There are three primary set of export and sanctions rules.
These are:
- · U.S. Export Administration Regulations (EAR)
- · International Traffic in Arms Regulations (ITAR)
- · Economic Sanctions Regulations
U.S. Export Administration Regulations
Export Administration Regulations (EAR) are found in 15 CFR
Parts 730 to 744. These are administered under International Economic Emergency
Powers Act by the Commerce Department’s Bureau of Industry and Security. EAR
regulates exports including re-exports and deemed exports of commercial or
dual-use goods, software and technology.
Penalties for non-compliance with EAR are quite severe. It
can bring civil penalties of up to $250,000 per violation or twice the amount
of the transaction whichever are greater and criminal penalties of up to $1
million per violation along with up to 20 years imprisonment. There are severe
sanctions, in addition to the criminal and civil penalties that may be imposed
for violations, including:
• termination
of export privileges
• suspension
and/or debarment from federal government contracting
• loss
of federal funds
International Traffic
in Arms Regulations
International Traffic in Arms Regulations (ITAR) are
administered by the U.S. Department of State Directorate of Defense Trade
Controls (DDTC) under the Arms Export Control Act. It regulates exports of
items and services specifically designed for military applications. It controls
the permanent and temporary export and temporary import of items on the United
States Munitions List (USML). The items that are controlled include defense
articles, defense services and technical data. Exports
under ITAR include:
• Sending
or taking a defense article out of the U.S.
• Disclosing
or transferring in the U.S. any defense article to an embassy, agency or
subdivision of a foreign government.
• Performing
a defense service for a foreign person.
• Disclosing,
releasing or transferring technical data or other information to a foreign
person.
U.S. Economic
Sanctions
Economic sanctions are administered by the U.S. Treasury
Department Office of Foreign Assets Control (OFAC). These sanctions prohibit
certain transactions with countries that are subject to boycotts, trade
sanctions and embargoes. The sanctions can be either comprehensive or
selective. It depends on the country and the scope of sanctions. OFAC currently
enforces comprehensive economic embargoes against three countries – Cuba, Iran,
and Sudan. It restricts any kind of business with these three countries if you
are a U.S. person or a U.S. company. There are selective sanctions against
Burma, North Korea and Syria. For Burma there are restrictions on financial
activity and for North Korea and Syria, there are broad export controls. Most
U.S. origin items are restricted for North Korea and Syria. In addition to
country-based sanctions U.S. also has sanctions against Specially Designated
Nationals (SDN).
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