Specialized Export Compliance Topics

Transcription

1 Specialized Export Compliance Topics Alexandra López-Casero Nixon Peabody Ann Marie Paul, U.S. Customs and Border Protection James Kevin Wholey Phillips Lytle LLP Omari Wooden U.S. Census Bureau HOSTED BY PRESENTED BY

2 U.S. SANCTIONS UPDATE: IRAN, CUBA, RUSSIA AND CRIMEA ALEXANDRA LOPEZ-CASERO JUNE 10, 2016

3 SANCTIONS AND EMBARGOES The Treasury Department s Office of Foreign Assets Control ( OFAC ) administers and enforces most sanctions programs and embargoes. The prohibitions vary by country and program, but usually target: Transactions with sanctioned countries or entities in those countries Transactions with individuals or entities identified on lists maintained by the U.S. government Exports to sanctioned countries Imports from sanctioned countries

4 ACTIVE U.S. SANCTIONS PROGRAMS Examples of active U.S. sanctions programs: Burma Lebanon Burundi Libya Côte d Ivoire North Korea Cuba Russia Crimea Somalia Democratic Republic of the Congo Sudan Iran Yemen Iraq Zimbabwe The sanctions programs against Iran, Cuba, Syria, North Korea, and Sudan are the most comprehensive.

5 IRAN

6 JANUARY 16, 2016 CHANGES January 16, 2016: U.S. implements sweeping changes U.S. sanctions relief applies mostly to non-u.s. entities and individuals. The JCPOA lifts many (but not all) of the secondary sanctions. U.S. sanctions relief is only for nuclear-related sanctions. U.S. will maintain sanctions (including secondary sanctions) on Iran related to terrorism and human rights violations.

7 THE SANCTIONS RELIEF WILL PRIMARILY BENEFIT NON-U.S. COMPANIES U.S. companies (incorporated or formed under U.S.): Primary sanctions remain fully in place (limited exceptions for e.g., aviation industry, medical products) U.S. owned or controlled subsidiaries abroad: New General License H. Only if export has no nexus to the U.S. Other non-u.s. companies: Can export to Iran, as long as there is no nexus to the U.S. (E.g., products may not contain 10% U.S.-origin content)

8 CUBA

9 NEW BUSINESS OPPORTUNITIES UNDER NEW GENERAL LICENSES Cuba embargo remains in effect Rule: o Most transactions between the U.S. or persons subject to U.S. jurisdiction and Cuba are prohibited Exceptions: o General license (i.e., blanket authorization) o Specific license o The new changes introduce new general licenses

10 EXPORTS FROM THE U.S. TO CUBA Rule: All exports from the U.S. to Cuba require a license, unless authorized by a license exception Key License Exceptions o Consumer Communications Devices (CCD) o Support for the Cuban People (SCP) o Agricultural Commodities (AGR) o Gift parcels and humanitarian donations (GFT) Changes to Licensing Policy Redefinition of cash in advance

11 EXAMPLE OF NEW LICENSE EXCEPTION: EXPORTS UNDER SCP New License Exception Support for the Cuban People (SCP) authorizes the export and re-export without a license to Cuba of: o Building materials, equipment, and tools for use by the private sector to construct or renovate privately-owned buildings, including privately-owned residences, businesses, places of worship and buildings for private sector social or recreational use o Tools and equipment for private sector agricultural activity o Tools, equipment, supplies, and instruments for use by private sector entrepreneurs. Eligible items: EAR99 or only AT controls

12 RUSSIA AND CRIMEA

13 NOT COMPREHENSIVE, BUT TARGETED SANCTIONS Not geared toward entire Russian economy, but broader scope with each successive Executive Order U.S. has blocked several, significant Russian entities and individuals Sanctions also target prominent sectors of the Russian economy: Financial Services/Capital Markets Energy Defense Beware of providing goods, services, or technology to oil and gas projects in Russia s far east

14 BEWARE OF THE (REVISED) 50% RULE Blocked Shareholder A 45% Blocked Shareholder B 5% Russian customer/ intermediary Shareholder 50% U.S. Exporter/ Financial institution Screening only the counterparty would not have flagged this potential transaction with a blocked (but not listed) company.

15 U.S. SANCTIONS ON CRIMEA Comprehensive sanctions imposed by OFAC/BIS. General Rule: Nothing can be exported to Crimea. Exception: Food, Medicine, Software that is necessary to enable personal communications over the Internet (e.g., social networking, instant messaging, , web browsing, blogging, sharing of photos and movies).

16 THANK YOU ALEXANDRA LÓPEZ-CASERO NIXON PEABODY Partner (202) This presentation contains images used under license. Retransmission, republication, redistribution, and downloading of this presentation, including any of the images as stand-alone files, is prohibited. This presentation may be considered advertising under certain rules of professional conduct. The content should not be construed as legal advice, and readers should not act upon information in this publication without professional counsel Nixon Peabody LLP. All rights reserved.

