2008 CBP Trade Symposium Materials Posted
10/31/08 12:39 AM Filed in: CBP
U.S. Customs and Border
Protection (CBP) hosted its 2008 Trade Symposium in Washington,
D.C. on October 29 - 31, 2008. CBP posted remarks
by CBP
Commissioner W. Ralph Basham and event materials on its website.
The agenda for the symposium is
also available.
Prosecution of Export Controls Violations Increased in the Past Year
10/28/08 12:35 AM Filed in: DOJ | Enforcement
On October 28, 2008, the
U.S. Department of Justice issued a statement in which it announced
that the National Export Enforcement Initiative (NEEI), a
multi-agency effort to combat illegal exports of restricted
military and dual-use technology, has led to criminal charges
against more that 145 defendants in the past fiscal year.
The NEEI was established in October 2007 and is designed to increase coordination among agencies involved in export controls, to enhance prosecution of these crimes, and to deter illicit exports. The 145 defendants in export controls and embargo cases in FY 2008 are an increase from the 110 charged in FY 2007. Charges brought in these cases include violations of the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), the export control provision of the Patriot Reauthorization Act (PRA), the Trading with the Enemy Act (TEA), and other statutes.
About 43 percent of the defendants charged in FY 2008 were charged in export control or embargo cases that involved munitions or other restricted technology that were bound for Iran or China. Iran ranked as the leading destination for illegal exports of restricted technology in the prosecutions brought in both FY 2007 and FY 2008.
The illegal exports bound for Iran have involved such items as missile guidance systems, Improvised Explosive Device (IED) components, military aircraft parts, and night vision systems. The illegal exports to China have involved rocket launch data, space shuttle technology, missile technology, naval warship data, Unmanned Aerial Vehicle or “drone” technology, thermal imaging systems, military night vision systems and other materials. A significant portion of the cases in FY 2007 and FY 2008 involved illegal exports to Mexico. These prosecutions primarily involved illegal exports of firearms and large quantities of ammunition destined for Mexico.
The most recent indictment under the NEEI was returned on October 28, 2008, against three individuals in the District Court of Minnesota, charging them with conspiring to illegally export to China controlled carbon-fiber material with applications in rockets, satellites, spacecraft, and uranium enrichment process.
The U.S. Military items, dual-use equipment, and technological expertise may not be exported without the U.S. government approval. Foreign procurement networks rarely target complete weapons systems, but often focus on components to obtain their own weapons systems.
The NEEI was established in October 2007 and is designed to increase coordination among agencies involved in export controls, to enhance prosecution of these crimes, and to deter illicit exports. The 145 defendants in export controls and embargo cases in FY 2008 are an increase from the 110 charged in FY 2007. Charges brought in these cases include violations of the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), the export control provision of the Patriot Reauthorization Act (PRA), the Trading with the Enemy Act (TEA), and other statutes.
About 43 percent of the defendants charged in FY 2008 were charged in export control or embargo cases that involved munitions or other restricted technology that were bound for Iran or China. Iran ranked as the leading destination for illegal exports of restricted technology in the prosecutions brought in both FY 2007 and FY 2008.
The illegal exports bound for Iran have involved such items as missile guidance systems, Improvised Explosive Device (IED) components, military aircraft parts, and night vision systems. The illegal exports to China have involved rocket launch data, space shuttle technology, missile technology, naval warship data, Unmanned Aerial Vehicle or “drone” technology, thermal imaging systems, military night vision systems and other materials. A significant portion of the cases in FY 2007 and FY 2008 involved illegal exports to Mexico. These prosecutions primarily involved illegal exports of firearms and large quantities of ammunition destined for Mexico.
The most recent indictment under the NEEI was returned on October 28, 2008, against three individuals in the District Court of Minnesota, charging them with conspiring to illegally export to China controlled carbon-fiber material with applications in rockets, satellites, spacecraft, and uranium enrichment process.
