Census Modifies AES Filing Time Frames for Shipments Between U.S. and Puerto Rico

The U.S. Census Bureau has modified the Automated Export System filing time frames for shipments between the U.S. and Puerto Rico.

Since Puerto Rico is part of the "Customs territory of the United States", shipments between the U.S. and Puerto Rico are exempt from the advance filing requirements set forth in the Foreign Trade Regulations that were issued last year.

In FTR Letter No. 1 issued in September 2008, Census advised that even though Puerto Rico-related shipments were exempt from the FTR's advance filing requirements, the proof of filing citation had to be presented to the carrier “prior to departure” of the shipment.

After consulting with the trade community servicing Puerto Rico Census has modified the filing deadline. In FTR Letter No. 4, which was issued on April 23rd, Census stated that for shipments between the U.S. and Puerto Rico the proof of filing citation, postdeparture filing citation or exemption citation now has to be presented to the carrier “by the time the shipment arrives at the port of unlading.”

Read More

ITC Initiates Section 421 Market Disruption Investigation on Tires From China

The U.S. International Trade Commission (ITC) announced in today's Federal Register the initiation of a market disruption investigation on certain passenger vehicle and light truck tires from China. This case is being initiated by the ITC after receiving a petition filed by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union.

Section 421 was added to the Trade Act of 1974 by the U.S.-China Relations Act of 2000 (H.R. 4444), which established permanent normal trade relations with China and cleared the way for China's accession to the World Trade Organization (WTO). The China-specific safeguard provision was added to U.S. law in order to alleviate concerns over possible market disruption due to increased imports from China during the first 12 years that it is a WTO member.

In Section 421 investigations the ITC determines whether imports of a product from China are being imported into the U.S. in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products. If the ITC makes an affirmative determination, it proposes a remedy to the President and the President makes the final remedy decision. Such remedies can include quotas and other relief.

According to the petition filed in this case, China exported nearly 46 million consumer tires with a value of more than $1.7 billion to the U.S. in 2008, making it the largest source of consumer tire imports. The petition also claims that imports of consumer tires from China increased from 2004 to 2008 by 215% in volume and 295% by value.

This Section 421 investigation will move very quickly. The ITC has already issued questionnaires to producers and importers, and responses to these questionnaires will have a large impact on the outcome of the case. Companies affected by this investigation, including those in the automotive industry and retailers of tires, only have until May 5, 2009 to notify the ITC that they intend to participate.

The Bush administration considered and rejected seven Section 421 petitions. Thus, this investigation will be watched very closely to determine how the Obama Administration responds if the ITC recommends that relief be granted.

Read More

Non-U.S. Import/Export Controls Program to be Held in Dallas on May 18th in Dallas, Texas

While most U.S. companies are familiar with U.S. import and export requirements, it is often difficult for U.S. companies to obtain information on the import and export requirements in other countries in which they do business.

If your company has non-U.S. operations or conducts business around the globe you are in luck because the North Texas District Export Council is holding a program entitled "Non–U.S. Trade Controls: A Deeper Dive" on May 18, 2009 in Dallas, Texas.

This program, which will feature experienced speakers on customs and export control issues from Japan, the European Union, Canada, China and other countries, will cover the following topics:

• What are the differing trade controls regimes?
• What are the differences from U.S. trade controls?
• What types of operations will subject U.S. companies and their affiliates to these controls?
• What about conflicts between U.S. trade controls and controls in these countries?

The program will also feature panels on technology transfers in a global economy and managing global trade compliance, both from an outside counsel/consultant perspective and from an in-house point of view.

The cost of the full day program is only $95, which is a bargain. For more information and to register for the conference, click here or call the North Texas Export Assistance Center at (817) 310-3744.

Read More

Exporter Indicted on Conspiracy to Export Microwave Amplifer Products From U.S. to China

The U.S. Attorney for the Northern District of California today announced that a grand jury in San Jose, California indicted Mr. Fu-Tain Lu as well as two companies Mr. Lu founded, Fushine Technology, Inc., located in the San Jose area and Shenzen, China-based Everjet Science and Technology Corporation, conspired to export microwave amplifier products to China without obtaining the required licenses or other approvals from the U.S. Department of Commerce. Mr. Lu was also charged with two counts of making false statements to a government agency. Mr. Lu was arrested earlier this week at San Francisco International Airport after disembarking a flight.

According to Everjet's website, the company specializes in "providing RF and Microwave components, test instrumentations, and Satellite communication systems for markets in HongKong and China."

