Stroock Special Bulletin
"How Well Do You Know Your Customer? Commerce Department Says Third Parties Are Funneling Sensitive Goods to Russia"
As a consequence of the Russian conflict with Ukraine, the United States has sharply restricted trade with Russia, especially exports for use in Russia’s energy and defense sectors.
Now the Commerce Department’s Bureau of Industry and Security (BIS) has expressed concern that Russian buyers of U.S. export-controlled goods, unable to trade directly with U.S. suppliers, have resorted to third country intermediaries that operate as “fronts” funneling unlicensed defense and energy exports from the U.S. to Russia. BIS recently posted guidance specifically directed at this problem.
This Stroock Special Bulletin provides an overview of the BIS guidance, which serves as a salutary warning against the risks of dealing with intermediaries and puts an added burden on exporters to be vigilant.