Compliance in the
International Marketplace:
Export and Import Considerations
Association of Corporate Counsel
Dallas-Fort Worth Chapter
Annual In-House Symposium
May 22, 2008
Agenda
 Export Control and Related Laws
 Customs Laws
2
U.S. Export Control and
Related Laws
Who Regulates Exports?
 Department of Commerce, Bureau of Industry and
Security—export of commercial/“dual use” items.
 Department of State, Directorate of Defense Trade
Controls—export of items that are specifically designed
or modified for military or commercial space
applications.
 Department of the Treasury, Office of Foreign Assets
Control—U.S. sanctions laws.
 Other U.S. agencies, such as the Department of
Energy, the Nuclear Regulatory Commission and
Customs and Border Protection.
4
What is an Export?
 An export is NOT just the shipment out of the country of a
finished product.
 An export can occur when software, technology or data are
released to a foreign person.
 Technology includes “technical data” and “technical assistance.”
 Technical data: specifications, designs, formulae,
manuals, instructions
 Technical assistance: instructions, working
knowledge, training
 Technology/technical data does not include publicly available
(Commerce) or public domain (State) information, such as
published information or patents or fundamental research.
 Different definitions of publicly available and public domain.
5
Releasing
Technology and Software
 Software may be released through shipment of DVDs, by “pushing out”
software (e.g., via email), via downloads from the Internet or FTP sites,
or sharing source code with a foreign national.
 Special rules apply to commercial encryption software.
 Technical information may be released through visual inspection, oral
exchanges or application of personal knowledge and/or technical
experience.
 Exports and re-exports of technical data can occur in ways that are not
obvious:
- phone calls
- visits to facilities
- faxes
- meetings
- e-mail
- drawings, specifications
 Inadvertent exports are more likely with technical data than with
hardware.
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‘Deemed’ Exports
 Disclosing technical data or providing technical assistance to a foreign
person or a foreign company is an export, regardless of whether the
disclosure takes place in the U.S. or abroad.
 Sharing technical data with a foreign person, including employees, in
the U.S. is ‘deemed’ to be an export of the information to the national’s
home country.
 A foreign person is anyone who is not a U.S. citizen, a U.S.
permanent resident (green card holder), or an individual who is
protected under the Immigration and Naturalization Act.
 Commerce’s rules: Home country is the last place in which the person
obtained permanent residency or citizenship.
 May 19, 2008 Proposed Rule would require exports to consider also
the foreign person’s place of birth and previous citizenship.
 State’s rules: Home country depends on all factors, including place of
birth.
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Extraterritorial Export Laws:
The “Reexport”
 Export laws apply to the retransfer to a third
country of:
 U.S.-origin items
 Items manufactured outside the United States
containing U.S.-origin content
 Commerce: De minimis rules look to amount of U.S. content
 State: “See through” rules, so there is no de minimis content
 Certain items manufactured outside the United States
that are derived from U.S.-origin technology
 Deemed reexports: Govern the release of
technology/technical data outside the United
States to third country nationals.
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Export Controls:
Licensing Requirements
 ALL exports/reexports are subject to export
control regulations, but the regulations may or
may not require a license or other U.S.
Government authorization.
 Licensing requirements depend, in part, on
which agency has jurisdiction over the proposed
export/reexport.
 Commodity jurisdiction determinations – made by
State.
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Department of Commerce
Bureau of Industry & Security
Export Administration Regulations (EAR)
Department of
Commerce
 Administers the Export Administration
Regulations (EAR)
 The EAR control exports/reexports of so-called
“dual-use” items—military and commercial
applications—and commercial only items
including hardware, software and technology.
For example, antennae for cell phones and
blackberries are subject to the EAR.
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EAR – Licensing
 Licensing decision requires consideration of the
following factors:
 Classification of item on Commercial Control List (CCL)
 Destination country
 Ultimate end-user
 Ultimate end-use
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Licensing Analysis:
Classification/Destination
 Commerce Control List (CCL): The EAR set forth a list of
items that require licenses for exports to various destinations.
 The CCL contains ten categories, each with technical
descriptions of hardware, software and technology.
 Each description is assigned an Export Control Classification
Number (ECCN).
 Depending on the ECCN, a license may be required for one
destination, but not another.
 Items that are subject to the rules, but do not fit any technical
descriptions on the CCL are assigned a basket number:
“EAR99.”
