Jun 2011
DDTC Seeks Comments on Export/Import Licenses, Agreements, Reports, and Record Maintenance Requirements
On
June 30, 2011, the Department of State posted
a notice in the Federal
Register seeking Office of Management and Budget
(OMB) approval for the information collection
requirements for the following:
Comments are due to the Department of State within 60 days from June 30, 2011 or by August 29, 2011.
- DSP-5:
Application/License for Permanent Export of
Unclassified Defense Articles and Related
Unclassified Technical Data;
• DSP-61: Application/License for Temporary Import of Unclassified Defense Articles;
• DSP-73: Application/License for Temporary Export of Unclassified Defense Articles;
• DSP-83: Non-Transfer and Use Certificate
• DSP-85: Application/License for Permanent/Temporary Export or Temporary Import of Classified Defense Articles and Classified Technical Data;
• DSP-94: Authority to Export Defense Articles and Services Sold under the Foreign Military Sales (FMS) Program;
• DSP-6, DSP-62, DSP-74, DSP-84, DSP-119: Application for Amendment to License for Export or Import of Classified or Unclassified Defense Articles and Related Technical Data;
• Request for Approval of Manufacturing License Agreements, Technical Assistance Agreements, and Other Agreements;
• Statement of Political Contributions, Fees, or Commissions in Connection with the Sale of Defense Articles or Services; and
• Maintenance of Records by Registrant.
Comments are due to the Department of State within 60 days from June 30, 2011 or by August 29, 2011.
BIS Publishes Changes to ECCN 4A003 and Revisions to License Exception APP
06/24/11 09:35 PM Filed in: BIS | Rulemaking
On
June 24, 2011, the Bureau of Industry and Security
(BIS) published a final rule revising the
Export Administration Regulations (EAR) to
implement changes made to the Wassenaar
Arrangement’s List of Dual Use Goods and
Technologies (Wassenaar List) 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, or WA) at
the December 2009 WA Plenary Meeting (the
Plenary) that relate to Export Control
Classification Number (ECCN) 4A003.
This rule also makes corresponding revisions to License Exception APP, the de minimis rule, and post shipment verification reporting requirements in the EAR.
Additionally, this rule moves Albania and Croatia from Computer Tier 3 to Computer Tier 1 in the section of the EAR dedicated to export control requirements for high performance computers. The Administration believes Albania and Croatia are eligible to be treated as Computer Tier 1 countries because their governments have made the necessary reforms to allow the countries to join the North Atlantic Treaty Organization, and have adopted accepted global standards in export controls.
This rule is effective on June 24, 2011.
This rule also makes corresponding revisions to License Exception APP, the de minimis rule, and post shipment verification reporting requirements in the EAR.
Additionally, this rule moves Albania and Croatia from Computer Tier 3 to Computer Tier 1 in the section of the EAR dedicated to export control requirements for high performance computers. The Administration believes Albania and Croatia are eligible to be treated as Computer Tier 1 countries because their governments have made the necessary reforms to allow the countries to join the North Atlantic Treaty Organization, and have adopted accepted global standards in export controls.
This rule is effective on June 24, 2011.
ITA Seeks Comments Regarding Cooperation between the US and EU
On
June 23, 2011, U.S. Department of Commerce
International Trade Commission (ITA)
reopened the comment
period regarding regulatory cooperation
activities between the U.S. and the EU that
would help eliminate to reduce unnecessary
divergences in regulation and in standards that
impede U.S. exports.
ITA seeks comments on the following possible types of cooperative regulatory activities between the United States and the European Union: Information-sharing agreements; technical assistance; memoranda of understanding, mutual recognition agreements; collaboration between regulators before initiating rulemaking proceedings; agreements to align particular regulatory measures; equivalency arrangements; and accreditation of testing laboratories or other conformity assessment bodies.
These comments will serve as a basis for discussion with the European Union on regulatory cooperation activities to undertake which will support the President's National Export Initiative and serve as a basis for discussion within the U.S.— EU High-Level Regulatory Cooperation Forum.
Comments are due August 8, 2011.
