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Greetings!
We hope you are all enjoying the fall and had a Happy Halloween!
This month's import/export news highlights include: CBP requests comments on statistical sampling for audits and prior disclosures and offsetting overpayments; BIS publishes Final Encryption Simplification Rule; OFAC issues Quarterly Report of TSRA Licensing; DDTC Allows Electronic Submission of Agreements for All Applicants; CBP Publishes Guidance on Lace Act Declarations; and 10+2 ISF Progress Reports are Available in preparation for Jan. 26, 2010 full enforcement of 10+2 filings. 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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BIS Publishes Final Encryption Simplification Rule
Corrections and Clarifications Made, Effective 10/15/09
 On October 15, 2009, the Bureau of Industry and Security (BIS) published the Final Encryption Simplification Rule in the Federal Register. BIS had published the interim final rule entitled "Encryption Simplification" on October 3, 2008 (73 Fed. Reg. 57,495). This rule finalizes that rule, corrects errors published in the October 3, 2008 interim final rule, and resolves inconsistencies in that rule identified by the public.
Among other things, the October 3, 2008 interim final rule removed section 744.9 of the EAR, which set forth requirements for authorization from BIS for U.S. persons to provide technical assistance to foreign persons with the intent to aid a foreign perosn in the development or manufacture outside the U.S. of encryption commodities or software that, if of U.S.-origin, would be "EI" controlled under ECCNs 5A002 or 5D002. Although the interim final rule removed section 744.9, other parts of the EAR that referred to that section were inadvertently not removed. The final rule removes those sections and makes other corrections to harmonize with revisions made in the October 3, 2008 interim final rule. Finally, some revisions in the final rule are the results of requests for clarification from the public on the October 3, 2008 encryption simplification rule.
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OFAC Issues Quarterly Report of TSRA Licensing Activities
Licensing Statistics and Average Processing Times are Noted
 On October 15, 2009, the U.S. Treasury's Office of Foreign Assets Control (OFAC) issued its quarterly report of licensing activities pursuant to Section 906(b) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) covering licensing activities undertaken by OFAC from April to June 2009.
The report sets forth the number of license applications, licenses issued, license amendments issues, and applications denied by agricultural commodities, medicine, or medical devices categories, as well as by country (i.e., Iran or Sudan). The average processing time was as follows:
· Denial Letters - 116 days
· Licenses - 60 days
· Return Without Action (RWA) Letters - 16 days
· Overall - 49 days
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DDTC Allows Electronic Submission of Agreements for All U.S. Applicants
New Agreement Applications May be Submitted Electronically Beginning October 19, 2009
On October 7, 2009, the Directorate of Defense Trade Controls (DDTC) announced that beginning October 19, 2009, DDTC will alllow all U.S. applicants to submit agreements electronically via the D-Trade 2 application. DDTC states that this electronic system will employ the D-Trade 2 Production application as the means for submitting, reviewing, and approving agreement proposals. It will incorporate the DSP-5 tool as the primary instrument for transitioning agreements and their respective amendments from one phase of the adjudication process to the next and will negate the need for DDTC to issue a separate authorization letter upon approval of a case.
DDTC states that only new agreements and re-baselined agreements may be submitted initially using the D-Trade 2 production systems. Applicants are not authorized to submit an electronic amendment proposal to an approved paper agreement. Once an electronic agreement is approved, electronic amendments to that approval may be submitted.
DDTC encourages all applicants to thoroughly review the Guidelines for Preparing Electronic Agreements (as of October 7, 2009). Additionally, DDTC is requesting that any U.S. applicant not previously approved to submit electronic agreements as part of the Test Phase submit only one initial electronic agreement proposal. Once that application has cleared DDTC and has been forwarded for staffing to additional agencies, the applicant can openly submit applications as required. DDTC states that this initial submission "pause" will aloow DDTC analysts to confirm submissions are complete and accurate and minimize the number of potential applications being returned without action.
Both paper and electronic submission of agreement proposals will continue to be accepted. However, DDTC anticipates making the sumbission of electronic agreement applications mandatory for all applicants in Fall 2010.
