What are best pactices a firm should follow to better ensure compliance with U.S

Question

What are best pactices a firm should follow to better ensure compliance with U.S controls? and What are examples of export controls enforced in other countries?

Should ASE 2 U.S. Export Controls The following are real-life examples of export control violations taken directly from the U.S. Bureau of Industry and Security (BIS) publication "Don't Let This Happen to You. Introduction: The Weatherford violations were noteworthy because the company received the largest civil penalty the BIS has ever levied. The company was doing so many things wrong that multiple agencies, including the BIS, the Office of Foreign As- sets Control, and the Securities and Exchange Commission, were involved in the final penalties assessed (over $250 million). The Violation: From 1998 through 2007, Weatherford International and four of its subsidiaries-Weatherford Oil Tools Middle East, Weatherford Production Optimiza- tion (UK) Limited, Precision Energy Services ULC (Canada) and Precision Energy Ser- vices Columbia Limited-engaged in conduct that violated various U.S. export control and sanctions laws by exporting or re-exporting EAR99 oil- and gas-drilling equip- ment to, and conducting Weatherford business operations in, sanctioned countries without the required U.S. government authorization. In addition to the involvement of employees of several Weatherford International subsidiaries, some Weatherford In- ternational executives, managers, or employees on multiple occasions participated in directed, approved, and facilitated the transactions and the conduct of its various sub sidiaries. This conduct involved persons within the U.S.-based management structure of Weatherford International participating in conduct by Weatherford International foreign subsidiaries and the unlicensed export or re-export of U.S.-origin goods to Cuba, Iran, Sudan, and Syria. Weatherford subsidiaries Precision Energy Services Co lombia Ltd. and Precision Energy Services ULC (formerly known as Precision Energy Services Ltd.), both headquartered in Canada, conducted business in Cuba. Weath 5

Explanation / Answer

The best practices that a firm should follow to better ensure compliance with the US controls is it should visit the US Export Administration Regulations which provides links to important EAR information for exporters. Specifically, exporter should go through the links of the Defense Threat Reduction Agency, the National Nuclear Security Administration, Office of Foreign Assets Control, Custom-Trade Partnership Against Terrorism, Container Security Initiative, Bureau of Customers and Border Protection, Export Enforcement Coordination Center, Project Shield America, Department of Commerce’s Export Controls, DOC’s Bureau of Industry and Security, and Department of State: Directorate of Defense Trade Controls/Bureau of International Security and Nonproliferation.

In both the cases given there was deliberate fraud to avoid export restrictions. In case of Amplifier Research Corp. invoices and shipping documents were altered to hide the correct classification, and in case of Corezing International, it intentionally conspired to illegally export radio frequency modules. In the US companies should develop a code of conduct for its employees, train employees to follow the code, and any attempt to violate it should face disciplinary action.

Examples of export control in another country are those in China. China has a list of items controlled for export. The Administrative List o Export of Military Products lists military items, Index of Management of Import and Export Permits of Dead-Use Items and Technologies lists dual-use items. This list covers nuclear, biological, chemical, and missile-related dual-use goods. These controls are administered and enforced by the Ministry of Commerce, the State Council & Central Military Commission, and the Chinese Customs Bureau.

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