Understanding Sanctions and Trade Compliance

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From time to time, the U.S. and other countries and jurisdictions (such as the European Union) restrict or prohibit trade dealings with certain countries, entities, and individuals.

These restrictions may include bans on exports, imports, travel, investments, and other financial dealings with sanctioned parties.

As employees of a U.S.-headquartered company with global business operations, we are required by law to comply with all U.S. trade sanctions programs and controls in every country in which we do business.

Upon completion of this course, you will be able to:

• Describe the environment in which we operate,
• Understand trade sanctions and why U.S. trade sanctions apply to everyone at Abbott,
• Understand Abbott’s expectations for compliance with U.S. trade sanctions and how to recognize warning signs of potential violations,
• Understand the importance of screening prospective third-party partners, and
• Know where to go for help and support.

[1] Welcome

1 minute

[2] Introduction to Trade Sanctions

5 minutes

[3] Laws and Regulations

4 minutes

[4] The Impact on Our Business

4 minutes

[5] Our Responsibilities

1 minute

[6] Your Commitment

1 minute

[7] Knowledge Check

5 minutes

Learning Progress

This Topic is now available.

Trade sanctions, also known as economic sanctions, are trade restrictions imposed by the government of one or more countries on another country, organization, group, or individual.

For example, one country may restrict certain exports, implement controls over particular goods, freeze or block assets, or prohibit trade dealings with another country, entity, or individual altogether.

Governments impose trade sanctions with the purpose of changing the behavior and policy of targeted countries or individuals that endanger their interests or violate international norms of behavior.

Because trade sanctions make it more difficult or impossible for the sanctioned country or individual to trade with the country imposing sanctions, they usually cause negative economic consequences for the targeted countries or individuals.

Trade sanctions are typically imposed to advance foreign policy or national security goals.

For example, the U.S. and other countries impose sanctions on countries or individuals that sponsor terrorism, commit human rights violations on their people, or are known drug traffickers.

Violating sanctions, or engaging in any activity designed to circumvent them, is a serious offense which can result in severe civil and criminal penalties for companies and individuals, including fines and imprisonment.

As a U.S.-headquartered company, Abbott and its employees are required by law to comply with all U.S. trade sanctions programs and trade controls in every country in which Abbott operates.

Abbott is committed to conducting business according to the highest legal and ethical standards.

Because of this, all Abbott employees must comply with U.S. trade sanctions programs. This requirement is reflected in the Code of Business Conduct and Global Trade Compliance policies and procedures.

Here is what our Code of Business Conduct says about adherence to trade regulations:

We adhere to all applicable trade regulations, such as export and import controls issued by governments for foreign policy and national security reasons. Trade regulations include sanctions, restrictions on exporting of certain products, and prohibitions on conducting business with certain individuals, groups or entities.

Our Global Trade Compliance policies and procedures provide detailed guidance on how to comply with trade sanctions.

For a full list of trade policies and procedures, please refer to the Resources section of this course.

Those required to comply with U.S. sanctions programs are referred to as “U.S. persons” and include:

• Companies incorporated in or based in the U.S. (including Puerto Rico),
• Employees of such U.S. companies (including those based in Puerto Rico), as well as employees of their non-U.S. branches,
• U.S. citizens or U.S. permanent residents, regardless of where they are located,
• Anyone who is in the U.S., including someone traveling on vacation, and
• Any foreign subsidiary of a U.S.-headquartered company or a U.S.-owned or -controlled entity.

In practice, the category of U.S. persons is broad and far-reaching, which is why Abbott requires all employees (including foreign subsidiaries and affiliates and their employees) to comply with these programs.

Besides U.S. trade sanctions programs, Abbott may also be subject to sanctions imposed under the local laws of the other countries in which we do business.

Sanctions mandated by the United Nations or the European Union may also impose restrictions on Abbott. This course focuses specifically on U.S. trade sanctions programs and the types of activities covered by each program. If you have questions about trade sanctions programs in other countries, please contact exports@abbott.com.

Quick Check

Test your knowledge now!

Because you do not work in the U.S., the topic of trade sanctions is not relevant to you.

True.

False.

Submit

That's correct!

That's not correct!

As a U.S.-headquartered company, Abbott and its employees are required by law to comply with all U.S. trade sanctions programs and trade controls in every country in which Abbott operates.

Michelle, an account manager at a small, Colombian diagnostics company recently acquired by Abbott, receives an order for assays from a customer in Cuba. The U.S. has trade sanctions against Cuba, while Colombia does not. Since Michelle is a Colombian citizen working for a Colombian subsidiary, and Colombia has no trade sanctions against Cuba, would it be okay for Michelle to fill the order?

