CES Export Controls & Sanctions Compliance 2

Question 1

What is a 'deemed export' under US export control regulations?

Accepted Answer

The release of controlled technology or source code to a foreign national within the United States

Answer

An export shipment that has received advance BIS approval

Answer

A shipment completed without required export documentation

Answer

An export to a country with an active US free trade agreement

Question 2

What are the maximum criminal penalties for knowingly violating the Export Administration Regulations (EAR)?

Accepted Answer

Up to $1 million per violation and/or 20 years imprisonment

Answer

Civil fines up to $10,000 per violation with no criminal exposure

Answer

Suspension of export privileges for 90 days and a $50,000 fine

Answer

A warning letter for first offense with escalating fines thereafter

Question 3

What does the 'red flag' rule require US exporters to do when warning signs appear in a transaction?

Accepted Answer

Pause the transaction and conduct reasonable inquiry to resolve the concern before proceeding

Answer

Mark the shipment with red warning labels and proceed normally

Answer

Report the transaction to BIS and await written clearance before shipping

Answer

Cancel the transaction immediately and file a suspicious activity report

Question 4

The Strategic Trade Authorization (STA) license exception primarily benefits exporters by:

Accepted Answer

Permitting export of specified controlled items to approximately 36 close US allies without individual licenses

Answer

Allowing unlimited export of any item to all countries without individual licenses

Answer

Exempting all EAR99 items from filing Electronic Export Information

Answer

Providing a blanket license for all dual-use technology to NATO members only

Question 5

When determining whether a US export license is required, what should be the exporter's first step?

Accepted Answer

Classify the item by identifying its ECCN on the Commerce Control List

Answer

Contact the destination country's customs authority for guidance

Answer

Submit a license application to BIS as a precautionary measure

Answer

File Electronic Export Information (EEI) through AES and await clearance

Question 6

BIS's Entity List identifies which type of parties?

Accepted Answer

Foreign persons subject to specific license requirements due to proliferation or national security concerns

Answer

Countries that have signed US free trade agreements

Answer

Foreign entities pre-approved to receive US-origin technology without a license

Answer

All foreign companies that have successfully applied for US export licenses

Question 7

Which statement best describes the difference between EAR and ITAR jurisdiction?

Accepted Answer

EAR controls dual-use commercial items via BIS; ITAR controls defense articles on the USML via DDTC

Answer

EAR controls all military items; ITAR controls all commercial items

Answer

EAR applies only to software; ITAR applies only to hardware

Answer

EAR is administered by Treasury; ITAR is administered by Commerce