What’s Happening with Export Reform?
The Bureau of Industry and Security (BIS) recently published proposed changes to US export law in the Federal Register and asked for public comment. The changes primarily deal with the fact that the US has two lists for items that require export control and licensing: the US Munitions List (USML) administered by the State Department, and the Commerce Control List (CCL) maintained by the Commerce Department.
The current export control statute, written in 1979, reflects its Cold War heritage and hasn’t adapted to the rapid pace of technological change since then. Many items on the USML that were once considered high risk to national security are now widely available or low risk.
A key aspect of the proposed reform legislation would remove those items from the USML and move them to the CCL where exemptions to licensing are more flexible. This would allow the government to focus its limited resources on controlling transactions that need the highest level of scrutiny.
The details of the reform are available here. Of course, Management Dynamics will continue to monitor the changes proposed to the export control rules and numbering system. Once enacted, our classification and license determination products will accurately reflect the changes. For now, we support the efforts of our legislators to update and streamline the export control lists so they are more in line with today’s technologies.
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Firm Receives One of the Largest Fine in U.S. Export Violation History
American Shipper Magazine reports that Balli Aviation Ltd. was sentenced to five years probation and is to pay $2 million for exporting B747 planes to Iran. Balli Aviation plead guilty to issuing three planes to be shipped to Iran without properly obtaining an export license from BIS or receiving authorization from the Treasury Department’s Office of Foreign Assets Control. Furthermore, they continued negotations with Iran even after BIS issued a Temporary Denial Order.
The $2 million fine combined with the $15 million civil settlement is one of the largest fines a company has received in U.S. export violation history.
There couldn’t be a more better example of how important it is to remain compliant then reading about Balli Aviation. Simply using a broker or adding software can help eliminate these huge fines and help keep companies out of court.
Management Dynamics offers an export trade solution that ensures compliance with export requirements of all major trading countries around the world allowing businesses to move goods across borders legally and efficiently.
To read more about the export violator, click here.
To find out more information about Management Dynamics’ Export Solution, click here.
Dutch Aviation Company Violated Export Laws
The U.S. Bureau of Industry and Security reports a Dutch Aviation company, Aviation Services International, B.V. (ASI), plead guilty to U.S. federal charges of conspiracy to illegally exporting aircraft parts from the U.S. to Iran via the Netherlands, the UAE and Cyprus.
The director Robert Kraaipoel and sales manager Robert Neils Kraaipoel, both citizens of the Netherlands, are charged with conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations by exporting aircraft components and other goods to Iran without obtaining licenses from the Treasury Department’s Office of Foreign Assets Control (OFAC). The two defendants, each face a potential sentence of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss. ASI has agreed to pay a $100,000 fine and corporate probation for five years.
U.S. Customs officials became suspicious of ASI when its shipment of aircraft parts were detained and Mr. Kraaipoel denined the shipment will be re-routed to Iran from the Netherlands. Later that year, a similar shipment on it’s way to Iran was detained in Dutch Customs. The investigation began.
”This investigation demonstrates in clear terms the threat we face from the illegal foreign acquisition of U.S. technology. Keeping America’s critical technology from falling into the hands of state sponsors of terror has never been more important,” said David Kris, Assistant Attorney General for National Security.
To read the full press release from BIS, click here.
Foxsemicon Integrated Technologies, Inc. of Taiwan Agreed to Pay Fine For Export Violation
The U.S. Bureau of Industry and Security (BIS) issued a statement on Tuesday that Foxsemicon Intergrated Technologies (FITI) agreed to pay its penalty of $250,000 for 31 export violations. They are charged with exporting a product from the U.S. to China without a proper export license.
“Exporters must heed the advice of their suppliers when told that products require an export license. Companies involved in systems integration bear the burden of ensuring that license requirements regarding parts and components are met before exporting to foreign customers,” said Kevin Delli-Colli, the acting assistant secretary of Commerce for Export Enforcement.
Furthermore, BIS alleged that FITI knew that licenses were required, but failed to apply for them. BIS agreed to suspend $160,000 worth of FITI fines because they corporated throughout the investegation and agreed to not violate the export law for at least one year.
Knowing which license to apply for can be challenging. Management Dynamics offers a solution that can help. Export On-Demand is a complete trade automation solution the helps U.S. exporters establish an export management system. It is available as a flexible, on-demand solution that can determine if a license is required for a transaction, one of its many features.
To find out more about Export On-Demand, click here.
To read the full report from BIS, click here.
“A Compliance Program Is Only As Good As Its Last Revision”
The U.S. Bureau of Industry and Security reports a Houstin Firm was fined $610,000 in civil penalities to settle allegations that it exported certain oil and gas industry service parts which was in violation of the Export Adminstration Regulations (EAR).
“An effective compliance program is only as good as its last revision,” said Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement, “not staying up to date with regulatory changes can lead to violations of the export regulations.”
The allegations involve 78 unlicensed exports of certain products that are controlled for reasons of increased risk in production of chemical and biological weapons.
How to not make the same mistake?
Management Dynamics offers an Export On-Demand solution with the most up-to-date information. The goal of this program is to ensure that each export/re-export is treated consistantly and in compliance with U.S. export laws and regulations.
To download a free brochure, click Export On-Demand
To read the full press release, click here.