International Trade Law News

In a long overdue, but welcome, development, the Bureau of Industry and Security's (BIS) Office of Antiboycott Compliance (OAC) today published in the Federal Register a proposed rule setting forth penalty guidelines for violations of the antiboycott provisions of the Export Administration Regulations (EAR)). These penalty guidelines are similar to those published by BIS's Office of Export Enforcement in February 2004 for violations of other provisions of the EAR.

The proposed antiboycott penalty guidelines set forth specific procedures for voluntary self disclosures of violations to OAC, provide guidance on how OAC will respond to violations of the antiboycott provisions, and describe how OAC will makes penalty determinations in the settlement of administrative enforcement cases related to the antiboycott provisions. As with the other penalty guidelines issued by BIS, the proposed guidelines set forth a number of general, aggravating and mitigating factors that OAC will consider when determining the appropriate penalty associated with a voluntary disclosure. For example, an effective antiboycott compliance program will be considered a mitigating factor and will be given "great weight".

Fortunately, the proposed rule states that OAC will still permit parties to submit a voluntary disclosure even if the violation has been revealed to OAC in telephone or e-mail requests for advice concerning the antiboycott regulations.

Public comments on the proposed antiboycott penalty guidelines must be submitted to BIS by August 29, 2006. A final rule will be issued after BIS reviews and considers the public comments.

Labels: BIS, Export Controls

U.S. Customs and Border Protection today announced in the Federal Register that the quarterly interest rates used to calculate interest on underpayments and overpayments of customs duties will change. For the calendar quarter beginning July 1, 2006, the interest rates for overpayments will increase from 6 to 7 percent for corporations and from 7 to 8 percent for non-corporations, and the interest rate for underpayments will increase from 7 to 8 percent.

U.S. Customs and Border Protection (CBP) and the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service and will begin enforcing the third and final phase of the wood packaging material (WPM) regulation on July 5, 2006. All WPM, including pallets, crates, boxes and pieces of wood used to support or brace cargo (dunnage), must meet import requirements and be free of timber pests before entering or transiting through the United States.

All WPM entering or transiting through the United States must be either heat treated or fumigated with methyl bromide as outlined in the International Standards for Phytosanitary Measures: Guidelines for Regulating Wood Packaging Material in International Trade (ISPM 15). The WPM must also be marked with an approved international logo, certifying it has been appropriately treated. For more details and information see the WPM page on CBP's website at: www.customs.gov/xp/cgov/import/commercial_enforcement/wpm/

Labels: Customs

The U.S. International Trade Commission today announced the following determinations in the sunset reviews on pipe and tube and stainless steel wire rod from various countries:

• Affirmative determination on the countervailing duty order on circular welded pipe and tube from Turkey;
  
• Affirmative determination on the antidumping duty orders on circular welded pipe and tube from Brazil, India, Korea, Mexico, Taiwan, Thailand and Turkey.
• Affirmative determination on the antidumping duty order on light-walled rectangular pipe and tube from Taiwan.
• Negative determination on the antidumping duty order on light-walled rectangular pipe and tube from Argentina.
• Affirmative determination on the antidumping duty order on stainless steel wire rod from India.
• Negative determination on antidumping duty orders on stainless steel wire rod from Brazil and France.
  

Labels: Antidumping, Countervailing Duties

Even though the Generalized System of Preferences (GSP) expires on December 31, 2006 and its future remains in doubt, the U.S. Trade Representative (USTR) announced in today's Federal Register that it will conduct a 2006 annual GSP product and country eligibility review to modify the list of products that are eligible for duty-free treatment under the GSP program, and to modify the GSP status of certain GSP beneficiary developing countries. Interested parties, including foreign governments, may submit petitions to:

1. Designate additional articles as eligible for GSP benefits, including to designate articles as eligible for GSP benefits only for countries designated as least-developed beneficiary developing countries, or only for countries designated as beneficiary sub-Saharan African countries under the African Growth and Opportunity Act (AGOA);
2. Withdraw, suspend or limit the application of duty-free treatment accorded under the GSP with respect to any article, either for all beneficiary developing countries, least-developed beneficiary developing countries or beneficiary sub-Saharan African countries, or for any of these countries individually;
   
