The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) recently released a new set of best practices that are aimed at helping exporters, re-exporters and freight forwarders guard against the diversion of dual use items shipped to a transshipment hub. While transshipments are a growing part of international trade and offer many benefits, they can be used illegally to either disguise the final destination or divert trade to unauthorized end users.
The new set of best practices encourages exporters to maintain strong internal compliance strategies, conduct focused outreach, and continuously raise awareness of export control regulations and obligations.
The following is a summary of the best practices published by BIS:
- Companies should pay attention to the Red Flag Indicators on the BIS website.
- Companies should seek to utilize Trade Facilitators that administer sound export management and compliance practices.
- Companies should “know” their foreign customers – by obtaining detailed information to measure the risk of diversion.
- Companies should avoid routed transactions when exporting and facilitating the movement of dual-use items.
- When the Destination Control Statement (DCS) is required, companies should provide the appropriate Export Control Classification Number (ECCN) and the final destination where the item(s) are intended to be used.
- Companies should provide the ECCN or the EAR99 classification to freight forwards, and should report this information in AES.
- Companies should use information technology to the maximum extent feasible to augment "know your customer" and other due-diligence measures.
For more detailed information, please read the full article.