 No license is required to export EAR99 items, except to
prohibited destinations (Cuba, Iran, North Korea, Sudan, and
Syria), to prohibited end-users, or for prohibited end-uses.
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Classification/Destination
Licensing: Compliance Tips
 Classification is a highly technical process.
 Review by Legal with assistance of Engineering.
 Create a product/technology matrix.
 Include Schedule B numbers.
 Implement mechanisms for review of new products or
product changes.
 When in doubt, submit a classification request to
Commerce.
 Classification reviews required for certain items, such as
encryption items.
 Commerce’s determination is referred to as a “CCATS.”
 Be prepared to provide ECCN and/or CCATS to distributors and/or
customers.
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Licensing Analysis:
Prohibited End-Users
 Apart from the classification/destination analysis, items may not be
exported to prohibited end-users (even if a licensing exception is
available)
 There are seven lists of prohibited end-users:
Department of Commerce’s Denied Persons List
Department of Commerce’s Entity List
Department of Commerce’s Unverified List
Department of Commerce’s General Order 3 to Part 736
Department of the Treasury’s List of Specially Designated Nationals and
Blocked Persons
 Department of State’s Debarred Parties List
 Department of State’s Nonproliferation List
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 The lists are available at:
http://www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm
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Prohibited End-Uses
 No exports/reexports to individuals or entities if there is
“knowledge” that the exported item will be put to the
following end-uses or transferred to end-user involved in
such activities:
 Nuclear, chemical and biological weapons and missile
delivery systems
 China – Military (end-use rules applicable to items
with certain ECCNs)
 “Knowledge” means “know” or “have reason to know or
to believe” and can be inferred from conscious disregard
or willful avoidance of facts.
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Anti-Diversion Controls:
“Red Flags” Examples
 Client or purchasing agent reluctant to offer information about the
end-use of a product
 Product’s capabilities do not fit the buyer – e.g., foreign financial
institution seeks assistance in improving production processes for
certain nuclear power plants
 Product ordered is incompatible with technical level of country to
which product is being shipped – e.g., nuclear-related technology
required export for country without commercial nuclear power
plants
 Shipping route is abnormal for the product and destination
 Packaging is inconsistent with the stated method of shipment or
destination
 Payment method is unusual
 When questioned, buyer is evasive or unclear re whether product is
for domestic use, export or re-export
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“Know Your Customer” Guidelines:
Compliance Tips
 To guard against inadvertent unauthorized exports, most
exporters screen transactions.
 Exporters look for “red flags” – end-use, end-user, or
destinations and often request written end-user/ end-use
information.
 In the case of certain exports to China, additional due
diligence may be required to confirm to verify the end-use.
 It is important not to self-blind – i.e., cut off flow of
information into company.
 If appear to be red flags, a company should inquire and
investigate.
 If no sufficient explanation for red flags, an exporter should
refrain from transaction.
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Export Administration Regulations:
Penalties
 Criminal “willful violation”
 Corporations: up to $1 million per violation
 Individuals: up to $250,000 per violation and up
to 20 years in prison
 Civil: up to $250,000 per violation or twice the value
of the transaction.
 Suspension or denial of export privileges.
 Debarment from U.S. Government contracts.
 Mechanism for voluntary disclosure – mitigates
penalties.
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Case Study:
MTS Systems Corporation
 In 2003, MTS submitted two applications for exports to
India of seismic testing equipment.
 Failed to disclose on the applications that the equipment
may be used as part of nuclear power plant testing.
 Internal compliance officer “warned” employees about
Red Flags and told representative in India that current
licensing policy was a presumption of denial for nuclear
end-uses in India.
 Fined $400,000 criminal penalty and $400,000 civil
penalty.
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Department of State
Directorate of Defense Trade Controls
International Traffic in Arms Regulations
(ITAR)
Department of State
 Administers the Arms Export Control Act and
implementing International Traffic in Arms Regulations
(ITAR).
 Governs all exports (temporary and permanent) of
“defense articles” identified on the U.S. Munitions List.
 Governs all exports of “defense services.”
 License is required to virtually all destinations.
 Information developed under a Department of Defense
contract may be controlled by the EAR or the ITAR.
 Proposed DFARS rule would require compliance with
export controls.
