International Trade Law News

The AP reports today that the attorney for Arif Ali Durrani, the convicted Pakistani military-parts dealer, that was recently indicted on additional export control law violations involving jet engine parts (see September 28, 2005 post below), claims that Durrani "is innocent and was set up by the U.S. government." The story states that Durrani's attorney "said he believed the F-5 engine parts were ultimately destined for Iran" but a man, identified by prosecutors as an unindicted co-conspirator, traveled to Iran and sold the aircraft parts, but did not do so at Durrani's instruction. The indictment alleges that Durrani conspired with others in 2004 and 2005 to illegally export engine components for the F-5 fighter jet to Malaysia and Belgium and a cockpit canopy panel for the T-38 Talon to the United Arab Emirates.

Calabrian Corporation of Port Neches, Texas today filed an antidumping petition on Liquid Sulfur Dioxide from Canada. According to data prepared by the Innovation Group, Calabrian is by far the largest U.S. producer of sulfur dioxide, having dramatically increased their capacity to produce the product during the past few years. The same source indicates that the largest Canadian producers of sulfur dioxide are Falconbridge, Inco, Teck Cominco and Marsulex.

Labels: Antidumping

Today President Bush issued two Presidential Determinations that remove restrictions on Libya. The first Presidential Determination (P.D. 2005-39) permits the State Department's Directorate of Defense Trade Controls (DDTC) to issue license permitting U.S. companies to work with Libya to destroy its stockpile of chemical weapons. The second Presidential Determination (P.D. 2005-40) permits DDTC to issue licenses allowing U.S. companies to assist Libya in refurbishing eight C-130H cargo aircraft that Libya bought from the U.S. in the 1970s. Libya owns the aircraft, but never took possession of the planes that are stored in the U.S.

Secretary of Homeland Security Michael Chertoff today announced Commissioner for U.S. Customs and Border Protection, Robert C. Bonner, notified the President earlier this week that he will retire from government service. His retirement date has not yet been determined.

Bonner was confirmed by the Senate on September 19, 2001 and was sworn in as the 17th Commissioner of U.S. Customs on September 24, 2001. When the Department of Homeland Security was established, he oversaw the merger of three separate agencies and 42,000 employees into a unified border agency.

As indicated by a story in today's FederalTimes.com, Bonner's tenure as CBP Commissioner has evoked mixed emotions.

The International Compliance Professionals Association (ICPA) has announced the topics that will be covered during ICPA's 3rd Annual Conference that will take place from March 6 - 9, 2006 in Las Vegas. The program will cover a number of timely issues related to import and export compliance. A complete list of topics can be viewed here. Registration for the conference will begin in December.

The Rand Corporation's National Security Research Division has issued a report entitled "Chasing the Dragon: Assessing China's System of Export Controls for WMD-related Goods and Technologies", which criticizes China's commitment to export controls on sensitive goods and technologies that could help create chemical, biological, radiological and nuclear weapons. While the report indicates that China has made much progress, it needs to do more to enforce its own controls on exports that could help other nations or organizations develop weapons of mass destruction. The study says China should do more to strengthen its anti-proliferation efforts if it wants to show itself to be a "responsible major power" that is engaged in a "peaceful rise." For example, the study notes that the Chinese government has made public only two cases of export control violations where penalties were assessed. As a result, the study says there is minimal incentive for Chinese companies to comply with the laws controlling WMD exports and to eventually police themselves.

The study also says:
--Foreign agents and enterprises operating in China have already taken advantage of China's weak regulatory environment to illicitly procure controlled items for their national WMD-related development programs.
--As a result of China's membership in the World Trade Organization, foreign involvement in China's domestic nuclear, aerospace and chemical industries will grow and could become a matter of concern for China's export control system.
--China's current anti-proliferation mechanisms are largely reactive and based primarily on reports and tips from Western intelligence officials about pending exports of controlled goods and technologies.
--Chinese Ministry of Commerce officials appear to be unwilling to pursue investigations of alleged wrongdoing against large and influential Chinese state-owned enterprises with strong political connections.

China's Foreign Ministry issued a statement criticizing the report and said the Rand Corporation "should adopt a sincere and objective attitude in viewing the Chinese government's efforts and commitment to nonproliferation."

