1. Office of Export Enforcement Bureau of Industry and Security (BIS) U.S. Department of Commerce Anthony Levey Special Agent in Charge Los Angeles Field Office (949)251-9001

2. 2 The enforcement arm of The Department of Commerce, Bureau of Industry and Security (BIS) Who Are We?

3. 3 Root Causes of Problems Questions & Answers Office of Export Enforcement

4. 4 Bureau of Industry and security Office of Export Enforcement Keep the most sensitive goods out of the most dangerous hands. Our Mission

5. 5 How Do I Avoid This? Root Causes of Civil Enforcement Cases 1. Incomplete Transaction Information 2. Ignoring Red Flags 3. Human Error 4. Incorrect SED Filing 5. Non-Compliance with License Conditions

6. 6 1. Incomplete Transaction Information Unknown end-user Unknown or inconsistent end-use Multiple parties to a transaction not listed Incorrect product classification Solution: Identify all parties to a transaction, confirm legitimate intermediaries and ultimate consignees.

7. 7 2. Ignoring Red Flags Person placing the order is unfamiliar with product or information regarding end-use Inappropriate end-user: banks, overseas freight forwarders, etc. Conflicting information on sales documentation and export routing correspondence. Solution: Ask questions and inquire further if you have concerns.

8. 8 RED FLAGS The customer or its address is similar to one of the parties found on the Commerce Department's [BIS's] list of denied persons. The customer or purchasing agent is reluctant to offer information about the end-use of the item. The product's capabilities do not fit the buyer's line of business, such as an order for sophisticated computers for a small bakery.

9. 9 RED FLAGS The customer has little or no business background. The customer is unfamiliar with the product's performance characteristics but still wants the product. Routine installation, training, or maintenance services are declined by the customer. Delivery dates are vague, or deliveries are planned for out of the way destinations.

10. 10 RED FLAGS The shipping route is abnormal for the product and destination. Packaging is inconsistent with the stated method of shipment or destination. When questioned, the buyer is evasive and especially unclear about whether the purchased product is for domestic use, for export, or for re- export.

11. 11 RED FLAGS The item ordered is incompatible with the technical level of the country to which it is being shipped, such as semiconductor manufacturing equipment being shipped to a country that has no electronics industry. The customer is willing to pay cash for a very expensive item when the terms of sale would normally call for financing.

12. 12 3. Human Errors Pressure to meet sales goals and rush order processing New personnel using outdated go-by documentation Export manager on vacation - no cross trained back up export managers Poor communication with sales staff and foreign distributors Solution: Increase training and cross train personnel. Ensure export guidelines and classifications are current.

13. 13 4. Incorrect SED Filing Wrong ECCN entered on SED Improper use of NLR (No License Required) exemption Incorrect Ultimate Consignee Solution: Seek assistance from BIS and ensure correct classifications.

14. 14 5. Non-Compliance with License Conditions Failure to identify all conditions on issued license Failure to identify any conflict of conditions with sales transaction. Solution: Resolve any conflicts before proceeding with transaction. Even if this means amending the license! Notify intermediate and ultimate consignees of the BIS license conditions. Submit all reporting as required by BIS license.

15. 15 Voluntary Self Disclosure Permitted under EAR Section 764.5 Initiated by a company when a company identifies export violations Violations still investigated by OEE “Great Weight” Mitigating Factor

16. 16 OFFICE OF EXPORT ENFORCEMENT Hotline 1-800-424-2980 For more information or to receive regular email updates, please visit our website at : www.bis.doc.gov

17. 17 SHARE INFORMATION Anthony Levey Special Agent in Charge Los Angeles Field Office 949-251-9001 ALEVEY@BIS.DOC.GOV