CBP Adopts Changes to Country of Origin Rules Applicable to Certain Commodities
09/02/11 11:55 PM Filed in: CBP
On
September 2, 2011, U.S. Customs and Border Protection
(CBP) posted a final rule in the Federal
Register amending the country of origin rules
applicable to pipe fittings and flanges, greeting
cards, glass optical fiber, rice preparations, and
certain textile and apparel products, as codified
in part 102 of the CBP regulations. The changes
take effect October 3, 2011.
Proposed changes to the country of origin rules were first published in the Federal Register on July 25, 2008. The notice proposed to adopt part 102 rules for country of origin determination not only for the specific merchandise listed above, but also to all imported merchandise. However, CBP withdrew the proposal of uniform country of origin rules for all imported merchandise at this time to permit further consideration of relevant issues.
Thus, at this time, part 102 rules of country of origin determination are adopted only for the following merchandise:
The tariff shift rule in CBP regulations has been amended for commodities classified in headings 7301 through 7307, HTSUS, and now provides for a change within heading 7307 from fitting forgings or flange forgings to fittings or flanges made ready for commercial use by certain processing, including beveling, bore threading, center or step boring, face machining, heat treating, recoining or resizing, taper boring, machining ends or surfaces other than a gasket face, drilling bolt holes, and burring or shot blasting.
The tariff shift rule for merchandise classified in headings 4901 through 4911, HTSUS, has been amended to include a specific rule for heading 4909, providing for a change to that heading from any other heading except from heading 4911 when the change is a result of adding text. According to CBP, the effect of this change will enable the country of origin of all printed greeting cards to be determined according to the country of initial printing of literary text, photographs, graphic designs, or illustrations. This change is also consistent with CBP practice in applying the substantial transformation standard to printed materials, as reflected in CBP's administrative rulings.
The tariff shift rule for subheading 9001.10, HTSUS, which encompasses optical fibers and optical fiber bundles and cables, has been amended to provide for a change to 9001.10 from any other subheading, except from subheading 8544.70, HTSUS, or glass preforms of heading 7002, HTSUS.
Tariff shift rule for subheading 1904.90, HTSUS, which encompasses certain rice preparations, has been amended to provide for a change to subheading 1904.90 from any other heading, except from heading 1006, HTSUS, or wild rice of subheading 1008.90, HTSUS.
With respect to the rules of origin for textile and apparel products, to properly align the country of origin rules with the language of the underlying statute (19.U.S.C. 3592(b)(1)(C)), Sec. 102.21(c)(3)(ii) has been amended to add the words “fabrics of chapter 59 and” so that the amended text now reads “Except for fabrics of chapter 59 and goods of heading * * *.” The proposed rule explained that this change would have the effect of ensuring that fabrics of chapter 59, HTSUS, derive their country of origin from where the fabric is formed, consistent with the statute.
In addition, the tariff shift rule for goods classified in headings 6210 through 6212, HTSUS, has been amended by creating a separate rule for heading 6212, which encompasses “brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof, whether or not knitted or crocheted.” In the proposed rule, CBP noted that the existing tariff shift rule for headings 6210 through 6212 does not provide for the possibility of knit-to-shape goods, even though the body-supporting garments of heading 6212 may be knot to shape. As amended, the rule ensures that a knit-to-shape good of heading 6212 is found to derive its origin from where the good is knit to shape.
Proposed changes to the country of origin rules were first published in the Federal Register on July 25, 2008. The notice proposed to adopt part 102 rules for country of origin determination not only for the specific merchandise listed above, but also to all imported merchandise. However, CBP withdrew the proposal of uniform country of origin rules for all imported merchandise at this time to permit further consideration of relevant issues.
Thus, at this time, part 102 rules of country of origin determination are adopted only for the following merchandise:
- Pipe fitting and
Flanges
The tariff shift rule in CBP regulations has been amended for commodities classified in headings 7301 through 7307, HTSUS, and now provides for a change within heading 7307 from fitting forgings or flange forgings to fittings or flanges made ready for commercial use by certain processing, including beveling, bore threading, center or step boring, face machining, heat treating, recoining or resizing, taper boring, machining ends or surfaces other than a gasket face, drilling bolt holes, and burring or shot blasting.