ITA seeks comments on the following possible types of cooperative regulatory activities between the United States and the European Union: Information-sharing agreements; technical assistance; memoranda of understanding, mutual recognition agreements; collaboration between regulators before initiating rulemaking proceedings; agreements to align particular regulatory measures; equivalency arrangements; and accreditation of testing laboratories or other conformity assessment bodies.
These comments will serve as a basis for discussion with the European Union on regulatory cooperation activities to undertake which will support the President's National Export Initiative and serve as a basis for discussion within the U.S.— EU High-Level Regulatory Cooperation Forum.
Comments are due August 8, 2011.
Nationals of Four Countries Indicted for Supplying Iran with U.S. Military Aircraft Components
06/23/11 09:06 PM Filed in: Export
| Enforcement
On
June 23, 2011, the U.S. Department of
Justice announced that seven
individuals and five companies based in the
U.S., France, the UAE, and Iran have been
indicted in the Middle District of Georgia for
their alleged roles in a conspiracy to illegally
export military components for fighter jets and
attack helicopters from the U.S. to Iran.
Specifically, eight of the defendants were
charged with conspiring to violate and violating
the Arms Export Control Act (AECA), the
International Emergency Economic Powers Act
(IEEPA) and the Iranian Transactions
Regulations, as well as conspiracy to defraud
the United States, money laundering and false
statement violations.
One of the defendants and his company were sentenced on June 22, 2011, with the individual receiving almost five years in prison. Another defendant and his company have admitted their illegal conduct and also pleaded guilty in the investigation.
The indictment alleges that the defendants conspired to export components for attack helicopters and fighter jets to Iran without the required U.S. export licenses. These components included military parts for the Bell AH-1 attack helicopter, the UH-1 Huey attack helicopter, as well as the F-5 and F-4 fighter jets.
One of the defendants and his company in the U.A.E. are alleged to have placed orders and purchased military aircraft parts, including those for the Bell AH-1 attack helicopter, from a defendant and his company in the U.S., who then exported the aircraft parts to the U.A.E.
One defendant in Illinois is alleged to have placed orders and purchased U.S. aircraft parts from another defendant in Georgia on behalf of an Iranian national and his company in Iran. The charges specify that the defendant in Georgia and other defendants exported the aircraft parts to Iran via defendants in France.
A conspiracy charge carries a maximum penalty of five years in prison. A maximum penalty for an AECA violation is 20 years in prison, and an IEEPA violation carries a maximum penalty of 20 years. Money laundering carries a maximum 20 years in prison, while making false statements carries a maximum of five years in prison.
One of the defendants and his company were sentenced on June 22, 2011, with the individual receiving almost five years in prison. Another defendant and his company have admitted their illegal conduct and also pleaded guilty in the investigation.
The indictment alleges that the defendants conspired to export components for attack helicopters and fighter jets to Iran without the required U.S. export licenses. These components included military parts for the Bell AH-1 attack helicopter, the UH-1 Huey attack helicopter, as well as the F-5 and F-4 fighter jets.
One of the defendants and his company in the U.A.E. are alleged to have placed orders and purchased military aircraft parts, including those for the Bell AH-1 attack helicopter, from a defendant and his company in the U.S., who then exported the aircraft parts to the U.A.E.
One defendant in Illinois is alleged to have placed orders and purchased U.S. aircraft parts from another defendant in Georgia on behalf of an Iranian national and his company in Iran. The charges specify that the defendant in Georgia and other defendants exported the aircraft parts to Iran via defendants in France.
A conspiracy charge carries a maximum penalty of five years in prison. A maximum penalty for an AECA violation is 20 years in prison, and an IEEPA violation carries a maximum penalty of 20 years. Money laundering carries a maximum 20 years in prison, while making false statements carries a maximum of five years in prison.
CBP Issues Instructions re: Post-Importation Preference Program Claims with a Classification Change
On
June 23, 2011, U.S. Customs and Border Protection
(CBP) issued instructions
for
the trade community regarding post-importation
preference program claims under 19 U.S.C. §
1520(d) that involve a tariff classification
change.
The instructions provide that if a preference claim is not made at the time of importation, post-importation preference claims can be made within one year from the date of importation. This statutory provision does not allow for other changes and/or amendments to an entry summary, therefore importers and brokers must use existing regulatory provisions to make corrections to an entry summary.
