Twocountries, oneperspective Christina Speer-Reinsch U.S. Consulate Frankfurt Dr. Björn Griebel -BAFA.

Transcription

1 Twocountries, oneperspective Christina Speer-Reinsch U.S. Consulate Frankfurt Dr. Björn Griebel -BAFA

2 Core Elements of a Robust Internal Compliance Program Best Practices for Corporate Management: Nominate a responsible person at management level (Compliance Officer) Select competent staff members Monitor staff regularly Provide ongoing training to staff members Maintain written records Duty to retain documentation of all business transactions 2

3 Core Elements of an Internal Compliance Program Transparency and Understanding: determine facts of export and verify end-use/final destination by using all information available about the exporter, including red flags (suspicious circumstances) such as: New customer or unclear identity Customer s existence cannot be verified Business partners not mentioned Lacks necessary equipment for the use of the goods No or evasive answers to customary questions or circumstances Unusual requirements or no technical knowledge Splitting of one transaction, economic connection unclear Indication of circumvention or unusual business behavior 3

4 CASE1-BatchMixertoBrazil U.S. manufacturer obtains a license to export a vertical batch mixer (1B117) to a German plastic manufacturer. German company no longer needs the mixer and decides to reexportthe mixer to a rubber production company in Brazil.

5 CASE1 BatchMixertoBrazil.US&GermanPerspective Since the batch mixer is listed in the Missile Technology Control Regime Annex, a German export license and a U.S. reexportlicense are both required.

6 CASE 1-Batch Mixer to Brazil Reexporter of U.S. item to Brazil Yes, ECCN: 1B117 EAR Parts 738 and 774 No; a license is required and no license exceptions are available Apply for reexportlicense at: If requested by BIS If requested by BIS Post If license has notification condition BIS may conduct a PSV in Brazil Similarities Am I the exporter/reexporter? Are the items listed? What is the legal basis for my transaction? Can I use simplified procedures? Where do I have to apply? Do I need an EUC? Do I need an end-user profile? Post Is there a notification requirement? Do I need a reexportlicense? Will there be post shipment verifications? Yes, for export to Brazil 1B117, Annex I only Art. 3 EC-DU-Reg. Yes, EU003, EU004 or AG12 Apply for license at: Yes, listed item Yes, listed item Post No (exception possible) No, if transact. ends in Brazil No

7 CASE2-FPGAtoRussia Micro-German GmbH purchases FPGAs (Field Programmable Gate Arrays) from the US. (ECCN/Annex I 3A001a7) and exports them to Russia for civilian purpose.

8 CASE2 USPerspective U.S. reexport license is required Reexport could possibly be authorized using license exception CIV -Item must be for civilian end use -Heightened due diligence requirements. If export license is obtained from BAFA; this license satisfies BIS s reexport license requirement per license exception APR (EAR Section ).

9 CASE 2 German Perspective Export of dual-use item requires a license Russia embargo provisions apply Know-your-customer compliance is crucial Delivery to a military entity or a Mischempfänger (MIL/CIV-producer) with a military production capacity would be denied

10 CASE 2-FPGA to Russia Reexporter to Russia Yes, ECCN: 3A001.a.7 EAR Parts 738, 740, and 774; EAR / (MEU) Yes; CIV (EAR 740.5) Apply online at: BIS may require for license; strongly encouraged for CIV Yes; BIS may require for license Post No Yes(3A001); CIV? Yes Similarities Am I the exporter/reexporter? Are the items listed? What is the legal basis for my transaction? Can I use simplified procedures? Where do I have to apply? Do I need an EUC? Do I need an end-user profile? Post Is there a notification requirement? Do I need a reexportlicense? Will there be post shipment verifications? Yes, exporter to Russia 3A001a7, Annex I only Art. 3 EC-DU-Reg. / Art. 2 para 1 Russia Emb.Reg. No, Destination is under Emb. Apply for license at: Yes, listed item Yes, listed item Post No (exception possible) No, if transact. ends in Russia No

11 CASE3-AircraftsoldtoIran FlyGermany purchases civilian aircraft engine (U.S. ECCN 9A991; not on EU control list) from the US. The engine is built into a small plane and sold to an Iranian company in Tehran. Does FlyGermanyneed to obtain an export license before the plane is transferred to the Iranian company?

12 CASE3 USPerspective US-SANCTIONED IRANIAN AIRLINES 1) Caspian Airlines 2) Mahan Air 3) Pouya/Yas Air 4) MerajAir A license from OFAC/Treasury is required to export the engine. Presumption of approval for non-sanctioned airlines If the U.S. engine is built into a German-made airplane, a de minimiscalculation is required 1)What % of overall value of plane is U.S. content? If over 10%, the plane is subject to the EAR (U.S. export and reexport controls). 2)Does the U.S. content require a license to Iran? Yes, ECCN 9A991 civil aircraft engine needs license to Iran under EAR )Since the plane is subject to U.S. controls, does it need a license? Yes, aircrafts need a license to Iran under U.S. Iranian Transactions and Sanctions Regulations (ITSR).

