OCR Services Inc.

After a long deliberation period, the UK finally left the EU during January 2020. However, the two parties are still going through a transition period, which is going to expire at the end of 2020. This implies that the new trade rules are going to be implemented starting January 2021. In this regard, the UK government has recently published guidance for sending goods to and from the EU. This guidance focuses on the post-transition period, i.e. the goods traded from January 2021. This blog focuses on analysing the key aspects of the new guidance and assesses its importance for traders.

Key Aspects of the New Guidance

The first and foremost aspect of the new guidance is that UK-based traders will have to make a customs declaration before exporting goods to the EU. A similar declaration would also be required in case you are importing goods from the EU. Such a declaration should include key information about the goods being traded. The key areas that are covered under the declaration include a description of the goods as well as the appropriate tariff codes assigned to the products.

The second point that you need to keep in mind is that you may require new licenses and permissions in order to trade goods with EU business partners. The actual license depends upon the type of goods that you are trading. For example, goods and services categorised under the technology sector would need different permissions compared to food items. You need to check with the UK government website in order to ensure that you have the required permissions according to your items.

Thirdly, you will also need to ensure that you are registering a UK-specific EORI number in order to execute your trades. This EORI number usually starts with the letters GB. Further, you will also need to obtain a new EU EORI number if you are planning to import or export goods within the EU. In addition to the above, the tariff scheme will also change post-2020. As of now, the Common External Tariff of the EU customs union is applicable to all trades taking place within the EU. However, starting from 1st January 2021, the UK Global Tariff is going to replace it. The UK government has already set up a search tool that helps you in comparing the tariffs under the old regime and the new regime.

Finally, one point of relief for the traders is that the standard VAT rate will remain the same even in 2021. This rate has been frozen at 20%. In addition, the new guidance states that UK-based traders will now be allowed to zero-rate their goods. This implies that traders can charge their customers a 0% VAT. This rule is applicable to customers within the EU as well as outside the EU.

Thus, it is clear that the new guidance includes several changes compared to the earlier trade regime. It is advisable that traders make use of specialised export software in order to keep track of the changes that are taking place. This could help you in mitigating your compliance risk and ensure smooth trade operations.

Conclusion

In conclusion, it is evident that there are multiple regulatory aspects that UK-based traders need to comply with. If you need external assistance related to your trade compliance program, there are various trade management firms active in the market.

Our export management software makes sure that your business is fully compliant with all trade regulations. For more information about our global trade management software offerings, please contact us.

OCR Services Inc. –  Global Trade Management Solution Provider           

Modern-day traders must be aware of the various requirements related to compliance. One such set of rules are the International Traffic in Arms Regulations (ITAR). It is a regulatory regime that takes care of defense and military-related technologies. The primary objective of the ITAR is to ensure that US national interests can be safeguarded and foreign policy objectives can be bet. Therefore, it is extremely important for traders around the world to know about these rules and comply with them. This blog discusses the key aspects of ITAR compliance.

A Guide for Traders

There are various items that come under the ambit of ITAR. Some of these include firearms, chemicals, ammunition, launch vehicles, explosives, vessels, tanks, aircraft, as well as other military equipment. Traders that are dealing with these products must be extremely careful in order to avoid sanctions and penalties. The best policy is to cross-check the list of items that are covered under the ITAR.

These regulations are applicable to US citizens, permanent residents of the US, and corporations that are registered under US laws. Further, businesses must be aware of the authorizations and licenses that are needed to export their items to different parts of the world. In addition to this, the ITAR also covers a list of countries that are currently placed under US sanctions. Some of the countries that are covered under US sanctions include Iran and North Korea. Traders must keep checking this list regularly since it is updated from time to time.

It is also important to note that the ITAR is not only limited to products. Different types of technical data can also be covered under these regulations. It is advisable that traders check the sensitivity of the data that they are planning to export. According to US authorities, technical data can be defined as information related to the manufacturing of defense articles or significant military equipment (SME). This information can either be classified or unclassified. In addition, software products that are directly related to these sensitive items must also be fully compliant with the ITAR.

Traders must also be aware of the registration requirements under the ITAR. Traders who are dealing with sensitive items must register with the US department of state. In addition to this registration, they may also need to acquire special licenses or authorizations based on the category of product or data that is being exported. Thus, traders need to be aware of multiple types of ITAR compliance requirements.

