International Trade Law News

President Bush issued an Executive Order on June 29, 2005 to freeze the assets of individuals or companies that are doing business with entities in Iran, North Korea and Syria believed to be involved in the proliferation of weapons of mass destruction (WMD).

The WMD Proliferation Financing Executive Order designates eight organizations as being responsible for WMD and missile programs, freezes their U.S. assets, and prohibits U.S. citizens or companies from engaging in transactions with them. The Executive Order also authorizes the Secretary of State and the Secretary of the Treasury to designate additional WMD proliferators and persons that provide support or services to those entities.

The text of the WMD Proliferation Financing Executive Order can be found on the White House's Web site at:
www.whitehouse.gov/news/releases/2005/06/20050629.html.

The complete list of the eight organizations named in the annex to the Executive Order can be found at OFAC's website:
www.treas.gov/offices/enforcement/ofac/actions/20050629.shtml.

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) today announced that Elan Pharmaceuticals, Inc. (Elan) of South San Francisco, California, agreed to pay a $31,000 civil penalty to settle charges that it exported PRIALT, a sub-unit of conotoxin, to Belgium in violation of the Export Administration Regulations (EAR).

In its charging letter, BIS alleged that between May 2000 and April 2002, Elan committed eight violations of the EAR stemming from four exports of the controlled biological toxin to Belgium. BIS alleged that these exports were made with reason to know that the required export licenses would not be obtained.

Elan voluntarily self-disclosed the violations and cooperated fully in the investigation. In addition to the monetary penalty, the settlement agreement requires Elan to perform an internal audit of its export compliance program.

The White House today announced that the President has nominated two individuals to fill vacant senior positions at the Commerce Department's Bureau of Industry and Security.

David H. McCormick, of Pennsylvania, has been nominated to be Under Secretary of Commerce for Export Administration. Mr. McCormick currently serves as President and Director of Ariba, Inc., a software and services solutions company. He previously served as President and CEO of FreeMarkets, Inc. Prior to that, he served in the U.S. Army and received a Bronze Star Medal for his service in Iraq during the first Gulf War. Mr. McCormick received his bachelor's degree from the United States Military Academy at West Point. He later received his master's degree and his Ph.D. from Princeton University.

Darryl W. Jackson, of the District of Columbia, has been nominated to be Assistant Secretary of Commerce for Export Enforcement. Mr. Jackson currently serves as a Partner in the law firm of Arnold & Porter, LLP. In addition, he is a Distinguished Lecturer in Law at the Columbus School of Law of The Catholic University of America. Prior to that, Mr. Jackson served as Executive Assistant United States Attorney for Operations in the District of Columbia. He received his bachelor's degree from Lincoln University of Pennsylvania and his J.D. from Howard University School of Law.

Customs and Border Protection (CBP) has recently created the Portal Support Center (PSC) to answer questions regarding the functionality of the Automated Commercial Environment (ACE) for all ACE Accounts and ACE Users. The PSC is intended to answer questions relating to ACE functionality only and will not replace the existing ACE Help Desk for technical questions.

Initially, the PSC will be staffed by CBP from 8:00 a.m. to 4:30 p.m. EDT, Monday through Friday, except government holidays. CBP intends for the PSC to be fully staffed by the end of July 2005. Once fully staffed, the hours of operation will expand to 8:00 a.m. to 8:00 p.m. EDT, Monday through Friday. Voice mail will be available after hours and in the event the staff is assisting others. The Portal Support Center can be reached at (703)921-6000 or (800)-927-8729 option 4, option 6 and option 2.

Mr. Fu Chengyu, Chairman and CEO of the China National Offshore Oil Corporation (CNOOC) Ltd., said Friday that his company is ready to participate in an investigation conducted by the Committee on Foreign Investment in the United States (CFIUS) if its offer to purchase Unocal is accepted by Unocal's board of directors.

