International Trade Law News

The U.S. Trade Representative today announced that the U.S. has requested WTO dispute settlement consultations with China over its treatment of imported auto parts. The U.S. claims that China's regulations on imported auto parts impose a tax beyond that allowed by WTO rules and results in discrimination against imported auto parts. Specifically, the U.S. claims that China is acting inconsistently with several WTO provisions, including Articles II and III of the General Agreement on Tariffs and Trade 1994 and Article 2 of the Agreement on Trade-Related Investment Measures, as well as specific commitments made by China in its WTO accession agreement.

The Bureau of Industry and Security has announced that the Simplified Network Application Process Redesign (SNAP-R) Prototype will be available from April 3-14, 2006 for exporters to preview and provide comments on the design. Some of the new features of SNAP-R will include on-line submission of electronic supporting documentation, on-line messaging between the licensing officer and exporter and enhanced security.

Labels: BIS

The Bureau of Industry and Security (BIS) has imposed an $82,500 penalty on Ameribrom, Inc., the New Jersey-based subsidiary of Israel's Dead Sea Bromine Group, to settle charges of illegal exports of chemicals to Israel. Specifically, BIS alleged that Ameribrom exported chloropicrin-based pesticide and soil fungicide, an item classified under Export Control Classification Number 1C355.b, to Israel on 11 occasions without obtaining and submitting to BIS the end-use certificate required by Section 745.2 of the Export Administration Regulations (EAR). That provision requires that an end-use certificate from the government of the recipient of the applicable items be submitted to BIS for exports of Chemical Weapons Convention Schedule 3 chemicals to countries not party to the Chemical Weapons Convention, such as Israel.

Senators Grassley (R-IA) and Baucus (D-MT), Chairman and Ranking Member of the Senate Finance Committee, recently introduced "The U.S. Trade Enhancement Act of 2006", legislation aimed at resolving currency and trade enforcement issues between the U.S. and other countries (namely China). The U.S. Trade Enhancement Act of 2006 would give the U.S. government new rules and new tools to encourage nations to value their currency appropriately and to abide by international trade agreements.

The bill requires the Treasury Department to engage the International Monetary Fund (IMF) and other countries to resolve major currency imbalances with the dollar. It provides for specific consequences for nations that refuse to adopt appropriate policies that facilitate the fair valuation of their currency, including: disapproval of Overseas Private Investment Corporation (OPIC) insurance; disapproval of international financing (e.g., at the Asian Development Bank); opposition to additional voting power in the IMF; and retention of non-market economy status for purposes of U.S. antidumping law.

The bill will also create a new Assistant Secretary of the Treasury to focus more directly on currency issues and exchange rates. The U.S. Trade Enhancement Act would also give the U.S. Trade Representative (USTR) new tools and authority to deal with specific trade enforcement problems prioritized by Congress. The bill requires USTR to produce, with Congress, an annual report identifying the most significant market access barriers to American exporters. It also would create a new, Senate-confirmed trade enforcement officer, who will be supported by a task force drawn from numerous federal agencies.

The text of the bill has not been issued, however a summary of the bill can be found here.

The World Trade Organization has announced that Vietnam’s WTO membership negotiations are proceeding and are now in the "final stages."

U.S. Trade Representative (USTR) Rob Portman announced yesterday that he has named Stephen Kho and Terry McCartin as the co-chairs of the USTR's new China Trade Enforcement Task Force. The task force is part of the USTR's "top-to-bottom review" of U.S.-China trade policy. Mr. Kho now serves as the USTR's Acting Chief Counsel for China Enforcement and Mr. McCartin is the Deputy Assistant U.S. Trade Representative for China Enforcement. They will be joined on the task force by USTR staffers specializing in intellectual property rights, industrial policies, agriculture, services, investment, WTO affairs and textiles.

