International Trade

Key points:

  • Leading aircraft manufacturers obtain U.S. government authorization to sell planes to Iran.
  • Issuance of authorizations is notable but may be hard to duplicate in other industries.
  • Even if authorized, companies face practical challenges if pursuing business in Iran.

Boeing and Airbus have overcome another hurdle to tapping into the Iranian market. According to news reports, on September 21, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) issued licenses to both companies to sell aircraft to Iran.  Boeing’s license is said to authorize the sale of 80 planes; Airbus reportedly has been permitted to export 17 aircraft as part of a larger plan to sell 118 aircraft to Iran.  (Although Airbus is a non-U.S. company, to the extent its aircraft contain more than a de minimis amount of U.S.-origin equipment, Airbus would need a specific authorization from OFAC.)Continue Reading Pioneers of the New Frontier: Boeing and Airbus Cleared to Sell Aircraft to Iran

I offered insights for an article outlining ways that the United Kingdom’s exit from the European Union could affect the Washington, D.C. region. My comments are specific to how the transition could impact government contracting and benefit the defense trade.

The full article, “6 Ways Brexit Could Impact Washington Business,” was published by…

Despite a host of unanswered questions, national security concerns and political barriers, Boeing announced on June 22, 2016 that it has signed a Memorandum of Agreement (MOA) with state-owned Iran Air. If finalized, the agreement would mean that Boeing could sell up to 100 commercial aircraft to Iran, at a cost of roughly $25 billion.

Boeing reportedly obtained a license from the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC) to execute the MOA and engage in the negotiations that led to its signing. (OFAC is the U.S. government agency that administers most U.S. economic sanctions on Iran.) That authorization was made possible due to a new licensing policy relating to commercial passenger aircraft that OFAC issued in January 2016, following the July 2015 Joint Comprehensive Plan of Action (JCPOA) between the United States and its allies and Iran. The JCPOA significantly scaled back sanctions against Iran.Continue Reading Iran Update: The Significance of the Boeing Deal

May was a busy month in the world of U.S. defense exports. Perhaps most controversial was President Obama’s decision to terminate the arms embargo against Vietnam. The embargo, in place since 1975, was partially lifted in 2014 to provide Vietnam with greater maritime surveillance and improved security systems. Since then, the United States has contributed $46 million to strengthening Vietnam’s maritime security.

Separately, the U.S. State Department announced that it would begin reviewing applications for licenses to export defense articles and defense services to Cote d’Ivoire, Liberia and Sri Lanka on a case-by-case basis. Those announcements followed three U.N. Security Council Resolutions terminating the U.N. arms embargoes against those nations.Continue Reading The United States Lifts Arms Embargoes Against Vietnam and Other Countries

We recently authored an article outlining the details surrounding the United States’ eased trade restrictions with Cuba. Businesses must carefully analyze the new regulations before venturing into business opportunities in Cuba.

As stated in the article, “in its zeal to ease restrictions, the U.S. government has not always accounted for how to authorise certain activities…

We recently authored an article discussing recent updates in U.S. sanctions and their effect on companies engaged in international business, including cyber-related sanctions and enforcement.

As stated in the article, “…through enforcement actions against both large and small companies, the government continues to underscore that any company conducting business internationally – whether directly or through…

On February 19, 2016, the UK Serious Fraud Office (SFO) convicted Sweett Group plc (Sweett), a London-based construction and professional services company, under Section 7 of the UK Bribery Act. This is the first conviction under Section 7, which requires companies to prevent bribery in the course of business, and the penalty imposed against Sweett – the company had to pay a total of GBP 2.25 million – was minimal in the context of penalties paid under the U.S. Foreign Corrupt Practices Act (FCPA). Yet this action provides further evidence that the SFO may really be able to meaningfully enforce the Bribery Act.

Under Section 7 of the Bribery Act, a company can be found liable if it – or any associated person, subsidiary or entity, anywhere in the world – engages in bribery with the intention of obtaining or retaining business or some sort of commercial advantage. Liability can be established even if company management does not authorize or encourage, and is not even aware of, the illicit conduct. (While a company will have a full defense if it can show that it maintained adequate procedures to prevent bribery, as appears evident from the resolution in this matter, Sweett was unable to present such a defense.)

According to news reports, the SFO began investigating Sweett, which is listed on the Alternative Investment Market (or AIM) in London, in July 2014. Through its investigation, the SFO found that a Sweett subsidiary in the United Arab Emirates (UAE), Cyril Sweett International Limited (Cyril), had made corrupt payments to the Vice Chairman of Al Ain Ahlia Insurance Company (AAAI) to help secure a contract to build a hotel in Abu Dhabi. After pleading guilty in December 2015, Sweett was ordered to pay a GBP 1.4 million fine, a GBP 851,152 confiscation amount and GBP 95,000 in SFO prosecution costs.

The SFO reportedly is continuing its investigation of individuals involved in the scheme.

Lessons Learned. We derive several interesting lessons from this action.Continue Reading SFO Convicts UK Company for Middle East Bribery

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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