Export Controls & Sanctions Compliance Flashcards

Which country is subject to one of the most comprehensive US trade embargoes, prohibiting nearly all commercial transactions without specific OFAC authorization?

Answer: Cuba

Cuba has been subject to a comprehensive US trade embargo for decades, enforced by OFAC, with very limited exceptions for authorized humanitarian, journalistic, or specific commercial activities.

What is the US Munitions List (USML)?

Answer: The list of defense articles, defense services, and related technical data controlled under ITAR

The USML, maintained by DDTC, enumerates all defense articles, defense services, and related technical data subject to ITAR controls, requiring State Department authorization before export.

An effective export compliance program (ECP) must include which combination of elements?

Answer: Management commitment, risk assessment, written policies and procedures, training, and internal auditing

A robust ECP requires management commitment, ongoing risk assessment, documented policies, employee training, export authorization procedures, recordkeeping, and periodic internal audits to demonstrate and maintain compliance.

Under US export control rules, what is a 'reexport'?

Answer: The export of a US-origin item (or qualifying foreign item) from one foreign country to another

A reexport is the shipment of a US-origin item — or a foreign-made item containing US-controlled content above de minimis thresholds — from one foreign country to another, which may still require US government authorization.

What is the primary purpose of a post-shipment end-use verification conducted by BIS?

Answer: To confirm that exported items are being used for their authorized purpose and have not been diverted

BIS conducts post-shipment verifications to confirm that US-origin controlled items are being used as stated in the export license application and have not been diverted to unauthorized parties or uses.

Under the EAR's 'de minimis' rule, foreign-made products are generally NOT subject to US reexport controls when:

Answer: US-controlled content comprises less than a specified threshold percentage of the foreign item's total value

The de minimis rule provides that foreign-made items fall outside US reexport jurisdiction when they contain US-origin controlled content below the applicable threshold (typically 10% for embargoed countries or 25% for others).

Which action best demonstrates 'know your customer' (KYC) due diligence in export compliance?

Answer: Screening the customer against the Consolidated Screening List, verifying end-use via a questionnaire, and documenting the findings

Effective KYC due diligence requires actively verifying the customer's identity, legitimacy, and intended end-use through screening, questionnaires, and documentation — not passive reliance on third parties or unverified assurances.