January 5
[The Ex/Im Daily Update is published each business day by the Northrop Grumman
Corporation Law Department, providing notice of all changes to ATF, CR, EAR, FACR,
FTR, HTSUS, and ITAR regulations, plus related high-tech export/import news and
comment. See subscription information below.]
EX/IM ITEMS FROM TODAY'S FEDERAL REGISTER:
1. Commerce/BIS Settles Export Violation Charges with Ning Wen of Manitowoc, WI 2.
President's Executive Order No. 13526, "Classified National Security Information'',
Prescribes Uniform System for Classifying and Safeguarding National Security
Information 3. President Implements Executive Order "Classified National Security
Information''
4. President Designates National Security Information Classification Authorities 5.
Treasury/OFAC Designates JAYSH RIJAL AL-TARIQ AL-NAQSHABANDI as Blocked Entity 6.
DHS/CBP Seek Comments on Proposed Amendment to Customs Regs re Continuous Customs
Bonds 7. DHS/CBP Announces New Interest Rates Used in Calculating Interest on
Overdue Accounts and Refunds on Customs Duties
OTHER GOVERNMENT SOURCES:
8. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 9.
Ex/Im Items in Congressional Record 10. US International Trade Commission Publishes
New Version of US Harmonized Tariff Schedule
NEWS:
11. Expeditors Newsflash: Presidential Proclamation Amends GSP Beneficiary Countries
12. International Government Contractor: "AIA Urges U.S. Export Control Changes"
13. World Trade\INTERACTIVE: "CBP to Centralize Continuous Bond Program"
14. World Trade\INTERACTIVE: "DOJ Announces $1.5 Million Penalty of UTStarcom Inc.
for FCPA Violations"
OPINIONS & LETTERS TO EDITOR:
15. A. Graddy: "U.S. Duty Suspensions Have Expired"
16. R.C. Burns: "The Name Game Chinese Style"
EX/IM MOVERS & SHAKERS:
17. Jim Dickeson Launches "Import Export Geeks"
EX/IM TRAINING, MEETINGS & SOCIAL EVENTS:
18. "ITAR: Beyond the Basics" Seminar Feb 4-5 in West Palm Beach
EDITOR'S NOTES:
19. Are Your Copies of Ex/Im Regs Up to Date? Latest Changes: ATF (2 Oct 08),
Customs (30 Dec 09), EAR (24 Dec 09), FACR/OFAC (23 Nov 09), FTR (5 Aug 09), HTSUS
(2 Jul 09), and ITAR (6 Aug 09)
**********
EXPANDED ITEMS:
1. Commerce/BIS Settles Export Violation Charges with Ning Wen of Manitowoc, WI
(Source: http://edocket.access.gpo.gov/2010/E9-31367.htm)[Excerpts.]
75 FR 337-338: Action Affecting Export Privileges: In the Matter of: Ning Wen, No.
07511-089, Federal Prison Camp--H Dorm, P.O. Box 1000, Duluth, MN 55814; and 1218
Dewey St., 14, Manitowoc, WI 54220, Respondent.
* Agency: Commerce Department, Bureau of Industry & Security Order Relating to Ning
Wen
The Bureau of Industry and Security, U.S. Department of Commerce ("BIS'') has
initiated an administrative proceeding against Ning Wen (``Wen'') pursuant to
Section 766.3 of the Export Administration Regulations (the ``Regulations''),\1\ and
Section 13(c) of the Export Administration Act of 1979, as amended (the ``Act''),\2\
through issuance of a charging letter to Wen that alleged that he committed 124
violations of the Regulations.
. . . .
Whereas, BIS and Wen have entered into a Settlement Agreement pursuant to
Section 766.18(b) of the Regulations whereby they agreed to settle this matter in
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accordance with the terms and conditions set forth therein, and
Whereas, I have approved of the terms of such Settlement Agreement;
It is therefore ordered:
First, that Wen shall be assessed a civil penalty in the amount of $1,364,000,
the payment of which shall be suspended for a period of one (1) year from the date
of entry of this Order, and thereafter shall be waived, provided that during the
suspension, Wen has committed no violation of the Act, or any regulation, order or
license issued thereunder.
Second, that for a period of 15 years from the date of issuance of the Order,
Ning Wen, No. 07511-089, Federal Prison Camp-H Dorm, P.O. Box 1000, Duluth, MN
55814, with an address at 1218 Dewey St., 14, Manitowoc, WI 54220, and when acting
on behalf of Wen, his representatives, assigns, or agents (``Denied Person'') may
not participate, directly or indirectly, in any way in any transaction involving any
commodity, software or technology (hereinafter collectively referred to as ``item'')
exported or to be exported from the United States that is subject to the
Regulations, or in any other activity subject to the Regulations, . . . .
This Order, which constitutes the final agency action in this matter, is
effective immediately.
Entered this 29th day of December 2009.
Kevin Delli-Colli,
Deputy Assistant Secretary of Commerce for Export Enforcement.
