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Knowing how the product will be used ...........................................

The first important question to ask when you’re exporting is who you’re

exporting to. The second important question is what is the item and what will

it be used for. The company with the $100 million export fine didn’t violate

the who — they violated the what. The company knowingly shipped a prod-

uct with a military use out of the U.S. without the proper permission.

Here are some of the major compliance concepts governments use to deter-

mine if a company has followed global trade guidelines:

End use:Before exporting an item, you have to think about what it is,

who will get it, and what it might ultimately be used for. Under global

trade compliance regulations, a company that ships an item overseas

can be held responsible if the buyer uses it for an illegal purpose, or if

the buyer turns around and sells it to someone else, who uses it illegally.

Dual use:A company can also be held responsible if it ships a product to

a buyer that uses it in an unintended way that is illegal or harmful. For

example, a reputable medical supply company sold plasma filters to a

medical organization in Europe. The filters ultimately ended up in the

hands of a terrorist organization that found they could be used to filter

anthrax just as effectively. This example raises the question of how a

152 Part II: Diving into GRC

Sidebar: Helpful government links on global trade

Here are some links to trade-related govern-

ment Web sites you may find helpful:

U.S. Bureau of Industry and Security:

http://www.bis.doc.gov/

U.S. Customs and Border Protection: http://www.

cbp.gov/

U.S. International Trade Commission: http://www.

usitc.gov/

U.S. Department of Treasury: http://www.

treas.gov

U.S. Directorate of Defense Trade Controls:

http://pmddtc.state.gov

Office of U.S. Trade Representative: http://www.

ustr.gov/

Export.gov: http://www.export.gov/index.

asp

European Commission Tariff and Customs:

http://ec.europa.eu/

U.S. Office of Regional Security and Arms

Control: http://www.state.gov/t/pm/rsat/

Office of Foreign Asset Control: http://www.

treasury.gov/offices/enforce

ment/ofac/

Sarbanes-Oxley Act: http://www.sarbanes-

oxley.com/search.php?q=404