CBP instructions also state that, “when a post-importation preference program claim under 19 USC 1520(d) is presented on an unliquidated entry which also requires a Harmonized Tariff Schedule of the United States (HTSUS) classification change, the tariff change should be presented as a Post Entry Amendment (PEA) or Post Summary Correction (PSC) in the Automated Commercial Environment (ACE), simultaneously with the 520(d) submission.”
PSC functionality was deployed in ACE effective June 4, 2011. Therefore, 520(d) claims should reference any PSC filed in ACE to ensure any classification changes are taken into account prior to the processing of the 520(d). For ACE entry summaries importers or filers should also add language to the PSC Filing Explanation Record that confirms the filing of the 520(d) claim.
When a post-importation preference program claim under 19 USC 1520(d) is presented on a liquidated entry which also requires a HTSUS classification change, the tariff change should be presented as a 19 USC 1514, protest, simultaneously with the 520(d) submission.”
The instructions provide that if a preference claim is not made at the time of importation, post-importation preference claims can be made within one year from the date of importation. This statutory provision does not allow for other changes and/or amendments to an entry summary, therefore importers and brokers must use existing regulatory provisions to make corrections to an entry summary.
CBP instructions also state that, “when a post-importation preference program claim under 19 USC 1520(d) is presented on an unliquidated entry which also requires a Harmonized Tariff Schedule of the United States (HTSUS) classification change, the tariff change should be presented as a Post Entry Amendment (PEA) or Post Summary Correction (PSC) in the Automated Commercial Environment (ACE), simultaneously with the 520(d) submission.”
PSC functionality was deployed in ACE effective June 4, 2011. Therefore, 520(d) claims should reference any PSC filed in ACE to ensure any classification changes are taken into account prior to the processing of the 520(d). For ACE entry summaries importers or filers should also add language to the PSC Filing Explanation Record that confirms the filing of the 520(d) claim.
When a post-importation preference program claim under 19 USC 1520(d) is presented on a liquidated entry which also requires a HTSUS classification change, the tariff change should be presented as a 19 USC 1514, protest, simultaneously with the 520(d) submission.”
BIS Implements Strategic Trade Authorization License Exception
On
June 16, 2011, the Bureau of Industry and Security
(BIS) posted a final rule in the Federal
Register that adds the Strategic Trade
Authorization (STA) license exception to the
Export Administrations Regulations (EAR). STA
authorizes the export, reexport, and transfer
(in- country) of specified items to destinations
that pose relatively low risk that those items
will be used for a purpose that licensing
requirements were designed to prevent.
To use the STA license exception, parties to the transaction must exchange notifications and statements designed to provide assurance against diversion of such items to other destinations. The exception is only relevant to exports, reexports, and transfers for which a license is required under the EAR. Thus, if the EAR do not impose an obligation to apply for and receive a license before exporting, reexporting, or transferring an item subject to the EAR, STA is not relevant to the transaction.
STA license exception is expected to facilitate exports between the U.S. and partner countries while enhancing the competitiveness of U.S.’s key industrial base sectors.
The final rule is effective June 16, 2011.
To use the STA license exception, parties to the transaction must exchange notifications and statements designed to provide assurance against diversion of such items to other destinations. The exception is only relevant to exports, reexports, and transfers for which a license is required under the EAR. Thus, if the EAR do not impose an obligation to apply for and receive a license before exporting, reexporting, or transferring an item subject to the EAR, STA is not relevant to the transaction.
STA license exception is expected to facilitate exports between the U.S. and partner countries while enhancing the competitiveness of U.S.’s key industrial base sectors.
The final rule is effective June 16, 2011.
CBP E-Allegation Leads to Criminal Conviction
On
June 15, 2011, U.S. Customs and Border Protection’s
(CBP) announced that analysts
of its trade fraud targeting unit, responding to
a complaint filed through E-Allegations, CBP’s
online trade violation reporting system,
uncovered a transshipment scheme to avoid paying
antidumping duties on imported steel-wire
hangers. The scheme was identified in December
2009 after analyzing a commercial allegation.
Analysts pursued the lead, piecing together information about a Mexican manufacturer who appeared to be involved in the alleged illegal scheme where the hangers were shipped form China to the U.S., sent to Mexico, and then imported back into the U.S. as products of Mexico. The 55-count indictment in the Southern District of California included conspiracy, entry of goods by means of false statements, false statement, wire fraud, and money laundering.
