DHL Fined $9.44 Million for Role in Exports and Not Keeping Records - Export Compliance Training Institute

By: Danielle McClellan

Most people understand that the exporter of a good is usually the person who is responsible for export compliance; the exporter determines if the good needs a license and ensures that all records pertaining to the export are kept according to EAR requirements. Recently BIS and OFAC have proven, through civil penalties, that the exporter of the goods is not the only one responsible for export compliance, especially record keeping requirements.

BIS and OFAC recently entered into a joint settlement agreement with DPWN Holdings (USA), Inc. formerly known as DHL Holdings Inc. and DHL Express. The company has agreed to pay a civil penalty of $9,444,744 and must hire an unaffiliated third-party consultant to conduct external audits of all of DHL’s exports and reexports to Iran, Syria and Sudan from March 2007 through December 2011. DHL must then provide these audit reports to BIS. This agreement proves that all parties to an export transaction, including agents are required to comply with the EAR.

BIS alleges the following:

• DHL caused, aided and abetted the export of prohibited items to Syria on eight different occasions;
• DHL failed to comply with EAR recordkeeping requirements with regard to 90 exports, they failed to maintain airway bills and other documents for the EAR 5 year requirement after shipment

OFAC alleges:

• Between August 2002 and March 2007, DHL made more than 300 shipments to Iran and Sudan in violation of the ITR and SSR
• Between December 2002 and April 2006, DHL failed to maintain the required records with respect to shipments to Iran; in violation of the “Reporting, Procedures and Penalties Regulations” (RPPR)
• DHL shipped 63 unlicensed shipments of merchandise to Iran
• DHL imported an unlicensed shipment of merchandise from Iran
• The company exported or attempted to export 4 unlicensed exports to Sudan
• Between August 2002 and August 2007 DHL did not maintain shipping records for 32,228 exports to Iran

BIS and OFAC’s press release of August 6, 2009 emphasized how important it is that all exporters and logistics companies comply with recordkeeping requirements. BIS stated that, “large scale compliance breakdowns lead to significant sanctions aimed at ensuring that freight forwarders put into place and maintain necessary measures to meet their compliance responsibilities.”All logistic providers should take careful notice.

More information:

• BIS News Release
• BIS Agreement