- Greeting Cards
The tariff shift rule for merchandise classified in headings 4901 through 4911, HTSUS, has been amended to include a specific rule for heading 4909, providing for a change to that heading from any other heading except from heading 4911 when the change is a result of adding text. According to CBP, the effect of this change will enable the country of origin of all printed greeting cards to be determined according to the country of initial printing of literary text, photographs, graphic designs, or illustrations. This change is also consistent with CBP practice in applying the substantial transformation standard to printed materials, as reflected in CBP's administrative rulings.
- Glass Optical
Fiber
The tariff shift rule for subheading 9001.10, HTSUS, which encompasses optical fibers and optical fiber bundles and cables, has been amended to provide for a change to 9001.10 from any other subheading, except from subheading 8544.70, HTSUS, or glass preforms of heading 7002, HTSUS.
- Rice Preparations
Tariff shift rule for subheading 1904.90, HTSUS, which encompasses certain rice preparations, has been amended to provide for a change to subheading 1904.90 from any other heading, except from heading 1006, HTSUS, or wild rice of subheading 1008.90, HTSUS.
- Certain Textile
and Apparel Products
With respect to the rules of origin for textile and apparel products, to properly align the country of origin rules with the language of the underlying statute (19.U.S.C. 3592(b)(1)(C)), Sec. 102.21(c)(3)(ii) has been amended to add the words “fabrics of chapter 59 and” so that the amended text now reads “Except for fabrics of chapter 59 and goods of heading * * *.” The proposed rule explained that this change would have the effect of ensuring that fabrics of chapter 59, HTSUS, derive their country of origin from where the fabric is formed, consistent with the statute.
In addition, the tariff shift rule for goods classified in headings 6210 through 6212, HTSUS, has been amended by creating a separate rule for heading 6212, which encompasses “brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof, whether or not knitted or crocheted.” In the proposed rule, CBP noted that the existing tariff shift rule for headings 6210 through 6212 does not provide for the possibility of knit-to-shape goods, even though the body-supporting garments of heading 6212 may be knot to shape. As amended, the rule ensures that a knit-to-shape good of heading 6212 is found to derive its origin from where the good is knit to shape.
BIS Publishes New “Best Practices” for Industry to Guard Against Unlawful Diversion through Transshipment Trade
On
August 31, 2011, the U.S. Department of Commerce’s
Bureau of Industry and Security (BIS) published a new
“best practices” guide for to help guard against the
diversion of dual-use items shipped to a
transshipment "hub," or to any intermediate country
before being shipped to the country of ultimate
destination. BIS states that these best practices
were developed in conjunction with U.S. industry.
In the announcement, BIS stated:
Transshipment is a routine and growing part of legitimate world trade with logistical benefits, but also can be used illegally to disguise the actual country of ultimate destination. Transshipment practices may also create a risk that items are diverted to unauthorized end-users or end-uses.
“These new best practices provide a formidable tool to help secure trade through transshipment hubs,” said Assistant Secretary for Export Administration Kevin J. Wolf. "BIS is committed to working with industry to adopt best practices critical to safeguarding U.S. national security interests.”
The following new best practices will help exporters, re-exporters, freight forwarders and other parties to comply with US export control regulations and laws and augment BIS’s Export Management and Compliance Guidelines. BIS is encouraging industry to:
This set of best practices, aimed at U.S industry, supports one of ten best practices suggested by the State Department’s Bureau of International Security and Nonproliferation to foreign governments at the Global Transshipment Seminar in Dubai, United Arab Emirates, in March 2011. That best practice suggestion encouraged industry to develop stronger internal compliance programs, conduct focused outreach, and raise awareness of export control obligations.
The 2011 “Best Practices for Preventing Unlawful Diversion of U.S. Dual-Use Items Subject to the Export Administration Regulations, Particularly through Transshipment Trade” are posted on the BIS website.
In the announcement, BIS stated:
Transshipment is a routine and growing part of legitimate world trade with logistical benefits, but also can be used illegally to disguise the actual country of ultimate destination. Transshipment practices may also create a risk that items are diverted to unauthorized end-users or end-uses.
“These new best practices provide a formidable tool to help secure trade through transshipment hubs,” said Assistant Secretary for Export Administration Kevin J. Wolf. "BIS is committed to working with industry to adopt best practices critical to safeguarding U.S. national security interests.”
The following new best practices will help exporters, re-exporters, freight forwarders and other parties to comply with US export control regulations and laws and augment BIS’s Export Management and Compliance Guidelines. BIS is encouraging industry to:
- Pay heightened attention to BIS’s Red Flag Indicators and communicate red flag concerns internally.