The U.S. Military items, dual-use equipment, and technological expertise may not be exported without the U.S. government approval. Foreign procurement networks rarely target complete weapons systems, but often focus on components to obtain their own weapons systems.
BIS to Hold Public Meeting on Proposed Intra-Company Transfer (ICT) Rule
10/21/08 10:01 PM Filed in: BIS | Rulemaking
On October 27, 2008, the Commerce
Department's Bureau of Industry and Security (BIS) will hold
a public
meeting to
discuss its proposed rule on the Intra-Company Transfer (ICT)
license exception. The meeting will be held at 9:00 am in Room 4830
of the Herbert C. Hoover Building in Washington, D.C. on October
27, 2008.
CBP Issues Guidelines For Assessment & Mitigation of Claims for Liquidated Damages
On
October 17, 2008, the U.S. Customs and Border Protection (CBP)
issued a
general notice announcing
guidelines for the assessment of liquidated damages claims as an
alternative sanction to counter late payment of entry duties and
fees.
Under the current procedure, if a bond principal fails to pay Periodic Monthly Payment Statement estimated duties in a timely fashion, CBP requires the bond principal to file entry summary documentation with estimated duties and fees attached before its merchandise may be released from any CBP port.
Under the new guidelines, when a Periodic Monthly Statement estimated duty payment is not paid in full on or before the 15th of the working day after the month in which the entry or release of the merchandise has occurred, CBP has the authority to jointly and severally assess liquidated damages against the bond principal and surety.
Before issuing any claims for liquidated damages, CBP will notify the statement filer electronically or by paper notice on or before the first day of the month following the month that the payment was due that those estimated duties and fees have not been paid. The statement filer will have two working days from the date of notification to pay the estimated duties and fees or correct the situation. If the late fees are not paid after the two-working day period, the CBP will issue a liquidated damages claim to bond principals and sureties, jointly and severally, for non-payment of the estimated duties and fees.
If the estimated duties and fees are paid in an untimely manner, CBP may issue a liquidated damages claim or a broker penalty claim. Payment of the estimated duties and fees within the two-working day period does not relieve any charged party from incurring a claim for late payment of those estimated duties and fees.
Furthermore, CBP may exercise its authority to suspend any bond principal (the importer of record) from participating in the Periodic Monthly Payment Statement test and require that the bond principal pay estimated duties and fees on an entry-by-entry basis. CBP may also exercise its authority to require the bond principal to file entry summary documentation with estimated duties and fees attached before merchandise is released from any CBP port.
Under the current procedure, if a bond principal fails to pay Periodic Monthly Payment Statement estimated duties in a timely fashion, CBP requires the bond principal to file entry summary documentation with estimated duties and fees attached before its merchandise may be released from any CBP port.
Under the new guidelines, when a Periodic Monthly Statement estimated duty payment is not paid in full on or before the 15th of the working day after the month in which the entry or release of the merchandise has occurred, CBP has the authority to jointly and severally assess liquidated damages against the bond principal and surety.
Before issuing any claims for liquidated damages, CBP will notify the statement filer electronically or by paper notice on or before the first day of the month following the month that the payment was due that those estimated duties and fees have not been paid. The statement filer will have two working days from the date of notification to pay the estimated duties and fees or correct the situation. If the late fees are not paid after the two-working day period, the CBP will issue a liquidated damages claim to bond principals and sureties, jointly and severally, for non-payment of the estimated duties and fees.
If the estimated duties and fees are paid in an untimely manner, CBP may issue a liquidated damages claim or a broker penalty claim. Payment of the estimated duties and fees within the two-working day period does not relieve any charged party from incurring a claim for late payment of those estimated duties and fees.
Furthermore, CBP may exercise its authority to suspend any bond principal (the importer of record) from participating in the Periodic Monthly Payment Statement test and require that the bond principal pay estimated duties and fees on an entry-by-entry basis. CBP may also exercise its authority to require the bond principal to file entry summary documentation with estimated duties and fees attached before merchandise is released from any CBP port.
