Last year, JP Morgan had to pay $88.3 Million in fines for breaking U.S. embargo laws and trade sanctions, including Global Terrorism Sanctions Regulations and Weapons of Mass Destruction Proliferators Sanctions, in three incidents between 2005 and 2011 that involved Cuba, Iran and Sudan, as reported on AllGov. That’s a huge penalty that resulted from simply making loans and wire transfers. And in 2010, Maersk had to pay a $3.1 Million fine for using ships registered in the U.S. to carry commercial cargo to Sudan and Iran between January 2003 and October 2007. Another huge penalty for carrying goods that had never touched the US.
The issue at hand is trade sanctions and all of the pitfalls associated with them if you are US based, importing into, or exporting out of the US. As pointed out in this recent World Trade article on avoiding the pitfalls of trade sanctions, a company has to deal with:
- (broad) country sanctions,
- import or export specific country sanctions, and
- Specially Designated National (SDN) sanctions against
front companies, non-state entities, or individuals
- denied persons list and
- entity list
There are dozens of country sanctions, hundreds of import/export (commodity) specific sanctions (and more could be on the way, including, of all places, a new sanction against the UK which could appear as early as 2013 as a result of allegations that they gave Airbus illegal subsidies (as per this recent Daily Mail article). And then there are thousands of denied persons and entities and this list also changes regularly.
Then you can monitor the denied persons list and the denied entities list on the Bureau of Industry and Security site, which summarizes a multitude of export administration regulations. But considering that these are only summaries, and the full details can only be found in the Federal Register on the Department of State web site, including the pages on non-proliferation sanctions and chemical and biological weapons sanction laws as well as the pages of the counter narcotics group, you would also need to monitor the pages of the office of terrorism finance and economic sanctions policy, and the energy, sanctions, and commodities group of the bureau of economic and business affairs.
But that’s a lot of work … and it may not be enough! So what’s next?