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Greetings!
Welcome to the August 2008 edition of Global Trade Expertise's newsletter, the Global Trader. Highlights from this month's news include: Trial Starts for Retired Professor Charged with ITAR Violations for Foreign Grad Student Access; North Korea to Remain on State Sponsors of Terroism List; Recent Enforcement Actions; BIS Publishes Proposed Regulations re: Nuclear Nonproliferation Policy; First Sale Declaration Requirements Become Effective 8/20/08 and Enforced as of 9/20/08; and CBP Announces Trade Symposium Details.As always, we would appreciate any comments or suggestions you may have to improve this newsletter either by email to info@globaltradeexpertise or via our feedback survey link in our left column.Thank you for reading! Jennifer Kessinger & Tammie Goldstein Krauskopf
globaltradeexpertise
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Trial Begins for Retired Professor Charged with ITAR Violations
Company Pleads Guilty and Admits to Access by Chinese Grad Student
 On August 25, 2008, J. Reece Roth, a retired University of Tennessee (UT) physics professor went on trial charged with violating the Arms Export Control Act (AECA). As reported by USA Today, prosecutors allege Roth violated AECA by allowing two UT students, one from China and another from Iran, unrestricted access to information about the technology used in an U.S. Air Force project. The professor is also said to have taken documents relating to that project on his trip to China in 2006.
The Air Force contract involved developing lightweight flight control system technology for use in unmanned air vehicles, otherwise known as drones. According to USA Today, Atmospheric Glow Technologies (AGT), with Roth as a consultant and subcontractor, promised a control system that would use plasma, rather than mechanical flaps, to lift the aircraft. Roth, an expert in plasma technology, was one of the founders of AGT, but later the company went public. The company specialized in use of plasma technology that was developed by UT.
AECA bars the transfer of sensitive information to foreign nationals without permission. Roth came under investigation in 2006 when UT export-control officials discovered his use of foreign nationals in his UT lab on the military contract. Government agents searched his office and seized his laptop computer when he returned from a lecture trip to China in May of 2006.
On August 20, 2008, AGT pleaded guilty to 10 counts of AECA violations from late 2004 to May 2006, reports the Knoxville News Sentinel. AGT, which is in bankruptcy, still faces probation and a maximum fine of $1 million for each AECA violation. Knoxville News Sentinel reports that, as part of the plea agreement, AGT's board of directors now admits company officials knew Roth had allowed the China national access to information on the Air Force project without notifying the Department of Defense.
Daily updates on the trial can be found at www.knoxnews.com.
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North Korea to Remain on the State Sponsors of Terrorism List
Lack of Progress and Refusal to Permit Verification by Outside Experts Cited
 On August 25, 2008, after the U.S. refused to remove North Korea from the State Sponsors of Terrorism List, North Korea announced it has stopped disabling its nuclear reactor complex and will consider rebuilding.
The statement comes two months after North Korea released the report of its plutonium programs and detonated the reactor's cooling tower, reports the Washington Post. These actions prompted statements by the Bush administration that the U.S. will remove North Korea from the State Terrorism List and will lift some trade sanctions.
However, on August 11, 2008, the United States refused to remove North Korea from the list, citing slow progress and refusal to permit outside experts to verify the scope of the nuclear program.
The work to disable the Yongbyon nuclear reactor complex stopped on August 14, 2008, according to a statement issued by North Korea's Ministry of Foreign Affairs. The official Korean Central News Agency added that the country will consider rebuilding the nuclear plant to its original state. U.S. officials note, however, that the plant has been substantially dismantled under the supervision of outside nuclear technicians and it would take at least a year to restore it to its operation.
North Korea entered into agreement with the U.S. in 2007 to abandon its nuclear program. North Korea promised to start by disabling the Yongbyon plant and detailing the scope of its nuclear program. In return, the U.S. promised aid and removal from the terrorism list. Removal from the list would mean lifting of the associated sanctions.
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Recent Enforcement Actions
Announced by BIS and DOJ
 On August 22, 2008, the Commerce Department's Bureau of Industry and Security (BIS) announced that Johnson Trading & Engineering Company, Ltd. (Johnson Trading) of Taiwan has agreed to a $90,000 civil penalty to settle charges that it knowingly caused the unlicensed export of computer chips to China in violation of the Export Administration Regulations (EAR). BIS also alleged that Johnson Trading took action to evade the EAR.
On seven occasions, Johnson Trading ordered the computer chips form a U.S. exporter and falsely represented to that exporter that the ultimate destination was Taiwan. Once the computer chips were delivered to Taiwan, Johnson Trading arranged for their subsequent shipment to China via Hong Kong. The computer chips were subject to the EAR and controlled for national security and anti-terrorism reasons.