Conclusion

In conclusion, it is evident that traders need to comply with several aspects of the ITAR. If you need external assistance related to your trade compliance program our global trade management software makes sure that your business is fully compliant with all trade regulations. For more information about our global trade management software offerings, please contact us.

It is necessary for compliance experts and global trade professionals to keep up to date about the different types of regulations that apply to their products. Some of these regulations include the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). The EAR is applicable to products that are designed for commercial purposes but could have implications for the military. This is the primary reason why these products need to be monitored more carefully. This blog discusses the export of products to China in compliance with the EAR.

Staying Compliant

US export controls allow traders to export and re-export goods to China without requiring any additional US governmental licenses. However, if products being exported include items that are manufactured in the US, then you may be required to obtain certain additional permissions. Similarly, there are a list of entities in China that are prohibited from receiving any sensitive items from the US. Most of these entities are associated with the Chinese government.

The key idea behind these regulations is that the US wants to protect its military-use equipment at all costs. Further, the EAR also covers military-related technologies as well. For instance, if you are exporting technology to China, and it could have end-use for the Chinese military, then you need to be extremely careful. Traders must know the different types of product and technology categories that are covered under the EAR so that they can avoid penalties and fines.

Violations related to export control laws and the EAR can result in penalties of up to $250,000 per violation. This is a significant sum that can have an adverse impact on any trader, small or large. In addition to this, traders who willingly or unwillingly export sensitive items to China without meeting the regulatory aspects can be jailed for up to 20 years. They can also have their trading licenses revoked permanently. In order to avoid these situations, it is advisable to utilize industry experts to ensure full compliance for all transactions with Chinese partners.

Due to recent events, this topic has assumed even greater significance as tensions between the US and China have been escalating. The two countries have been engaged in a full-scale trade war, placing sanctions on products sourced from each other. Therefore, traders need to be even more careful in order to avoid a risky situation.

Conclusion

In conclusion, compliance with EAR is paramount. If your company needs assistance with your trade compliance program, our global trade management software makes sure that your business is fully compliant with all trade regulations. For more information about our global trade management software offerings, please contact us.

For compliance professionals who export, OFAC compliance is non-negotiable: If you’re shipping to an entity that is identified by OFAC, you must be aware of the necessary sanctions for each shipment.

The Office of Foreign Assets Control (OFAC) administers sanctions based on US foreign policy. It enforces both economic and trade sanctions with the primary objective of following the national security standards of the US. OFAC focuses on four major activities, including terrorism, narcotics, targeted foreign countries, and weapons of mass destruction. Exporters need to be fully compliant with the regulations prescribed, as any case of non-compliance can be penalized by monetary fines, bans, or even prosecution. This blog discusses a few best practices that could help you achieve full OFAC compliance.

Best Practices To Help Your Business

Complying with OFAC regulations is not a straightforward task as there is no single list that you can check. However, to ensure that you adhere to some basic compliance elements, here are four key points to follow. 

Check the Specially Designated Nationals List: This list includes information related to individuals and companies who typically act on behalf of targeted nations. All assets of such persons or companies are blocked, and US-based exporters are prohibited from any transactions. Therefore, it is good practice to monitor this list continually and cross-check all your export shipments against it as it is periodically updated.  Use Specialized Software: If there is any doubt regarding OFAC compliance, employing specialized software can help; it is recommended to choose a solution that is holistic in nature and covers different types of compliance requirements.

Focus on the 50% Rule: It is also necessary to check on all the rules and regulations, especially the 50% rule. As per this rule, companies must check whether the customer company they are doing business with is owned by an entity that is listed by OFAC. It is advisable to check on the ownership details of all individuals and entities being dealt with, as there is always the possibility that your customer may be 50% owned by a prohibited person or entity.

Keep a Check on Ownership: Even if a prohibited person or entity does not own 50% of your customer, it is important to continue to check their interest in the firm. Even if the stake is not currently at 50%, there is a possibility that it may increase in the future. Continuous monitoring of ownership structure could save you from a situation where you violate the 50%  

Thus, if you follow the above best practices, you will remain protected from all types of fines and penalties. Also, it will help in eliminating reputation risks and reducing any risks of disruption.

Conclusion

Following the above recommendations could help achieve OFAC compliance. If you are looking for external assistance related to your trade compliance program, our global trade management software can assist your business in complying with all trade regulations. For more information about our offerings, please contact us.

