This article is reprinted with permission from the August 2006 issue of New Jersey Lawyer magazine.
The mission of the Bureau of Industry and Security of the United States Department of Commerce (BIS) is "to advance U.S. national security, foreign policy and economic objectives by ensuring an effective export control and treaty compliance system and promoting U.S. strategic technology leadership."
The BIS engages in preventative enforce activities, including detention of shipments suspected of violation of the export administration regulations (EAR). It also engages in the conduct of end-use checks to confirm that the items to be exported will he properly utilized by end-users.
Enhanced enforcement activity by the BIS is reaching individuals and companies, large and small, and addressing both intentional and unintentional violations of the EAR. In fiscal year 2005, the BIS was involved in investigations leading to the criminal conviction of 31 individuals and businesses, and over $7.7 million in criminal fines. The conclusion of 74 administrative cases resulting in the imposition of $6.86 million in administrative penalties for violation of dual-export and anti-boycott laws.
While the examples noted above are not intended to suggest any intentional conduct on behalf of those companies referenced, they demonstrate the fact that some of the largest and most sophisticated companies can and do run afoul of these regulations. To be sure, smaller and less well-known companies have likewise been found to violate the EAR. With New Jersey as the site of one of the largest transportation systems — including ground, air and maritime terminals, as well as the multitude of companies engaged in the export of goods — it is likely that the New Jersey practitioner will be faced with issues related to the EAR. This article is intended to provide an overview of the EAR and the licensing process, and also to suggest the need for sensitivity to the regulations in the context of commercial transactions.