FBI – Vigilance in International Sales & Export Compliance

Above is a short film originally posted on the FBI website ‘recounting a true story that illustrates the need for vigilance in international sales and export compliance’.

The video shows a dramatic re-enactment of the sale of carbon fibre by a US manufacturer to a company in the US called Barton Exports. Barton Exports then sell the goods via an import-export company in the Czech Republic and a shipping company in the UAE into Iran where they are used in a Uranium factory. The US manufacturer had therefore unwittingly sold high grade carbon fibre materials which can be used in the production of nuclear weapons into a major proliferation system.

The video shows that the diligence of a new Export Compliance Office at the US manufacturer, flagging irregularities in the end-use of their products by the buyer, resulted in the FBI being able to intercept the proliferation system to make significant arrests, including the CEO of Barton Exports and the Iranian buyers.

Barton Exports had said that the carbon fibre was going to be used in the manufacture of golf clubs despite such material being inappropriate for this. The compliance officer also noted that emails received from the buyer had an Iranian IP address.

The moral of the story is to spot and report red flags.

The film is followed by an interview with an Export Compliance Officer for Reliance Steel & Aluminium Company, who wisely advises:

“Ninety-nine percent of export is about managing risk. We reduce risk by applying for licenses. We reduce risk by getting end use and end user information. We reduce risk by doing denied party screenings. We reduce risk by properly filling out our paperwork and following the terms and conditions of our licenses.

“We reduce risk by reaching out to the Bureau or other law enforcement when we see something that doesn’t fit. We reduce risk when we refuse orders that are clearly not right.

“Everything is risk management. And that’s ultimately what we’re doing, is managing risk, reducing that risk to as small as possible, without paralyzing our business. When you’re asked to reach out to law enforcement or include law enforcement, federal law enforcement into your business world, there is a certain level of, ugh, you know?”