INTERNATIONAL TRADE Helping you to manage export compliance risks in your supply chain

International Trade Compliance

The world is increasingly reliant on international trade, with companies outsourcing their manufacturing and support services overseas and looking to grow their customer base in export markets. At the same time, global concerns around nuclear proliferation, terrorism, human rights and cyber-security mean that most countries have adopted complex laws that restrict the export of goods from their territories and the ability to do business with certain countries, governments, entities and individuals.

Failure to obtain appropriate export clearances can lead to delays at borders, lost sales, refusal of future export privilege s, reputational damage, civil penalties, criminal fines and, in serious cases, imprisonment. Politicians and lawmakers are also reacting to political change and instability around the world by using targeted sanctions programmes to apply pressure on repressive regimes and to combat behaviour considered unacceptable to the wider international community. These measures can change quickly in light of political developments and often have a broad extraterritorial reach.

This makes for a complex and fast-moving legal framework for engaging in global commerce. Regulatory restrictions, whether implemented by way of export licensing requirements or financial sanctions measures, can affect any business looking to trade internationally in almost all sectors – from manufacturing, defence and oil and gas through to retail and consumer products, healthcare, the digital sector, financial services and insurance. Controls apply not only to the movement of physical goods from one country to another, but also to the sharing of information electronically, the supply of technical services and engineeri ng support, online development platforms and the use of international banking systems. How we can help

Our International Trade specialists can advise on all aspects of export licensing requirements, outbound trade compliance, supply chain security and financial sanctions programmes.

EXPORT COMPLIANCE HEALTH CHECK

In order to help you assess export risks in your business and develop and implement robust compliance procedures, we can provide a one-day Export Compliance Health Check. As part of this, one of our International Trade experts would visit your business or meet those responsible for outbound trade compliance to discuss export controls, sanctions and supply chain risks across the business, provide an update on the latest legal developments and work with stakeholders (whether legal teams, compliance officers, export control officers or management) to enhance internal systems and procedures in order to minimise risks and improve compliance in this complex area.

ONGOING SUPPORT

We can also provide day-to-day support on export compliance matters and help our clients to:

► Export to or enter into projects or transactions with third parties located in countries subject to trade restrictions in compliance with international legal requirements

► Obtain export licences and manage an existing portfolio of export authorisations

► Develop and implement global customer intake, due diligence and trade compliance procedures that sit within existing CRM systems and financial controls

► Provide training to management, staff and agents on trade compliance red flags and customer due diligence processes

► Conduct internal investigations and audits into international trade issues to enhance compliance processes and identify potential exposure

► Interact with regulatory authorities such as the UK Export Control Organisation, HM Revenue and Customs and the Office of Financial Sanctions Implementation

► Interpret and navigate complex and multi-layered international sanctions programmes

► React to international developments such as the Joint Comprehensive Plan of Action with Iran and the introduction of EU and US sanctions on Russia's oil and gas and financial sectors

► Find commercial and pragmatic solutions on how best to manage compliance risks when conducting business with more sensitive jurisdictions

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Our experience

We regularly advise PLCs, blue chip companies and SMEs looking to export to or work with third parties located in countries subject to trade restrictions. We also provide support in developing and implementing appropriate controls and procedures, conducting internal investigations, obtaining and managing export authorisations and dealing with regulatory authorities.

Examples of our experience in this area include:

► Providing extensive advice to a major engineering resources organisation regarding their move to Iran. Our advice covered all aspects of the client's Iran operations, from strategic options assessment to detailed practical advice concerning, for example, the use of US origin software on laptops to be used in-country. We undertook reviews of policies and procedures and advised in relation to proposed supplier contracts, due diligence and sanctions screening.

► Helping an energy sector company to conduct an internal review of export licensing issues in relation to intra-group transfers of certain goods and technologies, following initial enquiries received from the Export Control Organisation. As a result of this, we identified a small number of possible export violations. We assisted in drafting a detailed voluntary disclosure to the authorities outlining the circumstances surrounding the exports and the compliance measures put in place to avoid future issues. This led to no further action being taken by the regulators.

► Reviewing and enhancing customer and transaction due diligence procedures for a European manufacturer of advanced materials following changes to EU and US sanctions measures relating to Russia.

► Advising a manufacturer of engines and power generation systems on the application of EU, UK and US export controls , including end-use controls, to goods and technology specially designed or modified for use in military applications.

► Assisting a materials science PLC in conducting an export classification exercise across its product portfolio, reviewing the application of the UK Strategic Export Control List to a number of complex products and materials.

► Advising a major textiles manufacturer on the application of US and EU sanctions measures to European subsidiaries of US parent companies looking to carry out business in Iran following agreement of the Joint Comprehensive Plan of Action .

► Providing support to a major manufacturing company in relation to new business in Iran. We provided strategic advice on alternative business structures and shared our knowledge of practical and commercial issues in the Iranian market. Together with a US partner firm, we also provided technical advice regarding re-export restrictions on US origin products.

Who to contact

If you are interested in hearing more about how Addleshaw Goddard can support you in developing pragmatic and commercial solutions that enable compliance with international trade controls, please contact our team.

NICHOLA PETERS JACOB BLATCH MATT BUTTER Partner Legal Director (Barrister) Associate 020 7160 3370 020 7160 3026 020 7788 5086 07540 201 707 07739 860 954 07715 237 770

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