Aug 2008
North Korea to Remain on the State Sponsors of Terrorism List
08/26/08 10:58 PM Filed in: North
Korea | State
On August 25, 2008, after the U.S.
refused to remove North Korea from the State Sponsors of Terrorism
List,
North Korea announced it has stopped disabling its nuclear reactor
complex and will consider rebuilding.
The statement comes two months after North Korea released the report of its plutonium programs and detonated the reactor’s cooling tower, reports the Washington Post. These actions prompted statements by the Bush administration that the U.S. will remove North Korea from the State Terrorism List and will lift some trade sanctions.
However, on August 11, 2008, the United States refused to remove North Korea from the list, citing slow progress and refusal to permit outside experts to verify the scope of the nuclear program.
The work to disable the Yongbyon nuclear reactor complex stopped on August 14, 2008, according to a statement issued by North Korea’s Ministry of Foreign Affairs. The official Korean Central News Agency added that the country will consider rebuilding the nuclear plant to its original state. U.S. officials note, however, that the plant has been substantially dismantled under the supervision of outside nuclear technicians and it would take at least a year to restore it to its operation.
North Korea entered into agreement with the U.S. in 2007 to abandon its nuclear program. North Korea promised to start by disabling the Yongbyon plant and detailing the scope of its nuclear program. In return, the U.S. promised aid and removal from the terrorism list. Removal from the list would mean lifting of the associated sanctions.
The Bureau of Industry and Security (BIS) has published Q &A for exporters on the Rescission of North Korea from the State Sponsor of Terrorism List, which can be found here. The Q&A also details general export to North Korea licensing requirements.
The statement comes two months after North Korea released the report of its plutonium programs and detonated the reactor’s cooling tower, reports the Washington Post. These actions prompted statements by the Bush administration that the U.S. will remove North Korea from the State Terrorism List and will lift some trade sanctions.
However, on August 11, 2008, the United States refused to remove North Korea from the list, citing slow progress and refusal to permit outside experts to verify the scope of the nuclear program.
The work to disable the Yongbyon nuclear reactor complex stopped on August 14, 2008, according to a statement issued by North Korea’s Ministry of Foreign Affairs. The official Korean Central News Agency added that the country will consider rebuilding the nuclear plant to its original state. U.S. officials note, however, that the plant has been substantially dismantled under the supervision of outside nuclear technicians and it would take at least a year to restore it to its operation.
North Korea entered into agreement with the U.S. in 2007 to abandon its nuclear program. North Korea promised to start by disabling the Yongbyon plant and detailing the scope of its nuclear program. In return, the U.S. promised aid and removal from the terrorism list. Removal from the list would mean lifting of the associated sanctions.
The Bureau of Industry and Security (BIS) has published Q &A for exporters on the Rescission of North Korea from the State Sponsor of Terrorism List, which can be found here. The Q&A also details general export to North Korea licensing requirements.
First Sale Declaration Requirement Effective August 20, 2008
08/26/08 10:04 PM Filed in: Customs | First
Sale
Starting August 20, 2008 and
effective for a one year period, all importers are
required at the time of entry to provide
the United States Customs and Border Protection (CBP) with a
declaration as to whether the transaction value of the imported
merchandise is calculated on the basis of the First Sale Rule.
Under the Rule, when the merchandise is introduced into the United
States as a result of a series of sales, the transaction value is
calculated based on the first or earlier, rather than later sale.
However, this rule will not be enforced until September 20,
2008.
The First Sale Declaration Requirement was established under § 15422(a) of the Food, Conservation and Energy Act of 2008, commonly referred to as the Farm Bill. To meet the Requirement, an importer must enter “F” next to the declared value of the merchandise on CBP Form 7501, or its electronic filing equivalent, if the declared transaction value of the imported merchandise is determined on the First Sale basis. If First Sale is not the basis for the transaction valuation, the box will remain blank.
The trade community has advised CBP that it would not be ready to comply with the Declaration Requirement by August 20, 2008 because of the complex programming changes required. In response, to permit the community sufficient time to comply, CBP has delayed enforcement of First Sale Declaration Requirements for 30 days until September 20, 2008. Thus, imports made between August 20 and September 19, 2008 will not be rejected based on the First Sale Declaration Requirement; however, these entries will require amendment. Information on the amendment requirements will be forthcoming.
The First Sale Declaration Requirement will enable CBP to gather information on the frequency of the first sale valuation, which will be reported to the International Trade Commission.
The First Sale Declaration Requirement was established under § 15422(a) of the Food, Conservation and Energy Act of 2008, commonly referred to as the Farm Bill. To meet the Requirement, an importer must enter “F” next to the declared value of the merchandise on CBP Form 7501, or its electronic filing equivalent, if the declared transaction value of the imported merchandise is determined on the First Sale basis. If First Sale is not the basis for the transaction valuation, the box will remain blank.