**********
2. President's Executive Order No. 13526, "Classified National Security
Information'', Prescribes Uniform System for Classifying and Safeguarding National
Security Information
(Source: http://edocket.access.gpo.gov/2010/E9-31418.htm)[Excerpts.]
75 FR 705-731: Executive Order 13526--Classified National Security
Information--Memorandum of December 29, 2009--Implementation of the Executive Order
"Classified National Security Information''
Title 3--The President
Executive Order 13526 of December 29, 2009 Classified National Security Information
This order prescribes a uniform system for classifying, safeguarding, and
declassifying national security information, including information relating to
defense against transnational terrorism. Our democratic principles require that the
American people be informed of the activities of their Government. Also, our
Nation's progress depends on the free flow of information both within the Government
and to the American people. Nevertheless, throughout our history, the national
defense has required that certain information be maintained in confidence in order
to protect our citizens, our democratic institutions, our homeland security, and our
interactions with foreign nations. Protecting information critical to our Nation's
security and demonstrating our commitment to open Government through accurate and
accountable application of classification standards and routine, secure, and
effective declassification are equally important priorities.
NOW, THEREFORE, I, BARACK OBAMA, by the authority vested in me as President by the
Constitution and the laws of the United States of America, it is hereby ordered as
follows:
[Only outline provided due to length.]
PART 1--ORIGINAL CLASSIFICATION
. . . .
Sec. 1.7. Classification Prohibitions and Limitations.
. . . .
PART 2--DERIVATIVE CLASSIFICATION
PART 3--DECLASSIFICATION AND DOWNGRADING
. . . .
Sec. 3.3 Automatic Declassification.
. . . .
Sec. 3.7. National Declassification Center.
. . . .
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PART 4--SAFEGUARDING
PART 5--IMPLEMENTATION AND REVIEW
PART 6--GENERAL PROVISIONS
Sec. 6.3. Effective Date. This order is effective 180 days from the date of
this order, except for sections 1.7, 3.3, and 3.7, which are effective immediately.
(Presidential Sig.)
THE WHITE HOUSE,
December 29, 2010.
**********
3. President Implements Executive Order "Classified National Security Information''
(Source: http://edocket.access.gpo.gov/2010/E9-31424.htm)
75 FR 733-734: Memorandum of December 29, 2009; Implementation of the Executive
Order, "Classified National Security Information''
Memorandum for the Heads of Executive Departments and Agencies
Presidential Documents
Today I have signed an executive order entitled, "Classified National Security
Information'' (the "order''), which substantially advances my goals for reforming
the security classification and declassification processes. I expect that the order
will produce measurable progress towards greater openness and transparency in the
Government's classification and declassification programs while protecting the
Government's legitimate interests, and I will closely monitor the results. I also
look forward to reviewing recommendations from the study that the National Security
Advisor will undertake in cooperation with the Public Interest Declassification
Board to design a more fundamental transformation of the security classification
system. To further assist in fulfilling the goal of measurable progress toward
greater openness and transparency, I hereby direct the following actions.
(1) Initial Implementation Efforts.
Successful implementation of the order requires personal commitment from the
heads of departments and agencies, as well as their senior officials. It also
requires effective security education and training programs, self-inspection
programs, and measures designed to hold personnel accountable.
In accordance with section 5.4 of the order, the head of each department and
agency that creates or handles classified information shall provide the Director of
the Information Security Oversight Office (ISOO) a copy of the department or agency
regulations implementing the requirements of the order. Such regulations shall be
issued in final form within 180 days of ISOO's publication of its implementing
directive for the order. The Director of ISOO shall consider agency actions to
implement the requirements of section 5.4 of the order as a key element in planning
oversight of agencies. Each senior agency official designated under section 5.4(d)
of the order shall provide ISOO with updates concerning agency plans and other
actions to implement the requirements of the order. The Director of ISOO shall
publish a periodic status report on agency implementation.
(2) Declassification of Records of Permanent Historical Value.
Under the direction of the National Declassification Center (NDC), and
utilizing recommendations of an ongoing Business Process Review in support of the
NDC, referrals and quality assurance problems within a backlog of more than 400
million pages of accessioned Federal records previously subject to automatic
declassification shall be addressed in a manner that will permit public access to
all declassified records from this backlog no later than December 31, 2013. In order
to promote the efficient and effective utilization of finite resources available for
declassification, further referrals of these records are not required except for
those containing information that would clearly and demonstrably reveal: (a) the
identity of a confidential human source or a human intelligence source; or (b) key
design concepts of weapons of mass destruction.
The Secretaries of State, Defense, and Energy, and the Director of National
Intelligence shall provide the Archivist of the United States with sufficient
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January 5
guidance to complete this task. The Archivist shall make public a report on the
status of the backlog every 6 months.
(3) Delegation of Original Classification Authority.
Delegations of original classification authority shall be limited to the
minimum necessary to implement the order and only those individuals or positions
with a demonstrable and continuing need to exercise such authority shall be
delegated original classification authority.
Accordingly, heads of departments and agencies with original
classification authority shall commence a review to ensure that all delegations of
original classification authority are so limited and otherwise in accordance with
section 1.3(c) of the order. Each department and agency shall submit a report on the
results of this review to the Director of ISOO within 120 days of the date of this
memorandum.