The U.S.-China Economic and Security Review Commission (USCC) has announced that it will hold a hearing on April 4, 2006 on "China's World Trade Organization Compliance: Industrial Subsidies and the Impact on U.S. and World Markets.'. The hearing is designed to assist the USCC in fulfilling its mandate by assessing China's compliance with its World Trade Organization accession agreement on subsidies, examining what constitutes the breadth of China's subsidy regime, evaluating the level of transparency into China's subsidy regime and economic planning process, and identifying how China's industrial subsidies negatively or positively affect U.S. companies, investors, and workers.

The State Department's Bureau of Political-Military Affairs today published in the Federal Register a notice announcing that the U.S. will now permit the licensed export to Indonesia of lethal defense articles controlled on the U.S. Munitions List, as well as defense services related to the export of such lethal defense articles. Applications for such exports will be considered by the State Department on a case-by-case basis.

The United States International Trade Commission (ITC) 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-103-14), was requested by the U.S. Trade Representative (USTR) on March 20, 2006. The ITC will provide advice to the USTR on the probable effect of the proposed NAFTA rules of origin modifications on U.S. trade and on domestic producers of the affected articles.

This investigation covers a wide variety of articles, including fish and crustaceans; herbs and spices; fish oils; food preparations; oil and petroleum products; leather; aluminum; diesel engines; turbines; valves; electric motors, transformers and generators; batteries; apparatus for radio telephony; turntables and cassette players; alarms; rail locomotives and parts; medical appliances and parts; lighters; instruments to control or measure and others. Details can be obtained from the attachment to the USTR's request letter, which can be found on the ITC's electronic document information system (EDIS).

The ITC is seeking written input for this investigation from interested parties. Written comments should be addressed to the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 and should be submitted no later than 5:15 p.m. on June 2, 2006. The ITC expects to submit its advice to the USTR by August 14, 2006.

The U.S. Army has entered into an Administrative Compliance Agreement with Eagle Global Logistics (EGL) Inc. lifting the recently imposed suspension from contracting with any agency in the executive branch of the U.S. Government. The effective date of this agreement is March 24, 2006.

Since EGL is once again eligible to contract with U.S. Government agencies, the Directorate of Defense Trade Controls announced today that EGL is now again eligible to participate in defense trade activities. Applications on which EGL is a party to the transaction will no longer be denied solely on the basis of EGL’s participation.

U.S. Customs and Border Protection (CBP) has issued a memorandum advising the trade community that the instructions to the CBP Form 7501 Entry Summary form are being updated to be in compliance with recent policy and procedural changes. Specifically, the changes being made to CBP Form 7501 relate to block 13 "Manufacturer ID", "Rules for Constructing The Manufacturer Identification Code" and section B of column 29 "AD/CVD Case Number." CBP's memorandum can be found at the following link (opens as Word document).

Labels: Customs

On May 23, 2006, the Greater Dallas Chamber of Commerce will hold a program entitled "Trading In America - Incoterms for Domestic Use." This program is intended to create a bridge guiding Americans from the deleted UCC terms to the application of Incoterms for domestic use. The program will be conducted by Frank Reynolds, one of American's leading Incoterms experts.

Officials from the U.S., Canada and Mexico reaffirmed their commitment to the North American Free Trade Agreement (NAFTA) during a March 24 meeting of the NAFTA Free Trade Commission in Acapulco, Mexico. U.S. Trade Representative Rob Portman, Mexican Secretary of Economy Sergio García de Alba and Canada Minister of International Trade David Emerson discussed the changing global commercial environment and the implications for North America at the meeting. Following the session, the leaders issued a joint statement reaffirming their commitment to NAFTA and to the removal of impediments to the free flow of goods, services and capital in North America.

The Justice Depatment announced on Friday that an employee of a Titan Corporation working in Iraq as a translator has been arrested on a charge of offering to bribe an Iraqi police official. According to Justice, Faheem Mousa Salam, 27, of Livonia, Michigan, was arrested at Dulles International Airport on Thursday upon returning from Iraq. He was charged with offering to bribe a foreign official under the Foreign Corrupt Practices Act (FCPA). Salam is a naturalized U.S. citizen employed by Titan Corporation, and had been living in Baghdad, Iraq.

