export control reform: exposing the risks for the unsuspecting
TRANSCRIPT
Export Control Reform:
Exposing the Risks
for the Unsuspecting
Freight Forwarder
April 10, 2014
Summerlin, NV
Lenny Feldman
Manager Member (Miami Office) & Import-Export Practice Group Co-Chair
[email protected] 305-894-1011
Disclaimer
5
All materials contained in this presentation are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written approval of Sandler, Travis & Rosenberg, P.A. and/or Sandler & Travis Trade Advisory Services, Inc. You may not alter or remove any trademark, copyright or other notice from copies of the content. The materials contained in this presentation are provided for informational use only and should not be considered legal advice. The hiring of a lawyer is an important decision that should not be based solely on advertisements or seminar/ webinar materials. Before you decide, contact us and we will send you free written information about our qualifications and experience.
Census:
15 CFR §30.1 Authorized agent. An individual or legal entity physically located in or otherwise under the jurisdiction of the United States that has obtained power of attorney or written authorization from a USPPI or FPPI to act on its behalf, and for purposes of this part, to complete and file the EEI.
15 CFR §30.3(b)(3) Authorized agent. The agent shall be authorized by the USPPI or, in the case of a routed export transaction, the agent shall be authorized by the FPPI to prepare and file the EEI. In a routed export transaction, the authorized agent can be the “exporter” for export control purposes as defined in 15 CFR 772.1 of the U.S. Department of Commerce EAR. However, the authorized agent shall not be shown as the USPPI in the EEI unless the agent acts as a USPPI in the export transaction as defined in paragraphs (b)(2)(iii), (iv), and (v) of this section.
Census:
Shipper - Forwarder Relationship
6
BIS:
“Forwarding agents have compliance responsibilities under the Export Administration Regulations (EAR) even when their actions are dependent upon information or instructions given by those who use their services. However, hiring an agent, whether a freight forwarder or some other agent, to perform various tasks, does not relieve a party of its compliance responsibilities.”
Shipper – Forwarder Relationship
7
Forwarding agents are responsible for—
• Representations made in EEI filings.
• Suspending a transaction if knowledge that a violation is about to or is intended to occur.
• Export screening (i.e., RPL, embargoed/sanctioned country, “red flags”).
• Ensuring recordkeeping compliance.
• Implementing a formal internal compliance program.
• Filing voluntary self-disclosures when necessary.
FFs as well as their customers may be subject to civil and/or criminal penalties for violations.
BIS Guidance (January 2010)
8
What are the Forwarder’s Responsibilities?
The forwarder relies on the accuracy of the information provided by the USPPI, but is responsible to question any information that might be incomplete or seemingly contradictory to U.S. export regulations.
NCBFAA USPPI Responsibility Information Sheet
9
U.S. Export Control Regime
There are several U.S. federal government agencies that administer exports and reexports under their own set of regulations–
Commerce Dept -
Bureau of Industry and Security (BIS)
State Dept – Directorate of Defense Trade
Controls (DDTC)
Treasury Dept – Office of Foreign
Assets Control (OFAC)
Justice Dept - Bureau of Alcohol,
Tobacco, Firearms & Explosives (ATFE)
Department of Energy (DOE)
Nuclear Regulatory
Commission (NRC)
Dept of Homeland Security – US Customs and Border Protection
(CBP)
Commerce Dept – Census Bureau
10
Essence of U.S. Export Controls Product Classification
What is being exported?
Destination
Where is it going?
End-User
Who will receive it?
Products, software, technology? Purely commercial, dual-use,* military?
End-Use
How will it be used ? What else do they do?
Embargoed or sanctioned country? License required for destination?
Prohibited party, WMD proliferator, military end-user, government end-user?
Prohibited end-uses (e.g., Nuclear, Missile, CBW, Red Flags)?
*Dual-use: Items that have both commercial and military or proliferation applications.
11
Essence of U.S. Export Controls Product Classification
What is being exported?
Products, software, technology? Purely commercial, dual-use,* military?
*Dual-use: Items that have both commercial and military or proliferation applications.
12
Commerce Department – Bureau of Industry and Security (BIS)
Requirements found in:
- Export Administration Regulations (EAR): 15 CFR 730 - 774
- Commerce Control List (CCL): Supplement 1 to Part 744
Issues export and reexport licenses if required per classification,
destination country, end-user and end-use.