(4) Promotion of New Technologies to Support Declassification.
Striking the critical balance between openness and secrecy is a difficult
but necessary part of our democratic form of government. Striking this balance
becomes more difficult as the volume and complexity of the information increases.
Improving the capability of departments and agencies to identify still-sensitive
information and to make declassified information available to the public are
integral parts of the classification system.
Therefore, I am directing that the Secretary of Defense and the Director of
National Intelligence each support research to assist the NDC in addressing the
cross-agency challenges associated with declassification.
(5) Publication. The Archivist of the United States is authorized and directed to
publish this memorandum in the Federal Register.
(Presidential Sig.)
THE WHITE HOUSE,
Washington, December 29, 2009
**********
4. President Designates National Security Information Classification Authorities
(Source: http://edocket.access.gpo.gov/2010/E9-31425.htm)
75 FR 735-736: Presidential Order of December 29, 2009 -- Original Classification
Authority
Pursuant to the provisions of section 1.3 of the Executive Order issued today,
entitled ``Classified National Security Information'' (Executive Order), I hereby
designate the following officials to classify information originally as ``Top
Secret'' or ``Secret'':
TOP SECRET
Executive Office of the President:
The Assistant to the President and Chief of Staff The Assistant to the President for
National Security Affairs (National Security Advisor)
The Assistant to the President for Homeland
Security and Counterterrorism
The Director of National Drug Control Policy
The Director, Office of Science and Technology
Policy
The Chair or Co-Chairs, President's Intelligence Advisory Board Departments
and Agencies:
The Secretary of State
The Secretary of the Treasury
The Secretary of Defense
The Attorney General
The Secretary of Energy
The Secretary of Homeland Security
The Director of National Intelligence
Page 4
The
The
The
The
The
The
The
January 5
Secretary of the Army
Secretary of the Navy
Secretary of the Air Force
Chairman, Nuclear Regulatory Commission
Director of the Central Intelligence Agency
Administrator of the National Aeronautics and Space Administration
Director, Information Security Oversight Office
SECRET
Executive Office of the President:
The United States Trade Representative Departments and Agencies:
The Secretary of Agriculture
The Secretary of Commerce
The Secretary of Health and Human Services
The Secretary of Transportation
The Administrator of the United States Agency for International Development
The Administrator of the Environmental Protection Agency Any delegation of this
authority shall be in accordance with section 1.3(c) of the Executive Order, except
that the Director of the Information Security Oversight Office, the Secretary of
Agriculture, and the Administrator of the Environmental Protection Agency may not
delegate the authority granted in this order. If an agency head without original
classification authority under this order, or otherwise delegated in accordance with
section 1.3(c) of the Executive Order, has an exceptional need to classify
information originated by their agency, the matter shall be referred to the agency
head with appropriate subject matter interest and classification authority in
accordance with section 1.3(e) of the Executive Order. If the agency with
appropriate subject matter interest and classification authority cannot readily be
determined, the matter shall be referred to the Director of the Information Security
Oversight Office. Presidential designations ordered prior to the issuance of the
Executive Order are revoked as of the date of this order. However, delegations of
authority to classify information originally that were made in accordance with the
provisions of section 1.4 of Executive Order 12958 of April 17, 1995, as amended, by
officials designated under this order shall continue in effect, provided that the
authority of such officials is delegable under this order. This order shall be
published in the Federal Register.
(Presidential Sig.)
THE WHITE HOUSE,
December 29, 2009.
**********
5. Treasury/OFAC Designates JAYSH RIJAL AL-TARIQ AL-NAQSHABANDI as Blocked Entity
(Source: http://edocket.access.gpo.gov/2010/E9-31313.htm)
75 FR 518: Designation of One Entity Pursuant to Executive Order 13438
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Notice.
* SUMMARY: The Treasury Department's Office of Foreign Assets Control (``OFAC'') is
publishing the name of one newly designated entity whose property and interests in
property are blocked pursuant to Executive Order 13438 of July 17, 2007, ``Blocking
Property of Certain Persons Who Threaten Stabilization Efforts in Iraq.''
* DATES: The designation by the Secretary of the Treasury of the entity and
individual identified in this notice pursuant to Executive Order 13438 is effective
on December 22, 2009.
* FOR FURTHER INFORMATION CONTACT: Assistant Director, Compliance Outreach &
Implementation, Office of Foreign Assets Control, Department of the Treasury,
Washington, DC 20220, tel.: 202/622-2490.
* SUPPLEMENTARY INFORMATION: . . . .
On December 22, 2009, the Secretary of the Treasury, in consultation with the
Secretary of State and the Secretary of Defense, designated, pursuant to one or more
of the criteria set forth in the Order, one entity whose property and interests in
property are blocked pursuant to Executive Order 13438.