- Seek to utilize only those trade facilitators and freight forwarders that administer sound export control management and compliance programs that include transshipment trade best practices.
- Obtain detailed information on the credentials of foreign customers to assess diversion risk.
- For routed transactions, establish and maintain a trusted relationship with parties to mitigate risks.
- Communicate export control classification and destination information to end-users and consignees on government and commercial export documentation.
- Provide the ECCN or the EAR99 classification to freight forwarders for all export transactions and report the classifications in the Automated Export System (AES), if applicable.
- Use information technology to the maximum extent feasible to augment "know your customer" and other due-diligence measures in combating the threats of diversion and increase confidence that shipments will reach authorized end-users for authorized end-uses.
This set of best practices, aimed at U.S industry, supports one of ten best practices suggested by the State Department’s Bureau of International Security and Nonproliferation to foreign governments at the Global Transshipment Seminar in Dubai, United Arab Emirates, in March 2011. That best practice suggestion encouraged industry to develop stronger internal compliance programs, conduct focused outreach, and raise awareness of export control obligations.
The 2011 “Best Practices for Preventing Unlawful Diversion of U.S. Dual-Use Items Subject to the Export Administration Regulations, Particularly through Transshipment Trade” are posted on the BIS website.
Notice of Open Meeting of PECSEA
On
August 24, 2011, the U.S. Department of Commerce’s
Bureau of Industry and Security (BIS)
announced that the
President’s Export Council Subcommittee on Export
Administration (PECSEA) will meet on September 19
and 20, 2011, 10 a.m., at the Sofitel Hotel Miami,
5800 Blue Lagoon Drive, Miami, Florida 33126.
The PECSEA provides advice on matters pertinent to those portions of the Export Administration Act, as amended, that deal with United States policies of encouraging trade with all countries with which the United States has diplomatic or trading relations and of controlling trade for national security and foreign policy reasons.
BIS states that, “A limited number of seats will be available for the public sessions on both days. Reservations are not accepted. To the extent time permits, members of the public may present oral statements to the PECSEA. Written statements may be submitted at any time before or after the meeting. However, to facilitate distribution of public presentation materials to PECSEA members, the PECSEA suggests that public presentation materials or comments be forwarded before the meeting to
Ms. Yvette Springer at Yvette.Springer@bis.doc.gov.”
The published agenda is as follows:
Monday, September 19
Open Session
1. Export Control Reform Field Hearing.
Tuesday, September 20
Open Session
1. Welcome and Remarks by the Chairman and Vice Chair.
2. Export Control Reform Update.
3. Presentation of Papers or Comments by the Public.
4. Review of Field Hearing.
5. Status of 2011 Workplan.
6. Discussion of 2012 Workplan.
7. Subcommittee Breakout Sessions.
The PECSEA provides advice on matters pertinent to those portions of the Export Administration Act, as amended, that deal with United States policies of encouraging trade with all countries with which the United States has diplomatic or trading relations and of controlling trade for national security and foreign policy reasons.
BIS states that, “A limited number of seats will be available for the public sessions on both days. Reservations are not accepted. To the extent time permits, members of the public may present oral statements to the PECSEA. Written statements may be submitted at any time before or after the meeting. However, to facilitate distribution of public presentation materials to PECSEA members, the PECSEA suggests that public presentation materials or comments be forwarded before the meeting to
Ms. Yvette Springer at Yvette.Springer@bis.doc.gov.”
The published agenda is as follows:
Monday, September 19
Open Session
1. Export Control Reform Field Hearing.
Tuesday, September 20
Open Session
1. Welcome and Remarks by the Chairman and Vice Chair.
2. Export Control Reform Update.
3. Presentation of Papers or Comments by the Public.
4. Review of Field Hearing.
5. Status of 2011 Workplan.
6. Discussion of 2012 Workplan.
7. Subcommittee Breakout Sessions.
New Executive Order Blocks Property of the Government of Syria and Prohibits Certain Transactions With Respect to Syria
On
August 18, 2011, in response to the Syrian
Government’s continuing escalation of violence
against the people of Syria, President Obama
signed Executive Order 13582
(E.O.) that
imposed additional sanctions against the
government of Syria.
The E.O. blocks all Government of Syria’s assets that are within the U.S. or within the control of any U.S. person, including any overseas branches. In addition, the E.O. prohibits:
(1) new investment in Syria by a U.S. person;
(2) exports, reexports, sales, or provisions of direct or indirect services to Syria from the U.S., or by a U.S. person, wherever located;
(3) imports into the U.S. of petroleum or petroleum products of Syrian origin;
(4) any dealing by a U.S. person related to petroleum or petroleum products of Syrian origin; and (5) any approval, financial facilitation, or guarantee by a U.S. person of transactions by a foreign person where the transaction would be prohibited to a U.S. person.
