International Trade Law News

Labels: Boycotts

On July 17, 2007, the Commerce Department's Bureau of Industry and Security (BIS) published the following three important final rules and notices in the Federal Register:

Antiboycott Penalty Guidelines:

The first document published by BIS in the July 17, 2007 edition of the Federal Register was a final rule setting forth BIS policy concerning voluntary self-disclosures of the antiboycott provisions of the Export Administration Regulations (EAR) and the factors that BIS will consider when deciding whether to pursue administrative charges and impose penalties for violations of the antiboycott provisions.

Specifically, the final rule creates a new section 764.8 of the EAR (15 CFR § 764.8) setting forth the procedures for voluntary self disclosure of violations of the antiboycott provisions. For example, section 764.8 requires, among other things, that voluntary self-disclosures be in writing and that they be received by BIS's Office of Antiboycott Compliance before the agency learns of the same or substantially similar information from ‘‘another source’’ and has commenced an investigation or inquiry in connection with that information. Significantly, the final rule specifies that violations revealed by exporters to BIS in telephone or e-mail requests for advice concerning the antiboycott provisions are "not information received from another source". The final rule states that a voluntary self-disclosure of a violation of the antiboycott provisions of the EAR will be considered to be a "Great Weight" mitigating factor in the settlement of administrative enforcement cases.

The final rule also creates a new supplement No. 2 to part 764 that describes how BIS responds to violations of the antiboycott provisions and how BIS makes penalty determinations in the settlement of antiboycott administrative enforcement cases. The rule also specifies the various factors that BIS considers to be important when settling antiboycott administrative enforcement cases.

The final antiboycott guidelines rule takes effect on August 16, 2007.

Guidance on Licensing Jurisdiction of Microelectronic Circuits:

BIS also published a final rule in the July 17, 2007 Federal Register adding language to ECCN 3A001 advising that the following are subject to the licensing jurisdiction of the Department of State, Directorate of Defense Trade Controls (DDTC):

Radiation hardened microelectronic circuits controlled by Category XV(d) of the United States Munitions List (USML) and all specifically designed or modified systems or subsystems, components, parts, accessories, attachments, and associated equipment controlled by Category XV(e) of theUSML.

1. The overall structure of the CCL, including suggestions for how the structure of the CCL may be changed to better advance U.S. national security, foreign policy, and economic interests;
2. Types of items that should be listed on the CCL and the appropriate levels of controls to be placed on those items, taking into account technology levels, markets, and foreign availability;
3. Any updates to the CCL item descriptions that would enable the descriptions to better reflect the intent of the multinational controls and to eliminate any overly broad descriptions that inadvertently capture non-critical items that are not controlled by other countries; and
4. Coordination and harmonization of controls on items covered by the multilateral regimes, such as the Wassenaar Arrangement.
   

Labels: BIS, Boycotts, DDTC

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced today that Cooper Tools Industrial Ltda. (CTIL), a wholly-owned Brazilian subsidiary of Cooper U.S., Inc., a Delaware Corporation, agreed to pay a $27,000 civil penalty to settle allegations it committed fifteen violations of the antiboycott provisions of the Export Administration Regulations.

In its charging letter, BIS's Office of Antiboycott Compliance alleged that CTIL furnished fifteen items of prohibited information about business relationships with Israel to persons in Kuwait and the United Arab Emirates.

Labels: BIS, Boycotts

The Jerusalem Post reports today that "representatives of 14 Arab states convened in Damascus this week for a four-day gathering aimed at strengthening the economic and trade boycott of Israel."The article states that the conference, "which began on Monday, is being held under the auspices of the Arab League and brings together regional liaison officers from participating Arab countries. It marks the fourth time the boycott officers have met in the past 18 months."

According to the article, the conference participants include "Syria, Sudan, Algeria, the United Arab Emirates, Morocco, Libya, Lebanon, Qatar, the Palestinian Authority, Tunisia and Yemen." Egypt and Jordan, which have signed peace treaties with Israel, are not participating in the conference.

Labels: Boycotts

Three members of Congress have criticized Saudi Arabia following the report in Monday's Jerusalem Post that Saudi Arabia continues to enforce the primary boycott of Israeli goods.

Friday's edition of the Jerusalem Post contains quotes from Representatives Howard Berman (D-CA), Joseph Crowley (D-CT) and Mike Pence (R-IN) that are strongly critical of Saudi Arabia for continuing the boycott, despite their agreement to terminate the boycott during the WTO accession process. The three members of Congress called for Saudi Arabia to end their boycott immediately.

