Human Resources/Export Management
Q. Explain the restriction on Dealing and transactions with different countries?
B. Explain the restriction on Dealing and transactions with different countries?
Security and political relationships have long had a direct bearing on commerce. Stewart and Stewart is deeply experienced in representing both U.S. and foreign interests at this intersection of commerce and national security.
With experience in international economic sanctions imposed under the Office of Foreign Assets Control (OFAC) regulations and all the various export control and export licensing regimes, Stewart and Stewart can help U.S. and foreign firms seeking:
export licenses for their products, services, and technologies subject to export controls, whether restricted as dual-use items under the Export Administration Regulations (EAR), as defense articles and services under the International Traffic in Arms Regulations (ITAR), or under the short supply regulations such as crude oil and petroleum or liquefied natural gas (LNG)
advice and representation regarding all aspects of voluntary disclosures and/or enforcement actions and litigation
design and implementation of comprehensive compliance programs addressing:
o U.S. economic sanctions and embargoes
o U.S. export control regimes
o U.S. munitions-related export and import controls
o Anti-boycott regulations
o Foreign Corrupt Practices Act
advocacy in securing approvals and mitigating penalties for violations
policy advice and monitoring services to ensure that our clients maintain compliance programs that fully address the current state of the law and government enforcement priorities.
U.S. Economic Sanctions and Embargoes
Economic sanctions, spelled out in the Office of Foreign Assets Control (OFAC) regulations, are generally targeted at foreign countries as well as individuals, banks, and other organizations or entities that may be involved in activities that oppose U.S. national security interests and foreign policy objectives. Increasingly, however, sanctions are more narrowly drawn in order to target particular groups. With a deep understanding of U.S. economic sanctions, Stewart and Stewart can assist clients in complying with these complicated and shifting laws.
The restrictions are based upon the statutory authority contained in a number of laws, including but not limited to:
Trading With the Enemy Act
International Emergency Economic Powers Act
The Antiterrorism and Effective Death Penalty Act
International Security and Development Cooperation Act
Because these laws are subject to frequent changes and impose very different restrictions on transactions with different countries and entities, U.S. companies and persons engaged in international commerce must exercise considerable care to ensure that they neither directly engage in any transaction nor indirectly facilitate any transactions by foreign persons that may violate these laws.
Violations of these sanctions programs may result in heavy penalties, both civil and criminal, including up to 20 years in prison for individuals or $1 million for corporations.
U.S. Export Controls Export Controls on Defense Articles, Services, and Technologies
Stewart and Stewart assists U.S. and foreign entities in complying with U.S. export controls laws including export licensing, manufacturing license agreements, technology assistance agreements (TAAs), and associated security arrangements while manufacturing, exporting, or acquiring companies and technologies covered by the U.S. Munitions List (USML).
Controls on USML listed defense articles, services, and technologies are very strict and violations carry potentially severe penalties, both civil and criminal.
Export Controls on Dual-Use Items
Stewart and Stewart advises clients on export controls applicable to dual-use items (i.e., items useful in both a military and commercial context) and related software and technologies that are subject to export controls as set forth in the Commerce Control List (CCL) and the restrictions as described in the Export Administration Regulations (EAR).
Export restrictions on dual-use items also are rigorously enforced and violations can incur heavy penalties, both civil and criminal.
Stewart and Stewart provides assistance on the application of U.S. anti-boycott laws, including regulatory prohibitions, tax penalties, reporting obligations, and compliance with the requirements of the anti-boycott programs. We also assist clients with internal anti-boycott compliance reviews and audits initiated by the Commerce Department (BIS) or the Treasury Department (IRS), as well as enforcement proceedings.
Conduct that may be penalized under the Anti-boycott Regulations includes:
Agreements to refuse or actual refusal to do business with or in Israel or with blacklisted companies.
Agreements to discriminate or actual discrimination against other persons based on race, religion, sex, national origin, or nationality.
Agreements to furnish or actual furnishing of information about business relationships with or in Israel or with blacklisted companies.
Agreements to furnish or actual furnishing of information about the race, religion, sex, or national origin of another person.
Implementing letters of credit containing prohibited boycott terms or conditions.
These regulatory regimes also impose complex reporting requirements and often counter-intuitive restrictions on U.S. persons, companies, and foreign subsidiaries and affiliates - especially those in certain Middle Eastern countries. The regulations subject companies doing business in certain countries to strict deadlines, and violations of the rules or failures to make timely reports can expose U.S. companies to penalties and adverse publicity.
Foreign Corrupt Practices Act (FCPA)
Stewart and Stewart advisors are poised to advise your company to navigate the complex rules under the U.S. Foreign Corrupt Practices Act (FCPA), which prohibits payments to foreign officials with the aim of securing or maintaining business. Fines can be very high for violations of the FCPAcriminal violations can result in companies facing fines up to $2 million per violation and individuals facing fines up to $100,000 and up to five years in jail.
U.S. directors, officers, and managers should exercise great care when contracting with foreign consultants, representatives, or joint venture partners for any work that might involve external interfaces on their behalf because the FCPA explicitly provides that U.S. persons and companies can be held liable for the acts of their representatives if they have reason to know that the representatives are making bribes on their behalf