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Greetings!
Thanks again for reading our newsletter. We hope you are enjoying Spring!This month's import/export news highlights include: CBP's announcement of the Broker Self-Assessment Pilot; recent export enforcement actions; and new requirements for some imported food products, freight forwarders, and D-Trade users.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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D-Trade License Application or Amendment Subject to New Requirements
All D-Trade users must use their DDTC-approved registrant name
 On April 16, 2009, U.S. Department of State (DOS) Directorate of Defense Trade Controls (DDTC) launched a new DTrade2 application and database. While the old DTrade will remain active to track or upload supplemental information to applications submitted prior to April 16, 2009, the new DTrade2 system must be used for all new license applications. DDTC will return all submissions uploaded to the old DTrade system after April 16, 2009 without action.
Several important changes are effective with the launch of the DTrade2:
The new system will use the new license amendment form (DSP-6; DSP-62; and DSP-74);
The DTrade2 will no longer accept paper DSP-119 forms. DDTC also intends to discontinue usage of ELLIENet for DSP-119 submission, however, EELIENet submissions will be available for approx. 60 days after DTRade2 launch; and
All D-Trade users must use their DDTC-approved registrant/applicant name which corresponds to their DDTC registration record before an application or amendment will be accepted by the new system. D-Trade request will be checked against DDTC's registration records to confirm that the name submitted on the request matches DDTC's official records. Applications or amendments that do not match the records will be automatically rejected. DDTC explains that this extra level of security will aid in prevention of improper third party use of a registrant's name, their code or licensing privileges.
Applicants who routinely use subsidiary names or "doing business as" names on the D-Trade submission must now use the DDTC-approved registrant/applicant name identifications. This name can be found on the addressee line of the registration letter sent by the Office of Defense Trade Controls Compliance at the time of registration or renewal.
Users unsure of their DDTC-approved name must contact their central export control office to obtain the information. DDTC will not provide this information to D-Trade users over the phone or via e-mail.
New and updated forms are available on DDTC's website.
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BIS Updates Information and FAQs regarding the Entity List
 On April 17, 2009, the Bureau of Industry and Security (BIS) updated information and its FAQs regarding the Entity List on its website. BIS describes the Entity List as follows:
The Export Administration Regulations (EAR) contain a list of names of certain foreign persons - including businesses, research institutions, government and private organizations, individuals, and other types of legal persons - that are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items. These persons comprise the Entity List, which is found in Supplement No. 4 to Part 744 of the EAR. On an individual basis, the persons on the Entity List are subject to licensing requirements and policies supplemental to those found elsewhere in the EAR.
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DDTC Updates Agreements Guidelines
On April 6, 2009, the Directorate of Defense Trade Controls (DDTC) updated its Agreements Guidelines (Revision 1A - Interim Update) on its website. The DDTC also provided a Summary of Changes. In that document, DDTC states:
This update is being published to correct substantive and administrative errors identified in the "Guidelines for Preparing Agreements - Revision 1." This update is not the result of changes or modifications to DTC policies or procedures.
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Iranian National Charged with Violations of IEEPA, AECA, and the U.S. Iran Embargo
Allegations include conspiracy to export parts for the fighter jets and military helicopters to Iran
 On April 6, 2009, the Department of Justice (DOJ) issued a press release announcing that Baktash Fattahi, an Iranian national and U.S. resident, was arrested on April 3, 2009, in California, on charges of conspiring to illegally export parts for fighter jets and military helicopters to Iran, a violation of the International Emergency Economic Powers Act (IEEPA), the Arms Export Control Act (AECA), and the U.S. Iran Embargo.
In an indictment, a Miami federal grand jury charged that Fattahi and ten other defendants conspired to and illegally shipped thirteen different types of aircraft parts designated as defense articles on the USML from the U.S. to Iran via Dubai, U.A.E.. The specific parts are known to be used primarily by the Iranian military. All of the parts exported were manufactured in the U.S., designed exclusively for military use, and designated by the U.S. Department of State as "defense articles" on the USML, which requires registration and licensing with the DDTC. Neither Fattahi nor other defendants were registered or obtained licenses from DDTC to ship these goods to Iran.
The indictment alleges that the defendants in Iran sent, via e-mail, orders to a co-conspirator in Novato, California, for specific aircraft parts. The co-conspirator in California would, allegedly, contact a counterpart in Florida and would make arrangements for the sale and shipment of the parts to one of the several defendant counterparts in Dubai. The parts were then shipped from Dubai to their final destination in Iran.
If convicted, the defendants face a statutory ten to twenty years imprisonment, and a fine of up to $1 million.
