Do You Know Your Customer? Strategies to Avoid Costly Fines When Doing Business Abroad
Selling to customers abroad has never been easier. However, there are some pitfalls that you must be aware of in order to avoid serious and potentially critical problems when doing business outside the US. The Knowledge Group has assembled panel of thought leaders to help you understand the critical elements when trading goods and services abroad in accordance with today’s challenging business and regulatory environment. The speakers will share their opinions in a two-hour LIVE Webcast which will cover the following key topics:
- Checking and Assessing Restricted Party List
- Understanding Entity List, Denied Persons List and the Unverified List
- When and How to Get Export License
- Things to Consider before Agreeing to Transactions
- Potential Defaults and Penalties Involved
- Up to the minute-regulatory updates
- Other issues
David Hardin, Member,
Conducting Due Diligence of Your Customers
- Why conduct due diligence? – The Legal, Business, and Moral Justifications
- What does due diligence entail? – Examining Risk Factors and Red Flags
- How do you conduct due diligence? – Methods, Tools, and Resources
- How far do you need to go in conducting due diligence? – Standard of Care and Real-Life Lessons
- Helpful Due Diligence Tips
Eric H. Cottrell, Partner,
What Happens When You Don’t Know Your Customer – Survey of Enforcement Actions
Important to know the who, what, and where of customers.
- Enforcement Actions Related to International Business Are on the Rise
- Increase in both frequency and penalty amounts
- Many enforcement actions rooted in a failure to understand identity and role of customer.
- WHO is my customer?
- Is my customer a Specially Designated National? (OFAC)
- Representative Cases
- Is my customer a foreign official? (FCPA)
- Representative Cases
- Is my customer a government-owned entity? (FCPA)
- Representative Cases
- Is my customer a Specially Designated National? (OFAC)
- WHAT is my customer’s business?
- Red Flags (FCPA & Export Controls)
- Representative Cases
- Anti-boycott issues
- WHERE is my Customer?
- Export License Requirements (Export)
- 126.1 countries
- Transshipment Issues (Export)
- Lessons Learned
- Voluntary Disclosures – lessons from representative cases
- Importance of Compliance Plans & Training
Matthew Goldstein, In-charge, Export Control Compliance,
DHS’s Office of Science and Technology Policy
Defense Trade Brokering Pitfalls
- Defense Trade Registration Requirements
- Defense Article Manufacturers and Exporters
- Defense Service Providers
- Defense Trade Brokers
- What Constitutes Brokering and Brokering Activities
- How to spot a broker
- Who is exempt
- Foreign Broker Registration Requirements
- Prior Notice and Approval Requirements for Brokering Activity
- Annual Reporting Requirements
- Agency Guidance Process
- Civil and Criminal Liability for Violations
- Penalties for failure to register
- Penalties for use of unregistered parties
- Sample enforcement cases
- Best practices in dealing with parties required to register
- What you need to know about upcoming changes to the Brokering requirements
Andrew Edlefsen, Nevada Director,
U.S. Commercial Service | U.S. Department of Commerce
– federal export/int’l services and resources, focusing on advocacy and avoiding pitfalls
Kathleen Little, Partner,
Vinson & Elkins L.L.P
Where and When Does My Liability Begin and End?
Dealing With Domestic Customers
- Dealing With Domestic Customers
- Technical Data
- Off-shore procurement
- How far does my liability extend?
- Hardware sales
- Do you need to identify end-user?
- Who obtains license?
- What is my responsibility?
- How far does that responsibility go?
- Liability for unauthorized exports
- Technical Data
- Dealing With Overseas Customers
- Liability for reexports and retransfers
- Responsibility for obtaining any reexport/retransfer licenses
- How far does my responsibility go for ensuring that data and equipment are properly controlled abroad?
- Compliance Best Practices for Managing Risk
- Managing liability for the conduct of agents, freight forwarders and representatives
- Marking of technical data
- When to use end-use and end-user assurances
- Export terms and conditions in purchase orders and other contractual agreements
- Internal policies/procedures for reviewing new customers – when should due diligence begin?
- Spotting special licensing requirements before a customer becomes a customer (e.g., ITAR proposal restrictions)
- When should an existing customer be re-screened?