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On August 14, 2008, the Commerce Department's Bureau of Industry and Security (BIS) announced that Reson A/S (RAS) of Slangerup, Denmark, has agreed to pay a $119,250 civil penalty to settle allegations of 29 Export Administration Regulations (EAR) and of two deemed export violations.
The EAR violations primarily involved unlicensed exports and reexports of underwater navigation equipment - items controlled for national reasons - to destinations in South Africa, Singapore, the United Arab Emirates, Mozambique, Taiwan, Russia, and India during a four-year period. The deemed export violations involved nationals from France and the United Kingdom.
RAS voluntarily disclosed the violations and cooperated fully in the investigation.
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On August 12, 2008, the Commerce Department's Bureau of Industry and Security (BIS) announced that Ingersoll Machine Tools (IMT) of Rockford, Illinois has agreed to pay a $126,000 penalty to settle allegations that it committed eight unlicensed deemed exports to Italian and Indian foreign nationals in violation of the Export Administration Regulations.
The allegations involved deemed exports of production and development technology for vertical fiber placement machines and production technology for milling machines to Italian and Indian national during the period of November 2003 and January 2007. The technology was controlled for National Security and Missile Technology reasons to Italy and India. The technology was also controlled to India for Nuclear Non-Proliferation reasons.
Assistant Secretary of Commerce for Export Enforcement Darryl W. Jackson reminded that companies that employ foreign nationals must be mindful of the Export Administration Regulations requirements, which regulate release of controlled technology to foreign visitors or employees.
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On July 28, 2008, Allied Telesis Labs, Inc. (ATL) was sentenced in United States District Court in Elizabeth City to a $500,000 criminal fine and was placed on a two-year probation for violating the law regarding conducting business with Iran, announced U.S. Department of Justice.
The sentence was passed after ATL's guilty plea acknowledging that the firm conspired with another to trade with Iran in violation of the law. Specifically, ATL had entered into a $95,000 contract with an Iranian IT company to rebuild and upgrade the telecommunications systems of approximately 20 Iranian cities. The preparation for the execution of the contract went as far as manufacturing of $2 million worth of telecommunications equipment. The systems were not installed and sold elsewhere when the contract negotiations collapsed.
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BIS Pubishes Proposed Regulations
Proposed Regulations Expand the Scope of Activities Subject to U.S.-IAEA Safeguards Agreement
 On July 30, 2008, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) issued proposed regulations that will have a strong impact on nuclear nonproliferation policy. The new regulations propose to implement the provisions of the Protocol Additional to the U.S.-International Atomic Energy Agency (IAEA) Safeguards Agreement, which expands the scope of safeguards to the entire nuclear fuel cycle.
Under the proposed regulations, companies engaged in activities that fall within the scope of the Additional Protocol Regulations will provide BIS with annual reports, which will be then be transmitted to IAEA. Such companies will also be subject to complementary access by IAEA inspectors.
The following activities fall within the scope of the Proposed Regulations:
· Uranium mining;
· Certain nuclear-related equipment manufacturing;
· Exports and imports of nuclear-related equipment and nuclear-related non-nuclear material; and
· Civil nuclear fuel cycle-related research and development activities not involving nuclear material.
The comments to the proposed regulations closed on August 25, 2008.
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First Sale Declaration Requirement Effective August 20, 2008
Requirement will not be enforced until September 20, 2008
 Starting August 20, 2008 and effective for a one year period, all importers are required at the time of entry to provide the United States Customs and Border Protection (CBP) with a declaration as to whether the transaction value of the imported merchandise is calculated on the basis of the First Sale Rule. Under the Rule, when the merchandise is introduced into the United States as a result of a series of sales, the transaction value is calculated based on the first or earlier, rather than later sale. However, this rule will not be enforced until September 20, 2008.
The First Sale Declaration Requirement was established under § 15422(a) of the Food, Conservation and Energy Act of 2008, commonly referred to as the Farm Bill. To meet the Requirement, an importer must enter "F" next to the declared value of the merchandise on CBP Form 7501, or its electronic filing equivalent, if the declared transaction value of the imported merchandise is determined on the First Sale basis. If First Sale is not the basis for the transaction valuation, the box will remain blank.
The trade community has advised CBP that it would not be ready to comply with the Declaration Requirement by August 20, 2008 because of the complex programming changes required. In response, to permit the community sufficient time to comply, CBP has delayed enforcement of First Sale Declaration Requirements for 30 days until September 20, 2008. Thus, imports made between August 20 and September 19, 2008 will not be rejected based on the First Sale Declaration Requirement; however, these entries will require amendment. Information on the amendment requirements will be forthcoming.
The First Sale Declaration Requirement will enable CBP to gather information on the frequency of the first sale valuation, which will be reported to the International Trade Commission.