3. Waive the "competitive need limitations'' for individual beneficiary developing countries with respect to specific GSP-eligible articles (these limits do not apply to either least-developed beneficiary developing countries or beneficiary sub-Saharan African countries); and
   
4. Otherwise modify GSP coverage.
   

By Alison Battiste*

The Commerce Department’s Bureau of Industry and Security (BIS) recently imposed nearly $1.1 million in civil penalties on oil and gas equipment manufacturer Dresser, Inc., and its subsidiaries and affiliates in Canada, Dubai, Italy, Germany Mexico and the United Kingdom, as a result of numerous violations of the Export Administration Regulations (EAR). The violations, which occurred between 2000 and 2004 and involved exports to Libya, Cuba and Iran, were voluntarily disclosed by Dresser, Inc. to BIS. The following is a summary of the facts and circumstances that led to the settlement agreements reached with BIS:

• BIS imposed an $820,000 penalty on Dresser Italia S.r.l. (Dresser Italy) for unauthorized exports of oilfield-related items to Iran and Libya. Specifically, BIS alleged that Dresser’s facility in Voghera, Italy (which the company no longer operates) specially ordered from a U.S. company various oil industry-related items, including valves and valves parts (all classified as EAR99), which were exported by the U.S. company through Italy to Libya without the required U.S. Government authorization. BIS claimed that Dresser Italy ordered, bought, stored, sold and/or transferred items exported from the U.S. with knowledge that a violation was occurring in connection with the items. In addition, BIS claimed that Dresser Italy knew or had reason to know that the items would be exported to Libya/Iran without the required U.S. Government authorization and that Dresser Italy personnel had knowledge that U.S. products could not be sold to sanctioned countries, including Libya/Iran. BIS's charging letter noted that Dresser Italy’s management was so focused on making sales to the point that they disregarded U.S. export controls and certain Dresser Italy personnel stated that they did not agree with the strictness of U.S. export regulations.

• A $122,100 penalty was imposed by BIS on DI U.K. Ltd. (Dresser U.K) for reexporting oilfield items from the U.K. to Libya and Iran without the required U.S. Government authorization. BIS claimed that DI U.K. specially ordered the items from the U.S. that were exported by the U.S. company through the U.K. to Libya without the required U.S. Government authorization. BIS alleged that Dresser U.K. and its U.S. supplier knew or had reason to know that the items were destined for illegal destinations.

• A $110,000 penalty was imposed on U.S.-based Dresser Inc. for engaging in illegal exports to Iran and Libya. Specifically, BIS alleged that Dresser, through its Massachusetts facility, exported various items through Canada to Libya without the required U.S. Government authorization. BIS alleged that Dresser was in possession of documentation stating that the items were destined for Libya, and no OFAC authorization was obtained. Dresser also exported, through its Louisiana facilities, various oil industry-related items through the U.K. to Libya and Iran without the required U.S. Government authorization. BIS claimed that Dresser knew or had reason to know that the items were intended for Libya and Iran. BIS also claimed that Dresser Inc., through its Texas and Louisiana facilities, exported various items through Italy to Libya without the required U.S. government authorization. BIS alleged that Dresser knew or had reason to know that the items were intended for Libya.

• BIS assessed a $19,800 penalty on Dresser Europe GmbH (Dresser Europe) for causing an export to Libya without the required U.S. Government authorization. Specifically, BIS alleged that Dresser Europe’s facility in Germany specially ordered from a U.S. company various oilfield items that were exported by the U.S. company through Germany to Libya without the required U.S. Government authorization. BIS also claimed that Dresser Europe acted with knowledge, since it ordered, bought, stored, sold and/or transferred items exported from the U.S. with knowledge that a violation was occurring in connection with the items. BIS noted that Dresser Europe knew or had reason to know that the items were intended would be exported to Libya without the required U.S. Government authorization and company personnel had knowledge that U.S. products could not be sold to sanctioned countries, including Libya.
  