According to Mr. Fu, CNOOC anticipated that its merger with Unocal would be reviewed by the CFIUS and they are fully prepared to participate in such a review. CNOOC indicated that it is ready to provide assurances to Unocal to address concerns relating to energy security and ownership of Unocal assets located in the U.S. CNOOC also stated that it is open to placing non-exploration and production assets under U.S. management through arrangements that CFIUS has approved in the past and are prepared to sell or take other actions with respect to Unocal's minority pipeline interests and storage assets.

The Exon-Florio provision of U.S. law (Section 5021 of the Omnibus Trade and Competitiveness Act of 1988, which amended Section 721 of the Defense Production Act of 1950) gives the President the authority to suspend or prohibit any foreign acquisition, merger or takeover of a U.S. corporation that is determined to threaten the national security of the United States. The President can exercise this authority under Exon-Florio to block a foreign acquisition of a U.S. corporation only if he finds:

(1) there is credible evidence that the foreign entity exercising control might take action that threatens national security, and

(2) the provisions of law, other than the International Emergency Economic Powers Act do not provide adequate and appropriate authority to protect the national security.

Labels: CFIUS

Haaretz today reported that the Government of Israel will soon sign a memorandum of understanding with the U.S. agreeing that Israel will terminate the planned sale of Harpy unmanned aerial vehicles (UAV) and other defense articles to China and will adopt the export control provisions of the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies. The Department of Defense has suspended information sharing with Israel on the F-35 Joint Strike Fighter Program and has launched a review of all arms exports to Israel after learning that Israel had agreed to export UAVs and other military equipment to China.

A World Trade Organization (WTO) dispute settlement panel today issued a report ruling in favor of the U.S. in a long-running dispute involving the exports of apples to Japan ("Japan -- Measures affecting the importation of apples" (DS245)). The U.S. has maintained that that Japan has unfairly banned U.S. apples for the past 20 years using unscientific fire blight restrictions. Fire blight is a disease unique to certain fruit trees.

The U.S. won earlier WTO proceedings against the Japanese restrictions, and in this most recent proceeding challenged Japan's attempts to bring its restrictions into conformity with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). In this segment of the proceeding the WTO panel held that Japan's current import regime violates several provisions of the SPS Agreement and recommended that the Dispute Settlement Body request Japan to bring the phytosanitary measure in dispute into conformity with its obligations under the SPS Agreement.

In the event that Japan fails to comply with the recommendations and rulings of the WTO, the U.S. could move forward with its request for WTO authorization to impose $143.4 million a year in trade sanctions, the U.S. estimate of U.S. apple exports to Japan in the absence of the import restrictions. This figure would be subject to arbitration at the WTO.

The WTO's decision can be found at the following links:

www.wto.org/english/tratop_e/dispu_e/245rw-1_e.pdf (Panel report - 138 pages)

In preparation for the upcoming vote in Congress on the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA), the Office of the U.S. Trade Representative has released a "CAFTA Briefing Book" on its website. The CAFTA Briefing Book contains the text of the free trade agreement along with position papers on CAFTA-related issues. The CAFTA Briefing Book can be found at the following link:
www.ustr.gov/Trade_Agreements/Bilateral/CAFTA/Briefing_Book/Section_Index.html.

Representatives Phil English (R-PA), Mark Green (R-WI), Chris Chocola (R-IN) and Robin Hayes (R-NC ) yesterday introduced H.R. 3004, the Currency Harmonization Initiative through Neutralizing Action (CHINA) Act of 2005, that would impose automatic tariffs on China if the Treasury Department finds China's exchange rate policy conforms with the WTO definition of currency manipulation.

The CHINA Act would direct the Treasury Secretary to, within 60 days of enactment, analyze and report to Congress whether China's exchange rate policy deviates from the intent of both General Agreement on Tariffs and Trade (GATT) 1994 or relevant International Monetary Fund (IMF) agreements. Article XV of GATT 1994 prohibits WTO members from, by exchange rate action, frustrating the intent of the provisions of that Agreement, or, by trade action, the intent of the provisions of the Articles of Agreement of the IMF. The IMF prohibits the use of currency manipulation as a method of gaining unfair trade advantage; defining such manipulation as large-scale and protracted intervention in one direction to gain an unfair trade advantage. If the Secretary finds in the affirmative, then within 30 days after sending the report to Congress, the Secretary is required to levy tariffs equal to the percentage of manipulation found.