Controls exports/reexports/transfers of commercial and ‘dual-use’ goods, software and technology to foreign persons. Issues deemed
export licenses for transfer of EAR-controlled items to a foreign person located in the U.S.
13
What Items are Subject to the EAR?
Commercial Commodities and Dual-Use Commodities (15 C.F.R. 730 – 774) -
• Commodities, software and technology physically located in the U.S.
(including items in-transit through the U.S. and items located in Foreign Trade Zones)
• All U.S.-origin commodities, software and technology, wherever
located in the world
• U.S.-origin parts, components, materials incorporated abroad into foreign-made products, and U.S. origin software/technology commingled abroad with foreign software/technology where the US origin content exceeds specified de minimis levels.
• Certain foreign-made direct products of U.S.-origin technology or software
14
• Items exclusively controlled for export or reexport by other U.S. Government agencies (DOE, NRC, DDTC, ATF, Patent and Trademark Office, etc.);
• Printed books, pamphlets, miscellaneous publications (e.g., newspapers, periodicals, books, music books, sheet music, calendars, maps, atlases, charts, globe covers, photographs, film, advertising printed matter)
• Publicly available technology and software (except for encryption items);
• Foreign-made items with U.S.-origin content below specified de minimis levels
What Items are NOT Subject to the EAR?
15
State Department – Directorate of Defense Trade Controls (DDTC)
Requirements found in:
- International Traffic in Arms Regulations (ITAR): 22 CFR 120-130
- United States Munitions List (USML): 22 CFR part 121
Issues export, reexport, temporary import and temporary export licenses and agreements (there are more than 50 license exemptions available).
Controls exports, reexports, temporary imports, temporary exports and brokering of items specifically designed, developed, configured,
adapted or modified for military applications or intelligence gathering use, and have no predominant civil applications to foreign
persons. Also involved in transactions involving certain political contributions and fees.
16
17
• Sending or taking a defense article out of the U.S. in any manner;
• Disclosing (including orally/visually) or transferring technical data to a foreign person, whether in the U.S. or abroad; or
• Performing a defense service on behalf of, or for the benefit of, a foreign person whether in the U.S. or abroad.
Authorization under ITAR required to transfer defense article, technical
data or defense service outside of the U.S. and/or to a Foreign Person in the U.S
Covered Items & Activities
18
• Any item or technical data designated on the U.S. Munitions List
• An article may be designated as a defense article if it is: – Specifically designed, developed, configured, adapted or modified for
military application; and
• Has no predominant civil applications; and
• Has no performance equivalent (defined by form, fit, function) to those of an article used for civil applications; or . . .
– Specifically designed, developed, configured, adapted or modified for a military application and has a significant military or intelligence application such that control is necessary.
Covered Items and Activities (2)
19
• Information required for the design, development, production, manufacture, assembly, operation, repair, testing maintenance or modification of defense articles. – May take the form of technical data (blueprints, diagrams, plans,
instructions, models, formulas, engineering designs and specifications, manuals) or technical assistance, which may take forms such as instruction, skills training, working knowledge, consulting services
• Software directly related to defense articles.
• Classified information relating to defense articles/services.
• Information covered by an invention secrecy order.
Covered Technical Data
ITAR EAR
Highly Restrictive • Most transactions require a license (limited and restrictive exemptions) • Regulations broad and vague at times • Prohibited countries include significant U.S. trading partners (e.g. China, Sri Lanka, etc.) • Significant Military Equipment (SME) Requirements • Congressional Notification Requirements – longer approval time
Less Restrictive • 98% of all items exported from US are subject to the EAR (purely commercial and dual use items) • High percentage of commodities may be exported under an exception • Detailed Regulations (positive list) • Designated terrorism supporting countries (‘T5’) (Cuba, Iran, North Korea, Sudan, and Syria) • Detailed rules for items with cryptographic functionality
20
ITAR vs. EAR
• Start with ITAR first – Self-determine with assistance of product/item specialists
– Review item based on following criteria (22 CFR Part 120.3): Is it—
• Specifically designed, developed, configured, adapted, or modified for a military application and
– Does not have predominant civil applications, and
– Does not have performance equivalent (defined by form, fit and function) to those of an article or service used for civil applications;
OR
• Specifically designed, developed, configured, adapted, or modified for a military application and
• Has significant military or intelligence applicability
Process for Determining Jurisdiction (ITAR vs. EAR)
21
Unable to determine with complete certainty whether
or not item is ITAR-controlled?
