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Cleveland Manufacturer Violated OFAC Sanctions By Allowing Shipments To Iran - Know Your Customer and Know Their Customer

Between 2013 and 2017, UniControl exported 21 shipments of its products to two European customers. These 21 shipments were subsequently reexported to Iran, which violated the Iranian Transactions and Sanctions Regulations (“ITSR”) listed in 31 CFR Part 560.

WARNING SIGNS

UniControl encountered multiple alerts before and during this period and failed to take proper actions. In 2010, several years prior to the first of these shipments, a European trade partner of UniControl inquired whether UniControl could supply a significant market it had identified in Iran. UniControl turned down the opportunity but did not confirm that the sales to this European partner were not then being shipped to the Iranian market.

In 2014, UniControl and a European customer entered a sales agreement that listed Iran as a country to which the partner could re-sell these products. In 2016, UniControl offered to ship products directly to a purported third-party European end user, but the customer refused this offer in an attempt to obfuscate the end user. At European trade conferences, UniControl had direct interactions with Iranian nationals, but did not question their European trade partner on the interest. Finally, UniControl received a request from its European partner to remove the “Made in USA” labels from its products with the explanation that the Iranian end user may have issues with the product origin.

FIXING THE PROBLEM

UniControl consulted with outside counsel and then voluntarily self-disclosed these violations. In total, UniControl engaged in 21 prohibited transactions with a total product value of $687,189. The maximum statutory penalty that UniControl faced was $5,423,766. However, once all mitigating and aggravating factors were weighed, UniControl was able to reach a settlement with OFAC for $216,464.

Parallel to UniControl’s cooperation with OFAC and ceasing all shipments to its European trade partners, the company also righted its own “compliance ship.” This began by retaining outside counsel to strengthen their export control procedures. End-user certificates were created to make sure that buyers are not reselling to prohibited end users. These certificates are also requested from second and third level buyers of reexported products. UniControl added a Destination Control Statement within the footer of many of their trade documents to remind recipients of the restrictions on reselling, transferring, manipulating, or otherwise disposing of their products.

For a review of your export policies and processes, or questions on trade compliance, please contact International Law Attorney Kevin Burwell at kdburwell@bmdllc.com or 330-253-3715. 

Changes to Physician Assistant Statutes in Florida

In the last year, there have been many changes to the scope of practice and collaboration/supervision requirements for advanced practice providers such as APRNs and physician assistants in the state of Florida. In a previous Client Alert we discussed House Bill 607, which expanded the autonomous practice of APRNs providing primary care services in Florida.

Ohio Senate Bill 49 – Ohio Expands Lien Rights for Design Professionals

Effective September 30, 2021, Ohio granted limited lien rights to design professionals, including architects, landscape architects, engineers, and surveyors. Ohio Governor Mike DeWine signed Senate Bill 49 into law on July 1, 2021. This new law established a statutory right to lien commercial real estate by Ohio design professionals who, until now, could not file a lien for non-payment of professional services. Senator Vernon Sykes, a primary sponsor of Senate Bill 49, stated that the “legislation ensures that architects, engineers and other designers will get paid for their work, regardless of the outcome of their projects . . . It will support hardworking Ohioans by protecting the value of their labor . . ..”

Primary Care Practice Officially Defined in Florida for APRNs Practicing Autonomously

As many providers in Florida are aware, House Bill 607 (the “Bill”), which was passed in February of last year, gives certain APRNs in Florida the ability to practice autonomously. The only catch is that they must work in primary practice. When the Bill was initially passed, there was question as to what was exactly considered primary care, absent a definition from the Florida Board of Nursing. However, as of February 25, 2021, “primary care practice” has officially been defined.

Part II of the No Surprises Act

The Department of Health and Human Services (“HHS”) published Part II of the No Surprises Act on September 30, 2021, which will take effect on January 1, 2022. The new guidance, in large part, focuses on the independent dispute resolution process that was briefly mentioned in Part I of the Act. In addition, there is now guidance on good faith estimate requirements, the patient-provider dispute resolution processes, and added external review provisions.

Safer Federal Workforce Task Force - Guidance for Federal Contractors and Subcontractors

The Safer Federal Workforce Task Force has issued its Guidance for Federal Contractors and Subcontractors (Guidance). Note that the Guidance applies only to “covered contracts,” which are contracts that include the clause (Clause) set forth in Sec. 2(a) of Executive Order 14042 (Ensuring Adequate COVID Safety Protocols for Federal Contractors). The Federal Acquisition Regulatory Council (FARC) is to conduct rulemaking and take related action to ensure that the Clause is incorporated into federal contracts. Until that happens, federal contractors likely will not see the Clause in its contracts. Following is a broad summary of the Guidance.