Penalties for breaching the US Department of Commerce’s import and export regulations have surged over the past six months, with further increases set to take effect next week.
The heightened penalties include violations related to the import or export of seafood and wildlife, breaches of foreign trade zone rules, and infractions under the 2018 Export Controls Act. While most penalty increases are relatively modest, often rising by a few hundred dollars per violation, the uptick comes amid growing scrutiny and enforcement actions within the supply chain sector.
Hugo Pakula, CEO of Tru Identity and a seasoned customs expert, emphasised the critical importance of compliance in the current regulatory climate. “It has never been more important to stay ahead of non-compliance – and it has never been more costly [not to comply],” he stated in a LinkedIn post. Pakula also highlighted that the updated penalties would apply retroactively to violations occurring before the 15 January implementation date.
According to trade law firm Sandler, Travis & Rosenberg, the maximum penalty under the 2018 Export Controls Act will increase from $364,992 to $374,474. Although these changes may appear minor, they signal a broader trend of escalating compliance risks for businesses engaged in global trade.
Export and cross-border ecommerce expert Silvia Carter observed that constant regulatory updates have heightened financial risks for shippers. Similarly, Kyle Grobler, global trade compliance manager at TE Connectivity, described the rising penalties as a deterrent, urging companies to adopt a proactive compliance approach. “I have seen more fines and penalties over the last six months of my career than ever before,” Grobler noted, reinforcing the need for vigilance.
The penalty hikes follow a joint advisory issued in March by the departments of commerce, justice, and treasury. The advisory warned that “malign regimes and other bad actors” could exploit the interconnected global marketplace to threaten US national security, underscoring the importance of robust compliance measures.
With stricter enforcement and increasing financial consequences, experts are urging businesses to prioritise compliance to avoid the costly repercussions of regulatory breaches.
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