In recent years, the US has tightened its sanctions policies related to a number of countries, including China, Iran, Russia, and Venezuela. The primary objective behind this uncompromising approach has been to make sure that multinational firms are fully compliant with all regulations and that they do not indulge in suspicious transactions. Further, within this sanction policy, certain sectors have been prioritized above the others. For instance, areas such as finance, energy, technology, manufacturing, and shipping have been earmarked by the US government as potentially vulnerable sectors.

Due to the change of administration in Washington D.C., there is a possibility that these sanctions policies will be revised in the near future. This blog focuses on the US sanctions outlook for 2021 and discusses the possible outcomes in terms of the new strategic and tactical approaches that could be adopted by the Biden administration, while also analyzing policy aspects that are likely to remain unchanged.

The Current State of Affairs

The Biden administration could implement its own strategies in order to ensure that their foreign policy priorities are met. The current sanctions policy designed by OFAC focuses on four major areas related to global trade:

country     sanctions

targeted     sanctions

 sectoral     sanctions

 extraterritorial     sanctions

Each of these sanctions aims to ensure that US foreign policy goals are met at all times. Further, these sanctions are also used to make sure that multinational corporations do not form international nexuses to circumvent US regulations.

The previous Trump administration announced certain major sanctions right before the end of his term. For example, new sanctions related to Yemen and Syria were announced during the final few months of the previous regime. These new sanctions aimed to eliminate activities such as terrorist financing and money laundering. Similarly, the Trump administration had also ramped up the pressure on China by announcing significant sanctions on companies that were engaging in transactions with the Chinese government. This situation is likely to change under the new regime.

The Outlook for 2021

The Biden administration has already started to implement its own strategies when it comes to international trade. There has been a noticeable push towards international cooperation. The new political leadership of the US will certainly look to leave its mark when it comes to international trade relations. However, this does not mean that all existing sanctions and related policies will be completely discarded. In fact, most of the existing sanctions are likely to remain in place. This is because the trade partners of the US are not likely to change to a great extent. 

The change is likely to happen in the form of human rights-related sanctions. The new administration has already placed great emphasis on ending human rights abuses around the world, and this could mean that countries that are involved in such activities are likely to face economic sanctions. In addition, 2021 is likely to witness an increase in international trade cooperation between the US and other nations. This is because the new administration wants to step up multilateral trade efforts in order to boost the US economy. 

Similarly, the new administration is also likely to reduce the efficacy of the “maximum pressure” policy adopted by the previous regime in the US. For instance, the large-scale sanctions related to imports from China are likely to be scaled back. Similarly, the stance on Syria and Yemen could also be altered during 2021. Overall, the new administration is likely to adopt a much more pragmatic approach when it comes to international trade. It will be interesting to note whether these new measures are able to help the US in achieving its short-term trade goals.

Conclusion

In conclusion, it is evident that the US sanctions regime is likely to witness some changes during 2021. If you need external assistance related to your trade compliance program, OCR’s global trade management software makes sure that your business is fully compliant with all trade regulations. For more information about our global trade management software offerings, please contact us.

Virtual Tour Of OCR – Global Trade Management Solutions:

Our world has constantly evolving security concerns and complex geopolitics. Governments and companies rely on denied-party lists to legally navigate through global trade. Denied-party lists are indexes of entities that should not be accepted as a party in certain or all business transitions.

These lists are extensively used by government agencies to enforce sanctions and embargoes, to protect their economy, to combat the empowerment of their enemies, and to ensure public health and safety. They can range from lists of disbarred individuals or organizations who can no longer participate in business transactions (purchasing, acquiring, or delivering a good or service) to lists of countries that cannot import goods. Moreover, restrictions can span multiple verticals and industries, including; pharmaceutical, manufacturing, government contracting, technology, commercial, government, and private sectors.

Any business participating in international transactions or exports is held responsible for adhering to the limitations imposed by these lists. It is, therefore, in every company’s interests to understand what they are and how to adhere to them.

In this article, we will explain:

What are denied-party lists?

What are the penalties associated with them?

What is denied-party list screening?

Why does your business need it?

Features of an Ideal Denied Party Screening Solution

What Is a Denied or Restricted Party Screening List?

Both terms refer to a collection of entities, either individuals or organizations, that are deemed unlawful to do business with to some extent or completely.

Denied-Party Lists contain entities who export, import, and/or exchange services and have been denied by a governing body (e.g. a Government Agency).