These sanctions are in addition to the national emergency declared in E.O. 13338 of May 11, 2004 (as amended), which blocks property of certain persons and prohibits the export of certain goods to Syria.
The E.O. blocks all Government of Syria’s assets that are within the U.S. or within the control of any U.S. person, including any overseas branches. In addition, the E.O. prohibits:
(1) new investment in Syria by a U.S. person;
(2) exports, reexports, sales, or provisions of direct or indirect services to Syria from the U.S., or by a U.S. person, wherever located;
(3) imports into the U.S. of petroleum or petroleum products of Syrian origin;
(4) any dealing by a U.S. person related to petroleum or petroleum products of Syrian origin; and (5) any approval, financial facilitation, or guarantee by a U.S. person of transactions by a foreign person where the transaction would be prohibited to a U.S. person.
These sanctions are in addition to the national emergency declared in E.O. 13338 of May 11, 2004 (as amended), which blocks property of certain persons and prohibits the export of certain goods to Syria.
CBP Will Discontinue Mailing Paper Liquidation Notices to ABI Filers
08/17/11 11:50 AM Filed in: CBP
On
August 17, 2011, Customs and Border Protection (CBP)
issued a final rule in the Federal
Register amending Title 19 of the Code of Federal
Regulations (CFR) pertaining to the method by
which U.S. Customs and Border Protection (CBP)
issues courtesy notices of liquidation to
importers of record whose entry summaries are
filed in the Automated Broker Interface (ABI).
Currently, CBP provides an electronic courtesy notice to the ABI filers and a paper courtesy notice to the importer of record. In an effort to streamline the notification process and reduce printing and mailing costs, CBP will discontinue mailing paper courtesy notices of liquidation. Effective September 17, 2011, all ABI filers (importers of records and brokers that file as the agent of an importer of record) will receive electronic courtesy notices. In addition, all importers of record with an Automated Commercial Environment (ACE) Secure Data Portal Account can monitor the liquidation of their entries by using the reporting tool and the ACE Secure Data Portal Account. Importers of record whose entries are not filed through ABI will continue to receive paper courtesy notices of liquidation.
Currently, CBP provides an electronic courtesy notice to the ABI filers and a paper courtesy notice to the importer of record. In an effort to streamline the notification process and reduce printing and mailing costs, CBP will discontinue mailing paper courtesy notices of liquidation. Effective September 17, 2011, all ABI filers (importers of records and brokers that file as the agent of an importer of record) will receive electronic courtesy notices. In addition, all importers of record with an Automated Commercial Environment (ACE) Secure Data Portal Account can monitor the liquidation of their entries by using the reporting tool and the ACE Secure Data Portal Account. Importers of record whose entries are not filed through ABI will continue to receive paper courtesy notices of liquidation.
Recent OFAC Enforcement Actions
08/16/11 12:14 PM Filed in: OFAC
| Enforcement
On
August 16, 2011, Office of Foreign Assets Control
(OFAC) posted on its web site
information on recent OFAC enforcement
actions:
Norton Lilly International (Norton), Mobile, AL, has been assessed a penalty of $18,750 for its violation of the Iranian Transactions Regulations that occurred in November 2006. Norton engaged in a transaction or dealing related to services of Iranian origin, and facilitated a transaction by a foreign person involving Iranian-origin services. In the transaction, Norton acted as a paying agent for a foreign entity, to pay port charges incurred at an Iranian port in the amount of $14,936. OFAC determined that Norton did not voluntarily self-disclose the violation to OFAC and that the violation constituted a non- egregious case.
The base penalty amount for the violation was $25,000. The assessed penalty reflects OFAC’s consideration that Norton had knowledge or reason to know that the conduct, activity, or transaction giving rise to the violation involved port charges with respect to a ship calling in Iran; Norton did not have a compliance program in place at the time of the violation; Norton has instituted remedial measures by adopting procedures to comply with OFAC’s regulations in the future; Norton cooperated with OFAC by promptly responding to OFAC’s administrative subpoena and providing OFAC all relevant information regarding the violation; and Norton has not been subject to an OFAC enforcement action in the five years preceding the date of the violation.