H.R. 3004 would require the Bush Administration to take faster action than S. 295, the bill introduced by Senator Schumer (D-NY) that would impose a 27.5% tariff on imports from China unless the Chinese government revalued its currency within six months. S. 295 also contains a provision allowing the White House to delay that action for up to two years. Both S.295 and H.R. 3004 are opposed by the Bush Administration.

On a related note, the Senate Finance Committee will hold a hearing on U.S.-China Economic Relations on June 23, 2005, at 10:00 a.m. in room SDG50 of the Dirksen Senate Office Building.

By a vote of 423-2, the House of Representatives yesterday voted to approve H. J. RES. 52, a measure providing for the renewal of import restrictions contained in the Burmese Freedom and Democracy Act of 2003. As a result of the Burmese Freedom and Democracy Act of 2003, the U.S. prohibits the importation of any products produced in Myanmar (Burma). Similar legislation (S.J. Res. 18) is pending in the Senate and a vote is expected to be taken before the current sanctions expire July 28th.

The House Appropriations Committee yesterday approved by voice vote an amendment introduced by Representative Jo Ann Emerson (R-MO) to the FY06 Transportation, Treasury, Housing and Urban Development appropriations bill that would reverse the Office of Foreign Assets Control's (OFAC) February 2005 regulation providing that the term "payment of cash in advance" as it applies to sales of agricultural products to Cuba.

The June 18th edition of The Economist contains a glowing story about newly confirmed U.S. Trade Representative Rob Portman. The article states that Portman is "an internationalist Republican free-trading former legislator who commands bipartisan respect and has close connections with the White House: that is a compelling resume for America's top man on trade." The article also notes that Portman is "that rare politician whom colleagues from both parties seem to respect and like" and it is "hard to find a Democrat with a bad word to say about him . . . ."

The Census Bureau today announced the following change to AESDirect, the Internet based system for filing Shipper's Export Declaration (SED) information to the Automated Export System (AES):

Effective Tuesday, June 21st, the AESDirect Shipment Print capability will be changed as follows:

1. The existing PDF (SED look alike) format will be changed to a text style listing.
2. Additionally, in AESPcLink the print function will also be changed to allow only shipments that are retrieved from AESDirect to be printed.

These changes are being made to allow AESDirect to better support the pending mandatory AES filing regulations. Users of the AESDirect Web application will see no change except the format change. In AESPcLink the Print function is moved from the Edit Shipment function to Retrieve Shipment function.

New versions of AESPcLink Standard and Network Editions incorporating these changes will also be made available for download on Tuesday, June 21st. AESPcLink users are recommended to upgrade their AESPcLink installation to the latest version.

Labels: AES

The U.S. International Trade Commission (ITC) announced today that it is seeking input on a newly initiated investigation concerning proposed modifications to the North American Free Trade Agreement (NAFTA) rules of origin. The investigation, Probable Effect of Certain Modifications to the NAFTA Rules of Origin (Inv. No. NAFTA-103-012), was requested by the U.S. Trade Representative (USTR) in a letter received on May 23, 2005. The original request was modified by USTR staff in a letter received on June 16, 2005, to delete three products.

The modifications concern rules of origin in NAFTA Annexes 401 and 403 for (1) cocoa and cocoa preparations; (2) cranberry juice; (3) ores, slag and ash; (4) leather; (5) cork and articles of cork; (6) prepared feathers and down and articles made of feather or of down, artificial flowers, and articles of human hair; (7) glass and glassware; (8) copper; (9) nickel and articles thereof; (10) lead; (11) zinc and articles thereof; (12) tin; (13) other base metals; (14) televisions; (15) information technology agreement goods; and (16) controls.

The ITC requests that interested parties submit their comments on the proposed changes by August 3, 2005. The ITC expects to submit its advice to the USTR by September 26, 2005.