13 CASE 3 German Perspective Before Implementation Day Arms Embargo, 79 AWV Dual-use-Embargo, VO 267/2012 Embargo on civilianitems, VO 267/2012 Items for internal repression, VO 359/2011 Sanctions lists, VO 267/2012, 359/2011 After Implementation Day Arms Embargo, 79 AWV LicenserequirementforWA andag items Procurement Channel for NSG items Prohibition for MTCR items Embargo on civilianitems, VO 267/2012 Items for internal repression, VO 359/2011 Sanctions lists, VO 267/2012, 359/2011

14 CASE 3 German Perspective No import license is required for the German company to import the engine from the U.S. No transit case as decision for Iran-export is made after import from U.S. Neither engine nor plane are listed End-users in Iran may still fall under sanctions lists Documentation of exporter for sanctions list check is required Application for Nullbescheid (zero license) needed to avoid customs stop

15 CASE 3-AircraftsoldtoIran Reexporter of U.S. engine Yes, ECCN: 9A991 EAR Parts 746 and 774; ITSR (31 CFR ) No, destination embargoed Apply/Introduction.aspx Treasury/OFAC decision Treasury/OFAC decision Post Yes; OFAC may require Yes, from OFAC, not BIS Not in Iran; perhaps during servicing outside Iran Similarities Am I the exporter/reexporter? Are the items listed? What is the legal basis for my transaction? Can I use simplified procedures? Where do I have to apply? Do I need an EUC? Do I need an end-user profile? Post Is there a notification requirement? Do I need a reexportlicense? Will there be post shipment verifications? Yes, exporter to Iran No 1 AWG Not necessary, non-listed item (Opt.) Apply for license at: BAFA-decision BAFA-decision Post No (exception possible) No, if transact. ends in Iran No, non-listed item

16 Summary Condition for application License? Check ECCN/country Consolidate Screening List / EAR / CCL / OFAC Sanctions Check ECCN/destination Most: Iran: If asked by BIS; yes for STA Post Yes if shipping from U.S. or reporting condition on license Yes; check ECCN/country For select transactions (BIS conducts 1,000+ per year) Similarities Am I the exporter/reexporter? Are the items listed? What is the legal basis for my transaction? Can I use simplified procedures? Where do I have to apply? Do I need an EUC? Do I need an end-user profile? Post Is there a notification requirement? Do I need a reexportlicense? Will there be post shipment verifications? Condition for application Licensing requirement Sanctions lists / Emb. Reg. / EC-Dual-use-Reg. / AWV Check country of destination Single window BAFA Yes Yes Post No No, if transaction ends with a final import No, only Iran PCh

17 Consequences for your ICP Pre-license phase: Regular check homepage (bis.doc.gov/ bafa.de), newsletter, information leaflets Train your export control officers Get certifications and registrations (AGG/SAG-Registration, CERTIDER) Establish an early warning system / sanctions list screening (US: Licensing phase: Apply with exhaustive documentation only (EUC, end-user profile, technical data sheets, contract etc.) Name possible reexport-locations / US: name each specific end user Maintain functioning contact point for interaction with authority Post Licensing phase: Monitor licensing conditions; submit any required reports Assess reexport conditions Prepare as contact point for post-shipment verifications Communicate with customs

18 Case4-UAVtoMalta A German company imports long-range autonomous underwater vehicles (AUVs) from the U.S. (ECCN: 8A001.c). After the import, the German company decides to transfer the AUVs (Annex I, 8A001c; no listing in Annex IV) to Malta for use in a surveying project.

19 CASE4 UAVtoMalta.USPerspective No license is required for the U.S. company to ship the AUVs to Germany A reexportlicense would be required to ship the U.S.-origin AUVs from Germany to Malta The U.S. imposes a licensing requirement on exports and reexportsof all Wassenaar Sensitive List and Very Sensitive List items to Malta In some cases, German reexportersto Malta may use license exception STA to transfer such items, in lieu of a specific license from BIS. STA requirements, including obtaining a signed consignee statement, are found in EAR Section

20 CASE 4-UAV to Malta German Perspective No import license is required for the German company to the AUVs from the U.S. No transit case as decision for Malta-export is made after import from U.S. The item is not listed under Annex IV The European Single Market requires no transfer license to Malta for Annex I items

21 CASE 4-UAV to Malta Reexporter of U.S. item to Malta Yes, ECCN: 8A001.c EAR Parts 738, 740, and 774 Yes, STA (EAR ) Apply for reexportlicense at: BIS Form 711 optional No Post If license has PSV condition Yes, but STA is available BIS may conduct a PSV in Malta Similarities Am I the exporter/reexporter? Are the items listed? What is the legal basis for my transaction? Can I use simplified procedures? Where do I have to apply? Do I need an EUC? Do I need an end-user profile? Post Is there a notification requirement? Do I need a reexportlicense? Will there be post shipment verifications? Yes, for transfer to Malta 8A001c, Annex I only Art. 35 TFEU, 1 AWG Not necessary, Single Market No application required No No, mandatory profile check Post No No, if transaction ends in Malta No

22 Do you have any questions? Christina Speer-Reinsch U.S. Consulate Frankfurt Gießener Str Frankfurt am Main Dr. Björn Griebel Federal Office for Economic Affairs and Export Control Frankfurter Str Eschborn