International Trade Law News

The Commerce Department today published a final rule in the Federal Register authorizing a program that will permit the importation of supplies for use in emergency relief work declared by the President that are exempt from antidumping (AD) and countervailing (CV) duties.

Under the procedures established in the final rule, importers interested in participating in this program must submit a written request to the Commerce Department providing specific information about the product, such as the producer's name, the HTS number, the U.S. price, the quantity, the proposed date and port of entry, the end-user's name and the intended use of the product.

The Commerce Department will review the request and if the request is accepted, Commerce will instruct U.S. Customs and Border Protection (CBP) to allow entry of the merchandise identified in the request submitted under without regard to antidumping and countervailing duties. A notice will also be posted on the Commerce Department's website.

Approved merchandise must enter the United States normally within 60 days or the merchandise will be subject to AD or CV duties. Also, any imported merchandise that is imported under this program that is not used for emergency relief work is subject to seizure and penalties.

Labels: Countervailing Duties

In what hopefully will be a positive development for exporters of defense articles and services, on October 27, 2006, Susan Clark, the Director of Defense Trade Controls Licensing (DTCL), issued a letter to the Defense Export Community promising "extraordinary measures to process the vast majority of . . . license applications and agreements by January 2007."

The letter notes that "all available personnel within" the Directorate of Defense Trade Controls (DDTC) "are dedicated to the successful completion of this goal" and that "licensing officers will continue to focus entirely on processing applications." To accomplish this goal, "routine activities such as training, meetings, and outreach events will be minimized during this period."

The letter says that all licensing inquiries should be directed to DDTC's Response Team, rather to licensing officers.

The complete text of the Director of DTCL's letter can be found here.

Labels: DDTC, Export Controls

A new study shows that the U.S. imposed 125 new unilateral sanctions against 47 countries between 2002 and June 2006. The study, entitled Study of New U.S. Unilateral Sanctions: 1997-2006, was commissioned by USA*Engage and the National Foreign Trade Council and conducted by Professor Michael P. Malloy, of the University of the Pacific McGeorge School of Law. The study shows that although the U.S. has imposed or threatened significantly more sanctions on countries during this period than in years past, these new sanctions tend to be more targeted than those prior to 1996.

The study is a follow-up to a 2002 sanctions report commissioned by USA*Engage, which showed a decline in the imposition of U.S. unilateral sanctions. Not surprisingly, the study indicates that from 2001 to 2006, the imposition of sanctions against individuals and non-governmental organizations increased, typically as a response to heightened concerns about the threat of terrorism.

The PDF version of the Study of New U.S. Unilateral Sanctions: 1997-2006 and associated appendices can be found at the following links:

• Complete Report
  
• Executive Summary
  
• Introduction & Observations
  
• Sanctions Compilation 1997-2006
  
• Sanctions by Country
  

The Computer History Museum in Mountain View, California recently hosted a 30th anniversary celebration of Public-Key Cryptography (PKC) to honor the inventions, inventors, historical milestones and the future of PKC. The panel of speakers spent much of the program focused on U.S. export controls on encryption products and concurred that the U.S. government was a major obstacle in advancing cryptography until it transferred export control jurisdiction on encryption products from the U.S. Munitions List to the Commerce Control List in 1996. The podcast and video of the program can be found here.

The Federation of American Scientists' Strategic Security Blog published a recent post noting that Aerospace Industries Association (AIA) announced at a Heritage Foundation program on defense-related export controls that the association is "fine tuning"” the second phase of its campaign to reform U.S. export control laws on defense articles and services. The AIA plans to draft a new export control law that it hopes will be introduced in the next session of Congress.

The audio and video from the Heritage Foundation's recent program on "Export Control Policy in the Age of Globalization: The View From The Defense Industry" can be found here.

U.S. Customs and Border Protection has posted on its website the exam and answer key to the October 3, 2006 Customs Broker License Examination. The exam's pass rate was approximately 26%.

Labels: Customs

The Corporate Crime Reporter reports today that the Federal Bureau of Investigation (FBI) intends for the first time to focus on major U.S. corporations that violate the Foreign Corrupt Practices Act. The article notes that the head of the FBI's Criminal Division has deployed agents to the Justice Department's Fraud Section to investigate foreign bribes paid by major U.S. corporations.

