New Sanctions For Libya

On February 25, 201, President Obama signed Executive Order 13566, which blocks property and prohibits certain transactions related to Libya. Members of the immediate family of Colonel Muamar Gaddafi have been added to the OFAC’s SDN List. Additional persons and entities will be added. The Office of Foreign Assets Control issued a General License that authorizes transactions related to certain third-country Libyan-owned or controlled banks.

Although the Libya is already subject to an arms embargo, the Directorate of Defense Trade Controls (DDTC) announced the immediate suspension of all export licenses for defense articles and technical data that have been issued under the ITAR. In addition, no ITAR exemptions may be utilized to export items subject to the ITAR to Libya. The U.S. Federal Aviation Administration (FAA) issued a notice to U.S. operators of civil aircraft to "exercise extreme caution" with respect to flight operations to or from Libya. U.S. companies using corporate aircraft to remove employees in Libya should check with their flight companies and the FAA when making arrangements. The United Nations Security Council adopted Resolution 1970 imposing sanctions and other actions on Libya.

Click HERE to view the Executive Order.

CBP Publishes FAQ on Instruments of International Traffic

U.S Customs and Border Protection published a Frequently Asked Questions (FAQ) document on Instruments of International Traffic Imported with Residue. The information is designed to help the trade community understand obligations of transporting carriers concerning the advance electronic cargo information and importers for entry requirements required by HQ Ruling H026715. The FAQ provides information about the definition, parties responsible to make entry, how to determine value and various scenarios. Enforcement begins July 17, 2011. 

   

Click HERE to view the FAQ document.

CBP Issues Request of Comments on Notice of Detention

On February 22, CBP published a request for comments in the Federal Register related to the Notice of Detention.

Pursuant to 19 U.S.C. 1499 and 19 CFR 151.16 U.S. Customs and Border Protection may detain merchandise when it has reasonable suspicion that the subject merchandise may be inadmissible but requires more information to make a positive determination. So, if a CBP officer stops you at the border, examines your laptop, discovers something suspicious and takes it from you, then the laptop has been detained. When CBP decides to detain merchandise, a Notice of Detention is sent to the importer or to the importer's broker/agent no later than five business days from the date of examination. The notice states that the merchandise has been detained, the reason for the detention, and the anticipated length of the detention.

Respondents are invited to provide comments related to ways to enhance the quality, utility, and clarify of the information collected, ways to minimize the burden of information and whether the information is necessary and has practical utility.

Comments are due by April 25, 2011.

Kudos to Con-Way

Employees at Con-Way in Lubbock, Texas spotted a suspicious package, reported to it to management, who reported it to local law enforcement officials. The package contained phenol, an explosive chemical used to make bombs. The FBI arrested Khalid Ali-M Aldawsari and charged him with attempted use of a weapon of mass destruction. The FBI found a journal that provided his plans for an attack inside the U.S., which included information about renting cars, planting the bombs and positioning them at various locations during rush hours. Aldawsari came to the U.S. from Saudi Arabia in 2008 on a student visa.

Kudos to the employees at Con-Way for identifying the cargo and to Con-Way for implementing security measures to detect potential terrorist threats!

CBP Trade Symposium Sold Out

All of the seats for attendance at the CBP Trade Symposium on April 13 – 14 in Washington, D.C. have been sold out; however, the public can still register for the live webcast for $150. The live webcast provides two days of broadcasting from the symposium and access to the recoded sessions for a limited time after the event.


Click HERE to register.

What's Happening With ACTA?

There seems to be a little tug-of-war going on with the potential intellectual property agreement known as the Anti-Counterfeiting Trade Agreement (ACTA). ACTA seeks to provide international enforcement of intellectual property rights through cooperation and coordination among international governmental agencies.


Most people agree that protection of intellectual property encourages creativity that is essential to continued growth and success of the economy; however, there seems to be disagreement surrounding some of the text of the Act, the secrecy in drafting it and the potential of its passage without Congressional approval.

