Export control and economic sanction requirements have been around for years, but now are taking on increasing prominence in the wake of record-setting fines. It is now more important that ever to be aware of export controls and economic sanctions red flags. Priming employees to be alert to the following red flags is an important bulwark against export controls and economic sanctions missteps.
Shipment-related fact patterns
• The final consignee is a trading company, freight forwarder, export company or other entity with no apparent connection to the purchaser.
• Delivery dates are vague or deliveries are planned for out-of-the-way destinations.
• A freight-forwarding firm is listed as the product’s final destination.
• The shipping route is abnormal for the product and destination.
• Packaging is inconsistent with the stated method of shipment or destination.
User-related fact patterns
• The customer appears on one of the blocked-persons lists. Links to the current lists can be found at www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm.
• The customer or ultimate end-user is unknown.
• Financial information about the customer is unavailable.
• The customer is willing to pay well in excess of market value for the shipment.
• When questioned, the buyer is evasive about whether the purchased product is for domestic use, for export, or for re-export.
• The purchaser is reluctant to provide information on the end-use or end-user of the product.
• The customer appears unfamiliar with the product, its application, support equipment, or performance.
• The customer orders products or options that do not correspond with its line of business.
• The customer has little or no business background.
• Firms or individuals from foreign countries other than the country of the stated end-user place the order.
• The customer declines normal service, training, or installation.
• The product’s capabilities do not fit the buyer’s line of business, such as an order for sophisticated computers for a small bakery.
• The customer’s order seems inappropriate, such as an order for a replacement part for an item that the customer never ordered.
• The customer is willing to pay cash for a very expensive item when the terms of sale normally would call for financing.
• The customer is unfamiliar with the product’s performance characteristics but still wants the product.
• Routine installation, training, or maintenance services are declined by the customer.
Destination-related fact patterns
• The order is being shipped using circuitous or economically illogical routing.
• The customer’s name or its address are the same as or similar to those of a person found on a blocked-person list.
• The customer asks for delivery in a country that does not match its supposed area of operations.
• The end-destination is Iran, Sudan, North Korea, Cuba, Burma, Syria, or another country with OFAC or BIS restrictions.