The filing resulted in the sentencing of the responsible individual from Tijuana, Mexico, to 70 months in federal prison and an order to pay more than $3 million in restitution to the U.S. government as well as a forfeiture of more than $4 million in proceeds gained through the illegal transshipment scheme.
Analysts pursued the lead, piecing together information about a Mexican manufacturer who appeared to be involved in the alleged illegal scheme where the hangers were shipped form China to the U.S., sent to Mexico, and then imported back into the U.S. as products of Mexico. The 55-count indictment in the Southern District of California included conspiracy, entry of goods by means of false statements, false statement, wire fraud, and money laundering.
The filing resulted in the sentencing of the responsible individual from Tijuana, Mexico, to 70 months in federal prison and an order to pay more than $3 million in restitution to the U.S. government as well as a forfeiture of more than $4 million in proceeds gained through the illegal transshipment scheme.
BIS Revokes the Suspension of a $2M Penalty and Accelerates Payment of Outstanding $5.2 Penalty for Balli Group
On
June 13, 2011, the Bureau of Industry and Security
(BIS) announced that in
response to a May 20, 2011 order revoking the
suspension of a $2M civil penalty and invoking
the acceleration clause for the two remaining
$2.6M installment payments, Balli Group PLC and
Balli Aviation paid a total of $7.2M in civil
penalties.
BIS and the Treasury Department’s Office of Foreign Assets Control (OFAC) had entered into an agreement with Balli Group PLC and Balli Aviation Ltd. (collectively “Balli&rdquo
in February 2010, with civil
penalties totaling $15M, originally suspending
$2M, regarding allegations that Balli
conspired to export or reexport commercial
aircraft from the United States to Iran in
violation of the Export Administration
Regulations (EAR) and the Iranian Transactions
Regulations (ITR). This case represented the
largest civil penalty ever imposed by BIS.
In his revocation order, BIS Assistant Secretary Mills stated: "[Balli] failed in my judgment to arrange its business and financial affairs in such a manner as to ensure compliance with its civil penalty payment obligations – obligations that were imposed, moreover, as a result of Balli’s egregious conduct that violated U.S. export control laws and provided support to Iran and its proliferation efforts."
BIS previously had charged that between 2005 and 2008 Balli conspired with an Iranian airline to export or reexport U.S.-origin Boeing 747 aircraft to Iran without the required U.S. Government authorization. Specifically, three of the aircraft were flying on routes in and out of Iran using Iranian flight numbers while under the operational control of the Iranian airline. Balli allowed the aircraft to continue to be operated contrary to U.S. export control laws, despite warnings from BIS and the manufacturer. Additionally, Balli misled and concealed information from BIS regarding the role the Iranian airline played in the acquisition and financing of the aircraft via funds from the Iranian Foreign Exchange Reserve Fund.
BIS also had charged that from July 2008, through September 2008, Balli took actions prohibited by a BIS order temporarily denying its export privileges. Balli conducted negotiations with persons, including another person subject to the Temporary Denial Order, concerning financing, receiving and/or using three additional U.S.-origin aircraft that had been exported from the United States and are subject to the EAR.
BIS and the Treasury Department’s Office of Foreign Assets Control (OFAC) had entered into an agreement with Balli Group PLC and Balli Aviation Ltd. (collectively “Balli&rdquo
in February 2010, with civil
penalties totaling $15M, originally suspending
$2M, regarding allegations that Balli
conspired to export or reexport commercial
aircraft from the United States to Iran in
violation of the Export Administration
Regulations (EAR) and the Iranian Transactions
Regulations (ITR). This case represented the
largest civil penalty ever imposed by BIS.
In his revocation order, BIS Assistant Secretary Mills stated: "[Balli] failed in my judgment to arrange its business and financial affairs in such a manner as to ensure compliance with its civil penalty payment obligations – obligations that were imposed, moreover, as a result of Balli’s egregious conduct that violated U.S. export control laws and provided support to Iran and its proliferation efforts."