Microwave amplifers and microwave assemblies/modules with certain specifications are classified in ECCN 3A001.b.4 on the Commerce Control List and are controlled for National Security (NS Column 2) and Anti-Terrorism (AT) reasons. Products subject to NS-2 controls require an export license from the Bureau of Industry and Security prior to be exported to China.

The indictment alleges that the items Fushine shipped and attempted to ship products controlled for national security reasons to China without the required export licenses. The indictment quotes an internal company e-mail in which an Everjet employee told a Fushine employee, “Since these products are a little bit sensitive, in case the maker ask [sic] you where the location of the end user is, please do not mention it is in China.” The indictment also quotes from another e-mail in which Lu advises a subordinate to pretend that the intended end-user for an item is in Singapore rather than China.

Read More

Antidumping and Countervailing Duty Petitions Filed on OCTG From China

In a widely expected move, today the U.S. steel industry filed antidumping and countervailing duty petitions against Oil Country Tubular Goods from China. No other countries were named in the petitions.

The petitioners are Maverick Tube Corporation, United States Steel Corporation, TMK IPSCO, V&M Star L.P., Wheatland Tube Corp., Evraz Rocky Mountain Steel, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC.

Read More

Florida Company Pleads Guilty to Violating FCPA in Connection With Bribes in Honduras and Yemen

The Justice Department announced today that Latin Node Inc. (Latinode), a privately held Florida telecommunications company, pleaded guilty today to a one-count information charging that the company violated the Foreign Corrupt Practices Act's anti-bribery provisions. As part of the plea agreement, Latinode agreed to pay a $2 million fine over a three-year period.

Latinode is a provider of wholesale telecommunications services using Internet protocol technology countries throughout the world, including Honduras and Yemen. Latinode admitted that from approximately March 2004 through June 2007, it paid approximately $1,099,889 in payments to third parties, knowing that some or all of those funds would be passed on as bribes to officials of Hondutel, the Honduran state-owned telecommunications company.

In addition, from in 2005 and 2006, Latinode allegedly made 17 payments totaling approximately $1,150,654 either directly to Yemeni officials or to a third-party consultant with the knowledge that some or all of the money would be passed on to Yemeni officials in exchange for favorable interconnection rates in Yemen. Each of those payments was made from Latinode’s Miami bank account. According to court documents, company e-mails indicate that the intended payment recipients included, but were not limited to, the son of the Yemeni president; the vice president of operations at TeleYemen, the Yemeni government-owned telecommunications company; other officials of TeleYemen; and officials from the Yemeni Ministry of Telecommunications.

Latinode’s parent company, eLandia International Inc., voluntarily disclosed the potential FCPA violations to the Justice Department after it acquired Latinode.

Read More

Manhattan District Attorney Alleges Chinese Individual and Company Misused NY Banks to Provide Material Support for Iran

Manhattan District Attorney Robert M. Morgenthau today announced that an 118-count indictment (pdf) was brought by a grand jury in New York County against Li Fang Wei, a Chinese citizen and his company for charges relating to the misuse of New York City banks and the proliferation of illicit missile and nuclear technology to the Government of Iran. The Chinese company, known as LIMMT, is an alleged supplier of prohibited weapons material to the Iranian military and was designated by the Treasury Department Office of Foreign Assets Control (OFAC) in 2006 for providing material support to Iran's missile program.

The indictment alleges that the defendants engaged in fraudulent business practices to gain access to the U.S. financial system. The defendants were each indicted on 117 counts of Falsifying Business Records in the First Degree, which is punishable by up to 1⅓ to 4 years in prison, and one count of Conspiracy in the Fifth Degree, which is punishable by up to 1 year in prison.

In a related action, OFAC today designated Li Fang Wei (spelled Li Fangwei by OFAC) and the names of eight LIMMT front companies as aliases on the list of Specially Designated Nationals under Executive Order 13382 for their connection to Iran's missile proliferation network.

The front companies include Ansi Metallurgy Industry Co. Ltd.; Blue Sky Industry Corporation; Dalian Carbon Co., Ltd.; Dalian Sunny Industry & Trade Co., Ltd.; Liaoning Industry and Trade Co., Ltd; SC (Dalian) Industry & Trade Co., Ltd.; Sino Metallurgy & Minmetals Industry Co., Ltd; and Wealthy Ocean Enterprises Ltd.

Read More

WSJ: The Vietnam Tariff? Plastic Bags Present a Test For Free Trade

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.

Read More

OFAC's Receives Overwhelming Response to International Trade Symposium

OFAC's recently announced International Trade Symposium in Washington, DC on May 15th generated an "overwhelming response" and registration is closed to new registrants.

OFAC is maintaining a waiting list for the event and will notify those on the waiting list of any availability.

Read More

Eleven Defendants Charged In Scheme to Export Military Aircraft Parts to Iran

In yet another criminal case involving the prohibited exports of military aircraft to Iran, the Justice Department announced today that an Iranian national has been arrested and charged, along with ten other defendants, with participating in a conspiracy to military aircraft parts from the U.S. to Iran.

Mr. Baktash Fattahi, an Iranian national and legal U.S. resident, was arrested in California, on April 3, 2009, on charges of conspiring to export military aircraft parts to Iran. Fattahi and ten other defendants were indicted on April 2, 2009, by a federal grand jury in Miami on charges of conspiring to violate U.S. export controls and sanctions laws for their participation in a conspiracy to export U.S.-made military aircraft parts to Iran.

The other defendants charged in the indictment were persons and companies located in Iran and Dubai.

According to the indictment, the defendants conspired to and exported 13 different types of ITAR-controlled aircraft parts from the U.S. to Iran via Dubai, UAE. Among the aircraft parts the defendants are alleged to have obtained and illegally shipped to buyers in Iran are parts for the F-5 Tiger fighter jet, the Bell AH-1 Cobra attack helicopter, the CH-53 helicopter, the F-14 Tomcat fighter jet, and the UH-1 Huey military helicopter.

If convicted, each of the defendants face statutory maximum sentences ranging from ten years' imprisonment to twenty years' imprisonment, and face fines of up to $1 million.

Read More

Japanese Technology and Instruments Believed to be Used by North Korea in Missile Development

Japan's Yomiuri Shimbun newspaper reports how North Korea acquired the controlled technology and products from Japan that was likely used in developing the missile launched on Sunday.

The article notes that at "a U.S. Senate hearing in May 2003, an engineer who had defected from North Korea testified that about 90 percent of the parts used for one type of North Korean missile originated in Japan, adding the components were brought into the country by a ferry every two to three weeks."

Read More

Two Defendants Plead Guilty in Unrelated Cases Involving Illegally Exported Military Aircraft Parts

Last week two defendants in unrelated cases pleaded guilty to violations involving the unlicensed export of military aircraft parts from the United States.

In Hartford, Connecticut, Stuart Wax, pleaded guilty today to one count of making a false statement in an export control document. Mr. Wax entered the plea both for himself and on behalf of his company, M.M.M. Wheels, Inc. According to the Justice Department, in 2003, Mr. Wax exported parts used in the F-4 fighter jet to be sent to a company in Israel without the required license from the Directorate of Defense Trade Controls. Mr. Wax indicated on the shipping documents that the box contained “plumbing parts for repair”, although the government alleged that Wax knew that the contents actually were parts for military aircraft.

When Mr. Wax is sentenced in September, he faces a maximum term of imprisonment of five years and a fine of up to $250,000. Wax's company, M.M.M. Wheels, Inc. faces a maximum penalty of five years of probation and a fine of $500,000.

In a separate case, Mr. Traian Bujduveanu pleaded guilty in the Southern District of Florida to one count of conspiring to illegally export military and dual-use aircraft parts to Iran through his company, Orion Aviation. Bujduveanu's co-defendant, Mr. Hassan Keshari, and his corporation, Kesh Air International, pleaded guilty in January 2009, and are awaiting sentencing.

According to the Indictment, Bujduveanu sold aircraft parts to Keshari for purchasers in Iran and exported the aircraft parts to Iran by way of freight forwarders in Dubai, United Arab Emirates. Bujduveanu allegedly received orders by email from Keshari requesting specific aircraft parts for buyers in Iran. Bujduveanu then provided quotes, usually by e-mail, to Keshari. After the receipt of payment for the parts from Keshari, Bujduveanu then shipped the parts to a company in Dubai through the use of false or misleading shipping documents. From Dubai, the parts were then shipped on to the purchasers in Iran.

The Justice Department claims that the aircraft parts exported to Iran included parts designed exclusively for the F-14 fighter, the Cobra AH-1 Attack Helicopter, and the CH-53A Military Helicopter. All of these aircraft are part of the Iranian military fleet, while the F-14 is known to be used exclusively by the Iranian military.

Mr. Bujduveanu faces a maximum sentence of five years imprisonment and a maximum fine of $250,000 when he is sentenced in June.

Read More

UAE Forms Import-Export Control Committee

The Emirates News Agency reported today that the United Arab Emirates Government approved the formation a "committee on the commodities subject to import-export control" to "cooperate and coordinate with the relevant authorities on the regulations relating to import and export, to study proposals by such authorities on prohibiting, excluding or restricting any commodity."

The Committee will also be responsible for preparing "a set of proposals on the procedure, provisions and fees for import or export licenses for such commodities."

In August 2007, the UAE enacted a new import and export control law. The law, known as Federal Law No. 13 of 2007, authorizes the UAE "to ban or restrict the importing, exporting or re-exporting of any commodity for reasons related to safety, public health, environment, natural resources, national security or for reasons related to the UAE's foreign policy."

During the past few years the U.S. has placed pressure on the UAE to strengthen its export control regime and there have been efforts underway in Congress to include the UAE as a "Destination of Possible Diversion Concern."

Read More

U.S. Government Condemns North Korea Rocket Launch; Additional Multilateral Sanctions Possible

The U.S. Government quickly reacted to North Korea's launch of a long-range Taep'o-dong 2 missile.

The U.S. Northern Command said that the stage one of the missile fell into the Sea of Japan and the remaining stages, along with the payload, landed in the Pacific Ocean. Despite North Korea's claims of launching a communications satellite into orbit, the Northern Command said no object entered orbit.

While in Prague, President Obama said that "North Korea broke the rules, once again, by testing a rocket that could be used for long-range missiles." He also said that such "provocation underscores the need for action - not just this afternoon at the UN Security Council, but in our determination to prevent the spread of these weapons. Rules must be binding" and "violations must be punished."

Representative Howard Berman (D-CA), Chairman of the House Foreign Affairs Committee issued the following statement:

It is alarming that North Korea carried out this missile launch in direct defiance of the international community. The test is an unnecessary provocation that raises tensions in the region, and I urge the North Koreans to stop using their missile and WMD programs to threaten their neighbors and the rest of the world. Since the launch violates UN Security Council resolution 1718, I urge the Security Council to take strong and concerted action to demonstrate that Pyongyang’s actions are unacceptable. I especially call on both China and Russia to work constructively with other members of the Security Council to show that the world is united in condemning North Korea’s disturbing behavior.

Representative Ileana Ros-Lehtinen (R-FL), the Ranking Republican on the House Foreign Affairs Committee, said North Korea's "launch and its growing partnership with Iran, as well as its reported assistance to Syria's nuclear program, clearly show that Pyongyang's behavior threatens our interests, our forces in northeast Asia, our allies, and global peace and security." As a result, she announced she will soon introduce legislation that requires U.S. economic sanctions and diplomatic isolation to remain in place "until North Korea abandons its illegal nuclear, missile and weapons programs, and resolves the glaring human rights abuses which it has been causing and perpetuating."

Despite the Bush Administration's decision last year to remove North Korea's designation as a State Sponsor of Terrorism, the U.S. still imposes comprehensive restrictions on trade with North Korea under the International Emergency Economics Power Act (IEEPA). For example, an export license must be obtained from the Bureau of Industry and Security (BIS) to export or reexport any item subject to the Export Administration Regulations to North Korea except food and medicine classified as EAR99.

In addition, the Treasury Department's Office of Foreign Assets Control (OFAC) maintains controls on certain transactions involving persons subject to U.S. jurisdiction and North Korean entities or any specially designated North Korean national and prohibits the importation of North Korean goods without prior notification to and approval from OFAC.

The U.N. Security Council will meet at 3 p.m. EDT today to discuss its options, including the possible imposition of additional sanctions.

Read More

OFAC to Hold First-Ever International Trade Symposium in Washington, DC

The Treasury Department's Office of Foreign Assets Control (OFAC) recently announced that it is holding its first-ever International Trade Symposium on May 15, 2009 in Washington, DC.

According to OFAC, the free Symposium is "designed to provide the international trade community with insight and perspective from top officials on compliance, enforcement and licensing issues related to U.S. export controls" and will provide "a unique opportunity to hear from and interact with not only the Office of Foreign Assets Control, but key personnel in the Census Bureau, Customs and Border Patrol, Bureau of Industry and Security, and the State Department’s Office of Defense Trade Controls."

For registration information and more details, click here to see the PDF flyer issued by OFAC.

Read More

DDTC to Launch DTrade2 License Submission System on April 16th

U.S. exporters of defense articles and technical data should be aware that the Directorate of Defense Trade Controls will be launching DTrade2, its new electronic license submission and internal case management system, on April 16, 2009.

Starting on April 16, 2009, all new license submissions must be submitted DTrade2 and any new submissions to DTrade1 will be Returned Without Action with a request to resubmit using the DTrade2 application. While the DTrade1 application will no longer accept new cases, it will be available to track status and to attach additional data to pre-existing cases as required.

DTrade2 will require the use of new versions of all licensing forms, which can be found here on DDTC's D-Trade site. For more information on the changes that will be occurring in DTrade2, click here.

Read More

"Black Money" Documentary to Air April 7th on PBS

Black Money, a FRONTLINE documentary on international bribery, will air Tuesday, April 7, 2009, at 9 P.M. EDT on PBS. The documentary investigates the shadowy side of international business, shedding light on multinational companies that have routinely made secret payments—often referred to as “black money”—to win business. Click here for a preview of the show.

Black Money includes interviews with current and former prosecutors involved in several high profile anti-bribery cases.

FRONTLINE has also been presenting a series of related stories on international bribery cases on its FRONTLINE/WORLD site. The The Business of Bribes site contains news and interviews with middlemen, prosecutors and whistleblowers, detailing the stories behind some of the largest bribery investigations in history.

Read More

Wall Street Journal Article on UAE Nuclear Deal Addresses Export Control Concerns

Thursday's Wall Street Journal contains an extensive story entitled "Oil-Rich Arab State Pushes Nuclear Bid With U.S. Help" on the United Arab Emirate's (UAE) efforts to build a commercial nuclear power facility and the upcoming debate in Congress on the Agreement for Cooperation Concerning Peaceful Uses of Nuclear Energy (123 Agreement) that the U.S. and the UAE signed in January of this year.

The article also discusses concerns over the UAE's involvement in Iran's nuclear program and its reputation as a diversion risk. For example, the article notes that:

Most critics of the program, including some U.S. lawmakers and nonproliferation experts, believe the U.A.E. is unlikely to turn to nuclear weapons. But they have reservations about the country's past role in the flow of sensitive military technologies. The rogue Pakistani scientist Abdul Qadeer Khan used the port of Dubai to transfer centrifuge technologies to countries like Libya, according to American and U.N. officials. Mr. Khan's network grew to include nuclear sales to North Korea and Iran, before American and international investigators shut him down in 2003.

Iran has allegedly obtained materials for its missile program from front companies based in Dubai. Iran and the U.A.E. are trading partners, exchanging more than $5.5 billion in goods in 2007, according to the European Union.

With respect to export controls, the article indicates that UA.E. officials have admitted that they have been "lax in monitoring the flow of sensitive technologies" through its ports but that "enforcement of U.N. sanctions against Iran and tightened business-license regulations for Iranian nationals" has occurred. The article also indicates that during the past three years "U.A.E. officials say, they have shut down 40 Iranian companies operating in Dubai over either export-control violations or lack of proper licenses. In the past six months, Emirati authorities have also blocked more then 10 shipments of goods for potential military use heading to Iran through Dubai, largely from Asia."

Read More

For U.S. Satellite Makers, a Bid for a Bailout That Wouldn’t Cost Billions

In anticipation of tomorrow's House International Relations Subcommittee hearing on possible reforms to export controls on commercial satellites, today's New York Times contained a good article entitled "For U.S. Satellite Makers, a Bid for a Bailout That Wouldn’t Cost Billions". The article, which examines the history of and debate over export controls on commercial satellites, notes that:

Proponents of change are optimistic, pointing to a campaign pledge by President Obama and the support of respected figures like Brent Scowcroft, national security adviser to Presidents Gerald R. Ford and George Bush.

But the export revision is by no means a sure thing. The national security arguments cited in imposing the limits still resonate with conservatives who believe strict regulation is needed to keep China and other countries from stealing secret technology.

The article discusses the National Academies' "Beyond Fortress America" report on export control reforms that was issued in January of this year. The report, which was written by a committee co-chaired by Stanford University president John Hennessy and Brent Scowcroft, found that many current U.S. export controls "aimed at protecting national security, in fact weaken U.S. innovation and competitiveness in global markets, thereby reducing economic prosperity, which is an essential element of U.S. national security."

Read More

Israel Becomes Signatory to OECD Anti-Bribery Convention

Israel recently became the 38th signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which entered into force on February 15, 1999, provides a broad definition of bribery and requires countries to pass anti-bribery laws and to impose sanctions for engaging in prohibited acts.

Read More