The 134 report can be purchased for $20.00 at the following link.

The San Diego Union-Tribune reports that Arif Ali Durrani, a convicted Pakistani military-parts dealer, faces new charges of engaging in a conspiracy to smuggle jet engine components from the U.S. to Malaysia, the United Arab Emirates and Belgium.

In 1987 Durrani was found guilty on three counts of violating the Arms Export Control Act and was released from prison in 1992. According to the U.S. Government, Durrani continued to operate his business from Mexico after leaving the U.S. in 1998 under pressure from U.S. authorities who were trying to deport him. Durrani returned to the U.S. in June of this year after Mexico authorities deported him. He was arrested when his flight landed in Los Angeles.

The following is the latest information on the status of the Census Bureau's final rule requiring all Shipper's Export Declarations (SEDs) to be filed electronically through the Automated Export System (AES) and increasing penalties for inaccurate or delinquent filings:

Census now expects to publish the final rule in the Federal Register by the end of November or beginning of December 2005. As expected, the final rule will provide for a 90 day implementation period. Thus, Census will expect all export data to be filed electronically by the end of February or beginning of March 2006. Overall, the final rule will be very similar to the proposed rule issued in February 2005, although certain language in the proposed rule has been modified in response to comments submitted by the public and additional inter-agency consultations. One of the main changes to the final rule will involve the provisions relating to penalties for providing inaccurate or late export information. For example, the final rule will provide that all voluntary self disclosures (VSDs) relating to inaccurate filings will be sent to Census. Census will examine the information contained in the exporter's VSD and make a decision whether to send it to BIS or CBP for enforcement. The final rule will provide a mitigation process for all civil penalties.

A summary of the proposed mandatory AES rule that was published by Census on February 17, 2005 can be found here. The public comments that were submitted to Cenus on the proposed rule can be found here.

Labels: AES

The U.S. General Accountability Office has issued a report criticizing the Continued Dumping and Subsidy Offset Act (CDSOA), known as the "Byrd Amendment." The report entitled "Issues and Effects of Implementing the Continued Dumping and Subsidy Offset Act" indicates that U.S. Customs and Border Protection (CBP) faces several problems in implementing payments made under the Byrd Amendment. For example, GAO indicated that CBP's processing of company claims and CDSOA payments is problematic because CBP's procedures are labor intensive and do not include standardized forms or electronic filing. GAO also noted that companies are not accountable for the claims they file because they do not have to support their claims and CBP does not systematically verify the claims. GAO found that CBP's problems in collecting duties that fund the CDSOA have worsened and that about half of the funds that should have been available for disbursement remained uncollected in fiscal year 2004. GAO also found that about half of the total payments made went to only five companies and two-thirds of the total payments have been made to only three industries: bearings, candles and steel.

The National Retail Federation (NRF) welcomed the GAO report by issuing calling for the repeal of the Byrd Amendment and noting that the "report confirms everything we've ever said about why the Byrd Amendment should be overturned." The NRF said the Byrd Amendment "encourages the filing of frivolous antidumping cases, and it does nothing to create or protect U.S. jobs." The statement said the "Byrd Amendment virtually defines corporate welfare" and is "a massive payola scheme that takes money out of the U.S. Treasury and uses it to line the pockets of private companies that have done nothing to earn it except sign on to antidumping petitions that drive up prices for American consumers."

Representative Jim Ramstad (R-Minn) has introduced H.R. 1121, a bill that would repeal the Byrd Amendment.

The PDF version of GAO's report can be found at the following link.

Labels: Antidumping

The Commerce Department's Bureau of Industry and Security (BIS) announced that Price Brothers (UK) Limited of Surrey, United Kingdom, agreed to pay civil penalties totaling $101,500 to settle charges pertaining to unlicensed reexports of U.S.-origin commodities from the U.K. to Libya while the U.S. trade embargo on Libya was in place. Specifically, BIS charged that, on six occasions between January 2000 and April 2000, Price Brothers (UK) supplied machinery spare parts to an entity in the U.K., which subsequently reexported them to Libya without obtaining the required licenses from BIS. BIS also charged that, on 23 occasions between June 2000 and June 2002, Price Brothers (UK) reexported machinery spare parts from the United Kingdom to a company in Libya without obtaining licenses from BIS. BIS indicated that Price Brothers (UK) voluntarily self-disclosed the violations and cooperated fully in the investigation.