• A $12,000 penalty was imposed on Dresser Instruments S.A. de C.V. (Dresser Mexico) for aiding and abetting an unlicensed reexport of Items to Cuba. BIS alleged that Dresser Mexico procured pressure gauges, thermowells and thermometers from a U.S. company for sale to a company in Mexico with knowledge or reason to know that the items would be reexported to Cuba without U.S. Government authorization.

• BIS imposed a $6,600 penalty on DI Canada, Inc. (Dresser Canada) for reexporting from Canada to Libya various oil industry-related items. BIS alleged that Dresser Canada specially ordered from a U.S. company various items that were subsequently exported by the U.S. company though Canada to Libya without the required U.S. Government authorization.

• A $6,600 penalty was imposed by BIS on Dubai-based Dresser International, Inc. for causing a reexport from Dubai to Iraq without the required U.S. Government authorization. BIS alleged that Dresser’s Dubai branch transferred to a customer various oilfield items that were reexported by the customer to Iraq. BIS also alleged that Dresser’s Dubai branch knew that the items were intended for use in Iraq, and Dresser knew or had reason to know that a license was required for these exports because its personnel had knowledge of the U.S. embargo against Iraq and the EAR.

• BIS imposed a $3,300 penalty on International Valves Ltd., a Dresser affiliate in the U.K., for reexporting from the U.K. to Libya U.S.-origin spare parts classified as EAR99 without the required U.S. Government authorization.

Labels: BIS

Arcelor's Board of Directors today agreed to accept the hostile takeover bid made by Mittal Steel, ending the five-month takeover battle for the company. By accepting Mittal's increased offer of 40.4 euros per share, Arcelor will have to pay a significant break-up fee to Severstal, the Russian steel company that it agree to buy for $16.6 billion in May 2006. The new steel group, which will be called Arcelor-Mittal. The merger between the largest and second largest steel producers will create the world's largest steel company, controlling nearly 10% of world steel production and employing more than 320,000 people. Mittal Steel USA is currently the largest steel producer in the U.S.

The San Diego Union-Tribune reports that the former president of the Titan Corporation's (Titan) Africa operations has plead guilty to a single count of falsifying a financial document in connection with his role in a $2 million bribery scheme in Benin. The bribe was intended to support the 2001 re-election campaign of then-President Mathieu Kerekou. According to the report, "Titan used the bribe to increase its management fee in a project to build and operate a telecommunications system in Benin."

The plea agreement represents the first publicly filed criminal charge against an individual in the five-year-old case involving violations of the U.S. Foreign Corrupt Practices Act (FCPA). In March 2005,Titan settled enforcement actions brought by the U.S. Securities and Exchange Commission and the U.S. Department of Justice for violating the anti-bribery, internal controls and books and records provisions of the FCPA. Titan agreed to plead guilty to one felony count of violating the anti-bribery provisions of the FCPA, one felony count for falsifying the books and records of Titan, and one felony count of preparing a false tax return. In addition, Titan paid $28.5 million in penalties, disgorgement of profits and prejudgment interest, the largest FCPA penalty paid to date.

On June 23, 2006, three U.S. producers of certain polyester staple fiber filed an antidumping duty petition allegeing that imports of certain polyester staple fiber from the People's Republic of China are injuring the domestic industry. The petition, filed by Dak Americas LLC, Nan Ya Plastics Corporation America and Wellman, Inc., covers polyester staple fibers with a diameter of three denier and greater, which is generally used as stuffing in sleeping bags, mattresses, bedding and furniture. The petition alleges antidumping margins of 88% to 109% and claims there are more than 100 producers of polyester staple fiber in China. This is only the second antidumping petition filed in the U.S. in 2006.

The U.S. currently imposes antidumping duties on polyester staple fiber from Korea and Taiwan. One of the petitioners, Nan Ya Plastics Corporation America, is a subsidiary of a Taiwanese producer of these products.

Labels: Antidumping

The Commerce Department has published in the Federal Register a proposed rule that sets forth procedures to exempt supplies imported into the U.S. for use in emergency relief measures from antidumping and countervailing duties.

Under the proposed regulation, the Secretary of Commerce would consider written requests for a duty waiver on a case-by-case basis. If the Secretary determines it appropriate to waive duties on particular imports of emergency supplies, the Secretary will notify the person who submitted the request and instruct U.S. Customs and Border Protection to enter merchandise free of antidumping and countervailing duties. If the particular merchandise is used in the U.S. for purposes other than emergency relief work, it may be subject to seizure or other penalties.