Page 5
January 5
The designee is as follows:
JAYSH RIJAL AL-TARIQ AL-NAQSHABANDI (a.k.a. ARMED MEN OF THE NAQSHABANDI ORDER;
a.k.a. NAQSHABANDI ARMY; a.k.a. ``AMNO''; a.k.a. ``JRN''; a.k.a. ``JRTN''), Iraq;
Web site: www.alnakshabandia-army.org; www.alnakshabndia-army.com [IRAQ3]
Dated: December 22, 2009.
Adam J. Szubin,
Director, Office of Foreign Assets Control.
**********
6. DHS/CBP Seeks Comments on Proposed Amendment to Customs Regs re Continuous
Customs Bonds
(Source: http://edocket.access.gpo.gov/2010/E9-30920.htm)
75 FR 266-282: 19 CFR Parts 101, 113, and 133; Customs and Border Protection's Bond
Program
* AGENCIES: Customs and Border Protection, Department of Homeland Security;
Department of the Treasury.
* ACTION: Notice of proposed rulemaking.
* SUMMARY: This document proposes amendments to title 19 of the Code of Federal
Regulations to reflect the centralization of the continuous bond program at Customs
and Border Protection's (CBP's) Revenue Division, Office of Finance. Pursuant to
this centralization, continuous bonds must be filed at the Revenue Division via
mail, fax, or in an electronic format, and the Revenue Division will assume the bond
functions previously performed at the port level. The authority to approve single
transaction bonds will remain with port directors. The changes proposed in this
document support CBP's bond program by ensuring an efficient and uniform approach to
the approval, maintenance, and periodic review of continuous bonds. Additionally,
the proposed changes update provisions to accommodate the use of information
technology and modern business practices.
* DATES: Comments must be received on or before March 8, 2010.
[Remainder of item deleted by Update Editor.]
* FOR FURTHER INFORMATION CONTACT: Bruce Ingalls, Chief, Debt Management Branch,
Revenue Division, Customs and Border Protection, Tel. (317) 298-1307.
Approved: December 14, 2009.
Jayson P. Ahern,
Acting Commissioner, U.S. Customs and Border Protection.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. E9-30920 Filed 1-4-10; 8:45 am]
BILLING CODE 9111-14-P
**********
7. DHS/CBP Announces New Interest Rates Used in Calculating Interest on Overdue
Accounts and Refunds on Customs Duties
(Source: http://edocket.access.gpo.gov/2010/E9-31353.htm)
75 FR 419-420: Quarterly IRS Interest Rates Used in Calculating Interest on Overdue
Accounts and Refunds on Customs Duties
* AGENCY: Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: This notice advises the public of the quarterly Internal Revenue Service
interest rates used to calculate interest on overdue accounts (underpayments) and
refunds (overpayments) of customs duties. For the calendar quarter beginning January
1, 2010, the interest rates for overpayments will be 3 percent for corporations and
4 percent for non-corporations, and the interest rate for underpayments will be 4
percent. This notice is published for the convenience of the importing public and
Customs and Border Protection personnel.
* DATES: Effective Date: January 1, 2010.
* FOR FURTHER INFORMATION CONTACT: Ron Wyman, Revenue Division, Collection and
Refunds Branch, 6650 Telecom Drive, Suite 100, Indianapolis, Indiana 46278;
telephone (317) 614-4516.
* SUPPLEMENTARY INFORMATION:
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Background
Pursuant to 19 U.S.C. 1505 and Treasury Decision 85-93, published in the Federal
Register on May 29, 1985 (50 FR 21832), the interest rate paid on applicable
overpayments or underpayments of customs duties must be in accordance with the
Internal Revenue Code rate established under 26 U.S.C. 6621 and 6622. Section 6621
was amended (at paragraph (a)(1)(B) by the Internal Revenue Service Restructuring
and Reform Act of 1998, Pub. L. 105-206, 112 Stat. 685) to provide different
interest rates applicable to overpayments: one for corporations and one for
non-corporations.
The interest rates are based on the Federal short-term rate and determined by
the Internal Revenue Service (IRS) on behalf of the Secretary of the Treasury on a
quarterly basis. The rates effective for a quarter are determined during the
first-month period of the previous quarter.
In Revenue Ruling 2009-37, the IRS determined the rates of interest for the
calendar quarter beginning January 1, 2010, and ending on March 31, 2010. The
interest rate paid to the Treasury for underpayments will be the Federal short-term
rate (1%) plus three percentage points (3%) for a total of four percent (4%). For
corporate overpayments, the rate is the Federal short-term rate (1%) plus two
percentage points (2%) for a total of three percent (3%). For overpayments made by
non-corporations, the rate is the Federal short-term rate (1%) plus three percentage
points (3%) for a total of four percent (4%). These interest rates are subject to
change for the calendar quarter beginning April 1, 2010, and ending June 30, 2010.
For the convenience of the importing public and Customs and Border Protection
personnel the following list of IRS interest rates used, covering the period from
before July of 1974 to date, to calculate interest on overdue accounts and refunds
of customs duties, is published in summary format.
[Remainder of item deleted by Update Editor.]
Dated: December 29, 2009.
Jayson P. Ahern,
Acting Commissioner, U.S. Customs and Border Protection.
