On December 12 the former CEO of a consolidation and shipping service pleaded guilty to felony smuggling and admitted to 166 administrative violations of U.S. export control laws. Among other offenses, Eric Baird of Access USA Shipping admitted to regularly changing the values and descriptions of items on export documentation, once describing laser sights as “tools and hardware” and rifle scopes as “sporting goods” or “tools, hand tools”. Additionally, Baird initiated a “personal shopper” program wherein employees would use Baird’s personal credit card, or credit cards they were directed to apply for, to purchase items for foreign customers while claiming to be the U.S. end user, and allowed for unlicensed exports of controlled items.

The moral for manufacturers and exporters and in particular freight forwarders is to maintain a vigilant compliance program and be aware of red flags. In the case of Access USA, who frequently removed or altered packaging label, a freight forwarder might not know they were illegally exporting controlled items. BIS (Bureau of Industry and Security) recommends: “Shipping and freight forwarding companies must take sufficient steps to ensure that they are always in compliance with United States law, in order to protect our borders and prevent potentially dangerous items from reaching the hands of our adversaries.” Likewise, while a US company may not have liability for the actions of US based customer after the fact, diligent scrutiny of transactions involving controlled items can help to avoid embarrassing entanglements with nefarious bad actors. BIS has a list of red flag indicators on its website.