While the export control regulatory framework can present a dizzying array of requirements for exporters, companies also risk being held responsible for the activities of others, including those abroad who transship their products to destinations embargoed by the United States, or in violation of U.S. licensing or regulatory requirements. Exporters may now face the doubling of fines for not having proper compliance programs in place.
Standards of Liability
A manufacturer who exports parts to a company abroad may be liable for an export violation if the subsequent entity does something wrong and an enforcement action subsequently finds that the original manufacturer should have been aware. A manufacturer also risks severe penalties if it does not pay proper attention to export control documentation, the parts classification issue for export licensing purposes and, importantly, the ultimate destination and recipient of the goods. These latter transgressions can be assessed under a “strict liability” theory and need not be “knowing” for an administrative violation.
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