The trade community has advised CBP that it would not be ready to comply with the Declaration Requirement by August 20, 2008 because of the complex programming changes required. In response, to permit the community sufficient time to comply, CBP has delayed enforcement of First Sale Declaration Requirements for 30 days until September 20, 2008. Thus, imports made between August 20 and September 19, 2008 will not be rejected based on the First Sale Declaration Requirement; however, these entries will require amendment. Information on the amendment requirements will be forthcoming.
The First Sale Declaration Requirement will enable CBP to gather information on the frequency of the first sale valuation, which will be reported to the International Trade Commission.
Trial Begins for Retired Professor Charged with ITAR Violations
On August 25, 2008, J. Reece Roth,
a retired University of Tennessee (UT) physics professor went on
trial charged with violating the Arms Export Control Act (AECA). As
reported by USA Today, prosecutors allege Roth violated
AECA by allowing two UT students, one from China and another from
Iran, unrestricted access to information about the technology used
in an U.S. Air Force project. The professor is also said to have
taken documents relating to that project on his trip to China in
2006.
The Air Force contract involved developing lightweight flight control system technology for use in unmanned air vehicles, otherwise known as drones. According to USA Today, Atmospheric Glow Technologies (AGT), with Roth as a consultant and subcontractor, promised a control system that would use plasma, rather than mechanical flaps, to lift the aircraft. Roth, an expert in plasma technology, was one of the founders of AGT, but later the company went public. The company specialized in use of plasma technology that was developed by UT.
AECA bars the transfer of sensitive information to foreign nationals without permission. Roth came under investigation in 2006 when UT export-control officials discovered his use of foreign nationals in his UT lab on the military contract. Government agents searched his office and seized his laptop computer when he returned from a lecture trip to China in May of 2006.
On August 20, 2008, AGT pleaded guilty to 10 counts of AECA violations from late 2004 to May 2006, reports the Knoxville News Sentinel. AGT, which is in bankruptcy, still faces probation and a maximum fine of $1 million for each AECA violation. Knoxville News Sentinel reports that, as part of the plea agreement, AGT’s board of directors now admits company officials knew Roth had allowed the China national access to information on the Air Force project without notifying the Department of Defense.
Daily updates on the trial can be found at www.knoxnews.com.
The Air Force contract involved developing lightweight flight control system technology for use in unmanned air vehicles, otherwise known as drones. According to USA Today, Atmospheric Glow Technologies (AGT), with Roth as a consultant and subcontractor, promised a control system that would use plasma, rather than mechanical flaps, to lift the aircraft. Roth, an expert in plasma technology, was one of the founders of AGT, but later the company went public. The company specialized in use of plasma technology that was developed by UT.
AECA bars the transfer of sensitive information to foreign nationals without permission. Roth came under investigation in 2006 when UT export-control officials discovered his use of foreign nationals in his UT lab on the military contract. Government agents searched his office and seized his laptop computer when he returned from a lecture trip to China in May of 2006.
On August 20, 2008, AGT pleaded guilty to 10 counts of AECA violations from late 2004 to May 2006, reports the Knoxville News Sentinel. AGT, which is in bankruptcy, still faces probation and a maximum fine of $1 million for each AECA violation. Knoxville News Sentinel reports that, as part of the plea agreement, AGT’s board of directors now admits company officials knew Roth had allowed the China national access to information on the Air Force project without notifying the Department of Defense.
Daily updates on the trial can be found at www.knoxnews.com.
CBP Announces Trade Symposium 2008 Details
08/25/08 10:15 PM Filed in: Customs
On August 25, 2008, Customs and
Border Protection announced the dates and topic for its Trade
Symposium 2008, The topic of this year’s symposium is "Global
Trade: Continuity Through Transition.'' The Symposium will focus on
U.S. Customs and Border Protection’s (CBP) commitment to security
and trade programs amidst transition within the administration.
Sessions will include:
The symposium will be held at the JW Marriott Hotel, 1331 Pennsylvania Avenue N.W., Washington, DC 20004. Registration is expected to open September 2, 2008, and must be made on-line. The registration fee is $250.
- CBP Trade Strategy
- Importer Security Filing
- Import Safety
- Automated Commercial Environment
- Trade Partnerships
- Regulatory Changes
- World Customs Organization
- CBP Agriculture Mission
The symposium will be held at the JW Marriott Hotel, 1331 Pennsylvania Avenue N.W., Washington, DC 20004. Registration is expected to open September 2, 2008, and must be made on-line. The registration fee is $250.
BIS Issues Rule for Expanding Entity List
On August 21, 2008, Bureau of
Industry and Security (BIS) issued a final rule
that expands the
criteria for adding parties to the Entity List. The BIS Entity List
lists parties whose involvement in a transaction can require a
license under the Export Administration Regulations (EAR). The list
specifies the license requirements that apply to each listed
entity.
