NVOs and forwarders may face significant fines and potential criminal charges if they fail to report customers who are exporting illegal components to countries like Russia and China, according to the US Department of Commerce. The department is urging these transportation providers to have a thorough understanding of their customers, which can be challenging for co-loaders who handle multiple shipments for different clients in a single container. The responsibility to report suspicious dual-use components now extends beyond electronics manufacturers and other shippers to include transportation providers.
The assistant secretary for export enforcement at the Commerce Department emphasizes that it’s not just electronics manufacturers who need to be aware of this issue. Express carriers and forwarders are also being urged to be vigilant because of the importance of combating illegal exports. This increased scrutiny on NVOs and forwarders is a reflection of the growing political tensions between Western countries and Russia and China, which are affecting the container shipping industry as a whole.
The Wall Street Journal has reported that Chinese-manufactured cranes are being closely examined by the US Congress and the Department of Defense. Additionally, proposed changes to ocean shipping reform would require a US Department of Transportation auditor to assess the potential influence of the Chinese government on the Shanghai Shipping Exchange. This exchange was established in 1996 by Shanghai officials and China’s Ministry of Transport.
Hefty fines and prison time possible
Transportation providers may find themselves in a predicament due to the US government’s efforts to combat espionage threats. They might be unaware or uncertain about the specific requirements imposed on them. To address this, the National Customs Brokers Association of America has informed its members that the Commerce Department will soon provide additional guidance. This guidance will help Non-Vessel Operating Common Carriers (NVOs) and forwarders identify signs in customers’ shipments that indicate the exportation of prohibited components.
The Bureau of Industry and Security (BIS) within the Commerce Department has the authority to impose civil penalties of up to $300,000 per violation, or double the transaction’s value, whichever is greater. Additionally, criminal penalties can result in a maximum of 20 years in prison or fines of up to $1 million per violation, as stated on the BIS website.
Furthermore, the policy clarification on export controls from BIS aims to encourage NVOs and forwarders to report their competitors if they suspect them of supporting illegal shipments. This initiative seeks to level the playing field and reward those who act responsibly. In fact, whistleblowers may be eligible for monetary rewards from the Justice and Treasury departments if their tip leads to prosecution.