The U.S. Department of Commerce announced new trade controls related to the country of Cambodia, in response to allegations of corruption, human rights abuses, and perceived threats to global security. The country now faces similar restrictions to those recently enforced against China and Venezuela.
As part of a series of moves made to limit the influence of the People’s Republic of China’s military in the region, the Departments of State and Commerce have imposed strict restrictions on exports and reexports from the small Asian nation. In addition to the restricted access to sensitive dual-use items subject to the EAR, Cambodia now faces a U.S. arms embargo, and finds itself subject to military end use and end user (MEU) restrictions.
“The United States remains fully committed to Cambodia’s independence and the sovereignty of its people,” said U.S. Department of Commerce Secretary Gina Raimondo. “We urge the Cambodian government to make meaningful progress in addressing corruption and human rights abuses, and to work to reduce the influence of the PRC military in Cambodia, which threatens regional and global security.”
The impact of these new restrictions has also led to BIS placing the nation in Country Group D:5. As such, license applications to export or reexport items to Cambodia now face a higher level of scrutiny and will be reviewed under a presumption of denial – especially concerning items controlled for national security purposes.
What this Means for Businesses
Companies currently engaged in business with Cambodia are likely examining their risk exposure to make sure that they are operating on the right side of the law. The first area of scrutiny is whether transactions require an export license. The second is whether any party to a transaction should now be considered part of the MEU/MIEU lists.
Companies would also have to be vigilant in monitoring the situation on an ongoing basis. For example, more items could be placed under restrictive export controls. And new people and organizations are identified as military end users.
How Descartes Can Help
The world of global trade compliance is typically fast-moving, so compliance officials should always be prepared for changes that bring in new regulations.
For companies unsure about their current readiness to handle the rapid pace of compliance additions, addendums, and new promulgations, they should re-examine their international trade compliance processes and procedures to ensure they are keeping up with ever-changing rules. Several noteworthy software solutions provided by leading vendors, such as Descartes Visual Compliance, can help organizations rapidly deploy full-fledged compliance solutions, including denied and restricted party screening, Military End User and End User data, sanctioned ownership screening to account for regulations such as the OFAC 50 percent rule, and export documentation and licensing management.
Compliance is an ongoing process, and the most important thing an organization can do to remain on the straight and narrow is to be aware of the ongoing changes in the compliance world as they occur, and to adapt to the changes in a timely manner.