**********
8. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: http://www.archives.gov/federal-register/)
* DEFENSE ACQUISITION REGULATIONS SYSTEM; PROPOSED RULES; Defense Federal
Acquisition Regulation Supplement: Foreign Participation in Acquisitions in Support
of Operations in Afghanistan [Publication Date: 1/6/2010]
* INDUSTRY AND SECURITY BUREAU; NOTICES; Action Affecting Export Privileges: Hailin
Lin [Publication Date: 1/6/2010]
**********
9. Ex/Im Items in Congressional Record
(Source: Barnes, Richardson & Colburn, LLP,
http://www.barnesrichardson.com/daily/daily.aspx)
LEGISLATIVE INFORMATION IN THE CONGRESSIONAL RECORD Vol. 155, No. Monday, January
04, 2010 (Congress was not in session Monday, January 4, 2010; will next meet
Tuesday, January 5, 2010.)
**********
10. US International Trade Commission Publishes New Version of US Harmonized Tariff
Schedule
(Source: http://www.usitc.gov/tata/hts/)
Official Harmonized Tariff Schedule -- This version of the US Harmonized Tariff
Schedule takes effect January 1, 2010.
This page consists of the most recent online versions of the Harmonized Tariff
Schedule, which may be an updated version of the last printed publication. Usually,
the links provided will be either to the basic annual edition or its supplement(s),
although there are intermediate electronic revisions that may be available. The
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January 5
USITC (Office of Tariff Affairs and Trade Agreements) is responsible for publishing
the Harmonized Tariff Schedule of the United States Annotated (HTSA). The HTSA
provides the applicable tariff rates and statistical categories for all merchandise
imported into the United States; it is based on the international Harmonized System,
the global system of nomenclature that is used to describe most world trade in
goods. Although the USITC publishes and maintains the HTSA in its various forms,
Customs and Border Protection is the only agency that can provide legally binding
advice or rulings on classification of imports. Contact your nearest Customs office
with questions about how potential imports should be classified. For a binding
ruling on classification, contact the Bureau of Customs and Border Protection. The
Harmonized Tariff Schedule is available from the Government Printing Office in
hardcopy form. If you would like to order a subscription to the latest printed
edition, the 2010 HTS can be ordered from http://bookstore.gpo.gov
HTS 2010 (effective 2010-01-01):
2010 HTSA Basic -- by chapter: <http://www.usitc.gov/tata/hts/bychapter/index.htm>
2010 HTSA Basic -- full edition [PDF]:
<http://www.usitc.gov/publications/docs/tata/hts/bychapter/1000htsa.pdf>
For tariff information from previous years, please visit the HTSA Archive page at
<http://www.usitc.gov/tata/hts/archive/index.htm>.
**********
11. Expeditors Newsflash: Presidential Proclamation Amends GSP Beneficiary Countries
(Source: http://www.expeditors.com/index.asp, 206-674-3400. Reprinted by
permission.)
On December 23, 2009, President Barack Obama issued a Proclamation amending the
eligible beneficiary countries under the Generalized System of Preferences (GSP).
In Proclamation 8467, the President has added Maldives to the GSP program, while
removing Trinidad and Tobago. Cape Verde will remain an eligible beneficiary country
for GSP, however no longer will be considered as a least-developed beneficiary
country. The Proclamation also stated that two additional countries, Equatorial
Guinea and Croatia, would no longer be eligible for GSP beginning January 1, 2011.
The full text of the Proclamation can be
http://edocket.access.gpo.gov/2009/pdf/E9-31096.pdf Expeditors Newsflash, (206)
674-3400, expeditors.newsflash@expeditors.com. This is a recurring email. This email
address was submitted to Expeditors through our subscription page. Subscription
information to subscribe or unsubscribe can be accessed at
http://www.expeditors.com/newsflash. Current and past issues of the Newsflash can
also be accessed through the front page of our web site or at
http://www.expeditors.com/newsflash.
**********
12. International Government Contractor: "AIA Urges U.S. Export Control Changes"
(Source: International Government Contractor,
http://west.thomson.com/productdetail/126903/40310628/productdetail.aspx; published
monthly by Thomson Reuters, Rick Southern, Sr. Principal Attorney Editor. Used by
permission.)
Dec. 2009. Members of the Aerospace Industries Association (AIA) recently wrote
President Obama to encourage the administration to act on initiatives to modernize
the U.S. export control system. On August 13, Obama directed the National Security
Council (NSC) and the National Economic Council (NEC) to spearhead a broad-based,
interagency review of the U.S. export control system. White House press secretary
Robert Gibbs stated at the time that NSC and NEC would review the overall system,
including dual-use and defense-trade processes, to enhance U.S. national security,
foreign policy and economic security interests. Although the U.S. has "one of the
most robust export control systems in the world," Gibbs said, "it is rooted in the
Cold War era of over 50 years ago and must be updated to address the threats we face
today and the changing economic and technological landscape." See 6 IGC ¶ 63.
Established by the National Security Act of 1947, P.L. 235-61, NSC is the
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January 5
president's principal forum for national security and foreign policy matters.