Submit a Commodity Jurisdiction Determination (CJ) Request (Part 120.4)
Submit electronically utilizing DS-4076
Commodity Jurisdiction Determination
22
Export Classification
Export Control Classification
Number (ECCN) or EAR99
USML Category Schedule B/
HTSUS
There are 21 categories of U.S.
Munitions List (USML) items
(defense articles & defense services) in
the ITAR.
Categories include end-items, parts,
components, accessories, associated
equipment, test equipment, tooling, technical data, etc.
5-character alpha-numeric code
contained in Commerce Control
List (CCL) that provides:
• Description of item • Reasons for control • Certain exceptions
If no ECCNs fit, classify as EAR99.
In most cases, either Schedule B or HTSUS may be reported in AES.
Schedule B is
based on HTSUS classification rules.
HTSUS and
Schedule B Codes should be the
same up to first 6 digits.
23
24
0- Nuclear Materials, Facilities and Equipment, and Miscellaneous 1- Materials, Chemicals, “Microorganisms” and Toxins 2- Materials Processing -ball bearings, machine tools, generators, control units, robots, monitoring systems
3- Electronics 4- Computers 5- Telecommunications and Information Security 6- Lasers and Sensors 7- Navigation and Avionics 8- Marine 9- Propulsion systems, space vehicles, and related equipment
USML Categories ECCN Categories
25
Category I – Firearms, Close Assault Weapons and Combat Shotguns
Category II – Guns and Armament
Category III – Ammunition/Ordnance
Category IV – Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, Mines
Category V – Explosives and Energetic Materials, Propellants, Incendiary Agents and Their Constituents
Category VI – Vessels of War and Special Naval Equipment
Category VII – Tanks and Military Vehicles
Category VIII – Aircraft and Associated Equipment
Category IX – Military Training Equipment and Training
Category X – Protective Personnel Equipment and Shelters
Category XI – Military Electronics
Category XII – Fire Control, Ranger Finder, Optical and Guidance and Control Equipment
Category XIII – Auxiliary Military Equipment
Category XIV – Toxicological Agents, Chemical Agents, Biological Agents, Associated Equipment
Category XV – Spacecraft Systems and Associated Equipment
Category XVI – Nuclear Weapons, Design and Testing Related Items
Category XVII – Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated
Category XVIII – Directed Energy Weapons
Category XIX – Submersible Vessels, Oceanographic and Associated Equipment
Category XXI – Miscellaneous Articles
USML Categories USML Categories
Essence of U.S. Export Controls
Destination
Where is it going?
Embargoed or sanctioned country? License required for destination?
*Dual-use: Items that have both commercial and military or proliferation applications.
26
Treasury Department – Office of Foreign Assets Control (OFAC)
Requirements found in:
- Foreign Assets Control Regulations: 31 CFR 500
- Trading with the Enemy Act (TWEA)
Issues licenses to engage in certain activities (i.e., trade, financial dealings, foreign investments, travel, etc.) with restricted entities, individuals, countries and groups.
Administers embargoes and economic sanctions against certain countries and controls U.S. person dealings with Specially Designated
Nationals.
27
Embargoed/Sanctioned Country Screening
U.S. persons, U.S. companies, and their foreign affiliates are prohibited from engaging in transactions with countries that are subject to U.S. embargoes or sanctions programs without a license.
U.S. persons are also barred from brokering, facilitating, approving or supporting virtually any transaction involving an embargoed country—anything that you cannot do directly, assume that you cannot do indirectly either!
