Anti-Diversion Clause

Basics

The prohibition of exported goods from reaching unauthorized destinations is governed by a U.S. government regulation known as the anti-diversion clause. To ensure compliance with this regulation, the Bureau of Industry and Security, operating under the Department of Commerce, mandates the inclusion of a destination control statement for commercially exported goods. This statement explicitly declares that the goods are solely permitted for export to specific approved locations, emphasizing that any diversion of these goods is strictly forbidden according to U.S. law. Thus, the anti-diversion clause forms an integral part of this statement, upholding the regulatory framework.

it is common to encounter the abbreviation "diversion" used instead of the term "anti-diversion."

Anti-Diversion Clause Explained

For proper documentation of exported goods, both the destination control statement and anti-diversion clause must be included in the accompanying invoice, as well as the ocean bill of lading or air waybill. These essential statements serve to certify that, to the best of the shipper's knowledge, the shipment is indeed bound for its designated destination. Controlling exports becomes a significant concern for governments due to various factors such as national security, adherence to nonproliferation treaties, and foreign policy considerations. In the United States, the inclusion of a destination control statement is required for most exports of items listed on the Commerce Control List.

The illicit practice of diversion occurs when products are sold in unauthorized markets. This restriction stems from multiple reasons, including sanctions, trade-related issues, and consumer safety concerns. To address such concerns, specific categories of goods are identified as having a higher likelihood of being unlawfully diverted to restricted countries. Consequently, the bill of lading or other relevant documents associated with these goods must bear an official statement (known as the destination control statement) affirming that the exporter's license is only valid for designated recipients of the goods.

Concerns related to anti-diversion measures are commonplace for companies engaged in the export of domestic products.