Yes. As a Colombian citizen living in Colombia, Michelle is not defined as a “U.S. person.” Therefore, she is not obligated to comply with the sanctions program.

Yes. While the U.S. trade sanction applies to U.S. companies operating in the U.S, it does not apply to their foreign subsidiaries.

No. Even though Michelle is a Colombian citizen living in Colombia, she is working for a subsidiary of a U.S. corporation and is therefore required to comply with the U.S. embargo of Cuba.

Submit

That's correct!

That's not correct!

Even though Michelle isn't a U.S. citizen or resident, her employer is a subsidiary of Abbott. As a result, Michelle and her company are considered “U.S. persons” under the Cuba sanctions program. Therefore, she may not fill the order.

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Review

Take a moment to review some of the key concepts in this section.

Trade Sanctions Defined

Trade sanctions, also known as economic sanctions, are trade restrictions imposed by the government of one or more countries on another country, organization, group, or individual.

Violating Trade Sanctions

Violating sanctions, or engaging in any activity designed to circumvent them, is a serious offense which can result in severe civil and criminal penalties for companies and individuals, including fines and imprisonment.

Who Is Required to Comply with U.S. Trade Sanctions

Those required to comply with U.S. sanctions programs are referred to as “U.S. persons.” In practice, the category of U.S. persons is broad and far-reaching, which is why Abbott requires all employees (including foreign subsidiaries and affiliates and their employees) to comply with these programs.

[1] Welcome

1 minute

[2] Introduction to Trade Sanctions

5 minutes

[3] Laws and Regulations

4 minutes

[4] The Impact on Our Business

4 minutes

[5] Our Responsibilities

1 minute

[6] Your Commitment

1 minute

[7] Knowledge Check

5 minutes

Learning Progress

This Topic is now available.

In the U.S., trade sanctions programs are administered and enforced by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) and U.S. Commerce Department’s Bureau of Industry and Security (BIS) as part of foreign and national security efforts.

U.S. trade sanctions programs fall into three broad categories:

• Comprehensive sanctions,
• Limited sanctions, and
• List-based sanctions.

Comprehensive sanctions, also commonly known as embargoes, prohibit nearly all transactions with a sanctioned country or territory including their governments, residents, and entities organized in or operating from the sanctioned country.

Comprehensive sanctions generally prohibit:

• Imports from the sanctioned country,
• Exports or re-exports to the sanctioned country, and
• Business negotiations or other financial dealings with or involving the sanctioned country or its government.

Did you know?

Comprehensive country sanctions prohibit most dealings with a country’s citizens and companies, even if they are not directly connected to the government of that country.

Sanctioned governments may also own or control companies that are outside their borders.

Comprehensive country sanctions generally prohibit “U.S. persons” from engaging in activities with these companies, wherever they are located.

Countries that are currently subject to U.S. comprehensive sanctions include:

• Cuba,
• Iran,
• North Korea,
• Certain Ukraine Regions (Crimea, Donetsk People’s Republic, and Luhansk People’s Republic) and
• Syria.

If you plan to conduct business with any of these countries, you should first contact exports@abbott.com.

Some other countries are subject to limited or targeted sanctions rather than comprehensive sanctions.

However, international events may cause the U.S. government to change a country’s status under its sanctions programs. This means some countries that are currently under limited sanctions could face more comprehensive sanctions in the future.

Limited sanctions are confined to certain activities or specifically named targets.

For example, limited sanctions might just restrict the import and export of certain products. Or, they might only target the government of certain countries.

Some common countries and territories subject to limited U.S. sanctions programs include:

• Afghanistan
• Burma (Myanmar)
• China (Incl. Hong Kong)
• Iraq
• Libya
• Nicaragua
• Russia
• Somalia
• West Bank
• Yemen

Visit Sanctions Programs and Country Information | Office of Foreign Assets Control (treasury.gov), for a full listing of OFAC sanctions programs.

If you are unsure of the status of a particular country, contact exports@abbott.com.

The majority of recent U.S. government sanctions are list-based sanctions that target individuals or entities in certain countries.

These individuals or entities are typically involved in terrorism, drug trafficking, nuclear proliferation, or acting for or on behalf of targeted countries. They are designated to an OFAC list of Specially Designated Nationals and Blocked Persons (“SDNs”).

Collectively, all these targeted entities, organizations, and people are commonly referred to as restricted, denied, or prohibited parties.

OFAC publishes the SDN list, which includes over 15,000 names of companies and individuals. The SDN list is dynamic and is updated constantly.

