Export Compliance

Amid unprecedented turmoil, the world of export compliance rolls on undeterred

We’re less than three months into the new year (and the new decade!), but it has already been packed to the gills with important news and developments.

With so much happening, such as the coronavirus outbreak, the volatility of the U.S. stock market, trade wars, the impending American elections, and escalating tensions in the Middle East, it can be easy to lose sight of things that are more routine and seem less significant when compared with these momentous events.

However, even as most people are distracted by all that has been going on, the work of export compliance officials remains integral. In fact, many of these same global issues make compliance more important. It goes without saying, for example, that if the trade tensions between the U.S. and China lead to more restrictions on Chinese goods (on top of sweeping tariff hikes), then there’s additional due diligence required on transactions with Chinese individuals and organizations. If the diplomatic row with Iran leads to more people being added to denied and restricted party lists, there’s more potential sanctioned entities to avoid.

And sure enough, amidst the ongoing global uncertainty, we have seen several U.S. government bodies, including the Department of Treasury’s Office for Foreign Assets Control (OFAC) and Bureau of Industry and Security (BIS), continue to enforce compliance actions and penalties, further driving home the necessity for export compliance. For instance:

  • On January 30, Iranian citizen Mahin Mojtahedzadeh was found guilty of violating U.S. sanctions against Iran, by conspiring to unlawfully export gas turbine parts. She was sentenced to 443 days in jail, and fined $5,000.
  • OFAC has been pretty busy the last few weeks, including announcing settlements with an aviation telecommunications firm and a shipping company, worth a cumulative ~$10 million – and this is less than two full months into the year!
  • Additionally, in February, OFAC made additions to lists relating to Venezuelan sanctions, North Korean sanctions, cyber-crime designations, and counter-terrorism designations – as well as other similar administrative actions.
  • In late February, the U.S. State department announced sanctions on 13 foreign entities and individuals in China, Iraq, Russia, and Turkey, in response to their alleged violations of the Iran, North Korea, and Syria Nonproliferation Act.
  • Earlier in March, OFAC added three Nicaraguan individuals to its SDN list, in addition to the U.S. State Department sanctioning all of the Nicaraguan National Police, in response to the human rights abuses and silencing of criticism and dissent by the country’s regime.

These are but a few of the numerous similar examples we could share, but they make the point effectively: it becomes more important than ever that the pilot of a plane pay full attention to what they are doing in bad weather, and a compliance official’s due diligence is more integral in this time of turbulence and unrest.

It is a good thing then that, as we have mentioned through this article, the work of most compliance officials also continues undeterred. Organizations with defined compliance and screening processes in place can rest assured they are doing their bit to stay on the right side of the law. Nonetheless, if you feel like you need assistance in setting up – or bolstering – your compliance program, please feel free to contact us. Having an extensive export compliance and screening solution in place, such as Descartes Visual Compliance, can be indispensable to many an organization’s compliance processes.