How to Remain Compliant in a Changing Landscape

By In Insight On 14th July 2022

Exporting merchandise from the U.S. is not as simple as it may seem.

Understanding what type of information is needed or what items should be checked can be difficult but can save your operation from costs and punishments by governing bodies if properly executed.

Restricted Parties Lists

The shipper and consignee, as well as principals, should be checked against the multiple restricted parties’ shipping lists.

The three most critical lists are issued by the Office of Foreign Asset Control (OFAC), Bureau of Industry and Security (BIS), and Department of State (DOS).  

Entities or individuals can be added to a list as a result of regulation violations, or if they are considered a greater risk of contributing to activities contrary to U.S. national security and/or foreign policy interests, among other reasons.

Know Where Your Goods are Going

The ultimate consignee is one of the most essential items to verify in today's political climate. Knowing who you are shipping to, and their affiliations are important to ensure your ultimate consignee is not on any restricted parties' lists. 

The most basic method of export is from the U.S. directly to an ultimate consignee. However, sometimes you may find you are shipping to an overseas party who may, in turn, be shipping to another party. The final 'ship-to' party would be considered the ultimate consignee in this transaction. 

Knowing the identity of your ultimate consignee is important as some merchandise is also restricted from being shipped from an intermediate consignee to the ultimate consignee.

Exporters not properly vetting or showing outright disregard for regulations can end up in hot water with penalties as steep as jail time and banned from exporting.

Commodity-Level Restrictions

Generally, any merchandise that can be used to create illicit drugs, chemical weapons, explosives, or any possible military use is restricted. You can't ship these products without proper vetting and in most cases, export licenses.

Commodities also need to be checked and may need to be classified under Export Commerce Control Number (ECCN) rules.

Examples of Red Flag Shipments

  1. Many items destined for Russia transit through Turkey. While sending humanitarian or medical-related goods is permissible, other general merchandise may require export licenses or be prohibited. Many current sanctions on Russia target financial institutions and persons associated with these institutions.
  2. China, another high-risk region, often raises flags for possible 'restricted party' matches for products shipping to China since the U.S. government closely monitors China.

How to Vet your Parties

Restricted party software scans for potential matches that need to be further verified to determine if any sanctions exist on a country-wide, company, or commodity level. 

Should you encounter any potential 'restricted party' matches or questionable commodities, please review them in detail to maintain compliance with regulations.

How we can Help

NNR uses restricted party software to check for red flags and directs secondary screening through our compliance department, and once verified, the shipment is cleared for export. 

In some cases, additional information may be requested to further identify companies, personnel, or commodities involved to reasonably ensure we are shipping in compliance with these regulations.

Written By

Ike Miura

Export Compliance Manager




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