Be on your guard for the American Export Control Legislation

Can companies in the Netherlands with no export activities in the United States still have problems with the American export legislation? This is indeed possible in certain cases because the United States argues that some legal regulations are applicable everywhere in the world. Whoever violates these regulations runs a huge risk, according to Richard Groenendijk, General Director of AEB Nederland.

In June 2014 Fokker Services reached a settlement with the American Government for the amount of 10.5 million US dollars. The settlement resulted after the Dutch specialist in aircraft maintenance had been charged with as many as 253 violations of the American export legislation in the period 2005-2010. Despite an embargo being in force at that time, Fokker Services had engaged in business with Iran Air, the Iranian national airline. According to the American Bureau of Industry and Security (BIS), the Iranian military was one of the parties involved in the export of spare parts – the trade in which had been restricted for security reasons. Investigations revealed that Fokker Services had systematically attempted to conceal the final destination of the spare parts.
In the mean time Fokker Services has taken the necessary measures. In 2010 the company ceased all trading with countries on the embargo list and has also set up a new compliance program.
By reaching a settlement, Fokker Services accepted responsibility for its behaviour and that of its employees. In this way, the company has avoided itself being placed on the ‘blacklist’.

Is American law applicable?
The Fokker Services example is a warning for all companies, and an incentive to closely monitor the U.S. sanction lists and export regulations. The United States deems that certain legal regulations are applicable everywhere in the world and can substantiate this. Does this mean that every company must abide not only with the European sanction list (CFSP) but also the American black lists? In principle, American law applies only to cases where there is an established link with American law. This is, inter alia, the case if American persons, products or currency are involved.

Whether your business falls under the American law or if you must check the American sanction lists, depends on the following five questions:

1. Do you have, directly or indirectly, anything to do with American products?
2. Do you trade in goods produced in the United States or do you process such goods in your own products?
3. Do these products fall under the U.S. Export Control Legislation?
4. Is your company a subsidiary of an American company or do you have a subsidiary in the United States?
5. Are American citizens responsible for your export process?

Read the full story on page 10 in Cargo Magazine, Click here



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