2018 has already been active for U.S.-based sanctions and Denied Party Screening (DPS) with changes coming at an increasingly rapid pace. So far this year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) acted on a number of items including the re-implementation of sanctions against Iran, the designation of Russian oligarchs and Venezuelan officials, the lifting of economic sanctions against Sudan, and more.
Antidumping (AD) and Countervailing (CV) duties are additional fees that the United States Department of Commerce (DoC) uses to discourage demand for products deemed to be import sensitive. AD/CV duties are one of the mechanisms that the U.S. government uses to help ensure a level playing field between U.S. suppliers & manufacturers and importers who are either receiving subsidies from foreign governments or are selling their products at lower prices in the United States.
An essential step in export compliance is determining whether a license is required from the Department of Commerce to export a commodity. This is done by ascertaining whether the item has a specific Export Control Classification Number (ECCN).
Export Control Classification Number (ECCN) are five-digit alphanumeric designations established by the commerce control list (CCL) to identify items that fall under Export Administration Regulations (EAR).
When goods are imported into the United States, they are subject to certain formalities involving Customs and Border Protection (CBP). Commodities are typically required to be “entered,” or declared to CBP, and are subject to scrutiny by Customs officials to ensure proper compliance on the part of the importer. As a part of this entry process, goods must be “classified” (determined where in the U.S. tariff system they fall) and their value must be determined.
A customs duty is a tariff or tax levied on goods when transported across international borders. Customs duties are imposed in order to protect a country’s import and export revenues by controlling the flow of goods into and out of the country.
While revenue is the primary consideration, customs duties may also be levied to protect a domestic industry from foreign competition.
The denied party screening process is a general term for the due diligence review of a business’s internal lists to ensure that transactions are not being conducted with entities included on a sanctioned list, watch list, concern list and more as well as countries that are either embargoed or sanctioned. It is also necessary to maintain accurate audits of a company’s denied party screening process and records of their compliance efforts.
Products shipped internationally may be subject to duties (tariffs), taxes, and other fees that are assessed by customs authorities. These duties and other trade restrictions can hinder a company’s ability to conduct international business: a high tariff may make a product too expensive to be competitive; a quota may limit may limit the possibility of importing or exporting goods to a specific country.