WHAT ARE U.S. EXPORT CONTROLS?
United States export controls consist of laws and regulations restricting the transfer of various domestic origin products, technology, and services to certain countries, foreign nationals, and other parties.
These laws and regulations, which include the Export Administration Act and the Arms Export Controls Act, govern both the shipment of physical goods to foreign countries (“direct exports”) and the communication of technical information to foreign entities and individuals, regardless of where those entities or individuals are located (“deemed exports”).
Export controls apply to a wide range of products and information beyond what one may typically consider an export. Computer programs, including commercially available software, are in many cases subject to export controls, as are many other seemingly commercial products.
The standard for compliance with export controls is strict liability, which requires no knowledge or intent to violate the law. Violations can result in substantial civil and criminal penalties, including crippling fines, imprisonment of responsible individuals, and revocation of export licenses. They can also result in the denial of export privileges, loss of government contracts, adverse publicity, interference with pending international transactions, and may trigger disclosures under the Sarbanes-Oxley Act.
Other U.S. laws and regulations, including the Antiboycott Act, Foreign Corrupt Practices Act, U.S.A. Patriot Act, Trading with the Enemy Act, and executive orders regarding economic sanctions, prohibit certain types of transactions and transactions with certain individuals, entities, or countries. Currently, transactions affected by these laws include those with Cuba, Iran, North Korea, Sudan, and many other countries for which exports are regulated or altogether barred for national security and foreign policy reasons.
*Taken in part from Matthew A. Goldstein, “Are U.S. Economic Sanctions Your Business Risk” (2006). Reprinted with permission from Inside Tucson Business.