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Greetings!
This month is relatively light on import and export news. Highlights include: enforcement actions involving the loss of export privileges for 20 years and the largest FCPA settlement in history; DDTC posts end use monitoring report for 2007, and USDA country of origin final rule goes into effect in March.
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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California & Taiwan Companies Lose Export Privileges for 20 Years
BIS states domestic sales of controlled items to persons with no technical understanding of product should be a Red Flag
 On February 6, 2009, the Bureau of Industry and Security (BIS) announced that Well Being Enterprise Co., Ltd. ("Well Being") of Taiwan and Elecmat, Inc. of San Francisco, CA settled allegations and each agreed to 20 year denials of export privileges. Well Being also agreed to a civil penalty of $250,000 to settle allegations that it committed 25 violations of the Export Administration Regulations (EAR) related to the unlicensed export of chemicals and metals from the United States to Taiwan that are controlled for Nuclear Proliferation reasons. In addition, Hui-Fen Chen, a Well Being employee, has agreed to a twenty-year denial of export privileges for items on the Commerce Control List (CCL), and Theresa Chang, Elecmat's former manger, has agreed to a two-year denial of export privileges for items on the CCL.
The denial orders imposed against Well Being, Chen and Chang prohibit them from participating in, or benefiting from, any transaction involving the export of an item listed on the CCL. The denial order imposed against Elecmat prohibits it from participating in, or benefiting from, any transaction involving the export of all items subject to the EAR. BIS has agreed to suspend $220,000 of Well Being's fine, provided that, in the next five years, no additional violations occur.
Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement stated that, "Individuals who devise schemes and willfully circumvent U.S. export controls warrant having their export privileges suspended. This case demonstrates that domestic sales of controlled items to persons with no technical understanding of the product should be considered a red-flag."
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KBR & Halliburton Agree to $579 Million Settlement for FCPA Violations
Largest settlement of FCPA violations in history
 The DOJ announced on February 11, 2009, that Kellogg Brown & Root LLC (KBR), a global engineering, construction and services company based in Houston, pleaded guilty to charges related to the Foreign Corrupt Practices Act (FCPA) for its participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts. The contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.
KBR agreed to pay a $402 million criminal fine. According to court documents, KBR was part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG, owning 49 percent of the company.
Under the terms of the plea agreement, KBR agreed to retain an independent compliance monitor for a three-year period to review the design and implementation of KBR's compliance program and to make reports to KBR and the Department of Justice. KBR also agreed to cooperate with the Department in its ongoing investigations. KBR's parent company, KBR Inc., and its former parent company, Halliburton Company, also reached a settlement of a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC). The SEC's complaint charged KBR Inc. with violating the FCPA's anti-bribery provisions, and charged KBR and Halliburton with engaging in books and records and internal controls violations related to the bribery. KBR Inc. and Halliburton jointly agreed to pay $177 million in disgorgement of profits relating to those violations.
Combined, the $579 million in fines constitutes the largest settlement of FCPA violations by any U.S. company in history.
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BIS Posts Notice on Transfers of Licenses
Section 750.10 of the EAR should be consulted
 On February 10, 2009, the Bureau of Industry and Security posted a notice on its website regarding the transfer of licenses. The notice stated the following:
Under the Export Administration Regulations (EAR), BIS issues individual export licenses to parties. In some instances, ownership of the party/licensee changes due to mergers and acquisitions. This may result in a change to the license if the party to whom the license was issued no longer exists, or is no longer engaged in exporting. The EAR contains a procedure under Section 750.10 that provides for the transfer of export licenses in such circumstances. Persons planning corporate mergers, transfers, or acquisitions should consider whether any existing export licenses will need to be transferred and should consult Section 750.10(b) which provides detailed instructions. Please note that the transfer of an export license must be requested by the licensee, therefore, any request for a transfer of a license that is the result of a corporate transaction in which the licensee will cease to exist as a legal entity must be made prior to the licensee ceasing to exist. |
DDTC Posts 2007 End Use Monitoring Report to Website
Results of "Blue Lantern" Program Detailed
 On February 9, 2009, the Directorate of Defense Trade Controls (DDTC) posted to its website its End Use Monitoring Report for 2007. The report begins:
This report describes actions taken by the Department of State during the past fiscal year to implement the "Blue Lantern" end-use monitoring program. The Blue Lantern program, operated in accordance with section 40A of the Arms Export Control Act, as Amended (AECA), monitors the end-use of commercially exported defense articles, defense services, and related technical data subject to licensing or other authorizations under section 38 of the AECA
The report goes on to state:
The Blue Lantern program is managed within PM/DDTC by the Office of Defense Trade Controls Compliance's (DTCC) Research and Analysis Division (RAD). Blue Lantern end-use monitoring entails pre-license, post license or post-shipment checks undertaken to verify the legitimacy of a transaction and to provide "reasonable assurance that -
i) the recipient is complying with the requirements imposed by the United States Government with respect to use, transfers, and security of defense articles and defense services; and
ii) such articles and services are being used for the purposes for which they are provided."