Chaired by the president, it regularly includes the vice president, the chairman of
the Joint Chiefs of Staff, the Director of National Intelligence, the secretaries of
defense, state and the treasury, and other cabinet officials, as appropriate. The
president's national security advisor is retired Marine Corps Gen. James Jones. NEC
was set up in 1993 within the White House Office of Policy Development to advise the
president on global economic policy. Chaired by NEC Director Lawrence Summers, it,
too, includes department and agency heads in relevant policy areas.
Under the Arms Export Control Act of 1976, 22 USCA § 2778, the State
Department regulates export of military items on the U.S. Munitions List. Under the
Export Administration Regulations (EAR), the Commerce Department Bureau of Industry
and Security regulates the export of dual-use items listed on the Commerce Control
List. The EAR's authorizing statute is the Export Administration Act of 1979 (EAA),
which lapsed in August 2001. Since then, the EAA has been applied under EO 13222 and
the president's authority to declare a national emergency under the International
Emergency Economic Powers Act, 50 USCA § 1701 et seq. The president August 13
continued for one year the national emergency caused by the EAA's lapse. See 74 Fed.
Reg. 41323 (Aug. 14, 2009).
AIA believes the review could create the framework for an effective export
control system that facilitates international collaboration, as well as safeguarding
critical technologies. It cited several potential reform initiatives that would not
require new legislation, and would "go a long way towards developing" an effective
export control system.
AIA urged the administration to (1) establish criteria to identify critical
and sensitive defense and space technologies that require rigorous controls; (2)
facilitate "timely technology flows" between the U.S. and its allies to support
defense and national security programs; (3) adopt procedures to ensure that required
Defense Department reviews of proposed releases of U.S. technology "properly balance
both policy and technical considerations, and are completed in a timely and
consistent manner"; (4) update treatment of the "next-generation of aerospace and
defense technologies, such as Unmanned Aircraft Systems (UAS), under U.S. and
multilateral export control regimes"; (5) clarify export control compliance
requirements for firms; and (6) review resource requirements "to raise confidence in
the effectiveness of U.S. enforcement efforts."
The letter said that "immediate attention on these matters, together with
ratification of the pending bilateral defense trade cooperation treaties with the
United Kingdom and Australia, will advance [U.S.] national security interests." See
4 IGC ¶ 59. The letter also noted that previous modernization efforts have met with
varying degrees of success, and that meaningful reform depends on sustained
administration oversight and input from Congress and the private sector. The letter
was signed by members of the Executive Committee of AIA's Board of Governors, the
Executive Committee of the Supplier Management Council and other AIA member
companies.
**********
13. World Trade\INTERACTIVE: "CBP to Centralize Continuous Bond Program"
(Source: www.strtrade.com/wti/register.asp; Copyright 2008, Sandler, Travis &
Rosenberg, P.A. Originally published in the Tuesday, January 5, 2010, issue of
ST&R's WorldTrade\Interactive. Reprinted by permission.)
U.S. Customs and Border Protection has issued a proposed rule that would amend its
regulations to reflect the centralization of the continuous bond program at CBP's
Revenue Division Office of Finance in Indianapolis, Ind. Comments on this proposal
are due by March 5.
CBP states that pursuant to the centralization of the continuous bond program,
continuous bonds must be filed, reviewed and, if approved, maintained at the RD. CBP
is proposing that the documentation for these types of bonds, including CBP Form
301, applications, riders, terminations, power of attorney forms and importer ID
input records (CBP Form 5106), must be filed at the RD via mail, fax or an
electronic format prescribed by CBP. The RD will assume the bond functions
previously performed at the port level, except that the authority to approve single
transaction bonds will remain with port directors.
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January 5
CBP notes that most continuous basic importation bonds are no longer processed and
retained on file at the ports and that the majority of bond sufficiency matters
concerning these bonds are currently processed at the RD. Consequently, under
existing procedures, any person required to post a continuous basic importation bond
to secure a CBP transaction or multiple transactions has the option of filing the
bond directly with the port director or indirectly to the RD. However, continuous
basic importation bonds that are submitted directly to the port are subsequently
referred to the RD by the port director.
**********
14. World Trade\INTERACTIVE: "DOJ Announces
for FCPA Violations"
(Source: www.strtrade.com/wti/register.asp;
Rosenberg, P.A. Originally published in the
ST&R's WorldTrade\Interactive. Reprinted by
$1.5 Million Penalty of UTStarcom Inc.
Copyright 2008, Sandler, Travis &
Tuesday, January 5, 2010, issue of
permission.)
The Department of Justice announced Dec. 31 that a global telecommunications
corporation [UTStarcom Inc.] headquartered in California has agreed to pay a $1.5
million fine for violating the Foreign Corrupt Practices Act by providing travel and
other things of value to employees at state-owned telecom firms in China. In a
related matter, the corporation has reached a settlement with the Securities and
Exchange Commission under which it will pay an additional $1.5 million penalty and
satisfy additional obligations for a period of four years.