Effective immediately, the new rule authorizes imposition of foreign policy export and reexport license requirements, limiting the availability of license exceptions, and setting license application review policy for exports and reexports. BIS may take such actions “if there is reasonable cause to believe, based on specific and articulable facts, that the entity has been involved, is involved, or poses a significant risk of becoming involved in activities that are contrary to the national security or foreign policy interests of the United States.”
Under the rule, the activities at issue do not have to be subject to EAR in order for a party to be placed on the Entity List. BIS lists five examples of conduct that could be found detrimental to the identified U.S. interests:
Supporting persons engaged in acts of terror;
Actions that could strengthen military or terrorism capabilities of governments that have been designated by the Secretary of State as repeatedly providing support for acts of international terrorism;
Dealing or assisting dealing in conventional weapons in a way contrary to the U.S. national security or foreign policy interest;
Preventing accomplishment of an end use check conducted by BIS or the Directorate of Defense Trade Controls; and
Engaging in conduct that poses a risk of violating the EAR when such conduct raises sufficient concern that prior review of exports or reexports enhances BIS’s ability to prevent EAR violations.
The rule applies to foreign parties only, and will not be used to add U.S. persons on the Entity List. Thus, a foreign party could be added to the Entity List if specific and articulable facts provide that it has been engaged in the type of conduct identified.
The new rule also amends the EAR to include a procedure for addressing requests of a listed parties to be removed from the list or have their listing modified.
Effective immediately, the new rule authorizes imposition of foreign policy export and reexport license requirements, limiting the availability of license exceptions, and setting license application review policy for exports and reexports. BIS may take such actions “if there is reasonable cause to believe, based on specific and articulable facts, that the entity has been involved, is involved, or poses a significant risk of becoming involved in activities that are contrary to the national security or foreign policy interests of the United States.”
Under the rule, the activities at issue do not have to be subject to EAR in order for a party to be placed on the Entity List. BIS lists five examples of conduct that could be found detrimental to the identified U.S. interests:
Supporting persons engaged in acts of terror;
Actions that could strengthen military or terrorism capabilities of governments that have been designated by the Secretary of State as repeatedly providing support for acts of international terrorism;
Dealing or assisting dealing in conventional weapons in a way contrary to the U.S. national security or foreign policy interest;
Preventing accomplishment of an end use check conducted by BIS or the Directorate of Defense Trade Controls; and
Engaging in conduct that poses a risk of violating the EAR when such conduct raises sufficient concern that prior review of exports or reexports enhances BIS’s ability to prevent EAR violations.
The rule applies to foreign parties only, and will not be used to add U.S. persons on the Entity List. Thus, a foreign party could be added to the Entity List if specific and articulable facts provide that it has been engaged in the type of conduct identified.
The new rule also amends the EAR to include a procedure for addressing requests of a listed parties to be removed from the list or have their listing modified.
DDTC Publishes Notice & FAQs on License Support Documentation
On August 7, 2008, the State
Department's Directorate of Defense Trade Controls (DDTC) published
an updated notice on license support documentation.
In the notice, DDTC states:
The FAQ questions can be found here.The purpose of this requirement is to confirm the legitimacy of the transaction, including the roles and responsibilities of all the parties. DTCL has received with increasing frequency supporting documentation that calls into question whether the applicants are in a position to fulfill their responsibilities as registered exporters and, in fact, whether anyone at the companies could meet the obligations as empowered officials under Section 120.25. In these instances, the applications have been Returned Without Action advising the applicants of the ITAR requirements. At this time, DTCL finds it prudent to iterate to exporters of defense articles the fundamental ITAR requirement for supporting documentation.
BIS Agenda for Next Six Months Outlined
On July 30, 2008, Under Secretary
of Commerce Mario Mancuso delivered a keynote address to the
Washington International Trade Association entitled,
"Sprinting to the Finish - The BIS Agenda for
the Final Six Months."
Highlights of the agenda are:
Highlights of the agenda are:
- BIS will continue to focus on the areas of highest enforcement concern to the agency: nations of illicit trans-shipment concern, proliferators, and terrorists - with Iran being of particular concern. Reauthorization of the EAA is a priority for the agency.
- BIS will work to implement the dual-use directive signed by the President this past January and BIS hopes to make meaningful progress on the following regulatory issues: the intra-company transfer license exception, deemed exports, encryption, thermal imaging, foreign availability, and 17C.
- BIS will continue to support its current work and make a smooth transition to the new administration. BIS is committed to doing its best to attract the best and brightest to public service, better integrate its enforcement and policy functions, improving interagency engagement, upgrading its technology infrastructure and business processes over time, and better aligning its workforce to address BIS's highest priorities.