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US (re-)export controls

Packaging Products
From Argentina
To United States of America
323 views / 0 experts
David W.
Dec 24, 2020

This question comes up over and over in our company. In which cases do we need to consider US sanction lists? Is it voluntary or mandatory? What happens if an EU or an APAC company appears on a US sanction list? What are the consequences for us? 

1 answer

Jasmine G.
Dec 24, 2020

Firstly: All business partners should be screened against global sanctions lists – including US lists – to ensure a company does not trade with restricted parties. This is not a one-time screening, but applies to all business transactions. Once parties appear on a sanctions list, trade may be fully prohibited or restricted to certain goods.
Secondly: US re-export controls under the US Export Administration Regulations (EAR) apply to goods that contain US parts above the “de-minimis” threshold. If the share of US components is above 10% of the value (for embargo countries) or 25% (other countries), the goods must be classified and the transaction must undergo an export control check under EAR. This even applies if goods are shipped within the EU or APAC. Violations of US export control regulations can bring about hefty fines: under EAR, maximum criminal fines are $1 million per violation and maximum jail time is 20 years. This is in addition to possible loss of export privileges and reputational damages, of course.

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