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Violation of International Business Laws

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					Doing Business Abroad: U.S. Laws                      months to acquire and may delay your proposed
that Affect FIU’s International                       research activity. Please note that it is very
                                                      likely that at least some of the laws discussed
Activities                                            in this document will apply to any given FIU
                                                      international activity. OSRA and the General
         Faculty and staff of Florida International   Counsel’s Office can help you understand and
University may engage in various activities           respond to the sometimes complex legal
overseas, such as attending conferences abroad,       requirements as mandated by these laws.
entering into academic agreements for services
or agreements to do research or to provide goods      Economic Sanctions and Boycotts
outside the U.S., making payments to foreign
entities or individuals, setting up overseas
                                                                       General Rule
programs, and co-publishing scholarly articles
with foreign colleagues.
                                                              The U.S. has imposed economic
         A handful of U.S. laws apply to the
                                                      sanctions against certain countries and
University’s foreign activities and to those who
                                                      persons. In most cases, the sanctions prohibit
plan, participate or implement them. These laws
                                                      or severely limit imports, exports and
apply to most university activities conducted
                                                      transactions with these countries and persons
abroad, even though those activities which may
                                                      who reside in them. Economic sanctions are
be educational in purpose. Violation of these
                                                      currently     in   effect   against:    Burma
laws carry monetary and/or criminal penalties,
                                                      (Myanmar), the Balkans (Serbia), Côte
for both the individual committing the
                                                      d’Ivoire, North Korea, Cuba, Liberia, Iran,
violation and for the University. In an effort to
                                                      Syria, Sudan, and Zimbabwe.
assist the university community, the University
                                                              The U.S. also prohibits dealings of
has prepared this document to explain the laws
                                                      any kinds with persons and entities it
that deal with international activities and how
                                                      designates as Specially Designated Nationals
and when they may apply to you.
                                                      (SDNs) and maintains a list of such persons
         The U.S. laws that affect FIU’s
                                                      and entities. FIU, and its individual
international activities can be grouped into the
                                                      employees,      may    not    participate   in
following categories: economic sanctions and
                                                      international boycotts not sanctioned by the
boycotts, export controls, and antiterrorism
                                                      U.S., such as the Arab boycott of Israel.
mandates. The scope and reach of some of these
laws can be quite onerous, for example in
                                                      1) Countries Sanctioned
certain circumstances it may be a criminal
                                                              U.S. economic sanctions are generally
offense to host a foreign government official or
                                                      known as “embargoes.” They prohibit most
even to talk to them about your research or
                                                      imports, export and transactions with certain
programmatic activities. This document will
                                                      countries, absent a general or specific license
explain why and also illustrate other laws that
                                                      from the Office of Foreign Assets Control
could apply to FIU’s international business
                                                      (OFAC) of the U.S. Department of Treasury,
activities, including issues related compliance in
                                                      which maintains and enforces the embargoes.
the arenas of the environment, employment,
                                                      Over the years, OFAC has moved away from
trade, tax, and antitrust laws. Laws of the host
                                                      broad embargoes to “targeted sanctions” that
country and a few international treaties will also
                                                      focus on the precise nature of the threat to the
affect the University’s foreign business activity.
                                                      U.S. For example, the U.S. currently has only
         After reading this document if you have
                                                      three comprehensive embargoes in effect – those
questions regarding the applicability of these
                                                      against Cuba, Iran and Sudan, but there are also
laws to activities you are planning or involved in
                                                      prohibitions that apply to the countries listed
for FIU please contact the Office of Sponsored
                                                      above. FIU faculty and employees must contact
Research Administration (OSRA). Providing
                                                      OSRA (when related to a sponsored project) or
information       regarding      your     proposed
                                                      the General Counsel’s Office (for all non
international activities to OSRA Pre-Award
                                                      sponsored research items) before entering into
personnel at proposal is a good idea since certain
                                                      negotiations with entities or persons in
licenses discussed in this document take several
sanctioned countries to determine whether such       based list of persons with whom a U.S. person
negotiations may move forward in light of            should not deal) or “whitelists” (a boycott-based
OFAC restrictions.                                   list of persons with whom a U.S. person should
                                                     deal) are prohibited. Specifically, you may not:
2) Persons, Companies, or Organizations Also
Sanctioned                                               •   refuse to do business with or in Israel or
        OFAC can also designate persons and                  with “blacklisted” companies;
companies as “Specially Designated Nationals”            •   discriminate against other persons based
or “SDNs,” that is, persons and companies or                 on race, religion, sex or nationality;
other entities subject to the same prohibitions as       •   furnish information about business
the country to which they have been “specially               relationships with or in Israel or with
designated.”                                                 blacklisted companies, or about the race,
        Consequently, if a deal cannot be made               religion, sex or national origin of
with the Syrian government, the same deal                    another person; and
cannot be made with an SDN from Syria. You               •   implement letters of credit or documents
may not have any dealings with persons or                    containing “stamps,” sometimes in
organizations who appear on the SDN list. The                Arabic, requiring boycott compliance or
list appears on OFAC’s website at                            containing prohibited boycott terms or
ww.treas.gov/offices/enforcement/ofac/sdn/. The              conditions.