According to a criminal complaint filed in the District of Columbia, Salam offered a senior Iraqi police official approximately $60,000 for the official’s assistance with facilitating the purchase by a police training organization of approximately 1,000 armored vests and a sophisticated map printer for approximately $1 million. The complaint alleges that Salam later made final arrangements with an undercover agent of the Office of the Special Inspector General for Iraq Reconstruction – posing as a procurement officer for the multinational Civilian Police Assistance Training Team (CPATT) in Iraq – for the map printer and vests, along with a separate $28,000 to $35,000 “gift” to process the contracts.

The maximum sentence for a charge of violating the FCPA is five years in prison plus a $100,000 fine or twice the gross gain, whichever is greater.

The Bureau of Industry and Security (BIS) today published in the Federal Register a notice extending the Denial Order that was imposed against Mr. Phaedon Nicholas Criton Constan-Tatos (a.k.a. Fred Tatos) on November 15, 2005 (70 Fed. Reg. 69,311) applicable to Assegai Trading (Pty) Ltd. of Cape Town, South Africa. BIS claims that Assegai Trading is owned by Mr. Tatos.

The Bureau of Industry and Security (BIS) has imposed an $8,000 civil penalty on Bear Basin Outfitters, a California-based distributor of optical equipment to law enforcement and sportsmen, for exporting optical sighting devices without the required export licenses. This penalty was imposed after Bear Basin Outfitters had disclosed to BIS that the company had made 64 unlicensed exports of optical sighting devices for firearms (classified as ECCN 0A987) from the U.S. to various countries, including Canada, Sweden and Switzerland, from December 2000 through February 2005.

This case is a good example of the dramatic reduction in penalties now available to companies that voluntarily disclose export violations to BIS. If a voluntary disclosure had not been made BIS could have imposed a civil penalty of up to $704,000 on the company for engaging in the 64 unlicensed exports ($11,000 per violation).

The Heritage Foundation last Friday held a program entitled "The Future of Export Control Policy: Protecting Sensitive Technologies and Promoting a Healthy Defense Industrial Base." The panelists incuded Peter Lichtenbaum, former Assistant Secretary of Commerce for Export Administration, Ambassador William Courtney of Computer Sciences Corporation and Daniella Markheim, the Heritage Foundation's Senior Analyst in Trade Policy. The panelists have some interesting things to say on a number of export control topics, including U.S. competiveness, foreign availability, defense trade controls and technology transfer issues to foreign nationals. This program is worth your time if you are interested in export control policy issues. You can view this event or download it to your iPod here (helpful hint: skip the first five minutes of the program).

The Bureau of Industry and Security (BIS) has imposed a $7,000 civil penalty on Tech Pro, Inc., an Ohio-based manufacturer of laboratory testing instruments for the rubber and plastics industries, for exporting software to a party in India on the BIS Entity List. Specificallly, BIS alleged that Tech Pro exported software upgrades classified under ECCN 4D994 to the Vikram Sarabhai Space Center of Thiruvanthapuram, India, an organization on the Department of Commerce’s Entity List, without obtaining an export license.

BIS established the Entity List in February 1997 to inform the public of entities whose activities imposed a risk of diverting exported and reexported items into programs related to weapons of mass destruction. The grounds for listing an entity on the Entity List have expanded to include entities sanctioned by the State Department for which U.S. foreign policy goals are served by imposing additional license requirements on exports and reexports. U.S. exporters should screen all of their customers against the Entity List.

U.S. Customs and Border Protection (CBP) has announced that it has seized $6 million worth of illegally imported textile products since February 24, 2006 and more than $20 million worth of textile products in fiscal year 2006. Almost all of the seizures were due to violations of the Chinese safeguard/quota requirements.

