The Law Office of Martin K. Behr, Logo

(201) 351-1274

Exporting Will Always Be Challenging

The United States' National Export Initiative promotes the export of all kinds of goods and services. Additional export programs and changes with how and what will be controlled, and the dedication of more and more resources to U.S. agencies focused on export enforcement mean that U.S. exporters have lots of reasons to act with care when they export.  These reasons can be angry and disappointed customers, heavy U.S. governmental fines and penalties, as well as the loss of good reputations and exporting privileges.

Many more companies have becoming exporters in the past few years. Exporting can be an extremely profitable activity. But it is essential for all exporters to review operations to make certain that they are adhering to all sorts of complex and often ambiguous U.S. export laws and regulations. Regardless of size or experience, all exporters must be informed and comply with all the export regulations that govern their products or services.

The Foreign Trade Regulations (FTR) places primary responsibility for compliance of the Electronic Export Information (EEI), formerly known as the Shippers Export Declaration, on the exporter.  Acting through a forwarding or other agent or delegating or re-delegating authority does not in and of itself relieve exporters of their compliance responsibility. Penalties are being issued by U.S. Customs and Border Protection (CBP) for late filing, no filing or inaccuracies on the EEI being filed through the Automated Export System (AES) on the new Automated Commercial Environment (ACE) platform.

Exporters must ensure the information they are providing to their forwarder or filing through AES themselves is timely, accurate, and updated when corrections are received. Now that U.S. Customs and Border Protection (CBP) and the U.S. Census Bureau, the U.S. Department of Commerce's Bureau of Industry and Security (BIS),  and the U.S. Department of State have access to ACE reports, they are able to identify anomalies far easier than ever before. These "anomalies" include but are not limited to the following:

  • The failure to file or the late filing of an EEI
  • The filing of an incomplete or inaccurate EEI
  • Items destined for any sanctioned country that are located on the Office of Foreign Assets and Control (OFAC) List
  • Items that require a Department of Commerce License (15 CFR Parts 730 - 774 of the Export Administration Regulations, or EAR)
  • Items that require Department of State, Directorate of Defense Trade Controls export license under the International Traffic in Arms Regulations (ITAR) (22 CFR Parts 120 - 130)
  • Items that require a Department of Justice (DOJ), Drug Enforcement Administration (DEA) export permit (21 CFR, Part 1312)
  • Items that require CBP approval prior to exporting, as per the Customs Regulations (CR) (19 CFR Part 192)

It is the exporter’s obligation to check all parties in a transaction against the most recent Excluded Parties Lists to avoid penalties for shipping to an entity that cannot receive U.S. exports. There are currently many lists (aka "Bad Guy Lists") that must be checked for each export transaction.  

Export Penalties

A number of U.S. government departments and agencies are involved in the implementation and enforcement of export laws and regulations. These include:

  • For violations of the EAR, a civil penalty can range from a maximum of $12,000 per violation or $120,000 per violation of items involving national security.
  • For violations of the ITAR, a civil penalty can cost you up to $500,000 per violation.
  • For violations of OFAC regulations, a civil fine for a corporate or individual may be up to $55,000 per violation.
  • For violations of the FTR, the CBP can fine you up to $50,000 for your failure to submit an EEI filing.
  • Criminal violations can result in a million dollar fine per violation. An individual can also face prison time up to 10 years per violation.

Export Legal and Business Solutions

When exporting commodities from the United States, you must first classify your article according to the Schedule B or Harmonized Tariff Schedule for reporting to Census.

If your commodity comes  under the Commerce Classification List (CCL) the exporter must provide the Export Commodity Classification Number (ECCN), and must know if a license is required to the export destination, or if an exception can be used for each transaction. Under U.S. law it is the responsibility of the exporter to classify the item(s) and to determine if an export license is required from any U.S. Government agency.

We can help you organize for exporting; locate the right U.S. suppliers, freight  forwarders, cargo insurers; advise you concerning export sales contracts, the proper use of Incoterms®2010, and alternative methods of payment; determine the correct  classifications and export licensing requirements of your commodities; file commodity jurisdiction requests with the U.S. Government; assist you in applying for export licenses, steer you away from troublesome problems related to embargoes, sanctions, currency reporting requirements, anti-boycott laws, intellectual property rights, hazardous materials, export documentation, recordkeeping, and responsibilities under the FTR, EAR, ITAR, CR, and OFAC.  You may also have to adhere to FDA, USDA, NRC, DEA, DOJ etc. responsibilities and procedures before you export anything.

We are also here to defend you vigorously should you be cited for having violated export laws or regulations. We are more than ready to deal with the CBP, BIS and other U.S. governmental entities on you behalf.     

Exporters should implement robust export compliance programs. We can help you design and implement one that is right for you.  We can also provide you with export compliance training, which can be done at your location.  In addition, we can get your  company get on board with the CBP Customs-Trade Partnership Against Terrorism (C-TPAT) Program.  And we can also prevent your competitors from knowing all about your export trade data, which they can easily do so by making use of numerous online providers..

Don't delay. Contact our office today. 

U.S. Logos