list is updated regularly. Even making a
donation to a SDN is a violation. When entering           Be aware of how seemingly innocently a
into discussions with a proposed non-US              violation may occur. For example, say you have
business partner, the first thing you should do is   just wrapped up a long negotiation with officials
check the SDN list for his or her name. OSRA         in Qatar to support an educational institution in
can provide guidance on how to complete such         their country. Your counterpart, who has
checks.                                              become very friendly to you, asks this question:
                                                     “Are you doing any work in Israel now?” Qatar
3) Boycotts                                          is a country that supports the Arab boycott of
         Almost all of the activity associated       Israel. The question may be boycott-related and
with the two currently active American boycotts      therefore you cannot answer it. What you should
are in the Middle East. Because FIU personnel        do instead is ask him why he wants to know. If
may be engaged in activites in this region, an       he replies, “because my cousin has a business
understanding of the boycott laws is key to          there and he might like to meet you if you travel
doing business with the countries parting this       to Israel,” then you know the question is not
region of the world. For convenience, we refer       boycott-related and you may answer it. But if
to the first boycott law the “Commerce boycott,”     instead he says, “our ministry won’t let me sign
after the government department which                a contract with anyone who does business with
administers it, and the second one is the            the Israelis,” then you know it is boycott related
“Treasury boycott,” which is a tax law.              and your answer has to be “I refuse to answer
                                                     your question.”
a. The Commerce Boycott                                   If you receive a request to take any action
         The Commerce Boycott prohibits the          that has the effect of furthering or supporting an
University or you as an individual from agreeing     unsanctioned boycott, the request must be
to participate in an unsanctioned boycott, such      reported to the U.S. Department of Commerce
as the Arab boycott of Israel, and imposes fines,    on form BIS 621-P or BIS-6051P. The
and in some cases prison terms, for violations. It   University, not you, should file the report, but
prohibits you or the University from refusing to     you may initiate the process and transmit a draft
do business with a boycotted country, in this        response to the Office of the General Counsel
instance Israel. It is a broad restriction. You      (OGC). The form can be found at:
cannot, for boycott reasons, refuse to do            http://www.bis.doc.gov/antiboycottcompliance/b
business, select one person over another, or         oycottrequestreportingform.htm.
engage in a course of conduct that constitutes a
refusal to do business. “Blacklists” (a boycott-     b. The Treasury Boycott
        The Treasury Boycott is a tax law that                technology to the same licensing requirements
prohibits the University, or you, from                        that would apply to an actual transfer to the
participating in an unsanctioned boycott and                  foreign national’s home country.
requires reporting activities in boycotting                           One of the export control laws is
countries on annual federal tax returns. It denies            administered by the U.S. Department of State
some foreign tax benefits to persons who                      (“State Department” or “DOS”); the other by the
cooperate with an unsanctioned boycott. It also               U.S. Department of Commerce (“Commerce
requires annual reporting by FIU (not the                     Department” or “DOC”).
individual FIU employee) of business activities
in boycotting countries. The U.S. Department of               1) International Traffic in Arms Regulations
the Treasury publishes a list of these countries              (ITAR)
each quarter. The current list includes                                The State Department export control law
Bahrain(*), Kuwait, Lebanon, Libya, Oman,                     is commonly called ITAR, which stands for
Qatar, Saudi Arabia, Syria, United Arab                       International Traffic in Arms Regulations. These
Emirates and the Republic of Yemen. For your                  regulations govern the export of any defense
information, the form can be found at                         articles and services. The term “defense
http://www.irs.gov/formspubs/lists/0,,id=97817,               services” is very broadly defined and it includes
00.html.                                                      furnishing assistance to foreign persons in the
                                                              design, development, engineering, manufacture,
*Bahrain no longer participates in the Arab boycott of        production,     assembly,      testing,    repair,
Israel, but still appears as a participating country in the
Treasury Department’s tax form filing instructions, and so
                                                              maintenance,        modification,       operation,
must be treated as a participating country                    demilitarization, destruction, processing or use
                                                              of a defense article. DOS maintains a list of
Export Controls                                               defense articles called the United States
                                                              Munitions List, and it can be found at
                                                              http://www.access.gpo.gov/nara/cfr/waisidx_99/
                    General Rule
                                                              22cfr121_99.html. A license from the DOS is
                                                              required before any defense service or article
Certain exports of technical data (including
                                                              may be exported. Fines and prison terms are the
technical programs on a FIU laptop), defense
                                                              sanctions for violations of the ITAR. Space
articles and defense services may require a
                                                              technology, for example, will frequently be
license from either the U.S. Department of
                                                              subject to ITAR limitations.
State or the U.S. Department of Commerce.
