- anti bribery, anti corruption, FCPA, OFAC, sanctions
U.S. restrictions continue to pose the risk of large penalties!
Our Trade sanctions and Anti-bribery Risk Seminar at Lundgrens May 18, made it clear just how important it is to pay close attention to your export control and OFAC sanctions in particular – 9 of the 10 largest FCPA actions have been against non-US companies for non-US conduct.
Here are some of the key points from our speakers:
According to Greg Husisian, partner in Foley & Lardner LLP, the 5 areas showing the largest fines in EU and US are:
- Antitrust / Fair Competition
- Anti-money Laundering
- Export Controls
- OFAC Sanctions
To cope with these fields, it is crucial for companies to be able to identify their risk points. First of all, it is important to conduct a risk assessment, establish procedures for high-risk countries, and evaluate dealings with government officials. However, always keep a close eye on what Greg Husisian calls red flags – that could be family or business ties of an intermediary with a government official, or requests for payments to be made to a third party.
One of the high-risk countries to be aware of is Iran, and the picture below clearly illustrates why engaging in business with the Middle East country, including any kind of facilitation, is very risky.
The comprehensive sanctions against Iran, and the fact that certain people and entities are blacklisted, makes it very difficult to obtain a license or deal with the country – even if it is authorized under US law.
Greg Husisian suggests that the 3 biggest recurring issues in terms of Iran first and foremost are the misunderstanding of the relaxation of sanctions against Iran, the extra-territorial application of laws, and not least the differences in EU and US approach. EU sanctions are much more liberal, however, Danish companies are subject to both EU and US sanctions – which means a company can be in compliance with EU sanctions but still violate OFAC sanctions.
Therefore, Greg Husisian presented 6 crucial points of compliance:
- Have a compliance program
- Know your customers and partners
- Implement internal controls
- Training of non-US persons
- Diversion / Re-export / Red flags awareness
- Dangers of re-engagement with Iran
Let’s get a piece of advice from Greg Husisian himself:
To add to this, Jim Peterson, partner in Foley & Lardner LLP, stressed the importance of using a risk-based approach when implementing your compliance program. Hear his key point here:
Mogens Aarestrup Vind, Attorney-at-law and partner at Lundgrens, posed 3 important questions that any company needs to consider:
- Is there something suspicious about the customer?
- Does the export concern critical products?
- Are you exporting to a critical market?
He predicts that the key development in export control will be new regulations including human rights as a control criterion, modernized control, and the introduction of new technologies and “smart security”.
Take a look at this youtube video if you want to hear a few comments to his agenda: Mogens Aarestrup Vind
To wrap up the seminar, Peter Ring, Group General Counsel at DSV, presented a best practice example of the DSV approach towards export controls. He explained how DSV has created a new division within the company to screen and review everything that has to do with export controls. He also shared a very relevant story of how an entire quantity of goods was rejected upon arrival – simply because the truck had driven through Iran to get there!
Hope you didn’t miss this great seminar!