Additionally, the report states:
Last fiscal year, PM/DDTC completed action on approximately 81,000 license applications and other export requests. Blue Lantern checks are not conducted randomly, but are rather the result of a careful selection process to identify transactions that appear most at risk for diversion or misuse. License applications and other requests undergo review by licensing officers and compliance specialists, who check case details against established criteria for determining potential risks: unfamiliar foreign parties, unusual routing, overseas destinations with a history of illicit activity or weak export/customs controls, commodities not known to be in the inventory of the host country's armed forces and other indicators of concern. The information derived from Blue Lantern checks helps PM/DDTC licensing officers and compliance specialists assess risks associated with the export of certain defense articles and services to various countries and regions, and provides significant insight into the reliability of companies and individuals involved in defense procurement overseas.
Finally, it was interesting to note that the DDTC found various reasons for unfavorable determinations, with the two largest categories being: (1) the failure of applicants to properly identify foreign parties on the license application, and (2) a party violated terms of the license or agreement. The DDTC noted that the failure to identify all parties to a license application creates the increased likelihood of diversion to unauthorized end-users and end-use.
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USDA Country of Origin Labeling Rule to Take Effect March 16, 2009
Final rule outlines labeling and recordkeeping requirements
 Agriculture Secretary Tom Vilsack announced February 20, 2009 that the USDA's January 15, 2009 final rule on mandatory country of origin labeling will go into effect as scheduled March 16, 2009. Under the COOL regulation, muscle cuts and ground beef, pork, lamb, goat, and chicken, wild and farm-raised fish and shellfish, fresh and frozen fruits and vegetables, peanuts, pecans, macadamia nuts and ginseng must be labeled at retail to indicate their country of origin. The final rule outlines requirements for labeling covered commodities and the recordkeeping requirements for retailers and suppliers, prescribes specific criteria that must be met for a commodity to bear a "United States Country of Origin" declaration and contains provisions for labeling covered commodities of foreign origin. |
Peru and Oman Removed from GSP Program
Bilateral trade agreements with those countries apply
 On February 3, 2009, Customs announced that "goods from Oman and Peru are no longer eligible for GSP preferences due to the implementation of bilateral trade agreements with these countries." The Oman FTA took effect on January 1, 2009 and the Peru TPA on February 1, 2009. GSP claims from these countries will not be accepted on or after these dates. |
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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. Here are some of the new job listings from this month:
CPI - Palo Alto, CA
Westinghouse Solar/IDC - Roanoke, TX
Covidient - Mansfield, MA & Hazelwood, MO
CBP - Los Angeles, CA
Mead Johnson Nutrition - Evansville, IN
Smiths Detection - Arlington, VA
GE Corporate - Washington, DC
BAE Systems - Washington, DC
Rayethon - Tuscon, AZ
Orthodyne Electronics - Irvine, CA
ITT Radar Systems - Van Nuys, CA
Kollsman, Inc. - Merrimack, NH
Pratt & Whitney - East Hartford, CT
Presidential Airways - Moyock, NC
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 March:
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2009 Winter Back to Basics Conference - Society for International Affairs
March 2 - 3, 2009 - San Diego, CA
"Where the Rubber Meets the Road" Workshop - SIA
March 4, 2009 - San Diego, CA
OFAC Controls - Women in International Trade - No. Cal.
March 11, 2009 - Palo Alto, CA - $45 Member/$60 Non-Member
4th Annual Export Control Forum & Special Topic - BIS
March 16 - 17, 2009 - Newport Beach, CA
"10+2" Outreach Session - Customs and Border Protection (CBP)
March 5, 2009 - Portland, OR - Free [Registration Now Closed]
"10+2" Outreach Session - Customs and Border Protection (CBP)
March 9, 2009 - Newark, NJ - Free
"10+2" Outreach Session - Customs and Border Protection (CBP)
March 10, 2009 - Newark, NJ - Free
"10+2" Outreach Session - Customs and Border Protection (CBP)
March 11, 2009 - JFK Airport, NY - Free
"10+2" Outreach Session - Customs and Border Protection (CBP)
March 12, 2009 - JFK Airport, NY - Free
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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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