The release of technology to a foreign
                                                              2) Export Administration Regulations (EAR)
national (who is not a U.S. permanent
                                                                       The Commerce Department export
resident) who is in the U.S. is considered a
                                                              control law is known as EAR, Export
“deemed export” to the home country of that
                                                              Administration Regulations. EAR governs U.S.-
national. That technology is also subject to
                                                              origin, dual-use items that can be used for both
any license requirements that would apply to
                                                              commercial and military applications. These
an actual transfer of that technology to that
                                                              regulations apply to the transfer of all such
country.
                                                              products, data, and services. There are, however,
                                                              no controls on technical data in the public
                                                              domain. The term “technical data” is broadly
        The University and you are required by
                                                              defined as information necessary for the
law to obey two federal export control laws. It
                                                              development, production, or use of a product.
is safe to assume that the more technical the
                                                              Many types of information can be considered
scope of work, the more likely will be the
                                                              technical data. Blueprints and technical
application of these laws. It is entirely possible
                                                              drawings are technical data, as are instruction
that programs on your laptop may require an
                                                              manuals. Technical data need not be tangible:
export license if you take your laptop on a trip
                                                              training the police force in the United Arab
abroad. It is also possible that allowing a foreign
                                                              Emirates might be considered the export of
national access to technology within the U.S.
                                                              technical data under the EAR.
will be a “deemed export” to the home country
of that foreign national, which will subject the
         The export controls imposed by EAR           http://www.treas.gov/offices/enforcement/ofac/s
depend on two variables: the sophistication of        dn/.
the exported product or technology and its            The DOC has published "Know Your Customer"
intended destination. EAR requires an exporter        guidelines (available at
to obtain an individually validated license to        http://www.bis.doc.gov/complianceandenforcem
export certain items, especially when they are        ent/KnowYourCustomerGuidance.htm) that lists
exported to targeted countries. To find out if a      the type of abnormal circumstances, i.e., "red
license is required, you can check the Commerce       flags," that might indicate that an exported item
Control List. If the export has been assigned an      could be destined for an inappropriate end-use.
Export Control Commodity Number on the
CCL, you should cross reference the item with
its intended destination on the Commerce
                                                      Antiterrorism
Country Chart. Both the list and the chart are
available                                      at                      General Rule
http://www.access.gpo.gov/bis/ear/ear_data.html
.                                                     It is a crime to provide material support to a
         As mentioned earlier, in possible            foreign organization engaged in terrorist
exports found on sponsored projects, the              activities. “Material Support” is defined
appropriate time to mention these possible            broadly. Some organizations with legitimate
exports is at proposal time. The following            names may mask terrorist bearings.
questions are asked on the Internal Clearance
Form to garner if a potential issue related to
export controls may be present in your proposal:              Two principal laws, the 1996
    • Will any part of this project involve           Antiterrorism and Effective Death Penalty Act
         work outside the United States?              and the 2001 USA Patriot Act, make it a crime
                                                      for the University or you as an individual to
    • Wil any non-U.S. citizen or non-U.S.
                                                      provide material support to a foreign
         permanent resident be involved with this
                                                      organization engaged in terrorist activities.
         project?
                                                      Material support is broadly defined and may
    • Will any equipment, technology or
                                                      include training and other services. The State
         writeen know-how be exported or taken
                                                      Department maintains a list of foreign terrorist
         to a foreign country?
                                                      organizations                                 at
                                                      http://www.state.gov/s/ct/rls/45394.htm. It is
         OSRA is reviewing contracts at Award
                                                      imperative to check the origanizations that you
time to flag any export control related clauses.
                                                      plan to collaborate with since some
In the event that a contract does hold an export
                                                      organizations which appears on the list of
control related clause, you will be contacted by
                                                      foreign terrorist organizations appear to have
OSRA to determine if the technologies are
                                                      legitimate names which mask their terrorist
regulated. The PI will be required to fill out
                                                      bearings. One such example is a hospital in
Section II of the OSRA Record of Export
                                                      Palestine.
Control Review Form found on our website at:
http://www.osra.fiu.edu/forms. In many cases,
                                                      The information disseminated in this document
exports fall under a license exception, which         was compiled with information from the 2006
means no license is needed. EAR also prohibits        NCURA Conference on Export Controls and
exports to persons or companies whose names           Embargoes: Beyond the Basics in Alexandria, VA.
appear on one of four lists of sanctioned entities.
These are the Denied Persons List, the Entities       For further information on any of the items
List, and the Unverified List, each of                contained in this brochure please contact Eduardo
which         can        be         seen        at.   Serrano, Assistant Director, Pre-Award at the
http://www.bis.doc.gov/ComplianceAndEnforce           Office of Sponsored Research Administration.
ment/ListsToCheck.htm.
                                                      Additional     information       on    Export
The fourth is the SDN list, for which can be
                                                      Controls/Embargoes/Sanctions can be found on
found                                            at   the NCURA Reference Web site located at
                                                      http://www.ncura.edu/docs/export.html

				
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