SDNs may move from country to country, and U.S. persons are prohibited from dealing with them wherever they are located.

In addition, any entity owned 50 percent or more by one or more SDNs is also considered a prohibited party regardless of whether that entity is designated by name on the SDN list. U.S. persons are prohibited from engaging in nearly all activities with such entities.

The Bureau of Industry and Security (BIS) and the U.S. Department of State also maintain lists of restricted parties, including the Denied Persons List, the Entity List, the Unverified List, and the Debarred Party List.

Later in this course, you will learn about screening your prospective and existing trade partners against the various restricted party lists.

Quick Check

Test your knowledge now!

Mei, a sales manager at Abbott, is conducting restricted party screening on Zhejiang Medical Supply Company, a prospective new distributor in China. Although the company does not appear on any restricted party list, the customer profile states that the company is 75% owned by a board member, who is on OFAC’s list of SDNs. Assuming the distributor does not appear on any restricted party list, would it be okay to do business with this company?

Yes, probably. Since the company itself does not appear on any restricted party list, it is ok to do business with it.

No, probably not. Even though the company is not on any restricted party list, it appears to be owned by an SDN.

Submit

That's correct!

That's not correct!

Even though the company itself is not named on the restricted party lists, it appears to be owned by an SDN and requires further investigation.

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Review

Take a moment to review some of the key concepts in this section.

Comprehensive Sanctions

Comprehensive sanctions, also commonly known as embargoes, prohibit nearly all transactions with a sanctioned country or territory including their governments, residents, and entities organized in or operating from the sanctioned country.

Limited Sanctions

Limited sanctions are confined to certain activities or specifically named targets. For example, limited sanctions might just restrict the import and export of certain products. Or, they might only target the government of certain countries.

List-based Sanctions

List-based sanctions target individuals or entities in certain countries. They are designated as Specially Designated Nationals and Blocked Persons (“SDNs”). Collectively, these targeted entities, organizations, and people are commonly referred to as restricted, denied, or prohibited parties.

[1] Welcome

1 minute

[2] Introduction to Trade Sanctions

5 minutes

[3] Laws and Regulations

4 minutes

[4] The Impact on Our Business

4 minutes

[5] Our Responsibilities

1 minute

[6] Your Commitment

1 minute

[7] Knowledge Check

5 minutes

Learning Progress

This Topic is now available.

There are a number of activities that are prohibited or restricted by sanctions programs.

Let’s take a look at the main activities covered by sanctions and discuss how they relate to Abbott’s business.

Many sanctions programs make it illegal to export goods, services, software, or technology to a sanctioned country or to trade with a denied party.

Export bans prohibit not only direct exports to a sanctioned country, but also indirect exports or re-exports through a third, non-sanctioned country.

Many programs have exemptions and general authorizations that may allow you to export the following even when other exports are prohibited:

• Informational materials, personal baggage, clothing, cosmetics, and other personal belongings (if traveling)
• Certain food, medicine, and medical devices under a humanitarian exception.

These exemptions are narrow, do not apply in the same way in every program, and, in most cases, special licensing is required. Before exporting or re-exporting food, medicines, or medical devices under a sanctions program, contact exports@abbott.com for approval.

Quick Check

Test your knowledge now!

Bruno, an Abbott sales rep, is attending a trade show in the U.S. He is approached by Ashley, an Irish distributor, regarding a sales opportunity in Iran. Ashley proposes that Bruno sell and ship the product to her in Ireland, and then she will handle the shipment to Iran. Would it be okay to proceed with the export?

Yes, probably, as Abbott would be exporting directly to Ireland, and Ireland is not on the list of countries targeted by U.S. sanctions.

No, probably not, because even though export to Ireland is not banned by the U.S. government, export to Iran is, and Iran is the ultimate destination for Bruno’s product.

Submit

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Even though Bruno is shipping the product to Ireland, he knows that the product will be re-exported to Iran – a U.S. sanctioned country. Absent U.S. Government authorization, this is a violation of U.S. export bans that prohibit not only direct exports to a sanctioned country like Iran, but also indirect exports or re-exports through a third, non-sanctioned country, like Ireland, with the knowledge that they will be re-exported to Iran. The sanctions cannot be avoided by trans-shipping goods through another country or selling via a distributor.

Most trade sanctions programs prohibit the importation of goods and services directly from sanctioned countries into the U.S., and more broadly prohibit any dealings, anywhere, related to products or services that originate from sanctioned countries.

This includes return of exported products that entered the sanctioned country’s stream of commerce.

The prohibition extends to indirect imports of sanctioned country goods that travel through a non-sanctioned country.

The restriction also applies to goods made from raw materials or component parts from a sanctioned country. This means that a member of the Procurement team purchasing goods for Abbott must ensure that no products or components, in whole or in part, are knowingly sourced from any sanctioned person or country, no matter how far down the supply chain.

Did you know?

For Abbott purposes, importation prohibitions apply equally to Abbott affiliates, subsidiaries, and employees importing goods and services from targeted countries into any countries where Abbott does business. We should also educate Abbott suppliers on our expectation that they follow applicable trade controls. If you have any questions regarding sanctions-related import controls, please contact exports@abbott.com.

U.S. citizens are legally permitted to travel to most sanctioned countries.

However, some sanctions programs make it illegal to spend money or conduct certain activities in a sanctioned country without a license from OFAC. Even with proper licensing in place, certain in-country activities such as sales strategy meetings or promotional discussions in Iran, for example, are still prohibited.

So, as an Abbott employee located anywhere in the world, you must consult with Global Trade Compliance at exports@abbott.com before you travel on business to any sanctioned country.

Foreign trade controls and sanctions programs generally include a ban on facilitating activities by others.

This ban makes it illegal to assist a non-U.S. person or company in any transaction that you, as a U.S. person (or employee of a U.S.-headquartered company), are not permitted to participate in yourself. For example, a U.S. company is prohibited from referring business with sanctioned countries to foreign companies or subsidiaries that are not subject to U.S. sanctions.

Quick Check

Test your knowledge now!

Gina works for Abbott Argentina. She has seen the opportunity for expansion into Cuba but knows that unauthorized trade with Cuba remains prohibited under U.S. trade sanctions. Sergio, an Argentinian national, who works for an Argentinian marketing company, is heavily involved in the Cuban market. He approaches Gina about working on Abbott’s behalf to open up opportunities in the Cuban market in anticipation of the lifting of sanctions against Cuba. Gina agrees to refer business to Sergio’s company. Would this be okay?

Yes, probably, as the business with Cuba will be conducted by a third party whose company and country, Argentina, is not covered by the U.S. ban on trade with Cuba.

No, probably not, as it is still illegal for a U.S. company to use a third party to facilitate business with a targeted country like Cuba.

Submit

That's correct!

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Even though Gina intends to use a third party who is not subject to U.S. trade sanctions, as an employee of a U.S. company, she is not permitted to refer business with sanctioned countries to foreign companies who are not required to comply with U.S. sanctions.

Similar to prohibiting the facilitation of activities, most sanctions programs make it illegal to help someone avoid the sanctions rules.

For example, advising someone on how to structure a transaction so that it avoids or evades the sanctions laws is in itself a sanctions violation. However, giving a basic explanation of what the sanctions laws say is not a sanctions violation, as long as you do not offer strategic advice on how to avoid those laws.

The only legal way to do business with a sanctioned country without violating the sanctions program and Abbott policy is to get a license from the Office of Foreign Assets Control (OFAC) or Bureau of Industry and Security (BIS) to engage in authorized activities.

Contact exports@abbott.com for any activity involving sanctioned countries.

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Review

Take a moment to review some of the key concepts in this section.

Exportation and Re-exportation

Export bans prohibit not only direct exports to a sanctioned country, but also indirect exports or re-exports through a third, non-sanctioned country.

Importation

Most trade sanctions programs prohibit the importation of goods and services directly from sanctioned countries into the U.S. The prohibition extends to indirect imports of sanctioned country goods that travel through a non-sanctioned country.

Business Travel

U.S. citizens are legally permitted to travel to most sanctioned countries. However, some sanctions programs make it illegal to spend money or conduct certain activities in a sanctioned country. Consult with Global Trade Compliance at exports@abbott.com before you travel on business to any sanctioned country.

Facilitation of Activities by Others

Foreign trade controls and sanctions programs generally include a ban against facilitating activities by others. It is illegal to assist a non-U.S. person or company in any transaction that you, as a U.S. person (or employee of a U.S.-headquartered company), are not permitted to participate in yourself.

Trying to Circumvent Sanctions

It is illegal to help someone avoid the sanctions rules.

[1] Welcome

1 minute

[2] Introduction to Trade Sanctions

5 minutes

[3] Laws and Regulations

4 minutes

[4] The Impact on Our Business

4 minutes

[5] Our Responsibilities

1 minute

[6] Your Commitment

1 minute

[7] Knowledge Check

5 minutes

Learning Progress

This Topic is now available.

As mentioned earlier, both U.S. law and Abbott policy require every Abbott employee (including those of our foreign subsidiaries and affiliates) to comply with U.S. trade sanctions regulations.