The President's Export Council Subcommittee on Export Administration (PECSEA) met yesterday in Washington, DC. During the discussion of enforcement activity, BIS indicated that this year there have been 29 criminal actions, resulting in $7.7 million in fines. They have also brought 63 civil enforcement actions, which have resulted in $6.2 million in fines. If the current trend continues, the total number of cases brought this year will surpass last year's total and will result in almost double the amount of fines imposed. BIS has seen a dramatic increase in voluntary self-disclsoures (VSDs). Last year there were a total of 75 VSDs submitted to BIS. There have already been 136 VSDs submitted in 2005. If the current trend continues, the total number of VSDs will be more than double last year's total. BIS strongly encourages the filing of VSDs as a mitigating factor and as "the right thing to do" as good corporate citizens.

--Thanks to John Priecko for supplying this information.

From the House of Representatives International Relations Committee (HIRC) Report on the Foreign Relations Authorization Act (FRAA) for FY 2006-2007 (H.R. 2601):

"The committee commends the Department of Defense for the significant improvements it has made in reducing license review times in recent years, as documented by GAO, and notes that the overall 30-day goal established in Section 712(b)(6) would already be within the Executive Branch's grasp had the State Department's overall processing times not deteriorated since 2003."

H.R. 2601 contains a number of important provisions relating to export licensing. For example, section 713 authorizes up to $13,000,000 in fiscal years 2006 and 2007 "for salaries and expenses related to the assignment of additional full time license and compliance officers in the Directorate of Defense Trade Controls of the Department of State."

In addition, section 721 of the bill requires transparancy in the commodity jurisdiction and commodity classificaiton process. The bill states that the "complete confidentiality surrounding several thousand commodity classification determinations made each year by the Department of Commerce pursuant to the Export Administration Regulations and several hundred commodity jurisdiction determinations made each year by the Department of State pursuant to the International Traffic in Arms Regulations is not necessary to protect legitimate proprietary interests of persons or their prices and customers, is not in the best interests of the security and foreign policy interests of the United States, is inconsistent with the need to ensure a level playing field for United States exporters, and detracts from United States efforts to promote greater transparency and responsibility by other countries in their export control systems."

The bill also requires the State and Commerce Department to publish in the Federal Register a description of the item that has been classified, including performance levels or other technical characteristics, an explanation of whether the item is controlled under the International Traffic in Arms Regulations or the Export Administration Regulations, and the USML designation or ECCN under which the item has been designated or classified (exempting company names, prices and customers from disclosure) and requires the agencies to maintain on their websites an archive of the classifications published in the Federal Register.

Registration is now open for U.S. Customs and Border Protection's Trade Symposium that will be held in Washington from November 2-5, 2005. Information on the program and a link to the registration site can be found at the following link: www.cbp.gov/xp/cgov/import/communications_to_industry/
trade_2005/trade_symp_2005_info.xml

U.S. Customs and Border Protection today published in the Federal Register a notice announcing changes in CBP's National Customs Automation Program (NCAP) test concerning periodic monthly deposit of estimated duties and fees. The notice states that participants in the Periodic Monthly Statement test are no longer required to provide a bond rider covering the periodic payment of
estimated duties and fees. However, nonpayment or untimely payment of estimated duties and fees may result in action by CBP to impose sanctions on the delinquent importer of record or to allow the surety to terminate its basic importation bond. If the bond principal is a participant in the Periodic Monthly Statement test, sureties will now be allowed, under certain conditions, to terminate bonds with 3 business days notice to the bond principal and CBP.

Reuters reports that an unamed British defense official speaking at a defense trade association conference in Washington that that it "could become more difficult for Britain to join military operations with U.S. troops unless Washington eases tight export controls on its closest military ally." The official said the U.S. government had tightened its interpretation of already restrictive export controls over the past year, and it would take a "long, hard battle" to reverse the current trend." He also indicated that the export controls system in the U.S. is "is immensely more bureaucratic. . . than any environment that I have come across in Europe."