There will be a public comment period on this proposal, during which written comments may be submitted to the Department of Commerce. Comments on the proposed rule must be submitted to Commerce by July 24, 2006. After the comment period closes, the Commerce Department will review comments and make a final decision.

Labels: Boycotts

On June 21, 2006, the Senate Committee On Foreign Relations held a hearing on the U.N. Convention Against Corruption (Convention), which was signed by the U.S. in December 2003 and transmitted to the Senate for advice and consent last October. The Convention, which entered into force on December 15, 2005, has been ratified by 58 countries. The U.S. is among 82 countries that have signed, but not yet ratified the Convention.

The witnesses at the hearing included, Samuel Witten, Deputy Legal Adviser at the Department of State; Bruce Swartz, Deputy Assistant Attorney General in the Criminal Division of the Department of Justice; Alan Larson, Chairman of Transparency International-USA; and William Reinsch, President of the National Foreign Trade Council (click here for his testimony). The hearing can be viewed at the following link: foreign.senate.gov/hearings/2006/hrg060621a.html.

President Bush today signed an Executive Order blocking property of the President of Belarus and nine other high-ranking Government of Belarus officials for "undermining Belarus' democratic processes or institutions." The Executive Order immediately blocks all property and interests in property of the 10 individuals named in Executive Order's annex. Effective immediately, all U.S. companies and individuals are prohibited from engaging in any transactions with the targeted persons. These persons will not be able to access any assets that they might have in the U.S. and U.S. financial institutions, wherever located, will not be able to provide any financial services to them. OFAC has added the ten individuals to OFAC's Specially Designated Nationals list.

Labels: OFAC

The Department of the Treasury has recently designated four Chinese companies and one U.S. company as proliferators of weapons of mass destruction for supplying Iran's military and Iranian proliferators with missile-related and dual-use components. As a result of the designations that were made under Executive Order13382 all transactions between the designees and any U.S. person are prohibited. In addition, U.S. financial institutions must freeze the assets of the designees.

• Beijing Alite Technologies Company, Ltd. (ALCO)
• LIMMT Economic and Trade Company, Ltd.
• China Great Wall Industry Corporation (CGWIC)
• China National Precision Machinery Import/Export Corporation (CPMIEC).
  

• Torrance, California-based G.W. Aerospace, Inc., which serves as the U.S. office of CGWIC.
  

The Treasury Department stated that the Chinese firms have provided, or attempted to provide, financial, material, technological or other support for, or goods or services in support of, the Aerospace Industries Organization (AIO), the Shahid Bakeri Industrial Group and/or the Shahid Hemmat Industrial Group (SHIG), all of which were designated in the annex to E.O. 13382.

According to Treasury, AIO, is a subsidiary of the Iranian Ministry of Defense and Armed Forces Logistics and is the overall manager and coordinator of Iran's missile program, overseeing all of Iran's missile industries. SBIG, an affiliate of AIO, is also involved in Iran's missile programs. Among the weapons SBIG produces are the Fateh-110 missile, with a range of 200 kilometers, and the Fajr rocket systems, a series of North Korean-designed rockets produced under license by SBIG with ranges of between 40 and 100 kilometers. Both systems are capable of being armed with at least chemical warheads.

SHIG is responsible for Iran's liquid-fuelled ballistic missile programs, most notably the Shahab-III medium range ballistic missile, which is based on the North-Korean-designed No Dong missile and has a range of at least 1300 kilometers.

The House Committee on Financial Services has unanimously (64-0) approved H.R. 5337 the National Security Foreign Investment Reform and Strengthened Transparency Act of 2006 ("National Security FIRST Act"), legislation that would reform the process by which the Committee on Foreign Investments in the United States (CFIUS) reviews acquisitions of US companies by foreign companies under the Exon-Florio provision of U.S. law. Among other things, H.R. 5337 would make the following changes to the CFIUS review process:

• Require an additional 45-day review period when the acquiring company is controlled by a foreign government;
  
• Require signatures by the Secretary of the Treasury and the Secretary of Homeland Security or their deputy secretaries on all transactions;
  
• Require an analysis of any potential threat on each transaction by the Director of National Intelligence;
  
• Establish a process to monitor and enforce post transaction compliance with mitigation agreements;
• Ensure that all appropriate factors are considered by CFIUS and add "critical infrastructure" as a factor;
  
• Require CFIUS to conduct roll call votes;
• Require the President’s approval if there is a single dissent on a decision after the investigation;
• The bill would provide additional funding to CFIUS.