U.S. law prohibits doing business with any person or organization that is an SDN or is on a restricted party list.

All Abbott affiliates globally must screen their prospective trade partners, customers, vendors, banks, healthcare professionals, principal investigators, speakers, recipients of donations, etc. against all applicable and relevant restricted party lists.

In addition, all Abbott affiliates globally must continue to screen their existing trade partners on an ongoing basis to ensure that they are not subsequently added to a restricted party list after the initial screening has been completed.

Screening is critical for compliance with sanctions programs.

To help you conduct screening, Abbott’s Global Trade Compliance department has implemented a system that makes screening easy and efficient. This system allows you to screen a name or entity against the current restricted party lists, and once a name/entity is uploaded, the system automatically re-screens it whenever the lists are updated. To obtain access to the system and instructions on how to use it, please contact CCTC_DPS@abbott.com.

Did you know?

The Denied Party Screening Procedure (CCTC8990.09.001) provides guidelines for complying with the denied party screening requirements and applies to all subsidiaries and divisions of Abbott globally.

If screening reveals that a name or an entity appears on a restricted party list as an exact match, you should proceed with extreme caution.

You should immediately suspend transactions involving the person or entity listed and contact CCTC_DPS@abbott.com for further due diligence.

Most (but not all) transactions with denied parties are prohibited.

Each country’s specific sanctions program has exceptions, exemptions, and licensed activities that may permit a particular transaction to go forward. To learn more about Abbott’s Denied Party Screening requirements, review the Denied Party Screening page on Abbott World.

During the normal course of your business, watch out for red flags that can warn you of a potential violation of a trade sanctions program or might indicate that a product is destined for an unintended end-use, end-user, or end destination.

Identifying a red flag does not mean that the transaction cannot or should not proceed, but it does warn you of suspicious circumstances that need to be investigated before proceeding further.

Turning a blind eye to red flags and proceeding with a transaction with knowledge that a violation has occurred or is about to occur is in itself a violation of the regulations.

For example, if the end-user hospital name indicates possible connections with a sanctioned country (such as "Cuban Hospital" located in Qatar), this should be treated as a red flag that requires further investigation before proceeding.

Here are some other red flags you should watch out for:

• A customer declines routine installation, training, or maintenance service for a product that she has recently purchased (e.g., a diagnostic analyzer);
• A customer is willing to pay cash for an item that would normally be paid for in installments;
• You notice a large unexplained increase in orders from a customer.

The list above isn’t all-inclusive, so always be on alert for other possible red flags. Additional examples of red flags can be found in the Corporate Finance Policy CFM 8990 – U.S. Export and Foreign Trade Control Laws and Regulations. If you do notice any red flags, contact exports@abbott.com for further instructions.

Quick Check

Test your knowledge now!

Which of the following are red flags that should alert you that you may be dealing with a sanctioned country or person?

A company based in Rome that has connections to Iran asks you to ship an order to Turkey, one of Iran's neighbors.

You meet with a customer in Belgium. His company is called International Trade Co. of Syria.

A purchasing agent is reluctant to provide you with information about the final destination of some nutritional product you are selling.

Orders for assays come from a location different from the location to which you sold the analyzer product.

Submit

That's correct!

That's not correct!

These are all examples of red flags that should alert you that you may be dealing with a sanctioned country or person.

Violations of the U.S. sanctions programs may result in civil penalties of more than U.S. $300,000 per violation and criminal penalties of up to $1 million and/or 20 years imprisonment per violation.

Other consequences such as negative publicity and loss of export privileges may also occur.

Self-disclosing a violation is a significant mitigating factor in terms of reducing penalties.

So if you are aware of any potential violations, immediately contact Global Trade Compliance at +1-224-668-9585 or Legal Regulatory & Compliance at +1-224-668-5635.

Trade sanctions programs are complicated and can change in response to international events.

CLICK FORWARD TO LEARN WHAT YOU CAN DO TO FULLY COMPLY WITH ALL U.S. FOREIGN TRADE CONTROLS AND SANCTIONS PROGRAMS.

Follow Policies and Procedures

Be aware of and follow Abbott’s policies and procedures for processing and reviewing business activities that could be affected by sanctions programs.

Watch Out for Red Flags

Always watch out for red flags indicating potential sanctions violations.

Stop the Transaction

If you spot a red flag, immediately stop the transaction and contact exports@abbott.com for guidance.

Screen Trade Partners

Always screen prospective trade partners, customers, vendors, healthcare professionals, etc. against all applicable and relevant restricted party lists, and ensure that existing partners are screened on an ongoing basis.