According to a DOJ press release, the U.S. company has acknowledged responsibility
for the actions of its wholly-owned Chinese subsidiary and its employees and agents,
who arranged and paid for employees of Chinese state-owned telecom companies to
travel to popular tourist destinations in the U.S. The trips were purportedly for
those individuals to participate in training at the company's facilities, but the
company had no facilities in those locations and conducted no training. Instead, the
true purpose for providing these trips was to obtain and retain lucrative telecom
contracts.
In addition to the penalty, the agreement requires the company to implement rigorous
internal controls and cooperate fully with the DOJ. The agreement recognizes the
company's voluntary disclosure, thorough self-investigation of the underlying
conduct, cooperation with the DOJ and remedial efforts. As a result of these
factors, the department has agreed not to prosecute the company or its subsidiaries
in this case provided that the company satisfies its obligations under the
agreement.
**********
15. A. Graddy: "U.S. Duty Suspensions Have Expired"
(Source: BDP Tradewatch; BDP International, bdp@bdpnet.ccsend.com)
* Author: Adrienne Graddy, Corporate Director, Compliance Solutions, 847-350-2156,
adrienne.graddy@bdpinternational.com
Many duty suspensions that had benefited importers over the last two years expired
on December 31, 2009 as no action was taken by the Senate to pass a Miscellaneous
Tariff Bill (MTB).
There currently are discussions concerning the possibility of passing a scaled back
MTB early this year, with a second MTB containing more duty suspensions later in
2010. The first MTB would include bills designed to extend expiring tariff
suspensions vetted by the U.S. International Trade Commission (USITC) and may also
include new duty suspensions cleared by the USITC. The second MTB could include all
measures not yet vetted by the Senate or the USITC.
A key issue is whether the Congress will authorize refunds for higher duties paid
between the December 31, 2009 expiry and the date when the duty suspensions are
reinstated. In the past, when duty suspensions had lapsed, companies did not
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January 5
normally receive refunds. However, there have also been opportunities in the past
for importers to file for retroactive refunds.
Previous retroactive refund filing processes have been viable for only a very short
period, usually 90 days. Instructions from CBP on the process indicate that refund
requests are to contain specific language and have specific documentation attached
to substantiate the claim.
Should a retroactive refund process/period be announced, importers should move
quickly to determine if any commodity, on which duty was paid after December 31,
2009, qualifies under the refund process.
In addition, as duty is being calculated and paid on items that previously have
entered duty free, a review of bond sufficiency should take place to ensure that
shipments are not held by CBP for insufficient bond amount.
BDP International is available to assist with any announced retroactive refund
filing process and to assist you with a review of your bond sufficiency.
**********
16. R.C. Burns: "The Name Game Chinese Style"
(Source: Export Law Blog, www.exportlawblog.com.
Reprinted by permission.)
* Author: R. Clifton Burns, Esq, Bryan Cave LLP, Wash DC, 202-624-3949,
Clif.Burns@bryancave.com)
An interesting story
<http://online.wsj.com/article/SB126256626983914249.html?mod=googlenews_wsj> in
today's Wall Street Journal details instances in which a number of U.S. companies
imported items from China Precision Machinery Import Export Corporation
<http://www.nti.org/db/china/cpmiec.htm> despite the fact that CPMIEC is on the
Office of Foreign Assets Control's Specially Designated Nationals List
<http://www.treas.gov/offices/enforcement/ofac/sdn/sdnlist.txt>. The reason for
this, asserts the story, is that Chinese companies on the SDN list "have proved
adept at creating aliases or subsidiary shell companies to mask their ownership."
Consider this example cited in the article:
"John Iliff, general manager of American Forge & Foundry, says the single
shipment of oil-drainage tanks it received in 2006 from the CPMIEC unit set off no
alarms. "Trading in illegal goods certainly never crossed our minds," he says. The
shipment came from China JMM Import & Export Shanghai Pudong Corp., which didn't
appear on any sanctions list until Thursday. Records indicate the company shares an
address and phone number with a CPMIEC unit that was previously banned: CPMIEC
Shanghai Pudong Corp. The Treasury determined that the two companies are
affiliated."
That designation
<http://www.treas.gov/offices/enforcement/ofac/actions/20091231.shtml> of JMM Import
& Export occurred just a few days ago on December 31, 2009, almost three years after
the cited shipment. But there were several red flags that American companies might
have picked up on before OFAC's belated designation of the CPMIEC affiliate. Not
only is there a similarity in the names of the two companies, but they shared the
same street address. Standard procedure should be not only to check names on the SDN
list but addresses as well.
But the larger issue here is that the obvious ease with which Chinese companies can
morph into new entities effectively renders company-based sanctions almost
completely ineffective. It's obviously as easy for Chinese companies to rename
themselves as it is for underage Chinese gymnasts to acquire new, earlier and
eligible birth dates on official documents. I'm not so sure what the solution is
here but it doesn't appear to be imposing penalties or additional compliance
obligations on U.S. companies that deal with affiliates of companies on the SDN
list.