A recent Reuters report on the increased number of cases involving the Foreign Corrupt Practices Act (FCPA) confirms what those of us that practice in the area have experienced first-hand:FCPA cases are "gaining prominence on the U.S. regulatory docket" due to increased international merger activity. The article quotes Paul Berger, the associate director of the Securities and Exchange Commission's (SEC) enforcement division as stating that the SEC has "seen an increase in the number of companies coming forward to discuss issues with respect to the FCPA" and that "there are a fair number of investigations under way" dealing with the FCPA. Compliance with the FCPA should be closely examined during the acquistion of any company that engages in sales outside of the United States.

Representative Bill Thomas (R-CA), Chairman of the House Ways and Means Committee, today announced that the Ways and Means Committee will hold a hearing on the implementation of the U.S.-Bahrain Free Trade Agreement (FTA). The hearing will examine the U.S.-Bahrain FTA and the benefits that the agreement will bring to U.S. businesses, farmers, workers, consumers and the U.S. economy, as well as to the U.S. strategic relationship in the region.

The hearing will take place at 10:30 a.m. on Thursday, September 29, 2005, in the room 1100 of the Longworth House Office Building.Oral testimony at this hearing will be from both invited and public witnesses. Invited witnesses will include Shaun Donnelly, Assistant U.S. Trade Representative for Europe and the Mediterranean. Any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. Requests to be heard at the hearing must be made by telephone to Michael Morrow or Kevin Herms at (202) 225‑1721 no later than 12:00 p.m. on September 23, 2005.

House Majority Whip Roy Blunt (R-MO) sent a letter to President Bush yesterday requesting that antidumping and countervailing duties on Canadian softwood lumber be suspended or eliminated in order to reduce the cost of Hurricane Katrina reconstruction. The letter indicated that the softwood lumber tariffs add at least $1,000 to the average new American home.

In the same letter, Blunt also urged the Bush Administration to drop or reduce the antidumping duties on cement from Mexico. He noted that Asian cement, which is not subject to antidumping duties, requires weeks or months to arrive in the Gulf region and the supply is unpredictable due to a lack of transport capacity.

Labels: Antidumping

The International Import Export Institute (IIEI) has published the latest issue of its GlobalWatch newsletter. The newsletter contains information of interest to exporters, including information on compliance and trade-related news. The newsletter also mentions that IIEU will begin a new course, Orientation for Empowered Officials, on October 20th and will launch a course on U.K. Export Control Regulations in early 2006. The September/October issue of GlobalWatch and previous issues of the newsletter can be found at the following link:
www.iiei.edu/Newsletter/newsletter.html.

Information on the 23rd Havana International Fair, that will be held from October 31 through November 5, 2005, can be found at the following site: www.cepec.cu/ingles/fihav3.htm.

Alimport, Cuba's food purchasing and import agency, has reportedly told the Texas Wheat Producers Association that Cuba is interested in buying 250,000 tons (13 million bushels) of hard red winter wheat from Texas in 2006.

The Canada Border Services Agency (CBSA) has initiated, pursuant to Canada's Special Import Measures Act, an antidumping and countervailing duty investigation on grain corn in all forms, excluding seed corn (for reproductive purposes), sweet corn and popping corn, from the U.S.

CBSA's investigation follows receipt of petitions filed by the Ontario Corn Producers' Association, the Federation des producteurs de cultures commerciales du Quebec and the Manitoba Corn Growers Association Inc. The petitions alleged that the dumping and subsidizing of grain corn is harming Canadian production by causing price erosion, price suppression, decreased incomes, increased burdens on government support programs and reduced acreage planted.

The CBSA will now investigate whether the imports are being dumped or subsidized and will make a decision by December 15, 2005. While the CBSA is conducting its investigation, the Canadian International Trade Tribunal (CITT) will begin a preliminary inquiry to determine whether the imports are harming the Canadian producers. The CITT will issue a decision by November 15, 2005.

