I am often asked why export controls and economic sanctions are important. The simple answer is that if you export a controlled good or export goods to a sanctioned country, your company could become front page news. If that should happen because your company manufactured and sold goods that are used to kill a Canadian soldier, your company's reputation (and maybe your reputation) will be damaged.

Even if no one dies, your company's reputation may suffer damage to its brand. Or, customer trust in your company may be damaged. Things may never be the same.

Your company may lose business opportunities. For example, and this is a real possibility, if your company is under investigation, Canada may not issue your company other export permits. You might not be able to sell your goods into export markets if you cannot get an export permit. Other countries (e.g., the United States) may learn that you have breached Canada's export controls and/or economic sanctions laws and put your company on the SDN (Specially Designated Nationals) List. If this should happen, U.S. companies will not be able to sell goods to your company. Also, financial institutions will not want to enter into transactions involving your company.

Let's go back to U.S. companies not being able to sell to your company. This could shut down your production if you cannot obtain the inputs you require to manufacture your goods. This slowdown in the supply chain may take place for many months as you work to resolve the issues.

Resolving the issues will likely mean money spent on lawyers. There will be hours on internal investigations. The RCMP could come and raid your offices. You may see documents leave your premises in evidence boxes.

Resolving the issues may mean new reporting requirements. You may have to spend significant amounts of money on new software. You may have to change how you do business. You may have to pay penalties for the non-compliance. There could be a public criminal trial.

Have I convinced you yet that export controls and economic sanctions laws should be taken very seriously? Export controls and economic sanctions are possibly the number one non-financial risk an export business faces.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.