Labels: CFIUS

In an editorial in the current edition of Science magazine, editor-in-chief Donald Kennedy, discusses the "uncomfortable relationship between the scientific community in the United States and the regulations of its government regarding exports." Mr. Kennedy writes:

"The anxiety among scientists and academic administrators has returned, and once again its major source has been the application of certain regulations to basic research findings. ITAR (International Traffic in Arms Regulations) control the export of military data and defense services; EAR (Export Administration Regulations) are managed by the Department of Commerce and address security concerns regarding dual-use technologies. Both raise a similar problem: Regulations have been applied to scientific information as well as to technology, military devices, and supporting data."

The U.K. Parliament's House of Lords Select Committee on Economic Affairs has commenced an inquiry into the impact of economic sanctions. The inquiry will gather evidence on the purpose and effectiveness of economic sanctions, including financial sanctions and trade and commodity sanctions. It also intends to consider whether the U.K Government's policy in this area is "coherent and effective." A call for evidence was issued on June 14, 2006 and is available at the following link: www.parliament.uk/documents/upload/CfEEASanctions.pdf. The deadline for submissions is September 30, 2006.

Vietnam's Thanh Nien Daily has reported that the U.S. shrimp industry has agreed to exclude 19 Vietnamese shrimp exporters from the first administrative review of the antidumping order on frozen warmwater shrimp from Vietnan if the exporters agree to pay 2% of their U.S. export revenues to the Southern Shrimp Alliance.

Labels: Antidumping

The U.S. House of Representatives yesterday passed by voice vote an amendment offered by Representative Jerry Moran (R-KS) “to facilitate agricultural trade between the U.S. and Cuba" during the debate on the FY 2007 Transportation, Treasury and Housing appropriations bill. This amendment would deny funding to enforce the restrictions imposed by OFAC in February 2005 on cash-in-advance payments for agricultural products. Representative Moran said as a result of OFAC's policy change U.S. exports of corn to Cuba fell 21%, meat product sales declined 26% and wheat sales decreased by 17%.

A separate amendment to deny funding for OFAC enforcement of restrictions on religious travel to Cuba was presented by Representative Jeff Flake (R-AZ), but later withdrawn due to a lack of votes to pass the amendment.

USA*Engage Director Jake Colvin said "passage of the Moran amendment today is an encouraging step towards common-sense engagement with Cuba. USA*Engage urges Congressional leaders to heed the calls by Members on the House floor today to spread U.S. values and the promise of democracy by increasing trade, travel and educational exchanges. It is past time for us to rethink the failed Cold War-era policies of the past, and embrace new approaches that would benefit the Cuban people."

Richmond, Virginia-based Universal Corporation announced in its annual report recently submitted to the Securities and Exchange Commission (SEC) that it has been notified by the SEC of a formal investigation into possible violations of the U.S. Foreign Corrupt Practices Act. Universal Corporation reported the possible violations to the SEC after an internal investigation revealed that the company's subsidiaries may have made approximately $1 million in illegal payments over a five-year period.

Flight International reports that Iran Air has grounded six of its 36 Airbus 310-200 aircraft because the airline is not able to obtain spare parts for the GE CF6 engines on the aircraft.

The Precision Metalforming Association (PMA) has announced its opposition to H.R. 5529, the Trade Law Reform Act of 2006, recently introduced by Representative Phil English (R-PA). (A summary of the Trade Law Reform Act of 2006 can be found here.) The PMA said the Trade Law Reform Act "could diminish the ability of U.S. companies to access inputs such as raw materials and steel necessary to compete in an increasingly tight commercial marketplace."

