Bureau of Industry and Security (BIS), U.S. Department of Commerce administers the export control laws that regulate the transfer of controlled information (including technical data and technical assistance) as well as controlled physical items (such as scientific equipment) to foreign colleagues and organizations in the United States and abroad. Exports include the shipment or transfer of equipment, articles, services or encryption software to another country as well as the transfer of technical data or information to a foreign national, whether it occurs in the U.S. or abroad. These regulations restrict dissemination of a wide range of goods, services, information, software and technology in a manner that may affect research abroad.
The Office of Export Control at the University of Pittsburgh was created to provide best practices advice and hands-on assistance to the University community for compliance with these laws and regulations.
In addition, BIS maintains separate lists of individuals and entities with which one may not engage. These lists should be routinely checked before entering into business transactions with a foreign person or entity.
In the event a company, entity or person on one of the lists appears to match a potential party in an export transaction, additional due diligence is required before proceeding. Depending on which list the match was found, a match indicates either: there is a strict export prohibition; a specific license requirement; or the presence of a “red flag.” Prior to taking any further actions, you should consult the requirements of the specific list on which the company, entity or person is identified by reviewing the webpage of the agency responsible for the list. The Office of Export Control can be helpful in navigating the BIS website and lists described therein.
The Foreign Corrupt Practices Act (FCPA) was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign governmental officials to assist in obtaining or retaining business. Note that in certain countries, officials at universities and executives at companies can be government officials. In such cases, payments and gifts to such individuals can be governed by FCPA rules. The U.S. Department of Justice has issued A Resource Guide to the U.S. Foreign Corrupt Practices Act. The guide includes a summary of the statutory requirements, hypothetical examples and addresses a wide variety of topics. See Policy 05-02-18 Attachment A for definitions, scope, and detailed policy requirements related to compliance with the Foreign Corrupt Practices Act.
Office of Foreign Assets Control, U.S. Department of Treasury (OFAC) administers and enforces economic and trade sanctions to protect against threats to national security, foreign policy or the economy. OFAC also maintains a list of individuals and entities that requires special consideration.
Sanctions may be comprehensive embargoes, which prohibit most activities with the embargoed country, or targeted sanctions that ban specific activities with or within a given country. A summary description of each particular embargo or sanctions program may be found on Sanctions Program and Country Summaries and on Regulations by Industry pages of the OFAC website. In certain instances, OFAC may have the authority by means of a specific license to permit a person or entity to engage in a transaction which otherwise would be prohibited; however, legislation may restrict that authority. In the event that you are interested in undertaking an educational or research activity in a country subject to embargoes or specific sanctions, please contact the University’s Office of Export Controls Services to determine whether a license is a possible option.
As part of its enforcement efforts, OFAC publishes a list of over 6,000 individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals” or “SDNs.” Their assets are blocked and U.S. persons are generally prohibited from dealing with them. The Specially Designated Nationals and Blocked Persons list is frequently updated by OFAC.
Because OFAC’s programs are dynamic, it is very important to check the OFAC website on a regular basis to ensure that your sanctions lists are current and you have complete information regarding the latest restrictions affecting countries and parties with which you plan to do business.
Terrorist organizations have exploited charitable organizations, both in the United States and worldwide, to raise and move funds, provide logistical support, or otherwise cultivate support for their organizations and operations. This type of abuse can result in violations of OFAC-administered economic sanctions programs. For this reason, OFAC has actively engaged with charitable organizations to assist them in understanding and complying with their legal obligations under U.S. sanctions programs while delivering aid in high-risk areas. OFAC has encouraged charities to develop proactive, risk based compliance programs, informed by best practices, to protect their assets and resources from diversion or exploitation by rogue actors, terrorists, or other sanctions targets.
To assist the charitable sector in adopting an effective, risk-based approach, OFAC has provided a matrix of common risk factors associated with disbursing funds and resources to grantees. This matrix is intended to be particularly useful to charities that conduct overseas charitable activity due to the increased risks associated with international activities. The matrix is designed to provide charities with an understanding of the risks that they should consider in the course of conducting their due diligence.
Violations of OFAC sanctions may result in civil or criminal penalties, including substantial monetary fines.
The Bureau of Industry and Security (BIS), U.S. Department of Commerce also is charged with administering and enforcing the Anti-Boycott Laws under the Export Administration Act through the Office of Antiboycott Compliance. Those laws discourage, and in some circumstances, prohibit U.S. companies from furthering or supporting the boycott of Israel sponsored by the Arab League, and certain other countries, including complying with certain requests for information designed to verify compliance with the boycott. Compliance with such requests may be prohibited by the Export Administration Regulations (EAR) and may be reportable to BIS. If you run across any language which you suspect supports the boycott of Israel, it should be reported to OEC.
The Treasury Department publishes a quarterly list of “boycotting countries.” Past lists have included: Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates, and Yemen. Additionally, it is important to know that:
- IRS regulations require U.S. taxpayers to report services performed in, with, or related to a boycotting country or its nationals, whether or not they are for-profit.
- Violations of any of the reporting requirements or anti-boycott laws can result in significant fines, administrative sanctions and potentially imprisonment.
For more information on legal restrictions or to answer any questions, please contact the following: