International Trade Law News

The U.S. and Japan have jointly informed the World Trade Organization that the two countries have resolved the long-running dispute over restrictions imposed by Japan on the import of U.S. apples. The press release issued by the U.S. Trade Representative on this case can be viewed at the following link:
www.ustr.gov/Document_Library/Press_Releases/2005/
August/United_States_Succeeds_in_Removing_Japans_Barriers_to_US_Apples.html.

U.S. Customs and Border Protection (CBP) has published a notice in the Federal Register containing the updated quarterly IRS interest rates used to calculate interest on overdue accounts (underpayments) and refunds (overpayments) of customs duties. For the calendar quarter beginning July 1, 2005, the interest rates for overpayments will be 5 percent for corporations and 6 percent for non-corporations, and the interest rate for underpayments will be 6 percent. This interest rate remains unchanged from the previous calenar quarter. CBP's notice, which contains the quarterly interest rate data from 1974 to present, can be found at the following link:
a257.g.akamaitech.net/7/257/2422/01jan20051800/
edocket.access.gpo.gov/2005/05-17247.htm.

The Bureau of Industry (BIS) has published a Final Rule in the Federal Register removing license requirements for exports and reexports to India of certain items controlled unilaterally for nuclear nonproliferation reasons and removing certain Indian entities from the Entity List.

The Directorate of Defense Trade Controls (DDTC) today published a final rule in today's Federal Register containing several amendments to the International Traffic in Arms Regulations (ITAR). Most of the ITAR amendments are technical in nature, such as adding some new definitions, changing the term Office of Defense Trade Controls to Directorate of Defense Trade Controls and amending the definition of District Director of Customs to reflect the change in title to Port Director of U.S. Custom and Border Protection.

However, the final rule contains some important changes to the ITAR that should be closely reviewed. Such changes include revisions to section 122.3, which now requires registration renewals to be submitted 30 days prior to the expiration date, and section 122.5, which make significant additions to the recordkeeping provisions as they relate to maintenance of electronic records. The complete text of the final rule can be viewed at the following link: http://a257.g.akamaitech.net/7/257/2422/
01jan20051800/edocket.access.gpo.gov/2005/05-17121.htm.

Labels: DDTC, Export Controls

The State Department today published a final rule in the Federal Register to expand the scope of the arms embargo on the Democratic Republic of the Congo (DRC).

The Bureau of Industry and Security's Regulations and Procedures Technical Advisory Committee (RPTAC) will hold a public meeting on September 13, 2005 at 9 a.m. in Washington, DC. The meeting agenda and further details can be found at the following link:
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/
edocket.access.gpo.gov/2005/05-17120.htm

The U.S. International Trade Commission (ITC) today published a notice in the Federal Register seeking proposals on changes to the international Harmonized Commodity Description and Coding System (Harmonized System), including the rules of interpretation, section and chapter notes and the texts of the headings and subheadings. The comments are being requested in order to ensure that the Harmonized System reflects changes in technology and trade patterns. The submitted comments will be reviewed by the ITC staff for potential submission to the World Customs Organization (WCO). Specifically, the ITC is seeking proposals on the following: Deletion of HS headings or subheadings with low trade volume; identification of new products important in international trade; and simplification of the Harmonized Tariff Schedules, e.g., by the elimination of classification provisions which are difficult to administer. Comments must be submitted to the ITC by October 14, 2005.

The Commerce Department's International Trade Administration today published a notice in the Federal Register containing a list of the antidumping and countervailing duty administrative reviews that have been initiated as a result of requests made in July 2005.

Labels: Countervailing Duties

This is a reminder that September 2, 2005 is the deadline for submitting public comments to the House Ways and Means Trade Subcommittee on the proposed technical corrections to U.S. trade laws and the numerous miscellaneous duty suspension bills that have been introduced in the 109th Congress. Hundreds of miscellaneous duty suspension bills were submitted by Members of Congress by the April 28, 2005 deadline, most of which relate to the suspension of duties on imported chemical products. However, duty suspension bills were also introduced on a wide variety of imported products, including bicycle parts, aspirin, camel hair, certain cathode-ray tubes and basketballs. Among the proposed technical corrections to U.S. trade laws, is H.R. 1121, a bill that would repeal the Byrd Amendment.

A complete list of the proposed technical corrections to U.S. trade laws and miscellaneous duty suspension bills, as well as details on how to submit public comments, can be found on the Ways and Means Committee's website at: waysandmeans.house.gov/hearings.asp?formmode=view&id=2951.

The public comments that have been submitted to the Subcommittee to date can be found at the following link:
waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=438&comm=5.

Immucor, Inc., which sells reagents and systems used to identify the properties of blood prior to a transfusion, issued a press release on Friday stating that the Securities and Exchange Commission (SEC) had issued a formal order in an investigation related to payments made by the company's Italian subsidiary to individuals associated with government medical facilities. The formal order allows the Staff of the SEC to compel testimony and document production from Immucor. The SEC's investigation commenced after Immucor voluntarily disclosed to the SEC a possible violation of the books and records requirements of the Foreign Corrupt Practices Act (FCPA).

As a result of the terrorist attack of September 11, 2001, many import entry documents that were maintained by Customs and Border Protection (CBP) at 6 World Trade Center in New York City were destroyed. Due to the extended liquidation cycle of antidumping and countervailing duty (AD/CVD) entries, CBP is only now beginning to receive liquidation instructions from the Department of Commerce for many AD/CVD entries from previous years.

CBP today published a notice in the Federal Register today advising importers that they have the option to provide a reconstructed entry summary package to CBP for liquidation of entries relating to these entries. Most of the affected entries related to AD/CVD entries filed at the New York Seaport (port code 1001) and Newark/Elizabeth, NJ (port code 4601, and sub-ports 4602, etc.). Although less likely, the destroyed documents may also include documents related to AD/CVD entries filed at JFK Airport/Jamaica/Queens NY, (port code 4701 and sub-ports 4702, etc.).

The notice indicates that if a reconstructed entry summary package is not received by the CBP within 30 days following publication by the Department of Commerce that suspension of the liquidation of the subject entry, or entries, has been lifted, and the Department of Commerce has issued final assessment instructions, CBP will begin liquidating the entries based on the information available in ACS. Failure by the importer to provide a reconstructed entry summary package within the 30 day time frame may result in liquidation by CBP of the entry, or entries, based upon the information available within the Automated Commercial System (ACS), which may not be complete. The reconstructed entry package should be mailed to: Customs and Border Protection, ATTN: ADCVD 6WTC Reconstructed Entry(s), 1100 Raymond Boulevard, Newark, NJ 07102.

The complete text of the notice issued by CBP can be found at the following link:
http://a257.g.akamaitech.net/7/257/2422/
01jan20051800edocket.access.gpo.gov/2005/05-17045.htm.

Representative Randy Forbes (R-VA), Chairman of the Congressional founder and co-chairman of the Congressional China Caucus has written an article published in the online edition of Military Information Technology entitled "The Dual-Use Double-Edged Sword". The article notes that "the reality of the dual-use issue with China is not one of right versus wrong, but rather, of risk versus reward. It is right to want the greatest possible economic advantages for our country. And it is right to want the greatest possible security advantages for our country. To restrict our economic opportunities in pursuit of a more secure nation is always a double-edged sword. What we must do is evaluate the size of the risk and the size of the reward and measure the indicators that point to which blade of the sword ultimately cuts deepest."

Russia's Interfax news agency reports that Russian Foreign Ministry officials, in a meeting with members of the Independent Inquiry Committee on the United Nations Oil-for-Food Program (the Volcker Commission), denied that any Russian company involved in the program engaged in any illicit activity. The story states quotes a Foreign Ministry press release stating that "In response to questions about the role of Russian companies in the humanitarian operation, it was stressed that in the course of implementation of this program, our companies acted in strict conformity with the regime of sanctions against Iraq imposed by resolutions of the UN Security Council and with legislative acts of the Russian Federation."

If you believe that statement, I have some swampland in Siberia I'd like to sell you. As previously reported, Richard Goldstone, a member of the Volcker Commission, said that about half of the 4,500 companies that took part in the U.N. program paid kickbacks or illegal surcharges to the Government of Iraq.

A USA Rice Federation membership delegation comprised of producers, millers and association staff is currently in Cuba. The 17-member delegation will be in Cuba until Saturday and is visiting in response to a personal invitation from Pedro Alvarez, the chairman and CEO of ALIMPORT, Cuba's food import agency. The USA Rice Federation claims that U.S. rice exports to Cuba have decreased 50% in 2005 as a result of the cash-in-advance "clarification" that was issued by OFAC in February 2005 and modified in July.

Labels: OFAC

The Customs Lawyers Association, a professional association of government attorneys involved in the practice of customs and international trade law, will hold its annual customs law symposium on October 18, 2005 at the J.W. Marriott Hotel in Washington, DC. The theme of this year's program, primarily intended for customs lawyers, is "Integrating New Technologies to Promote Global Trade and Security."

The meeting's program includes: a primer on CBP's transition into the Automated Commercial Environment; a presentation on textiles safeguards; a discussion of CBP's advance manifest requirements and the implementation of the Advance Passenger Information System (APIS); a presentation by the Clerk of the U.S. Court of International Trade (CIT) and a discussion of current issues in international trade litigation; and a panel discussing the new programs and technologies that will be utilized to implement the WCO's Framework of Standards to Secure and Facilitate Global Trade.

Registration for the program is now taking place. Registration information and more details on the program is available at www.acteva.com/go/cla and on the CLA website at www.customslawyersassociation.org.

The Bureau of Industry and Security (BIS) recently imposed civil penalties in connection with two enforcement cases involving unlicensed exports to Iran and China.

In the first case, BIS alleged that Ali Khan, Chief Executive Officer of Turboanalisis, Inc., a Phoenix-based supplier of civil and military aircraft parts, and of Turbo Technologies LLC, an FAA-approved repair station, in his individual capacity, conspired to export and exported aircraft parts classifed as ECCN 9A991 to Iran via Singapore and Malaysia on three separate occasions. Under the settlement agreement reached with BIS, Khan was assessed a civil penalty of$110,000. The charging letter, settlement agreement and order can be viewed at efoia.bis.doc.gov/ExportControlViolations/E910.pdf.

In the second case, BIS imposed a $33,000 civil penalty on Hong Kong-based Sunford Trading Ltd. for ordering, buying, financing and forwarding an industrial hot press furnace to the Beijing Research Institute of Materials and Technology without the required export license. In addition to the penalty, BIS imposed a three-year denial order on Sunford Trading Ltd. and the company has been included on BIS's unverified list. The order issued by BIS in this case can be viewed at efoia.bis.doc.gov/ExportControlViolations/E909.pdf.

Iran's Mehr News Agency reports that Iran's cabinet has approved the revamping of Iran's import and export laws to "prevent illegal trade and smuggling."

The Moscow Times reports that representatives of the Federal Industry Agency and the Federal Service for Technical and Export Control, which oversee Russia's defense technology exports, unsuccessfully attempted to shut down Aviakonversia's display at last week's Moscow Aviation and Space Show (MAKS 2005) since the company had not received the required clearance to display its products to the public. Aviakonversia makes devices that jam the global positioning systems used in navigation. The jamming equipment made by Aviakonversia was used against U.S. forces in the first days of the Iraq war in March 2003.

The front page of today's Washington Post contains an article entitled "Common in China, Kickbacks Create Trouble for U.S. Companies at Home." The article discusses U.S. companies adopting Chinese-style tactics to secure sales, as they compete in a market in which Communist Party officials routinely control businesses, and purchasing agents consider kickbacks part of their salary." The article observes that "managers of U.S. companies say they are caught in a dilemma: They are answerable to shareholders on Wall Street and home offices that demand a piece of an increasingly lucrative Chinese market. Yet they are also held to account at home by the Department of Justice and the SEC." The article also contains examples of several recent FCPA investigations brought against U.S. companies for engaging in prohibited practices in China. The complete article can be viewed at the following link:
www.washingtonpost.com/wp-dyn/content/
article/2005/08/21/AR2005082101068_pf.html
(free registration required).

The U.S. and Israel, in a joint statement issued on August 16, 2005, say they have agreed on a remedy for previous troubles in their defense technology security relationship that resulted from Israel's plans to supply spare parts for unmanned Harpy surveillance aircraft it had previously sold to China.

Israel's ambassador to the United States, Daniel Ayalon, said the agreement ends the dispute by dealing with principles, not details and "the major principle is mutual consultation." Pentagon spokesman Bryan Whitman said there will not be a U.S. veto for possible arms sales by Israel, but that U.S. officials will be informed and consulted. Whitman said the agreement would begin to restore U.S. confidence in Israel's ability to protect sensitive technologies.

The complete text of the joint statement is as follows:

U.S. Department of Defense - Israeli Ministry of Defense Joint Press Statement

The strategic alliance between the United States and Israel reflects common understandings of the global security environment. In this cooperative relationship, the United States and Israel share information and consult on possible threats to U.S. and Israeli defense interests.

The U.S. Department of Defense and the Israeli Ministry of Defense have signed an understanding that is designed to remedy problems of the past that seriously affected the technology security relationship between their defense establishments and which begins to restore confidence in the technology security area. In the coming months additional steps will be taken to restore confidence fully.

The signing of this understanding underscores the commitment of the U.S. and Israel to work together to address global security challenges. Cooperation between the U.S. and Israel is important to the security of the Middle East and we expect that cooperation to continue.

In the latest enforcement case involving a medical device company and the second recent case involving South Africa as a transshipment point, the Commerce Department's Bureau of Industry and Security (BIS) recently imposed a penalty of $82,500 on Zoll Medical Corporation (Zoll), a Massachusetts-based manufacturer and seller of cardiac defibrillators and other cardiac-related medical devices, for making unlicensed sales of cardiac defibrillators to Iran.

According to the charging letter and settlement agreement, BIS alleged that Zoll committed 10 violations of the Export Administration Regulations (EAR). Specifically, BIS alleged that Zoll committed two violations of the EAR by making two shipments in 2000 of cardiac defibrillators to Iran, via South Africa, without the required export licenses. BIS also alleged that Zoll knowingly committed two violations of the EARs since the company knew or had reason to know that the products would be exported to Iran. In addition, BIS contended that Zoll made false statements on the Shipper's Export Declarations filed in connection with the shipments, by misrepresenting the ultimate destination of the products, inaccurately stating the ultimate consignee of the goods and incorrectly specifying that the goods qualified for export from the U.S. as NLR (no license required).

Earlier this year, Asher Karni, an Israeli national residing in Capetown, South Africa, pled guilty in connection with a scheme to export oscilloscopes and triggered spark gaps from the U.S. to Pakistan, via South Africa.

The charging letter, settlement agreement and Order issued by BIS in the Zoll Medical case can be viewed at the following link: http://efoia.bis.doc.gov/ExportControlViolations/E906.pdf.

The Associated Press and Reuters have reported that Grundfos, a Denmark manufacturer of industrial pumps, has stated that the results of an internal investigation has revealed that two of its employees paid bribes to Iraqi officials to win two orders under the United Nations administered Iraqi oil-for-food program (OFC). Following the investigation, Grundfos fired the employee and notified the Danish Foreign Ministry and the U.N.

According to the IIC's October 2004 report, Grundfos was ranked as 758th on the list of the largest OFP vendors.

The statement referenced in the articles is available only in Danish on the company's website at:
www.grundfos.com/web/homeDK.nsf/Webopslag/
AED06F0028746C07C1257062002DE81F.

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced that The McFarland Cascade Pole and Lumber Company and The Oeser Company, manufacturers of lumber and wood products headquartered in Washington State, agreed to pay civil penalties to settle charges that they violated the Export Administration Regulations (EAR) by exporting unprocessed western red cedar to Canada for further processing at wood treatment plants without obtaining the required export licenses.

Exports of unprocessed Western red cedar harvested from state and federal lands in the United States are controlled for short supply reasons and require a license for export to any destination outside the U.S.

McFarland agreed to settle charges relating to 1136 unlicensed exports of unprocessed Western red cedar to Canada for further processing from November 1999 to February 2004. McFarland will pay a civil penalty in the amount of $454,000.

Oeser agreed to settle charges relating to 208 unlicensed exports of unprocessed Western red cedar to Canada for further processing during the same time period and has agreed to pay a civil penalty in the amount of $83,200.

BIS noted that McFarland and Oeser agreed to the settlement prior to a penalty determination hearing before an Administrative Law Judge (ALJ). In June, the ALJ issued a summary decision as a matter of law in favor of BIS, ruling that the companies’ exports to Canada required licenses from BIS.

The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCen) and the Office of the Comptroller of the Currency announced that it has imposed a $24 million civil penalty on the New York branch of Jordan-based Arab Bank, PLC, for systemic Bank Secrecy Act failures. The penalty is the largest penalty imposed on a bank by the Treasury Department since the $25 million imposed on Riggs Bank in 2004 after it was discovered that Riggs had conducted business with officials in Equatorial Guinea former Chilean dictator Augusto Pinochet.

After the penalty was announced, Arab Bank accused U.S regulators of enforcing "confusing and constantly evolving" money-laundering laws and complaining that the $24 million payment was "unreasonably high."

Details on the alleged violations can be found at the following link: www.fincen.gov/arab081705.pdf.

Labels: FinCen

The Treasury Department's Office of Foreign Assets Control (OFAC) has amended and reissued the Burmese Sanctions Regulations in their entirety to implement Executive Order 13310 issued on July 28, 2003, which imposed new sanctions on Burma (Myanmar). The full text of the amended Burmese Sanctions Regulations can be found at the following link:
www.treas.gov/offices/enforcement/ofac/legal/regs/fr05_16144.pdf.

OFAC has also updated its brochure describing the various U.S. sanctions imposed on Burma (in PDF format).

Labels: OFAC

The Portland Press published an excellent article describing the contentious sentencing hearing involving Maine Biological Laboratories, Inc. (MBL) and several of its employees for engaging in numerous import and export violations, including receiving an avian influenza virus smuggled from Saudi Arabia, mail fraud, violation of the Virus-Serum-Toxin Act, making false statements to the U.S. Government and violations of the Export Administration Act.

The article notes that during the sentencing hearing U.S. District Court Judge John Woodcock criticized the company's argument that a significant monetary penalty would force the company to be shut down by stating "I find Maine Biological Laboratories' position here very troubling. . . . A good corporate citizen would accept the penalty, pay the fine and move on. Instead, Maine Biological Laboratories has . . . raised the specter of terrible economic suffering and trouble for its innocent employees." The article notes that MBL faced a fine ranging between $560,000 and $1.1 million and that federal prosecutors suggested a penalty of $500,000, the amount that the judge imposed on the company.

The article also contains a timeline describing the events that led to the imposition of the fines on the company and jail time for several of the company's executives and employees.

The Bureau of Industry and Security has announced the agenda for Update 2005, which will be held from October 24-25 in Washington, DC. The topics for the plenary sessions include: Hot Issues: Interagency Round Table Discussion; Export Enforcement: Advancing Trade and Security; and Innovations in SNAP.

The breakout session topics include: Developments in Encryption Export Controls; Responsibilities of Parties to the Transaction; Commerce vs. State: Export Licensing Jurisdiction; Technology Transfers to Foreign Nationals (including BIS response to IG recommended changes to the "deemed export" rule); Parts and Components Reexports; Country Policies: A Year in Review; The Automated Export System and Foreign Trade Regulations; Common License Application Sins; Supporting National Defense and Homeland Security; International Traffic in Arms Regulations; Foreign Assets Control Regulations; and International Programs.

The complete agenda for Update 2005 can be found at the following link: www.bis.doc.gov/SeminarsAndTraining/updateagenda.htm.

Registration for Update 2005 begins on September 6, 2005.

The Bureau of Industry & Security (BIS) today released the Proposed Charging Letter, Settlement Agreement and Order relating to an enforcement proceeding brought against Quantchrome Instruments, a Boynton Beach, Florida designer and manufacturer of laboratory instruments for characterizing properties of porous materials and powders. Under the settlement agreemetn Quantchrome Instruments agreed to pay a civil penalty of $6,000 to settle charges resulting from unlicensed exports of an Automated Surface Area and Pore Size Analyzer and related scientific instruments to India's Department of Atomic Energy Bhaba Atomic Research Center, an organizationincluded on BIS's Entity List. The documents related to this case can be viewed at the following link:
efoia.bis.doc.gov/ExportControlViolations/E905.pdf.
.

The Bureau of Industry and Security (BIS) has posted the numerous public comments it received on the March 28, 2005 advance notice of proposed rulemaking (ANPR) seeking input on proposed changes to the regulations governing the issuance of "deemed export" licenses for the transfer of controlled technology to foreign nationals in the U.S.

BIS included all 300+ comments, consisting of more than 1,100 pages of text, in a single PDF file. As a result, the file is more than 84 megabytes in size. Due its size, you SHOULD NOT attempt to open the file unless you have a very fast internet connection.

As previously reported, the majority of the comments (approximately 67%) are from universities, with the remainder from industry and other trade associations, law firms, companies and individuals.

The PDF file containing the comments can be viewed at the following link (see the above disclaimer before trying to open this link):
www.bis.doc.gov/FreedomForInformation/FINAL%20deemed%
20doc%20without%20respective%20comments.pdf.

U.S. Customs and Border Protection (CBP) has issued a document clarifying the continuous bond guidelines issued on July 9, 2004 covering certain special categories of merchandise subject to antidumping and countervailing duty cases.

The Office of the U.S. Trade Representative (USTR) announced yesterday that the U.S. and China will hold talks in San Francisco August 16-17 in an attempt to negotiate a broad, long-term agreement on textile trade. The U.S. negotiating team will be led by Special Textile Negotiator David Spooner and will include members from the departments of Commerce, State, Labor and Treasury.

Customs and Border Protection today published an announcement in the Federal Register clarifying that the reconciliation test procedure covers only the following issues: (1) Value issues, other than claims based on latent manufacturing defects; (2) classification issues, on a limited basis; (3) issues concerning value aspects of entries filed under heading 9802, Harmonized Tariff Schedule of the United States (HTSUS; 9802 issues); and (4) post-entry claims under 19 U.S.C. 1520(d) for the benefits of the North American Free Trade Agreement (NAFTA) or the United States-Chile Free Trade Agreement (US-CFTA) for merchandise as to which such claims were not made at the time of entry.

The U.S. Department of Commerce (DOC) today published a notice in the Federal Register seeking comments on a proposal to modify the methodology used to calculate the normal value in antidumping cases involving nonmarket economies. Specifically, DOC is now proposing to use respondents' market economy purchase prices to value all of the input when the majority of each input by volume is sourced from market economy countries. Comments on this proposal must be submitted to DOC by September 6, 2005.

A three-person NAFTA Extraordinary Challenge Committee (ECC) yesterday issued a unanimous decision dismissing U.S. claims that an earlier NAFTA panel ruling involving countervailing duties imposed on Canadian softwood lumber was incorrectly decided.

The Canadian lumber industry is claiming this is the final blow that should end the dispute and are demanding quick return of the $5 billion in countervailing duties paid by U.S. importers of softwood lumber products. After the decision was announced, the USTR issued the following statetement:

"We are, of course, disappointed with the ECC's decision, but it will have no impact on the antidumping and countervailing duty orders given the ITC's November 2004 injury determination. We continue to have concerns about Canadian pricing and forestry practices. We believe that a negotiated solution is in the best interests of both the United States and Canada, and that litigation will not resolve the dispute."

Richard Goldstone, a member of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme (commonly known as the Volcker Commission) told the Associated Press yesterday that about half of the 4,500 companies that took part in the U.N. program paid kickbacks or illegal surcharges to the Government of Iraq. In fact, the Volcker Commission recently sent out letters to a large number of companies advising them that the Commission has information that the companies may have made unauthorized payments and giving them a chance to respond before the Commission issues its final report later this year.

The Bureau of Industry and Security (BIS) today announced the settlement of three export enforcement cases involving unlicensed exports. Each of these settlements occurred during the past few months.

In the first case, BJ Services Company USA, L.P. (BJ Services), agreed to pay a $142,450 civil penalty to settle charges that between October 1999 and June 2002 the company made several exports of items controlled for chemical weapons reasons to various destinations without obtaining the required export licenses. As part of the settlement agreement entered into with BIS, BJ Services is required to perform an audit of its internal compliance program that will be submitted to BIS's Office of Export Enforcement. BIS stated that the investigation of the shipments resulted from voluntary self-disclosures made by BJ Services and that the company cooperated with BIS during the proceeding.

BIS also announced that ExxonMobil Corporation of Fairfax, Va., agreed to pay civil penalties totaling $49,500 to settle charges that affiliates of the former Mobil Oil Corporation, located in Texas, the United Kingdom and Egypt participated in or were otherwise liable for the unauthorized re-export of computer servers and laptop computers to Sudan between June 1999 and February 2000. Mobil's affiliates in London and Egypt were also charged with failure to retain export control documents as required by the Export Administration Regulations (EAR). BIS stated that ExxonMobil voluntarily self-disclosed the violations and cooperated fully in the investigation.

Finally, BIS announced that Lufthansa German Airlines of Atlanta, GA, agreed to pay a $18,000 civil penalty to settle charges that it violated the EAR in connection with an unlicensed export and an attempted unlicensed export to an entity in India on the BIS's Entity List. BIS charged that between January 6 and January 15, 1999, Lufthansa aided and abetted an unlicensed export and attempted export of Cobolt-57, iron foil, and potassium ferrocyanide to the Department of Atomic Energy in India, an organization on BIS's Entity List, without the required export licenses. BIS further charged that in connection with the attempted export, Lufthansa stored the items with knowledge that a violation of the EAR would occur. This is the second export-related settlement this year involving a member of the Lufthansa Group. Earlier this year Lufthansa Cargo AG, agreed to pay a $31,787 penalty to settle an enforcement action brought by the Office of Foreign Assets Control involving the transportation of goods to Yugoslavia in 1999-2000.

The State Department's Directorate of Defense Trade Controls today published a notice in the Federal Register imposing a three-year statutory debarment on three persons convicted of violating or conspiring to violate the Arms Export Control Act.

Labels: DDTC

On September 16, 2005, U.S. Customs and Border Protection (CBP) will begin enforcement of the United States Department of Agriculture's (USDA) Animal and Plant Health Inspection Service (APHIS) import regulation for wood packaging material (WPM). The rule requires WPM, such as pallets, crates, boxes, and dunnage used to support or brace cargo, to be treated and marked. In cases of noncompliance, the WPM will be subject to immediate export along with the accompanying cargo.

CBP has created a page on its website with information on the WPM regulation, inclulding a link to the USDA's final rule published in the Federal Register on September 16, 2004. The site can be viewed at the following link:
www.customs.ustreas.gov/xp/cgov/import/commercial_enforcement/wpm/.

The Independent Inquiry Committee (IIC) into the United Nations Oil-for-Food Programme (OFP) today issued its third Interim Report. The report records the IIC's analysis and conclusions with respect to the the illicit activities of Benon Sevan, Executive Director of the U.N. Office of Iraq Programme, in concert with past or present principals of African Middle East Petroleum Co., Ltd. The report also contains evidence that a U.N. procurement officer, Alexander Yakovlev, in concert with French businessman Mr. Yves Pintore, solicited a bribe in connection with the OFP and otherwise presumptively accepted illicit payments from other U.N. contractors. Yakovlev pleaded guilty today in federal court to charges of wire fraud and money laundering for accepting hundreds of thousands of dollars in bribes from U.N. contractors in his work. He could face up to 20 years in prison for each of the three counts in the indictment.

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) today announced that Erik Kyriacou, of New York , N.Y., was sentenced to five years probation and ordered to pay $8,000 in restitution in connection with the export of night vision equipment for delivery to Iran without the required U.S. Government authorization.

Kyriacou pled guilty to two counts of violating the International Emergency Economic Powers Act, one count of interstate transportation of stolen property and one count of making a false statement in export documents.

According to court documents, in January 2004, Kyriacou unlawfully attempted to export four Astroscope camera lenses from the U.S. with knowledge that the lenses were to be shipped to Iran, which is currently under a U.S. embargo. Kyriacou also attempted to sell the lenses on the Internet to undercover agents posing as international arms brokers. The Astroscope is a third generation night vision device that allows a video camera to capture images clearly in the dark.

Court documents also indicate that the lenses had been stolen from NBC News in New York by Kyriacou while he was a part-time employee.

Customs and Border Protection (CBP) has implemented new procedures for the sealing of containerized cargo inspected by CBP officers. Effective August 9, 2005, CBP will only use International Organization for Standardization Publicly Available Specification 17712 (ISO/PAS 17712) compliant high security bolt seals. CBP officers will affix ISO/PAS 17712 compliant high security bolt seals immediately upon the conclusion of an inspection.

The new seal is intended to standardize the type of seal CBP officers are authorized to use, to eliminate confusion and delays for the trade community and to ensure the integrity of containerized cargo leaving CBP's possession following a physical inspection. Since only containers that are physically inspected will receive the new seals, containers undergoing non-intrusive inspections (NII) will not have them affixed.

This policy does not apply to empty containers or containers that are solely screened by non-intrusive inspection imaging technology. This policy is applicable to containerized cargo that is arriving, departing, or transiting the United States via sea or land.

CBP officers will notify the appropriate parties of the number of the container that has been examined and the serial number of the newly installed high-security bolt seal before the container is released. This generally involves notifying the broker and/or annotating the transportation documents.

The Commerce Department's Bureau of Industry and Security (BIS) today announced the settlement of two enforcement cases involving violations of the antiboycott provisions of the Export Administration Regulations (EAR).

In the first case, National-Oilwell L.P. (NOW) of Houston, Texas, agreed to pay a $3,000 civil penalty to settle allegations that it violated the antiboycott regulations. BIS charged that, on one occasion in 2001 in connection with transactions involving the sale and ultimate transfer of goods from the United States to Syria, NOW furnished prohibited information about its business relationships with Israel in violation of the EAR. BIS also charged that NOW failed to report in a timely manner its receipt of the request from an intermediary in Croatia to provide such certification. The company voluntarily disclosed the transactions and cooperated fully with the investigation.

In the second case, H. D. Sheldon & Company Inc. (Sheldon), a New York-based factory export representative for foodservice equipment and supplies, agreed to pay a $13,500 civil penalty to settle allegations that it violated the antiboycott regulations. BIS alleged that, on two occasions in connection with transactions involving the sale and transfer of goods from the United States to Bahrain and Qatar, Sheldon furnished prohibited information about another company's business relationships with Israel in violation of the EAR. BIS also alleged that, on five occasions, Sheldon failed to report in a timely manner its receipts of requests from Dubai to provide such certification.

The Internet Corporation for Assigned Names and Numbers (ICANN) recently voted to transfer the ".iq" name from InfoCom Corp. to the National Communications and Media Commission (NCMC) of Iraq. On July 7, 2004, a federal court jury in the Northern District of Texas convicted five Palestinian brothers of conspiring to use InfoCom Corp., their Dallas, Texas area computer services company, to make illegal shipments of high-tech goods to Libya and Syria and making false statements to the U.S. Government.

Registration is now open for the National District Export Council Conference to be held in Washington, DC from September 14-16, 2005. This year's conference will focus on international free trade agreements, current competitive challenges and opportunities, and other relevant and timely international trade topics. Invited speakers include Commerce Secretary Carlos Gutierrez, U.S. Trade Representative Rob Portman, Federal Express Chairman Fred Smith, and other international trade experts. Further details and registration information can be found at the following link: www.decconference.com.

The Treasury Department's Office of Foreign Assets Control (OFAC) has issued its monthly report of civil penalties imposed on companies and individuals for violating the sanctions regimes administered by OFAC. OFAC's August 5, 2005 report indicates that the agency settled one case with a corporate entity and entered into informal settlement agreements with 69 individuals for engaging in prohibited Cuba travel-related transactions.

OFAC settled the following cases with corporate entities (amount of the civil penalty is in parentheses):
--DHL Express (USA), Inc. for facilitating trade with Yugoslavia in 1999-2000 and for the late filing of its response to Requirement to Furnish Information in 2002-2003 ($25,000.00).

OFAC settled the following cases with individuals (OFAC does not publish names or amounts of individual settlements):
--OFAC settled 32 cases with individuals engaging in travel-related transactions with Cuba and imposed civil penalties totaling $34,400 (average settlement of $1075)
--OFAC settled 37 cases with individuals for traveling to and importing goods from Cuba. The total penalties imposed was $40,600 (average settlement of $1,097).

Labels: OFAC

On August 4, 2005, Asher Karni, of Cape Town, South Africa, was sentenced to 36 months in federal prison for his role in a scheme to export controlled oscilloscopes and triggered spark gaps to Pakistan. The Justice Department's press release can be viewed at the following link: www.bis.doc.gov//News/2005/karniasher_sen_pre.pdf.