Changes

DOC, Treasury, DOJ, State, and DHS Issue Joint Compliance Note: Know Your Cargo

On December 11, 2023, the U.S. Departments of Commerce, State, Justice, Treasury and Homeland Security published a joint Quint-Seal Compliance Note, “Know Your Cargo: Reinforcing Best Practices to Ensure the Safe and Compliant Transport of Goods in Maritime and Other Forms of Transportation.”

The agencies highlight the increasingly complex nature of global supply chains and opportunities for nefarious actors to evade export control laws and U.S. sanctions. The note also highlights the responsibility of individuals and entities participating in the global transport of goods to assess their risk profile and implement compliance programs.

Potential Indicators of Efforts to Evade Sanctions and Export Controls

The note directs companies involved in funding and facilitating the transport of cargo to be aware of these practices that may suggest export control or sanctions evasion: 

  • Manipulating location or identification data
  • Falsifying cargo and vessel documents
  • Ship-to-ship transfers
  • Voyage irregularities and use of abnormal shipping routes
  • Frequent registration changes” that evade national provisions; and
  • Complex ownership or management

Recommended Compliance Practices

The note recommends that individuals and entities who participate in maritime and other transportation industries should implement and strengthen compliance controls as necessary, especially when operating in high-risk areas or when dealing with entities who demonstrate suspicious behavior. A non-exhaustive list of compliance practices includes:

  • Institutionalizing sanctions and export control programs
  • Establish location monitoring best practices and contractual requirements
  • Know your customer
  • Exercise supply chain due diligence
  • Industry information sharing

The note also encourages individuals and companies to report suspicious behavior to the relevant U.S. authorities.

Recent Activity to Combat the […]

By |2023-12-24T10:53:35-05:00December 24, 2023|Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce (DOC), U.S. Department of Homeland Security (DHS), U.S. Department of Justice (DOJ), U.S. Department of State (DOS)|Comments Off on DOC, Treasury, DOJ, State, and DHS Issue Joint Compliance Note: Know Your Cargo

New Court Rulings on Marijuana-Related Paraphernalia: Understanding the Impact on Importers

The marijuana industry is rapidly growing, with more and more states legalizing its use for medical and/or recreational purposes. With this growth, there is an increase in the importation of products such as grinders, storage containers, rolling paper, pipes, and vape pens, both for business and personal use. More businesses are asking why there is an issue importing such items when they only intend to sell and distribute within the many states where marijuana is legal for medical or recreational use and have established regulations for marijuana-related products. It is still essential to remember, while many states have legalized marijuana for medical or recreational use, marijuana remains illegal under federal law. 

This blog will address recent Court of International Trade (CIT) cases on this very topic and will be a part 2 to our previous blog covering U.S. Customs and Border Protection (CBP) seizures of drug paraphernalia 

CBP Authority 

CBP has the power to seize “drug paraphernalia” products.  This does not only cover importations of products for commercial use, but also items for personal use with individuals traveling internationally seeking entry into the United States.  CBP’s website section: Know Before You Go – Prohibited and Restricted Items encourages individuals to contact CBP prior to traveling and make sure that prohibited or restricted items, such as drug paraphernalia, are not brought into the country, as they are not only subject to seizure pursuant to 19 […]

By |2023-03-10T12:04:07-05:00March 10, 2023|E-Cigarette, Export, Import, Seizures, Tobacco, U.S. Court of International Trade, U.S. Customs and Border Protection (CBP)|Comments Off on New Court Rulings on Marijuana-Related Paraphernalia: Understanding the Impact on Importers

2022: A Year in Review

From all of us at Diaz Trade Law, we are immensely grateful for your support this year. While returning to a new normal post-pandemic, Diaz Trade Law still managed to save our clients MILLIONS of dollars in 2022. It is with great joy that we finish off 2022 filled with numerous achievements and accomplishments we are humbled to share with you. We look forward to assisting you in what we envision will be a better and brighter 2023!

Below we share some of our top 2022 success stories with you.

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Customs and Trade Law Weekly Snapshot

Here is a recap of the latest customs and international trade law news:

 

 

 

 

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