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Greetings!
We hope you enjoyed the Memorial Day holiday.
May's import/export news highlights include: a $2M criminal fine for a UK firm convicted of exporting aircraft to Iran (combined with a $15M civil settlement); BIS adds another Validated End-User for China; a French court refuses extradition of an engineer accused of U.S. export violations; Chinese nationals convicted of exporting USML electronics to China and face up to 20 years imprisonment, a $1M fine each, and deportation to China after serving their sentences; DDTC updates online guidelines; CBP signs a MOU with China on supply chain security; CBP hosts free trade outreach webinars; and CBP closes LA/Long Beach drawback center. As always, we would appreciate any comments or suggestions you may have to improve this newsletter either by email or via our feedback survey link in our left column.Thank you for reading! Jennifer Kessinger, Tammie Goldstein Krauskopf
& Ruta Riley
globaltradeexpertise
info@globaltradeexpertise.com
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UK Firm Fined $2 Million for Exporting Boeing 747 Aircraft to Iran
The $2M Fine Plus a Related $15M Civil Settlement is One of the Largest Fines for Export Violations in BIS History
 On May 11, 2010, the Department of Justice (DOJ) announced that Balli Aviation Ltd., a subsidiary of the United Kingdom-based Balli Group PLC, was sentenced that day in the U.S. District Court for the District of Columbia to pay a $2 million fine and to serve a five-year corporate period of probation after pleading guilty on Feb. 5, 2010, to a two-count criminal information in connection with its illegal export of commercial Boeing 747 aircraft from the United States to Iran.
DOJ stated that:
According to count one of the criminal information filed with the court, beginning in at least October 2007, through July 2008, Balli Aviation Ltd. conspired to export three Boeing 747 aircraft from the United States to Iran without first having obtained the required export license from BIS or authorization from OFAC, in violation of the Export Administration Regulations (EAR) and the Iranian Transactions Regulations. Specifically, the information states that Balli Aviation Ltd., through its subsidiaries, the Blue Sky Companies, purchased U.S.-origin aircraft with financing obtained from an Iranian airline and caused these aircraft to be exported to Iran without obtaining the required U.S. government licenses. Further, Balli Aviation Ltd. entered into lease arrangements that permitted the Iranian airline to use the U.S.-origin aircraft for flights in and out of Iran.
Count two of the criminal information states that Balli Aviation Ltd. violated a Temporary Denial Order (TDO) issued by BIS on March 17, 2008, that prohibited the company from conducting any transaction involving any item subject to the EAR. Starting in or about March 2008 and continuing through about August 2008, Balli Aviation Ltd. willfully violated the TDO by carrying on negotiations with others concerning buying, receiving, using, selling and delivering U.S.-origin aircraft which went to the Export Administration Regulations.
The court imposed the maximum $2 million fine and a corporate probation of five years. The $2 million fine combined with a related $15 million civil settlement among Balli Group PLC, Balli Aviation Ltd., the U.S. Department of Commerce's Bureau of Industry and Security (BIS), and the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), is one of the largest fines for an export violation in BIS history.
In addition to the fines, Balli Aviation and Balli Group are denied export privileges for five years. This sanction will be suspended provided that neither company commits any export violations and pays the civil penalty.
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BIS Amends EAR to Add AMD China, Inc. as an Authorized Validated End-User
Exports, reexports and transfers of certain items to AMD China now authorized under License Exception VEU
 On May 10, 2010, the Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to add Advanced Micro Devices China, Inc., as an end-user to the list of validated end-users in the People's Republic of China. Exports, reexports and transfers of certain items to this end-user are now authorized under Authorization Validated End-User (VEU).
BIS further revised the EAR with additional AMD China information on May 14, 2010.
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French Court Refuses U.S. Request to Extradite Iranian Engineer
Engineer Accused of Re-Exporting Items from Malaysia to Iran
The New York Times reported that on May 5, 2010, French court rejected a U.S. request to extradite Majid Kakavand (Kakavand), an Iranian engineer and businessman accused of buying equipment for a front company in Malaysia and then rerouting it to Iranian military firms, in violation an American embargo on exports to Iran.
Specifically, the indictment against Kakavand alleged that from January 2006 to December 2008 he purchased online dual-use equipment intended for military purposes and had it shipped to Iran via Malaysia. The equipment included capacitors, resistors, connectors, reflectometers and pressure sensors that have a military application.
