The U.S. Commerce Department's Bureau of Industry and Security on Wednesday published a new set of 'best practices,' developed in cooperation with U.S. industry, to help guard against the diversion of dual-use items shipped to a transshipment "hub," or to any intermediate country before being shipped to the country of ultimate destination.
Transshipment is routinely used to move goods throughout the world. However, according to U.S. law enforcement officials, it can be used illegally to disguise the actual country of ultimate destination. Transshipment practices may also create a risk that items are diverted to unauthorized end users or end uses.
'These new best practices provide a formidable tool to help secure trade through transshipment hubs,' said Commerce's Assistant Secretary for Export Administration Kevin J. Wolf, in a statement. "BIS is committed to working with industry to adopt best practices critical to safeguarding U.S. national security interests.'
BIS said the new best practices would help exporters, re-exporters, freight forwarders and other parties to comply with U.S. export control regulations and laws and augment the agency's Export Management and Compliance Guidelines. In specific, BIS encourages companies to:
' Pay heightened attention to the agency's 'Red Flag Indicators' and communicate red flag concerns internally.
' Use trade facilitators and freight forwarders that administer 'sound' export control management and compliance programs with transshipment trade best practices.
' Obtain detailed information on the credentials of overseas customers to assess diversion risk.
' Establish and maintain a trusted relationship with parties to mitigate risks with 'routed' transactions.
' Communicate export control classification and destination information to end users and consignees on government and commercial export documentation.
' Provide the ECCN (Export Control Classification Number) or the EAR (Export Administration Regulations) 99 classification to forwarders for all export transactions and report the classifications in the Automated Export System (AES), if applicable.
BIS noted its set of best practices, aimed at U.S industry, supports one of 10 best practices suggested by the State Department's Bureau of International Security and Nonproliferation to foreign governments at the Global Transshipment Seminar in Dubai, United Arab Emirates, in March. That best practice suggestion encouraged industry to develop stronger internal compliance programs, conduct focused outreach, and raise awareness of export control obligations.
The 2011 Best Practices for Preventing Unlawful Diversion of U.S. Dual-Use Items Subject to the Export Administration Regulations, Particularly through Transshipment Trade,
is posted on the BIS Web site