Who Should Attend:
– In house lawyers
– Commercial and contract managers
– Business development managers
– Licensing executives
– COO/CFO of Corporate Legal Departments
– General Counsel and Corporate Attorneys
– Corporate Heads (Executive Directors, Finance Directors, Managing Directors, Controllers, Analysts)
– Other Related Professionals
David Hardin’s practice involves international trade matters before various U.S. agencies, focusing on export control and sanction matters that companies and individuals face in conducting business outside the United States or with non-U.S. persons in the United States. His primary areas of expertise entail business and legal issues arising under export control and sanction regulations administered by the U.S. Departments of Commerce, State, and Treasury. He frequently advises clients on all aspects of screening and other third party due diligence requirements that arise in the context of domestic and cross-border transactions, including the nature and scope of those requirements, development and implementation of procedures to ensure compliance, use of screening systems, and practical guidance for compliance. David frequently advises companies and other types of organizations on how to screen third parties in practical, cost-efficient ways and in a manner commensurate with a company’s risk profile. His aim is to deliver useful and easy-to-understand information about due diligence that will help ensure companies fully comply with the law.
David Hardin’s practice involves international trade matters before various U.S. agencies, focusing on export control and sanction matters that companies …
Eric Cottrell is a seasoned litigator in both civil and criminal matters and has been lead counsel in multiple jury trials. He divides his practice between white collar criminal matters and commercial litigation.
Mr. Cottrell represents businesses that are the subject of government inquiries and conducts internal investigations into allegations of corporate misconduct. He has particular experience in managing complex Foreign Corrupt Practices Act (FCPA) investigations and advising companies on FCPA compliance matters. Mr. Cottrell recently concluded a federal grand jury investigation related to alleged FCPA violations. He successfully obtained a declination letter from the Department of Justice, formally closing the matter with no penalties or fines.
Mr. Cottrell also has significant experience advising companies on complying with U.S. export control laws and investigating and disclosing violations to federal authorities. He has conducted numerous internal investigations involving alleged violations of the ITAR, EAR and OFAC regulations, including alleged exports to Sudan, Iraq and Afghanistan.
In his commercial litigation practice, Mr. Cottrell represents public and private entities in shareholder litigation, commercial contract disputes, financial services and securities litigation, trade secret litigation and product liability defense. He has served as trial counsel for companies in federal and state court and has often litigated in the North Carolina Business Court. Mr. Cottrell also has extensive experience in managing complex and time-sensitive electronic discovery matters.
Eric Cottrell is a seasoned litigator in both civil and criminal matters and has been lead counsel in multiple jury …
Matthew A. Goldstein concentrates his practice in the area of U.S. export controls and economic sanctions compliance for exporters of military, homeland security, dual-use, and purely commercial items and technologies. He has represented manufacturers in exports to Africa, Australia, Canada, Europe, Singapore, South Korea, the United Kingdom, and the Middle East. This work includes analysis and consultations on commodity jurisdiction and commodity classification; preparation and filing of license applications, advisory opinion requests, and other submissions to the Department of Commerce Bureau of Industry and Security, the Department of State Directorate of Defense Trade Controls, and the Department of Treasury Office of Foreign Assets Control; the development and implementation of corporate trade compliance programs; and company training.
Matthew is the Principal Counsel at Matthew A. Goldstein, PLLC. Prior to returning to private practice, he was the Team Leader of contractor support at the U.S. Department of Homeland Security Science and Technology Directorate’s Export Control Group where he served as an export controls compliance subject matter expert for DHS and coordinated agency component, federal laboratory, and division-wide compliance with the International Traffic in Arms Regulations and Export Administration Regulations.
Matthew A. Goldstein concentrates his practice in the area of U.S. export controls and economic sanctions compliance for exporters of …
Andrew Edlefsen currently serves as Nevada Director of the US Commercial Service. His Las Vegas office works directly with Nevada companies providing export-related and international business-related assistance, including USCS market research and matchmaking services. Prior to moving to Las Vegas in July, 2008, he served as International Trade Specialist in the Utah Export Assistance Center in Salt Lake City and also worked in the Utah Governor’s Office of Economic Development, International Trade and Diplomacy office, focusing primarily on the Asia region
Andrew has a wealth of experience in international business, particularly in the aviation industry, having done consulting work for over 10 years for international aviation companies exploring China, in addition to having spent several years living and working in Taiwan and other parts of Asia. He was one of the original organizers and creators of the China GA Forum, an annual aviation event held in China which focuses on general aviation industry issues and B2B networking in that market.