A coalition of export, agriculture and business organizations and companies has sent a letter to Representatives Delahunt (D-MA), Emerson (R-MO), Flake (R-AZ) and Moran (R-KS) supporting their efforts to reverse the Office of Foreign Assets Control's (OFAC) February 2005 regulation clarifying the term "payment of cash in advance" as it applies to sales of agricultural products to Cuba.

The letter states that sales of U.S. agricultural products to Cuba have "declined significantly" since OFAC announced that U.S. exporters must be paid in cash before shipment rather than before title of goods changed hands as had been the case since December 2001. The letter notes that this "change in policy has hindered the payment process by requiring an additional letter of credit for the Cuban buyer" making "the payment process much more difficult."

The letter cites the following examples of how the new regulations have caused a decrease in sales of U.S. agricultural products to Cuba:

--U.S. Department of Agriculture data show that sales of agricultural products to Cuba for the first four months of 2005 are 26% below the levels of the same period in 2004.

--The USA Rice Federation reports that sales of rice to Cuba in 2005 have dropped 52% by volume over the same period in 2004. Rice exporters have said that Cuba is now purchasing rice from China and Viet Nam.

--Last month, Pedro Alvarez, Chairman of Alimport, the main Cuban buyer, stated that due to the change in payment requirements, Alimport was forced to purchase $300 million of wheat, corn, soybeans, rice, poultry, pork and other agricultural products from other countries.

--The U.S. Apple Association reports that exports to Cuba from the U.S. are projected to fall at least 30% as this summer's apple crop is harvested and sold.

--Dairy America has experienced slower and more costly shipments to Cuba of nonfat dry milk with the new regulations adding an additional $3,000 per each shipment of 1,000 MT which may cause Cuba to look elsewhere.

--The Port of Corpus Christi in Texas reports that the OFAC regulations have curtailed its ability to conduct and grow its business with Cuba.

--The Virginia Department of Agriculture predicts that companies in Virginia which sold $20 million to Cuba in 2004 will face a reduction due to the OFAC regulations of 50% in sales to Cuba which will particularly impact small to medium sized firms.

The Department of State today published a notice in the Federal Register announcing that the agency has decided to extend the administrative debarment that was imposed in May 2004 on Hughes Network Systems (Beijing) Co. Ltd. (HNS China) (now part of the DirecTV Group Inc.). As a result, HNS China remains prohibited from participating directly or indirectly in any brokering activities and from exporting from the U.S. or importing into the U.S. any defense articles, related technical data or defense services covered by the International Traffic in Arms Regulations (ITAR). The State Department's notice can be viewed at the following link:
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/
edocket.access.gpo.gov/2005/05-12011.htm

The Bureau of Industry and Security (BIS) announced on June 15, 2005 that Valtex International Incorporated (Valtex), an export management and manufacturer's representative firm based in Palo Alto, Calif., and its president and owner Vladimir Alexanyan, of Los Altos, California, were each sentenced in U.S. District Court for the District of Minnesota, on May 17, 2005, in connection with their guilty pleas to criminal charges concerning illegal exports of metallized polymide film to the People's Republic of China (PRC). Metallized polymide film is classified as ECCN 1A003.b and requires an export license to be exported to the PRC and certain other destinations.

Valtex was sentenced to five years probation and ordered to pay a $250,000 criminal fine. Alexanyan was sentenced to 3 years probation and a $12,000 criminal fine. In addition, Chief Judge James Rosenbaum ordered that Alexanyan be forbidden from engaging in any international business activities during his probationary period.

Separately, on January 12, 2005, BIS reached a settlement with Valtex and Alexanyan concerning related administrative violations of the Export Administration Regulations. Valtex agreed to pay an administrative penalty of $77,000 while Alexanyan agreed to an $88,000 administrative penalty. As part of the civil settlement, Valtex agreed to implement an export management system not later than December 29, 2005.