28
Current OFAC Embargo/Sanction Programs
29
Countries Programs
Balkans Belarus Burma
Cote d’Ivoire
Cuba Congo
Iran Iraq Lebanon
Liberia North Korea
Somalia
Sudan Syria Yemen
Zimbabwe
Counter Narcotics Trafficking Sanctions
Counter Terrorism Sanctions
Nonproliferation Sanctions
Rough Diamond Sanctions
Transnational Criminal
Organization Sanctions
EAR Licensing Determinations – A Closer Look
30
ECCN Description
Reason for Control &
Country Chart Reference
EAR Licensing Determinations Commerce Country Chart
31
Reason for
Control
Destination Country No X = Likely NLR
License Exceptions
List-Based License Exceptions
GBS (Group B Shipments)
CIV (Civilian End-Users and Uses)
LVS (Low Value Shipments)
APP (Computers based on Adjusted Peak Performance)
TSR (Technology and Software Restricted)
ENC (Encryption Items)
Transaction-Based License Exceptions
TMP (Temporary Exports and Reexports)
RPL (Repair and Parts License)
GOV (US and certain other Government end users)
BAG (Baggage Personally Owned by the Traveler)
TSU (Technology and Software Unrestricted)
GFT (Gift Parcels and Humanitarian Donations)
AVS (Aircraft and Vessels)
APR (Additional Permissive Reexports)
AGR (Agricultural Commodities)
STA (Strategic Trade Authorization)
32
Export & Temporary Import - DDTC Prohibited Countries/Embargoes
33
ITAR 126.1(a) Prohibited Countries ITAR 126.1(c) UN Arms Embargoed Countries
Belarus Burma Cuba
China Eritrea Iran
N. Korea Sudan Syria
Venezuela
Cote d’Ivoire
Congo Eritrea
Iraq
Iran
Lebanon
Liberia
Libya
North Korea
Somalia Sudan
ITAR: Licensing Authorization
• With certain exceptions, all exports or temporary imports of US defense articles, defense services or technical data to foreign persons require a license from DDTC.
• Companies must designate an Empowered Official and be registered with DDTC to file license applications.
• ITAR Licenses/Authorizations: • DSP-5 – Permanent exports (unclassified) • DSP-61 – Temporary imports (unclassified) • DSP-73 – Temporary exports (unclassified) • DSP-85 – Export/Temporary import (classified) • DSP-94 – Exports under FMS Program • DSP-119 – Amendments to Existing Licenses • Technical Assistance Agreements • Manufacturing License Agreements • Distribution Agreements • Offshore Procurement Agreement • General Correspondence • Exemptions
34
Essence of U.S. Export Controls
End-User
Who will receive it?
Prohibited party, WMD proliferator, military end-user, government end-user?
*Dual-use: Items that have both commercial and military or proliferation applications.
35
Restricted Parties List Screening
Embargoed Country Screening
End-Use Screening
Antiboycott Screening
Diversion Risk
Screening
Export Screening
36
Restricted Parties Lists (RPL) Screening
U.S. persons are prohibited from dealing with individuals and entities designated
on published restricted parties lists (RPL) without a license:
U.S. exporters expected to screen ALL PARTIES to their transactions against these lists and establish processes for handling any matches against them.
Denied Persons List
(BIS)
Unverified List (BIS)
Entity List (BIS)
Specially Designated Nationals
List (OFAC)
Debarred Parties List
(DDTC)
Proliferators List (DDTC)
37
Essence of U.S. Export Controls
End-Use
How will it be used ? What else do they do?
Prohibited end-uses (e.g., Nuclear, Missile, CBW, Red Flags)?
*Dual-use: Items that have both commercial and military or proliferation applications.
38
End-Use Screening
U.S. companies/persons may not (without a license) provide products
or services to customers or projects involved in proliferation activities:
Nuclear explosive activities
Missile proliferation
Unsafeguarded nuclear activities
Chemical/biological weapons
proliferation
39
Diversion Risk Screening
To prevent unauthorized diversion:
• Get to know your customers and their business/products/services
• Do not ‘self-blind’
Establish internal processes for:
• Screening all shipments for red flags
• Training personnel
• Creating audit trail to show screening was performed
If red flags surface:
• Place order on hold and investigate further
• If resolved – proceed with shipment
• If cannot be resolved – cancel order and contact authorities
40
Antiboycott Compliance
Following countries may require participation in, or cooperation with, an international boycott and all documents (e.g., RFP’s, letters of credit, terms and conditions of sale, invoices) memorializing a sale to or payment from these countries must be carefully reviewed for prohibited boycott language:
• Iraq
• Kuwait
• Lebanon
• Libya
• Qatar
• Saudi Arabia
• Syria
• The United Arab Emirates
• The Republic of Yemen
41
• Requests for the U.S. company to provide information on the religion and nationality of its officers, board members, employees, etc.
