Compliance and Foreign Trade Law

We assist companies in complying with regulatory requirements and in establishing effective compliance structures. In international business, it is often not contract law that determines the feasibility of a transaction, but foreign trade law.

Can this transaction take place?

Before any delivery abroad, three checks must be conducted. First, the goods check: Is the item, software, or technology subject to an export permit requirement? Second, the person check: Is any party listed on a sanctions list? Third, the end-use check: Are there indications of a critical end-use?

Particularly tricky are goods with dual-use — items that can be used for both civilian and military purposes. The classification follows technical parameters and is hardly manageable without expertise. The transmission of technology is also frequently overlooked: Even the transfer of design data or technical knowledge to a foreign subsidiary can constitute an export.

Sanctions

Sanction regimes change rapidly and take effect immediately. A business partner who was permissible yesterday may be listed today — resulting in frozen funds and even prohibiting the fulfillment of an existing contract. For companies with supply relationships in multiple countries, this means an ongoing obligation to check, not just a one-time requirement.

We establish checking processes that are integrated into daily operations: screening when creating a new business partner, re-screening before accepting orders and payments, documented approvals in case of anomalies. An important consideration is the issue of indirect control — even a non-listed company can be captured if it is controlled by a listed person.

A compliance system that works

A set of rules alone is not effective. It is crucial whether responsibilities are clearly assigned, whether employees know the rules, and whether violations can be reported without the reporting person fearing disadvantages. Companies of a certain size must maintain an internal reporting channel; its design — confidentiality, deadlines, feedback — is legally mandated.

We develop such systems in a risk-oriented manner. A trading company with sanctions exposure requires different controls than a service provider with public clients. A generic set of rules does not meet either requirement.

Typical scenarios

The intermediary. The goods go to a dealer in a third country, and the actual end-use is unknown. Anyone who does not obtain an end-use declaration and does not document anomalies bears the risk alone.

The corporate guideline. A Turkish parent company sets rules that contradict German data protection or labor law — for example, regarding anonymous reporting or employee monitoring. We adapt such requirements without abandoning the corporate standard.

The suspicion case. A tip is received. Now the first week is crucial: Who checks, what data is secured, what is reported and when? Premature reports are harmful, just as are omissions.

Customs and origin

There is a customs union between the EU and Turkey for commercial goods. It eliminates tariffs but requires proof of customs status through the correct movement certificate — and it does not apply to all product groups. Agricultural products and certain other items follow their own rules.

Errors in classification, origin, or customs value often only become apparent years later during a customs audit, but then retroactively for the entire audit period. We check the classification of disputed goods in advance and utilize, where beneficial, binding information from the customs administration — this creates planning security that an internal assessment does not provide.

Supply chains

Companies with a certain number of employees have due diligence obligations in their supply chains — risk analysis, preventive measures, complaint procedures, and reporting. Indirectly, these obligations continue to apply because large buyers pass them on contractually to their suppliers. We examine which commitments a company can actually fulfill before it signs them.

Money laundering prevention

Not only banks are obligated. Also, goods traders with high cash payments, real estate agents, and legal professions are subject to the obligations of the Money Laundering Act in certain activities: identification of the contracting party, clarification of the beneficial owner, ongoing monitoring of the business relationship, and reporting in case of suspicion.

The report itself is sensitive: it must be submitted immediately, and the transaction must not be executed initially. At the same time, the affected party must not be informed. We clarify whether and when an obligation exists and accompany the submission — a failure to report is subject to fines, and a negligent report harms the business relationship unnecessarily.

Related advisory services

Violations of foreign trade law are subject to fines and criminal penalties; therefore, we work closely with economic criminal defense. In cases of acquisition participation, we also examine investment control, and in contract designs, we review sanction clauses.