Raise Questions and Concerns

If you have any questions or concerns about sanctions, raise them immediately to exports@abbott.com.

Click the arrow to begin your review.

Review

Take a moment to review some of the key concepts in this section.

Denied Party Screening

All Abbott affiliates globally must screen their prospective trade partners, customers, vendors, banks, healthcare professionals, principal investigators, speakers, recipients of donations, etc. against all applicable and relevant restricted party lists.

Abbott’s Denied Party Screening System

Abbott’s Denied Party Screening System makes screening easy and efficient. To obtain access to the system and instructions on how to use it, contact CCTC_DPS@abbott.com.

If an Entity Appears on Restriction List

If screening reveals that a name or an entity appears on a restricted party list as an exact match, you should immediately suspend transactions involving the person or entity listed and contact CCTC_DPS@abbott.com for further due diligence.

Red Flags

During the normal course of your business, watch out for red flags that can warn you of a potential violation of a trade sanctions program or might indicate that a product is destined for an unintended end-use, end-user, or end destination.

Violations of U.S. Trade Sanctions Programs

Violations of the U.S. sanctions programs may result in civil penalties of more than U.S. $300,000 per violation and criminal penalties of up to $1 million and/or 20 years imprisonment per violation.

Questions and Concerns

If you have any questions or concerns about sanctions, raise them immediately to exports@abbott.com.

[1] Welcome

1 minute

[2] Introduction to Trade Sanctions

5 minutes

[3] Laws and Regulations

4 minutes

[4] The Impact on Our Business

4 minutes

[5] Our Responsibilities

1 minute

[6] Your Commitment

1 minute

[7] Knowledge Check

5 minutes

Learning Progress

This Topic is now available.

Take a moment to confirm that you understand your responsibilities related to trade sanctions

I confirm that I understand my responsibilities regarding trade sanctions and know where to locate and review the applicable policies and procedures.

Confirm

The Knowledge Check that follows consists of 10 questions. You must score 80% or higher to successfully complete this course.

WHEN YOU ARE READY, CLICK THE KNOWLEDGE CHECK BUTTON.

[1] Julie is a U.S. citizen and an Abbott employee in Canada. She is asked to arrange a trip to Cuba for a group of her Canadian colleagues, including booking hotel accommodations in Havana and some tourism. Canada has no economic sanctions against Cuba. Is it okay for Julie to arrange this trip?

[1] Yes.

[2] No.

Next

Question 1: Feedback

There are several reasons why Julie must refrain from any involvement in arranging the travel:

• As a U.S. citizen, Julie is considered a “U.S. person” and is subject to trade sanctions against Cuba, regardless of where she resides.
• As a U.S. person, Julie may not assist non-U.S. persons to travel to Cuba for business or any purpose.
• As an employee of Abbott – a U.S. company – Julie is required to comply with all U.S. trade sanctions programs and controls in every country in which Abbott does business.

[2] James, an Abbott Business Development Manager in the U.S., received a request for export of goods and services to Iran. He was aware of the general restriction against U.S. exports to Iran, so he passed along the business to his colleague in Spain. Is this okay?

[1] Yes.

[2] No.

Next

Question 2: Feedback

James should not have referred the business to his colleague in Spain because:

• Using a subsidiary to have dealings with a sanctioned country, like Iran, is considered facilitation of activities by others, and is prohibited. Referring the business to the subsidiary likely violates the OFAC sanctions, even if the subsidiary never actually engages in any Iran business. The prohibition on facilitation makes it illegal to assist a non-U.S. person or company in any transaction that you, as a U.S. person (or employee of a U.S.-headquartered company), are not authorized or permitted to participate in yourself.
• Because James’ colleague is an employee of Abbott – a U.S. company – just like James, he or she is required to comply with all U.S. trade sanctions programs and controls in Spain and in every country in which Abbott does business.

[3] Which of the following are considered U.S. persons who must comply with U.S. trade sanctions?

Check all that apply.

[1] A U.S. citizen who resides permanently in Israel.

[2] The Paris affiliate of a U.S. company.

[3] A Mexican company located in Juarez that sells primarily to the U.S.

[4] A Danish citizen visiting the U.S. while on vacation.

Next

Question 3: Feedback

U.S. trade sanctions apply to all "U.S. persons." The definition of a U.S. person includes:

• Companies incorporated in or based in the U.S. (including Puerto Rico),
• Employees of U.S. companies (including those based in Puerto Rico), as well as employees of their non-U.S. affiliates,
• U.S. citizens or U.S. permanent residents, regardless of where they are located,
• Anyone who is in the U.S., including someone traveling on vacation, and
• Any foreign subsidiary of a U.S.-headquartered company or a U.S.-owned or-controlled entity.