Labels: Customs

The World Trade Organization (WTO) has issued its Trade Policy Review of the United States. This is the WTO's first review of U.S. trade policy since 2004. The report says that the "U.S. has undergone solid economic growth since . . . 2004, aided by the openness and transparency of its trade regime which has supported the continuous drive for change and efficiency characteristic of the US economy as a whole, according to a WTO Secretariat report on the trade policies and practices of the United States."

The report states that the U.S. "continued making incremental changes to its trade regime, including liberalization on an MFN and preferential bases. The report notes, nonetheless, that market access barriers and other distorting measures, notably subsidies, persist in a few but important areas, and that addressing these distortions would benefit U.S. consumers and taxpayers and help strengthen the global economy." The report also says that it is important to preempt possible protectionist sentiment.

The U.S. Trade Representative's statement on the report can be found here.

Due to the unreliability of the Bloglet service, we have migrated to the FeedBlitz e-mail notification service. You will receive a single daily e-mail advising when International Trade Law News has been updated. As always, your e-mail address is secure and you will not receive any spam as a result of subscribing to this service. Thank you for your continued interest and support.

The Bureau of Industry and Security (BIS) today published in the Federal Register a final "fix it" regulation making a number of technical changes to the Export Administration Regulations (EAR). The following is a summary of the provisions contained in the final rule:

• Clarifies country group restrictions on use of certain license exceptions;
• Corrects citations in statement of licensing policy regarding certain sanctioned entities;
• Revises administrative law judge address; and
  
• Removes obsolete interpretation.
  

The Bureau of Industry and Security (BIS) has imposed a $4,500 civil penalty on Nvidia Corporation, a Santa Clara, California-based company that creates programmable graphics technologies, for violating the "deemed export" rule for transferring controlled technology to an Iranian national in the U.S. Specifically, BIS charged that between March 18, 2002 and February 20, 2003 Nvidia engaged in conduct prohibited by the Export Administration Regulations (EAR) by transferring technology classified under Export Control Classification Number (ECCN) 4D994 to an Iranian national. The technology transfer was deemed by BIS to be an export under section 734.2 of the EAR and required a license pursuant to section 746.7 of the EAR. Nvidia voluntary disclosed the deemed export to BIS.

The "deemed export" rule provides that an export of technology or source code is "deemed" to take place when it is released to a foreign national within the U.S. See section 734.2(b)(2)(ii) of the EAR.

The World Customs Organization (WCO) has announced that it will hold a Customs Exhibition in Brussels, Belgium from June 29 through July 1, 2006. The theme of the Exhibition is "Safer trade through technology." The Exhibition will coincide with the annual meeting of the WCO Council. Online registration will open on March 31, 2006. More information will soon be available at events.wcoomd.org.

National Public Radio today had a good story on how Immigration and Customs Enforcement (ICE) agents are working with manufacturers of defense articles to help identify potential export control violations. You can listen to the story, entitled "Government Turns to Arms Makers to Fight Smuggling" at the following link: www.npr.org/templates/story/story.php?storyId=5291844.

The Center for Nonproliferation Studies (CNS) has published the March 2006 issue of the International Export Control Observer (IECO). This publication (in PDF format) is available on the CNS website at cns.miis.edu/pubs/observer/index.htm.

USA*Engage recently honored Representatives Jim Kolbe (R-AZ) and Gregory Meeks (D-NY) for their records of achievement in helping the U.S. pursue pro-engagement policies. According to USA*Engage, both Kolbe and Meeks have "voted consistently in favor of opportunities for expanded U.S. international trade and cultural and humanitarian assistance, and have opposed efforts to either impose or continue counterproductive and ineffective unilateral U.S. sanctions."

Last week, the U.S.-China Economic and Security Review Commission (USSC) held a hearing examining China’s military modernization and the utility and effectiveness of U.S. national security controls on exports to China of dual-use technologies. The witnesses testifying at the hearing included several members of Congress, members of the Bush Administration and several leading experts on China and export controls from the private sector.

