Though international trade compliance has been in effect ever since the Export Control Act was passed in 1940, it forever remains a hot topic of debate. Security concerns over technology and commodity export are nowadays more prevalent than ever and, exponentially, there are greater concerns over materials and products imported into the US.
Moreover, documentation requirements, whether hard copy or electronic, have now become more stringent and robust. Notwithstanding the technology or commodity of your company, the bar of compliance has been raised quite significantly and, accordingly, the penalties for non-compliance have surged.
The federal agencies given the task to enforce international trade compliance have added extra resources for better screening, investigation and prosecution of non-compliant or illegal activities. And these efforts are clearly supported by agency facts.
DDTC, the Directorate of Defense Trade Controls (DDTC)
The support to criminal investigations as well as criminal convictions/indictments have spiked significantly in voluntary disclosures.
BIS, the Bureau of Industry and Security
As per recent reports from the BIS, the number of administrative violence cases have increased significantly of late and, the number of administrative penalties have also doubled during the same time period.
OFAC, the Office of Foreign Asset Controls
The OFAC has reported an increase in the number of civil penalties from the first half of 2016 to the current date in 2017.
CBP, the Customs and Border Protection
A 40% increase has been witnessed in penalties and fines as compared to 2016.
The penalties of violation have been raised drastically in an effort to enhance compliance with federal laws. Various agencies as well as the census have surged on the raised penalty bandwagon. As per the Federal Trade Regulation (FTR), people involved in export processes can expect (fear) heavy penalties for non-compliance of the regulations.
Why should you abide by the federal trade regulations?
Is your current international trade compliance process in harmony with the latest amendments in the enforcement and regulatory environment? Enterprises that lack in compliance program will not be able to stay safe and undetected for long since there is an increase in the level and intensity of cargo screening techniques, improved data mining and general enforcement efforts.
Fulfilling this objective is a responsibility of each and every member of the international trade communities. Implementing and maintaining trade compliance is no way a cost burden on your business? It is rather the right legal and moral thing you can adopt to stay legit on papers and save money at the same time by steering clear of any type of negative publicity and improving your international transaction efficiency.
About the author
Ari Afilalo is a leading professor and scholar of international trade laws who inspires the business community to abide by the federal international trade compliance to do their business legitimately and more effectively.