So, the U.S. citizen living in Israel, the Paris affiliate of the U.S. company, and the Danish citizen while in the U.S. on vacation are all categorized as “U.S. persons.” But the Mexican company in Juarez is not, even though it trades with the U.S.

[4] Which of the following actions by a U.S. company are likely to violate U.S. trade sanctions?

Check all that apply.

[1] Exporting goods to France, knowing they will be re-exported to North Korea.

[2] Sending food and medicine to a sanctioned country without OFAC or BIS licensing.

[3] Selling to a company owned by an SDN.

[4] Selling equipment to a research institute affiliated with the government of Iran.

[5] Purchasing goods that contain components, materials or ingredients sourced from sanctioned countries.

Next

Question 4: Feedback

All of these actions are likely to violate U.S. trade sanctions.

• A U.S. company cannot use a non-sanctioned country, like France, to re-export goods to a sanctioned county, like North Korea.
• Exports of food and medicine to a sanctioned country for humanitarian reasons may be permitted, but only with appropriate licensing from OFAC or BIS.
• U.S. trade sanctions prohibit selling to a company owned 50% or more by an SDN.
• It is a violation of U.S. sanctions to sell equipment to a company that has an affiliation with a sanctioned country, like Iran.
• A U.S. company cannot purchase goods, in whole or in part, that have been produced, manufactured, extracted, or processed in a sanctioned country or procured from a sanctioned person.

[5] Istanbul Distributors, organized under the laws of Turkey, is a customer of Abbott. Istanbul Distributors places an order with Abbott for five (5) diagnostic devices. The purchasing agent specifically requests that all the labelling and packaging for the shipment be in Farsi because the devices are intended for re-export to Iran. Which of the following is true?

[1] Abbott may sell the devices to Istanbul Distributors because Turkey does not impose economic sanctions on Iran.

[2] Abbott may sell the devices to Istanbul Distributors as long as none of the documents relating to the transaction indicate that the devices are intended for re-export to Iran.

[3] Abbott may not sell the devices to Istanbul Distributors without a license because Abbott knows that the devices are intended for re-export to Iran.

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Question 5: Feedback

Sending goods from the U.S. to a non-sanctioned country, like Turkey, with the intention of re-exporting them into a targeted country, like Iran, would be a violation of the U.S. sanctions program. Abbott may not sell the devices without a license to Istanbul Distributors because Abbott knows that the devices are intended for re-export to Iran. Even without explicit knowledge that the devices are destined for Iran, the request for Farsi labelling is a red flag that would require us to ask questions about the intended end-destination.

[6] Trade sanctions are always imposed against countries and not individuals or entities.

[1] True.

[2] False.

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Question 6: Feedback

While trade sanctions can be imposed against countries, they can also be imposed against individuals and entities suspected of illegal activity. This can help prevent the spread of criminal enterprises. Governments of various countries maintain the details of these persons and entities on lists, and any sanctions against them are called list-based sanctions.

[7] Which of the following could happen to a U.S.-based company that imports refurbished medical equipment marked "Made in Iran” from Europe-based Iranian doctors?

Check all that apply.

[1] Nothing. The goods are imported from Europe, not Iran.

[2] If the imports are not properly licensed, the company may have to pay a fine of more than U.S. $300,000 per violation.

[3] If there is evidence that the owners of the company are intentionally hiding the true country of origin, they may be prosecuted and, if convicted, imprisoned and fined.

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Question 7: Feedback

OFAC rules generally prohibit imports from Iran. Violations of U.S. sanctions may result in civil penalties of more than U.S. $300,000 per violation. Also, if the violation is found to be criminal in nature, higher penalties and potential imprisonment may apply.

[8] You have screened a prospective customer against all applicable and relevant restricted party lists. The customer does not appear on any of the lists. Your manager shares a red flag she identified about the customer. You decide not to look into the red flag because you have already screened the customer. Is this okay?

[1] Yes.

[2] No.

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Question 8: Feedback

Red flags warn you of suspicious circumstances that need to be investigated before proceeding. If you do not investigate the red flag and end up doing business with a restricted party, you can be found guilty of violating U.S. trade sanctions laws, even if your violations are unintended.

[9] Which of the following should warn you that a transaction could potentially violate U.S. trade sanctions laws?

[1] A customer requests an order to be delivered to an unusual location.

[2] A customer insists on paying cash for an expensive item that would normally be paid for in installments.