The article also quotes an official from the U.S Trade Representative's Office that:

"At the time of its accession to the WTO, Saudi Arabia did not invoke the nonapplication provisions of the WTO Agreement with respect to any member, and therefore has taken on all WTO rights and obligations, including most-favored-nation treatment, with respect to all members, including Israel."

In our view," the official said, "continuing the primary boycott of Israel would not be consistent with these commitments."

Labels: Boycotts, USTR

Monday's Jerusalem Post reports that "despite a promise made to Washington nearly 18 months ago" Saudi Arabia continues to enforce the Arab League boycott of Israel and "bar entry to products manufactured in Israel or to foreign-made goods containing Israeli components."

The article quotes a number of Saudi customs officials as stating that "goods made in Israel are not allowed here in Saudi Arabia . . . ." Another Saudi customs official said if a good "is made in Israel, then it is not allowed here in Saudi Arabia. If it is made in any other country, then no problem. But not from Israel." The article states that "Israeli-made goods would be confiscated upon arrival" in Saudi Arabia.

The article notes that U.S. officials "continue to raise the boycott issue with their Saudi counterparts" and that U.S. Trade Representative Susan Schwab recently wrote a letter to Senator Gordon Smith (R-OR) confirming that continued Saudi enforcement of the Israel boycott would "not be in keeping" with Riyadh's WTO commitments.

Labels: BIS, Boycotts

The Bureau of Industry and Security (BIS) today posted on its website the agency's Fiscal Year 2006 Annual Report. The 2006 Annual Report contains a great deal of useful information and statistics on export licensing, export enforcement and antiboycott reporting.

The PDF version of the 2006 Annual Report can be found at the following link.

Labels: BIS, Boycotts, Export Controls

The Bureau of Industry and Security (BIS) has imposed a $22,000 civil penalty on the National Bank of Egypt's New York Branch (NBE) for violating the antiboycott regulations. Specifically, BIS alleged that the NBE committed four violations of the antiboycott regulations by providing commercial invoices to a trading company in Syria that contained prohibited negative certificate of origin clauses. In addition, BIS charged NBE with four additional violations for failing to maintain records for five years. The proposed charging letter, settlement agreement and order can be found here.

The warning letters issued during 2006 by the Office of Antiboycott Compliance can be at the following link.

Labels: BIS, Boycotts

The January 8, 2007 edition of the Federal Register contains the Treasury Department's periodic "List of Countries Requiring Cooperation With an International Boycott." The list of countries includes: Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates, Republic of Yemen. The notice states that "Iraq is not included in this list, but its status with respect to future lists remains under review by the Department of the Treasury." This list is unchanged from the previous version published by Treasury in October 2006.

Labels: Boycotts, Treasury Department

The Jerusalem Post reports that "despite the public perception that the Arab trade embargo of Israel is on the wane, the number of boycott-related requests made to US companies this year by Arab states has registered a sharp increase." The article, which examines recent data issued by the Commerce Department's Bureau of Industry and Security (BIS), indicates that the number of boycott-related requests submitted to BIS in 2006 is "nearly 20 percent over the rate recorded last year." The article notes that the largest number of boycott requests came from the United Arab Emirates, followed by Syria.

The antiboycott provisions of the U.S. Export Administration Regulations (EAR) (15 CFR Part 760) prohibit U.S. persons from engaging in certain activity relating to restrictive trade practices and unsanctioned foreign boycotts, including implementing letters of credit containing prohibited boycott terms or conditions and entering into agreements containing prohibited boycott language. The antiboycott provisions also require U.S. persons to report quarterly requests they have received to take certain actions to comply with, further or support an unsanctioned foreign boycott.

Labels: BIS, Boycotts, Export Controls

Antidumping/Countervailing Duties

A three judge panel of the U.S. Court of International Trade (Chief Judge Restani and Judges Barzilay and Eaton) issued an opinion on Friday that will certainly complicate the softwood lumber settlement agreement negotiated between the U.S. and Canada. In Tembec, Inc., et al. v. United States, Chief Judge Restani and Judges Barzilay and Eaton held that the U.S. Trade Representative (USTR) improperly continued to enforce antidumping and countervailing duty orders on softwood lumber from Canada following the implementation of an affirmative injury determination issued by the U.S. International Trade Commission (ITC) pursuant to section 129 of the Uruguay Round Agreements Act ("URAA").

On June 18, 2006, the U.S. International Trade Commission (ITC) determined that terminating the antidumping suspension agreement that limits imports of Russian uranium products would materially injure the U.S. uranium industry. By a 4-1 vote, the ITC's Commissioners found that lifting the 1992 Russian suspension agreement would likely cause material injury to the U.S. industry, which include, among others, USEC Inc., the only U.S. producer of enriched uranium fuel for nuclear power plants; ConverDyn, the sole U.S. uranium converter; and Power Resources and Crow Butte Resources, the two largest uranium mining companies in the U.S.

Cuba

The recently released second report of the U.S. Commission for Assistance to a Free Cuba can be found here. The report includes the following recommendations for assistance and programs the U.S. can offer to advance freedom and democracy in Cuba, including $80 million over two years to increase support for Cuban civil society, expand international awareness, break the regime's information blockade and continue developing assistance initiatives to help Cuba realize a democratic transition. The House International Relations Commmittee's Subcommittee on the Western Hemisphere will hold a hearing on the Cuba Commission report on July 27, 2006.

Customs

The Customs Electronic Bulletin Board (CEBB) has officially been retired. A complete description of where the items on the CEBB can now be found on CBP's website is located at: www.customs.gov/xp/cgov/import/communications_to_trade/cebb_linklist.xml.

The minutes of the May 20, 2006 Departmental Advisory Committee on Commercial Operations of Bureau of Customs and Border Protection (COAC) have been posted on the CBP website. Among other things, the minutes state that 32% of C-TPAT members have been validated and 154 C-TPAT members are included in Tier 3.

On July 25, 2006, the Subcommittee on Trade of the Committee on Ways and Means will hold a hearing on budget authorizations for fiscal years 2007 and 2008 for the Bureau of Customs and Border Protection (CBP) and the Bureau of Immigration and Customs Enforcement (ICE) of DHS, and on other Customs issues. The hearing will also address other Customs issues, including: the creation of CBP and ICE and the integration of the former U.S. Customs Service into DHS, the C-TPAT program, Customs automation and modernization efforts and the mechanisms needed to fund them, as well as general Customs oversight issues.

Senators Chuck Grassley (R-IA) and Max Baucus (D-MT) recently introduced the Customs and Trade Facilitation Reauthorization Act of 2006 (S. 3658). Among other things, the Customs and Trade Facilitation Reauthorization Act provides for the following:

• Requires, within one year, an assessment of nonintrusive container scanning in foreign ports;
• Adds CBP personnel at all U.S. ports of entry;
• Requires enhanced cargo targeting and analysis to facilitate trade and restart the movement of cargo following a transportation disruption;
• Requires the Commissioner of Customs to develop a trade resumption plan, which must be routinely exercised with federal, state, local officials and private stakeholders;
• Authorizes the negotiation of bilateral customs partherships (such as the Container Security Initiative) with foreign governments to facilitate safer U.S.-bound trade;
• Authorizes a Customs Industry Partnership Program (including the Customs-Trade Partnership Against Terrorism) to facilitate safer trade; the program shall offer benefits to qualifying customs users who use secure business systems and meet appropriate physical security requirements;
• Requires a one-portal government-wide system to collect mandatory import and export clearance documentation;
• Adds personnel for Treasury Department oversight of delegated customs functions carried out by the Bureau of U.S. Customs and Border Protection;
• Adds resources for trade facilitation and enforcement, such as increasing the number of CBP import specialists, adding personnel for FTA implementation and enforcement; and restoring and adding personnel to conduct customs violations investigations at ICE;
• Creates a New CBP Intellectual Property Rights Division, director and staff, including co-location of an ICE investigative liaison;
  
• Streamlines and automates claim and collection of customs duty drawback

By a vote of 23-13, House Ways and Means Committee last week approved draft legislation to implement the U.S.-Peru Trade Promotion Agreement (PTPA). The PTPA would immediately remove the duties on 80% of U.S. exports of consumer and industrial products to Peru and more than two-thirds of current U.S. farm exports to Peru. Bilateral trade between the U.S. and Peru was $7.4 billion during 2005, with $2.3 billion of this coming from U.S. exports.

OFAC

OFAC has named two additional Iranian companies, Sanam Industrial Group and Ya Mahdi Industries Group, to the List of Iranian Weapons Proliferators under Executive Order 13382. These entities are owned or controlled by, or act or purport to act for or on behalf of, directly or indirectly, the Aerospace Industries Organization (AIO), a subsidiary of the Iranian Ministry of Defense and Armed Forces Logistics. AIO manages and coordinates Iran's missile program and oversees all of Iran's missile industries. These entities have been added to OFAC's List of Specially Designated Nationals with the program designation "NPWMD".