Today's technological advancements and the ability of foreign manufacturers to produce lower cost goods present almost limitless opportunities for distribution of goods that are authorized by the IPR owner. However, this same technology and low cost production provide the same opportunities for proliferation of products that infringe on intellectual property rights. For example, anyone with a computer equipped with a CD and/or DVD burner and a stack of discs can illegally copy and distribute protected works. The lack of protection and enforcement has led to widespread unauthorized copying and use of unlicensed marks to flood the market with goods that violate intellectual property rights.

Parties involved in negotiations include the U.S., the EU, Japan, South Korea, Canada, Mexico, Australia, Morocco, Singapore, Switzerland and New Zealand. Click HERE to view the most recent text published on November 15, 2010.

On December 17, 2010, the USTR published a notice in the Federal Register, requesting written comments from the public on the final text of the Agreement. Click HERE to read the comments submitted in response to the final text of ACTA.

• Some of the comments, including those from a group of university professors, stated that ACTA must be submitted for Congressional approval pursuant to Article I Section 8 and that the Obama administration could not unilaterally enter into an international agreement on intellectual property rights.

• Other comments opposed portions of the agreement because they believed that the current text of those parts would foster increased criminal penalties for infringement in the U.S.

• Some comments supported ACTA for the increased authority it provides to U.S. Customs and Border Protection (CBP). The same comments also praised the enhanced provisions for seizure of infringing goods and criminal enforcement for violators.

As importers, exporters and other members of the trade community, what do you think of ACTA? Are there provisions that need change? Does the President have the authority to sign the agreement without Congressional approval? We’d like to hear your comments.

Click HERE to view recent ACTA events on the USTR web site.

Stay tuned to this blog for more developments.

International Trade Acronyms

Welcome to our weekly list of acronyms used in international trade. The acronyms found here represent terms used in logistics, imports, exports, government agencies and more. We start our series with acronyms starting with “A.” Please feel free to contribute additional acronyms to the list.

AAEI	American Association of Exporters and Importers
ABI	Automated Broker Interface
ACE	Automated Customs Environment
ACH	Automated Clearing House
ACS	Automated Commercial System
ACT	Assessment Compliance Testing
AD/ADD	Antidumping/ Antidumping Duty
AECA	Arms Export Control Act
AES	Automated Export System
AGOA	African Growth and Opportunity Act
AGR	Agriculture – EAR License Exception
AMS	Automated Manifest Systems
APHIS	Animal and Plant Health Inspection Service – Agency of USDA
APO	Administrative Protective Order – Antidumping/Countervailing/Export Issues
ATF	Bureau of Alcohol, Tobacco, Firearms, and Explosives – Agency of DOJ
ATPA	Andean Trade Preference Act
ATPDEA	Andean Trade Promotion & Drug Eradication Act
ATS	Automated Targeting System
AWB	Air Waybill

Are Some Bribes Acceptable?

The news is full of articles about corporations in trouble for violating the Foreign Corrupt Practices Act (FCPA), yet the U.S. openly approves of certain bribes when made by the government. Is this another “do as I say and not as I do” situation?

All parts of the cotton plant serve a useful function, from the fiber used to make cloth to the cottonseed used for oil in cooking oil and salad dressing. Cotton is the backbone of American exports and as such, cotton farmers have as been subsidized by the government for decades. In addition to the U.S. subsidies, the U.S. also subsidizes Brazilian cotton farmers.

If you are scratching your head and wondering why we would do such a thing, let’s look at the history that brings us to the present day subsidy.

In 2002, Brazil filed a complaint against U.S. cotton subsidies with the World Trade Organization. While subsidizing farms is allowable, it is limited and Brazil argued that the U.S. subsidies violated the trade rules. The WTO agreed and gave Brazil permission to impose retaliatory duties on U.S. exports to Brazil.