We have received many inquiries in response to current events in Thailand. There is no arms embargo on Thailand. The United States continues to review all proposed arms transfers and sales to Thailand on a case-by-case basis. Exports that support the foreign policy and national security goals of the United States will be approved. Already approved export authorizations and exports under ITAR exemptions continue to be allowed.

Labels: DDTC, Export Controls

The Bureau of Industry and Security (BIS) published in today's Federal Register two notices requesting public comments.

The first notice requests comments on the effectiveness of its licensing procedures for the export of agricultural commodities to Cuba pursuant the Trade Sanctions Reform and Export Enhancement Act of 2000(TSRA). The comments will be used BIS in preparing its biennial report to Congress that is required by TSRA. Parties submitting comments are asked to be as specific as possible, such as providing details on the average amount of time elapsed from the date of filing of a license application until the date of its approval.

The second notice states that BIS is seeking comments on continuing or revising existing U.S. foreign policy-based export controls for another year. BIS is interested in receiving comments and information on how foreign-policy based export controls have affected exporters and the general public, such as the economic impact of proliferation controls.

Comments on both topics must be submitted to BIS by November 22, 2006. The details on where to submit comments are contained in the notices.

Labels: BIS, Export Controls

U.S. Customs and Border Protection (CBP) has announced that it will hold its annual trade symposium from December 13-15, 2006 at the Ronald Reagan Building and International Trade Center in Washington D.C. Registration will open on CBP's website on November 1st. The registration fee is $250.

The symposiums's theme is "The World of Trade – 5 Years After 9/11." The symposium will open with an evening reception on December 13, followed by a day and half of events that include panel discussions on CBP’s international trade security and facilitation initiatives. Panel participants will include CBP personnel, members of the trade community and other government agencies.

Update: The Federal Register published by CBP on October 23rd about this event can be found here.

Labels: Customs

The Bureau of Industry and Security's Annual Update Conference on Export Controls and Policy concluded this afternoon. Details from today's breakout sessions on Foreign Policy Controls and Sanctions, Systematic Approach to Classification, International Perspectives on Export Controls, and Department of the Treasury's Foreign Assets Control Regulations, as well as the main points from the concluding Enforcement Plenary session, can be found at Scott Gearrity's Export Control Blog.

Labels: BIS, Export Controls

For those of you unable to attend Update, be sure to see Export Control Blog for a summary of today’s plenary and breakout sessions (I contributed to some of the summaries since the breakout sessions were running concurrently and Scott Gearrity could only be in one place at a time).

Some of the biggest news items to come out of Update include:

--The comment period on the proposed China “catch-all” regulation will be extended until December 4, 2006. In case you haven't seen it yet, BIS has posted on its website answers to the most frequently asked questions on the China proposed rule that were asked in the public meetings that BIS held around the country.

• The most significant improvement in SNAP-R is the ability for the applicant to attach PDF versions of supporting documents (technical specifications, letters of explanations, etc.) to export license applications and commodity classification requests. This should speed up processing times since the licensing officers will have direct access to the supporting documents submitted by the exporter. The system can accept PDF files up to 10MB in size. Supporting documents uploaded to SNAP-R can be copied and re-used on other applications.
  

• Another major improvement in SNAP-R is the ability to include up to 80 items on an export license application. This is a major improvement over the old version of SNAP that limited export license applications to six items per application. However, commodity classifications will still be limited to six items per request.

• SNAP-R will permit BIS licensing officers to communicate with applicants by e-mail.

• The system offers the capability to share work items with other users in the same company.

Labels: BIS, Export Controls

As widely reported, on Saturday the U.N. Security Council passed a unanimous resolution, S/Res/1718 (2006), imposing certain sanctions on the Democratic People’s Republic of Korea (DPRK or North Korea) as a result of North Korea's recent nuclear test.