Retroactive Filing of First Sale Declaration Extended
10/15/08 11:50 PM Filed in: Customs | First Sale
On
October 15, 2008, the U.S. Customs and Border Protection (CBP)
issued a notice to extend the last filing date for retroactive
First Sale declarations until October 17, 2008, which was effective
August 20, 2008.
The First Sale declaration requires that importers of merchandise enter an “F” next to the declared value at the line level on CBP Form 7501, or the electronic filing equivalent, when the declared transaction value is based on the First Sale. Under the First Sale method, the value of imported merchandise is determined on the basis of the earlier than the last sale prior to the introduction of the merchandise into the U.S.
Due to the short notice of the implementation of the First Sale declaration requirement, CBP allowed the trade a 30-day grace period to comply with the first sale requirements, covering entries filed between August 20, 2008 and September 19, 2008. Importers were allowed to submit spreadsheets listing entry summary lines that needed an “F” indicator added or removed to the ports of entry where the entry summaries were filed. A sample spreadsheet can be found here.
These corrections, originally to be submitted to CBP no later than September 26, 2008, can now be submitted to CBP until October 17, 2008. The period covered remains August 20, 2008, through September 19, 2008.
The First Sale declaration requires that importers of merchandise enter an “F” next to the declared value at the line level on CBP Form 7501, or the electronic filing equivalent, when the declared transaction value is based on the First Sale. Under the First Sale method, the value of imported merchandise is determined on the basis of the earlier than the last sale prior to the introduction of the merchandise into the U.S.
Due to the short notice of the implementation of the First Sale declaration requirement, CBP allowed the trade a 30-day grace period to comply with the first sale requirements, covering entries filed between August 20, 2008 and September 19, 2008. Importers were allowed to submit spreadsheets listing entry summary lines that needed an “F” indicator added or removed to the ports of entry where the entry summaries were filed. A sample spreadsheet can be found here.
These corrections, originally to be submitted to CBP no later than September 26, 2008, can now be submitted to CBP until October 17, 2008. The period covered remains August 20, 2008, through September 19, 2008.
BIS Implements Wassenaar Arrangement Changes to Export Administration Regulations
On
October 14, 2008, the U.S. Department of Commerce’s Bureau of
Industry and Security (BIS) issued
a final rule in
the Federal Register revising the Export Administration Regulations
(EAR) to implement changes made to the Wassenaar Arrangement’s List
of Dual Use Goods and Technologies and Munitions (Wassenaar
List).
The Wassenaar List is maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies (Wassenaar Arrangement).
This final rule revises the EAR by amending certain entries that are controlled for national security reasons. Specifically, entries in Categories 1, 2, 3, 5 Part I (telecommunications), Category 5 Part II (information security), and Categories 6, 7, and 9 were amended, and new entries were added to the Commerce Control List (CCL).
The final rule also increases unilateral U.S. export controls on certain items to make them consistent with the amendments made to implement the Wassenaar Arrangement’s decisions.
Although this rule is effective immediately, shipments that were on dock prepared for loading or those that were en route to a port of export on October 14, 2008, may proceed to that destination under the previous license requirements as long as they are exported from the United States before December 15, 2008. Items not exported before the December 15, 2008 deadline will require a license under the new regulations.
The Wassenaar List is maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies (Wassenaar Arrangement).
This final rule revises the EAR by amending certain entries that are controlled for national security reasons. Specifically, entries in Categories 1, 2, 3, 5 Part I (telecommunications), Category 5 Part II (information security), and Categories 6, 7, and 9 were amended, and new entries were added to the Commerce Control List (CCL).
The final rule also increases unilateral U.S. export controls on certain items to make them consistent with the amendments made to implement the Wassenaar Arrangement’s decisions.