The Bureau of Industry and Security (BIS) announced on June 15, 2005 that Hord Crystal Corporation (Hord) of Pawtucket, Rhode Island, agreed to pay a $12,500 civil penalty to settle allegations that it violated the antiboycott provisions of the Export Administration Regulations (EAR). BIS alleged that on four occasions, Hord, in connection with transactions involving the sale and transfer of goods from the U.S. to Dubai, United Arab Emirates, furnished prohibited information about its business relationships with Israel in violation of the EAR. Specifically, Hord certified on shipping documents that the goods were "neither of Israeli origin nor do they contain Israeli materials, nor are being exported from Israel." BIS also alleged that Hord failed to report in a timely manner its receipt of a request from Dubai to provide such certification.

The Bureau of Industry and Security (BIS) has imposed civil penalties on E.D. Bullard Co. (Bullard) and its German affiliate, Bullard GmbH (Bullard Germany), for reselling, reexporting or transferring thermal imaging cameras to Austria, France and Switzerland. Bullard is a leading manufacturer of personal protective equipment and systems that are marketed worldwide. The thermal imaging cameras sold by Bullard are classified as ECCN 6A003.b.4 and require an export license to be shipped to many countries.

In its charging letter, BIS alleged that Bullard committed 55 violations of the Export Administration Regulations (EAR) related to the export of thermal imaging cameras. For example, BIS alleged that Bullard exported thermal imaging cameras to Israel without a license; exported thermal imaging cameras in excess of the quantities specified in the licenses; violated license conditions specified in the export licenses by reselling, reexporting or transferring the cameras to destinations not specified in the licenses; exported thermal imaging cameras to an intermediate consignee not authorized by the license; exported thermal imaging cameras after the expiration date of the license; and making false statements on numerous export Shipper's Export Declarations. In addition, BIS alleged that Bullard Germany violated license conditions specified in the export licenses by reselling, reexporting or transferring the cameras to destinations not specified in the export licenses that it had obtained.

Bullard entered into a settlement agreement with BIS which provided that Bullard would pay a $330,000 civil penalty to Commerce Department. The settlement agreement also specifies that Bullard must perform an internal audit of its internal export compliance and provide a copy of the internal audit to BIS's Office of Export Enforcement. The settlement agreement entered into by Bullard Germany requires the company to pay a $36,000 civil penalty to the Commerce Department.

The charging letters, settlement agreements and orders in these cases can be found at the following links:
http://efoia.bis.doc.gov/ExportControlViolations/E895.pdf (Bullard GmbH)
http://efoia.bis.doc.gov/ExportControlViolations/E896.pdf (E.D. Bullard)

The Bureau of Industry and Security (BIS) has posted the minutes of the Information Systems Technical Advisory Committee meeting held on April 27-28, 2005 at http://tac.bis.doc.gov/2005/042705istacminP.htm.

Of particular interest is the presentation on nanotechnology made by Don R. Kania Ph.D, president of Veeco Instruments, a manufacturer of equipment for the semiconductor and nanotechnology industry. The thesis of Dr. Kania's presentation was that nanotechnology has been over-hyped and largely misunderstood, and he prefers to call it nanoscience. He also noted that size alone is not the determinant of nanoscience - simply scaling down doesn't make it so. What does matter, he said, is when the materials properties and physics change as a result of the reduction in size. He noted that this field is in its infancy and the investment level is measured and careful. In fact, more funds are spent on nanotechnology in Asia than in the U.S. The bulk of the work is published, academic research. Dr. Kania urged the audience to watch for the developments in fabrication, measurement, and computation to gauge when the infrastructure is sufficient to displace existing technologies.

By David Eiselsberg

The Department of State's Directorate of Defense Trade Controls today published a final rule in the Federal Register making several changes to the International Traffic in Arms Regulations (ITAR). The changes pertain to Part 120 (Purpose and Definitions), Part 123 (Licenses for the Export of Defense Articles), Part 124 (Agreements, Off-Shore Procurement and Other Defense Services), Part 126 (General Policies and Provisions) and Part 127 (Violations and Penalties). Most of the amendments are minor and technical in nature. For example, the amendment include the formal transfer of responsibility for commodity jurisdictions (CJs) from the Office of Defense Trade Controls Licensing to the Office of Defense Trade Controls Policy (the Office of Policy has been responsible for handling CJs for some time) and stating that voluntary disclosures should be sent to DDTC's Office of Defense Trade Controls Compliance.

The more significant changes made to the ITAR include the establishment of new thresholds for congressional notification for major defense equipment and defense service contracts with NATO countries, Australia, Japan and New Zealand. The new threshold for these countries is $25 million for major defense equipment contracts and $100 million for defense service contracts (the previous thresholds were $14 million and $50 million respectively). The thresholds for all other countries remain the same. Congress mandated these threshold changes in the FY2003 Foreign Relations Act. Another significant change made to the ITAR relates to the requirement that exporters obtain licenses for exports of man-portable air defense systems (MANPADS) and related parts and components and technical data to Canada. The requirement is a new addition to the list of defense articles, technical data and defense services (see 22 CFR 126.5(b)) that require a license or other form of authorization for Canada.

The notice can be accessed at the following link:
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/
edocket.access.gpo.gov/2005/pdf/05-11892.pdf.

Labels: DDTC

U.S. Trade Representative Rob Portman today announced that Deputy USTR Peter Allgeier will succeed Ambassador Linnet Deily as the U.S. Representative to the World Trade Organization (WTO) in Geneva, Switzerland. Ambassador Allgeier is expected to take up the WTO post permanently in the Fall. In the meantime, he will divide his time between Geneva and Washington until his successor is in place.

The House Ways and Means Committee today held an informal markup of the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA). The informal markup was held in order to provide guidance to the Bush Administration on the draft DR-CAFTA implementing bill and Statement of Administrative Action. Under Trade Promotion Authority procedures, once the Administration formally submits these documents to Congress, they may not be amended.

The Committee approved by a vote of 25-16 an amendment in the form of a Chairman's substitute, that made changes to two sections of the proposed text of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act. The substitute amendment added a provision (section 403) to require the Administration to report on activities conducted by the DR-CAFTA countries and the United States on capacity building on labor issues. In addition, the substitute also included a provision (section 404) to require the President to prepare a report that would examine after one year whether the agreement has had a net negative effect on the services industry. The provision requires the President to make recommendations as to how the Trade Adjustment Assistance program should be amended if the CAFTA-DR has led to negative effects on the services industry. The complete text of the substitute amendment and the Ways and Means Committee's section-by-section analysis of the DR-CAFTA implementing bill can be found at the following link: http://waysandmeans.house.gov/legis.asp?formmode=item&number=424.

Separately, the Senate Finance Committee Senate voted 11-9 in favor of passage of the agreement in a mock markup held yesterday. The Senate Finance Committee's staff summary of the DR-CAFTA Implementation Act can be found at the following link: http://finance.senate.gov/sitepages/leg/leg061305a.pdf.

Canada's Embassy newspaper today published an interesting article entitled "Cuba Trade: 'Don't Ask, Don't Tell'" describing how many Canadian businesses do business with Cuba, despite the possibility of being subject to extraterritorial U.S. sanctions, including the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 (commonly known as the Helms-Burton law). The article can be viewed at the following link: www.embassymag.ca/html/index.php?display=story&full_path=/2005/june/15/cuba/

The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies recently published several changes to the List of Dual-Use Goods and Technologies and Munitions List (WA-LIST (04) 1). The changes include all of the amendments that wewre agreed to by a joint Experts Group/General Working Group in April 2005 and were subsequently approved at Plenary level on June 3, 2005. The specific changes included revisions to certain notes relating to optical sensors and cameras contained in Category 6 of the List of Dual-Use Goods and Technologies and to certain Validity Notes. These changes will not affect the U.S. Commerce Control List until they are published in the Federal Register at a future date.

The complete summary of changes adopted in June 2005 and the revised version of the List of Dual-Use Goods & Technologies and Munitions List (now referred to as "WA-LIST (04) 2") can be viewed at the following link: www.wassenaar.org/list/wa-listTableOfContents.htm.

On June 13, 2005 OFAC published a notice in the Federal Register amending the Sudanese Sanctions Regulations (31 CFR part 538). The amendments pertain to the transfer of funds from the U.S. to Sudan, as well as the operation of accounts in U.S. financial institutions for individuals ordinarily resident in Sudan. The Federal Register notice can be found at the following link:
www.treas.gov/offices/enforcement/ofac/legal/regs/fr34060.pdf.

As expected, the U.S. House of Representatives yesterday voted 338-86 to reject H.J. Res. 27, a joint resolution withdrawing the approval of the Congress from the World Trade Organization (WTO) Agreement. A similar resolution in 2000 failed by a vote of 363-56.

Under the Under the Uruguay Round Agreements Act (URAA), the 1994 law that approved U.S. participation in the WTO, any member of Congress has the right once every five years to demand a vote by the full House or Senate on withdrawing from the WTO. On March 2, 2005, Rep. Bernard Sanders (D-VT) introduced H.J. Res 27 to withdraw the approval of the U.S. from the Agreement establishing the WTO. The resolution would not automatically pull the United States out of the WTO and does not require the President to withdraw the United States from the WTO. Rather the resolution merely states that Congress does not approve of U.S. membership in WTO. Because the joint resolution must pass both chambers, yesterday's vote means that the Senate will not consider the measure.

The results of the House's roll call vote can be viewed at the following link: http://clerk.house.gov/evs/2005/roll239.xml.

The U.S. House of Representatives voted on June 8, 2005 to delay for one more year implementation of a rule calling for mandatory country-of-origin labeling for meat and other food products. An amendment offered by Representative Dennis Rehberg (R-Mont.) to strike the delay provision from the fiscal year 2006 agriculture spending bill was rejected by the House by a 240-187 vote.

The country-of-origin labeling requirement, which was passed in 2002 and is now voluntary, would require meat, fruit, vegetables, fish and peanuts to originate, be raised and be processed in the United States in order to be labeled a "USA product." Congress voted in 2004 to delay enforcement of the provision and the U.S. Department of Agriculture (USDA) must begin enforcing the rule in October unless both the House and Senate vote to delay implementation again.

Cattle ranchers in the Midwest support the country-of-origin labeling requirement, saying it would help them build brand loyalty for their products. However, meat processors, retailers and some ranchers in the South say the rule would drive up the cost of beef for consumers. Many consumer groups also support the labeling requirement.

The roll call vote on the amendment can be viewed at the following link: http://clerk.house.gov/evs/2005/roll231.xml.

The U.S. Department of Commerce has announced the preliminary results of the 2003-2004 antidumping administrative review on circular welded carbon steel pipe (standard pipe) from Turkey. The preliminary results for the two respondents were as follows:

--Borusan Group (including Borusan Boru A.S. and Mannesmann Boru A.S.) = 0.86%
--Yucel Group (including Cayirova Boru Sanayi ve Ticaret A.S. and Yucel Boru Ithalat Ihracat ve Pazarlama A.S.) = 12.11%

The preliminary determination will be published in the Federal Register later this week and the final results will be announced within 120 days from the publication date of the preliminary determination.

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has announced that Wilden Pump and Engineering Co., LLC (Wilden), a Grand Terrace, California-based company will pay a $700,000 civil penalty to settle charges that it violated the Export Administration Regulations (EAR) in connection with unauthorized exports of diaphragm pumps from the United States to the Iran, Israel, People's Republic of China, Syria, and the United Arab Emirates (UAE) without the required BIS export licenses. The diaphragm pumps produced and exported by Wilden are classified on the Commerce Control List (CCL) as ECCN 2B350i.4. Wilden is owned by that Dover Resources, Inc., a public company whose shares are traded on the New York Stock Exchange.

BIS's charging letter states that, between 2000 and 2003, Wilden committed 71 violations of the EAR. Specifically, BIS found that Wilden committed 26 violations by exporting diaphragm pumps without the required licenses. BIS claimed that in connection with 22 of the exports, Wilden violated the EAR by transferring diaphragm pumps with knowledge that violations of the EAR would occur. BIS also charged that Wilden committed 23 violations of the EAR by making false statements on Shipper's Export Declarations (SEDs). For example, Wilden issued several SEDs stating that the products were destined for the UAE when the ultimate destination was Iran. In addition, several of the SEDs stated that the products qualified for export from the U.S. as NLR (No License Required) when an export license was required to be obtained prior to shipment.

