Enforcement Insights: No company is too small for export controls compliance

Earlier this summer, the Department of Commerce temporarily banned a small Wilmington, NC based company’s export privileges for sending its customers designs out of the country for manufacturing. Though a full investigation is pending, we identified 5 key reminders simply based on the temporary enforcement action:

1. Pay attention to the details of non-disclosure. A company’s non-disclosure agreements should include sufficient language to protect it even if its vendors violate export control regulation.
2. Drawing, blueprints, and other information are often export-controlled. Their improper safeguarding and dissemination may be deemed an export in violation of the Export Administration Regulation (EAR).
3. An enforcement action can ruin a company’s reputation. The Department of Commerce advised all persons and companies in the United States and abroad to cease doing business with the company. The enforcement action was also reported in the Washington Post. http://ow.ly/3bbf50KtkSz
4. Prevention is key. The Department of Commerce can temporarily deny a company’s export privileged even before the company had an opportunity to respond. Here the denial was based on whistleblowing from one of the company’s customers and the Department’s own investigation.
5. Even small companies are the subject of export control enforcement actions.

Bureau of Industry and Security Press Release: http://ow.ly/9ROJ50KtkSA