Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

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

Client Alert
March 30, 2021

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. 

International LawKevin Burwell
Client Alert

OHIO ADOPTS THE SERIES LLC: Implementation of Ohio’s Revised Limited Liability Company Act is Coming

February 24, 2021On January 7, 2021, Ohio adopted S.B. 276. The new legislation establishes the Ohio Revised Limited Liability Company Act (“ORLLCA”) which effectively replaces the current Ohio LLC Act. ORLLCA will be fully effective as of January 2022. While the new law contains numerous changes to the existing LLC landscape, below is an overview of some of the key differences under the ORLLCA.Client Alert

Will Federal Legislation Open Cannabis Acquisition Floodgate?

February 18, 2021Are potential buyers quietly lobbying at federal and state levels to kick open the door to launch a new round of strategic acquisitions? Will presently pending federal legislation, the SAFE and MORE Acts, providing safe harbor for banks and re- or de-scheduling marijuana, be sufficient to mobilize into action major non-cannabis companies that previously shunned the cannabis industry due to the unknown implications of owning businesses whose activities are illegal under federal law?Client Alert

The Future of the Families First Coronavirus Response Act

February 3, 2021Over the last year we all have had to adjust to the new normal ushered in by the coronavirus pandemic. Schools and daycares closed, businesses transitioned from in-office work to work from home, bars and restaurants have closed their doors...all to slow the spread and try to prevent this pandemic from spiraling out of control. The start of the pandemic was utter pandemonium. Working parents trying to balance both caring for their now at-home children and their livelihood. Businesses trying to decide how to implement leave policies with limited information. Employees determining if they could financially afford to take time off. We were all flying by the seat of our pants trying to adjust to our new normal.Client Alert

Ohio Supreme Court Clarifies Medical Statute of Limitations

February 1, 2021The Ohio Supreme Court issued a decision in late December that clarifies and finalizes the Ohio law regarding the period of time in which patients can assert claims for medical malpractice. The Court was examining the interplay between three different statutes being the statute of limitations, the statute of repose, and the savings statute.Client Alert

Ohio Hospitals and Healthcare Clinics: It’s Time to Revisit Your Billing and Collection Practices

February 1, 2021According to a recent Cuyahoga County case, certain healthcare entities may not be protected from liability when engaging in unfair or deceptive billing acts. This decision is consistent with the growing trend across the country to encourage price transparency and eliminate unfair surprise billing practices by health care organizations. Now is the time for hospitals and other health care organizations to revisit their billing and collection policies and procedures to confirm that they are legally defensible and consistent with best practices.
Older posts
Newer posts