As an exporter it is your responsibility know if you need an export license. On top of that, it is your responsibility to know who you’re exporting to and to watch for red flags. To help, the Bureau of Industry and Security (BIS) has published guidance for exporting to Pakistan, Saudi Arabia, and UAE. But what if you don’t export to those countries? Luckily, these guidelines apply to all exports.
Export Due Diligence
Research any new or unfamiliar customers. Exporters should exercise increased due diligence when vetting new customers. If you notice any of the following red flags, then those customers merit extra scrutiny.
- A new customer places an unexpected and/or high-value order for sophisticated equipment.
- The customer is a reseller or distributor. In such cases, you should always inquire who the end-user is.
- The customer has no website or social media and is not listed in online business directories.
- The customer’s address is similar to an entity listed on the U.S. Government’s Consolidated Screening List (CSL), or the address indicates the customer is located close to end-users of concern, including co-located with an entity listed on the Entity List.
- Your customer places an order ex-works and makes all shipping arrangements through a freight forwarding service. In such cases, request that the freight forwarder provide you a copy of the Electronic Export Information (EEI) filing to ensure the information is accurate.
Assess the potential applications of your products. Whenever you identify red flags indicating a potential concern about your customer, or if you are unable to confirm the bona fides (i.e. legitimacy and reliability) of your customer, you should consider potential dual-use applications of your products.
File true, accurate, and complete export control information. True, accurate, and complete EEI must be filed in accordance with Sections 758.1 and 758.2 of the EAR, as well as the Foreign Trade Regulations (15 C.F.R. Part 30). In the case of exports made under the terms of a letter of credit (LoC), BIS has noticed that the parties to an export transaction may be inadvertently misrepresented on EEI filings due to differences between commercial document requirements and EEI requirements.
It is imperative for you to know who you’re exporting to. If you are still unsure, the BIS also has guidance on ways to ensure you know your customer. It is highly recommended that you check if your customer is on the Consolidated Screening List.
Need help identifying if your shipment needs an export license and if so, how to get one? Reach out to Mohawk Global Trade Advisors, we’ll walk you through it.
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