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Red Flags

 

BIS cautions regarding certain scenarios that require an extra layer of due diligence on the part of an exporter during an export transaction when determining whether to enter into the transaction. This list is not exhaustive, but is meant to illustrate certain times when the exporter cannot rely solely on the information provided by a foreign consignee. These examples include: when the address of the foreign consignee is similar to one of the parties on the restricted parties lists; when the item being purchased does not fit in with the foreign company’s line of business; when the foreign company does not want to disclose end user/end use information, when shipping/freight details are unusual for the item/destination; and when the foreign company has little/no business background.

 

If you discover a red flag when reviewing a potential export transaction, you have a duty to exercise due diligence to determine the correct end use, end user and ultimate country of destination. Additionally, exporters are advised that self-blinding (i.e. intentionally not discussing end use/end user, etc. with a customer) does not shield a company from potential liability and could instead be a potential aggravating factor in an enforcement case.

 

If after the increased scrutiny questions remain regarding the validity of information provided, the exporter should either turn down the order or apply for a license from BIS for the export.

 

Should you ever have any concerns regarding a potential export transaction please contact our office and we can help you make a determination on whether or not to accept the order.

 

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