International Trade Law News

The Center for Strategic and International Studies (CSIS) held a program earlier this week entitled U.S. Satellite Export Controls: Is It Getting Better or Worse? The program's opening remarks were made by Representative Ellen Tauscher (D-CA) and featured representatives from ATK, Aerojet, IOT Systems, Orbital Systems, Boeing, Lockheed Martin and Intelsat.

The overwhelming consensus was that U.S. export controls on commercial satellites are getting worse.

Representative Tauscher said it is time for Congress to revisit the issue of transferring the licensing authority for commercial satellites back to the Commerce Department, which was one of the recommendations contained in the 2002 report issued by the CSIS Satellite Commission. Representative Tauscher said that when one of her staff members that paid a visit to the Directorate of Defense Trade Controls (DDTC) said that licensing officers categorized license applications in three categories: old, older and oldest.

The industry representatives uniformly criticized the current regulatory regime on commercial satellites and agreed that license and technical assistance agreement (TAA) processing times are getting worse. In fact, it is not uncommon for it to take 6-7 months for a TAA to be approved by DDTC. Not only are these delays leading to lost sales opportunities by U.S. companies, they said, but U.S. export controls on commercial satellites have led to the creation of overseas competitors that are not subject to U.S. export controls, including the creation of "ITAR-free" satellites by European companies.

For a good overview on U.S. export controls on commercial satellites, see CSIS report at the following link: www.csis.org/media/csis/pubs/030502_regulating_satellite_exports.pdf.

Labels: DDTC, Export Controls

Registration for BIS's Update 2006 resumed this afternoon. While the technical issues appear to have been resolved, the program sold out in less than an hour. The waiting list is also full. While many people were shut out, congratulations to those that were able to sign up before registration closed. Fortunately, I was one of the lucky few and I look forward to seeing everyone at Update next month. Perhaps BIS should hold next year's Update at a bigger venue, such as the DC Convention Center, in order to accomodate all of those in the export compliance community that want to attend this program.

Labels: BIS, Export Controls

The National Council on International Trade Development (NCITD) will kick off its fall meeting series on Thursday, September 14, 2006. The topics and speakers include:

• Hillary Hess, Director of the Bureau of Industry and Security's Regulatory Policy Division, will provide an update on pending and future BIS regulations;
• William Nolles, Customs and Border Protection, will speak on the World Customs Organization's Security Framework and its implications for importers and exporters; and
• Felice Laird of Export Strategies, LLC, will lead a discussion of BIS's proposed China catch-all regulation.
  

Labels: BIS, Export Controls

In case you haven't heard, BIS has apparently resolved the technical difficulties associated with registration for the Update 2006 Conference on Export Controls and Policy. Registration will reopen on Wednesday, September 13. However, to register for Update, you must sign up for BIS's Seminar Email Notification Service (https://www.bis.doc.gov/forms/notificationform.htm) before next Wednesday. On Wednesday morning, BIS will email out the registration link which will be activated later in the day to ensure that everyone has had the opportunity to receive the link. If you are receiving Update notifications via the Seminar Email Notification Service already, you do not need to do anything before Wednesday.

Labels: BIS, Export Controls

Secretary of Commerce Carlos Gutierrez will lead a senior-level U.S. business delegation to Beijing and Shanghai, China from November 13-17, 2006 to promote U.S. exports to ChinaÂ’s leading industry sectors.

The trade mission aims to assist experienced U.S. exporters enter the Chinese market for the first time and also help U.S. companies already operating in China increase current levels of exports. The mission will help participating firms gain market information, make business and government contacts, solidify business strategies and advance specific projects, all geared towards the goal of helping U.S. firms expand their exports to China. Included in the program are business-to-business matchmaking appointments with local companies, as well as meetings with key government officials, and American and local chambers of commerce. The Mission will additionally provide a platform for policy and commercial issues – including intellectual property rights protection, transparency, and rule-of-law – that U.S. companies face in the Chinese market.

The Department of Commerce will accept applications to join the trade mission through September 14. Further details on this mission can be found at the following link: www.export.gov/chinamission.

The California State Legislature last week passed a bill, SB 927, that would impose a container fee of $30 per twenty foot equivalent unit (TEU) and $60 per forty foot equivalent unit (FEU) on all cargo – both imports and exports – moving through the ports of Los Angeles and Long Beach (the first and second busiest port in the U.S.). The bill is now waiting for Governor Schwarzenegger's signature or veto.

If signed into law, the "user fee" that would be collected after January 1, 2008 is estimated to generate more than $500 million per year. The bill provides that one-third of the revenues would be earmarked for improving the rail system moving port container cargo to and from the Ports of Los Angeles and Long Beach. Another third would be spent to fund port security programs. The final third of revenues would go to the California Air Resources Board to reduce truck, ship and rail pollution associated with the ports.

Many legal experts believe that the container user fee created in SB 927 is unconstitutional.

Governor Schwarzenegger previously vetoed a similar measure on grounds that such a container fee was bad for business.

However, this year is an election year and it is uncertain how the Governor will act. The Los Angeles Times, in an editorial in today's edition entitled "Clean Up the Killer Ports", urged the Governor to sign the bill.

The California Chamber of Commerce, the National Retail Federation and many other trade associations have announced their opposition to this bill.

The Justice Department today announced that three men have been indicted by a federal grand jury in Fresno, California on charges relating to the acquisition and transmission of secret defense information and the export of stolen and sensitive military equipment.

Among other charges, the indictment alleges that two of the three defendants violated the Arms Export Control Act and the International Traffic in Arms Regulations by shipping several military articles, including body armor and chemical protective suits to Yemen. These items cannot be legally exported from the United States without authorization from the Department of State's Directorate of Defense Trade Controls.

The defendants were also charged with Conspiracy to Possess and Transmit Defense Information; Conspiracy to Unlawfully Export Defense Articles; Attempted Unlawful Export of Defense Articles; and Conspiracy to Possess Stolen Government Property. If convicted, the defendants face significant jail time and monetary penalties.

Registration commenced at 1 p.m. today for the Bureau of Industry and Security's (BIS) Annual Update Conference on Export Controls and Policy. Demand for this program has increased to such an extent that getting a ticket for Update is much harder than getting tickets to a Washington Redskins playoff game (plus, unlike most sporting events, BIS does not permit scalping).

However, the third-party registration site that BIS is using to conduct registration for Update was overwhelmed by the number of users trying to register at the same time.

Shortly after 1 p.m. the following message started appearing on the registration site, even though the registration site is supposed to be open and BIS had sent e-mail messages to their LISTSERV advising that the site was open: "Online registration has not yet started for this event. Please come back later to register."

Shortly before 2 p.m. the following notice appeared: "Online registration is currently unavailable for this event. Please check back soon."

Shortly after 3 p.m., BIS announced on its website:

The Update registration software server is temporarily down.
No one is able to register at this time. Once the server is back
up, we will send another email message. We cannot accommodate phone
and fax registrations.

Thank you for your patience.

By 5 p.m. BIS realized that the technical problems were more serious than they thought when the agency announced:

Registration for Update has been postponed due to technical problems. We cannot
accept email, fax or phone registration requests. We do not have an estimate at
this time of when registration will resume. We will ensure that there is adequate
notice given on the BIS website and by email notification when registration is set
to resume.

Thank you for your patience.

Labels: BIS, Export Controls