InTents June/July 2022 - 44

business | management
U.S. sanctions compliance
Is your company at risk of indirectly violating U.S. sanctions?
by Jesse Madden
I
Sanctions compliance resources
The government has several resources
available to help companies navigate
the rapidly changing landscape of
international trade.
* U.S. Department of Treasury, Offi ce of
Foreign Assets Control (OFAC): home.
treasury.gov/policy-issues/offi ceof-foreign-assets-control-sanctionsprograms-and-information
*
U.S. Department of Commerce, Bureau of
Industry and Security (BIS): bis.doc.gov/
* U.S. State Department Directorate of
Defense Trade Controls: pmddtc.state.
gov/ddtc_public
If you have any concerns about
suspicious inquiries that come to your fi rm,
you are encouraged to contact your local
BIS Export Enforcement Offi ce: bis.doc.
gov/index.php/enforcement/enforcement
-fi eld-offi ces
n response to the Russian invasion of
Ukraine, new sanctions/restrictive measures
have been issued by the U.S., EU, UK,
Switzerland, Canada, Japan, South Korea,
Taiwan, Singapore, Iceland, Australia and
New Zealand. As a result, Russia is now
the most heavily sanctioned country in
the world.
On March 15, 2022, the U.S. Department
of Commerce hosted a webinar with
several speakers giving presentations on
what these measures involve and how they
could potentially affect any U.S. company
that imports or exports goods, services
or technology.
A key point made during this webinar
was that violations of these sanctions are
prosecuted as felony violations of federal
criminal law, and it is vital that companies
understand that the standard of prosecution
is not intent.
" A company or individual's conduct may
be considered a civil violation even if there
is a lack of knowledge that a transaction
was prohibited, " explained Edward Heath, a
partner with the law irm Robinson + Cole
and one of the speakers at the webinar. " Put
another way, the government doesn't have
to prove intent or prove knowledge or even
that you should have known. They simply
have to prove that a violation has occurred. "
Indirect violations
Under the current sanctions against Russia,
Belarus and the breakaway republics of
Ukraine, the import of any goods, services
or technology, either directly or indirectly,
is prohibited. Also, the exportation, reexportation,
sale or supply of any goods,
44 intents june-july 2022
services or technology, either directly or
indirectly, is prohibited.
" Technology " includes data sharing or
providing information. Providing any kind
of support, service or guidance violates
these sanctions.
Company owners are generally aware
that they are prohibited from making
any new investments in the sanctioned
regions and that trade is prohibited. What
they are frequently unaware of, however,
is the " indirectly " portion of the sanctions.
This one word can cause serious legal
problems for companies that engage in
any sort of international trade.
Selling a product to a buyer in China may
appear to be a legal transaction, but if that
buyer then turns around and sells your
product to a buyer in a sanctioned country,
your company will be guilty of indirectly
violating sanctions and could face federal
criminal charges.
" Any dealings with Ukraine or any country
bordering Russia carries increased risk
and should be scrutinized very carefully, "
said Heath. " For example, if you're selling
your product to Latvia or a known transshipment
country like Dubai, you want
to scrutinize that transaction carefully to
make sure it isn't being passed on to one of
the sanctioned regions. "
OFAC
All U.S. economic and trade sanctions
programs are administered and enforced
by the U.S. Department of the Treasury's
Ofice of Foreign Assets Control (OFAC).
Every business owner should be familiar
with the 2019 OFAC Compliance

http://www.treasury.gov/policy-issues/offi http://bis.doc.gov/

InTents June/July 2022

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