Labels: Countervailing Duties

Today the Bureau of Industry and Security (BIS) published in the Federal Register a final "fix-it" regulation that makes various minor technical changes to the Export Administration Regulations (EAR). The regulation deletes a redundant paragraph, inserts material inadvertently omitted from previous rules in three places, clarifies instructions for applying for authorization to transfer items subject to the EAR in-country, adds an alias for a previously listed entity on the Entity List and removes references to two Export Control Classification Numbers (ECCNs) that do not exist. The final regulation can be viewed at the following link:
a257.g.akamaitech.net/7/257/2422/01jan20051800/
edocket.access.gpo.gov/2005/05-18373.htm

The prepared testimony delivered yesterday by Under Secretary of Commerce for Export Administration-Designate David H. McCormick and Darryl W. Jackson, Assistant Secretary of Commerce for Export Enforcement-Designate before the Senate Committee on Banking, Housing and Urban Affairs on September 15, 2005 can be found at the following link:
www.bis.doc.gov/news/index.htm#testimony (scroll down for the links). The Committee did not vote on the nominations yesterday and has not announced when a vote will be held.

By a vote of 60 to 39, the U.S. Senate today rejected an amendment to H.R. 2862, the Departments of Commerce and Justice, Science, and Related Agencies Appropriations Act of 2006, submitted by Senator Byron Dorgan (D-ND) that would have prohibited funding for U.S. trade negotiators to enter into any agreement that would modify a number of U.S. trade laws, including antidumping laws and countervailing duty laws. The Dorgan amendment was strongly opposed by the Bush administration and business interests. The Senate voted 99-0 for an alternative proposal by Senator Grassley (R-IA) that was milder than the Dorgan amendment. The Grassley Amendment provides that none of the funds appropriated or otherwise made available by H.R. 2862 may be used "in a manner that is inconsistent with the principle negotiating objective of the United States with respect to trade remedy laws."

On September 15, 2005, the Senate Banking, Housing and Urban Affairs Committee will hold a hearing on the following nominations for senior positions at the Commerce Department:

Israel Hernandez, of Texas, to be Assistant Secretary of Commerce and Director General of the U.S. and Foreign Commercial Service;

Darryl W. Jackson, of the District of Columbia, to be Assistant Secretary of Commerce for Export Enforcement;

Franklin L. Lavin, of Ohio, to be Under Secretary of Commerce for International Trade; and

David H. McCormick, of Pennsylvania, to be Under Secretary of Commerce for Export Administration.

President Bush has nominated Karan K. Bhatia, of Maryland, to be Deputy United States Trade Representative, with the Rank of Ambassador. Mr. Bhatia currently serves as Assistant Secretary for Aviation and International Affairs at the Department of Transportation. He previously served as Deputy Under Secretary of Commerce for Industry and Security. Prior to that, Mr. Bhatia served as Chief Counsel for the Department of Commerce's Bureau of Export Administration.

The Bureau of the Census expects to publish in the next two or three weeks the final rule requiring all Shipper's Export Declarations (SEDs) to be filed electronically through the Automated Export System (AES) and increasing penalties for delinquent SED filings.

A summary of Census' proposed rule that was published on February 17, 2005 can be found at the following link: www.djacobsonlaw.com/2005/02/census-publishes-proposed-rule-on.html.
The public comments that were submitted on the proposed rule can be found at the following link:
www.census.gov/foreign-trade/regulations/nprresponse/.

Labels: AES

The U.S. Attorney for the District of New Jersey today announced that four owner and operators of Manten Electronics, Inc. of Mount Laurel, NJ pleaded guilty to charges that they used their business to illegally transfer sensitive national-security controlled items to state-sponsored research institutes in China.

Manten Electronics, Inc.'s president Xu Weibo, a/k/a "Kevin Xu," 38, purchasing agent Xiu Ling Chen, a/k/a "Linda Chen," 34, (wife of Kevin Xu), vice president Hao Li Chen, a/k/a "Ali Chan," 29, (brother of Linda Chen) and company controller Kwan Chun Chan, a/k/a "Jenny Chan," 29, (wife of Ali Chan), all entered their pleas before U.S. District Judge Joseph A. Greenaway, Jr., in federal court in Newark. All four defendants are naturalized U.S. citizens.

Xu Weibo pleaded guilty to a three-count Information charging one count of conspiracy to violate the Export Administration Act and the Arms Export Control Act, and one count each of violating the Export Administration Act and the Arms Export Control Act. Xiu Ling Chen, Hao Li Chen, and Kwan Chun Chan each pleaded guilty to one-count Informations charging conspiracy to violate United States export laws, namely the Export Administration Act and the Arms Export Control Act. The sentencing proceedings are scheduled for February 6, 2006.

