In a routed transaction, who assumes responsibility for export compliance?

In a routed transaction, the Foreign Principal Party in Interest (FPPI) assumes the responsibility for export compliance. This means that the FPPI, typically the foreign buyer or recipient of the goods, is responsible for ensuring that the transaction adheres to all relevant export laws and regulations. This includes obtaining any required licenses or permits and ensuring that the shipment complies with both the exporter’s and the FPPI’s country’s export control laws.

The FPPI's involvement is critical because in a routed transaction, the exporter relinquishes control of the shipment to the FPPI, placing more compliance responsibilities in their hands. This structure is designed for cases where the buyer prefers to have more say in the shipping process and logistics, thus assuming more risk and responsibility for compliance with export regulations.

Understanding the roles and responsibilities in routed transactions is crucial for ensuring that all legal and regulatory requirements are met, preventing potential violations that could occur if the oversight lies solely with the exporter or the shipping agency.