Several members of the USSC expressed their concern that the Bush administration, in its desire to boost trade with China, could be turning a blind eye to national security concerns when it approves exports to China of dual-use technology.

The panel on the "Efficacy of U.S. Export Control Regimes" included Beth McCormick, acting Deputy Undersecretary of Defense for Technology Security Policy and Darryl Jackson, Assistant Secretary of Commerce for Export Enforcement. Ms. McCormick said that that the Defense Technology Security Administratin (DTSA) received about 1,000 dual-use export license applications from China annually for the past four years and approved about 70% of the applications. The remainder were denied or returned without action.

Ms. McCormick said most of the applications have been for chemical manufacturing equipment, toxic gas monitoring systems, equipment used in handling biological materials and technology and electronic and semiconductor equipment. She indicated that DTSA approved only a few of the more sensitive munitions export license applications for China in the last two years. She noted that the "approvals include an explosive ordnance disposal containment vessel for Chinese security training in preparation for the Beijing Summer Olympics, an inertial reference system for use in railway track curvature measurements and several commercial satellite licenses."

Commission chairman Larry Wortzel questioned why the administration approved technology to support China's railway, which he says will play a key role in the country's military modernization. "As China moves to mobile, strategic intercontinental ballistic missile systems that can put warheads [aimed] on the United States, it is going to transport a lot of that stuff by rail," said Mr. Wortzel. "As China increases that military buildup against Taiwan and threatens Taiwan with shorter-range missiles by the second artillery, the principle way that the second artillery moves those missiles from plants to storage and moves its conventional and nuclear warheads is by rail."

In his testimony, Undersecretary Jackson stated that China is "in the midst of an accelerated expansion and modernization of its armed forces, and has a mixed record on nonproliferation of weapons of mass destruction issues." Mr. Jackson noted that "of particular interest to BIS investigations are Chinese efforts to obtain U.S. technology to further its command, control, communications, computers, intelligence, surveillance and radar systems and Maritime programs." With respect to enforcement actions, Mr. Jackson said that in "Fiscal Year 2005 BIS investigations led to 14 criminal convictions and 13 civil penalties for export control violations related to China" and BIS had 136 open investigations involving China as of March 3 of this year."

Edmund Rice, President of the Coalition for Employment Through Exports, stated in his testimony that since "China has virtually unfettered access to dual-use items and technology everywhere in the world except the U.S. and Japan, U.S. controls have virtually no effect in restricting dual-use technology transfer to China, including U.S.-origin items." As a result, he stated that "dual-use export controls cannot be relied upon as a tool for carrying out U.S. policy goals with respect to China."

The written testimony presented by most of the witnesses at the hearing can be found on the USCC's website.

U.S. Customs and Border Protection today issued an administrative message (06-0361) reminding all customs brokers that "establishing and maintaining brokerage operations outside the customs territory of the United States is inconsistent with the broker's obligation to exercise responsible supervision and control while conducting customs business."

Labels: Customs

Customs and Border Protection (CBP) today published in the Federal Register a final rule amending CBP's regulations to reflect the imposition of import restrictions on certain archaeological material and certain ethnological material from Colombia.

Labels: Customs

The Pittsburgh Post-Gazette published an article yesterday entitled "Former Ariba president walks export tightrope" describing Under Secretary for Export Administration David McCormick's role in balancing the interests of U.S. firms seeking to sell their products abroad while trying to ensure that controlled U.S. technology does not fall into the wrong hands. McCormick was in Pittsburgh for a meeting with the Pittsburgh Technology Council. During his speech.

Separately, the Pittsburgh Tribune Review reports that McCormick said that the U.S. government has not conducted a national security review of the proposed sale of Westinghouse Electric Company to Japan's Toshiba Corp. However, he left open the possibility that such a review could take place. Westinghouse provides fuel, services, technology, plant design and equipment for the commercial nuclear electric power industry.

