Exporters of military and dual-use goods are first and foremost business people, and sometimes have the habit of skipping over the crucial export compliance steps between making the sale and delivering the product to their buyer.
Most often the results of this practice are slowed delivery schedules, government fines, and even restrictions on future exports. The less tangible result, and one that I urge my customers to remember is the effect they might be having on the national security of the United States of America! With that in mind, here are a few red flag indicators you can keep in mind when dealing with overseas customers ordering controlled products:
13 Red Flag Indicators for Export Transactions
- The customer or its address is similar to one of the parties found on the Commerce Department’s [BIS's] list of denied persons. Case example.
- The customer or purchasing agent is reluctant to offer information about the end-use of the item.
- The product’s capabilities do not fit the buyer’s line of business, such as an order for sophisticated computers for a small bakery.
- The item ordered is incompatible with the technical level of the country to which it is being shipped, such as semiconductor manufacturing equipment being shipped to a country that has no electronics industry.
- The customer is willing to pay cash for a very expensive item when the terms of sale would normally call for financing.
- The customer has little or no business background.
- The customer is unfamiliar with the product’s performance characteristics but still wants the product.
- Routine installation, training, or maintenance services are declined by the customer.
- Delivery dates are vague, or deliveries are planned for out of the way destinations.
- A freight forwarding firm is listed as the product’s final destination.
- The shipping route is abnormal for the product and destination.
- Packaging is inconsistent with the stated method of shipment or destination.
- When questioned, the buyer is evasive and especially unclear about whether the purchased product is for domestic use, for export, or for reexport.
If you have reason to believe a violation is taking place or has occurred, you may report it to the Department of Commerce by calling its 24 hour hot line number: 1 (800) 424-2980.
Posted on September 26th, 2007 by keeton
Filed under: EAR, ITAR | Comments Off
This guide contains answers to over 70 questions most often asked by exporters who are regulated by the Department of State and the US Government. It’s got useful advice, recommendations, technical answers, and more.
Get a Free Copy of the Deparment of State Frequently Asked Questions Now
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Among the frequently asked questions, you’ll find:
“Why do I need to get the U.S. Government’s approval to export and import defense articles and defense services?”
“How do I obtain approval before I export or import defense articles and defense services?”
“How do I know whether an article or service is controlled by the ITAR?”
“If I’m not sure what list my item is on, USML or CCL, how can I find out?”
“Who can apply for export or temporary import licenses?”
Posted on August 17th, 2007 by keeton
Filed under: Uncategorized | Comments Off
- Governance
- Documented Processes and Procedures
- Analysis, Classification and Validation or product classification (ECCN) codes under ITAR/EAR and European Union legal guidelines
- Risk Management
- Active Products and Blocked Shipments
- Customer contract fulfillment
- Compliance
- HEC and TEC Verification
- Export Licensing Compliance and Management (SAP/GTS)
- Export Compliance Manual Customization
- International Consulting Company for Exporters
Posted on July 11th, 2007 by philip
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From ExportLawBlog:Â An article on the CTV website today revealed that
Canada is considering a change in its Export and Import Permits Act to permit exempt imports and exports by law enforcement officers when they cross the U.S.-Canada border in the course of their official duties. Significantly this is said to be part of a reciprocal arrangement with the
United States, although the
United States has yet to announce that it is considering such a reciprocal arrangement.  Read more…
Posted on July 9th, 2007 by philip
Filed under: Canada, News | Comments Off
From EpcohTimes
During his recent visit to Canada, Chen Yonglin the Chinese diplomat who defected in Australia pointed out that the Chinese embassies in North-America control and use the Chinese Student and Scholar Associations (CSSA) for ulterior motives such as spying. More and more evidence for this Chinese embassy’s control has surfaced lately.
Read More
Posted on July 9th, 2007 by keeton
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Q: What is all the fuss about this See-Through Rule? A: Let’s pretend you are Export Compliance SuperPerson with x-ray vision that can see through, say, an aircraft engine. Your uncanny sight can distinguish USML (United States Munitions List)  classified parts from commercial parts.  Let’s say you see a USML nut and bolt in there, but all else is commercial. Under the current interpretation of the See Through Rule, Export SuperPerson must now consider the entire engine as being  under the USML jurisdiction.  Or maybe not? This is the puzzling mud-pit known as the “See Through Ruleâ€. Some call it “ITAR Creep†because of its slow moving and, well, creepy quicksand nature.  It is when one bad ITAR apple spoils the whole bunch. Â
Brilliant analogies aside, the Rule considers products to be on the USML list if any part or component in the commercial dual use item is on the USML.Â
While tight export restrictions can be a good thing when it comes to protecting US technology from smarmy evildoers, industry, particularly the military industrial complex, is up in arms:  ”globalization” efforts and sales of dual use equipment to China are frozen since, as we all know, USML parts or their related technology can’t be sent there. It is also more costly, or even impossible to outsource production or to even export ITAR-tainted products for sale to other countries. Not to mention all that infected stuff out there was previously exported in more carefree days.
Thus, the industry argues, it will lose out against foreign competitors who aren’t impeded by Cold War era ITAR restrictions. So industry is still pushing for clarification of the see-through rule but the State Department won’t give it up just yet. A Big Chill was sent though the aeronautics industry a few years back when Boeing was fined $15 million because a USML classified QRS-11 navigation chip was included in a commercial engine exported for sale to
China.Â
 The question is: just how far will the See Through Rule be applied?  If State decides that the See Through Rule applies to all things, then there are lots of export violations floating around this planet which will be a world of bureaucratic hurt for US exporters.  JRÂ
Posted on July 5th, 2007 by philip
Filed under: China, News, QRS-11, See Through Rule, Uncategorized | Comments Off
The UK Ministry of Defence has brokered a bilateral agreement with its US State Department that would relax technology transfer restrictions that threatened London’s continued participation in the Lockheed Martin F-35 Joint Strike Fighter project. Read about it in Flight International USA
Posted on June 29th, 2007 by philip
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David Trimble, Director of Defense Trade Controls Compliance reports enforcement stats from February 2004 to February 2006:
- $60 million in fines
- 44 Debarments
- 12 Companies over direct oversight through ongoing consent agreements
- 459 Directed Disclosures
Keep up the good work. Here is a slide show you can use in putting your presentation programs together. Use it - you paid for it!
 - Zerbe
Posted on June 5th, 2007 by philip
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 From Space.com -
USA
U.S. export controls governing the exchange of technical data have complicated matters for NASA and its partners as they prepare for Automatic Transfer Vehicle’s (ATV) debut. Now NASA has asked the U.S. State Department ifor space station-specific relief from U.S. International Traffic in Arms regulations that govern many space-related products and services.
Read more at Space.com Â
Â
Posted on May 22nd, 2007 by philip
Filed under: News | Comments Off