CMA CGM (America) LLC (CCA), of Norfolk, VA, has remitted $374,400 to settle allegations of violations of the Cuban Assets Control Regulations, the Iranian Transactions Regulations, and the Sudanese Sanctions Regulations, occurring between December 2004 and April 2008. OFAC alleged that CCA, a global container shipping company, facilitated the exportation of goods from foreign ports to Sudan on at least two occasions and, in 28 separate transactions, accepted payments for shipping services provided by its foreign parent company, CMA CGM, or its foreign affiliates, in connection with shipments between third countries and Cuba, Iran, or Sudan. The transactions involving the alleged violations were valued at approximately $402,265.
OFAC determined that CCA did not voluntarily self-disclose the matter to OFAC and that the alleged violations constituted a non-egregious case. The base penalty amount for the alleged violations totaled $640,000. The settlement amount reflects OFAC’s consideration of the following: the alleged violations appear to have resulted from a pattern of conduct over a period of approximately three years; given the size and scope of CCA’s operations and the nature of its international business, it appears to have lacked an adequate compliance program to avoid U.S. sanctions violations; some of the goods exported from third countries to Cuba and Iran may have qualified as agricultural/medical products under the Trade Sanctions Reform and Export Enhancement Act of 2000 and, thus, may have been eligible for a license; CCA and CMA CGM have undertaken remediation to ensure that such alleged violations do not recur; CCA had not been the subject of OFAC penalties within the past five years; and CCA cooperated with OFAC throughout the investigation, including by requesting the cooperation of CMA CGM and its foreign affiliates in gathering relevant transaction data, and by agreeing to toll the statute of limitations.
Société Générale New York Branch, New York, NY (SGNY) has remitted $111,359 to settle allegations of violations of the Iranian Transactions Regulations (Regulations) occurring December 27, 2006, and May 9, 2007. OFAC alleged that SGNY dealt in Iranian-origin services and/or facilitated transactions by a foreign person where the transactions by the foreign person would have been prohibited by the Regulations if performed by a U.S. person. Specifically, OFAC alleged that SGNY, as the issuing bank of two letters of credit between two non-sanctioned parties, processed two payments under those letters of credit involving the shipment of cargo transported aboard vessels owned and/or managed by the Islamic Republic of Iran Shipping Lines of Tehran, Iran, an Iranian entity. The value of the payments was $329,954.
SGNY voluntarily self-disclosed the alleged violations and OFAC has determined that the alleged violations constituted a non-egregious case. The base penalty amount for the alleged violations was $164,977. The settlement amount reflects OFAC’s consideration of the following: SGNY improved its compliance program in response to the apparent violations by enhancing its internal controls related to screening trade finance transactions, and provided additional training to staff involved in processing such transactions; SGNY cooperated with OFAC’s investigation and resolution of this matter; and OFAC has not issued a penalty notice or Finding of Violation against SGNY in the five years preceding the transactions at issue.
Heritage Turbines, Inc., Hyannis, MA (Heritage) has remitted $4,500 to settle an alleged violation of the Sudanese Sanctions Regulations occurring on or about November 21, 2007. OFAC alleged that Heritage attempted to ship two fuel nozzle kits to Sudan without an OFAC license. The fuel nozzle kits were valued at a total of $2,000. OFAC determined that Heritage did not voluntarily self-disclose this matter to OFAC and the alleged violation constituted a non-egregious case. The base penalty amount for the alleged violation totaled $10,000. The settlement amount reflects the fact that Heritage had no history of sanctions violations and cooperated with OFAC’s investigation of this matter.
Norton Lilly International (Norton), Mobile, AL, has been assessed a penalty of $18,750 for its violation of the Iranian Transactions Regulations that occurred in November 2006. Norton engaged in a transaction or dealing related to services of Iranian origin, and facilitated a transaction by a foreign person involving Iranian-origin services. In the transaction, Norton acted as a paying agent for a foreign entity, to pay port charges incurred at an Iranian port in the amount of $14,936. OFAC determined that Norton did not voluntarily self-disclose the violation to OFAC and that the violation constituted a non- egregious case.
The base penalty amount for the violation was $25,000. The assessed penalty reflects OFAC’s consideration that Norton had knowledge or reason to know that the conduct, activity, or transaction giving rise to the violation involved port charges with respect to a ship calling in Iran; Norton did not have a compliance program in place at the time of the violation; Norton has instituted remedial measures by adopting procedures to comply with OFAC’s regulations in the future; Norton cooperated with OFAC by promptly responding to OFAC’s administrative subpoena and providing OFAC all relevant information regarding the violation; and Norton has not been subject to an OFAC enforcement action in the five years preceding the date of the violation.
