The Rotterdam Rules, which are currently signed by 21 countries, define the rights of obligation of parties engaged in maritime transportation of goods. Considering that 80% of world trade is conducted by sea, the Rotterdam Rules are intended to facilitate international trade by making the underlying contracts and documentation more efficient.
The U.S. signed the Rotterdam Rules on September 23, 2009. The meeting will be held on December 9, 2009 in Washington, DC. Further details can be found in the Federal Register notice.
On November 25, 2009, the DDTC also published a proposed rule to amend Section 125.9 of the ITAR regarding an exemption for technical data, to clarify that the exemption covers technical data, including classified information, regardless of media or format, sent or taken by a U.S. person who is an employee of a U.S. corporation or a U.S. Government agency to a U.S. person employed by that U.S. corporation or to a U.S. Government agency outside the United States. DDTC will accept comments on this proposed rule until January 25, 2010.
Gibson Guitar, heralded in the past for its pioneering efforts to use sustainable wood products, is the first U.S. company to face prosecution under the revised Lacey Act – a new federal law banning trade in articles made of or containing specifically designated wood. The company issued a statement in which it proclaims full cooperation with the U.S. Fish & Wildlife Service investigation into the wood procurement.
The Lacey Act was expanded by the 2008 Farm Bill (the Food, Conservation, and Energy Act of 2008) to include timber and wood products, making the U.S. the first in the world to regulate trade in plants. Among other things, the Lacey Act requires an import declaration for certain plants and plant products, including the plant’s geographical origin and biological genus.
Penalties for violations of the Lacey Act range from a forfeiture of goods to fines up to $500,000 and even imprisonment if the company is found to have knowingly engaged in trade of illegally sourced wood.
The agenda for the Symposium is available here.
This rule has been initially published as an interim final rule with request for comments on September 8, 2008. In response to comments received, OFAC made several changes to the final version of the rule:
- The definition
of “voluntary self-disclosure” was amended to
clarify that when a third party required to
report an apparent violation fails to do so, but
a person that has committed an apparent violation
and is subject to any of the OFAC sanctions
("Subject Person") reports the violation to OFAC,
the notification will still be considered a
voluntary self-disclosure. However, in those
cases where the third party does notify OFAC
before a final enforcement response to the
violation, a Subject Person’s notification will
not be considered a voluntary self-disclosure
even if it precedes the third party’s
- The definition
of “voluntary self-disclosure” was also amended
to clarify that a self-initiated notification to
OFAC made at the same time as another government
agency learns of the apparent violation (either
through disclosure or otherwise) does qualify as
voluntary self-disclosure if the other aspects of
the definitions are met. This change is intended
to cover self-disclosures made to OFAC and
another government agency simultaneously.
- Similarly, if a
Subject Person notifies another government agency
of an apparent violation as required by that
agency, the notification may be considered a
voluntary self-disclosure by OFAC, based on a
- On the requested
clarification on Suspicious Activity Report (SAR)
filing, OFAC responded that the filing of a SAR
does not itself preclude a determination of
voluntary self-disclosure for a subsequent
self-disclosure to OFAC of the same transaction,
unless OFAC learns of the apparent violation
prior to the self-disclosure filing.
- Regarding party
cooperation and tolling agreements, the final
rule eliminates any reference to statute of
limitations waivers. Furthermore, with respect to
whether a Subject Person’s refusal to enter into
a tolling agreement should be considered an
aggravating factor in assessing the person’s
cooperation, the final rules states that a
Subject Person’s unwillingness to enter into a
tolling agreement will not be considered against
the Subject Person. On the other hand, if a
Subject Person is willing to enter into a tolling
agreement, it may be considered a mitigating
- For the purposes
of calculating a penalty in cases involving a set
of “substantially similar violations,” OFAC
clarified that the penalty reduction of up to 25%
for a Subject Person’s first violation will
generally apply to the entire set of
“substantially similar violations” and not solely
to the first of those violations.
- OFAC also
amended the final rule to make clear that
determination of appropriate enforcement response
is not limited to prior formal determinations of
sanctions violations. Thus, prior cautionary
letters, warning letters, and evaluative letters
will be considered in determining OFAC sanctions,
if any. This particular amendment specifies that
consideration of a Subject Person’s sanction
history will be limited to the five years
preceding the transaction giving rise to the
- On the issue of attorney-client privilege or the attorney work product doctrine, the final rule was amended by eliminating the reference to “failure to furnish the requested information” and instead referring to a “failure to comply” with a request for information. The language is intended to specify that OFAC will not seek penalties in cases where responsive information is withheld on the basis of apparently applicable and properly invoked privilege.
- The Enforcement
Guidelines also clarify the base penalty amounts
for transactions within the scope of the Trading
With the Enemy Act (TWEA), which are capped at
the $65,000. In non-egregious cases involving
apparent violations of TWEA, when the apparent
violation is disclosed through a voluntary
self-disclosure, the civil penalty is capped at
the $32,500. Non-egregious violations of TWEA not
voluntarily disclosed are capped at the $65,000.
- The penalty for
failure to maintain records in conformance with
the requirements of OFAC regulations is set at a
maximum of $50,000.
More detailed discussion of the amendments and public comments can be found in the final rule, published as Appendix A to Part 501 – Economic Sanctions Enforcement.
Monarch has been engaged in imports and exports of military and commercial aircraft components for over 20 years.
Wang-Woodford was arrested at San Francisco International Airport in December 2007 after arriving on a flight from Hong Kong and has remained incarcerated ever since. Originally, Wang-Woodford was charged along with her husband Brian D. Woodford in a 20-count indictment returned in the Eastern District of New York on January 15, 2003. A superceding indictment charging Wang-Woodford with operating Jungda International Pte. Ltd (Jungda), a Singapore-based successor to Monarch, was returned on May 22, 2008. Brian Woodford, a U.K. citizen who served as chairman and managing director of Monarch, remains a fugitive.
The 2008 indictment alleged that between January 1998 and December 2007, the defendants exported controlled U.S. aircraft parts from the U.S. to Monarch and Jungda in Singapore and Malaysia and then re-exported those items to buyers in Iran without the required U.S. government licenses. The parts exported included aircraft shields, shears, “o” rings, and switch assemblies. On the export documents filed with the U.S. government, the defendants falsely listed Monarch and Jungda as the ultimate recipients of the parts.
At the time of her arrest, Wang-Woodford had in her possession catalogues from China National Precision Machinery Import and Export Corporation (CPMIEC) containing advertisements for military technology and weaponry, including surface-to-air missile systems and rocket launchers. CPMIEC, a Chinese company, has been sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) based on the company’s history of selling military hardware to Iran. Under those sanctions, all U.S. persons and entities are prohibited from engaging in business with CPMIEC.
The Bureau of Industry and Security publish on its website Lists to Check that include sanctions by various government agencies and that should be consulted by persons involved in export or re-export transactions.