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Greetings!
We hope you all enjoyed a Happy Thanksgiving!
This month's import/export news highlights include: proposed ITAR amendments with comments due 1/25/10; OFAC Enforcement Guidelines issued; a prison sentence for the director of a Singapore company imposed for Iran embargo violations; CBP Trade Symposium 2009 live webcast announced; the first reported search warrant issued for possible Lacey Act violations; and the State Department announces a public meeting on the Rotterdam Rules of international transport and contract law. 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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State Publishes Proposed ITAR Amendments
Comments due by January 25, 2010
 On November 25, 2009, the Department of State's Directorate of Defense Trade Controls (DDTC) published a proposed rule to amend Section 126.6 of the International Traffic in Arms Regulations (ITAR) pertaining to U.S. Government transfer programs and foreign-owned military aircraft and naval vessels. Section 126.6 is being amended to clarify the particular circumstances when a license is not required by DDTC. DDTC will accept comments on this proposed rule until January 25, 2010.
On November 25, 2009, the DDTC also published a proposed rule to amend Section 125.9 of the ITAR regarding an exemption for technical data, to clarify that the exemption covers technical data, including classified information, regardless of media or format, sent or taken by a U.S. person who is an employee of a U.S. corporation or a U.S. Government agency to a U.S. person employed by that U.S. corporation or to a U.S. Government agency outside the United States. DDTC will accept comments on this proposed rule until January 25, 2010.
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OFAC Releases Economic Sanctions Enforcement Guidelines
Guidelines Issued as a Final Rule
 On November 9, 2009, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) issued "Economic Sanctions Enforcement Guidelines" as final rule in the Federal Register, setting forth the enforcement guidelines that OFAC will follow in determining a response to violations of the OFAC-enforced U.S. economic sanctions programs.
This rule has been initially published as an interim final rule with request for comments on September 8, 2008. In response to comments received, OFAC made several changes to the final version of the rule:
· The definition of "voluntary self-disclosure" was amended to clarify that when a third party required to report an apparent violation fails to do so, but a person that has committed an apparent violation and is subject to any of the OFAC sanctions ("Subject Person") reports the violation to OFAC, the notification will still be considered a voluntary self-disclosure. However, in those cases where the third party does notify OFAC before a final enforcement response to the violation, a Subject Person's notification will not be considered a voluntary self-disclosure even if it precedes the third party's notification.
· The definition of "voluntary self-disclosure" was also amended to clarify that a self-initiated notification to OFAC made at the same time as another government agency learns of the apparent violation (either through disclosure or otherwise) does qualify as voluntary self-disclosure if the other aspects of the definitions are met. This change is intended to cover self-disclosures made to OFAC and another government agency simultaneously.
· Similarly, if a Subject Person notifies another government agency of an apparent violation as required by that agency, the notification may be considered a voluntary self-disclosure by OFAC, based on a case-by-case determination.
· On the requested clarification on Suspicious Activity Report (SAR) filing, OFAC responded that the filing of a SAR does not itself preclude a determination of voluntary self-disclosure for a subsequent self-disclosure to OFAC of the same transaction, unless OFAC learns of the apparent violation prior to the self-disclosure filing.
· Regarding party cooperation and tolling agreements, the final rule eliminates any reference to statute of limitations waivers. Furthermore, with respect to whether a Subject Person's refusal to enter into a tolling agreement should be considered an aggravating factor in assessing the person's cooperation, the final rules states that a Subject Person's unwillingness to enter into a tolling agreement will not be considered against the Subject Person. On the other hand, if a Subject Person is willing to enter into a tolling agreement, it may be considered a mitigating factor.
· For the purposes of calculating a penalty in cases involving a set of "substantially similar violations," OFAC clarified that the penalty reduction of up to 25% for a Subject Person's first violation will generally apply to the entire set of "substantially similar violations" and not solely to the first of those violations.
· OFAC also amended the final rule to make clear that determination of appropriate enforcement response is not limited to prior formal determinations of sanctions violations. Thus, prior cautionary letters, warning letters, and evaluative letters will be considered in determining OFAC sanctions, if any. This particular amendment specifies that consideration of a Subject Person's sanction history will be limited to the five years preceding the transaction giving rise to the apparent violation.
· On the issue of attorney-client privilege or the attorney work product doctrine, the final rule was amended by eliminating the reference to "failure to furnish the requested information" and instead referring to a "failure to comply" with a request for information. The language is intended to specify that OFAC will not seek penalties in cases where responsive information is withheld on the basis of apparently applicable and properly invoked privilege.
· The Enforcement Guidelines also clarify the base penalty amounts for transactions within the scope of the Trading With the Enemy Act (TWEA), which are capped at the $65,000. In non-egregious cases involving apparent violations of TWEA, when the apparent violation is disclosed through a voluntary self-disclosure, the civil penalty is capped at the $32,500. Non-egregious violations of TWEA not voluntarily disclosed are capped at the $65,000.
· The penalty for failure to maintain records in conformance with the requirements of OFAC regulations is set at a maximum of $50,000.
More detailed discussion of the amendments and public comments can be found in the final rule, published as Appendix A to Part 501 - Economic Sanctions Enforcement.
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Director of Singapore Company Sentenced for OFAC Iran Embargo Violations
Sentence of 46 Months Incarceration Imposed
On November 5, 2009, a federal court in Brooklyn, NY sentenced Laura Wang-Woodford, a U.S. citizen and a director of Singapore-based Monarch Aviation Pte, Ltd. (Monarch), to 46 months' incarceration for conspiracy to violate the U.S. trade embargo by exporting controlled aircraft components to Iran.