• Request that U.S. company provide negative certificate or origin stating that exported goods are not of Israeli origin.
• Purchase Order terms and conditions: "In the case of overseas suppliers, this order is placed subject to the suppliers being not on the Israel boycott list published by the central Arab League."
• Purchase Order terms and conditions: "Goods of Israeli origin not acceptable.”
• Letter of Credit Condition: Requirement that a signed statement be provided from the shipping company, or its agent, stating the name, flag and nationality of the carrying vessel and confirming that it is permitted to enter Arab ports.
Real-Life Examples
42
The presence, in any document or communication of the following words and phrases, or variations thereof, should be considered boycott-related and subject to close review:
– "blacklist"
– "Israel" or "Israeli" or "Jewish“ or “religion”
– "boycott" or "boycott office" or "boycott laws" or "boycott certificate"
– "comply" with the laws of boycotting country (may be permissible depending upon the context)
– (A ship or aircraft being) "eligible to enter an Arab port"
– "Negative certificate" (of origin or otherwise)
Antiboycott Red Flags
43
AES Filing Requirements
15 CFR 30.2(a)(1): Electronic Export Information (EEI) Filing • EEI must be filed for exports of physical goods where total value of
any one Schedule B/HTS Number exceeds $2,500 for exports: ― From U.S. to foreign countries; ― From Puerto Rico to foreign countries; ― From FTZs located in the U.S. or Puerto Rico to foreign countries; ― From the U.S. Virgin Islands to foreign countries; ― Between the U.S. and Puerto Rico; ― From Puerto Rico to U.S. Virgin Islands; and ― From the U.S. to the U.S. Virgin Islands
44
Value of goods from 1 USPPI to 1 consignee on 1 carrier, classified under
1 Sched B#, is >$2,500
USML Items
(regardless of value, whether DDTC license obtained or exemption
applies)
Goods Requiring an EAR License (regardless of
value)
Goods Requiring a DEA Export Permit (regardless
of value)
Goods Destined for a Country Listed in Country Group E:1 (regardless of
value)
Goods Requiring an Export License Issued by
Any Other Fed Govt Agency (regardless of
value)
Rough Diamonds Classified in HTS 7102.10,
7102.21 or 7102.31 (regardless of value)
On/after 10/15/2013: Items classified in new
600-series ECCNs
Items exported under EAR License Exception
Strategic Trade Authority (STA)
When EEI Must Be Filed
45
Required EEI Data Elements
46
- Shipment Reference Number (SRN) - USPPI Name, Address and Federal Tax Identification
Number - Ultimate Consignee’s Name and Address - Filing Option Indicator - Date of Export - Country of Ultimate Destination Code - Mode of Transportation (MOT) Code - Carrier ID - Conveyance Name/Carrier Name
- Port of Exportation Code - Related Company Indicator - Domestic/Foreign Origin Indicator
- Routed Export Transaction Indicator - Export Information Code (EIC) - Line Number - Schedule B/HTS
- Export License No, CFR Citation, Authorization Number
-ECCN Number -Department of State Requirements (Registration No., SME Indicator, Certification No., USML Category Code, Export License No., Etc. - Commodity Description - Quantity/Unit of Measure (Primary) - Shipping Weight
- Value of Goods (US Dollar Value per Schedule B/HTSUS Declared)
- Hazardous Material Indicator - In bond Code - Shipment Filing Action Request indicator - Line Item Filing Action Request Indicator - U.S. State of Origin Code known, report the
state in which the commodities are consolidated for export.
- License Code and Expiration/License Exception or Exemption Abbreviation
- Licensed Value of Goods - Type of Ultimate Consignee (direct
consumer, government, reseller, other/unknown)
Shipper’s Letter of Instructions
47
Export - Penalty Summary DDTC: • Civil Penalties – Maximum $500k/violation • Criminal Penalties
– Up to 10 years’ imprisonment; and/or, – Up to $1 million criminal fines
BIS: • Civil Penalties: Greater of $250k or twice the amount of the transaction/violation Criminal: 20
years’ imprisonment OFAC: • TWEA sanctions: $65,000/violation (civil)/10 years’ imprisonment (criminal)
• IEEPA sanctions programs:
– $250k/violation or twice the amount of transaction (civil);
– 20 years’ imprisonment (criminal)
CBP- Census: • Failure to file EEI. $10K max. Mitigation $750 to $10K. First time up to $2,500.
