Friendly Export Reminder: Know Your End-User!

Tucker Arensberg, P.C.
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When shipping defense articles or dual-use items overseas, it is important to identify the actual end-user.   This task cannot simply be outsourced to a freight forwarder.  The burden is on the exporter to make sure their exports are not used by an unauthorized end-user.

The US government maintains various lists of restricted individuals and organizations, such as the Denied Persons List, Entity List and ITAR Debarred List (to name just a few).

The entities on these lists have been identified for a reason and so exporting — or even attempting to export – to a listed entity can put your company in legal jeopardy.

For example, in 2014, a California electronics manufacturer was fined $10 million for various export control violations that included shipping components to entities on a State Department watch list.

More recently, a New York company was fined $155,000 for three separate exports to certain Russian and Chinese research and academic organizations that were on the EAR’s Entity List.

To ensure that your company does not make such a costly mistake, it is necessary to both verify the intended end-users of all exports and to check all foreign customers against the consolidated screening list prior to shipping products outside the US.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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