The Bureau of Export Administration requires the exporter to "know the customer." Guidance and "red flags" in this regard can be found in detail in the Export Administration Regulations (EAR; 15 CFR Part 732, Supplement 3) and at the BXA Web site:
Be alert for "red flags." That is, note any irregularities, or abnormal circumstances in a transaction that might indicate the export is destined for an inappropriate end use, end user, or destination. Potential "red flags" could include:
If there are "red flags," inquire further. In the absence of any "red flags," Exporters are not required to inquire, verify, or otherwise go behind the foreign party's representations. However, when "red flags" are raised, exporters should not proceed with the export but immediately notify export authorities so that suspicious circumstances and the end use, end user, or ultimate country of destination can be checked out.
Do not self-blind. Do not "put on blinders" to prevent the discovery of relevant information. (For example, do not tell potential foreign partners to refrain from discussing actual end uses, end users, or countries of destination.) Attempts to avoid learning "bad" information will not insulate exporters or individuals from liability and could be considered an aggravating factor in enforcement proceedings.
Know how to handle "red flags." The technical and programmatic knowledge of exporters in spotting "red flags" is a valuable resource. If you have knowledge of, or suspect a "red flag" in a proposed transfer or export, that information must be passed on to export authorities for evaluation. All "red flags" must be resolved before the export can proceed.
When in doubt, do not export. If concerns remain about a particular export after inquiry and evaluation, refrain from the export.
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Last modified: March 11, 2006