• Other EEI violations. $10K max. Mitigation $500 to $10K. First time up to $2,500.
Other Administrative Consequences: • Detentions/Seizures/Forfeitures/Additional Penalties by CBP • Revocation, suspension, or revision of license exceptions or licenses • Exclusion from Practice (FFs, attorneys, consultants) • Loss of Government contracts/orders • Bad publicity! 48
• Houston FF misrepresents SED stating exports of triethanolomine to Mexico were authorized pursuant to NLR, although licensed required.
• FF pays $156K penalty.
• Exporter pays $40K penalty because files VSD, cooperates and begins obtaining licenses.
• Date: January 23, 2008.
Exporter & Freight Forwarder Action
49
Recommended Process for All Transactions
• Know which laws/regulations apply? – International Traffic in Arms Regulations? – Export Administration Regulations? – Foreign Assets Control Regulations?
• Know the export classification of your items?
– Determination made with assistance from product specialists – Performed for all items/tech exported/reexported/transferred – Performed for all items/tech likely to roll out in the future – Made when the control lists change – Reviewed and updated on a regular and periodic basis – Document classification findings (database/matrix) – Retain copies of any classification rulings obtained in export files
50
• Know the license requirements & any additional restrictions on ability to ship (even if item itself does not require a license? – Restricted Parties Lists?
– Embargoed/Sanctioned Countries?
– Proliferation Activities?
– Red Flags or knowledge that a violation is about to occur?
• Under what authorization may I ship? – NLR? – License Exception/Exemption? – License?
• Any anti-boycott factors that I should consider?
Recommended Process for All Transactions
51
52
• Thales Australia-MK Technologies Export Control Best Practices or ECBP Report (Sept. 2009) was a successor, and update, to the Nunn-Wolfowitz “best practices” study for export compliance programs in 2000.
• Key elements include:
– Management and Commitment to Compliance (i.e., Compliance Council)
– Export Compliance Personnel
– Export Compliance Instruction Manuals/Resources (i.e., on intranet sites)
– Training and Education
– License Application Process
– Implementing License Authorizations
– Handling Foreign National Issues
– Recordkeeping
– Internal Audits
– Process for Handling Suspected Violations (e.g., voluntary disclosure, AES corrections)
Nunn-Wolfowitz Task Force &
Best Practices Report
• Formal corporate compliance policy statement • Adequate compliance infrastructure and management support • Commodity jurisdiction, classifications & licensing processes • RPL and embargoed/sanctioned screening • Customer IP address geolocation identification • Diversion risk, end-use and antiboycott screening • Export compliance and indemnification language in PO Terms, Contracts • Training for employees & senior management • Regular post-shipment reviews and formal internal audits • Issue escalation protocol & corrective/remedial action plan • Record retention program • Deemed export/technology transfer processes • Due diligence for mergers/acquisitions/divestitures • Oversight & management of brokers/forwarding agent • Documented export compliance policies and processes
Your Policies and Procedures
53
• First ECR Final Rules Go into Effect on October 15, 2013
• Moves certain aircraft (Cat. VIII)/related items from USML to CCL
• Moves certain gas turbine engines to new USML Cat. XIX
• New “600” series in Category 9 of the CCL
• New Part 758.6 Requirements (DCS – 600 Series ECCN)
• New AES Data Elements
• New AES License Codes
• New AES Filing Exclusions
• Option 4/Post-Departure AES Reporting Changes
• Transition plan for existing DDTC licenses/authorizations
Export Control Reform
54
• Second set of ECR Final Rules Go into Effect on January 6, 2014:
• Vessels/special naval equipment (USML Cat. VI)
• Tanks and military vehicles (USML Cat. VII)
• Auxiliary Military Equipment (USML Cat. XIII)
• Submersible Vessels (USML Cat. XX)
• Third set of ECR Final Rules Go into Effect on July 1, 2014:
• Missles, Launch Vehicles (USML Cat. IV)
• Explosives (USML Cat. V)
• Military Training Equipment (USML Cat. IX)
• Protective Personnel Equipment (Cat. X)
• Nuclear Testing Equipment (Cat. XVI)
ECR (2)
55
• AES Regulatory Changes – Informed Compliance to October 2, 2014:
• Post Departure Filing (10 to 5 days and moratorium)
• Household Goods (Definition change)
• Used Self Propelled Vehicles (Must be filed 72 hours prior to export)
• Port of Export (Where goods cross border)
• Split Shipments (Applies to all modes; 24 hrs for vessel; 7 hrs all others)
• Exclusions (Not required for U.S. destination)
• Exemptions (Added: technical data, tools of international trade, license exception BAG, specific shipments to E1 Group. Removed: temporary shipments, in bond/in transit shipments)
• International Waters (Definition change)
• License Value and Ultimate Consignee Data Elements
ECR (3)
56
Contracts, Agreements & Responsibility Sheets
• Must be reviewed by Compliance and Internal Legal(if applicable)
• Must be reviewed by E and O insurance providers.