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Defense Articles
 “Defense articles” – items that are specifically designed,
modified or configured for military or commercial satellite
use.
 Identified on the U.S. Munitions List.
 USML has 20 categories of defense articles.
 Even so-called “COTS” items can be considered “defense
articles.”
 Commercial items modified even in minor ways for a
defense application can become “defense articles.”
 Include hardware, software and “technical data.”
 If an item is on the USML, it is subject to the ITAR even if
its intended use is commercial or research/development.
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Technical Data and
Defense Services
 “Technical Data” – Information required for the design,
development, production, manufacture, assembly, operation,
repair, testing, maintenance or modification of defense articles.
 May be in the form of data, presentations and documents
 Also includes software
 “Defense Services” – Furnishing of assistance or training to
foreign persons in the design, development, engineering,
production, processing, manufacture, assembly, testing, use,
operation, overhaul, repair, maintenance, modification, or
reconstruction of defense articles.
Furnishing foreign persons controlled “technical
data,” whether in the U.S. or abroad.
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What Authorization Is Required?
 Prior approval by the Department of State is required for virtually
all exports to almost all destinations.
 Canada – An existing exemption limited to (a) the Canadian
Government and certain companies registered under the
Canadian Controlled Goods Directorate and (b) only certain
defense articles and defense services. Reporting requirements
may apply.
 United Kingdom – Pending exemption.
 Australia – Pending exemption.
 Approval may be in the form of an export license or an
agreement.
 Commercial contracts should take into account lead times
necessary to obtain licenses before an export occurs.
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ITAR: Penalties
 Criminal penalties include up to $500,000 per
violation (and imprisonment for individuals).
 ITT $100,000 million in fines.
 Civil penalties include up to $250,000 per
violation.
 Historically, fines imposed in “headline” amounts.
 Recent amendment clarifies mitigation for voluntary
disclosures.
 Recent trend to require independent compliance
reviews for companies that submit voluntary or directed
disclosures.
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Common ITAR Pitfalls:
Technology Transfers
 “Access to” technical data
 Presumption of release of data to foreign national
employees/contractors who have the ability to access
technical data.
Tips:(a) Identify foreign person employees.
(b) Segregate technical data.
(c) Implement Technology Control Plan.
(d) Implement IT system to track access.
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Common ITAR Pitfalls: Procurement
 Foreign procurement: transfers of technical data in
connection with the procurement of parts/components for
an ITAR-controlled item may require prior authorization
from State.
 Domestic supplier/vendor:
 Not registered with State.
 Manufactures items abroad.
 Subcontracts with a foreign manufacturer.
 Employs foreign persons.
Tips:Mark technical data.
Specify applicable export rules in contract.
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Common ITAR Pitfalls:
Sales Representatives
 The ITAR requires brokers to register with State and in
certain circumstances, file notifications or reports
regarding their activities.
 Dealings with an unregistered broker can result in a
denial of licenses, or in the worse case, penalties.
 Commissions and payments to brokers may be subject to
reporting requirements.
Tip:
As part of due diligence, require ITAR compliance.
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Doing Business with Distributors:
Do you know where they are reselling your
products?
Department of the Treasury
Office of Foreign Assets Control
U.S. Economic Sanctions
What are Sanctions?
 U.S. imposes economic sanctions to further its foreign policy
and national security objectives.
 U.S. sanctions programs may prohibit a U.S. company from
dealing with certain targeted countries, foreign governments,
individuals, entities and practices.
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Department of the Treasury:
Office of Foreign Assets Control
 U.S. imposes economic sanctions to further its foreign
policy and national security objectives
 U.S. sanctions programs implemented and enforced by the
Treasury Department’s Office of Foreign Assets Control
 OFAC administers and enforces economic & trade
sanctions against targeted:
 Foreign governments (e.g., Iran, Sudan, Cuba)
 Individuals (e.g., terrorists, narcotics traffickers)
 Entities (e.g., drug front companies, charities
linked to terrorist groups)
 Practices (e.g., trade in non-certified rough
diamonds, proliferation of WMD)
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OFAC: Jurisdiction
Individuals
 American citizens and permanent resident aliens located
anywhere in the world.
 Any individual, regardless of citizenship, who is physically
located in the United States.
Commercial Entities
 Corporations organized under U.S. law, including foreign
branches of U.S. companies.
