Saturday, November 19, 2011

A Cautionary Tale for International Business Lawyers

News reports indicate that technology produced by a United States company is being used by the Syrian government to monitor dissidents. Under the US Export Administration Act and accompanying regulations, as well as US economic sanctions against Syria, it is illegal to sell and export such technology to Syria without a license from the government. The producer of the technology is a California company called Blue Coat Systems. Blue Coat maintains that it did not sell any technology directly to Syria. Syria likely obtained the surveillance equipment though a third party intermediary - a common way in which the export control regulations may be violated. Accordingly, the US government requires exporters to "know their customers" and many exporters require their buyers to sign contracts promising not to resell the technology. However, it is not always possible for a US producer to control what happens to its products once they leave the country. Lawyers who advise such businesses must work with their clients to develop procedures to ensure to the best of their ability that their products are being put to proper end uses by approved end users. A company that does not have such procedures in place may face significant fines and may lose the ability to obtain future export licenses.


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