• Must narrow approved signatures to any document between a client or vendor to officers.
Contractual Language
• Validate
• Expert
• Responsible
• Accountable
• Audit
• Indemnify
Achieving Optimal Compliance
• Knowledge
• Technology
• Checks and Balances
Knowledge • Industry Involvement and Networking
– NCBFAA
– Local Associations
– ICPA
– Product Industry Specific Associations and Conferences
• Engagement in Government Agencies and Programs
– BIS Annual Conference
– Trade Support Network
– Pilot Programs of any type
Knowledge – Internal Training • Internal
» General Approach
• (Screen Shot of Training Page)
» Approach of regulatory compliance to system data entry
» Approach of regulatory compliance to documentation review and documentation generation
• Shippers Letter of Instruction
• Commercial Invoice
• Certificate of Origin
• Packing List
Knowledge – External Training • NCBFAA
• NEI
• Certification
• Webinars, Online Classes, Case Studies
• Local Association Educational Programs
• Government Agencies
• Webinars
• Regional Seminars
• Web Resource Material
• Third Parties
• Educational Institutions
• Legal Firms
• Consultants
Knowledge – Internal Tools
• Informational Emails
• Shared Drive Information
• (Screen Shot of Education page again)
• (Screen Shot of Export Did you know)
Knowledge – External Tools
Compliance Services
• Bureau of National Affairs – Export Reference Library
Informational Emails
• Legal Firms
• Government Agencies
• Consulting Firms
Technology
• Product Data Bases
• EDI Feeds From Clients
Technology Metrics and Reporting
•Time frame of cut off to filing of government filings
•Inconsistency of data entry, documentation generated and government data filing.
Audits • Internal
» Statement of Policy
• Branch/Department/Office Audits
• Corporate Compliance
» Audit Templates
• General High level
• (Insert Screen Shot # 2 of audit sheet)
• Detail
• (Insert Screen Shot #3 of detail audit sheet)
FILE NUMBER: CSR: SHIPPER:
AES NOTES
INFORMATION ENTERED CORRECTLY YES NO N/A
AES TRANSMISSION REPORT YES NO N/A
FILED TIMELY YES NO N/A
UPDATED ACCORDINGLY YES NO N/A
SCHEDULE B/HTSUS CODE/LICENSE # NOTES
SCHEDULE B/HTSUS CODE ENTD. CORRECTLY YES NO N/A
ECCN YES NO N/A
LICENSE # (IF APPLICABLE) YES NO N/A
TRANSPORTATION NOTES
HBL COMPLETE YES NO N/A
SLI ON FILE YES NO N/A
POA ON FILE & COMPLETED CORRECTLY YES NO N/A
WRITING FOR USPPI ON FILE & COMPLETED CORRECTLY YES NO N/A
WAS THIS A ROUTED EXPORT TRANSACTION? YES NO N/A
WRITING FOR FPPI ON FILE & COMPLETED CORRECTLY YES NO N/A
PROFILE (SOP): YES NO N/A
COMMENTS:
CORRECTIVE ACTION:
Know Your Client
• Client Intake Process/On-Boarding
• Standard Operating Procedures
• Expectations, Roles & Responsibilities
Self-Evaluation
• Where You Are
• Where You Need to Be