 Any corporation or company physically located in the U.S.,
including U.S. branches of foreign companies.
 Under the Cuba and North Korea programs, non-U.S.
entities that are owned or controlled by U.S. companies or
citizens/permanent residents.
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Department of the Treasury:
Office of Foreign Assets Control
OFAC currently administers sanctions programs against:
 Balkans
 Belarus
 Burma (Myanmar)
 Cote D’Ivoire
 Cuba
 Narcotics trafficking
 Non-proliferation
 North Korea
 Sudan
 Diamond trading
 Syria
 Iran
 Terrorist Organizations
 Iraq
 Terrorists
 Liberia
 Zimbabwe
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OFAC: Comprehensive Sanctions
 Applicable to Cuba, Iran and Sudan
 In general, the following are prohibited under
comprehensive sanctions programs:
 Exports (direct or indirect)
 Imports (direct or indirect)
 Trade brokering, financing or facilitation
 Any attempt to evade or avoid the sanctions
 Applies to most goods, technology & services
 Limited exceptions may be licensable by OFAC, such as
agricultural goods or humanitarian items
35
OFAC: Limited Sanctions

North Korea
 Importation of items of North Korean origin are restricted.
 Assets of certain persons blocked.

Burma (Myanmar)
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Importation of items of Burmese origin is prohibited.
Ban on export of financial services.
Specific entities are blocked.
Exports to Burma are not prohibited, but transactions must
comply with export control rules and the prohibitions regarding
financial services.
Syria
 Ban export of US-origin goods.
 Requirement to block assets of entities and individuals related to
terrorism, WMD, undermining reconstruction in Iraq &
assassination of Prime Minister Harari.

Diamond Trading
 Import and export of rough diamonds restricted.
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List-Based Sanctions
 Balkans – block property of Milosevic supporters
 Belarus – block property of persons undermining democratic process
 Cote d’Ivoire – block property of individuals threatening peace
 Iraq – sanctions lifted, but assets previously blocked remain blocked
 Liberia – block property of Charles Taylor and his supporters; no imports
of Liberian timber
 Zimbabwe – block property of persons undermining democratic process
 Nonproliferation – no dealings with persons involved in proliferation of
weapons of mass destruction
 Terrorism – no dealings with persons or organizations involved with
terrorism
 Narcotics Traffickers – no dealings with designated traffickers
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SDN List
 OFAC maintains a list of sanctioned individuals and entities –
List of “Specially Designated Nationals” (SDN List)
 SDN List includes all blocked persons – agents of current and
former sanctioned country governments as well as terrorists,
terrorist organizations, persons sanctioned under the WMD
program and narcotics traffickers
 Review this list prior to engaging in an export or other
international transaction
 This list is one of the seven lists of prohibited
persons that will be shown in the EAR discussion
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Sanctions vs. Export Controls
Sanctions
Export Controls
 Comprehensive use of U.S.
economic force based on
foreign policy goals
 Blocked assets and
restrictions on trade & financial
transactions
 Used against specific targets
& their agents
 OFAC expertise is financial
 Jurisdiction includes U.S.
companies &
citizens/permanent residents
 Aimed at controlling the
dissemination of dual use or
military products & technology to
destinations & end users
throughout the world
 BIS/DDTC expertise includes
engineering and product
knowledge used for product
classification
 Jurisdiction is U.S. persons as well
as technology and goods
39
Sanctions Regulations: Penalties
 Criminal “willful violation”
 Corporations: up to $1.2 million per
violation
 Individuals: up to $250,000 per violation
and up to 20 years in prison
 Civil: up to $250,000 per violation or twice the
value of the transaction.
 Mechanism for voluntary disclosure –
mitigates penalties.
40
Sanctions Issue:
Resale of Products
 Our distributor has proposed to resell our commercial
products into Cuba. We advised that it could not do so.
The distributor has suddenly changed its delivery
requirements, requesting that all products be delivered
to its facility. Is this a problem?
 Recently, we discovered that our distributor is reselling
our commercial products into Syria. Do we have any
liability for these retransfers?
 In reviewing our commercial distributor agreements, we
discovered that one agreement includes Iran in the
sales territory. We do not have a license and are
uncertain whether any products have been sold to Iran.
Do we have any obligation to investigate?
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Sanctions Issue: Secondment of U.S.
