Double Down on Export Compliance, BIS Tells Forwarders, Brokers

The Bureau of Industry and Security’s top export enforcement official this week urged customs brokers, forwarders and non-vessel operating common carriers to be more proactive in export compliance even though they may not always have the “primary” responsibility for ensuring goods comply with U.S. export licensing restrictions. Matthew Axelrod, the BIS assistant secretary for export enforcement, said those service providers should take steps to ensure they have maximum visibility into their clients and the goods they are shipping.

“When I say ‘KYC,’ I don't only mean ‘know your customer.’ Also know your cargo, right?” Axelrod said during the National Customs Brokers & Forwarders Association of America's Government Affairs Conference in Washington this week. “It’s just really important to know, to the extent you can, what the things are that are moving under your auspices.” Axelrod said BIS plans to “put out some further guidance” on “what to watch out for and some tips” in the “near future.”

BIS, in trying to prevent illegal exports to Russia, is focusing less on the “universe of items” that are subject to license restrictions, Axelrod said, and is focusing more on the goods that fall under nine Harmonized System codes the agency included in a May joint alert with the Treasury Department’s Financial Crimes enforcement Network. Those items include various electronics, capacitors and electrical parts, although some industry officials said the items listed are too generic for compliance purposes (see 2308150051).

Axelrod said the agency is “doing an all-out push” to make sure industry is aware of the risks associated with shipping items that fall under those HS codes. “It's not just the electronics manufacturers that we're talking to,” he said. “We're talking to banks, we're talking to express carriers, we're talking to freight forwarders. Because everyone in the chain we want -- even maybe in ways that you haven't done previously -- but we want everyone sensitized to this because of the importance of the effort.”

Forwarders and others who “see something unusual” involving a shipment should “do something about it,” Axelrod said, such as placing a voluntary hold on the export. “No one knows your business like you do. No one's going to have a sense that something's off, like a routing path isn’t the normal routing path,” he said. “When your spidey sense is tingling, there's usually a reason why, and I encourage you to listen to it.”

He also urged forwarders and brokers to ask their customers and clients to sign a “simple certification” that says they are complying with U.S. export control laws. “Even something like that -- it's just a piece of paper,” Axelrod said. “But it’s a little more than a piece of paper, because if someone refuses to sign it -- well, that’s a pretty big red flag.”

Axelrod also noted that if a client signs an export control certification and BIS later discovers a violation connected to that shipment, the forwarder or broker can show BIS the certificate to potentially mitigate liability. “You're protecting yourself, right?” he said. “And then if something ends up where it [shouldn’t], that helps us in showing that ‘hey, they certified that they would comply, and then they didn't.’”