In a press release announcing the settlement, BIS indicated that "the size of the penalty . . . is due to the significant number of violations, many of them with knowledge that the shipments were destined to an embargoed country." In addition to the civil penalty, Wilden also agreed to be subject to a three-year denial of export privileges for items on the CCL. The denial of export privileges will be suspended for two years provided that Wilden does not commit any violations of the EAR during the suspension period. The denial of export privileges is a signficant additional penalty since Dover's 2004 annual report indicates that over one-half of Wilden's sales are derived from international markets.

June 6, 2005: Five-year (sunset) review adequacy determinations in the following cases (by action jacket; no open meeting will be held):
--Internal combustion industrial forklift trucks from Japan, Inv. No. 731-TA-377 (Second Review)
--Porcelain-on-Steel Cooking Ware from China and Taiwan and Top-of-the-Stove Stainless Steel Cooking Ware from Korea and Taiwan, Inv. Nos. 701-TA-267-268 and 731-TA-298, 299, 304, and 305 (Second Review)
--Raw In-shell Pistachios from Iran, Inv. No. 731-TA-287 (Second Review)

June 7, 2005: Commission Vote in the five-year (sunset) reviews involving Certain Stainless Steel Plate from Belgium, Canada, Italy, Korea, South Africa, and Taiwan, Inv. Nos. 701-376, 377, and 379 and 731-TA-788-793 (Review), 11:00 a.m. ITC Main Hearing Room

June 8 through June 10, 2005: No hearings, votes or meetings scheduled.

The Treasury Department's Office of Foreign Assets Control (OFAC) today issued its monthly penalty report of civil penalties imposed on companies and individuals for violating the sanctions regimes administered by OFAC.

OFAC's monthly report indicates that it imposed penalties on four corporations, all of which involved activity prior to 2001. The report indicates that none of the enforcement actions resulted from a voluntary disclosure. The following is a summary of the enforcement actions (amount of the civil penalty is in parentheses):

--Fidelity Brokerage Services, Inc. d/b/a Fidelity Investments, 1999-2000 operation of Iranian accounts ($63,853 settlement).
--Pioneer Valley Travel, 2001 provision of unlicensed Cuba travel-related services ($750 settlement).
--WTS Agencies, Inc. (formerly Inchcape Shipping Services), 1997 facilitation of trade with Sudan ($3,000 assessment).
--Zooma Enterprises, Inc. 1998 attempted exportation of goods to Iraq ($2,500 settlement).

OFAC's monthly report also indicates that the agency settled 33 cases with individuals for engaging in travel-related transactions with Cuba for a total of $31,963 (average settlement of $968.58)(OFAC does not publish names or amounts of individual settlements). In addition, OFAC settled 15 case with individuals for traveling to and importing goods from Cuba for $24,942.38) (average settlement amount of $1662.83).

The Directorate of Defense Trade Controls today posted on its website the minutes from the May 3, 2005 Defense Trade Advisory Group (DTAG) meeting, which was the first DTAG meeting held in more than 18 months. The minutes can be viewed at the following link:
http://pmdtc.org//docs/dtag_plenary_may_2005_minutes.pdf.

Labels: DDTC

Michael D. Turner, the recently appointed director of the Bureau of Industry and Security's Office of Export Enforcement (OEE) will be one of the featured speakers at the June 9, 2005 meeting of the National Council on International Trade Development (NCITD). Also speaking at the meeting will be Matthew Rohde, Deputy Assistant U.S. Trade Representative for World Trade Organization and Multilateral Affairs.

The NCITD meeting will be held from 9:15 to 12 noon on June 9, 2005 at the University Club of Washington, DC. Contact the NCITD Secretariat (202-872-9280 or cu@ncitd.org) to RSVP for this meeting or for more information about the organization. The non-member fee to attend this meeting is $45.