Sectors

OFAC Compliance for Boat & Auto Dealerships

From its earliest days, the automotive industry has transacted across international borders whether as a local manufacturer or distributor.

Today's auto manufacturers possess global networks of suppliers, vendors, manufacturing plants and sales distributors. Compliance risks are highest in areas relating to international sales alignments, channel marketing, and vendor and supplier contracts.

In instances where certain technologies cannot be manufactured in the host country, it's necessary to bring these from elsewhere. Problems usually arise though, when having to deal with the host countries protectionist tariffs. Traditionally, manufacturers would hire agents who specialized in dealing with customs officials and the regulations governing imports. However this practice is coming under increased scrutiny because of the inherent risk of bribery to speed up the importation process.

As underscored by recent enforcement actions, violations of the Foreign Corrupt Practices Act have the ability to impact not only a transaction's timing and successful completion, but also its ultimate price. In some cases, infractions can result in significant penalties, with costs being borne by the acquiring company. In these instances, there is often no recourse to acquisition agreement attestations, recoveries, or setoffs.