While international trade, having been around since the passage of the Export Control Act in 1940, it has increasingly become a hot issue since the terrorist attacks of September 11, 2001. Security concerns commodity and technology exports are greater than ever, and now, so are concerned of products and materials imported to the US In addition, requirements, whether electronic or hard copy, have become more stringent. Regardless of a company’s product or technology, compliance has increased significantly and the penalties for non-compliance have increased as a result.
Each federal agencies tasked with enforcing international trade compliance have increased resources to better monitor, investigate and prosecute illegal or not in compliance activities. Agency facts clearly support this effort.
Directorate of Defense trade controls (DDTC)
In FY2007 the DDTC reported a 50% increase in support for the investigation of criminal cases and a 50% jump in criminal charges / conviction as well as a 60% increase in voluntary disclosure.
Bureau of Industry and Security (BIS)
BIS reported increase administrative breach of cases from 69 in FY2005 104 in FY2006 and doubling administrative penalties of $ 6.8 million to $ 13.1 million in the same period.
Office of Foreign Asset Controls (OFAC)
OFAC also reported a 17% increase in civil penalties from the first half of 2007 to the first six months of 2008.
Customs and Border Protection (CBP)
CBP reported a 40% increase in fines and penalties from FY2004 to FY2007.
If the latest statistics are not enough to convince you that now is the time to get compliant, considering the fact that penalties for violations have increased sharply in an effort to improve compliance with federal regulations. 16 October 2007 President Bush signed into law the International Emergency Economic Powers (IEEPA) Enhancement Act. The Act provides for civil penalties exceeds $ 250,000 or twice the value of the transaction which the offense is based, imposed for each violation of IEEPA. Deliberately break can expect criminal penalties in fines of up to $ 1 million and up to 20 years in prison. The IEEPA penalties apply to violations of the Export Administration Regulations (EAR) and sanctions programs implemented by OFAC. Under Secretary of Commerce for Industry and Security Mario Mancuso said that “the new law provides significant additional support for our cases, we are going to apply a fair, deliberative and rigorous way. Skara, we think that the increase will better align incentives to improve overall compliance our policies. “
Census and other agencies have also risen on increased penalties bandwagon. New Federal Trade Regulations (FTR) effective September 30, 2008, mandated harsher penalties for anyone involved in exporting. To impose fines on violation of the FTR from $ 1,100 to $ 10,000 for both civil and criminal for the delayed filing, failure to file, false filing of export information and / or using Automated Export System (AES) to further any illegal activity.
This strengthened rules will not likely end here. Under Secretary Mancuso is urging Congress to follow the lead of Senator Chris Dodd is to pass Export Enforcement Act (EEA) to reauthorize the EAA (which expired in 2001) and includes several other important measures that would increase the US National Security through surveillance ‘dual use “goods. He said that” Congress should move quickly to provide law enforcement agents with our comprehensive statutory authority they need to better combat the illegal trade in these products. “
Is international trade compliance program monitored with the latest changes in regulations and implementation of environment? Companies lacked a good compliance program will not likely fly under the radar for a long time due to increased enforcement efforts, improved data mining and cargo screening technology. To achieve these objectives, the role of every member of the international business community. Come on and maintain international compliance is not a cost of doing business. Aside from being the “right thing to do”, it can save you money, keep away negative coverage, and improve the global trading efficiency.
Will you go? … Now!