BIS previously had charged that between 2005 and 2008 Balli conspired with an Iranian airline to export or reexport U.S.-origin Boeing 747 aircraft to Iran without the required U.S. Government authorization. Specifically, three of the aircraft were flying on routes in and out of Iran using Iranian flight numbers while under the operational control of the Iranian airline. Balli allowed the aircraft to continue to be operated contrary to U.S. export control laws, despite warnings from BIS and the manufacturer. Additionally, Balli misled and concealed information from BIS regarding the role the Iranian airline played in the acquisition and financing of the aircraft via funds from the Iranian Foreign Exchange Reserve Fund.
BIS also had charged that from July 2008, through September 2008, Balli took actions prohibited by a BIS order temporarily denying its export privileges. Balli conducted negotiations with persons, including another person subject to the Temporary Denial Order, concerning financing, receiving and/or using three additional U.S.-origin aircraft that had been exported from the United States and are subject to the EAR.
CBP Seeks Comments on Petition for Remission or Mitigation of Customs Forfeitures and Penalties Incurred
On
June 13, 2011, the U.S. Customs and Border
Protection (CBP) issued a notice in the Federal
Register seeking comments on an information
collection requirement concerning the Petition
for Remission or Mitigation of Forfeitures and
Penalties Incurred.
CBP Form 4609, the Petition for Remission of Forfeitures and Penalties Incurred, is completed and filed with the CBP Port Director by individuals who have been found to be in violation of one or more provisions of the Tariff Act of 1930, or other laws administered by the CBP. Persons who violate the Tariff Act are entitled to file a petition seeking mitigation of any statutory penalty imposed or remission of a statutory forfeiture incurred. This petition is submitted on CBP Form 4609 and used by CBP personnel as
a basis for granting relief from forfeiture or penalty.
Comments are due by August 12, 2011.
CBP Form 4609, the Petition for Remission of Forfeitures and Penalties Incurred, is completed and filed with the CBP Port Director by individuals who have been found to be in violation of one or more provisions of the Tariff Act of 1930, or other laws administered by the CBP. Persons who violate the Tariff Act are entitled to file a petition seeking mitigation of any statutory penalty imposed or remission of a statutory forfeiture incurred. This petition is submitted on CBP Form 4609 and used by CBP personnel as
a basis for granting relief from forfeiture or penalty.
Comments are due by August 12, 2011.
DDTC Posts a New Commodity Jurisdiction Request Form
The
U.S. Department of State Directorate of Defense
Trade Controls (DDTC) announced that effective June
3, 2011, applicants must download and use
the updated DS-4074 Version
1.1. All prior
versions of the form will be rejected.
CBP Will No Longer Mail Copies of Approved Bond Submissions to the Bond Principals
Effective June 1,
2011, U.S. Customs and Border Protection’s (CBP)
Revenue Division will no longer mail copies of approved
bond submissions to bond principals via U.S.
mail. Principals
can confirm the approval of all continuous bond
submissions including new bonds, riders, and
terminations via ACE portal account access. The
trade community can also validate continuous
bond approvals using other electronic methods
such as the Automated Broker Interface and
Automated Surety Interface.
The Revenue Division will provide copies of recently approved continuous bond submissions at no charge if a valid request is received from a principal associated with the bond as follows:
The Revenue Division will only provide requested copies as an email ‘reply’ to received requests which fully satisfy all of the above conditions. In addition to the above, principals continue to have the option of obtaining copies of continuous bond paperwork via the Freedom of Information Act (FOIA) process at any time.
The Revenue Division will provide copies of recently approved continuous bond submissions at no charge if a valid request is received from a principal associated with the bond as follows:
- Requests must be
made by the principal via email
to cbp.bondquestions@dhs.gov.
• The request must be received within 30 calendar days of the bond transaction approval. Requests received after 30 calendar days may use the Freedom of Information Act (FOIA) process.
• The request must identify the specific documentation being requested, such as a copy of a new bond, rider, or termination paperwork. The request must reference the applicable 9-digit CBP bond number and the principal’s importer number.
• These email requests must use an email subject line that begins with the words “Bond Copy Request”.
The Revenue Division will only provide requested copies as an email ‘reply’ to received requests which fully satisfy all of the above conditions. In addition to the above, principals continue to have the option of obtaining copies of continuous bond paperwork via the Freedom of Information Act (FOIA) process at any time.