Iran Electronics Industry, one of the Iranian companies Kakavand bought the equipment for, was put on the European Union blacklist in June 2008. The last transaction between him and the company took place in April 2008. The other company, Iran Communications Industry, manufactures military and civilian communication equipment and now too is on the European blacklist.
The French government prosecutor opposed the request to extradite Kakavand on the grounds that he had not violated French law and that equipment at issue was not necessarily military in nature. In addition, he emphasized that, in contrast to the U.S., neither France nor the European Union has a general trade embargo on Iran.
The court ordered Kakavand set free, and his passport and bail returned. The U.S. Justice Department spokesman said efforts to apprehend Kakavand would continue, and that he would stand trial for his alleged crimes if he came into U.S. custody.
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Chinese Nationals Convicted of Illegally Exporting ITAR-Controlled Items to China
Individuals Each Face Up to 20 Years Imprisonment, $1M Fine, and Deportation to China After Serving Sentence
 On May 17, 2010, Bureau of Industry and Security (BIS) announced that a federal jury in Massachusetts convicted Chinese nationals Zhen Zhou Wu (Wu) and Yufeng Wei (Wei) of conspiracy to violate U.S. export laws and illegally exporting electronic equipment from the U.S. to China on numerous occasions from 2004 to 2007.
Evidence presented at trial showed that between April 2004 and June 2006 Wu and Wei illegally exported military electronic components, designated on the U.S. Munitions List (USML), to mainland China via Hong Kong. The defense articles that defendants exported are primarily used in military phased array radar, electronic warfare, military guidance systems, and military satellite communications.
Also indicted was Chitron Electronics, Inc. (Chitron), a company created by Wu. Using Chitron, Wu targeted Chinese military factories and research institutes as customers of Chitron, including numerous institutes of the China Electronics Technology Group Corporation, which is responsible for the procurement, development, and manufacture of electronics for the Chinese military.
Based on the correspondence, Wu, Wei and other Chitron employees knew that exports of restricted parts were being shipped to Chinese customers without required export licenses. Wu instructed Wei and Chitron employees to never tell U.S. companies that parts were being exported overseas. Instead, U.S. companies were told to ship all ordered products to the Chitron office located in Waltham, Massachusetts. Upon receiving the products, Chitron employees forwarded them to Chitron's Shenzhen office using freight forwarders in Hong Kong. The shipments were done without the requisite Department of State and Department of Commerce export licenses.
Wu and Wei both face up to 20 years imprisonment to be followed by three years supervised release and a $1 million fine. After serving their sentence, both will face deportation to China.
Chitron faces up to a $1 million fine for each count in the indictment charging them with illegal export of U.S. Munitions List items and $500,000 for each count in the indictment charging them with illegal export of Commerce controlled electronics. Sentencing is scheduled for August 17, 2010.
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DDTC Updates Guidelines
Unclassified Agreements must be submitted via DTRADE
 DDTC has updated its website to state that:
Effective September 1, 2010 DDTC-Licensing will no longer accept unclassified paper submissions of Technical Assistance Agreements, Manufacturing License Agreements, and Warehouse Distribution Agreements (to include major amendments). After this date all submissions must be made electronically via D-Trade 2 utilizing the DSP-5 form. For information on submitting agreements electronically please reference the "Guidelines for Preparing Electronic Agreements" located on this website.
In addition, DDTC updated its Guidelines Regarding Company Names on License Documentation on May 3, 2010 and its Guidelines for Preparing Electronic Agreements, addition concerning electronic agreements submitted as Re-Baselined agreements on May 26, 2010. |
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CBP Signs Agreement with China on Supply Chain Security
 On May 26, 2010, U.S. Customs and Border Protection (CBP) announced the signing of a Memorandum of Understanding with the General Administration of Customs of the People's Republic of China on Supply Chain Security and Facilitation. CBP considers the CBP-China Customs Memorandum of Understanding to be a key component of a cooperative security and trade relationship between the two nation's customs agencies.
"This memorandum will create a cooperative mechanism for CBP and the General Administration of Customs to collaborate on supply chain security standards and enhance CBP's implementation of a layered enforcement strategy," said Deputy Commissioner David Aguilar, who signed the MOU on behalf of CBP.
The MOU was signed during the Strategic and Economic Dialogue, which took place in Beijing May 24 - 25. The Strategic and Economic Dialogue is an ongoing mechanism for addressing the challenges and opportunities that the U.S. and China share on a wide range of bilateral, regional, and global areas of immediate and long-term strategic and economic interest.