The defendants also agreed as part of their plea agreements to forfeit $391,337, which represents their revenue from the illegal exports.

The four defendants were arrested on July 1, 2004, on a Criminal Complaint that resulted from an investigation that began in January 2003 by a multi-agency task force consisting of agents from the Federal Bureau of Investigation, Immigration and Customs Enforcement and the U.S. Department of Commerce.

The defendants pleaded guilty to illegally exporting items, including monlithic microwave integrated circuits, that are used in a wide variety of defense weapons systems, including radar, smart weapons, electronic warfare and communications. According to the Informations that the defendants pleaded guilty to, the illegal exports were destined for entities controlled by the Chinese government. Among those entities was a Chinese Research Institute that the United States government has identified as posing an unacceptable risk in the development of weapons of mass destruction or missiles used to deliver weapons of mass destruction.

At their plea hearings, the defendants admitted that they used various techniques to conceal their export activities, such as providing false written and verbal statements that purported that the recipient of the restricted items was a United States corporation rather than a government entity of the People's Republic of China, and falsifying shipping documents to conceal the true contents of their shipments to China.

The export violations carry a maximum penalty of 10 years in prison and a $1 million fine. The count of conspiracy to violate the Export Administration Act and the Arms Export Control Act, carries a maximum penalty of five years in prison and a $250,000 fine.

The Associated Press reports that the case involving Manten Electronics Inc. is the latest, but far from the largest, to deal with illegal technology and arms exports to China and that since January 2000, U.S. Immigration and Customs Enforcement has launched more than 400 investigations into illegal technology and arms exports to China.

The Miami Herald recently published an interview with John Kavulich, former president of the U.S.-Cuba Trade and Economic Council. In the interview, Kavulich tells of the frustration and disappointment in working on U.S.-Cuba related business issues that eventually led to his resignation from the organization he helped to found. The article can be viewed at the following link (free registration required):
www.miami.com/mld/miamiherald/12597107.htm.

The U.S. and the Kingdom of Saudi Arabia have concluded bilateral negotiations on issues related to Saudi Arabia's accession to the World Trade Organization (WTO). In the agreement, Saudi Arabia pledged not to enforce the Arab boycott against U.S. companies that maintain trade relations with Israel (the secondary and tertiary aspects of the Arab boycott of Israel). In addition, Saudi Arabia agreed not to invoke the non-application provision of the WTO Agreement and thus will have WTO relations with all WTO members, including Israel.

Saudi Arabia has been negotiating the terms of its accession to the General Agreement on Tariffs and Trade (GATT), and then to the WTO, since 1993. The U.S. is the last WTO member formally to conclude a bilateral market access agreement with Saudi Arabia. The agreement with the U.S. and those Saudi Arabia concluded with other WTO members will be consolidated in a package that must be approved formally by WTO members and accepted by the government of Saudi Arabia.

A summary of the U.S.-Saudi Arabia agreement prepared by USTR can be found at the following link:
www.ustr.gov/assets/Document_Library/Fact_Sheets/2005/
asset_upload_file762_7935.pdf.

Labels: Boycotts

The Association of American School Paper Suppliers, an ad hoc trade association of U.S. producers of paper school supplies, filed petitions on September 9, 2005, with the U.S. Department of Commerce and the U.S. International Trade Commission, alleging that imports of lined paper school supplies from India, Indonesia and the People's Republic of China are being sold at less than fair value and are causing material injury to the U.S. industry. The petitions also allege that imports from India and Indonesia are benefiting from government subsidies. The petitions seek the imposition of antidumping and countervailing duties against imports of lined paper school supplies from the three countries to counter the material injury and threat of material injury caused by the unfairly traded imports.

The petition covers lined paper school supplies on which notes are taken and includes school notebooks and filler paper. The antidumping margins alleged in the petition range from 207 to 319% for China, 157 to 208% for India and 103 to 177% for Indonesia. In addition, the petition alleges substantial countervailing duty margins against India and Indonesia.

The Association of American School Paper Suppliers includes the following domestic producers: MeadWestvaco Consumer and Office Products Division of MeadWestvaco Corporation, Norcom, Inc. and Top Flight, Inc.

