How to Instruct Non-U.S. Firearm and Ammunition Resellers to Conduct Screens for Designated Narcotics Traffickers

By March 2, 2021 April 1st, 2021 Firearm Export Sales
How to Instruct Non-U.S. Firearm and Ammunition Resellers to Conduct Screens for Designated Narcotics Traffickers

Did you know that if you export non-military rifles, handguns, parts or ammunition for resale in another country, your customer is required to screen its customers against the U.S. Specially Designated Nationals list?

It’s true. It says so right there in the conditions included in your approved Commerce Department export licenses:

The items authorized for export by this license may not be transferred to individuals identified on the Department of Treasury, Office of Foreign Assets Controls (OFAC) Specially Designated Nationals (SDN) List with the bracketed suffixes [SDNT] or [SDNTK]. The SDN List is available at: https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/sdn_data.aspx.

As an exporter, how should you convey this requirement (we’ll call it the “SDN Condition”) to your international dealers? Do you need to do more than inform them of the requirement?

In this post, we explain the SDN Condition and offer three simple recommendations for fulfilling your obligations. We also include a link to a free video we have prepared for firearm dealers in other countries. You can share it with them. The video gives step-by-step instructions and can display subtitles in any language.

 

 

What Does Your Export License Require You to Do?

When you export rifles, handguns, parts or ammunition for resale under a Department of Commerce export license, you are required to take reasonable steps to ensure that your international customers comply with the SDN Condition. The SDN Condition is included in every export license issued for 0A501 or 0A505 items. That means your customers who resell or otherwise transfer the firearms and ammunition you export to them must screen their customers against the SDN list.

Failure to inform your international dealer customers of this condition of your export license is a violation of the license and can lead to enforcement action under Part 764 of the Export Administration Regulations (EAR).

The need for non-U.S. dealers to comply with the SDN Condition underscores the importance of conducting due diligence before exporting firearms, parts, or ammunition to dealers in other countries. Among other reasons for conducting due diligence, you want to have a basis for expecting your dealers to comply with the requirement to screen their customers.

How Should You Tell Your Foreign Dealers They Must Conduct SDN Screens?

The export license condition does not specify the means for communicating the requirement. What should you do?

Section 758.6 of the EAR says that required destination control statements should be incorporated “as an integral part of the commercial invoice.” Exporters probably could not be faulted if they were to communicate the SDN Condition in the same place, immediately following the destination control statement, using a statement along the lines of the following:

These items may not be sold or transferred to individuals identified on the Department of Treasury, Office of Foreign Assets Controls (OFAC) Specially Designated Nationals (SDN) List with the bracketed suffixes [SDNT] or [SDNTK]. The SDN List is available at: https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/sdn_data.aspx.

There is no limit to how many ways you are permitted to draw your customers’ attention to the importance of conducting SDN screens. Feel free to use multiple means, such as inserting the requirement in dealer contracts, quotes, bids, pro forma invoices, your website or any other appropriate communication.

The test to apply is, “How can I most effectively tell my customer that it must conduct SDN screens?”

Is Additional Action Required?EasyExport now connects U.S. exporters to 82 Countries.

To be on the safe side, it is prudent to view communicating the requirement to conduct SDN screens as fulfilling only part of your obligation as an exporter.

Consider what else you can do to ensure that your foreign customers conduct SDN screens when required.

When you can, providing compliance training and resources to international customers is always a good idea. To make this easy for EasyExport™ customers, we have posted a training video for the dealers they sell to in other countries. You are welcome to use it, too. Viewers can use the Closed Caption feature to display auto-translated subtitles in any language. EasyExport does not process ammunition exports, so ammunition is not referenced in the video, but the instructions are equally applicable to foreign resellers of U.S.-origin 0A505 ammunition.

Keep Records

Record-keeping is always important in the compliance field. Take steps to ensure that you can show the U.S. Government the actions you took to ensure compliance by your customers with this license requirement. Also tell your customers to keep records so they can prove they did what they were supposed to do.

Worried you won’t do things right? If you sell firearms, parts, accessories, or optics online and want a safe and cost-effective way to export them without making mistakes, EasyExport probably can help. Schedule a call to learn more.

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