Complying with Trade Sanctions Takes Due Diligence

Doing business abroad requires knowledge about and compliance with U.S. trade sanctions in the United States. Knowing how to navigate these sanctions can help firms avoid hefty consequences.

Know who you’re doing business with and where the money is coming from, cautioned speaker Lizbeth Rodriquez-Johnson, Esq., of Holland & Hart LLP in Denver, during the FCIB Global 2015 Conference held Oct. 11-13 in Miami. Rodriquez-Johnson co-presented the session Compliance and Global Fraud with Jon Yormick, Esq., of Phillips Lytle LLP in Buffalo, NY.

“Follow the trail,” Rodriquez-Johnson said. Some companies conducting business in the Middle East have assumed they were working with a United Arab Emirates company because of the firm’s physical location. It was later discovered “their actual customer was in Iran,” she noted. “They’re not screening.” Yormick concurred. “If you don’t have documentation as far as the government is concerned, it did not happen.”

U.S. trade sanctions don’t just impact companies in America. They also affect foreign companies, Rodriquez-Johnson said. For example, if a company in Mexico has payments processed via a credit card in the U.S., that company could be subject to U.S. jurisdiction, she said. “It’s really important for companies that do business internationally or companies that are not U.S. based, but that do business in the U.S., to understand how these sanctions can impact their activities as they move on in their business.”

Putting together a compliance program is important. “No matter the cost, you want to make sure you have one that works,” Rodriquez-Johnson said. And companies that operate in other nations must pay attention to any sanctions those countries have, she noted. “You’ve got to pay attention to all of them.” Ignorance is not a defense. “If you violated them, you’re liable,” she said. “How big your liability is going to be will depend on a lot of circumstances.”

- Diana Mota, NACM associate editor

For additional coverage on FCIB’s Global Conference, read this week’s eNews from NACM.

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