Labels: Countervailing Duties

The Independent Inquiry Committee (IIC) today issued its final report on the overall management and oversight of the U.N.'s Oil for Food Program. The report states that while the program "accomplished many vital goals in Iraq", including "reversing a serious and deteriorating food crisis, preventing widespread hunger and probably reducing deaths due to malnutrition" at the same time " things went wrong, damaging the reputation and credibility of the United Nations." With respect to the program as a whole, the IIC's central conclusion is that the U.N. requires stronger executive leadership, thorough administrative reform and more reliable controls and auditing.

Yesterday, by a vote of 118 to 4, the Dominican Republic's Chamber of Deputies approved the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). The Dominican Republic, El Salvador, Guatemala, Honduras and the U.S. have now approved CAFTA-DR. Nicaragua and Costa Rica, the other two signatory countries, have not approved the agreement to date. The U.S. will be coordinating the implementation of the free trade agreement with signatory countries in the next few weeks.

Customs and Border Protection (CBP) has announced some changes to the Importer Self Assessment (ISA) Program. First, language has been removed from the ISA handbook and ISA Memorandum of Understanding (MOU) concerning prior disclosure that gave the impression that the prior disclosure benefits were extended only for the period when the ISA team was actually on site reviewing an importer's internal controls. CBP has announced that the enhanced prior disclosure benefits are available to an ISA participant for the duration of their time in the program as long as they are in good standing. Excluding, of course, a situation where the matter is already the subject of an ongoing CBP investigation or fraud is involved.

With respect to the annual notification letter that requires the importer to submit the "results of periodic testing", CBP has clarified that they want importers to submit a "summary of any findings" from the periodic testing, not the entire internal report on the testing results.

The Directorate of Defense Trade Controls has terminated the statutory debarment imposed against Orbit/FR, Inc., a supplier of antenna & microwave measurement systems, resulting from past violations of the Arms Export Control Act.

As previously reported, as a result of Hurricane Katrina Customs and Border Protection issued a notice waiving the Jones Act to permitnon-coastwise-qualified vessels (i.e., not U.S.-built, owned and documented) to help distribute petroleum and refined petroleum products to where it is needed. The notice was published in today's Federal Register. The waiver of the Jones Act applies only to vessels transporting petroleum and refined petroleum products and ends September 19, 2005 at 12: 01 a.m. eastern daylight time. The notice can be viewed at the following link:
a257.g.akamaitech.net/7/257/2422/01jan20051800/
edocket.access.gpo.gov/2005/05-17829.htm.

Registration for Update 2005, the Bureau of Industry and Security's (BIS) annual conference on export controls and policy, is now open on the BIS website. The conference will be held October 24-25 in Washington, DC. If you are interested in attending, be sure to register early since this event always sells out. Visit the following site to register: www.bis.doc.gov/seminarsandtraining/updatehow2signup.htm.

The Directorate of Defense Trade Controls today posted the following announcement on its website:

Defense Trade Controls - DDTC and Commercial Affiliations

To enhance operational efficiency in fulfillment of its mission, the Directorate establishes and maintains commercial arrangements with a variety of vendors, contractors and other for-profit private sector entities. Undertakings of this nature are conducted in full compliance with applicable Federal laws and regulations and Departmental policy. Although a number of companies cite or imply an association with the Directorate of Defense Trade Controls (DDTC) as a part of their efforts to market their goods and services, no commercial firm can legitimately claim to enjoy a "special" relationship with DDTC. While we may have a contractual relationship, this is accomplished in accordance with the contracting and procurement rules and each party's rights and obligations are under the particular contract or official procurement arrangement. DDTC use of any particular commercial product or service does not constitute a Directorate or USG endorsement.

-- The DDTC Managing Director

Labels: DDTC, Export Controls

Shara L. Aranoff was sworn in today as a Commissioner of the U.S. International Trade Commission (ITC). Ms. Aranoff was confirmed by the U.S. Senate on July 29, 2005 for the term expiring on December 16, 2012.