Andrew has a BA in Chinese and a MBA, from Brigham Young University and Utah State University, respectively. A private pilot (SEL), Andrew also reads/speaks/types fluent Mandarin Chinese, having previously worked as Chinese Language Analyst for the U.S. Department of Defense. He continues to hold a strong interest in aviation and China and is currently a member of the US Commercial Service’s Aerospace/Defense Team and serves as special advisor to the U.S. Department of Commerce’s China Business Information Center. He has organized CS trade missions to China and is often invited to speak at China-focused events in Las Vegas and around the country.
Andrew Edlefsen currently serves as Nevada Director of the US Commercial Service. His Las Vegas office works directly with Nevada …
Kathleen is a partner in the law firm of Vinson & Elkins L.L.P., a global law firm with 16 offices in the United States, Asia, and Europe. Kathleen concentrates her practice in export controls and sanctions. Kathleen’s export and sanctions practice spans almost 30 years and includes counseling clients on a wide variety of international issues, including compliance with sanctions regulations administered by the Office of Foreign Assets Control (“OFAC”), the International Traffic in Arms Regulations (“ITAR”), the Export Administration Regulations (“EAR”), and the Foreign Corrupt Practices Act (“FCPA”). Kathleen has been retained and has testified as an expert witness on a number of cases involving U.S. export controls. She has conducted numerous internal investigations related to export and sanctions compliance; prepared numerous voluntary disclosures for submission to OFAC, the Directorate of Defense Trade Controls (“DDTC”), and the Office of Export Enforcement (“OEE”). She also has handled both civil and criminal enforcement actions.
Kathleen is a partner in the law firm of Vinson & Elkins L.L.P., a global law firm with 16 offices …
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About Miller Chevalier
The pursuit of international business is always coupled with the obligation to ensure compliance with a host of U.S. and multilateral legal regimes – export controls and economic sanctions, anti-corruption laws, customs laws, anti-boycott laws, anti-money laundering laws, and key elements of the Sarbanes-Oxley and Dodd-Frank Acts – that follow companies, their employees, agents, and sometimes affiliates wherever business leads them. Miller & Chevalier is a Washington, D.C. law firm with significant knowledge and experience with those laws and the agencies that administer them. In particular, our lawyers have been heavily involved in the major regulatory and enforcement developments of the last few years and have great depth in export control and sanction regulations, policies, and processes, including the laws requiring third party screening and due diligence. Miller & Chevalier is a trusted partner to clients in the United States and around the world, providing solutions to their most complex problems and advice that enables clients to seize new opportunities.
About Parker Poe
Parker Poe is a full-service business law firm with more than 200 attorneys and is among the largest and most respected firms in our home states of North Carolina and South Carolina, where we have five offices located in the both state capital cities and the states’ major business centers. Our distinct practice areas provide comprehensive counsel and services in matters including business law, litigation, employment, intellectual property, health care, government and public policy, tax, environmental, banking and finance, and real estate.
Our clients include a variety of multinational, foreign and domestic clients, both public and private. We are equipped to serve a wide range of industries including automotive, banking and capital markets, biotechnology, chemical, building products, energy, equipment sales and rentals, financial services, food services, franchising and distribution, health care, information technology, insurance, motorsports, pharmaceuticals, retail, steel, telecommunications, textiles, transportation, and textiles. We offer clients creative, responsive and aggressive legal strategies as well as a broad portfolio of legal services.
About Matthew A. Goldstein, PLLC
Matthew A. Goldstein, PLLC is a law firm focused in the area of U.S. export controls and economic sanctions compliance for exporters of military, homeland security, dual-use, and purely commercial items and technologies.
About U.S. Commercial Service | U.S. Department of Commerce
The U.S. Commercial Service is the export promotion arm of the U.S. Dept of Commerce, and we provide a myriad of export/int’l related assistance and resources. With 107 offices in the U.S. and a presence in embassies/consulates in over 70 countries, our mission is to get U.S. products and services into foreign markets. Our range of help includes market research, international partnering, advocacy, etc.
About Vinson & Elkins L.L.P
Vinson & Elkins L.L.P., a global law firm with 16 offices in the United States, Asia, and Europe.