Case Studies

Reaching Agreement on Compliance with International Sanctions

The Issue

After the United States and European Union imposed sanctions on Iran, an overseas client that imported, refined and distributed large quantities of Iranian petroleum products sought urgent assistance. The client faced immense pressure from its customers to meet current supply requirements. At the outset of our representation, the client could not rely on its own government, an important U.S. ally, to adequately protect the company’s interests.

The Strategy

In consultations with the client, we determined that the best initial course of action was to seek a temporary waiver of sanctions from the Office of Foreign Assets Control (OFAC), with the support of the State Department, in exchange for the client’s agreement to significantly reduce imports of Iranian oil. Our longer term strategy was to reach agreement on a specific percentage reduction in oil imports that would justify ongoing U.S. sanction waivers.

The Impact

After intense negotiations, the client reached agreement with OFAC and the State Department to cut its imports of Iranian petroleum products by 50 percent for the indefinite future, entitling it to continuing waivers of U.S. sanctions. During the discussions leading up to this agreement, the client and its government, as a demonstration of good faith agreed to eliminate all Iranian petroleum imports for a period of two months. As a result of these efforts, the client was able to able to meet its ongoing supply requirements at a reduced level and thereby avoid legal retaliation from customers as well as maintain its commercial credibility and excellent reputation.

Instituting an Export Control Compliance Program

The Issue

The client expressed concern that its plan to begin exporting goods overseas could lead to violations of U.S. export control laws through inadvertently sharing export-controlled technical information or inadvertently shipping goods to a foreign customer when the client should have known of diversion risks.

The Strategy

We advised the client on establishing a strong export compliance program to meet U.S. regulatory requirements, protect its business interests, and increase the efficiency of its export operations. This program confirmed the commitment of the client’s management to upholding export controls, created an export compliance team, trained employees in compliance requirements, put in place a system to track shipments, and established internal company procedures to escalate possible violations to management for expeditious resolution.

The Impact

The client has implemented an effective export control compliance program, which to date has prevented any violations of export control regulations and mitigated the potential risk of large fines or criminal penalties. Having the compliance program in place and well integrated into daily operations has encouraged the client to expand significantly its foreign exports.

Achieving a Mutually Beneficial Resolution of an International Trade Dispute

The Issue

We organized strategic outreach to a key foreign government that had already stockpiled supplies of the client’s drug but was actively debating whether to meet pressing additional needs by authorizing local production of a generic equivalent. In consultations with key government agencies, the client emphasized its commitment to provide sufficient future drug supplies, coordinate closely with the government agencies, and discuss licensing the drug at a concessional rate for local manufacture.

The Strategy

We organized strategic outreach to a key foreign government that had already stockpiled supplies of the client’s drug but was actively debating whether to meet pressing additional needs by authorizing local production of a generic equivalent. In consultations with key government agencies, the client emphasized its commitment to provide sufficient future drug supplies, coordinate closely with the government agencies, and discuss licensing the drug at a concessional rate for local manufacture.

The Impact

The client’s outreach strategy proved successful. The lines of communication it established allayed fears on both sides, enabled the foreign government to increase significantly its drug stockpile to counter the flu outbreak and laid the basis for licensing agreements for local manufacture that remain in effect today.

Avoiding Seizure of Goods by U.S. Customs

The Issue

A client that regularly imported goods from overseas was informed by U.S. Customs that the agency had imposed “detention” of a large shipment on the grounds the goods were counterfeit and infringed existing copyrights and trademarks. Seizure of the goods by the government appeared imminent.

The Strategy

We determined to move quickly to prevent the legal issue shifting from detention to seizure, which could lead to months of delay before the client was able to retrieve its goods. We used the 30-day detention period to provide evidence satisfying the government that the goods in question were not, in fact, counterfeit and did not infringe any copyrights or trademarks.

The Impact

The client avoided a seizure of its imported goods by U.S. Customs which could have led to significant financial losses and damage to the client’s reputation in the business community. As a result of the unexpected detention of goods, the client adopted additional internal safeguards and procedures to ensure it could quickly verify that the goods it imported were entirely genuine and not counterfeit.

Mitigating Harsh Regulatory Actions by a Foreign Government

The Issue

A prestigious U.S. educational testing company that provided English language examinations for over ten years in an Asian country suddenly found its contractual agreements under pressure from a government ministry promoting the ministry’s own language tests. The client stood to lose a major investment and feared that adverse government action could put its contracts at risk in a number of neighboring countries as well

The Strategy

We worked closely with the client to position it as a partner of the ministry in developing sophisticated and accurate language tests that could help students obtain overseas educational opportunities. This approach aimed to mitigate underlying resentment against the U.S. company that was perceived as imposing its own standards on the country. We further highlighted the mutually beneficial legal agreements anchoring the client’s presence as well as the country’s laws and policies barring discrimination against foreign enterprises.

The Outcome

With support from the ministry, the client renewed a multiyear contract to provide educational testing services. The client took on a new commitment, in line with its corporate social responsibility policy, to assist the ministry, on an ongoing basis, in developing effective educational testing procedures – which in turn improved the client’s reputation in the country.

Joining the U.S. Customs Trade Partnership Against Terrorism to Protect a Client’s Business Interests

The Issue

The client – a U.S. importer of perishable goods from Europe – found its business under threat from regular delays in customs clearance. The delays significantly increased delivery times to demanding customers, making it virtually impossible to carry out just-in-time inventory management, and heightened the risk of spoiling the perishable goods leading to major losses.

The Strategy

To rectify the serious logistics problems the client was experiencing, we immediately determined it was critical that the client participate in the Customs Trade Partnership Against Terrorism (CTPAT). This program creates a close working relationship between companies and U.S. Customs by ensuring those companies implement the supply chain security measures that Customs desires. In return, Customs provides a number of critical benefits including a reduced number of Customs examinations, accelerated customs processing times, and expedited border crossing privileges.

The Impact

After the client successfully completed the application process for CTPAT, it encountered reduced delays and customs inspections, allowing shorter delivery and border crossing times. This in turn reduced risk and logistics costs while enabling the client to implement more efficiently its just-in-time inventory management strategy. Above all, CTPTAT participation mitigated the very serious risk of the client’s goods perishing in transit.

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