House Subcommittee to Hold Hearing on Export Controls on Satellite Technology

Representative Brad Sherman (D-CA), Chairman of the House Foreign Affair's Committee's Subcommittee on Terrorism, Nonproliferation and Trade Brad Sherman (D-CA) has announced that the subcommittee will hold a hearing next week on U.S. export controls on satellite technology.

The hearing, which will be held at 1 p.m. on April 2, 2009 in the room 2175 of the Rayburn House Office Building, will feature the following witnesses:

• Larry M. Wortzel, Ph.D., Vice Chairman, U.S. – China Economic and Security Review Commission

• Pierre Chao, Senior Associate, Center for Strategic and International Studies

• Patricia Cooper, President, Satellite Industry Association

Concerns over U.S. export controls on commercial satellites have intensified after Eutelsat Communications SA, a France-based global satellite operator, recently announced that it intends to use a Chinese Long March rocket in 2010 to launch an "ITAR-free" communications satellite.

In March 1999, export controls on commercial communications satellites were transferred from the jurisdiction of the Export Administration Regulations to the International Traffic in Arms Regulations (ITAR) after Congress passed the Defense Authorization Act for Fiscal Year 1999.

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Commerce Department Makes Antidumping Determination on Line Pipe From China

The U.S. Department of Commerce (DOC) yesterday announced its affirmative final determination in the antidumping duty investigation on imports of circular welded carbon quality steel line pipe from the People’s Republic of China. Welded line pipe is used for the transmission of gas or oil, generally in pipeline systems.

Mandatory respondent, Huludao Steel Pipe Industrial Co., Ltd., received a final dumping rate of 73.87 percent. Three Chinese exporters received a separate rate of 73.87 percent. All other Chinese producers/exporters of welded line pipe received the China-wide rate of 101.10 percent, including Chinese mandatory respondent, Shanghai Metals & Minerals Import & Export Corp., as this company withdrew from the investigation.

As a result of this final determination, Commerce will instruct U.S. Customs and Border Protection to collect a cash deposit or bond based on the final rates.

The U.S. International Trade Commission (ITC) is scheduled to issue its final injury determination on or about May 7. If the ITC makes an affirmative final injury determination that imports of welded line pipe from China materially injure, or threaten material injury to, the domestic industry, Commerce will issue an antidumping order.

The petitioners in this antidumping investigation are Maverick Tube Corporation, United States Steel Corporation, Tex-Tube Company, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC.

Expect to see a number of antidumping petitions to be filed in the U.S. in the coming months on additional steel products from China and other countries.

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Senate Confirms Gary Locke as Secretary of Commerce

The third time was the charm. The United States Senate last night confirmed Gary Locke as the nation’s 36th Commerce Secretary by unanimous consent.

Locke was elected Washington State’s 21st governor in 1996, making him the first Chinese American governor in U.S. history and the first Asian American governor on the mainland. In 2000, Locke was re-elected to a second term as governor.

We expect to see nominations of several key senior Commerce Department officials in the coming weeks, including Under Secretary for Industry and Security and Under Secretary for International Trade.

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Irish Trading Company and Three Individuals Indicted in Connection With Scheme to Export Aircraft Parts to Iran

The Justice Department announced yesterday that Mac Aviation Group, an Irish trading company, and three of its officers were charged in Federal Court in Washington, DC with purchasing helicopter engines and other aircraft components from U.S. firms and illegally exporting them to Iran using companies in Malaysia and the United Arab Emirates.

Among the alleged recipients of these U.S. goods was an Iranian military firm that has since been designated by the United States for being owned or controlled by entities involved in Iran’s nuclear and ballistic missile program.

The 25-count indictment, which was filed under seal in federal court in the District of Columbia in July 2008 and unsealed yesterday, charges Mac Aviation Group, doing business as Mac Aviation Limited and Mac Aviation Nigeria, which is a company registered in Ireland that brokers aircraft parts and related goods for foreign customers.

