Summary
DHL - USA will pay a $9.4 million settlement to the United States for shipping items to restricted countries such as Sudan, Iran and Syria.
The United States Department of Commerce and United States Department of the Treasury allege that DHL violated Export Administration Regulations (EAR) on numerous occasions from 2002 to 2007.
The departments further charge that DHL failed to monitor thousands of other packages shipped to those countries.
Analysis
DHL - USA (DPWN Holdings (USA) Inc.) entered into a civil settlement with the Bureau of Industrial Security (BIS) a unit of the Department of Commerce and the Office of Foreign Assets Control (OFAC) of the Department of the Treasury that will cost the company $9,444,744.
In addition DHL agreed to retain a consultant with expertise in U S export control laws and sanctions regulations to audit shipments to Iran, Sudan and Syria for the period of March 2007 to December 2009, as well as annual audits2010 and 2011. The expert will look at DHL's management of Export Administration Regulations (EAR) and regulations of the Office of Foreign Assets Control (OFAC), including recordkeeping.
The packages exported included informational materials and goods valued at less than $100, as well as items such as software, auto parts, electronic equipment and oil field equipment.
This fine places an emphasis on two areas of critical importance to freight forwarders. First, the importance of maintaining accurate record keeping in order to prove informed compliance. In this case DHL failed to maintain copies of air waybills and other required export documents required under Part 762 of the EAR. Second, the action illustrates the need to monitor contents of export shipments to restricted countries or parties.
The action also shines a light on the need for shippers, individuals and companies to understand their obligations under EAR and OFAC regulations for shipping materials to parties in restricted countries, or to restricted parties both outside of the United States and within the United States.
Proper classification of goods and informational materials being shipped, proper labeling of those goods and supporting shipping documents are critical both in the shipping process as well as in maintaining records.
Exporters, even individuals, and forwarders are required to perform due diligence prior to and during the shipment of items to all countries and are legally responsible for maintaining proper records. Failure to do so may result in civil penalties, loss of export license, and even criminal charges.
Source information:
Logistics Management
The Wall Street Journal
U. S. Department of Commerce, Bureau of Industrial Security
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
