Export Control

Export Control

In a contract between a seller of goods and a customer who may also resell such goods to its own customers, the parties may agree to terms that make the customer/reseller responsible and liable for complying with U.S. export control laws, which are the laws and regulations restricting how technology, data, items, and materials are physically or electronically exported, shipped, transmitted, transferred, or shared with foreign countries, persons, or entities for purposes of protecting the national security and other interests of the United States.

For example, the following exemplar places liability (including indemnification obligations owed to the seller) squarely on the customer/reseller (the exporting party), for breach of applicable requirements issued by the principal U.S. agencies that prohibit the unlicensed export of certain commodities or information for reasons of national security or trade protection:

Exemplar C32-1

The sale by Customer of any Inventory, and the underlying transaction related thereto, shall comply with all applicable laws, rules, regulations and orders of all governmental bodies having jurisdiction over such transaction, including but not limited to, all relevant trade controls requirements issued by the U.S. Office of Foreign Asset Control (“OFAC”), the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) or the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”), and no such sale or transaction shall involve dealings between Customer and any person or entity that a U.S. company would be prohibited from dealing with under any laws or regulations of the United States. In addition to any other right that Supplier may have under this Section or any other Section of this Agreement, any breach by Customer of the provisions of this Section shall require Customer to indemnify and hold Supplier harmless from any and all costs, damages, judgments, penalties, sanctions or expenses that may be imposed upon, or incurred by, Supplier as a result of Supplier’s provision of any item of Inventory relating to the sale or transaction which is the subject of such breach by Customer.