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CBP Hosts Free Trade Outreach Webinars
"Hear from Experts in Various CBP Disciplines"
 On May 25, 2010, CBP announced that it is hosting trade outreach events via free webinars to provide more timely and up-to-date information to the international trade community on CBP trade policy, as established by the agency.
CBP will begin a series of live webinars that will be recorded and available for subsequent on-demand viewing over the Internet. The programs will consist of a high-level overview of the initiative, policy, or other topic; and will conclude with an opportunity for the trade to ask pertinent questions. To maximize the trade community's ability to ask questions during the webinars, the presentation portion will be limited to approximately 30 minutes.
Space is limited per webinar, so please pre-register using the CBP on-line registration process listed. CBP states that although the trade outreach webinars are provided free of charge, CBP incurs a penalty fee for unused telephone lines per event. Thus, if for any reason you must cancel your registration, please submit your notice of cancellation via the on-line cancellation form 48 hours prior to the event.
Future CBP Trade Outreach Webinars:
CPSC Notices of Detention
Wednesday, June 2, 2010
2:00 - 3:00 p.m. (EDT)
(CPSC Notices Registration Form)
(CPSC Notices Cancellation Request Form)
CBP Outbound Issues
Thursday, June 10, 2010
2:00 - 3:00 p.m. (EDT)
(Webinar Registration - CBP Outbound)
(Cancellation Request Form - CBP Outbound)
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CBP To Close Drawback Center at Port of Los Angeles-Long Beach
Outstanding claims forwarded to San Francisco Drawback Center
On May 5, 2010, the U.S. Customs and Border Protection (CBP) issued a final rule in Federal Register announcing closure of the Los Angeles (L.A.) Drawback Center effective June 4, 2010. This decision is due to a small and continuously decreasing number of drawback claims filed and processed at the L.A. Drawback Center since 2003.
Any future drawback claims must be submitted to one of the four remaining drawback centers location in San Francisco, Chicago, Houston, or New York. All remaining claims that were filed at the L.A. Drawback Center prior to closure that have not yet liquidated and still require CBP review will be forwarded to the San Francisco Drawback Center for final processing.
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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:
Complying with U.S. Exports and Reexports Controls - Bureau of Industry and Security
June 2-3, 2010 - Tokyo, Japan - $250
Complying with U.S. Export Controls - Bureau of Industry and Security
June 2, 2010 - Houston, TX - $225
Complying with U.S. Export Controls - Bureau of Industry and Security
June 9 - 10, 2010 - Seattle, WA - $445
U.S. Export Controls Seminar - BSG Consulting
June 14 - 17, 2010 - Washington, DC - $1050
Defense Trade Controls Seminar - Export Compliance Training Institute
June 14 - 15, 2010 - Washington, DC - $1050
Basic ITAR Workshop - Federal Publications Seminar
June 16, 2010 - Dallas, TX - $595
Advanced ITAR Workshop - Federal Publications Seminar
June 17 - 18, 2010 - Dallas, TX - $995
INCOTERMS and Related Global Trade Issues - The World Academy
June 18, 2010 - Chicago, IL - $595
C-TPAT Certification Training Workshop - The World Academy
June 22, 2010 - Chicago, IL - $595
Drawback Workshop - The World Academy
June 22, 2010 - Chicago, IL - $595
Managing Harmonized Tariff Schedule - The World Academy
June 24, 2010 - Detroit, MI - $595
INCOTERMS and Related Global Trade Issues - The World Academy
June 25, 2010 - Detroit, MI - $595
ITAR Compliance and Audits - Federal Publications Seminar
July 15 - 16, 2010 - Hilton Head, SC - $995
2010 Summer Back to Basics Conference - Society for International Affairs
July 19 - 20, 2010 - Baltimore, MD - $700-$800
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Thanks again for your interest in our newsletter!
Sincerely,
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Jennifer Kessinger, Tammie Krauskopf & Ruta Riley
Attorneys & Consultants
jk@globaltradeexpertise.com
Tel. 925.876.1381 (Jennifer Kessinger)
tk@globaltradeexpertise.com
Tel. 708.707.4087 (Tammie Krauskopf)
rr@globaltradexpertise.com
Tel. (630) 862-8123
www.globaltradeexpertise.com
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