The U.S. House of Representatives this evening passed the Miscellaneous Trade and Technical Corrections Act of 2006 (H.R. 4944) by a vote of 412-2.

Australia's The Age newspaper reports that Rear Admiral Raydon Gates, Australia's defense attache in Washington, DC, testified at a hearing held today by the U.S. Senate Armed Services Committee that Australia will not join the next stage in the development of the Joint Strike Fighter (JSF) unless the U.S. agrees to provide Australia with access to certain technology controlled by the International Traffic in Arms Regulations.

Similarly, the Fort Worth Star-Telegram reports that Lord Peter Drayson, Great Britain’s minister for defense procurement, also told the committee that the United Kingdom will drop plans to purchase the JSF unless it gains access to classified U.S. technology used in developing the aircraft.

Yet another company has disclosed possible violations of the Foreign Corrupt Practices Act (FCPA). Today, FARO Technologies, Inc. (Nasdaq: FARO), a designer and developer of software and portable computerized measurement devices, announced that it recently learned of suspicious payments in connection with foreign sales activities in China. As a result, FARO is conducting an internal investigation to determine the extent of any improper payments and possible deficiencies in its books and records and internal controls with respect to operations in China and the Asia/Pacific region, in possible violation of the anti-bribery, books and records and internal controls provisions of the FCPA. FARO has voluntarily notified the Securities and Exchange Commission and the Department of Justice of the internal investigation and is cooperating with the agencies. FARO will delay the filing of its 2005 annual report (Form 10-K) with the SEC as a result of this investigation.

The House of Representatives has delayed until tomorrow a vote on the Miscellaneous Trade and Technical Corrections Act of 2006 (H.R. 4944). The complete text of the 186 page bill, which would provides for temporary duty exemptions and technical changes to U.S. trade laws, was posted this afternoon on the Ways and Means Committtee's web site at http://waysandmeans.house.gov/Media/pdf/SHAW_143.pdf.

Bill Thomas (R-CA), Chairman of the House Ways and Means Committee, has requested the U.S. International Trade Commission (ITC) to conduct a fact-finding investigation under section 332(g) of the Tariff Act of 1930 on competitive conditions affecting U.S. Trade of medical devices and equipment in principal foreign markets.

Section 332 investigations cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance or the House Committee on Ways and Means. The resulting reports convey the ITC's findings and independent analyses on the subjects investigated. The ITC makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

It is annual report season and it is worth reading the fine print. As indicated below, United Parcel Service Inc. (UPS) revealed in its annual report filed today with the Securities and Exchange Commission that it has learned that employees of a company it acquired in 2001 may have violated the United States Foreign Corrupt Practices Act. UPS stated that it disclosed the possible violations to the SEC and Justice Department. The following is the relevant language from the annual report:

"With the assistance of outside counsel, we have undertaken an internal investigation of certain conduct within our Supply Chain Solutions subsidiary in certain locations outside the United States. Our investigation has determined that certain conduct, which commenced prior to our subsidiary’s 2001 acquisition of a freight forwarding business that was part of Fritz Companies Inc., may have violated the United States Foreign Corrupt Practices Act. Our investigation also determined that a small number of former employees directed the conduct in question. The monetary value involved in this conduct appears to be immaterial. We have implemented numerous remediation steps, and our investigation continues. In March 2006 we informed the SEC and the Department of Justice of our investigation, and we intend to cooperate fully with any review by the government of these issues. We do not believe that the results of this investigation, the remediation or related penalties, if any, will have a material adverse effect on our financial condition, liquidity or results of operations, nor do we believe that these matters will have a material adverse effect on our business and prospects."

The Senate unanimously voted last night to confirm Leo M. Gordon to be a judge on the U.S. Court of International Trade (CIT). Mr. Gordon has served as the Clerk and Assistant Clerk of the CIT for many years.

