Protect Your Exports - Screen Your Business Partners, Every Time

Looking for some tips on how to ensure you remain in compliance with the US export regulations (including the re-export regulations as they apply to goods re-exported to a third country after being first exported from the United States)?

 My law firm has helped build compliance programs for aviation companies for decades. When we are helping a company build an export compliance program, we always recommend developing a mechanism to ensure that you can compare all of the relevant businesses and individuals involved in each transaction to the US Government lists that regulate exports. Specifically, we recommend searching the business and individual names through the US Government consolidated screening list.  This list consolidates a number of different US Government lists into one screening tool: https://www.export.gov/csl-search.

We recommend searching all of the relevant parties for every transaction, every time. The problem that arises is one of human nature battling against the company’s procedures. If you just searched a name last week then you might decide not to search that same name again, this week. If you’ve done business with someone for years you might feel that you have no worries about that person. But the lists change almost every day. So, someone who was not on the lists yesterday might have been added this morning; and if you don’t know this, then you might export to that forbidden party in violation of the law.

In order to avoid the risks that complacency can breed, we recommend to companies that they integrate an electronic search of all partners for every transaction. This can be done by tying some aspect or your computerized system to the US Government consolidated screening list (which is designed to be a searchable database that can be integrated with outside search systems). Make sure you tie the search to something that is entered for EVERY transaction. Because we like to see the search done as early as possible, we sometimes recommend tying the search to the quoting system, but unless you issue a quote for EVERY transaction, this cannot be your only search. Sometimes it also makes sense to build your system so that documents like shipping tickets and invoices cannot be generated without a completed search on the consolidated screening list.

It also helps to build a system where you must enter the names of the individuals involved in your transaction (or else have them mined from your electronic correspondence) so those names are part of the search process.

For example, imagine you get a purchase order from Cham Wings Airline. Before responding to the purchase order, you run a search on the consolidated screening list. A search for “Cham Wings Airline” would yield this result:

You can see from this that Cham Wings Airline is listed as a specially designated national. The next step is typically to perform a more direct and in-depth investigation. In this case, Cham Wings Airline is listed as a specially designated national so we should check the Treasury Departments list of specially designated nationals. That list is found online at https://www.treasury.gov/ofac/downloads/sdnlist.pdf. In that list, you will find that one of the relevant entries reads:

This provides more information about the specially designated national in order to help distinguish it from another party with a similar name.

How common is it to find aviation companies who are listed in restricted lists like the Treasury Department s list of specially designated nationals? More common than you might think. Here is a list of just some of the airlines and aviation companies included on the SDN list (this list changes, and companies go on-and-off the list, so always confirm a company remains on the SDN list  do not rely on this as your sole source of SDN information):

• Aero Continent
• Aero Continente
• Aero Courier Cargo
• Aero Express Intercontinental
• Aero Sky One
• Aerocaribbean Airlines
• Aerocomercial Alas De Columbia
• Aerocondor
• Aerolineas Aeroamanecer
• Aeronautica Condor
• Aerospace Industries Organization
• Aerospace Research Institute
• Al-Naser Airlines
• Al-Sham Wings
• Avia Group LLC
• Avia Import
• Aviation Capital Solutions, Ltd
• Butembo Airlines
• Caspian Airlines
• Cham Wings Airlines
• Cubana Airlines
• Dart Airlines
• Dena Airlines
• Empresa Cubana de Aviacion
• Fars Air Cargo Airline
• Hors Airlines Ltd
• Intercontinental de Aviacion
• International Airline Consulting
• Iran Air
• Khors Air
• Kyrgyztransavia Airlines
• Mahan Air
• Pouya Airlines
• Sky Blue Airlines
• Syrian Arab Airlines
• Ukrainian-Mediterranean Airlines
• UM Air
• Yasair Cargo Airline