In our blog posts and seminars, I caution traders against doing business with the ‘wrong’ country. The United States maintains several embargoes or trade sanctions programs.
An embargo or sanction program is a total or partial prohibition against trading or doing business with a given country, or individuals or entities within a country. The policy intends to punish or sanction the identified country, or individuals, for what the international community has labeled or the United States considers “poor” behavior.
For instance, the United States maintains a unilateral embargo against Cuba, the only US-sanctioned country in the Western Hemisphere. Just about every other country in the world, including U.S. NAFTA partners, Canada and Mexico, trades legally with Cuba.
What does not change is the severity of the penalties for ignoring the embargo or failing to comply with the licensing requirements. Penalties, irrespective of the company’s size, range from $50,000 to $10,000,000 for each transaction that violates the embargo. A trader who is found to have willfully violated the rules may also incur increased penalties, loss of export privileges, and/or imprisonment. There is no statute of limitations. A company could find itself paying millions of dollars in fines for violations that occurred over decades.
Why Traders Need to Pay Attention
• As a result of the underlying foreign policy goals to these sanctions programs, they are strictly enforced. Penalties for violation(s) can include individual and/or corporate fines in the tens of thousands of dollars/euros for each violation, denial of export privileges, and/or even imprisonment. Furthermore, just being investigated for an alleged violation can result in the loss of company reputation and clients.
• These programs change in response to foreign policy concerns. One year ago there were no sanctions in place against Russia.
• There is no statute of limitations on these violations. In a previous blog, we reported on the ING Bank, which in 2012 paid US 619 million in connection with violations dating back to its inception as a small, local bank in 1991
Avoiding Penalties
Whether it’s selling apples to Cuba, or oranges to Iran, a red flag should go off when it comes to doing business with individuals or entities in certain countries.
• Familiarize yourself with the sanctions programs enforced by the U.S. government against countries and individuals.
• Programs change with some frequency, so sign up to receive updates.
• Be aware of other countries’ embargo programs.
• Contact us for support with developing an effective compliance program
I am a seasoned international trade and customs attorney, and policy adviser for various companies and governments with a demonstrated history of successfully developing and implementing sustainable and dynamic trade programs. I am experienced in creating partnerships with various business-support organizations to drive compliance and growth in the international market.