The State Department's Directorate of Defense Trade Controls (DDTC) has announced that it will no longer accept license applications where a certain freight forwarder is the party to the transaction. The basis of this announcement was the guilty plea entered by one of the freight forwarder's former employees for committing government fraud.

Labels: DDTC, Export Controls

Today is the 70th anniverary of the publication of the Federal Register. For some interesting information and tidbits on the history and publication of the Federal Register see the Washington Post's article recent entitled "The Federal Register Turns 70."

U.S. Rep. Henry J. Hyde (R-IL), Chairman of the House International Relations Committee, recently stated that hearings on the U.S.-India "global partnership, announced by President George W. Bush and Indian Prime Minister Manmohan Singh, will begin later in March and focus on the recently concluded agreement on civil nuclear cooperation.

This is a complex agreement with profound implications for U.S. and global interests. Congress will need to take a close look at its many provisions in order to come to an informed decision," Hyde said. Hyde and the committee’s ranking member, Tom Lantos (D-CA), agreed to introduce the agreement's enabling legislation at the request of the Bush Administration, but Hyde suggested that Congress may seek conditions for its approval. "The issues involved are complicated and technical, and it will take some time for Congress to absorb them as we move the agreement to fruition," Lantos noted. "I view the new strategic alliance between the world’s oldest and largest democracies as a breakthrough, but all members of Congress will undoubtedly wish to see the details of the agreement before deciding how to vote."

Legislation amending the Atomic Energy Act is necessary to authorize U.S.-Indian nuclear cooperation because India has never adopted the Nuclear Nonproliferation Treaty and, therefore, cannot meet the prerequisites set out in current U.S. law.

Universal Corporation, a publicly traded company with operations in tobacco, lumber and agricultural products, today issued a press release stating that an internal investigation conducted by the Company's Board of Directors revealed that payments were made "that may have violated the U.S. Foreign Corrupt Practices Act." The investigation was commmenced after a post on the company's "Ethics Complaint hotline" alleged improper activities that involved or related to the company's tobacco subsidiaries. The payments involved appear to have approximated $1 million over a five-year period. The press release stated that the company "voluntarily reported these activities to the appropriate U.S. authorities and has initiated corrective actions."

DaimlerChrylser AG stated in its annual report filed last week with the U.S. Securities and Exchange Commission (SEC) that an internal investigation of bribery claims found evidence of "improper payments" in Africa, Asia and Eastern Europe that raise concerns under the U.S. Foreign Corrupt Practices Act, German law and the laws of other jurisdictions. DaimlerChrysler AG disclosed the investigation last year in a filing with the SEC.

In order to safeguard against the recurrence of the type of conduct that resulted in these issues, Daimler Chrysler AG indicated that it has taken a series of voluntary remedial actions, including the following:

—Initiated improvements in business processes as well as in compliance, control and training activities in order to foster a culture defined by openness and honesty.

—The company is evaluating and revising policies, procedures and controls and are conducting a comprehensive review and remediation of any related books and records, tax and internal control issues identified. The company also is establishing a global compliance organization so that the company's business practices are thoroughly reviewed, and policies upgraded and enforced as necessary.

—Initiated personnel measures related to questionable transactions or behavior identified in the course of our internal investigation. These actions include the severance of employment and suspensions of several employees.

The filing also stated that if the Justice Department or SEC determines that violations of U.S. law have occurred, the agencies "could seek criminal or civil sanctions, including monetary penalties, against DaimlerChrysler and certain of its employees, as well as additional changes to its business practices and compliance programs."

The House Committee on International Relations will hold a hearing on March 15, 2006 in Room 2172 of the Rayburn House Office Building to markup H.R. 282, the Iran Freedom Support Act. Among other things, H.R. 282 amends the Iran and Libya Sanctions Act of 1996 by eliminating the mandatory sanction provisions on Libya, imposing mandatory sanctions on a person or entity that aids Iran in acquiring or developing weapons of mass destruction, revising multilateral regime reporting requirements, enlarging the scope of sanctionable entities and eliminating the sunset provision.