[3] The name of the company you are dealing with indicates possible ties with a sanctioned country.

[4] A product's technical specifications do not fit the technical specifications of products typically found in the country it is being shipped to.

[5] All of the above.

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Question 9: Feedback

All of these actions should raise red flags or warning signals as they all indicate potential violations of U.S. trade sanctions laws.

[10] Who should you contact if you have any questions or would like to learn more about sanctions programs? Check all that apply.

[1] Human Resources (HR)

[2] Global Trade Compliance

[3] Public Affairs

[4] Legal Regulatory & Compliance (LR&C)

Submit

Question 10: Feedback

If you have questions or would like to learn more about sanctions programs, please contact Global Trade Legal Regulatory & Compliance (LR&C) at exports@abbott.com.

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Where to Get Help

MANAGER OR SUPERVISOR

If you spot a red flag when dealing with a trade partner, have concerns related to attempts by anyone to circumvent sanctions, or if you have general questions about trade sanctions programs, always speak to your manager. Your manager knows you and your work environment and should be able to help you address the situation appropriately. You can also talk to your manager if you have questions on how this course applies to your specific job responsibilities.

WRITTEN STANDARDS

• Review Abbott’s Code of Business Conduct for guidance on complying with all applicable trade regulations.
• Refer to the following corporate policies and procedures for processing and reviewing business activities that could be affected by sanctions programs. Click here to access the documents on Abbott World.
• Corporate Legal Policy 60-3 – U.S. Foreign Embargo & Trade Control Laws
• CFM 8990 – Sanctions and Foreign Trade Controls
• CCTC8990.01.001 – Deemed Export Controls
• CCTC8990.03.001 – BIS Export / Reexport License Requests
• CCTC8990.09.001 – Denied Party Screening Procedure
• CCTC8990.10.001 -- OFAC Licensing Procedure
• CCTC8990.10.003 – Commercial Activities Involving OFAC General Licenses
• CCTC8990.10.004 – Interactions with Healthcare Professionals and Sanctioned Countries
• CCTC8990.11.001 – Export Control Classification Number Classifications

Global Trade Compliance

Global Trade Compliance is a corporate resource available to address your questions or concerns about trade sanctions programs. If you have any questions or would like to learn more about sanctions programs, please contact:

Phone: +1-224-668-9585

Email: exports@abbott.com

Website:

• Denied Party Screening details can be reviewed on Abbott World by clicking here .
• If you have any concerns about a potential violation, immediately contact Global Trade Compliance at +1-224-668-9585 or Legal Regulatory & Compliance at +1-224-668-5635.

Legal Division

Contact the Legal Division at +1-224-668-5635 with questions or concerns about legal implications of potential trade sanctions violations.

OFFICE OF ETHICS AND COMPLIANCE (OEC)

The OEC is a corporate resource available to address your compliance questions or concerns, including interactions that may occur in connection with meals, travel, and entertainment.

• Visit the Contact OEC page on the OEC website on Abbott World.
• Visit Speak Up to voice your concerns about potential violations of our Code of Business Conduct or policies. Speak Up is available globally, 24/7 in multiple languages.
• You can also email investigations@abbott.com.

Course Resources

Transcript

Click here for a full transcript of the course

Welcome

Understanding Sanctions and Trade Compliance

Our Philosophy

Objectives

Table of Contents

Introduction to Trade Sanctions

Trade Sanctions Defined

Purpose of Trade Sanctions

Violating Trade Sanctions

Abbott’s Commitment

U.S. Persons Defined

Other Sanctions Programs

Quick Check

Review

Table of Contents

Laws and Regulations

Introduction

Comprehensive Sanctions

Limited Sanctions

List-based Sanctions

Quick Check

Review

Table of Contents

The Impact on Our Business

Introduction

Exportation and Re-exportation

Quick Check

Importation

Business Travel

Facilitation of Activities by Others

Quick Check

Trying to Circumvent Sanctions

Review

Table of Contents

Our Responsibilities

Introduction

Importance of Screening Trade Partners

Denied Party Screening System

What to Do If You Find a Name on a Restricted Party List

Red Flags

Quick Check

Consequences of Trade Sanctions Violations

What to Do

Review

Table of Contents

Your Commitment

Your Commitment

Knowledge Check

Introduction

Assessment

Feedback

Survey

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Course Description: As a healthcare company, it is critical that we always do what is right for the many people we serve. This includes complying with all applicable laws and regulations. In this course, employees will learn how to comply with U.S. trade sanctions, the types of activities covered and how to recognize the warning signs of potential violations. ​​​​​​This course will take approximately 30 minutes to complete.

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