International Trade Law News

In the first Foreign Corrupt Practices Act (FCPA) involving Vietnam, the Justice Department announced yesterday that Joseph T. Lukas, a former executive of Philadelphia-based Nexus Technologies Inc. pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA in connection with his role in a scheme to pay bribes to Government of Vietnam officials in exchange for contracts to supply equipment and technology to Vietnamese government agencies.

Mr. Lukas was arrested on September 5, 2008, after being indicted by a federal grand jury in Philadelphia. Also indicted in this case was Nexus Technologies and three alleged co-conspirators. Cases are still pending against the remaining defendants and the company.

Nexus Technologies Inc. is a Delaware company with offices in Philadelphia, New Jersey and Vietnam that allegedly purchased a wide variety of equipment and technology, including underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems, for export to agencies of the government of Vietnam. The indictment alleged that from approximately 1999 through 2008, the defendants engaged in a conspiracy to pay Vietnamese government officials bribes in order to secure lucrative contracts. Over the course of the scheme, the defendants are alleged to have paid at least $150,000 in bribes to foreign officials in Vietnam. The customers in Vietnam are alleged to have included the commercial branches of Vietnam's Ministries of Transport, Industry and Public Safety.

In connection with his guilty plea, Mr. Lukas admitted that from 1999 to 2005, he and other employees of Nexus Technologies Inc. agreed to pay, and knowingly paid, bribes to Vietnamese government officials in exchange for contracts with the agencies for which the officials worked. The bribes were falsely described as "commissions" in the company’s records.

Mr. Lukas faces a maximum prison sentence of 10 years in prison and a $350,000 fine when he is sentenced in April 2010.

Labels: FCPA, Vietnam

Today's Wall Street Journal Asia contains an opinion piece on the recently filed U.S. antidumping and countervailing duty petitions file on polyethylene retail carry bags from Vietnam. The article discusses whether the U.S. Commerce Department will apply the U.S. countervailing law to Vietnam, which is treated as a non-market economy for antidumping purposes, and discusses the cost of such a decision to U.S. consumers.

Labels: Antidumping, Countervailing Duties, Vietnam

Last Thursday, a Federal grand jury in Philadelphia indicted Nexus Technologies Inc. and four employees of the company on one count of conspiracy to bribe Vietnamese public officials in violation of the Foreign Corrupt Practices Act (FCPA) and four substantive counts of violating the FCPA by paying bribes to various Vietnamese government officials in exchange for contracts to supply equipment and technology to Vietnamese government agencies. The four employees were arrested the following day.

This appears to be the first FCPA case involving Vietnam.

According to the Justice Department, the indictment alleged that:

Nexus Technologies Inc. was a Delaware company with offices in Philadelphia, New Jersey and Vietnam that purchased a wide variety of equipment and technology, including underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems, for export to agencies of the government of Vietnam. The indictment alleges that from approximately 1999 through 2008, the defendants engaged in a conspiracy to pay Vietnamese government officials bribes in order to secure lucrative contracts for Nexus Technologies Inc. Over the course of the scheme, the defendants are alleged to have paid at least $150,000 in bribes to foreign officials in Vietnam. The defendants' customers in Vietnam are alleged to have included multiple Vietnamese government agencies, including the commercial branches of Vietnam's Ministries of Transport, Industry and Public Safety.

Labels: FCPA, Vietnam

Today the Office of the U.S. Trade Representative (USTR) announced the results of the 2007 Annual Review of the Generalized System of Preferences (GSP).

As a result of this year’s review, duty-free treatment for the vast majority of products covered by GSP will continue. In addition, the GSP eligibility for 99 exports from specific countries will continue, even though the quantities of those exports exceeded statutory thresholds in 2007. As authorized by the GSP statute, the Administration will waive those thresholds known as “competitive need limitations” (CNLs).

While adding three types of aluminum products to the list of GSP-eligible products from all beneficiary countries, the USTR determined that 25 products from beneficiary countries can compete effectively in the U.S. market without duty-free treatment and will no longer be eligible under the GSP program. This group includes 21 products that exceeded the statutory CNLs and four products that have had waivers to the CNLs for the past five years and are now subject to statutory “super-competitiveness” thresholds.

The USTR's Annual Review also involved an analysis of petitions to withdraw or limit a country’s GSP benefits for not meeting GSP eligibility criteria. These criteria include the extent to which a country provides adequate and effective protection of intellectual property rights (IPR) and whether a country is taking steps to ensure internationally recognized worker rights. Several beneficiaries remain under active scrutiny because of such concerns, including: Lebanon, Russia and Uzbekistan regarding their lack of IPR protection, and Bangladesh, Niger, the Philippines and Uzbekistan regarding worker rights.

The U.S. GSP program, which provides duty-free treatment for nearly 5,000 products exported to the United States from 132 beneficiary developing countries, will expire on December 31, 2008 unless renewed by Congress.

Update: The USTR also published in the Federal Register a notice announcing the initiation of a review to consider designating Vietnam as a beneficiary developing country under the GSP program. Public comments on whether Vietnam meets certain eligibility criteria for designation as a BDC must be submitted to USTR by August 4, 2008.

Labels: GSP, Vietnam

The U.S. Department of Commerce (DOC) announced today that, after reviewing the second six months of data from the monitoring program of apparel imports from Vietnam, there is insufficient evidence to warrant self-initiating an antidumping investigation. The import monitoring program began upon Vietnam’s entry into the World Trade Organization in January 2007.

Assistant Secretary for Import Administration David Spooner said that DOC's “investigation reveals that prices of Vietnamese apparel are in line with, and in most cases even exceed, other major suppliers, including Central America.”

During its review DOC examined import data for five different apparel product groups from Vietnam – trousers, shirts, underwear, swimwear and sweaters – during August 2007 through January 2008. The review determined that during this period, the U.S. did not import apparel from 208 of nearly 500 ten-digit Harmonized Tariff Schedule lines within the five groups from Vietnam. Many of the remaining ten-digit HTS lines had rising unit values, further indicating that dumping is not taking place.

DOC then compared trends in unit values and import levels to other suppliers of these products to the United States, including Bangladesh, CAFTA-DR (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua), India, Indonesia, Pakistan, Thailand, Cambodia, Macau, Malaysia and the Philippines. Based on this comparison, Commerce concluded that there was insufficient evidence to self-initiate an antidumping investigation.

DOC indicated that it will continue to monitor trade in these categories during the next six months for the next review that will begin in September 2008.

The import data for these product groups can be found on the Vietnam Textile and Apparel Import Monitoring Program Web site at www.otexa.ita.doc.gov/vn.htm.

Labels: Antidumping, Vietnam