Prior to her appointment, Commissioner Aranoff was Senior International Trade Counsel on the Democratic staff of the U.S. Senate Committee on Finance, where she was responsible for legislative and policy issues on international trade and investment, including the Trade Act of 2002; negotiations involving the World Trade Organization, the Free Trade Area of the Americas, and numerous free trade agreements; trade remedy laws; Trade Adjustment Assistance; and trade- related environment and labor issues.

From June 1993 until her Senate Finance Committee appointment in January 2001, she served as an Attorney-Advisor in the Office of the General Counsel at the U.S. International Trade Commission.

The Independent Inquiry Committee (IIC) investigating the U.N. Iraq Oil-for-Food Program (OFP) today released the preface to the IIC's forthcoming comprehensive report on issues relating to the OFP. The IIC's full report will be released tomorrow morning. Another report discussing the companies involved in the program is expected to be issued by the IIC in October. Today's preface and tomorrow's full report will be posted on the IIC's website at www.iic-offp.org.

The next meeting of the National Council on International Trade and Development (NCITD) will be held at 9:00 a.m. on September 8, 2005 at the University Club in Washington, DC. The speakers include:

Mel Schwechter, partner of the law firm of LeBoeuf, Lamb, Greene & MacRae, LLP, will be discussing proposed changes to the jurisdiction of the U.S. Court of International Trade;

Barbara Hammerle, Deputy Assistant General Counsel of the Office of Foreign Assets Control (OFAC); and

Hillary Hess, Director of the Bureau of Industry and Security's (BIS) Regulatory Policy Division (invited).

For information on how to join NCITD or to attend the meeting, contact the NCITD Secretariat by email (cu@ncitd.org) or by phone (202-872-9280).

Labels: OFAC

A Federal Judge in New Haven, Connecticut recently imposed a 32 month prison sentence on Kwonhwan "Howard" Park, 36, a South Korean citizen who admitted to diverting Black Hawk helicopter engines to China. On November 9, 2004, Park pleaded guilty to violating the Arms Export Control Act, and conspiracy charges, in connection with his effort to obtain military engines for the Black Hawk helicopter manufactured by Sikorsky Aircraft as well as other military items, and divert them to China.

As disclosed in court proceedings, Park was the subject of a two year investigation conducted by Special Agents of the U.S. Department of Homeland Security, Immigration and Customs Enforcement (ICE) and Defense Criminal Investigative Service (DCIS), after he and his Malaysian company, SGS, attempted to purchase military helicopter engines from Helicopter Support International, a company affiliated with Sikorsky Aircraft and located in Stratford, Connecticut. The government alleged that during 2001, Park and others provided documents to the U.S. Department of State's Directorate of Defense Trade Controls (DDTC) asserting that the engines, worth in excess of $1,000,000 each, were destined either for the Malaysian Army or the Korean Army. Park and SGS even provided sworn end-user certificates, with signatures from purported Malaysian and Korean military officials, which attested that the engines were for use by the Malaysian military and the Korean Army.

A subsequent investigation revealed that the signatures were fraudulent. The investigation also found that two helicopter engines which were shipped to Malaysia were diverted to China. Park and his associates later attempted to obtain four additional engines for the S70 Sikorsky military helicopter. Acting on a suspicion, General Electric, the manufacturer of the engines, notified governments agents. Park later indicated that the four additional engines were destined for the South Korean Army, although an investigation confirmed that the South Korean Army had never ordered the engines.

Park was arrested in April 2004 at Dulles International Airport when he attempted to depart the U.S. on a plane bound for Beijing, China. An inspection of Park's luggage confirmed that he had in his checked bag and on his person a sophisticated night vision goggle system that was manufactured by a U.S. company that is controlled for export.

After completing his term of imprisonment, Park is subject to deportation to South Korea.

The Customs Electronic Bulletin Board (CEBB) is nearly history. Customs and Border Protection has announced that in the near future the CEBB link will no longer be located in the Quicklinks on the CBP.gov homepage. While the CEBB link will be listed on the Import Quicklinks, Legal Quicklinks, Export Quicklinks and Publications Quicklinks on CBP's website, the information that was included in the CEBB (including rulings, quota information, AD/CVD instructions, exchange rates, etc.) now resides on various pages of CBP's website. A directory of where the CEBB information can now be found on CBP's website is located at:
cbp.gov/xp/cgov/import/communications_to_industry/cebb_linklist.xml.