The PMA is urging U.S. manufacturers to support H.R. 4217, the American Manufacturing Competitiveness Act, introduced by Representative Joe Knollenberg (R-MI). H.R. 4217 would permit U.S. manufacturing companies who consume raw materials to participate as "interested parties" in antidumping and countervailing duty cases before the U.S. Department of Commerce and U.S. International Trade Commission. H.R. 4217 currently has 49 cosponsors.

Following the Jerusalem Post's recent series of articles that Arab countries continue to enforce the boycott of Israel despite assurances to the contrary, Senator Jeff Bingaman (D-NM), the Ranking member of the Senate Finance Committee's International Trade Subcommittee, has joined the growing members of Congress that have voiced their dissatisfaction with the U.S. Trade Representative's (USTR) efforts to assess boycott compliance by Arab countries.

The Jerusalem Post reports today that Senator Bingaman has advised "USTR that they need to do a better job of determining the level of compliance of countries that have made commitments to the United States not to participate in the Arab League boycott." Bingaman also said that, while he is currently inclined to give the USTR "an opportunity" to improve its reporting mechanism on the Arab boycott, he did not rule out the possibility of introducing legislation in order to bring about change.

Labels: Boycotts

Under Secretary of Commerce for Industry and Security David McCormick, gave a speech last Friday on U.S.-China high technology trade at the Center for Strategic and International Studies (CSIS) in Washington, DC. While the speech focused on U.S.-China high technology policy issues, most of the attendees were interested in hearing additional details about the Bureau of Industry and Security's proposed China military "catch-all" regulation. The highlights of Under Secretary McCormick's speech and answers to questions from the audience included:

• The proposed regulation, which will be published in the "coming weeks", "is not a wide-ranging 'catch-all regulation' that subjects everything from fountain pens to office furniture to government scrutiny. Rather, these changes carefully target certain technologies that, while unrestricted until now, have the potential to materially enhance China's military capabilities."
• Announced that for certain technologies on the commerce control list, the proposed China catch-all rule will include the creation of a certified Chinese importer program. U.S. exporters will not need to apply for export licenses to export certain identified technologies to these companies in China.
• To become eligible for the "certified importer" program, Chinese companies must "demonstrate an established record of nonproliferation and responsible civilian use of U.S. imports."This program will require "unprecedented openness and cooperation on the part of Chinese companies" and will "create incentives for them to demonstrate good faith and sound practices."
• Expects that the regulation will cover 47 categories of products, such as composites, electronic components, and other items on the Commerce Control List that can enhance China's military capabilities.
  
• U.S. will continue to conduct on-the-ground spot checks in China to reduce the risk that civilian exports are diverted to third parties or to China's own military purposes.
• The list of "certified importers" will be made public to assist U.S. exporters in determining export licensing requirements.
• The regulation will be published as a proposed rule with a 120 comment period.
  

Labels: BIS

The US-ASEAN Business Council held its annual consultation with the ASEAN Customs Directors-General today in Siam Reap, Cambodia to discuss customs issues impacting U.S. companies in the region. Members of the US-ASEAN Businss Council made a series of presentations at the session covering issues related to Supply Chain Security, Advance Rulings on Classification, Trade Facilitation and other customs-related issues. The delegation included representatives from General Motors, IBM, Microsoft, Motorola, PricewaterhouseCoopers and UPS.

Here is some information on two upcoming events on unilateral sanctions that will be held in Washington, DC:

Assessing U.S. Sanctions Programs

The Washington International Trade Association will hold a program on June 20, 2006 on the effectiveness of current U.S. sanctions and the prospects for updated congressional sanctions regimes. The speakers include: NFTC President Bill Reinsch; David Abramowitz, Minority Counsel to the House International Relations Committee; Paul Simons, Deputy Assistant Secretary of State for Economic and Business Affairs; Tom Malinowski, Washington Director of Human Rights Watch; and Wynn Segall of Akin Gump Strauss Hauer and Feld. To register, visit www.wita.org.