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CBP Announces Details for Trade Symposium 2008
Topic: "Global Tade: Continuity Through Transition"
 On August 25, 2008, Customs and Border Protection announced the dates and topic for its Trade Symposium 2008, The topic of this year's symposium is "Global Trade: Continuity Through Transition.'' The Symposium will focus on U.S. Customs and Border Protection's (CBP) commitment to security and trade programs amidst transition within the administration. Sessions will include:
· CBP Trade Strategy
· Importer Security Filing
· Import Safety
· Automated Commercial Environment
· Trade Partnerships
· Regulatory Changes
· World Customs Organization
· CBP Agriculture Mission
The symposium will be held at the JW Marriott Hotel, 1331 Pennsylvania Avenue N.W., Washington, DC 20004. Registration is expected to open September 2, 2008, and must be made on-line. The registration fee is $250.
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Who's Hiring?
A Summary of Current Trade Job Opportunities
 As a service to the international trade community, Global Trade Expertise compiles links to trade job opportunities from many different sources. New trade job listings are posted frequently on our website.
ADC - Minneapolis, MN
Visium Resources of Florida - Huntsville, AL
Phillips-Van Husen Corp. - New York, NY
Advanced Energy - Fort Collins, CO
Tennant Company - Minneapolis, MN
Avaya - Basking Ridge, NJ
Northrop Grumman - San Diego, CA
Takeda Pharmaceuticals -Chicago, IL
Covidien - Mansfield, MA
KPMG LLP - Mountain View & Costa Mesa, CA
Teradyne - North Reading, MA
Honeywell - Chicago, IL
Galerie - Hebron, NY
Golden Beach, Inc. - Torrance, CA
MK Technical Services - Santa Clara, CA
Schilling Robotics - Davis, CA
Ameican Eagle Outfitters - Pittsburgh, PA
To sort the job opportunities by region, fields, or levels, click on the appropriate category or tag in the right column on our Trade Jobs webpage. |
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Calendar of Events
Upcoming Trade Events & Seminars
 Our website has a comprehensive listing of import and export conferences held throughout the country, as well as Customs training, EAR training, ITAR training, and other training. Below is a small sampling of what's available in September 2008:
U.S. Export Controls Seminar - Black, Sengers & Associates
September 8 - 9, 2008 - Chicago, IL - $1050
Managing Harmonized Tariff Schedule - The World Academy
September 8, 2008 - Newark, NJ - $595
C-TPAT Certification Training Workshop - The World Academy
September 9, 2008 - Newark, NJ - $595
Complying with U.S. Export Controls - Bureau of Industry and Security (BIS) & Minnesota Trade Office
September 9 - 10, 2008 - Bloomington, MN - $350
Advanced ITAR Compliance Seminar - Export Compliance Solutions (ECS)
September 9-10, 2008 - Washington, DC - $950
U.S. Trade Policy and Free Trade Workshop - Women in International Trade - Northern California
September 10, 2008 - Palo Alto, CA - $45 Member/$60 Non-Member
Complying with U.S. Export Controls - BIS & San Diego District Export Council
September 10-11, 2008 - La Jolla/San Diego, CA - $350
Defense Trade Controls Seminar - Black, Sengers & Associates
September 10 - 11, 2008 - Chicago, IL - $1050
Technology Controls - BIS & Minnesota Trade Office
September 11, 2008 - Bloomington, MN - $175
Export Compliance and AES PcLink Workshop - U.S. Census Bureau & Independent Freight Forwarders and Customs Brokers Association of Savannah Inc. (IFFCBA)
September 17 - 18, 2008 - Savannah, GA - Day 1 - $299 Member/$309 Non-Member, Day 2 - $89 Members/$98 Non-Members
Managing Harmonized Tariff Schedule - The World Academy
September 22, 2008 - Chicago, IL - $595
International Technology Transfers - American Conference Institute
September 22 - 23, 2008 - San Francisco, CA - $1995 - $3195
4th Advanced Forum on Import Compliance - American Conference Institute
September 22 - 24, 2008 - Washington, DC - $1995 - $3195
Drawback Workshop - The World Academy
September 23, 2008 - Chicago, IL - $595
C-TPAT Certification Training Workshop - The World Academy
September 23, 2008 - Chicago, IL - $595
Complying with U.S. Export Controls - BIS & Professional Association of Exporters and Importers (PAEI)
September 24-25, 2008 - San Jose, CA - $325
Satellite and Space Export Controls - American Conference Institute (ACI)
September 25 - 26, 2008 - Washington, DC - $1495/$2095
Update 2008 - Bureau of Industry and Security
September 29 - October 1 - Washington, DC - $775
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Thanks again for your interest in our newsletter!
Sincerely,
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Jennifer Kessinger & Tammie Krauskopf
Attorneys & Consultants
jk@globaltradeexpertise.com
Tel. 925.876.1381 (Jennifer Kessinger)
tk@globaltradeexpertise.com
Tel. 708.707.4087 (Tammie Krauskopf)
www.globaltradeexpertise.com
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