Although this rule is effective immediately, shipments that were on dock prepared for loading or those that were en route to a port of export on October 14, 2008, may proceed to that destination under the previous license requirements as long as they are exported from the United States before December 15, 2008. Items not exported before the December 15, 2008 deadline will require a license under the new regulations.
North Korea Removed from State Sponsors of Terrorism List
10/14/08 11:41 PM Filed in: North Korea
On
October 14, 2008, the U.S. Department of State
announced that
the U.S. has removed North Korea from its list of State Sponsors of
Terrorism after the North Korean government agreed to resume
dismantling of its nuclear facilities at Yongbyon.
On October 13, 2008, North Korea lifted its ban on United Nations (UN) inspections of the Yongbyon plutonium processing plant it used to develop nuclear test explosion. The core discharge activities at the nuclear reactor were to resume on October 14, 2008.
North Korea had been on the State Sponsors of Terrorism list since 1987 after the bombing of a South Korean passenger jet. However, the country remains subject to numerous other sanctions that were a result of North Korea’s 2006 nuclear test, its proliferation activities with other nations, its human rights violations and its status as a communist state.
On October 13, 2008, North Korea lifted its ban on United Nations (UN) inspections of the Yongbyon plutonium processing plant it used to develop nuclear test explosion. The core discharge activities at the nuclear reactor were to resume on October 14, 2008.
North Korea had been on the State Sponsors of Terrorism list since 1987 after the bombing of a South Korean passenger jet. However, the country remains subject to numerous other sanctions that were a result of North Korea’s 2006 nuclear test, its proliferation activities with other nations, its human rights violations and its status as a communist state.
State Amends ITAR to Include Eritrea on Prohibited Exports List
On
October 6, 2008, the U.S. Department of State published a
final rule amending
the International Traffic in Arms Regulations (ITAR) with respect
to Eritrea. The U.S. Department of State has added Eritrea to its
regulations on prohibited exports and sales to certain countries as
a result of Eritrea’s designation as country not cooperating fully
with antiterrorism efforts.
This rule is effective October 3, 2008.
This rule is effective October 3, 2008.
An Update from BIS Update 2008
The Department of Commerce's
Bureau of Industry and Security (BIS) held its annual update
conference in Washington, DC from September 29 - October 1, 2008.
Global Trade Expertise were there and here is a short summary of
key highlights from the event:
- BIS videotaped all of the sessions and plans to post the videos on their website in about 4 weeks.
- BIS announced five regulatory initiatives: (1) Expanding the Entity List; (2) Comprehensive Review of the Commerce Control List; (3) Revisions to the Encryption Regulations; (4) Revised De Minimis Regulations; and (5) a proposed rule will be published next week outlining the Intra-Company Transfer License Exception (ICT), for which a 45-day comment period will follow.
- BIS has expanded the foreign availability criteria beyond national security controls.
- Based on the representations by BIS, the Intra-Company Transfer License Exception (ICT) will require prior approval, which will be similar to the license application process; periodic reporting will be required; and only certain technology for deemed exports will be covered by the ICT license exception.
BIS Announces Five Regulatory Changes
On October 1, 2008, the Department
of Commerce's Bureau of Industry and Security (BIS) announced five
regulatory updates:
- Proposed rule to amend the Export Administration Regulations (EAR) to establish a new license exception entitled "Intra-Company Transfer (ICT)." (To be published in the Federal Register)
- Interim final rule to amend the EAR to make the treatment of encryption items more consistent with the treatment of other items subject to the EAR. (To be published in the Federal Register)
- Final rule to revise the EAR to implement changes agreed upon in the December 2007 Wassenaar Arrangement Plenary Meeting and the provisions regarding solar cells agreed upon in the December 2006 Plenary Meeting. (To be published in the Federal Register)
- Final rule to amend the EAR as a result of a systematic review of the Commerce Control List. (To be published in the Federal Register)
- Interim rule to amend the EAR to change the de minimis calculation for foreign produced hardware that is bundled with U.S.-origin software. (Published in today’s Federal Register)