The remaining defendants are Thomas McGuinn, a 72-year-old citizen and resident of Ireland who is the owner, director and principal officer of Mac Aviation; his son, Sean McGuinn, a 40-year-old citizen and resident of Ireland, who serves as sales/procurement director of Mac Aviation; and Sean Byrne, who serves as the commercial manager of Mac Aviation.

The indictment charges each of the defendants with two counts of conspiracy, 19 counts of violating the International Emergency Economic Powers Act (IEEPA) and Iranian Transactions Regulations, four counts of false statements and forfeiture allegations.

According to the indictment, beginning as early as August 2005 and continuing through July 2008, the defendants solicited purchase orders from customers in Iran for U.S.-origin aircraft engines and parts and then sent requests for aircraft components to U.S. companies. The defendants wired money to banks in the U.S. as payment for these parts and concealed from U.S. sellers the ultimate end-use and end-users of the purchased parts. The defendants caused these parts to be exported from the U.S. to third countries before causing them to be transshipped to Iran.

According to the indictment, the defendants purchased 17 model 250 turbo-shaft helicopter engines from Rolls-Royce Corp. in Indiana for $4.27 million on behalf of an Iranian trading company. The model 250 engine was originally designed for a U.S. Army light observation helicopter and has since been installed in numerous civil and military helicopters. The defendants concealed from Rolls-Royce the ultimate end-use and end-user of the helicopters engines. In one exchange, one defendant declared that Mac Aviation was not selling the engines to any military organization or government.

The indictment alleges that the engines were exported from the United States to third countries, including Malaysia, and later shipped to Iran. Among the recipients in Iran was the Iran Aircraft Manufacturing Industrial Company, known by its Iranian acronym as HESA. On Sept. 17, 2008, the Treasury Department's Office of Foreign Assets Control designated several Iranian weapons of mass destruction proliferators and members of their support networks pursuant to Executive Order 13382. Among the entities designated was HESA, which the Treasury Department determined was controlled by Iran’s Ministry of Defense and Armed Forces Logistics and has provided support to the Iranian Revolutionary Guard Corps.

The defendants are also alleged to have caused aircraft engine components, known as vanes, to be exported from the United States to Iran. According to the indictment, the defendants caused Pratt & Whitney to export 50 "5^th stage vanes" valued at approximately $141,750 from its Connecticut facility to Mac Aviation. The defendants falsely stated that final destination of the components was Belgium. Instead, these components were routed to Iran Aircraft Industries, known by its Iranian acronym as IACI, in Tehran.

The indictment alleges that the defendants also caused aircraft bolts valued at approximately $2,261 to be exported from the United States to Iran. According to the indictment, the defendants caused Uniflight LLC, a company in Texas, to ship 32 aircraft bolts to a representative of a trading company in Dubai, United Arab Emirates. Invoices referenced in the indictment indicate that the final destination of the aircraft bolts was Kish Island, Iran.

If convicted, the defendants face a maximum sentence of 10-20 years in prison for each of the IEEPA counts, 5-20 years in prison for each of the conspiracy counts, and five years in prison for each of the false statement counts.

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2009 Americas Annual Letter of Credit Survey Conference to be Held Next Week in Charlotte

For those exporters and others interested in letters of credit issues it is not too late to register for next week's 2009 Americas Annual Letter of Credit Survey conference that will be held March 26 and 27, 2009 in Charlotte, North Carolina.

The Annual Letter of Credit Survey is the premier letter of credit event in the U.S. The conference will be attended by bankers, exporters, lawyers, carriers, forwarders, etc. from around the U.S.

During the conference, speakers will discuss the leading U.S. and foreign reported LC court cases, regulatory issues and what is going on around the world in LCs.

The conference also provides a useful forum for the exchange of practical information and views on LCs.

The flyer for the program can be found here (pdf). Click here for more information and to register for the program.