Restricted-Party Lists contain entities who have been denied some business privileges. Certain types of transactions may be blocked, or a license may be required before any transactions with this party may take place.

Denied Party Lists are compiled by international governments and International organizations, such as:

U.S. Bureau of Industry and Security [BIS] (Denied Persons List, Entity List, Military End-User List, etc.)

U.S. Food and Drug Administration (Debarment List)

U.S. Treasury (Office of Foreign Assets Control Sanctions List)

U.S. Securities and Trade Commission (Anti Money Laundering Checklist)

U.S. Department of Justice (Foreign Corrupt Practices Act)

United Nations (Sanctions List, Al-Qaida and Taliban UN Consolidated List)

World Bank (List of ineligible firms)

European Union (Financial Sanctions List)

Entities are added to a denied party list because of:

Being a terrorist organization or affiliate

Being a threat to national security

Having a history of corrupt or criminal behavior

There are more than 1,300 such lists an international business must take into account. Every individual and company, small and large, is responsible for adhering to these prohibitions.

Many individuals and businesses are prosecuted for breaches of denied-service lists every year.

Non-adherence Penalties

Every list and associated law have different penalties that can be levied against violators. The following are two examples:

The U.S. Bureau of Industry and Security maintains several denied and restricted party lists. Not adhering to their restrictions will result in heavy penalties:

Criminal fines up to $1 million dollars per violation.

Incarceration for up to 20 years.

Administrative penalties of $300,000 per violation or twice the transaction’s worth, whichever is higher.

Loss of export privileges.

Deportation of non-U.S. Citizens.

The Arms Export Controls Act (AECA) and the International Traffic in Arms Regulations (ITAR) are laws that limit what can be exported, rather than to whom. These two laws place restrictions on weapons, armaments, and defense systems. Refusing to abide by them will also result in heavy penalties:

Criminal fines up to $1 million dollars per violation.

Incarceration for up to 10 years.

Civil penalties up to $500,000 per violation.

Voluntary self-reporting done in the proper way can mitigate these penalties, but obviously, the ideal situation is to avoid breaches altogether by carefully screening any business transactions beforehand.

What Is Restricted Party Screening?

With so many different lists and such high penalties, it is vitally important for a business to make sure they adhere to these sanctions, but scanning through the lists manually for every transaction would be a fool’s errand.

The restricted-party screening process provides corporations with the ability to check all individuals, businesses, and countries against the most current restricted, denied, or prohibited party lists to ensure no business transactions occur with an entity that is prohibited by law.

Why Does Your Business Need Denied Party Screening?

Sanctioned party list screening provides an easy solution to otherwise daunting challenges.

The quantity and size of denied party lists are extensive. As an example, the BIS maintains a list strictly for denied individuals, and even that list of such limited scope contains more than 1600 individuals. It includes names, alias, and addresses that must all be taken into account. The same Bureau’s entity list is more than 600 pages long.

The denied party lists are ever-changing. The BIS updated their denied persons list nearly once a day in the last two months of 2021.

Governments require extensive due diligence in preventing and reporting violations.

Features of an Ideal Denied Party Screening Solution

A comprehensive collection of global watch lists. The ideal solution should make sure that every denied party list included is relevant to your sector.

Daily updates. No matter how often a needed list is added to, updated, expired, or changed, the ideal solution should keep your business secure with the most up-to-date information.

Defensible Audit Trails. It should provide detailed reports and extensive notifications for a robust due diligence process.

Cutting Edge Algorithms. The ideal solution should leverage cutting edge technology with fuzzy logic to customize its parameters to match your business needs without sacrificing precision or risk reduction.

User-Friendly Dashboard. It should have a user friendly interface for easy navigation between processes.

Automated Alerts. It should keep users and managers updated on still pending actions like follow-ups, past due cases, and problem resolutions.

Synchronization with other services. It should have the flexibility to fit into the value chain of your export control compliance activities Export Shipment Process and Import Process.

Integration with ERPs and Business Systems. It should have the technical ability (via API’s, adaptors etc.) to fully integrate with your existing internal technology platforms and screen parties directly from your business systems without needing to open any other application.

The solution is restricted party screening software, such as what is offered by OCR Services Inc. To learn more about OCR’s Watch list Screening Solution, trusted by hundreds of organizations globally, please reach out to us at [email protected].