Employees Abroad
 Placement of U.S. employees within or U.S.
officers/directors on boards of foreign
subsidiaries.
 As U.S. citizens/permanent residents, they must
comply with U.S. sanctions.
 If they remain employees of the U.S. company,
the U.S. company could “facilitate” transactions.
 Recusal policies and OFAC training are
important.
42
Sanctions Issues:
Blocking Statutes
 Canada, the European Union, and Mexico have
implemented statutes prohibiting compliance with
U.S. sanctions laws’ extraterritorial requirements.
 Sheraton Hotel in Mexico penalized under blocking
provisions.
 European Commission is pressuring member countries
to enforce provisions.
 Blocking provisions do not provide an excuse for
noncompliance with OFAC’s laws.
 Trend to utilize discrimination laws as a
“blocking” mechanism.
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Doing Business in the
Middle East
Antiboycott Regulations
Antiboycott Regulations
 Prohibit participation in international boycotts not supported by the
U.S. Government.
 Prime example: Arab League’s boycott of Israel
 Prohibit actions to comply with, further, or support the
Arab League boycott.
 Deny tax benefits for certain types of boycott-related
agreements.
 Boycott related requests may originate from: Algeria, Bahrain,
Egypt, India, Iran, Iraq, Jordan, Kuwait, Lebanon, Libya, Malaysia,
Nigeria, Oman, Pakistan, Qatar, Saudi Arabia, Syria, Tunisia, the
United Arab Emirates, or the Republic of Yemen.
 Boycott related requests continue as tensions in the Middle East
persist.
45
Antiboycott Regulations
 U.S. Antiboycott regulations are complex and not intuitive.
 Prohibit agreements to refuse to do business with
Israel.
 Prohibit furnishing information about dealings with
Israel.
 Boycott related requests may appear in RFPs, contracts or letters of
credit.
 Reporting requirements for boycott-related requests, even if the
company does not respond to the request.
 EAR Penalties apply for non-violations.
 Section 999 requirements to report operations in or with a boycotting
country, regardless of whether the company receives a boycott-related
request.
 Be wary of agreements to “comply with” the laws of a boycotting
country, for tax penalties may apply to the U.S. taxpayer’s foreign
operations.
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INTERNATIONAL TRADE
DOGS HAVE COMPLIANCE
TAILS
INTERNATIONAL TRADE DOGS HAVE
COMPLIANCE TAILS
 International trade continues to grow as more and more goods
cross borders
 The world is both a global factory and a global market
48
National governments have a stake in
international trade
 Regulate trade ( national security, health and safety,
environment, unfair competition)
 Monitor imports and exports
 Promote international trade, investment
 Collect revenue
49
Private Companies Concerns
 Private Companies must be mindful of intersecting domestic
and international laws and regulations
 Enforcing compliance with those laws is a key government
policy
50
INTERNATIONAL TRADE LAWS
 Domestic legislation implements international standards –
customs and inbound trade laws at Title 19 US Code
 World Trade Organizations (WTO) – Geneva 1994
General Agreement on Tariffs and Trade (GATT) (1947)
 WTO GOALS
 Eliminate Non-tariff Barriers
 Lower duties
 Promulgate international trade laws – harmonize the system
 World Customs Organization (WCO) – Brussels
 Formerly Customs Co-Operation Council
 implement / reconcile laws
51
Customs Laws ___ Trade Laws
Customs Laws
 Raise revenue – duties are an indirect tax
 Imports attract duties and other indirect taxes such as Value
Added Tax (VAT) or Goods and Services Tax (GST)
 In the United States, pre-1913 income tax, duties and excise
taxes accounted for large shore federal government revenues
 In U.S. today, $21 billion in annual revenue
52
 While duty rates in the U.S. and developed world have been lowered
since the post-WWII rounds of GATT MTNs, (average U.S. duty is
3%) they may be spiked very high – apparel, footwear, luggage,
chemicals-rates approach or exceed effective tax rates (women’s
sweaters over 33%).
 In developing countries, indirect taxes (duty, VAT) are the primary
source of revenue
 Duties and VAT are inseparable
Costs of goods
$100
International freight Insurance
$10
Duty @ 10%
$11
VAT @ 15%
$18.15 TAX- Base is $121
Duty, VAT
$29.15 Customs value,
international freight,
plus duty
53
 Most duties are imposed on ad valorem basis – as a stated
percentage levied against the dutiable value of the imported
article.