The full text of Security Resolution 1718 is reprinted below (the list of sanctions is included in section 8, many of which are already included in U.S. law):

The Security Council,

Recalling its previous relevant resolutions, including resolution 825 (1993), resolution 1540 (2004) and, in particular, resolution 1695 (2006), as well as the statement of its President of 6 October 2006 (S/PRST/2006/41),

Reaffirming that proliferation of nuclear, chemical and biological weapons, as well as their means of delivery, constitutes a threat to international peace and security,

Expressing the gravest concern at the claim by the Democratic People’s Republic of Korea (DPRK) that it has conducted a test of a nuclear weapon on 9 October 2006, and at the challenge such a test constitutes to the Treaty on the Non-Proliferation of Nuclear Weapons and to international efforts aimed at strengthening the global regime of non-proliferation of nuclear weapons, and the danger it poses to peace and stability in the region and beyond,

Expressing its firm conviction that the international regime on the non-proliferation of nuclear weapons should be maintained and recalling that the DPRK cannot have the status of a nuclear-weapon state in accordance with the Treaty on the Non-Proliferation of Nuclear Weapons, “Deploring the DPRK’s announcement of withdrawal from the Treaty on the Non-Proliferation of Nuclear Weapons and its pursuit of nuclear weapons,

Deploring further that the DPRK has refused to return to the six-party talks without precondition,

Endorsing the Joint Statement issued on 19 September 2005 by China, the DPRK, Japan, the Republic of Korea, the Russian Federation and the United States,

Underlining the importance that the DPRK respond to other security and humanitarian concerns of the international community,

Expressing profound concern that the test claimed by the DPRK has generated increased tension in the region and beyond, and determining therefore that there is a clear threat to international peace and security,

Acting under Chapter VII of the Charter of the United Nations, and taking measures under its Article 41,

1. Condemns the nuclear test proclaimed by the DPRK on 9 October 2006 in flagrant disregard of its relevant resolutions, in particular resolution 1695 (2006), as well as of the statement of its President of 6 October 2006 (S/PRST/2006/41), including that such a test would bring universal condemnation of the international community and would represent a clear threat to international peace and security;

2. Demands that the DPRK not conduct any further nuclear test or launch of a ballistic missile;

3. Demands that the DPRK immediately retract its announcement of withdrawal from the Treaty on the Non-Proliferation of Nuclear Weapons;

4. Demands further that the DPRK return to the Treaty on the Non-Proliferation of Nuclear Weapons and International Atomic Energy Agency (IAEA) safeguards, and underlines the need for all States Parties to the Treaty on the Non-Proliferation of Nuclear Weapons to continue to comply with their Treaty obligations;

5. Decides that the DPRK shall suspend all activities related to its ballistic missile programme and in this context re-establish its pre-existing commitments to a moratorium on missile launching;

6. Decides that the DPRK shall abandon all nuclear weapons and existing nuclear programmes in a complete, verifiable and irreversible manner, shall act strictly in accordance with the obligations applicable to parties under the Treaty on the Non-Proliferation of Nuclear Weapons and the terms and conditions of its International Atomic Energy Agency (IAEA) Safeguards Agreement (IAEA INFCIRC/403) and shall provide the IAEA transparency measures extending beyond these requirements, including such access to individuals, documentation, equipments and facilities as may be required and deemed necessary by the IAEA;

7. Decides also that the DPRK shall abandon all other existing weapons of mass destruction and ballistic missile programme in a complete, verifiable and irreversible manner;

8. Decides that:

(a) all Member States shall prevent the direct or indirect supply, sale or transfer to the DPRK, through their territories or by their nationals, or using their flag vessels or aircraft, and whether or not originating in their territories, of:

(i) any battle tanks, armoured combat vehicles, large calibre artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems as defined for the purpose of the United Nations Register on Conventional Arms, or related materiel including spare parts, or items as determined by the Security Council or the Committee established by paragraph 12 below (the Committee);

(ii) all items, materials, equipment, goods and technology as set out in the lists in documents S/2006/814 and S/2006/815, unless within 14 days of adoption of this resolution the Committee has amended or completed their provisions also taking into account the list in document S/2006/816, as well as other items, materials, equipment, goods and technology, determined by the Security Council or the Committee, which could contribute to DPRK’s nuclear-related, ballistic missile-related or other weapons of mass destruction-related programmes;

(iii)luxury goods;

(b) the DPRK shall cease the export of all items covered in subparagraphs (a) (i) and (a) (ii) above and that all Member States shall prohibit the procurement of such items from the DPRK by their nationals, or using their flagged vessels or aircraft, and whether or not originating in the territory of the DPRK;

