Commentary: Export compliance officers tied in knots

No doubt these are unsettling and downright worrisome times, especially for those with global operations that conduct business with China and want to do the right thing. 

Commentary: Export compliance officers tied in knots

No doubt these are unsettling and downright worrisome times, especially for those with global operations that conduct business with China and want to do the right thing. 

Commentary: Export compliance officers tied in knots

No doubt these are unsettling and downright worrisome times, especially for those with global operations that conduct business with China and want to do the right thing. 

 

   If you’re an export compliance officer for a U.S. exporter or freight forwarder, you’re already thinking how can this trade dispute between the U.S. and China make complying with export control regulations any worse?
    Well, it just did in the past two weeks with the U.S. Commerce Department’s Bureau of Industry and Security, under order from the Trump administration, adding China-based Huawei Technologies Co. Ltd. and its 68 affiliates to the Entity List.
    The Entity List identifies entities believed to be involved in activities that pose a threat to U.S. national security and foreign policy.
    As part of their corporate compliance programs, U.S. exporters and their overseas affiliates, as well as their freight forwarders, must be aware of those entities on the Entity List to avoid running afoul of the Export Administration Regulations and being subject to substantial penalties.

   While the Entity List does not preclude a U.S. company or organization from doing business with a listed entity, it imposes additional license requirements and limits the availability to most license exceptions for exports, re-exports and transfers to listed entities.
    The move to add Huawei and its 68 overseas affiliates to the Entity List impacts hundreds of millions of dollars in potential U.S. semiconductor sales to the Chinese telecom giant. It also has sowed a level of confusion and panic among companies not only in the U.S. but throughout the world.
    While not taking this action laying down, the U.S. Commerce Department’s counterpart in China on Friday took aim at U.S. export control rules by announcing a blacklist of so-called “unreliable” foreign firms or individuals who financially or operationally “harm” Chinese business interests.
    “Foreign enterprises, organizations or individuals that do not comply with market rules, deviate from a contract’s spirit or impose blockades or stop supplies to Chinese enterprises for noncommercial purposes and seriously damage the legitimate rights and interests of Chinese enterprises will be included on a list of ‘unreliable entities,’” China’s Commerce Ministry spokesman Gao Feng told press outlets.
    Just what China’s unreliable list will include in terms of penalties and which companies, as well as how many, will be added to it in the weeks ahead remains to be seen. One can only imagine that even companies with no direct involvement in the dust-up between the U.S. and China over Huawei could find themselves suddenly on the unreliable list simply as part of a widespread U.S. economic punishment campaign by the Chinese authorities.
   No doubt these are most unsettling and downright worrisome times for U.S. export compliance officers, especially those with global operations that inevitably conduct business with China and who want to do the right thing.
    While the two governments continue to slug it out, the most important thing for U.S. companies to keep in mind is that their shipments from either the U.S. or overseas affiliates/subsidiaries involving China do not violate the BIS Entity List — or any other export control lists or regulations established by the Commerce, State, Treasury and Defense departments for that matter.
    As an export compliance manager, your primary responsibility is to protect your company from the financial and operational harm that could result from violations of U.S. export control regulations and uphold your professional reputation and value as a guardian of compliance.

I am of the opinion that shippers should pray that lines are allowed to continue to operate alliances.

Average container vessel size on the Asia to North Europe trade actually shrank between May 2018 and May 2019, falling from 14,253 TEUs to 13,808 TEUs, although total container vessel count on the trade rose from 219 to 229, according to BlueWater Reporting’s Capacity Report.

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Commentary: Export compliance officers tied in knots

No doubt these are unsettling and downright worrisome times, especially for those with global operations that conduct business with China and want to do the right thing. 

Jun 03, 2019 on Dec 27, 2018AmericanShipper.com

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Commentary: Export compliance officers tied in knots

No doubt these are unsettling and downright worrisome times, especially for those with global operations that conduct business with China and want to do the right thing. 

Jun 03, 2019 on Dec 27, 2018AmericanShipper.com