Faced with obtaining approval from Congress or a trade war with Brazil, the government was caught in a difficult situation, so the U.S. came up with a plan to send money to Brazil until Congress had a chance to change the cotton program. Now, what should we call these payments? Brazil has the right to impose retaliatory duties on U.S. exports, but the U.S. agrees to send Brazil a check until we get our act together to reduce our own subsidies. Some might call these payments a bribe. Indeed, if a U.S. corporation made the same type of payments to the Brazilian government, they might well find themselves in the middle of an FCPA investigation.

So, with these payments in place, will the U.S. government work to fix the U.S. subsidies to farmers or will they keep on paying Brazil in hopes that they will be happy and not rock the boat?

"Operation Broken Hearted" Shuts Down Websites

If it looks and sounds too good to be true, then U.S. Immigration and Customs Enforcement “ICE” will check it out and possibly shut it down. As part of “Operation in Our Sites,” ICE served orders seizing 18 domain names of websites selling counterfeit goods over the Internet.

Launched in June 2010, "Operation in Our Sites" targets Internet counterfeiting and piracy of items such as movies, music, pharmaceuticals, software, electronics and games. As part of “Operation Broken Hearted,” the fourth phase of this initiative, Federal law enforcement officials purchased made undercover purchases from suspected online merchants. The purchases netted counterfeit jewelry, handbags, sunglasses and wallets representing brand names such as Burberry, Chanel, Coach, Gucci, Louis Vuitton, Nike, Rolex and Timberland. Click HERE to view a list of websites seized and additional information about “Operation Broken Hearted.”

Most of the goods were shipped directly to the U.S. from other countries using international express mail. Once the goods were confirmed to be counterfeit, seizure orders were obtained. When accessing these websites now, users will see a banner notifying them that the website/domain has been seized by federal authorities. ICE Director John Morton stated, "These counterfeits represent a triple threat by delivering shoddy, and sometimes dangerous, goods into commerce, by funding organized criminal activities and by denying Americans good-paying jobs. HSI and our partners at the IPR Center will continue to work together to keep counterfeit products off our streets."

Protection of intellectual property encourages creativity that is essential to continued growth and success of the U.S. economy. Without protection, companies and individuals may not be as willing to invest the time and money necessary to develop new products that enhance, and in many cases, save our lives. Without proper enforcement, manufacturers may produce lower cost inferior goods by violating the trademark, copyright and patent laws. Some of these inferior goods such as pharmaceuticals could be hazardous to consumer’s health because they are not manufactured under the same regulations and processes as the patented or trademarked goods.

The IPR Center and the Department of Justice Task Force on Intellectual property (IP Task Force) work to eliminate the growth of intellectual property violations. They encourage involvement from the holders of IPR to assist them in the fight against this growing problem. To learn more about these efforts, visit the IPR Center at http://www.ice.gov/iprcenter/

Stay tuned as we eagerly await news of more seizures by ICE agents in the next phase of “Operation in Our Sites.”

Tyson's $5 Million FCPA Penalty Not "Chicken Feed"

Last week, Tyson Foods Inc. agreed to pay a $4 million criminal penalty and $1.2 million in disgorgement and pre-judgment interest to settle charges related to illegal payments by company representatives to government-employed inspection veterinarians in Mexico and a cover-up of the payments.  The Department of Justice and Securities and Exchange Commission initiated action against Tyson based on violations of the Foreign Corrupt Practices. Act.

According to The Department of Justice Assistant Attorney General Breuer, “Tyson Foods used false books and sham jobs to hide bribe payments made to publicly-employed meat processing plant inspectors in Mexico.”  Robert Khuzami, Director of the SEC’s Division of Enforcement stated that “Tyson and its subsidiary committed core FCPA violations by bribing government officials through no-show jobs and phony invoices, and by having a lax system of internal controls that failed to detect or prevent the misconduct,” The SEC said “it was not until two years after Tyson Foods officials first learned about the illicit payments that its counsel instructed Tyson de Mexico to cease making the payments."