(c) all Member States shall prevent any transfers to the DPRK by their nationals or from their territories, or from the DPRK by its nationals or from its territory, of technical training, advice, services or assistance related to the provision, manufacture, maintenance or use of the items in subparagraphs (a) (i) and (a) (ii) above;

(d) all Member States shall, in accordance with their respective legal processes, freeze immediately the funds, other financial assets and economic resources which are on their territories at the date of the adoption of this resolution or at any time thereafter, that are owned or controlled, directly or indirectly, by the persons or entities designated by the Committee or by the Security Council as being engaged in or providing support for, including through other illicit means, DPRK’s nuclear-related, other weapons of mass destruction-related and ballistic missile-related programmes, or by persons or entities acting on their behalf or at their direction, and ensure that any funds, financial assets or economic resources are prevented from being made available by their nationals or by any persons or entities within their territories, to or for the benefit of such persons or entities;

(e) all Member States shall take the necessary steps to prevent the entry into or transit through their territories of the persons designated by the Committee or by the Security Council as being responsible for, including through supporting or promoting, DPRK policies in relation to the DPRK’s nuclear-related, ballistic missile-related and other weapons of mass destruction-related programmes, together with their family members, provided that nothing in this paragraph shall oblige a state to refuse its own nationals entry into its territory;

(f) in order to ensure compliance with the requirements of this paragraph, and thereby preventing illicit trafficking in nuclear, chemical or biological weapons, their means of delivery and related materials, all Member States are called upon to take, in accordance with their national authorities and legislation, and consistent with international law, cooperative action including through inspection of cargo to and from the DPRK, as necessary;

9. Decides that the provisions of paragraph 8 (d) above do not apply to financial or other assets or resources that have been determined by relevant States:

(a) to be necessary for basic expenses, including payment for foodstuffs, rent or mortgage, medicines and medical treatment, taxes, insurance premiums, and public utility charges, or exclusively for payment of reasonable professional fees and reimbursement of incurred expenses associated with the provision of legal services, or fees or service charges, in accordance with national laws, for routine holding or maintenance of frozen funds, other financial assets and economic resources, after notification by the relevant States to the Committee of the intention to authorize, where appropriate, access to such funds, other financial assets and economic resources and in the absence of a negative decision by the Committee within five working days of such notification;

(b) to be necessary for extraordinary expenses, provided that such determination has been notified by the relevant States to the Committee and has been approved by the Committee; or

(c) to be subject of a judicial, administrative or arbitral lien or judgement, in which case the funds, other financial assets and economic resources may be used to satisfy that lien or judgement provided that the lien or judgement was entered prior to the date of the present resolution, is not for the benefit of a person referred to in paragraph 8 (d) above or an individual or entity identified by the Security Council or the Committee, and has been notified by the relevant States to the Committee;

10. Decides that the measures imposed by paragraph 8 (e) above shall not apply where the Committee determines on a case-by-case basis that such travel is justified on the grounds of humanitarian need, including religious obligations, or where the Committee concludes that an exemption would otherwise further the objectives of the present resolution;

11. Calls upon all Member States to report to the Security Council within thirty days of the adoption of this resolution on the steps they have taken with a view to implementing effectively the provisions of paragraph 8 above;

12. Decides to establish, in accordance with rule 28 of its provisional rules of procedure, a Committee of the Security Council consisting of all the members of the Council, to undertake the following tasks:

(a) to seek from all States, in particular those producing or possessing the items, materials, equipment, goods and technology referred to in paragraph 8 (a) above, information regarding the actions taken by them to implement effectively the measures imposed by paragraph 8 above of this resolution and whatever further information it may consider useful in this regard;

(b) to examine and take appropriate action on information regarding alleged violations of measures imposed by paragraph 8 of this resolution;

(c) to consider and decide upon requests for exemptions set out in paragraphs 9 and 10 above;

(d) to determine additional items, materials, equipment, goods and technology to be specified for the purpose of paragraphs 8 (a) (i) and 8 (a) (ii) above;

(e) to designate additional individuals and entities subject to the measures imposed by paragraphs 8 (d) and 8 (e) above;

(f) to promulgate guidelines as may be necessary to facilitate the implementation of the measures imposed by this resolution;

