When is carrying on business in a foreign country prohibited under US Law?
Embargoes are prohibitions against carrying on business transactions with certain countries. The Office of Foreign Assets Control (OFAC), a division of the US Department of Treasury, is charged with carrying out embargoes and targeted sanctions against countries. Targeted sanctions are restrictions on business relations with a country that falls short of a total embargo. OFAC may designate persons or companies as specially designated nationals (SDNs). These individuals or companies are treated with the same restrictions as the country to which they are designated. This keeps US citizens or businesses from using intermediaries to carry on business with a company subject to embargo. In order to carry on business with individuals from these countries (or purchase goods or services derived from these countries), the US company must request a license from OFAC.
Note: Many western nations, including the United States, were previously members of the Coordinating Committee for Multilateral Export Controls. This committee sought to control global exports among member countries. It was dissolved in 1994.
Example: The US currently has embargoes against Iran, Cuba, and the Sudan. The long-standing embargo against Cuba is the subject of controversy. The US has targeted sanctions against Syria and North Korea.
Related Topics
- International Law (Intro)
- What is International Law?
- What are the types of international law?
- United Nations
- United Nations Commission on International Trade law
- United Nations Conference on Trade Development
- North Atlantic Treaty Organization
- International Monetary Fund
- Other Economic Development Organizations
- World Bank
- World Trade Organization
- European Union
- What international courts exist and what are their functions?
- What are the methods of carrying on international business?
- What are the legal risks associated with carrying on international business?
- What major international agreements affect international trade?
- When is carrying on business in a foreign country prohibited by US law?
- What is the significance of boycotts between foreign countries?
- What US laws apply to limit business transactions in foreign countries?
- What regulations apply to exports from the United States?
- What are the legal limitations on importing goods into the United States?
- How are private international business agreements generally enforced?
- How do parties determine the rules, location, and method of resolving disputes?