CE Export Controls & Sanctions Compliance Flashcards

What is 'deemed export' under the EAR and why is it significant for U.S. companies employing foreign nationals?

Answer: The release of controlled technology to a foreign national in the U.S. is deemed an export to that person's home country and may require a BIS license

Deemed export rules mean that sharing controlled technical data or source code with a foreign national in the U.S.—even verbally—is treated legally as if you exported that information to their country of citizenship.

What is the purpose of the Specially Designated Nationals (SDN) List and which agency maintains it?

Answer: OFAC maintains the SDN List, which identifies individuals and entities whose assets are blocked and with whom U.S. persons are generally prohibited from transacting

OFAC's SDN List names terrorists, drug traffickers, sanctioned government officials, and others whose assets are frozen; U.S. persons are broadly prohibited from doing business with any listed party.

What civil penalty can OFAC impose on a U.S. company for a single willful violation of economic sanctions?

Answer: The greater of $1 million or twice the transaction value

OFAC can impose civil penalties up to $1 million or twice the transaction value per willful sanctions violation, with criminal penalties also possible for egregious cases.

What is an export compliance program (ECP) and what are its key components?

Answer: A company's documented system for ensuring compliance with export control laws, including management commitment, classification, screening, training, recordkeeping, and auditing

An ECP is a comprehensive internal compliance framework covering classification of products, screening of parties, transaction review procedures, employee training, recordkeeping, and periodic audits.

Under the EAR, how long must exporters retain export control records?

Answer: Five years from the date of the export, re-export, or other regulated transaction

BIS requires exporters to retain all export-related records (licenses, EEI filings, contracts, correspondence) for five years from the date of the transaction.

What is the 'catch-all' control under the EAR and when does it apply?

Answer: It applies when an exporter knows or has reason to know that an EAR99 item will be used in weapons of mass destruction (WMD) programs, requiring a license regardless of classification

The catch-all control (EAR Section 744) means that even EAR99 items require a BIS license if the exporter has knowledge or reason to know the items will be used in WMD, missile, or military end-use programs.