Maintaining a global supply chain brings its share of commercial, financial, and regulatory risks. Increasingly, telecommunications companies with global operations and suppliers are finding that U.S. trade control laws affect their operations. For instance, telecommunications companies can inadvertently breach export control or economic sanctions laws when critical suppliers are designated on U.S. or non-U.S. government restricted parties lists, engage in prohibited
transactions with sanctioned countries, or re-export U.S. origin items to prohibited destinations, end users, or end uses. In an interconnected world, even companies that primarily provide products and services within the U.S. can be exposed under trade control laws if they have a global supply chain. This article highlights the three areas of U.S. trade control laws that can affect the operations of U.S. telecommunications companies: export controls, economic sanctions, and anti-boycott restrictions. With U.S. and non-U.S. trade control laws constantly evolving as U.S. foreign and national security policies react to global developments, U.S. telecommunications companies need to remain alert to potential risks in their global activities and implement robust compliance programs to be prepared for sudden shifts in U.S. policy and/or legal requirements.
U.S. export controls laws
U.S. export controls laws govern how U.S. companies may export and re-export items to specified destinations and end-users around the world. These rules apply to dealings with third parties, as well as intra-company transfers. The export, re-export, and transfer of certain U.S. origin commodities, software, and technology requires authorization by the U.S. government and other procedures, even for transfers to U.S. company’s own affiliates and suppliers outside the United States. While most commercial telecommunications items are not highly controlled, there are certain items that require prior authorization. Therefore, it is critical for telecommunications companies to understand how their commodities, software, and technology are controlled. Major companies in the global supply chain for telecommunications and computer networking equipment have been targeted by export enforcement agencies, raising legal risks for U.S. companies who rely on their products and services.
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