Regulatory Basics

Authorization

 Even with a basic understanding of Import and Export regulations, it is easy to accidently violate the laws. There are many misconceptions about how authorizations work and what is and is not controlled. It is tempting to read the regulations in a favorable light to your organization. The regulations are sometimes very "grey" and leave much room for interpretation. This is not an invitation to make the law bend to your work efforts — a failure to understand the law is not a defensible position with any of the USG agencies should you violate. Even more dangerous to an organization, giving the impression that the organization "willfully" read the regulations wrong in order to support a business activity can result in individuals and organizations racking up criminal charges for each act.

Even if your organization has obtained an authorization, there are still a large number of regulatory requirements that must be met to use that authorization correctly. Obtaining an authorization is only the beginning of an organizations burden to follow the regulations. The actual obtaining the authorization is the easy part, the most difficult challenge organizations face is to implement those authorizations correctly. Sometimes the authorizations have terms or conditions that are difficult to understand, do not actually apply to your project or actually prevent your organization from completing a project. Your export expert must review these terms and conditions and a smart organization will engage in detailed training with any member of the organization that has a reason to "touch" that program or project. It is of vital importance that those working with the authorization understand what exactly they have been authorized to do and where the limitations have been placed.

Additionally, many times an organization is working with a branch of the U.S. Government or military that does not understand the Import and Export regulations and may feel they have the ability to instruct an organization to disregard the regulations because the effort is in support of a U.S. Government program. This is not the case — all organizations must follow the regulations — regardless of what their U.S. Government liaison may think. For example, many overseas contracts that support Operation Iraqi Freedom or Operation Enduring Freedom are managed by branches of the US State Department. It is easy to be confused when a liaison from the DoS tells your organization you are not obligated to follow export regulations. Often times however, the internal branches of the DoS do not work together and that branch may be unfamiliar with the Directorate of Defense Trade Controls or DDTC, which is the regulatory branch relating to imports and exports. Many an organization has found themselves in hot water with DDTC after following the guidance of another branch of DoS.

Determinations as to what is authorized and what is not should be made by your compliance professional only. All questions related to who you may work with, how you may interact, what you may share, and what you may provide must be cleared through your company compliance professional — before you discuss any of these things with a Foreign National. Also, include any conversations you may have had with a USG client, particularly relating to export and import controls.