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Exporter Charged With Violations of U.S. Export Regulations and False Statements to Government Agency
Indictment uses internal company e-mail to support the charges
 On April 6, 2009, the Department of Justice (DOJ) announced that federal grand jury sitting in San Jose, California, indicted Fu-Tain Lu (Lu), Funshine Technology, Inc. (Funshine), and Everjet Science and Technology Corporation (Everjet), charging them with conspiracy to violate U.S. export regulations and with lying to federal agents investigating Lu's conduct. Funshine, based in Cupertino, California, and Everjet, based in China, were founded by Lu. The indictment alleges that Lu and his two companies conspired to export sensitive microware amplifier technology to China without obtaining the required licenses or authorization from the U.S. Department of Commerce. Items that Funshine shipped and attempted to ship to China were restricted for reasons of national security. The indictment details that the defendants knew about the licensing restrictions but chose not to comply. Charges against Lu and the companies are supported, in part, by using internal company e-mails in which an Everjet employee told a Funshine employee, "Since these products are a little bit sensitive, in case the maker asks you where the location of the end user is, please do not mention it is in China." In another e-mail, Lu advised an employee to pretend that the intended end-user for the goods was in Singapore, not China. Lu, as an individual defendant, faces five years imprisonment and a $250,000 fine (or, twice the gross financial gain from the offense) on each of the counts of conspiracy to violate export regulations and false statements to a government agency; for charges of violation of export regulations, the statutory maximum penalty is 10 years imprisonment and a $50,000 fine, or twice the gross gain from the offense. |
CBP Announces Broker Self-Assessment Outreach Pilot
Applications to Participate Will Be Accepted from April 27, 2009 to May 27, 2009
 On April 27, 2009, the Customs and Border Protection (CBP) announced the commencement of the Broker Self-Assessment (BSA) Outreach Pilot (BSA Pilot) in a general notice published in the Federal Register. Modeled after the Importer Self Assessment (ISA) Program, the BSA Pilot is a voluntary program that CBP intends to be a partnership between itself and participating customs brokers. CBP states that the primary goal of the program is to facilitate a higher level of broker compliance with CBP laws and regulations. CBP states that:
[T]he BSA Pilot will allow for customs brokers to ascertain voluntarily with CBP how well they comply with their broker requirements, provide recognition and support to participating brokers, and facilitate legitimate trade so that CBP can focus on higher-risk trade enforcement issues. Under this program test, participating customs brokers will update and improve internal controls, perform periodic testing of these internal controls, and disclose to CBP deficiencies discovered through the testing. Any licensed customs broker who is a member of the Customs-Trade Partnership Against Terrorism (C-TPAT) and who meets the other eligibility requirements of the pilot, may apply to participate. After closure of the application period and review of the applications received, CBP will select a limited number of customs brokers to participate in the BSA Pilot.
The Federal Register notice provides details on the application process and the requirements for participation in the BSA Pilot.
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Imports of Food Products Subject to New Requirements
Products containing small amounts of meat or poultry affected
 On March 31, 2009, the U.S. Department of Agriculture (USDA), Animal and Plant Health Inspection Service (APHIS) issued a letter to the Trade outlining the new import permit process for USDA Food Safety Inspection Service (FSIS)-exempted food products containing small amounts (less than two percent) of meat and/or poultry ingredients.
All import permit applications for FSIS-exempted food products containing small amounts of meat and poultry ingredients submitted to APHIS after June 22, 2009 will be reviewed by FSIS before APHIS can issue an import permit. The new rules mandate that, after the permit applications are submitted to APHIS, they must be approved by FSIS to ensure that meat and poultry ingredients in such food products originate from eligible sources (i.e. prepared under FSIS supervision or in a foreign establishment certified by a foreign inspection system approved by FSIS). Importers will now be required to provide evidence directly to FSIS to support the origin of the meat and poultry ingredients used in the food products identified on the APHIS permit application.
Failure to provide such source documentation will lead to FSIS advising APHIS that the products are ineligible for entry into U.S. commerce, and an import permit will be denied.
Furthermore, APHIS has informed Customs and Border Protection (CBP) that a USDA import permit will now be required for FSIS-exempted food products containing small smounts of meat and/or poultry ingredients from countries considered by USDA to be affected with animal diseases of concern. Products from such countries that previously entered under a health certificate indicating product being concentrated for boiling (e.g. bouillon cubes, extracts, or soup mixes), will now require a USDA import permit. Customs will begin enforcing this APHIS policy on June 22, 2009.
A list of countries eligible to export meat, poultry or processed egg products to the U.S. can be found here.
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Freight Forwarder Documentation Requirements Amended
New regulations effective May 6, 2009
On April 6, 2009, the Department of Transportation (DOT) Federal Motor Carrier Safety Administration (FMCSA) issued a final rule in the Federal Register that amends its regulations to require all surface freight forwarders to issue a bill of lading or a receipt for each shipment for which they arrange cargo transportation by commercial motor vehicle in interstate commerce.
The current rule regarding receipts or bills of lading applies only to household goods freight forwarders, however, the new rule extends to both household and non-household goods freight forwarders.
The requirement for all freight forwarders to provide a receipt or a bill of lading for property has been in effect by statute since 1942 and by regulation until 1990, until the former Interstate Commerce Commission (ICC) limited the requirement to household goods freight forwarders.
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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.
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 May:
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Complying with U.S. Export Controls - Bureau of Industry and Security (BIS)
May 6 - 7, 2009 - Newport Beach, CA - $295
ITAR Compliance and Audits - Federal Publications Seminars
May 7-8, 2009 - La Jolla, CA - $995
Complying with U.S. Export Controls - BIS & World Trade Center of Central Pennsylvania
May 13 - 14, 2009 - Lancaster, PA - $350
"10+2" Outreach - Customs and Border Protection (CBP) ISF
May 15, 2009 - Norfolk, VA - Free
"10+2" Outreach - Customs and Border Protection (CBP) ISF
May 15, 2009 - Atlanta, GA - Free
Complying with U.S. Export Controls - BIS and Professional Association of Exporters and Importers (PAEI)
May 19 - 20, 2009 - Santa Clara, CA - $350
Export Control of Equipment, Technology, and Services - Federal Publication Seminars
May 19-20, 2009 - Washington, DC - $995
How to Develop An Export Management and Compliance Program - BIS & The Massachusetts Export Center
May 20 - 21, 2009 - Boston, MA - $425
Technology Controls - BIS & PAEI
May 21, 2009 - Santa Clara, CA - $250
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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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