 Requires ascertaining the
 Tariff classification of imported article – what is it?
 Dutiable value – how much is it worth?
 Origin - where is it from?
54
Tariff Classification
 Process whereby the paper product category is assigned to
imported article
 10,000 separate categories
 Similar to tax many used in biological sciences to assign
phylum, genus, species, etc.
 Harmonized System – common rules since 1989 – 97 chapters
in international system
55
Example – Harmonized to 6-digit lead
Other AC motors, multi-phase of an outpost not exceeding 750 W
In U.S.
Duty Rate
8501.51.40 20 Exceeding 74.6 but under
735 W gear motors
2.5% free 35%
8501.51.50 20 Exceeding 735 W. but
under 746 W gear motors
3.3% free 35%
In EU
8501.51.00
Other AC Motors, multiphase of an output not
exceeding 750W
2.7%
56
Valuation
International Agreement on Customs Valuation - 1979
 Hierarchy of methods
 Transaction Value is preferred method – defined as the price actually
paid or payable when sold for exportation to the United States
 Equates to invoice value of an FOB sale in the U.S. (other
jurisdictions use CIF basis)
 Off-invoice elements of cost must be added tack to make dutiable
value (e.g., packing costs, selling commissions)
 Focus on transfer pricing (TP) mirrors income tax authorities’ focus
on TP – e.g., section 482 of IRC
 Current trend
Tax-Efficient Supply Chain Strategies – setting up
offshore entity to play sourcing / trading role – in Hong Kong but with
tax, transfer pricing, customs issues in U,S, and all sourcing
countries. Contract Manufacturing regs, Branch rules, PE concerns
 Current trend
First sale for Export rule under attack in U.S.
57
Origin
The origin of the imported goods will dictate
 Labeling
 Duty rate (normal trade preference or Free Trade Agreement,
col. 2 rates)2.5% free 35% for gear motors
 Susceptibility of article to antidumping / CVD
 Eligibility for Buy American Act preference in government
procurement
Current trend
B
great audit emphasis on documentation
supporting FTA or preference treatment
58
International Trade Laws
Free Trade Agreements
 Provide for duty-free entry from FTA partner countries
 E.g., NAFTA, US/Israel, US/Australia
 Pending Colombia, Korea, Panama
Tariff Preferences
 Bolster development in friendly Beneficiary Developing Countries (BDCs)
 Generalized System of Preferences (GSP) and regional programs
Trade Remedy Laws
 Antidumping Duty
 Countervailing Duty
 Safeguards (no fault)
Social Issues
 No child labor, prison labor
 Anti–Burma prohibition on rubies and jadeite
59
Customs Compliance
 U.S. – far greater emphasis on customs compliance than most
trade partners
 United States changed the program in 1994 with the Customs
Modernization Act (Mod Act)
 Importers are responsible for the customs clearance function –
must show “reasonable care” and “informed compliance”
 Audit activity in late 1990s – Compliance Assessment Team
(CAT) audits
 Focused Assessments program – focus on internal controls
 U.S. relies heavily on post-entry audit program – other
countries have much less emphasis, with a focus on the entry
process itself
 Importer Self Assessment (ISA) – voluntary program
60
Customs Focused Assessment
 Tariff Classification
 Valuation
 Origin
 Recordkeeping
 Trade Programs (NAFTA)
 Quantities
Internal Controls
 Assigned responsibility
 Processes
 Manual
 Tariff classification database
 Manage the broker function
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9/11/01
Post 9/11 – Customs and Border Protection mission
is national security
 Some blending of national security, trade compliance, health and safety
 U.S. and key trading partners (China, EU) collaborating closely on cargo
security
 In U.S., C-TPAT (Customs-Trade Partnership Against Terrorism)
 In EU, Authorized Economic Operator (AEO)
 In U.S. corporate world, unprecedented focus on trade compliance
Current Trends
 Resource constraints are driving voluntary programs
 U.S. companies who have worked hard to get their U.S. programs in order are
now looking at trade compliance throughout their company – all of its
overseas locations
 Major corporations are establishing Director or VP-level Global Trade
Compliance positions
 Companies assign compliance responsibility to Tax or Legal function
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Challenges
Remember that Tail.
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