As part of the settlement, Tyson, headquartered in Springdale, Arkansas, admitted that employees at subsidiaries and agents made improper payments to government-employed veterinarians who inspected two of its chicken processing plants in Gomez Palacio, Mexico.  In addition to the monetary penalties, Tyson must implement rigorous internal controls and cooperate fully with the Department of Justice and Securities and Exchange Commission.  

Click HERE to view the complaint filed by the SEC.

Sources

Securities and Exchange Commissions. (2011, February). SEC Charges Tyson Foods with FCPA Violations. Retrieved from http://www.sec.gov/news/press/2011/2011-42.htm

Department of Justice. (2011, February). Tyson Foods Inc. Agrees to Pay $4 Million Criminal Penalty to Resolve Foreign Bribery Allegations  Retrieved from http://www.justice.gov/opa/pr/2011/February/11-crm-171.html

CBP Announces April 2011 Trade Symposium

U.S. Customs and Border Protection (CBP) announced that the 2011 Trade Symposium will be held April 13 – 14, 2011 at the Ronald Reagan Building and International Trade Center in Washington, DC. This year’s theme is "Working Together to Strengthen Economic Competitiveness.”


Attendance Options

1. Onsite Participation

To attend the meeting onsite in Washington, DC, click HERE to register. Registration for onsite participation will open on February 14, 2011 at 12:00 p.m. eastern time. The registration fee for onsite participation is $450.00 U.S. dollars. Registration and payment must be made online. Symposium, each company is requested to limit their registrations to three participants to afford equal representation from all members of the international trade community.


2. Webcast Participation

Complete the Webcast Compatibility Test by clicking HERE prior to completing registration. Click HERE to register for the webcast. ) Webcast registration for participation via the Internet will open on February 14, 2011 at 2:00 p.m. eastern time. The registration fee for participation via the web is $150.00 U.S. dollars. Registration and payment must be made online

Click HERE to view the agenda and other details about the Symposium.

Battle Over Free Trade Agreements

While Ambassador Kirk provided news that President intends to submit the Korea FTA to Congress “in the next few weeks” with hopes of approval by spring, Republicans pulled the bill that would have reauthorized the Andean Trade Preference Act for six months and extended the Trade Adjustment Assistance program.

Ambassador Kirk indicated that he has been directed to move forward to resolve the remaining issues with Columbia and Panama so that those agreements could be presented to Congress this year. Kirk indicated that the remaining issues were significant and included protection of labor rights. The parties need to be prepared to take significant actions to resolve these issues in order for the process to move forward timely.

Although Committee Chairman Dave Camp indicated that the labor issues were impeding passage of other items on the trade agenda, such as the ATPA and TAA, he might as well have said that the Republicans were going to hold extension of the ATPA and TAA hostage until they get what they want for the new FTAs.

Stay tuned, this battle isn’t over yet!

Should Experience Be Required to Obtain a Customs Broker License?

Beware: This topic might stir up a little controversy and debate!

Every now and then, I see an article or question about someone wanting to start a new customs brokerage office. These eager entrepreneurs either are contemplating the upcoming Customs Broker Exam (CHB Exam) or have recently passed it. The person continues to explain that they do not have any experience and would like some advice. For those of us who have been in the business a few years or so, our immediate response is “get some experience first.” However, a newly licensed entrepreneur might not be thwarted by that advice. Technically, someone who passes the CHB Exam can open his or her own customs brokerage business without any prior experience. This thought scares me, but then again, I’m not a huge risk taker.

Should CBP require a certain amount of experience or education prior to issuing a license? Let us look at some of the other professions that require licensure for a little guidance and compare with the requirements for becoming a Licensed Customs Broker.

Customs Brokers
Requirements for becoming a licensed customs broker include:

• Passing the Customs Broker License Exam
• submitting the license application with appropriate fees
• being a U.S. citizen and at least 21 years old
• not being a current employee of the Federal Government.


Pharmacists
Requirements for becoming a pharmacist include:

• completing at least two years of pre-pharmacy courses in college;
• graduating from a four-year pharmacy program;
• completing an internship; and
• passing a state licensing exam.