CMA CGM (America) LLC (CCA), of Norfolk, VA, has remitted $374,400 to settle allegations of violations of the Cuban Assets Control Regulations, the Iranian Transactions Regulations, and the Sudanese Sanctions Regulations, occurring between December 2004 and April 2008. OFAC alleged that CCA, a global container shipping company, facilitated the exportation of goods from foreign ports to Sudan on at least two occasions and, in 28 separate transactions, accepted payments for shipping services provided by its foreign parent company, CMA CGM, or its foreign affiliates, in connection with shipments between third countries and Cuba, Iran, or Sudan. The transactions involving the alleged violations were valued at approximately $402,265.
OFAC determined that CCA did not voluntarily self-disclose the matter to OFAC and that the alleged violations constituted a non-egregious case. The base penalty amount for the alleged violations totaled $640,000. The settlement amount reflects OFAC’s consideration of the following: the alleged violations appear to have resulted from a pattern of conduct over a period of approximately three years; given the size and scope of CCA’s operations and the nature of its international business, it appears to have lacked an adequate compliance program to avoid U.S. sanctions violations; some of the goods exported from third countries to Cuba and Iran may have qualified as agricultural/medical products under the Trade Sanctions Reform and Export Enhancement Act of 2000 and, thus, may have been eligible for a license; CCA and CMA CGM have undertaken remediation to ensure that such alleged violations do not recur; CCA had not been the subject of OFAC penalties within the past five years; and CCA cooperated with OFAC throughout the investigation, including by requesting the cooperation of CMA CGM and its foreign affiliates in gathering relevant transaction data, and by agreeing to toll the statute of limitations.
Société Générale New York Branch, New York, NY (SGNY) has remitted $111,359 to settle allegations of violations of the Iranian Transactions Regulations (Regulations) occurring December 27, 2006, and May 9, 2007. OFAC alleged that SGNY dealt in Iranian-origin services and/or facilitated transactions by a foreign person where the transactions by the foreign person would have been prohibited by the Regulations if performed by a U.S. person. Specifically, OFAC alleged that SGNY, as the issuing bank of two letters of credit between two non-sanctioned parties, processed two payments under those letters of credit involving the shipment of cargo transported aboard vessels owned and/or managed by the Islamic Republic of Iran Shipping Lines of Tehran, Iran, an Iranian entity. The value of the payments was $329,954.
SGNY voluntarily self-disclosed the alleged violations and OFAC has determined that the alleged violations constituted a non-egregious case. The base penalty amount for the alleged violations was $164,977. The settlement amount reflects OFAC’s consideration of the following: SGNY improved its compliance program in response to the apparent violations by enhancing its internal controls related to screening trade finance transactions, and provided additional training to staff involved in processing such transactions; SGNY cooperated with OFAC’s investigation and resolution of this matter; and OFAC has not issued a penalty notice or Finding of Violation against SGNY in the five years preceding the transactions at issue.
Heritage Turbines, Inc., Hyannis, MA (Heritage) has remitted $4,500 to settle an alleged violation of the Sudanese Sanctions Regulations occurring on or about November 21, 2007. OFAC alleged that Heritage attempted to ship two fuel nozzle kits to Sudan without an OFAC license. The fuel nozzle kits were valued at a total of $2,000. OFAC determined that Heritage did not voluntarily self-disclose this matter to OFAC and the alleged violation constituted a non-egregious case. The base penalty amount for the alleged violation totaled $10,000. The settlement amount reflects the fact that Heritage had no history of sanctions violations and cooperated with OFAC’s investigation of this matter.
CBP Revises Customs Bond Forms 301 and 301A
08/16/11 11:48 AM Filed in: CBP
Effective August 16,
2011, CBP announced that the new CBP
Forms 301 (Customs Bond) and 301A (Addendum to CBP
Form 301) are available via the “Forms” link on
the Customs and Border Patrol’s (CBP) website.
Until January 1, 2012, the previous version of the CBP Form 301 (with an expiration date of 12/31/2010) or the revised CBP Form 301 (expiration date 3/31/2014) will be accepted by the CBP. Beginning January 1, 2012, CBP will only accept the revised version of the CBP Forms 301 and 301A (with an expiration date of 3/31/2014).