(g) to report at least every 90 days to the Security Council on its work, with its observations and recommendations, in particular on ways to strengthen the effectiveness of the measures imposed by paragraph 8 above;

13. Welcomes and encourages further the efforts by all States concerned to intensify their diplomatic efforts, to refrain from any actions that might aggravate tension and to facilitate the early resumption of the six-party talks, with a view to the expeditious implementation of the Joint Statement issued on 19 September 2005 by China, the DPRK, Japan, the Republic of Korea, the Russian Federation and the United States, to achieve the verifiable denuclearization of the Korean peninsula and to maintain peace and stability on the Korean peninsula and in North-East Asia;

14. Calls upon the DPRK to return immediately to the six-party talks without precondition and to work towards the expeditious implementation of the Joint Statement issued on 19 September 2005 by China, the DPRK, Japan, the Republic of Korea, the Russian Federation and the United States;

15. Affirms that it shall keep DPRK’s actions under continuous review and that it shall be prepared to review the appropriateness of the measures contained in paragraph 8 above, including the strengthening, modification, suspension or lifting of the measures, as may be needed at that time in light of the DPRK’s compliance with the provisions of the resolution;

16. Underlines that further decisions will be required, should additional measures be necessary;

17. Decides to remain actively seized of the matter.

For those of you that were fortunate to survive the BIS Update registration process, I look forward to seeing you next week in Washington, DC. For those of you that are not able to attend, be sure to check out Scott Gearrity's second annual Update liveblog that will posted at Export Control Blog.

--Doug Jacobson

Labels: BIS, Export Controls

The Directorate of Defense Trade Controls (DDTC) has announced that the ELLIE system will no longer be available for the submission of DSP-5, DSP-61 and DSP-73 license applications.

In addition, DDTC has announced that the generic DSP-119 amendment form will continue to be available for amending licenses. However, DDTC expects the new D-Trade amendment forms (the DSP-6, DSP-62, and DSP-74) to be available in the last quarter of 2006 and will eventually replace the DSP-119 form.

DDTC has also announced that DDTC registration will be available via D-Trade "in the near future" and agreements forms are being readied for a Fall 2006 re-deployment.

DDTC reports that use of D-Trade has been gradually increasing and that approximately 40% of all license applications are submitted via D-Trade. Once DDTC achieves full D-Trade functionality (meaning all forms are available and no major technical obstacles) DDTC will require exporters to use D-Trade for the submission of all defense trade licenses. The only exceptions will be applications containing classified information and a few other miscellaneous reasons.

Labels: DDTC, Export Controls

USA*Engage and the National Foreign Trade Council (NFTC) yesterday released their Congressional Report Card on how members of the 109th Congress voted on key issues affecting trade, unilateral sanctions and global engagement.

The Report Card scored Senators on 12 trade-related votes and House Members on 14 trade-related votes, and weighted the vote on approval of CAFTA twice. Two House Members – Jeff Flake (R-AZ) and Vic Snyder (D-AR) – received an A+ with the highest score of 14, while Senators Chuck Hagel (R-NE) and Richard Lugar (R-IN) received an A+ with a score of 12. Three Senators and ten Representatives received a grade of F.

A complete copy of the Congressional Report Card, which includes a breakdown of the voting records and individual grades, can be found here.

U.S. manufacturers and exporters should be aware that as a result of the European Union's Metric Directive (80/181/EEC), beginning on January 1, 2010 the European Union (EU) will permit the use of only metric units and will prohibit the use of any other measurements for most products sold in the EU.

Unless the Metric Directive is amended or the implementation date is extended again, leaving U.S. customary units on a box or label will be illegal in the EU on January 1, 2010. None of the EU countries will permit dual indications of measurement. This will apply to labels, packaging, advertising, catalogs, technical manuals and user instructions.

Additional information on the Metric Directive can be found at http://buyusainfo.net/docs_orig/x_3107558.doc.

In a speech yesterday to the U.S. Chamber of Commerce in Washington, DC, Commissioner of U.S. Customs and Border Protection (CBP) W. Ralph Basham outlined CBP's five priorities:

1. Protecting business from unfair trade practices by enforcing antidumping and countervailing duty requirements to ensure the accurate collection of revenues linked to these trade actions;
2. Enforcing trade laws related to admissibility, including anti-circumvention laws, trade agreements and trade legislation pertaining to imported textiles.
3. Regulating trade practices to ensure strong controls over the revenue process and collecting the appropriate revenues due to the Treasury.
4. Protecting the American public, American agriculture and the nation’s economy from the intentional or unintentional contamination of agricultural products or food.
5. Protecting American business from theft of Intellectual Property Rights.

Labels: Customs

President Bush is expected to sign into law on Friday H.R. 4954, the Security and Accountability for Every Port Act ("SAFE Port Act").

Update: The President will sign the SAFE Port Act later today in a signing ceremony that will be held at the Old Executive Office Building in Washington, DC.

Update 2: It's official. The SAFE Port Act was signed into law this morning. The President's remarks at the signing ceremony can be found here.

Transparency International (TI) recently released the organization's 2006 Bribe Payers Index (BPI) which shows that overseas bribery by companies from the world'’s export giants is still common, despite the existence of international anti-bribery laws.

TI's BPI is a ranking of 30 leading exporting countries according to the propensity of their firms to bribe abroad. The BPI, which looks at the use of bribes by companies with headquarters in 30 of the world's leading exporting countries, is based on the responses of business executives from companies in 125 countries to questions about the business practices of foreign firms operating in their country.

Of the 30 exporting countries reviewed, Switzerland received the highest score and India received the lowest score.

The BPI's analysis report grouped the 30 countries into four clusters (or groups) of countries. Cluster 1 comprises the countries from which companies are least likely to bribe when doing business abroad, and cluster 4 comprises those that are most likely to bribe. According to the BPI 2006, the four clusters are:

Cluster 1: Switzerland, Sweden, Australia, Austria, Canada, UK, Germany, Netherlands, Belgium, U.S., Japan;

Cluster 2: Singapore, Spain, United Arab Emirates, France, Portugal, Mexico;

Cluster 3: Hong Kong, Israel, Italy, South Korea, Saudi Arabia, Brazil, South Africa, Malaysia;

Cluster 4: Taiwan, Turkey, Russia, China, India.

The BPI found that while companies from the wealthiest countries generally rank in the top half of the Index, they still routinely pay bribes.

Based upon the results of the 2006 BPI, TI recommends the following measures should be taken:

• OECD countries should step up enforcement of the OECD Anti-Bribery Convention's prohibition on foreign bribery and commit the necessary resources to monitor one another's enforcement.
• China, India and Russia should voluntarily adopt the provisions of the OECD Anti-Bribery Convention.
• Multilateral development banks must debar companies found guilty of foreign bribery.
• Companies must conduct due diligence when engaging in partnerships or acquisitions, and adopt and enforce strict internal no-bribes policies that include their agents, subsidiaries and branches.
• Developing countries should vigorously prosecute foreign companies found to have bribed on their soil, and must be supported in these prosecutions by the legal and financial cooperation of the host countries.
  

The U.S. Government yesterday announced the formation of a new task force dedicated to enforcing existing economic and trade sanctions against Cuba. The Cuban Sanctions Enforcement Task Force will be chaired by the U.S. Attorney for the Southern District of Florida, will be comprised of members from OFAC, ICE, FBI, IRS, Department of Commerce - Office of Export Enforcement, the U.S. Coast Guard, and the Field and Air divisions of Customs and Border Protection.

The primary goal of the Cuban Sanctions Enforcement Task Force is the "vigorous investigation of violations and enforcement through federal criminal prosecutions of the existing U.S. economic and trade sanctions against Cuba." Specifically, the Task Force intends to "agressively pursue criminal investigations and prosecutions, where appropriate, of Cuban Assets Control Regulations and other violations, including of those involved in organizing and facilitating unlicensed travel transactions with Cuba."

R. Alexander Acosta, U.S. Attorney for the Southern District of Florida, told a news conference in Miami yesterday that he would prosecute the import and export of goods to and from Cuba, transfers of hard currency to Cuba, and unapproved travel to Cuba.

Labels: OFAC

The National Council on International Trade Development (www.ncitd.org) will hold its next monthly meeting on October 12, 2006 from 9:15 a.m. to noon at the University Club in Washington, DC. The speakers include:

• David Nelson, Director, Office of Terrorism Finance and Economic Sanctions Policy, U.S. Department of State
  
• Stephen Bogni, Acting Chief, Arms and Strategic Technology Investigations Unit, Immigration and Customs Enforcement, Department of Homeland Security
• Jonathan Gold, Department of Homeland Security (will discuss container seal issues)
  

The Jerusalem Post reported today that the Government of Iranian "has published a blacklist barring trade with international companies that are said to be 'affiliated with the Zionist regime and Israeli stockholders.'" The article notes that Iran's Foreign Ministry has "recently taken various steps 'inside and outside the country to prevent patronage of Israeli goods,' and that it was working on the issue with other member states of the Organization of the Islamic Conference."

This serves as a reminder that U.S. companies that possess OFAC licenses to sell food, medicine or medical devices to Iran should closely review letters of credits and other documents related to such sales in order to ensure compliance with the U.S. antiboycott regulations.

Labels: OFAC

California Governor Arnold Schwarzengger recently vetoed SB 927, a bill passed by the California Legislature that would have imposed 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 two busiest U.S. ports.

In his veto statement, the Governor said that the bill "is flawed in its construction" and that it is drafted "to include only two ports and applies only to goods shipped in containers, ignoring all other forms of shipping and ports of entry." He also stated that the bill would have a negative impact on the "the sale and delivery of goods grown and manufactured in California."

The bill was opposed by many trade groups, including the California Chamber of Commerce, Los Angeles Area Chamber of Commerce, National Retail Federation, Retail Industry Leaders Association, California Manufacturers and Technology Association, Waterfront Coalition, Wine Institute, California Farm Bureau, California Trade Coalition, and Pacific Merchant Shipping Association.

Many legal experts believed that the container "user fees" established by SB 927 would have been held to be unconstitutional.

The author of the bill, Senator Alan Lowenthal told the Governor that "I'll be back" with similar legislation next year.

By Kenneth E. Siegel

Among the many provisions in H.R. 4954, the SAFE Port Act, passed by Congress this week (see related story in October 1, 2006 post below) was language that indicates that contract logistics providers are now eligible to apply for C-TPAT. Specifically, Section 212 of the bill states as follows:

SEC. 212. ELIGIBLE ENTITIES.
Importers, customs brokers, forwarders, air, sea, land carriers, contract logistics providers, and other entities in the international supply chain and intermodal transportation system are eligible to apply to voluntarily enter into partnerships with the Department under C-TPAT.

Labels: Customs

One of the other things the Senate accomplished on Friday before adjourning was to confirm Christopher A. Padilla to be Assistant Secretary of Commerce for Export Administration by unanimous consent. Mr. Padilla's confirmation testimony before the Senate Banking, Housing and Urban Affairs Committee can be found here.

Labels: BIS, Export Controls

In a flurry of last minute activity before adjourning for the fall election recess until November 13th, the U.S. Congress passed on early Saturday morning two trade-related bills, the Iran Freedom and Support Act and the Security and Accountability for Every (SAFE) Port Act.

Iran Freedom Support Act - After a great deal of behind the scenes activity, the Senate passed by unanimous consent H.R. 6198, the Iran Freedom Support Act (IFSA), which the House of Representatives had passed a day earlier. H.R. 6198, which extends the expiring sanctions on Iran until December 31, 2011, removed the most controversial provisions in the previous version of the Iran Freedom Support Act (H.R. 282) that passed the House in April, including the language that would extend the sanctions on Iran to independent foreign subsidiaries of U.S. companies.

H.R. 6198, the Iran Freedom Support Act, does the following:

• Codifies most existing U.S. sanctions on Iran;
• Imposes mandatory sanctions against entities that provide goods or services that contribute to Iran's ability to acquire nuclear, chemical, or biological weapons;
• Contains more detailed waiver language, by requiring the President to notify Congress 15 days before terminating any sanctions on Iran;
• Declares Congress' intent to avoid implementing agreements with countries that cooperate with Iran;
• Provides new authority for the President to prevent money-laundering that can be used to provide Iran and other dangerous countries with weapons of mass destruction;
• Authorizes financial and political support for foreign and domestic organizations and individuals seeking to promote democratic reforms in Iran.

I applaud Congress for demonstrating its bipartisan commitment to confronting the Iranian regime's repressive and destabilizing activities by passing the Iran Freedom Support Act. This legislation will codify U.S. sanctions on Iran while providing my Administration with flexibility to tailor those sanctions in appropriate circumstances and impose sanctions upon entities that aid the Iranian regime's development of nuclear weapons.

• Sets minimum standards for C-TPAT participation and formally divides program membership into tiered categories;
• Increases staffing and funds available to the C-TPAT program;
• Authorizes $3.4 billion over five years for port safety and security measures;
• Authorizes $400 million per year for port security grants;
• Authorize and codify the Domestic Nuclear Detection Office (DNDO);
• Require the Department of Homeland Security (DHS) to deploy nuclear and radiological detection systems at the largest 22 port U.S. ports to cover 98% of all incoming cargo;
• Establish three pilot programs to evaluate the feasibility of conducting 100% scanning of cargo containers for nuclear and radiological material at foreign seaports;
• Require background checks and credentials for workers at the nation's 361 ports;
• DHS is required to create protocols for resuming operations after an attack or security incident.

YM BioSciences Inc., a Canadian company engaged in the acquisition, development and commercialization of oncology and acute care products, recently announced that the Treasury Department's Office of Foreign Assets Control (OFAC) has issued a specific license allowing YM BioSciences' wholly-owned U.S. subsidiary to import nimotuzumab into the U.S. for the purpose of conducting clinical trials in pediatric patients with pontine glioma.

Nimotuzumab is a monoclonal antibody that targets the Epidermal Growth Factor Receptor and was developed at the Center for Molecular Immunology affiliated with the University of Havana. As a result of the OFAC license, YM BioSciences said that it plans to submit an application to the U.S. Food and Drug Administration to allow the investigation of nimotuzumab for the treatment of children with intrinsic diffuse pontine glioma. According to the company, if FDA permission is granted it would be the first anti-cancer drug from Cuba to be used in clinical trials in the US.

Labels: OFAC

The U.S. Court of International Trade will hold its 14th Judicial Conference on Monday, November 6, 2006 at the New York Marriott Marquis hotel. The theme of the Conference is: "Something Old, Something New: Emerging Issues Before the Court." All interested persons are invited to attend. Since seating capacity is limited, early return of the registration form is suggested.

U.S. Customs and Border Protection (CBP) recently issued an announcement reminding importers that, effective October 1, 2006, the civil penalty for failing to declare agricultural items at U.S. ports of entry will cost first time offenders $300. The penalty for the second violation will be $500. CBP stated that the "key to avoiding the penalty is to declare all agricultural items and present them to Customs and Border Protection for inspection so that an agriculture specialist can determine if it is admissible or not."

Labels: Customs

The U.S. Department of the Treasury has issued an updated version of the publication entitled "Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-based Charities (Guidelines)". The Guidelines provide recommended best practices, which are intended to help charities develop, reevaluate, and build upon pre-existing internal controls and protective measures. The Guidelines also urge charities to take a proactive risk-based approach to protecting against illicit abuse and are intended to be applied by those charities vulnerable to such abuse in a matter that is commensurate with the risks they face and the resources with which they work. The Guidelines contain anti-terrorist financing guidance, as well as guidance on sound governance and financial practices that helps to prevent exploitation of charities.

Sunkist Growers, Inc. recently filed an antidumping petition on Lemon Juice from Argentina and Mexico. This case is only the third antidumping case filed by U.S. industry in 2006.

The Cato Institute's Center for Free Trade Policy Studies recently published a policy bulletin entitled "All Quiet on the Antidumping Front? Take a Closer Look" analyzing the reasons for the decrease numbers of antidumping cases in the U.S. and around the world. The bulletin notes the following reasons for the decline in the number of antidumping cases filed in the U.S.:

1. The U.S. economy has been growing steadily since the recession of 2001. In a healthy economic environment, it is more difficult to make the case that a domestic industry is materially injured—one of the technical requirements of winning antidumping protection.
2. The U.S. steel industry, which has accounted for the preponderance of antidumping activity in the past, is arguably healthier than it has ever been.
3. The appeal of the U.S. market to foreign steel producers has decreased as demand in developing countries has created large alternative markets for steel.
4. As globalization has progressed, foreign direct investment has flourished and supply chains have gone international.
   

Labels: Antidumping