Accountants
Requirements for becoming an accountant include:

• completing a bachelor's degree; and
• majoring in accounting.

Requirements to become a certified public accountant (CPA) include:
• completing a five-year, 150 credit hour accounting program (awards a bachelor's or master's degree);
• having public accounting experience; and
• passing the Uniform CPA Examination.


Truck Drivers
Requirements for becoming a heavy truck driver include:

• completing a high school diploma or GED;
• being at least 18 years old (intrastate driving) or 21 years old (interstate); and
• obtaining a commercial driver's license (CDL), which requires passing written and practical tests.
• Although formal training is not mandated, most drivers learn skills through formal programs offered by specialized schools that offer certificates or diplomas. Some states may require completion of a basic truck-driving training program to obtain a commercial driver's license. Many people work in other related jobs such as driving light trucks, operating equipment or unloading trucks before becoming heavy truck drivers. Once hired, they may work with an experienced driver for a short time and receive additional training.


Plumbers
Requirements for becoming a plumber include:

• completing a high school diploma or GED;
• completing classroom course work;
• completing on-the-job training; and
• passing a state or local licensing exam.

	High School/ GED	College	Experience	Exam/License
Customs Broker	No	No	No	Yes
Pharmacist	Yes	Yes	Yes	Yes
Accountant/CPA	Yes	Yes	Yes	Yes
Truck Driver	Yes	No	No	Yes
Plumber	Yes	No	Yes	Yes

After reviewing these jobs, you will notice that they require some combination of education, examination and experience. Of the five jobs requiring a license, the Customs Broker is the one with the least requirements. To become a Licensed Customs Broker, it is not necessary to have any experience or specialized training. Does this give potential licensees unrealistic expectations that they can run a brokerage business just from passing the exam? Should Customs and Border Protection or some other regulatory organization require additional experience or education before issuing the CHB license? Weigh in on this important issue by taking the blog poll and submitting your comments!

Hearing on Status of Trade Policy Agenda – February 9th

United States Trade Representative Ron Kirk will speak on the status of President Obama’s trade policy agenda during the House Ways and Means Committee hearing next week. Due to the limited time available, Kirk will be the only witness presenting oral testimony; however, individuals and organizations may submit written statements for consideration by the Committee.


One important topic on the agenda is the status of the trade agreements with Colombia, Panama and South Korea. The trade agreements were signed in 2007; however, they are all still waiting for consideration by Congress. Expect discussion surrounding these agreements to focus on a period for sending all three agreements to Congress. In addition, the hearing will cover China’s restrictive trade practices, the Trans-Pacific Partnership negotiations, Russia’s efforts to become a party to the WTO and various other trade issues.

Click HERE for more news from the House Ways and Means Committee.

Click HERE to follow Ambassador Kirk.

Free CBP Webinars

On January 31, 2011, CBP announced that they will host a series of live webinars on various topics. The next scheduled webinar will be held on February 3, 2011 from 1:00 – 2:00 pm (ET) and will cover Administrative Process for Penalties and Seizures for Exports.  Space is limited. Registration for this event filled quickly, as it was closed by February 1, 2011.   

Check the Trade Outreach page often for new webinars and register early.  The events will also be recorded and available for viewing via the Internet.  Previous recorded webinars are available on the Webinar Archives page.

CBP Posts Notice for April 2011 Exam

On February 1, 2011, U.S. Customs and Border Protection posted information on their website for the April Customs Broker License Exam. The exam will be given on Monday, April 4, 2011 at various locations. Persons interested in taking the test should contact their local port office to verify testing locations.

Please note the change in requirements for taking the exam. Applicants for the Customs Broker License Examination must be U.S. citizens or not employed by the federal government at the time of the examination date of April 4, 2011.

Applications (CBP 3124E) and the exam fee of $200 must be received on or before Friday, March 4, 2011.

Click HERE to view the list of references required for the exam and other instructions.

Note:

The notice contains a few errors. In several locations, CBP refers to the October 2010 exam, so look for a correction to the original notice posted on February 1, 2011.