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When procuring products, governments around the world historically have shown a preference for domestically produced products. Laws exist that require government funds to be used only for the purchase of domestic products, or at least provide a price preference for such products. The law implementing the U.S. Governments preference for domestic products is known as the Buy American Act (BAA). The State Department in the International Traffic in Arms Regulation (“ITAR”) controls the export of any item, technology or service that it places on the U.S. Munitions List. The Department of Energy has authority over nuclear related items. The Department of Treasury through the Office of Foreign Asset Control (“OFAC”) implements and administers sanctions and embargoes against specific countries such as Cuba, Iran, Iraq, and Yugoslavia. The BAA, however, is not always applicable due to the Trade Agreements Act (TAA). The TAA allows for the procurement of products from certain countries other than the United States. Understanding whether the BAA or TAA applies to your procurement, and whether your products are compliant with the applicable standard, is crucial to avoid liability under the False Claims Act and the possible termination of a contract award.
Determining the country of origin for BAA and TAA purposes can present complex issues of interpretation and application that must be considered on a case-by-case basis, based on determinations of the Bureau of Customs and Border Protection (Customs). Companies that fail to accurately identify whether their products are compliant or non-compliant with the BAA or TAA requirements are at great risk of having their contract award terminated, and possibly even being liable to the U.S. Government under the False Claims Act. In the past few years, violations have cost companies tens of millions of dollars in fines and terminated contracts.
Lawyers at The Nevarez Law Firm have the ability to counsel clients on all obstacles that are products of the BAA and TAA. Complex issues and consideration on a case-by-case basis makes the need for representation vital. Our Firm has the experience, knowledge and expertise to help with the overwhelmingly stringent and complex issues presented by import and export controls.