Monarch has been engaged in imports and exports of military and commercial aircraft components for over 20 years.
Wang-Woodford was arrested at San Francisco International Airport in December 2007 after arriving on a flight from Hong Kong and has remained incarcerated ever since. Originally, Wang-Woodford was charged along with her husband Brian D. Woodford in a 20-count indictment returned in the Eastern District of New York on January 15, 2003. A superceding indictment charging Wang-Woodford with operating Jungda International Pte. Ltd (Jungda), a Singapore-based successor to Monarch, was returned on May 22, 2008. Brian Woodford, a U.K. citizen who served as chairman and managing director of Monarch, remains a fugitive.
The 2008 indictment alleged that between January 1998 and December 2007, the defendants exported controlled U.S. aircraft parts from the U.S. to Monarch and Jungda in Singapore and Malaysia and then re-exported those items to buyers in Iran without the required U.S. government licenses. The parts exported included aircraft shields, shears, "o" rings, and switch assemblies. On the export documents filed with the U.S. government, the defendants falsely listed Monarch and Jungda as the ultimate recipients of the parts.
At the time of her arrest, Wang-Woodford had in her possession catalogues from China National Precision Machinery Import and Export Corporation (CPMIEC) containing advertisements for military technology and weaponry, including surface-to-air missile systems and rocket launchers. CPMIEC, a Chinese company, has been sanctioned by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) based on the company's history of selling military hardware to Iran. Under those sanctions, all U.S. persons and entities are prohibited from engaging in business with CPMIEC.
The Bureau of Industry and Security publish on its website Lists to Check that include sanctions by various government agencies and that should be consulted by persons involved in export or re-export transactions.
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CBP Trade Symposium 2009 Available via Live Webcast
Webcast Participants Must Register and Pay $35 Fee
 U.S. Customs and Border Protection (CBP) has announced the availability of its Trade Symposium 2009 via webcast. Participation via live Webcast on December 8-10, 2009 is available with registration and payment of a $35 fee. Participants will also be provided with 30-day on-demand access of the Webcast free of charge. CBP will select three breakout sessions that will be shown during the live webcast. The general sessions and eight breakout sessions will be available during the 30-day on-demand access.
The agenda for the Symposium is available here.
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Gibson Guitar May Be First Company Prosecuted for Lacey Act Violations
Search Warrant Executed by U.S. Fish & Wildlife Services
 The Nashville Business Journal has reported that on November 10, 2009, U.S. Fish & Wildlife Service agents executed a search warrant at the Gibson Guitar Corporation's (Gibson Guitar) Nashville manufacturing plant. The search is said to be part of an investigation into the use of endangered rosewood from Madagascar in violation of the revised Lace Act.
Gibson Guitar, heralded in the past for its pioneering efforts to use sustainable wood products, is the first U.S. company to face prosecution under the revised Lacey Act - a new federal law banning trade in articles made of or containing specifically designated wood. The company issued a statement in which it proclaims full cooperation with the U.S. Fish & Wildlife Service investigation into the wood procurement.
The Lacey Act was expanded by the 2008 Farm Bill (the Food, Conservation, and Energy Act of 2008) to include timber and wood products, making the U.S. the first in the world to regulate trade in plants. Among other things, the Lacey Act requires an import declaration for certain plants and plant products, including the plant's geographical origin and biological genus.
Penalties for violations of the Lacey Act range from a forfeiture of goods to fines up to $500,000 and even imprisonment if the company is found to have knowingly engaged in trade of illegally sourced wood.
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Public Meeting on International Transport Law Announced
State Department Seeks Feedback on Domestic Implementation of The Rotterdam Rules
On November 27, 2009, the Department of State issued a public notice in the Federal Register announcing a public meeting of the Study Group on International Transport Law regarding domestic implementation of the U.N. Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea ("the Rotterdam Rules").
The Rotterdam Rules, which are currently signed by 21 countries, define the rights of obligation of parties engaged in maritime transportation of goods. Considering that 80% of world trade is conducted by sea, the Rotterdam Rules are intended to facilitate international trade by making the underlying contracts and documentation more efficient.
The U.S. signed the Rotterdam Rules on September 23, 2009. The meeting will be held on December 9, 2009 in Washington, DC. Further details can be found in the Federal Register notice.
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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:
Trade Symposium 2009 - U.S. Customs and Border Protection (CBP)
December 8-10, 2009 - Washington, D.C.
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
U.S. Export Controls Seminar - BSG Consulting
January 25 - 26, 2010 - San Diego, CA - $1050
Complying with U.S. Export Controls - Bureau of Industry and Security
January 26 - 27, 2010 - Phoenix, AZ - $425
Export Enforcement & Investigations - American Conference Institute
January 28 - 29, 2010 - Washington, DC - $1895 - 3395
Export Enforcement & Investigations - American Conference Institute
January 28 - 29, 2010 - Washington, DC - $1895 - 3395
Defense Trade Controls Seminar - BSG Consulting
January 27 - 28, 2010 - San Diego, CA - $1050
Basic ITAR Workshop - Federal Publications Seminar
January 28, 2010 - Atlanta, GA - $595
C-TPAT Certification Training Workshop - The World Academy
January 20, 2010 - Ft. Lauderdale, FL - $595
INCOTERMS and Related Global Trade Issues - The World Academy
January 22, 2010 - Ft. Lauderdale, FL - $595
Export Finance - American Conference Institute
January 25 - 26, 2010 - New York, NY - $1895 - $2795
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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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