17 Buffalo Field Office

18 Buffalo Field Office Operations Director, Field Operations Rose Hilmey Assistant Director, Border Security Richard Roberts Assistant Director, Trade Ann Marie Paul Assistant Director, Mission Support Brad Richardson Staffing as of April 1, 2016 Over 1,100 Uniformed Officers Over 240 Support Personnel For Official Use Only 18 Field Operations

19 CBP Field Operations Role in Export Compliance To enforce other U.S. Government agency laws and regulations. Inspect and examine cargo, passengers and export documentation. Detain questionable shipments. Seize shipments in violation of export control laws. Interdict unreported currency, stolen vehicles, and other illegal exports. Prevent terrorist groups, rogue nations and other criminal organizations from obtaining U.S. Munitions List (USML) and Commerce Control List (CCL) commodities. Enforce sanctions and embargoes against individuals, groups, organizations, and countries. Increase export compliance. For Official Use Only 19 Field Operations

20 How Does CBP Conduct Export Enforcement Risk-Based Assessment : Automated Export System (AES) Automated Targeting System - filters the AES data to look for suspect shipment characteristics. Cargo manifests (Bills of lading, Invoices, Packing Lists, Hazmat Certifications, Other shipping documentation). Company History or the lack of history. Routing (high-risk destination). Other paperwork. For Official Use Only 20 Field Operations

21 Iran and Cuba Sanctions Cuba Effective January 27, 2016 Policy is loosened pertaining to restrictions on a number of general licenses: Carrier services by air, Temporary sojourn for vessels and aircrafts, Informational materials, Professional meetings, Public performances, clinics, workshops, athletic and other competitions, exhibitions, and Humanitarian projects. The policy for exports and re-exports to Cuba was modified from a general policy of denial to a general policy of approval for certain items. Export license is still required!!! Iran Effective January 16, 2016 Executive Order signed regarding changes to the Iran Sanctions Program. Imports allowed under general license: Iranian foodstuffs for human consumption, Textile floor coverings, and Carpets used as wall hangings. Exports allowed under specific license: Aircraft, and Aircraft parts for civilian. The policy for exports and re-exports to Cuba was modified from a general policy of denial to a general policy of approval for certain items. Export license is still required!!! For Official Use Only 21 Field Operations

22 Examples of FTR Violations: Foreign Trade Regulations Failure to File EEI Late Filing of EEI Other EEI Violations (incorrect EEI, failure to provide authorized agent with accurate and timely export information, failure to obtain POA, failure to correct EEI, failure to provide carrier with proof of filing citation or exemption, failure to retain records) Carrier Violations Enforcement of FTR Violations: The Secretary of the Department of Commerce delegated to the Secretary of Homeland Security the authority to enforce the FTR. The Secretary of DHS delegated the authority to the Commissioner of CBP. CBP can issue civil penalties. CBP can also seize violative shipments. For Official Use Only 22 Field Operations

23 Omari Wooden Assistant Division Chief Trade Outreach and Regulations International Trade Management Division June 10, 2016

24 Foreign Trade Regulations (FTR) Topics Legal Requirements Parties to an Export Shipment Filing Requirements Compliance and Best Practices 2

25 Foreign Trade Regulations 15 CFR Part 30 Export Statistics: U.S. International Trade in Goods and Services (FT900) Enforcement:

26 Parties to an Export Shipment Domestic Parties: U.S. Principal Party in Interest U.S. Authorized Agent Carrier Foreign Parties: Foreign Principal Party in Interest Ultimate Consignee 5

27 What is a Shipment? [FTR 30.1] 1 Tip: The ONE Rule ONE U.S. Principal Party in Interest shipping their merchandise, to ONE Foreign consignee, on ONE Carrier moving the product out of the U.S., on ONE day, and over $2,500 per Schedule B number or requires a license 10

28 Filing Requirements 13

29 When is EEI required? [FTR 30.2(a)(1)(iv)] Shipment licensed by government agencies ITAR controlled items Sanctioned by the Office of Foreign Asset Control Rough diamonds Used self-propelled vehicles 14

30 When is EEI Not Required? - Exemptions [FTR 30.2(a)(1)(iv)] Country of ultimate destination is Canada [30.36(a)] $2,500 or less per Schedule B number [30.37(a)] Tools of Trade: hand-carried, personal or company use, not for sale, not shipped as cargo, returned within 1 year [30.37(b)] Temporary exports that are exported from and returned to the US in less than one year Goods previously imported under a TIB for return in the same condition as when imported 14

31 Compliance & Best Practices 35

32 Voluntary Self Disclosure (VSD) [FTR 30.74] Submit a letter detailing: Type of violation When & how the violations occurred All parties (foreign & domestic) related to the violations Any mitigating circumstances Number & value of shipments affected Corrective measures Corrected or filed shipments Mail on company letterhead to: Chief, Foreign Trade Division U.S. Census Bureau 4600 Silver Hill Road, Room 6K032 Washington DC Sample VSD: census.gov/foreign-trade/regulations/sample_vsd.pdf 36

33 Implement Best Practices Document!!! Document!!! Document!!! Correct information as soon as possible Maintain compliance Education & cross training Automation & Procedures Perform regular audits Attend Seminars & Workshops 38

34 OUTREACH AND TRAINING Outreach and Training Export Compliance seminars Full day training for exporters covering topics of reporting requirements, export regulations, classification assistance and enforcement issues Domestic/International trade shows Partnership with trade promotion agencies to provide real time training and expertise to help businesses expand abroad Webinars Online training covering a wide range of topics Archived and stored for your convenience

35 Upcoming Export Compliance Compliance Seminar Seminars & Workshops All seminars: Baltimore, MD June 21 Miami, FL July 21 Orlando, FL September 20 Laredo, TX October 12 Chicago, IL November 2 Boston, MA December 7 To register visit: census.gov/foreign-trade/aes/meetingsandpresentations/index.html 39

36 International INTERNATIONAL Trade TRADE Help HELP Line LINE Call Us: (800) Automated Export System Opt. 1 askaes@census.gov Classification Assistance Opt. 2 eid.scheduleb@census.gov Regulations Opt. 3 itmd.askregs@census.gov Data Dissemination Opt. 4 eid.international.trade.data@census.gov Trade Outreach Opt. 5 itmd.outreach@census.gov Secure Fax: Website: Blog:

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