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House, Senate Launch Efforts to Change Cuba Trade Policy

Efforts to ease trade with Cuba are beginning to move forward in Congress. Both the House and Senate took steps this week to expand bilateral commerce with the island nation, which has been under a U.S. embargo for over 40 years. Supporters say opening the Cuban market could provide a significant boost to the struggling U.S. economy.

In the Senate, a bipartisan group of 15 senators wrote to Treasury Secretary Timothy Geithner this week to oppose the continuation of a policy that has curtailed exports of agricultural and medical products to Cuba. The letter called on Geithner to reverse the recent action by Treasury’s Office of Foreign Assets Control, which they said runs contrary to the intent of Congress, as expressed in the fiscal year 2009 omnibus appropriations bill, to facilitate agricultural trade with Cuba.

In a March 11 notice, OFAC stated that the Cuba trade provisions in the omnibus bill “directed that none of the funds made available in [that bill] may be used to administer, implement, or enforce” a February 2005 regulatory amendment concerning the definition of “cash in advance,” one of the methods of payment for agricultural exports to Cuba allowed by the Trade Sanctions Reform and Export Enhancement Act of 2000. This amendment stated that “cash in advance” should be given its ordinary commercial meaning, which requires payment to be received by the seller or the seller’s agent prior to the shipment of goods from the port at which they are loaded. OFAC stated last week that because the omnibus bill does not amend the TSRA language, those statutory provisions remain in place, implying that OFAC’s position will not change either.

However, the senators charged that the agency’s interpretation of the term “cash in advance” as requiring payment prior to the shipment of goods is legally inaccurate. The letter cited the American Law Division of the Congressional Research Service as saying that “it appears customary within the international trade and finance community to place the emphasis on the legal transfer of control, rather than on the date of shipment” and that “OFAC’s interpretation appears to limit the available payment options to those that are considered risky, undesirable, and underutilized.” The letter added that prior to OFAC’s regulatory change cash-based sales of agricultural products to Cuba “were taking place and working well,” with no reported instances of a Cuban buyer taking possession of U.S. goods prior to completing payment to the seller.

The letter called on Geithner to stand by a pledge he made during Senate consideration of his nomination earlier this year to take “great care to follow congressional intent … [and] to ensure that OFAC’s activities with regard to Cuba are achieving its important objectives without unnecessary hurdles or unreasonable administrative delays.” Sen. Max Baucus, D-Mont., added that he fully expects Geithner to “revisit this issue to get U.S.-Cuba relations back on track and get our Cuba policy right.”

Baucus said he plans to soon introduce legislation that would ease restrictions on travel to and payment from Cuba, but House Ways and Means Committee Chairman Charles Rangel, D-N.Y., beat him to the punch. On March 16 Rangel introduced three bills to increase economic engagement with Cuba, including one [H.R. 1531] that would overturn OFAC’s interpretation of “payment of cash in advance.” That bill would also establish a government program to promote agricultural exports to Cuba and ease various requirements associated with travel to and doing business with Cuba.

Rangel also introduced a bill (H.R. 1530) that would eliminate the U.S. trade embargo completely within 60 days of its enactment. This bill asserts that the embargo is counterproductive because it adds “to the hardships of the Cuban people while making the United States the scapegoat for the failures of the communist system.” It also states that the best way to support democratic change in Cuba is by promoting trade and commerce, travel, communications and person-to-person exchanges, an approach the U.S is already using in other countries with similar governments.

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OFAC Publishes Cuba Family Travel Q&As

The Treasury Department's Foreign Assets Control today published a series of Questions and Answers regarding the implementation of the General License issued by the Office of Foreign Assets Control on March 11, 2009 that permits certain visits to family in Cuba.

OFAC has also published an unofficial Spanish translation of the Guidance On Implementation Of Cuba Travel And Trade-Related Provisions Of The Omnibus Appropriations Act, 2009.

As a result of a provision in the recently enacted FY 2009 Omnibus Appropriations Act, OFAC's March 11, 2009 general license reinstated the authorization for family travel to Cuba that existed prior to the June 16, 2004 amendments to the Cuban Assets Control Regulations.

The general license authorizes persons subject to the jurisdiction of the United States to travel to Cuba to visit close relatives for an unlimited period of time once every 12 months and to engage in travel-related transactions at the "maximum per diem rate" in effect at the time of travel, as established by the State Department. The current per diem rate for Cuba travel is $179 per day.

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Senate Confirms Ron Kirk as Next USTR; Senate Holds Secretary of Commerce Confirmation Hearing

Ron Kirk was confirmed by the Senate today to be the next U.S. Trade Representative (USTR). The vote was 92-5. As USTR, Kirk is member of President Obama’s Cabinet and will serve as the President’s principal trade advisor, negotiator and spokesperson on international trade issues.

Separately, this morning the Senate Committee on Commerce, Science, and Transportation held a hearing this morning on the nomination of Governor Gary Locke to be the 36th Secretary of Commerce. The video webcast of the hearing, as well as the prepared testimony of Governor Locke and other participants in the hearing, can be found here.

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Incoterms 3000 Scheduled to be Issued in Fall 2010

In an interview with International Trade Law News, Frank Reynolds, the U.S. Delegate to the International Chamber of Commerce's (ICC) Incoterm's drafting committee, said that the revised version of Incoterms 2000 should be released in the fall of 2010. Once released, the new Incoterms will take effect on January 1, 2011.

The new version of the Incoterms will be known as Incoterms 3000 in order to avoid the expectation that they will be revised every ten years.

The ICC introduced the first version of Incoterms, short for "International Commercial Terms," in 1936. There are currently 13 Incoterms, including EXW (Ex works), FOB (Free on Board), CIF (Cost, Insurance and Freight), DDU (Delivered Duty Unpaid) and CPT (Carriage Paid To).

The Incoterms have been revised six times in order to reflect international trade developments.

Frank Reynolds is the author of Incoterms for Americans, a very useful publication for U.S. exporters.

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New Details Emerge in Florida Export Controls Case

Some new details have emerged in the recent story regarding Joseph Piquet's conviction on seven counts of attempting to export ITAR-controlled power amplifiers to China. Piquet faces a maximum penalty of 30 years in prison and more than $4 million in fines when he is sentenced in May.

• The defendant is the owner of Alphatronx, whose website says the company is "leading, stocking distributor of military, industrial and commercial electronic components."
• The Palm Beach Post reports that Piquet's attorney said he is "a great guy who got caught up in this really technical stuff nobody can figure out"and that "the one guy who could have exonerated" him died in 2005.
• The U.S. Attorney for the Southern District of Florida commended Northrop Grumman Corporation for its outstanding cooperation from the inception of this investigation through the conclusion of the trial. Piquet bought the controlled products from Northrop Grumman's subsidiary, Velocium Products.
  

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Chris Wall, Assistant Secretary of Commerce for Export Administration Rejoins Former Law Firm

Christopher R. Wall, who recently served as the Assistant Secretary of Commerce for Export Administration in the Bureau of Industry and Security (BIS) has rejoined the Pillsbury law firm as senior international trade partner in the firm's Washington, DC office.

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Washington Post: U.S. to Toughen Its Stance On Trade

Following yesterday's confirmation hearing for U.S. Trade Representative nominee Ron Kirk, today's Washington Post reports on the Obama Administration's proposed changes to U.S. Trade Policy:

Even as world trade takes its steepest drop in 80 years amid the global economic crisis, the administration is preparing to take a harder line with America's trading partners. It will seek new benchmarks before supporting already-written trade agreements with Colombia and South Korea and is suggesting that it will dig in its heels on global trade talks, demanding that other countries make broader concessions first.

Ron Kirk's prepared testimony presented to the Senate Finance Committee yesterday can be found here.

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Do You Have the "Compliance Blues"?

For those of you following our Twitter feed, International Trade Law News is attending this week's International Trade Compliance Professionals annual conference in Anaheim, California.

In honor of all of the hard working trade compliance professionals out there I am posting the music and lyrics to "Compliance Blues", which was written a few years ago by Bruce Jackson, the "Trade Compliance Guy" and a well known export controls expert. Bruce wrote the song in 2002 and Bruce's friend Tim Birchard recently composed the music and recorded the song. The song can be heard here. (As you will see, some of the terms have changed since the song was written.)

Compliance Blues

Got a letter the other day
Came from a man at BXA
Said he’d like to come for a visit
Oh…man….this is it..

I’got those deep down compliance blues
I’got those deep down compliance blues
When you’d trade anything to be in someone else’s shoes

When I messed up that SED
They put out an A.P.B.
Yeah, the CI and AWB were out of line
But that shady forwarder said I’d be just fine

I’got those deep down compliance blues
I’got those deep down compliance blues
When you’d trade anything to be in someone else’s shoes

Senior Management was havin’ a fit
If only they could see it from where I sit
That enforcement agent with his slick RayBans
Was ready to toss me in the can

I’got those deep down compliance blues
I’got those deep down compliance blues
When you’d trade anything to be in someone else’s shoes

I can quote the regs til I turn blue
Sales and shipping just do what they wanna do
Maybe one day justice will prevail
And BXA will send our CEO to jail

I’got those deep down compliance blues
I’got those deep down compliance blues
When you’d trade anything to be in someone else’s shoes

As I soldier on through the compliance quagmire
I’ll trudge along till the last license expires
Cuz no matter what they may say
I ain’t got them blues as bad as ol’ Ken Lay

I’got those deep down compliance blues
I’got those deep down compliance blues
When you’d trade anything to be in someone else’s shoes
Yeah, I’got those deep down compliance blues

© By Bruce “BRJblues” Jackson February 2002

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Florida Jury Convicts Defendant for Conspiring to Violate U.S. Export Control Laws

A federal court jury in Fort Pierce, Florida last week convicted a defendant of seven counts of conspiring to violate U.S. export control laws.

Mr. Joseph Piquet, who will be sentenced on May 14, 2009, was convicted of attempting to purchase military use electronic components from Northrop Grumman Corporation and to ship the items to Hong Kong and the People's Republic of China without first obtaining required export licenses under the Arms Export Control Act and the International Emergency Economic Powers Act.

The products that Piquet attempted to export included power amplifiers designed for use by the U.S. military in early warning radar and missile target acquisition systems and low noise amplifiers that have both a commercial and military use.

According to the Justice Department, on five separate occasions spanning from March 2004 through February 2005, Piquet bought the electronic components and submitted false End-Use Certificates to the manufacturer to conceal the intended final destination of the parts, which he then forwarded through conspirators in Texas and Hong Kong.

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Employees of Japanese Machine Tool Producer Arrested for Alleged Export Control Violations

Various Japanese newspapers have reports that four employees of Japanese machine tools producer Horkos Corp were arrested this week for allegedly violating Japan's export control laws by exporting more than 1,000 sophisticated five-axis machining centers to 16 countries without the required export licenses and falsifying export documents.

The arrests follow a raid conducted by Japanese police on Horkos' headquarters and factory in July 2008 on suspicion that the company had illegally exported dual-use machine tools.

Although Horkos' machining centers exported machines can be used to manufacture automotive components and other commercial items, they can also be used to produce components for centrifuge separation devices for uranium enrichment and are controlled for nonproliferation reasons. As a result, Japan's Foreign Exchange and Foreign Trade Law requires Horkos and other exporters of five-axis grinding machines to obtain an export license from the Ministry of Economy, Trade and Industry (METI). (Similar products are classified on the U.S. Commerce Control List under ECCNs 2B001 and 2B201).

The Horkos employees that were arrested were allegedly involved in an effort to evade METI's licensing requirements by declaring on export declarations that Horkos machines did not require export licenses.

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BIS Issues First Version of Commodity Classification Information Table

The Bureau of Industry and Security (BIS) has released the first version of its Commodity Classification Information Table.

In September 2008, BIS announced that it intended to establish a page on its website where manufacturers could voluntarily provide information to customers and other persons that intend to export their products the Commerce Control List commodity classifications of their products. BIS explained that they commenced this initiative in an effort to aid exporters in the licensing process and to assist exporters in complying with U.S. export and reexport control laws.

The first version of the Commodity Classification Information Table, which is in PDF format, contains information submitted by 17 companies. The information that was submitted by companies varies widely and includes links to very detailed CCATS tables to general websites. In many cases, companies chose to simply list their export controls contact person, which at least gives customers a person to contact with questions regarding a product's ECCN, Schedule B number and other licensing requirements.

If your company currently has, or plans to have, Commodity Classification information available on your company’s website, or an export control point of contact, and you would like this information to be accessible via the BIS website, send an e-mail to CommodityClassifications@bis.doc.gov. In your e-mail, provide any of the following information you would like to be posted on the BIS website:

1) Company name
2) General description of the products/services
3) Commodity classification information website address
4) Export control point of contact (may be a general telephone number or email address)

We encourage companies planning to include their commodity classification information on the BIS website to contact their in-house legal counsel or outside export controls attorney before submitting the information to BIS.

UPDATE: Thanks to our readers for pointing out that the need to include the actual link on the BIS website where updated versions of the Commodity Classification Information Table will be posted in the future. The link is as follows: www.bis.doc.gov/commodityclassificationpage.htm.

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Compliance Week Reports on the "Long-Arm" of the FCPA

Today's Compliance Week contains a story on the the broad reach of the U.S. Foreign Corrupt Practices Act to companies located in the U.K. and other countries in Europe.

The article notes that "the long arm of U.S. regulatory compliance is now reaching ever more deeply into overseas corporations—even, when necessary, reaching over the shoulder of local regulators not enforcing their own standards to U.S. liking."

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Export Controls in the UAE: A Practical Manifestation of a Strategic Dilemma

Elena McGovern, a Research Associate with the Southwest Asia/Gulf Program at the non-profit Henry L. Stimson Center, recently wrote an excellent analysis of the United Arab Emirate's export control system in light of the recently signed U.S. -UAE civilian nuclear cooperation agreement. The article, entitled "Export Controls in the United Arab Emirates: A Practical Manifestation of a Strategic Dilemma," appeared in the most recent edition of WMD Insights, sponsored by the U.S. Defense Threat Reduction Agency (DTRA).

McGovern's article naturally focuses on the UAE's close proximity to and relationship with Iran. For example, the article notes:

While much of the continued laxity in UAE export controls and border security is due to a lack of capacity, allegedly opaque UN sanctions, and overdue attempts at course correction in an environment where skilled smugglers have been operating for decades, another major element in the equation is the absence of political will. Implementing export controls and border security measures is bad for business, especially for a country that relies so heavily on laissez-faire economic policies. Tightening the spigot on re-exports risks driving business elsewhere – not only to other developing ports in the Gulf, but to other locations, including China and Singapore – and stifling the UAE’s booming economic growth. With regard to direct UAE-Iran business, it has been difficult preventing these stricter policies from negatively affecting legitimate bilateral trade, a mainstay of the economies of both the Emirates and Iran.

The article concludes by observing that:

any sweeping attempt at course correction runs the risk of upsetting fragile regional security dynamics. This is undesirable due to the UAE government’s wish to preserve the strategic balance between the United States and Iran and the belief that it neither has the ability to affect political change in Iran today nor the stomach to be in open opposition to a potentially nuclear-armed Iran in the future. Given these realities, it is therefore possible to understand why, when explaining the limits to the UAE’s willingness to restrict trade with Iran, Sheikh Lubna al Qasimi, the Minister for Economy and Planning, said: “At the end of the day, Iran is still a neighbor.”

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OFAC Adds Companies Affiliated With Iran's Bank Melli to SDN List

The Treasury Department's Office of Foreign Assets Control (OFAC) today added 11 companies to the Specially Designated Nationals (SDN) list as a result of their ties to Iran's Bank Melli.

Bank Melli has previously been designated as a proliferator by the United States, the European Union and Australia for its role in Iran's nuclear and ballistic missile programs. Bank Melli has been alleged to provide financial services for Iranian front companies and entities engaged in proliferation activities and has handled transactions for other designated Iranian entities.

The companies designated today include companies located in Iran, the UAE and Cayman Islands that are involved in the investment, cement, textile and other sectors.

As a result of Treasury's actions today, all transactions involving the 11 entities and any U.S. person are prohibited and any assets the designees may have under U.S. jurisdiction are frozen.

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DDTC Issues Updated Guidelines for Licensing of Foreign Persons Employed by U.S. Persons

The Directorate of Defense Trade Controls (DDTC) today issued an updated version of its "Guidelines/Instructions for Licensing of Foreign Persons Employed by a U.S. Person."

DDTC requires all requests for the licensing of a foreign person employed by a U.S. person to be made through the use of a DSP-5 to cover all levels of requested technical data and defense services.

The new version of the Guidelines/Instructions can be found here.

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Australia and New Zealand Will Treat Vietnam as Market Economy for Antidumping Purposes

Australia and New Zealand have decided to treat Vietnam as a market economy for antidumping purposes. The decision was made in connection with the recent signing of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).

Australia and New Zealand are the two first countries to recognize Vietnam as a market economy since Vietnam joined the World Trade Organization in 2007.

The U.S. is unlikely to change its treatment of Vietnam as a non-market economy for several years since the U.S.-Vietnam WTO Agreement specifies that the U.S. can continue to treat Vietnam as a non-market economy for up to 12 years after accession, or until it is able to meet the economic criteria for a "market economy" designation.

U.S. antidumping law requires the Department of Commerce to calculate the "normal value" of goods produced from non-market economies using surrogate values from market economy countries in order to value the "factors of production" used to produce the subject merchandise. Use of the non-market economy methodology often leads to very high antidumping duty rates.

In addition to Vietnam, the U.S. treats China, Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan non-market economy for antidumping purposes.

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CBP Commissioner Basham Retires

Ralph Basham, Commissioner of U.S. Customs and Border Protection (CBP), retired yesterday after more than 38 years of public service.

In addition to serving three years as CBP Commissioner, Basham also served as Director of the U.S. Secret Service, Chief of Staff at the Transportation Security Administration and Director of the Federal Law Enforcement Training Center.

CBP Deputy Commissioner Jayson Ahern will serve as Acting CBP Commissioner until a successor is named by President Obama and confirmed by the Senate.

Portions of Basham's farewell message to CBP employees can be found here.

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OFAC Issues February Penalty Report

The Treasury Department's Office of Foreign Assets Control (OFAC) has issued its monthly report of civil penalties imposed on companies and individuals for allegedly violating the sanctions regimes administered by OFAC.

OFAC's February 2009 report indicates that the agency settled only case during the month. The case is summarized below:

• Lactalis USA, Inc. remitted $20,950.38 to settle allegations that it violated the Cuban Assets Control Regulations. OFAC alleged that between February 2004 and March 2007 Lactalis USA, Inc. made six unlicensed wire transfer payments in which Cuba or Cuban nationals had an interest. Lactalis did not voluntarily disclose this matter to OFAC.

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Japanese Trading Company Suspected of Unlicensed Export to North Korea

The Japan Times has reported that police raided a Tokyo trading company last week for allegedly violating Japan's export control laws.

According to the story, Japan's Ministry of Economy, Trade and Industry (METI) advised the Toko Boeki trading house that an export license was required before the magnetic measurement device could be exported to North Korea. However, the trading company proceeded to export the item to North Korea without obtaining the export license from METI.

The product to be exported was apparently subject to Japan's "catch-all" controls, which requires exporters to obtain an export license from METI for products not specifically included on Japan's Control List, but could contribute to WMD proliferation programs.

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