Export Rights and Responsibilities of a U.S. Owned Foreign Company

Export Rights and Responsibilities of a U.S. Owned Foreign Company

Foreign companies which are owned by a US company (for example, foreign subsidiaries) are subject to the rights and restrictions which are placed on all foreign companies. The foreign subsidiary must, as any foreign company must, comply with all restrictions and limitations placed on access to commodities or technical data that is provided to their company by a US company or US commodities provided to their company by any other company or entity (US or non-US).

A foreign company does have additional restrictions because the ownership or control by a US company restricts (with some exceptions) their carrying out any business with US sanctioned or boycotted countries, such as Cuba, Iran, North Korea, Sudan or Syria, or with restricted parties (companies, persons or organizations).  Foreign subsidiaries must also comply with US anti-boycott laws and regulations in their conduct of business involving any "activity in US commerce."

When a US company obtains appropriate end-use or end-user certification from a foreign customer or consignee (and, as required, US export licensing authority), and upon shipment qualifies the required controls for the commodities and/or technical data being exported, the US company has fulfilled their obligation in complying with US export laws and regulations.

US export or transfer of technical data to a foreign subsidiary presents higher expectations from the US Government of the foreign subsidiary's control and compliance with US export rights and/or restrictions. A US company should ensure that the actions of their foreign subsidiaries and facilities relating to their business involvement with US commodities and technology comply with US export laws and regulations, including applicable obligations to US sanctions and boycotts.

This publication is for informational purposes only and is not offered as legal advice as to any particular matter. No reader should act on the basis of this publication without seeking appropriate professional advice as to the particular facts and applicable law involved.