Until January 1, 2012, the previous version of the CBP Form 301 (with an expiration date of 12/31/2010) or the revised CBP Form 301 (expiration date 3/31/2014) will be accepted by the CBP. Beginning January 1, 2012, CBP will only accept the revised version of the CBP Forms 301 and 301A (with an expiration date of 3/31/2014).
DDTC Posts New Dual and Third Country National Guidance
The U.S.
Department of State’s Directorate of Defense Trade
Controls (DDTC) posted updated Guidelines for Implementing New
Dual National/Third-Country National Policy for
Agreements. On its website,
DDTC states:
The following guidance relates to the August 15, 2011 implementation of the new §126.18 rule on dual and third country nationals. The first document relates to the changes to agreements and will be incorporated into the new Guidelines as well. D-TCN AG Guidance Final.
The following notional implementation plan is a suggested approach, but is by no means the only way of complying with the rule and its core principle of preventing diversion of defense articles to unauthorized end-users and end-uses. Consistent with local national laws and programs for the control/protection of defense articles/technologies and consistent with the need for private entities to protect proprietary data, technology security plans should be designed with a comprehensive and individualized approach to securing sensitive data of all kinds with appropriate measures for physical security and personnel clearances. D-TCN Policy Implementation Final.
Additional guidance and clarification is provided in the attached Frequently Asked Questions relating to both of the above documents. D-TCN FAQs Final.
The following guidance relates to the August 15, 2011 implementation of the new §126.18 rule on dual and third country nationals. The first document relates to the changes to agreements and will be incorporated into the new Guidelines as well. D-TCN AG Guidance Final.
The following notional implementation plan is a suggested approach, but is by no means the only way of complying with the rule and its core principle of preventing diversion of defense articles to unauthorized end-users and end-uses. Consistent with local national laws and programs for the control/protection of defense articles/technologies and consistent with the need for private entities to protect proprietary data, technology security plans should be designed with a comprehensive and individualized approach to securing sensitive data of all kinds with appropriate measures for physical security and personnel clearances. D-TCN Policy Implementation Final.
Additional guidance and clarification is provided in the attached Frequently Asked Questions relating to both of the above documents. D-TCN FAQs Final.
Iranian National Sentenced to Four Years in Prison for Conspiracy to Illegally Export Prohibited Parts to Iran
On
August 15, 2011, U.S. Department of Justice
(DOJ) announced that Davoud
Baniameri, 38, an Iranian national who maintained
a residence and business in California was
sentenced to 51 months in federal prison after he
pleaded guilty in May to one count of conspiracy
to export goods and technology to Iran without a
license from the U.S. Department of Treasury in
violation of the International Emergency Economic
Powers Act (IEEPA) and one count of attempting to
export defense articles on the U.S. Munitions List
from the United States without a license or
approval from the U.S. Department of State in
violation of the Arms Export Control Act (AECA).
Baniameri was arrested on a criminal complaint on Sept. 9, 2009, and indicted in December 2009. A superseding indictment in July 2010 charged Baniameri and his two co-defendants Syed Majid Mousavi (Mousavi) and Andro Telemi (Telemi).
According to the plea agreement, sometime before October 10, 2008, Mousavi, based in Iran, contacted Baniameri in California and requested that he purchase and export radio test sets from the United States to Iran, through Dubai. Baniameri agreed and over the next few months negotiated the purchase of three Marconi radio test sets from a company in Illinois. Baniameri arranged for the radio test kits to be sent to him in California, where he shipped them to Dubai, for ultimate transshipment to Iran, without the required export license.
The plea agreement also states that, sometime before August 10, 2009, Mousavi contacted Baniameri and requested that he purchase and export to Iran via Dubai 10 connector adapters for the TOW and TOW2 missile systems. Baniameri agreed to purchase the items on behalf of Mousavi, and over the next few months, he admitted that he and his co-defendants attempted to purchase 10 connector adaptors from a company in Illinois, which unbeknownst to them, was in fact a company controlled by law enforcement. In September 2009, Baniameri admitted that he directed Telemi to take possession of the connector adaptors in California after having paid $9,450 to a representative of the Illinois company. To further facilitate the export of these items to Iran, Baniameri arranged to fly from the United States to Dubai and then from Dubai to Iran. Baniameri did not attempt to obtain a license from the U.S. government for the export of the connector adaptors. He was arrested before leaving the United States.
