OFAC is Focusing More on Export Trade Compliance
At the April 2008 National Customs Brokers & Forwarders Association of America's Annual Conference, an Office of Foreign Assets Control (OFAC) official discussed a variety of export-related issues. Highlights of her remarks include the following points:
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OFAC Focusing More on Export Trade Compliance
OFAC is now focusing more on the exporting community, and has been conducting more audits of forwarders, carriers, exporters, etc.
Culpability Never Stops
With OFAC, culpability never stops; anyone in the chain of export is susceptible to OFAC regulations.
OFAC often learns about potential violations from banks, as they are able to follow the chain of payment and can tip OFAC when potential violations occur. (Banks are subject to OFAC regulations as they are part of the export chain.)
Those Under OFAC's Jurisdiction
The following are under OFAC's jurisdiction:
Individuals - U.S. citizens and permanent resident aliens located anywhere in the world; and any individual, regardless of citizenship, who is physically located in the U.S.
Businesses
Under the International Emergency Economic Powers Act (IEEPA) programs - corporations organized under U.S. law, including foreign branches of U.S. companies; and any corporation or company physically located in the U.S., including U.S. branches, agencies, and representative offices of foreign corporations
Under the Trading With the Enemy Act (TWEA) programs - corporations organized under U.S. law, including foreign branches and foreign-organized subsidiaries of U.S. companies; and any corporation or company physically located in the U.S., including U.S. branches, agencies, and representative offices of foreign corporations
Jurisdiction of OFAC and BIS
OFAC, which is part of the Treasury Department, administers and enforces economic and trade (export/import) sanctions based on U.S. foreign policy and national security goals. The Bureau of Industry and Security (BIS), which is part of the Commerce Department, deals with export policy. Sometimes the export jurisdiction of these two agencies appear to overlap.
OFAC is concerned with assets/financial transactions in addition to exports/imports, while BIS is more focused on export product classification. Also the primary expertise of OFAC is financial, while BIS has the engineering and product knowledge to make complex export classification determinations.
Another way to view the two agencies is that OFAC deals with people and countries while BIS deals with technology. A "snapshot" of OFAC/BIS responsibility for certain terrorist-supporting countries is illustrative of the jurisdictional challenge:
| Exports of EAR99 items to Iran | OFAC |
| Exports of CCL items to Iran | OFAC |
| Reexports of EAR 99 items to Iran | |
| - by non-U.S. persons | BIS |
| - by U.S. persons | OFAC |
| Exports of all items to Libya | BIS |
| Exports of all items to Sudan | OFAC |
| Exports of CCL items to Sudan | OFAC and BIS |
| Exports of all items to Iraq | BIS |
| Exports of all items to Cuba | BIS |
| Exports of all items to Syria | BIS |
| Exports of CCL items to North Korea | BIS |
(See ITT's Online Archives or 04/23/08 and 05/05/08 news, 08042305 and 08050505, for earlier BP summaries of the NCBFAA conference on CBP addressing antiquated customs broker laws and CBP developing a new Broker Compliance Management program.)
OFAC FAQ for importers and exporters available at http://www.treas.gov/offices/enforcement/ofac/faq/index.shtmlimex
OFAC brochure on foreign assets control regulations for importers and exporters available at http://www.treas.gov/offices/enforcement/ofac/regulations/facei.pdf
OFAC home page available at http://www.treas.gov/offices/enforcement/ofac/