October 12th, 2012
Do your homework, know the end-use and end-user involved the transaction, otherwise you and your organization may receive a charging letter citing Part 764 of Title 15.
Often we hear excuses from the aerospace supply chain about why they think it is not their responsibility to perform reasonable care and due-diligence: “the customer never told us”, or “that is the Prime’s responsibility” or even “we have been in business for 20 years without a problem”.
It is the organization’s responsibility to have the proper controls in place (i.e., processes and procedures), including records of risk analysis and mitigation. Use Part 764.2 (listed below) as an audit tool for your systems, does your organization protect against these issues?
Title 15: Commerce and Foreign Trade
SUBTITLE B: Regulations Relating to Commerce and Foreign Trade (Continued)
CHAPTER VII: BUREAU OF INDUSTRY AND SECURITY, DEPARTMENT OF COMMERCE
SUBCHAPTER C: EXPORT ADMINISTRATION REGULATIONS
PART 764: ENFORCEMENT AND PROTECTIVE MEASURES
764.2 – Violations.
(a) Engaging in prohibited conduct. No person may engage in any conduct prohibited by or contrary to, or refrain from engaging in any conduct required by, the EAA, the EAR, or any order, license or authorization issued thereunder.
(b) Causing, aiding, or abetting a violation. No person may cause or aid, abet, counsel, command, induce, procure, or permit the doing of any act prohibited, or the omission of any act required, by the EAA, the EAR, or any order, license or authorization issued thereunder.
(c) Solicitation and attempt. No person may solicit or attempt a violation of the EAA, the EAR, or any order, license or authorization issued thereunder.
(d) Conspiracy. No person may conspire or act in concert with one or more persons in any manner or for any purpose to bring about or to do any act that constitutes a violation of the EAA, the EAR, or any order, license or authorization issued thereunder.
(e) Acting with knowledge of a violation. No person may order, buy, remove, conceal, store, use, sell, loan, dispose of, transfer, transport, finance, forward, or otherwise service, in whole or in part, any item exported or to be exported from the United States, or that is otherwise subject to the EAR, with knowledge that a violation of the EAA, the EAR, or any order, license or authorization issued thereunder, has occurred, is about to occur, or is intended to occur in connection with the item.
(f) Possession with intent to export illegally. No person may possess any item controlled for national security or foreign policy reasons under sections 5 or 6 of the EAA:
(1) With intent to export or reexport such item in violation of the EAA, the EAR, or any order, license or authorization issued thereunder; or
(2) With knowledge or reason to believe that the item would be so exported or reexported.
(g) Misrepresentation and concealment of facts. (1) No person may make any false or misleading representation, statement, or certification, or falsify or conceal any material fact, either directly to BIS, the United States Customs Service, or an official of any other United States agency, or indirectly through any other person:
(i) In the course of an investigation or other action subject to the EAR; or
(ii) In connection with the preparation, submission, issuance, use, or maintenance of any export control document as defined in 772.1, or any report filed or required to be filed pursuant to 760.5 of the EAR; or
(iii) For the purpose of or in connection with effecting an export, reexport or other activity subject to the EAR.
(2) All representations, statements, and certifications made by any person are deemed to be continuing in effect. Every person who has made any representation, statement, or certification must notify BIS and any other relevant agency, in writing, of any change of any material fact or intention from that previously represented, stated, or certified, immediately upon receipt of any information that would lead a reasonably prudent person to know that a change of material fact or intention has occurred or may occur in the future.
(h) Evasion. No person may engage in any transaction or take any other action with intent to evade the provisions of the EAA, the EAR, or any order, license or authorization issued thereunder.
(i) Failure to comply with reporting, recordkeeping requirements. No person may fail or refuse to comply with any reporting or recordkeeping requirement of the EAR or of any order, license or authorization issued thereunder.
(j) License alteration. Except as specifically authorized in the EAR or in writing by BIS, no person may alter any license, authorization, export control document, or order issued under the EAR.
(k) Acting contrary to the terms of a denial order. No person may take any action that is prohibited by a denial order. See 764.3(a)(2) of this part.