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January 5
**********
17. Ex/Im Movers & Shakers: Jim Dickeson Launches "Import Export Geeks"
(Source: Jim Dickeson, Jim@importexportgeeks.com)
Jim Dickeson, formerly of Vastera's Trade Management Consulting practice, has
launched a new business named Import Export Geeks, Inc., offering computer-based
training in U.S. import and export regulations. The Geeks' first product is
"Excellent Export Basics: Export Controls and License Determination", which can be
viewed at www.importexportgeeks.com. Contact Jim at Jim@importexportgeeks.com.
**********
18. "ITAR: Beyond the Basics" Seminar Feb 4-5 in West Palm Beach
(Source: Suzanne Palmer, spalmer@exportcompliancesolutions.com)
* What: ITAR Seminar: "ITAR: Beyond the Basics"
* When: February 4-5, 2010
* Where: Phillips Point Club by the Breakers, West Palm Beach, FL
* Sponsor: Export Compliance Solutions (ECS)
* Speakers: Suzanne Palmer, Patty Dudley, Paul Lasko
* Registration: http://www.exportcompliancesolutions.com, 410-757-1919, or
866-238-4018. Please mention to sponsor that you are a Ex/Im Daily Update
subscriber.
**********
19. Are Your Copies of Ex/Im Regs Up to Date? Latest Changes & Sources:
(Source: As indicated below.) The official versions of the following regulations are
dated 1 April (although published annually in June or July) in the U.S. Code of
Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.
The below list contains the latest change to each regulation.
* ATF ARMS IMPORT REGULATIONS (ATF), Department of Justice, Bureau of Alcohol,
Tobacco, Firearms, and Explosives; 27 CFR Part 447-Importation of Arms, Ammunition,
and Implements of War:
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=0624fc9399af9afc346df6f1f00
c88df&rgn=div5&view=text&node=27:3.0.1.2.2&idno=27
- 2 Oct 08: 73 FR 57239-57242: 27 CFR Parts 447, 478, 479, and 555;
Technical Amendments to Regulations in Title 27, Chapter II
* CUSTOMS REGULATIONS (CR): 19 CFR, Ch. 1, Pts. 0-192:
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?sid=7a725853611431bc58ba37d919f9324b&c
=ecfr&tpl=/ecfrbrowse/Title19/19tab_02.tpl
- 30 Dec 09: 74 FR 69015-69021: 19 CFR Parts 111, 113, 141, 142 and 143;
Remote Location Filing
* EXPORT ADMINISTRATION REGULATIONS (EAR): 15 CFR Subtit. B, Ch. VII, Pts. 730-774:
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?sid=ae096b291da9d16eab0b4af95b5d5866&c
=ecfr&tpl=/ecfrbrowse/Title15/15cfrv2_02.tpl#700
- 24 Dec 09: 74 FR 68370-68372: 15 CFR Parts 730, 734, 736, 738, 742, 744,
745, 754 and 774; Updated Statements of Legal Authority To Reflect Continuation of
Emergency Declared in Executive Order 12938 and Changes to the United States Code
* FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR), 31 CFR, Parts 500-599, Embargoes,
Sanctions, Executive Orders:
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?sid7512a3e262e688321f54bbe4ee1aff1d&c=
ecfr&tpl=/ecfrbrowse/Title31/31cfrv3_02.tpl#500
- 23 Nov 09: 74 FR 61036-61037: 31 CFR Part 594; Global Terrorism Sanctions
Regulations
- 23 Nov 09: 74 FR 61030-61036: 31 CFR Parts 538 and 560; Sudanese Sanctions
Regulations; Iranian Transactions Regulations
* FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30, Jan. 1, 2009;
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=e04a50b601e3e05b3a1e870e384
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January 5
3b757&tpl=/ecfrbrowse/Title15/15cfr30_main_02.tpl
- 5 Aug 09: 74 FR 38914-38916: 15 CFR Part 30; Eliminate the Social Security
Number (SSN) as an identification number in the Automated Export System (AES)
* HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA), 1 Jan 2010:
19 USC 1202 Annex: http://www.usitc.gov/tata/hts/. [Editor's Note: "HTS" and "HTSA"
are often seen as abbreviations for the Harmonized Tariff Schedule of the United
States Annotated, shortened versions of "HTSUSA".]
* INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR) 22 C.F.R. Ch. I, Subch. M, Pts.
120-130 (2008):
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?sid=6c0d30f40ed2aac29b20e86ead3a8861&c
=ecfr&tpl=/ecfrbrowse/Title22/22cfrv1_02.tpl and scroll down to "SUBCHAPTER M".
Printed copies of the ITAR in several sizes are available for purchase from SIA at
http://www.siaed.org/en/catalogs/search.asp. "The Annotated ITAR," an unofficial
version with practice commentary, in Word 2007 and pdf format, 225 pages (last
updated 4 Jan 2010), is available free upon request from author Jim Bartlett,
JEBartlett@JEBartlett.com.
- 6 Aug 09: 74 FR 39212-39213; 22 CFR Parts 127.13, re body armor temporary
export exemption
**********
**********
EDITORIAL POLICY:
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**********
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