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CBP Proposes Regulation Amendments re: Statistical Sampling for Audits and Prior Disclosures and Offsetting Overpayments
Written Comments Must Be Received On or Before December 21, 2009
 On October 21, 2009, Customs and Border Protection (CBP) announced that it had published in the Federal Register proposed amendments to the Customs regulations on the use of statistical sampling in CBP audits and prior disclosure cases and the use of offsetting overpayments and over-declarations in audits. Written comments on the proposed amendments may be submitted by interested persons on or before December 21, 2009.
The proposed amendments to the regulations provide further guidance with regard to the use of statistical sampling in audits conducted by CBP under section 1509 of the Regulations and in independent reviews and lost revenue calculations for private parties for purposes of prior disclosure. Specifically, the amended regulations provide that: (1) CBP has the sole discretion concerning whether to employ statistical sampling in any given case, authorize a person being audited to perform self-testing and use statistical sampling, or accept the statistical sampling used by a private party conducting an independent review and calculation of lost revenue in a prior disclosure case. Once CBP approves the specfics of a statistical sampling plan, and the person being audited or submitting the prior disclosure agrees to waive its ability to challenge the validty of the sampling plan at a later date (any future challenges will be limited to computation and clerical errors), the audit (or self-testing) may proceed in accordance with the sampling plan. CBP reserves the reight in any case to conduct a full enty-by-entry audit if it deems such an audit to be appropriate.
Furthermore, the amendments provide that CBP auditors and private parties seeking to use statistical sampling with regard to a prior disclosure case may do so only when: (1) review of 100 percent of the transactions is impossible or impractical; (2) the sampling plan is prepared in accordance with generally recognized sampling procedures; and (3) the sampling procedure is executed in accordance with that plan. 19 C.F.R. § 163.11(c)(2) (as proposed).
With regard to offsetting overpayments and over-declarations, CBP is proposing updating the regulations to reflect an amendment to section 1509(b) made by Section 382 of the Trade Act of 2002. Prior to the Act, once liquidation had become final with respect to an entry that was overpaid, CBP was bound by the liquidation and could not offset an overpayment against the underpayments that formed the basis of a penalty action. CBP is now authorized under the statute to account for overpayments of duties and fees and over-declarations of quantities or values when calculating loss of duties, taxes, or fees and monetary penalties levied under section 1592, if:
(1) The overpayments or over-declarations are identified by CBP during an audit (review or examination) conducted by CBP under section 1509(b);
(2) The audit was completed on or after August 6, 2002, the effective date of the Act;
(3) The overpayments or over-declarations relate to liquidated entries;
(4) The overpayments or over-declarations are determined by CBP as having been made within the time period and scope of the audit as defined by CBP; and
(5) The overpayments or over-declarations are determined by CBP not to have been made for the purpose of violating any provision of law, including the customs laws and laws enforced by other agencies, including, but not limited to, the Internal Revenue Service.
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CBP Publishes Guidance on Lacey Act Declaration
Electronic Filing of PPQ 505 Form Urged
 On October 15, 2009, Customs and Border Protection (CBP) posted guidance on the Lacey Act on its website. The Lacey Act (16 U.S.C. 3371 et seq., the Act, as amended) makes it unlawful to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant, with some limited exceptions, taken or traded in violation of the laws of the United States, a U.S. State or a foreign country.
On September 2, 2009, the U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) published a notice in the Federal Register announcing a revised enforcement phase in plan for the Act's requirement for a plant product import declaration (see 74 Fed. Reg. 45415 for details). The revised plan identifies a list of products and the associated Harmonized Tariff Schedule (HTS) Chapter or Heading as to which the requirement for a Plant Product Declaration Form (PPQ 505) is anticipated to be enforced.