Globes, an Israeli business publication, reports on Undersecretary of Commerce for Industry and Security David H. McCormick's recent trip to Israel. During his trip McCormick met with Israeli defense and export control officials and companies that export dual-use and defense products.

McCormick stated that Israel is only at the preliminary stages of implementing an arms exports control program and still has a long way to go. He indicated that the U.S. is offering aid to Israel to develop and implement arms exports controls.

Israel recently declared that, while it was not yet a signatory to the Wassenaar Arrangement, it would comply with its principles and international norms.

On March 8, 2006, Norit Americas Inc., of Marshall, TX, and Calgon Carbon Corp., of Pittsburgh, PA, refiled their antidumping petition on activated carbon from the People's Republic of China.

Norit and Calgon filed a similar antidumping petition in January 2006, but withdrew the petition the following month. The new petition limits the subject merchandise to "steam activated carbon" only.

As we previously reported, less than a week before the original petition was filed Calgon Carbon, one of the two petitioners, announced that it opened a "state-of-the art" activated carbon processing and packaging facility in Tianjin, China that will be operated by Calgon Carbon Company Tianjin Limited (CCT), a wholly owned subsidiary of Calgon Carbon Corporation.

Labels: Antidumping

The U.S. and Mexico last week signed the U.S.-Mexico Agreement on Cement which resolves the 16-year dispute over the U.S. antidumping duty order on imports of gray portland cement from Mexico.

The Agreement settles all litigation regarding outstanding claims for duties before U.S. and international courts, and the deposits of estimated antidumping duties between the parties. It also establishes a limit of three million metric tons of imports of Mexican cement to enter the U.S. at an antidumping duty rate of $3 per metric ton, and allows for an increase in the event of disasters. The Agreement also includes elements for mutual trade liberalization, including provisions to help increase access for U.S. producers to the Mexican market. If the terms of the Agreement are adhered to over its three-year life, the Agreement will be terminated and the antidumping duty order revoked.

Labels: Antidumping

U.S. Customs and Border Protection (CBP) has published instructions to the trade community on filing CAFTA-DR claims, certification procedures, verification policies, etc.

By Timothy F. Hubach

The Bureau of Industry and Security (BIS) recently imposed a $221,250 civil penalty on Massachusetts-based Hittite Microwave Corporation for allegedly participating in sales of controlled microwave solid state amplifiers and related equipment, including downconverters, from the United States to Russia, China and Latvia. The products are classified as ECCNs 3A001.b.2 and 3A001.b.4 on the Commerce Control List.

In its charging letter, BIS claimed that Hittite committed six violations of the Export Administration Regulations (EAR). BIS alleged that Hittite transferred the microwave equipment without obtaining the proper licenses from the Department of Commerce as required by the EAR. BIS also claimed that Hittite made a false statement on the Shipper’s Export Declaration (SED) since the SED stated that the export of the downconverters qualified for export from the United States under license exception "GBS" (i.e., Country Group B). However, Latvia was not in Country Group B at the time of export.

By Timothy H. Hubach

The Bureau of Industry and Security (BIS) assessed a civil penalty of $22,000 on Dolphin International, Ltd. of New Delhi, India (Dolphin) and a civil penalty of $19,800 on Orcas International, Inc. of Flanders, New Jersey (Orcas) for conspiracy to export toxins to North Korea. Both companies are also prohibited from participating in any transactions involving the export of goods subject to the Export Administration Regulations (EARs) for four years.

BIS alleged that Dolphin conspired with others to export toxins, including Aflatoxin (M1 , P 1, Q 1) and Staphyloccocal Enterotoxin (A and B), items subject to the Regulations and classified under export control classification number (“ECCN”) 1C351, from the United States to North Korea without the required Department of Commerce license. BIS further alleged that Dolphin solicited violations of the EARs by enlisting others to acquire the toxins.