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Is that a Legitimate Export Customer or an Illegal Front Company?

St. Basil's Cathedral

The U.S. government remains concerned about efforts by front companies and other intermediaries, who are not the true final end users, to transship or reexport U.S.-origin items to the Russian Federation in violation of current export controls.

To prevent unauthorized reexports to Russia, especially for transactions involving nationally security-controlled items or items listed in Supplement No. 2 to Part 744 of the EAR, the Bureau of Industry and Security has published additional guidance for U.S. exporters.

Here are a few preventative measures you can take to minimize the chances of unknowingly enabling illegal diversion of your exported goods to Russia. You can read the full version here.

  • Pay attention to discrepancies between the destination country and the country from which an order is placed (or the country from which payment is made). If the countries do not match, it’s possible that someone is planning to illegal divert your exported goods to a different country, such as Russia.
  • If a freight forwarder’s office/address is listed as the export’s final destination, you are required by law to investigate the situation further. Do not proceed with the transaction or even think about shipping out the goods before asking the purchaser about the item’s end user, end use, and ultimate destination.
  • Before shipping the item, go through the emails you’ve previously received from the customer, taking note of any mention of other email addresses or telephone number country codes. Do any of these details suggest a destination country other than what you’ve been told by the customer? If so, you should be wary of going through with the transaction.
  • Always check that your customer is not listed on the U.S. government’s consolidated export screening list. You can also use the International Trade Administration’s new online tool to search the list by entity name or address.

Russia Due Diligence Guidance (Bureau of Industry & Security)

By Michelle Kelley

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