In its guidance, CBP states that it has automated the process for collecting the PPQ 505 data elements. Data will be transmitted to CBP's Automated Commercial System (ACS) through the Automated Broker Interface (ABI) in the cargo release module. Electronic filing of the PPQ 505 declaration will not preclude remote location filing. Additional information on how to electronically file the PPQ 505 data can be found in the Participating Government Agencies chapter in the Customs and Trade Automated Interface Requirements (CATAIR) page. An importer has the option to complete and present a paper PPQ 505 for each line. (Plant and Plant Product Declaration Form) If a paper form of the PPQ 505 is used, the importer must mail the form to USDA at the address on the form.
CBP states that it expects and urges most importers to use the electronic system to file the declaration. If an entry package is presented to CBP to obtain release, the CBP 3461 form will be annotated in Box 29 to indicate "PPQ 505-Paper" if the declaration is presented in paper or "PPQ 505-ABI" if the declaration information was submitted electronically. If a paper form is submitted to CBP as part of the entry package, the paper form will be returned to the importer (or importer's representative) for mailing to USDA. CBP will not mail forms to USDA. As a reminder, providing false or misleading information to the U.S. government can result in civil or criminal actions against any involved party and may result in the seizure and forfeiture of the merchandise.
APHIS has been designated the lead regulatory agency for these new requirements and CBP is assisting APHIS with the electronic collection of data to fulfill the import declaration requirement. CBP will continue to work as part of the interagency working group, consulting with trading partners, importers, exporters, and other interested groups as the provisions of the Act are fully implemented. The most current information on implementation of the amended Lacey Act can be found on the USDA website.
If you have any CBP related questions, please contact Ms. Anne Rothrock, Office of International Trade, at (202) 863-6573.
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Importer Security Filing (ISF) Progress Reports Available
Full Enforcement of "10+2" Rule begins on Jan. 26, 2010
On October 26, 2009, Customs and Border Protection (CBP) reminded importers that it is still accepting registation for Importer Security Filing (ISF) Progress Reports.
CBP will begin full enforcement of the Importer Security Filing (ISF), popularly known as the "10+2" rule, on January 26, 2010. The 10+2 rule requires that importers and carriers transmit certain cargo information to CBP for imports destined to enter the U.S. or a free trade zone in the U.S., via the Automated Broker Interface (ABI) or Automated Manifest System (AMS). In preparation for the new requirements, CBP is providing all ISF filers with a progress report. CBP urges companies to review these reports with their ISF filers to address filing inaccuracies or delayed data transmissions during the flexible enforcement period currently in effect.
ISF Filers and C-TPAT Tier 2 and Tier 3 are eligible for the progress report, and may request their copy by contacting: Progress_Report@cbp.dhs.gov.
The filers' request should include: Company Name, Filer Code, Point of Contact, Point of Contact Telephone, and E-mail address to which the report should be sent.
C-TPAT Tier 2 and 3 importers should provide the same information except they should provide their tier level and, instead of a filer code, the importer of record numbers they wish included in the report.
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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 the coming months:
Basic ITAR Workshop - Federal Publications Seminar
November 4, 2009 - Las Vegas, NV - $595
Advanced ITAR Workshop - Federal Publications Seminar
November 5 - 6, 2009 - Las Vegas, NV - $995
22nd National Conference on Foreign Corrupt Practices Act - American Conference Institute
November 17 - 18, 2009 - Orlando, FL - $1995 - $4695
How To Develop an Export Management and Compliance Program - Bureau of Industry and Security
November 18 - 19, 2009 - Seattle, WA - $485
Basic ITAR Workshop - Federal Publications Seminar
December 4, 2009 - Atlanta, GA - $595
Defense Trade Controls Seminar - BSG Consulting
December 9 - 10, 2009 - Miami, FL $1050
Complying with U.S. Export Controls - Bureau of Industry and Security
December 8 - 7, 2009 - Orlando, FL - (Details not yet posted)
U.S. Export Controls Seminar - BSG Consulting
December 7 - 8, 2009 - Miami, FL $1050
Trade Symposium 2009 - U.S. Customs and Border Protection (CBP)
December 8-10, 2009 - Washington, D.C.
Economic Sanctions - American Conference Institute
December 8 - 9, 2009 - Frankfurt, Germany - €1599 - €2098
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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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