![]() The Bureau of Industry and Security (“BIS”) has previously published a set of industry “best practices” for U.S. Include a clause in your contact with the foreign purchaser that provides that the purchaser will indemnify the exporter from liability (including defense costs) arising from unauthorized diversion. Use information technology to enhance your due diligence review.Ĭonduct training for foreign distributors, resellers and other intermediaries regarding the legal risks from unauthorized diversion. Use only freight forwarders and other intermediaries who have sophisticated export compliance processes.Īvoid “routed” transactions unless they are with a trusted purchaser.Ĭonduct screening for: (i) prohibited parties (for all parties to the transaction) (ii) prohibited country destinations and (iii) prohibited end-uses.Ĭommunicate ECCN/EAR99 classifications and destination information to end-users, consignees, freight forwarders and other parties to the transaction. Require the purchaser to provide an end-use statement in the export contract or otherwise as part of the transaction documentation.Ĭonduct a careful due diligence review of the purchaser as well as all other parties to the transaction maintain copies of the results of this review to establish the exporter’s good faith attempts to comply with the law (this can be valuable if there is any subsequent investigation of the transaction). Include a clause in your contract with the foreign purchaser that provides that the customer will not reexport the product from the purchaser’s country without obtaining the consent of the exporter. This list is not complete and other steps are often added based upon the company, product and countries in question: The following are a number of steps that we advise for our clients to reduce potential liability from illegal diversion. exporters, ranging from reputational damage (news story about your product showing up in markets in Iran) to enforcement actions. Illegal diversion can create significant problems for U.S. Korea), Russia (for diversion to multiple locations) and Central American countries (for diversion to Cuba), however diversion can occur in any foreign country. Illegal diversion can occur most commonly in the high risk transshipment hubs such as Dubai (for diversion to Iran and Syria), China (for diversion to N. Simply defined, illegal diversion is when your company sells a product to a foreign customer (say in the U.A.E.) and that customer resells the product without your knowledge in a prohibited country (such as Iran or Syria), to a prohibited party or for a prohibited end-use. companies today is illegal diversion risk. export officials, one of the most significant export control issues facing U.S. Print Download Illegal Diversion Emerging As Top Export Control Issue By:Īccording to U.S.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |