DHL Express Hosting Export Compliance Program in Cincinnati Area on November 17, 2011

DHL Express is hosting a full day export compliance conference in the Cincinnati area on November 17, 2011.

The program, which is sponsored by DHL Express, AAEI, NAM and the Northern Kentucky International Trade Association, will feature a number of government, industry representatives and practitioners speaking on the following topics:

• U.S. export controls and export control reform efforts
• Overview of export enforcement by Bureau of Industry and Security (BIS), Office of Export Enforcement
• Discussion of recent changes to U.S. sanctions and embargo programs (OFAC)
• Automated Export System compliance
• BIS export compliance best practices

The program will also include an exporter's roundtable lunch.

The program will be held at the Hilton Cincinnati Airport located in Florence, Kentucky and is only $50.

For more information see the brochure below. The registration link can be found here.
DHL AAEI Export Conference Nov 17, 2011

Read More

Today's Sanctions, Export Controls and FCPA News and Notes

• OFAC today added to the SDN List six IRISL front companies in Panama that took ownership of IRISL vessels. The six Panamanian companies are: Galliot Maritime, Mount Everest Maritime, Melodious Maritime, Indus Maritime, Rishi Maritime, and Kaveri Maritime. OFAC Director Szubin says: "IRISL will undoubtedly continue trying to find other jurisdictions willing to host its companies and flag its ships. But IRISL’s days may be numbered. Governments and shipping companies are learning that IRISL’s deception, fraud and dangerous activities on behalf of the Government of Iran pose a risk to all of those exposed to IRISL and are proving to be very costly in the long term." 

• The State Departments Defense Trade Advisory Group (DTAG) will meet on November 9, 2011 in Washington, DC from 1 p.m. until 4 p.m. ET. Details and registration information can be found here.

•  The President's Export Council Subcommittee on Export Administration (PECSEA) will meet on November 14, 2011 in Washington, DC at 10 a.m. The meeting agenda and other information on the meeting can be found here.

• Want to go to Afghanistan? The U.S. Department of Commerce's International Trade Administration is organizing a business development trade mission to Kabul, Afghanistan in February 2012. The targeted sectors include: Construction (including engineering, architecture, transportation and logistics, and infrastructure); mining (including equipment, technology, and services); agribusiness; and information and communications technology. More information on this trade mission can be found here.

• The former president of Terra Telecommunications Corp. was sentenced to 15 years in prison for his alleged role in a scheme to bribe officials at Haiti Teleco. This is the longest prison sentence imposed under the FCPA. The company's former executive vice president was sentenced to seven years in prison for his alleged involvement. Both are required to forfeit more than $3 million. In a press release Assistant Attorney General Lanny Breuer said: 

 “This sentence – the longest sentence ever imposed in an FCPA case – is a stark reminder to executives that bribing government officials to secure business advantages is a serious crime with serious consequences . . . . A company’s profits should be driven by the quality of its goods and services, and not by its ability and willingness to pay bribes to corrupt officials to get business.  As today’s sentence shows, we will continue to hold accountable individuals and companies who engage in such corruption.”

• A Georgia man was sentenced yesterday to 46 months in prison, a $10,000 fine and was ordered to forfeit $160,362 in connection with his efforts to allegedly export military components for fighter jets and attack helicopters from the United States to Iran. 

• OFAC announced today that it had settled an enforcement case with a Florida-based trading company for $7,000 involving an attempted export to Iran of goods valued at $7,168. The transaction was not voluntarily disclosed to OFAC. Further details on the case, including the mitigating factors that OFAC used to determine the penalty amount, can be found here.

Read More

International Trade Law News Marks Eighth Anniversary

This week is the eighth anniversary of International Trade Law News.

I appreciate the kind words, favorable comments and tips received from clients, colleagues, government officials, law students and members of the international trade community over the last eight years.

I am also pleased that this blog has inspired several colleagues to start blogs of their own.

The number of readers of International Trade Law News has increased significantly over the past eight years and the site has thousands of readers per month and thousands of readers that subscribe to our e-mail notification service, RSS feed and Twitter (@tradelawnews) site.

The readers of this blog are truly international in scope. In 2011, International Trade Law News has had readers from 175 countries and territories (including all of the Country Group E countries, except North Korea).

--Doug Jacobson

Read More

BIS Adds 15 Parties to Entity List; Justice Department Indicts Five Individuals for Export Control Violations

Today the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) today announced that it will add fifteen parties to the Entity List. The parties, which are located in China, Hong Kong, Iran and Singapore, were added to the Entity List for their alleged roles in a procurement network involving products subject to the jurisdiction of the Export Administration Regulations and International Traffic in Arms Regulations.

The following eight parties will be added to the Entity List since it was determined that they have engaged in actions that could enhance Iran's military capability and because their conduct and deceptive practices pose a risk of ongoing violations of the Export Administration Regulations: 

• Corezing International
• Hia Soo Gan Benson
• Hossein Ahmad Larijani
• Lim Kow Seng
• Lim Yong Nam
• NEL Electronics Pte. Ltd.
• Paya Electronic Complex
• Wong Yuh Lan.

According to BIS these parties participated in a network that engaged in schemes to divert U.S.-origin items to Iran and/or to China by using shifting/circuitous routes and false or omitted information on shipping documentation in an attempt to conceal their activities. These parties are also alleged to have obtained ITAR-controlled antennas designed for use in military radars and aircraft, and exported them to Singapore and Hong Kong. The individuals named above were indicted today by the Justice Department for their alleged roles in conspiring to export U.S.-origin components to Iran that were later found in IEDs in Iraq.

The following seven parties will be added to the Entity List based on evidence that they aided and/or facilitated the activities of the procurement network.

• Action Global, Amaze International and OEM Hub Co., Ltd., all Hong Kong entities, allegedly served as front companies and are otherwise related to the other entities named today.

• Ms. Luo Jie, director of Corezing International, Action Global and Amaze International, is being added on the basis of information indicating that she was involved in the procurement and attempted procurement of U.S. power amplifiers intended for end-users in China, as well as in the diversion of various U.S.-origin goods through Hong Kong to Iran.

• Parto Systems Tehran, an Iranian freight forwarder, is being added based on information indicating that it was involved in the diversion of U.S.-origin items to Iran and is closely associated with Hossein Ahmad Larijani.

• Surftech Electronics, a Singapore corporation established by Hia Soo Gan Benson, is co-located with Corezing International and allegedly sought to purchase certain U.S.-origin items for shipment to Iran.

• Mr. Zhou Zhenyong, director of Corezing International, is being added based on information that he was specifically involved in the procurement and attempted procurement of U.S.-origin items, including U.S.-origin munitions items destined for end-users in China and/or Iran.

While a BIS license is required to export, reexport or transfer any item subject to the EAR to any of the persons listed above, BIS has established a policy of a presumption of denial for all license applications.

The BIS Entity List, found in Supplement Number 4 to Part 744 of the Export Administration Regulations, includes the names of businesses, research institutions, government organizations and individuals that have been identified as being involved in activities that merit additional scrutiny and licensing requirements.

The entries on the Entity List specify the license requirements and license review policy that are applicable to shipments to each listed entity. In some cases, a license will be required to ship items classified as EAR99 to the customer, even when a license would not normally be required. In other cases, all items subject to the Export Administration Regulations will require a license. The export license review policy also varies from entity to entity. In some cases, there is a presumption of approval or denial and, in other cases, the license will be reviewed by BIS on a case-by-case basis. Significant penalties can be imposed against parties that engage in transactions with parties on the Entity List without the appropriate license.

Update: The final rule associated with this announcement was published in the Federal Register on October 31, 2011 and is effective on that date.

Read More

Details of U.S. Antidumping and Countervailing Duty Cases Filed on Solar Cells and Modules from China

Yesterday, the Coalition for American Solar Manufacturing (CASM) filed antidumping (AD) and countervailing (CVD) duty petitions with the U.S. Department of Commerce and the International Trade Commission alleging that Chinese manufacturers of crystalline silicon photovoltaic cells and panels are selling in the U.S. market at less than fair value and are receiving illegal subsidies from the Chinese government.

CASM is a coalition of seven solar companies that manufacture solar cells and panels in the United States. The coalition is led by SolarWorld, the largest U.S. solar manufacturer. The six other companies have chosen to be anonymous, which is unusual in U.S. AD/CVD cases.

The scope of merchandise alleged by CASM to be subject to these AD/CVD petitions is as follows:

Crystalline silicon photovoltaic (PV) cells, whether or not individually or partially or fully assembled into other products, including, but not limited to, modules, laminates, panels and building integrated materials.

The scope covers crystalline silicon PV cells of thickness equal to or greater than 20 micrometers, having a heterogeneous, homogeneous or patterned p/n junction, heterojunction, metal-insulator-semiconductor junction or charge-induced junction. The junction may be formed by any means, including but not limited to dopant diffusion, ion implantation, epitaxial growth, any other deposition or growth of semiconductors, insulators or metals, or bonding of dissimilar materials. The merchandise subject to these petitions may be either partially or fully processed.

Merchandise covered by this investigation is currently classified in the Harmonized Tariff System of the United States (HTSUS) under subheadings 8541.40.60.20, 8451.40.60.30, 8501.61.00.00 and 8507.20.80. 

The petitions do not include thin-film photovoltaic products produced from amorphous silicon, cadmium telluride, copper indium gallium selenide, or dye-sensitized solar cells.

The AD petition alleges that Chinese solar cell and panel producers are dumping their products in the United States in amounts greater than 100% of their value.

The CVD petition claims that Chinese solar cell and panel producers benefit from a range of subsidies from the Chinese government, including cash grants; significantly discounted raw material inputs, such as polysilicon and aluminum; discounted or free land, power and water; preferential loans and directed credit; tax exemptions, incentives and rebates; export assistance credits; and export insurance at preferential rates. 

The statutory timeline for the AD and CVD cases indicates that preliminary antidumping duties could be imposed on these products by January 12, 2012, although such duties could be imposed 90 earlier since the petitioners have alleged “critical circumstances” and are seeking to have duties applied retroactively.

Read More

OFAC Issues General Licenses to Export Food Products to Iran and Northern Sudan

The Treasury Department's Office of Foreign Assets Control (OFAC) recently made changes to the Iran and Sudan sanctions regulations that will have a favorable impact on U.S. exporters of food and nutritional products.

Specifically, OFAC issued a final rule amending the Iranian and Sudanese Transactions Regulations by adding a general license authorizing the exportation or reexportation of “food” products to the Governments of Iran or Northern Sudan, individuals or entities in Iran or Northern Sudan, or persons in third countries purchasing specifically for resale to any of the foregoing parties in Iran and Northern Sudan, and the conduct of related transactions. No military or law enforcement purchasers or importers are authorized.

A general license is preexisting legal authority to conduct a transaction and does not require the submission of any license application to OFAC in order to utilize the authority. As a result, U.S. exporters no longer need to obtain a specific license from OFAC to sell food products to authorized customers in Iran or Northern Sudan.

The term “food” is broadly defined in OFAC's regulations as “items that are intended to be consumed by and provide nutrition to humans or animals in Iran, including vitamins and minerals, food additives and supplements, and bottled drinking water, and seeds that germinate into items that are intended to be consumed by and provide nutrition to humans or animals in Iran.” The term “food” does not include alcoholic beverages, cigarettes, gum, or fertilizer. In addition, there are several types of food products that are specifically excluded from eligibility for this general license.

It is important to note that OFAC only authorizes the following payment options for exports made under these general licenses:

1. Payment of cash in advance (i.e., wire transfer);
2. Sales on open account, provided that the account receivable may not be transferred by the person extending the credit; or
3. Financing by third-country financial institutions that are neither U.S. persons nor Government of Iran entities. Such financing may be confirmed or advised by U.S. financial institutions.

Payments by letter of credit (L/C) issued by a bank in Iran or Northern Sudan still requires a specific license to be issued by OFAC. Therefore, if the only way to obtain payment for the products is a L/C issued by an Iranian bank the exporter/beneficiary will still have to apply to OFAC for a specific license.

As with all licensed transactions involving Iran or Northern Sudan, banks included on OFAC’s Specially Designated Nationals List (SDN List) may not be involved in the payment transaction, even if cash in advance or one of the three payment mechanisms listed above is used.

While these new general license will be a useful tool for U.S exporters, exports to Iran and Northern Sudan present a number of logistical and compliance issues. As a result, exporters must closely coordinate these transactions with their freight forwarders, banks and export compliance counsel in order to prevent delays.

Read More