Lessons for Cuba

On June 22, 2006, USA*Engage director Jake Colvin will participate in a panel on "Lessons for Cuba" as part of a conference on "Legacies and Lessons of Normalization of US Diplomatic, Economic and Cultural Relations with Cambodia, Laos and Viet Nam." The other panelists on the Cuba issue include Col. Lawrence Wilkerson, USA (Ret.), former Chief of Staff to Secretary of State Colin Powell; Stephen McFarland, Director of the Office of Cuban Affairs at the State Department (invited); Kirby Jones of the U.S.-Cuba Trade Association; Robert Muse; and Richard Walden, President of Operation USA. To register, see www.ffrd.org/Agenda.htm.

In his continuing series of articles on the Arab boycott of Israel, Jerusalem Post reporter Michael Freund reports today that the Government of Oman continues to prohibit Israeli-made goods from entering the country. The article notes that only "five months after signing a Free Trade Agreement (FTA) with the U.S., Oman continues to restrict the import of Israeli-made goods despite a pledge made to the U.S. that it would not boycott the Jewish state." The article quotes Oman's most senior customs official as saying: "No, no. Products from Israel are not permitted because of the boycott" and "if someone brings products from Israel, they will be confiscated." The customs official added that "even catalogs of commercial products that mention Israel would likely be seized by Omani customs authorities."

Labels: Boycotts

After a four month hiatus, the Treasury Department's Office of Foreign Assets Control (OFAC) today announced that it had imposed civil penalties against two financial institutions, a logistics company, a college and an individual for violating the Cuba and Iran sanctions programs administered by OFAC. The following is a summary of the settlements announced by OFAC:

Downey Savings and Loan of Newport Beach, California paid $44,898.65 to settle allegations that the S&L violated the Iran Sanctions Regulations by operating 23 accounts for 20 account holders that were permanent residence in Iran. Downey voluntarily disclosed the violations to OFAC and advised OFAC that it has taken corrective measures and made improvements to its OFAC compliance program.

Minneapolis, Minnesota-based Augsburg College paid a civil penalty of $9,000 to settle allegations that it violated the Cuban embargo on four occasions between January 2000 and June 2004. OFAC alleged that Augsburg acted without an OFAC license or outside the scope of its license by arranging travel to, from, and within Cuba for other organizations. Augsburg was not licensed to act as a travel service provider, was not affiliated with and did not share a joint OFAC license with these organizations. Augsburg did not voluntarily disclose this matter to OFAC. [Editors Note: OFAC is currently investigating a number of violations of Cuba travel licenses].

After making a voluntary disclosure, Exel Global Logistics, Inc. of Hayward, California paid $6,226.50 to settle allegations that it coordinated shipments to Iran in 2001.

Bethesda, Maryland-based Chevy Chase Bank paid $3,352.86 to settle charges that the bank violated the Iran Sanctions Regulations in 2002 by processing an unauthorized funds transfer relating to Iranian origin services. Chevy Chase Bank did not voluntarily disclose this matter to OFAC.

OFAC also imposed a $3,750 civil penalty against an individual for travel-related transactions incident to travel to Cuba. Specifically, OFAC alleged that from March until April 2002, the individual engaged in travel-related transactions with Cuba, including purchasing food and lodging. The individual traveled to and from Cuba via third countries.

Labels: OFAC

A good summary of today's House hearing on the effectiveness of the Syria Accountability and Lebanese Sovereignty Restoration Act (SAA) can be found here.

The AP reports that a federal grand jury in Santa Ana, California today indicted two persons with making false statements and acting as agents of the Chinese Government. The two persons charged are related to Mr. Chi Mak, who was arrested in October 2005 for taking computer disks from a defense contractor where he was lead engineer on a research project involving the Navy's Quiet Electric Drive propulsion system.

The AP has reported that the package of incentives proposed by Britain, France, Germany, China, Russia and the U.S. aimed at persuading Iran to curb its nuclear program apparently includes a means to help the country repair its aging fleet of Boeing and Airbus civilian aircraft, which for years has been hindered by sanctions.

The Hill newspaper reports on the differing views in Congress on Iran sanctions-related legislation.