Baniameri was arrested on a criminal complaint on Sept. 9, 2009, and indicted in December 2009. A superseding indictment in July 2010 charged Baniameri and his two co-defendants Syed Majid Mousavi (Mousavi) and Andro Telemi (Telemi).
According to the plea agreement, sometime before October 10, 2008, Mousavi, based in Iran, contacted Baniameri in California and requested that he purchase and export radio test sets from the United States to Iran, through Dubai. Baniameri agreed and over the next few months negotiated the purchase of three Marconi radio test sets from a company in Illinois. Baniameri arranged for the radio test kits to be sent to him in California, where he shipped them to Dubai, for ultimate transshipment to Iran, without the required export license.
The plea agreement also states that, sometime before August 10, 2009, Mousavi contacted Baniameri and requested that he purchase and export to Iran via Dubai 10 connector adapters for the TOW and TOW2 missile systems. Baniameri agreed to purchase the items on behalf of Mousavi, and over the next few months, he admitted that he and his co-defendants attempted to purchase 10 connector adaptors from a company in Illinois, which unbeknownst to them, was in fact a company controlled by law enforcement. In September 2009, Baniameri admitted that he directed Telemi to take possession of the connector adaptors in California after having paid $9,450 to a representative of the Illinois company. To further facilitate the export of these items to Iran, Baniameri arranged to fly from the United States to Dubai and then from Dubai to Iran. Baniameri did not attempt to obtain a license from the U.S. government for the export of the connector adaptors. He was arrested before leaving the United States.
Singapore National Agrees to $100,000 Fine and 25-year Denial Order to Settle Export Conspiracy Charges
08/10/11 11:46 AM Filed in: Enforcement
| Export
On
August 10, 2011, Bureau of Industry and Security
(BIS) announced that Jianwei Ding
of Singapore has agreed to pay a $100,000 civil
penalty and have his export privileges denied for
a period of 25 years, to settle allegations that
he conspired to violate the Export Administration
Regulations (EAR) by knowingly and willfully
attempting to export carbon fiber to China for use
by the China Academy of Space Technology (CAST)
without the required export licenses.
The carbon fiber at issue is controlled by BIS for nuclear non-proliferation and national security reasons and was valued at approximately $315,000. According to BIS, from February 2007 through April 2008, Ding conspired with others to export two types of the carbon fiber to CAST in China, via Hong Kong and Singapore, without the required Department of Commerce license.
BIS alleges that BIS used his position as a manager of several Singapore-based companies to acquired items for CAST. In addition, He directed the activities of individuals and entities in the United States and Singapore to deceive U.S. suppliers and avoid detection by law enforcement, and provided the money used to obtain the controlled materials for export from the U.S. to China.
Ding received repeated warnings that an export license was required for the export of carbon fiber to China. After the material had been purchased and stored in New York as part of the scheme, Ding ultimately directed a co-conspirator by email to export some carbon fiber to Hong Kong and some to a company under Ding’s control in Singapore.
The items were stopped by Special Agents of BIS’s Office of Export Enforcement (OEE) before they could be exported. Ding subsequently was arrested when he attempted to enter the U.S. and is now incarcerated in a federal prison. Prior to settling BIS’s administrative charge, Ding entered a guilty plea to criminal charges of conspiracy to violate the EAR and was sentenced to a period of 46 months imprisonment.
The carbon fiber at issue is controlled by BIS for nuclear non-proliferation and national security reasons and was valued at approximately $315,000. According to BIS, from February 2007 through April 2008, Ding conspired with others to export two types of the carbon fiber to CAST in China, via Hong Kong and Singapore, without the required Department of Commerce license.
BIS alleges that BIS used his position as a manager of several Singapore-based companies to acquired items for CAST. In addition, He directed the activities of individuals and entities in the United States and Singapore to deceive U.S. suppliers and avoid detection by law enforcement, and provided the money used to obtain the controlled materials for export from the U.S. to China.
Ding received repeated warnings that an export license was required for the export of carbon fiber to China. After the material had been purchased and stored in New York as part of the scheme, Ding ultimately directed a co-conspirator by email to export some carbon fiber to Hong Kong and some to a company under Ding’s control in Singapore.
The items were stopped by Special Agents of BIS’s Office of Export Enforcement (OEE) before they could be exported. Ding subsequently was arrested when he attempted to enter the U.S. and is now incarcerated in a federal prison. Prior to settling BIS’s administrative charge, Ding entered a guilty plea to criminal charges of conspiracy to violate the EAR and was sentenced to a period of 46 months imprisonment.