The Bureau of Industry and Security (BIS) today published a notice in the Federal Register announcing that the agency has issued a General Order imposing a license requirement for export and reexports of all items subject to the Export Administration Regulations (EAR) to Mayrow General Trading and entities related to or controlled by Dubai-based Mayrow General Trading. The General Order was issued after BIS obtained information that Mayrow General Trading and its related entities have acquired electronic components and devices capable of being used to construct Improvised Explosive Devices (IEDs) that have been, and may continue to be, employed in IEDs or other explosive devices used against Coalition Forces in Iraq and Afghanistan.

General Order Number 3 requires exporters to obtain a license from BIS to export or reexport of any item subject to the EAR to any of the entities named in the General Order, including any transaction in which any of the named entities is will act as purchaser, intermediate consignee, ultimate consignee or end-user of the items. This order also prohibits the use of any License Exceptions for exports and reexports of items subject to the EAR involving such entities.

Labels: BIS

Labels: Boycotts

Congressman Phil English (R-PA) has announced that when Congress returns from recess next Tuesday he will introduce the "Trade Law Reform Act of 2006", legislation intended as a "comprehensive proposal to reform and strengthen key U.S. trade remedy laws." The following is a summary of the key provisions of the Trade Law Reform Act of 2006.

Changes to Antidumping and Countervailing Duty Laws

• Ensure effective application of the captive production provisions;
• Ensure that the International Trade Commission (ITC) can address cases in which price suppression, rather than increases in volume, is the key issue;
• Require that the ITC evaluate whether an industry is in a vulnerable condition for reasons including prior waves of unfairly traded imports;
• Clarify that the ITC need not determine the significance of imports relative to other economic factors when determining causation of material injury;
• Improve and clarify the rules which prevent circumvention of AD/CVD orders;
• Correct deficiencies in U.S. law to ensure producers of perishable agriculture products are able to obtain adequate AD/CVD relief;
• Clarify how the Department of Commerce will measure the amount of a subsidy in certain instances;
• Ensure that the Department of Commerce deducts AD and CVD duties from the import price in calculating the dumping margin for imports.
• Provide a process for expedited remedy in instances where persistent dumping is present;
• Replace the current bonds that are used by new shippers in antidumping cases with cash deposits for three years;
• Clarify how the Department of Commerce calculates the freight costs for inputs in nonmarket economies; and
• Requires that any Department of Commerce action to graduate foreign countries to market economy status receives Congressional approval prior to taking effect.
  

Changes to Safeguard Law (also known as the "Escape Clause")

• Replace the current standard for demonstrating a causal link between imports and serious injury to the U.S. industry with a standard comporting with that in the WTO;
• Expand the availability of early and meaningful provisional relief;
• Create for the first time a captive production provision for section 201;
• Restructure the ITC's causation analysis to ensure that import surges can be addressed more quickly and effectively;
• Add WTO-based factors to the injury analysis conducted by the ITC; and
• Make it more difficult for the President to deny relief when the ITC has recommended it.
  

UTStarcom, a manufacturer networking and telecommunications products, stated in its 2005 annual report (10-K) that was recently filed with the Securities and Exchange Commission (SEC) that the company has received notice of a formal inquiry by the staff of the SEC relating to a possible violation of the Foreign Corrupt Practices Act. Specifically, the investigation relates to allegations that an agent of UTStarcom's Mongolia joint venture had offered payments to a Mongolian government official. In addition, the company stated that in April 2006 the company also became aware that an agent for UTStarcom may have made an offer to pay an Indian government official in possible violation of the FCPA and that the company has "been in contact with the DOJ and SEC regarding the investigation" into such payment.

U.S. Customs and Border Protection (CBP) today published a massive 561 page notice in today's Federal Register advising domestic interested parties that have previously supported antidumping and countervailing petitions of the procedures required for them to claim their fiscal year 2006 share of monies collected under the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA), commonly known as the "Byrd Amendment". While the Byrd Amendment was repealed last year by Congress, the effect of the repeal will be delayed for several years because the law repealing the provision specified that duties collected on an entry filed before October 1, 2007 will be distributed to the domestic industry.

Eligible interested parties must submit their written certifications to obtain their Byrd Amendment funds to CBP by July 31, 2006. Any certification received after July 31, 2006 will be denied.

The companies that supply paper to the Federal Register should each personally thank Senator Robert Byrd for his contribution to the U.S. paper industry.