Export Compliance Update

ADMINISTRATION PROPOSES BILL TO ENHANCE EXPORT CONTROL ENFORCEMENT AUTHORITIES

The Bush Administration has proposed federal legislation aimed at providing law enforcement with enhanced tools in the fight against terrorism and the creation of weapons of mass destruction. The Export Enforcement Act of 2007 represents a significant step in aiding the Department of Commerce’s Bureau of Industry and Security (BIS). The Commerce Department’s legislative proposal would:

* Renew the now-lapsed EAA of 1979 for five years after the date of enactment.

* Increase civil and criminal penalties for violators of export control laws. These penalties would represent a substantial increase over those presently authorized by the International Emergency Economic Powers Act. IEEPA penalties apply to violations of the Export Administration Regulations when the EAA is in lapse. Under this bill, maximum corporate penalties for criminal violations would increase from $50,000, as provided for in IEEPA, to the greater of $5 million or ten times the value of the exports involved.

* Provide the Commerce Department’s Special Agents with statutory overseas investigative authority and expanded undercover authorities. With the EAA in lapse, Commerce’s export enforcement agents are subject to other federal agencies’ budgets and priorities when handling investigations. This can complicate and slow enforcement efforts.

* Make permanent provisions protecting confidential business information.

* Expand the list of criminal violations upon which a denial of export privileges may be based.

The Administration’s bill underscores the fact that export control laws are essential components of our national security. The bill provides vital tools that federal law enforcement agents need in the fight against terrorism and the proliferation of weapons of mass destruction.

D-Trade / Licensing Update: Only D-Trade Electronic Submissions as of April 30, 2007

As of April 30, 2007, the Office of Defense Trade Controls Licensing no longer accepts the “carbon paper” and “downloadable” DSP-5, DSP-61, and DSP-73 application forms. The D-Trade (electronic) version of these forms may only be used, and must be submitted through D-Trade. Any “carbon paper” or “downloadable” form postmarked or hand delivered after April 30 will be returned to the applicant. For amendments, the DSP-119 may still be used until replaced by the DSP-6, DSP-62, and DSP-74. Submissions not affected by this change include: DSP-85 (Application/License for Permanent/Temporary Export or Temporary Import of Classified Defense Articles and Classified Technical Data), DSP-53 (International Import Certificate), General Correspondences (GCs), Agreements and Agreement Amendments (AGs, TAAs, MAs, DAs), and Brokering Requests (BAs). Applicants Meeting the Registration Exemption Requirement Must Also Use D-Trade. To determine eligibility for this exemption, see page 9 in this document. For individuals who meet the registration exemption requirement, the D-Trade forms are also to be used to submit license applications. Do the following: 1) visit the D-Trade Homepage through the DDTC Web site; 2) download PureEdge Form Viewer; 3) complete the appropriate DSP form on-line; and 4) sign, print, and mail the application using the appropriate address.

LogicaCMG, Inc. (“LogicaCMG”), Pleads Guilty and is Fined for Illegally Causing Goods to be Exported to Cuba

The Bureau of Industry and Security (BIS) issued a final rule that revises office names and addresses to reflect a recent Bureau of Industry and Security (BIS) reorganization, updates the statements of legal authority for ten parts of the Export Administration Regulations (EAR), and replaces an outdated statute name and citation with the current name of that statute in one section of the EAR. This rule is effective May 4, 2007.

The Office of Foreign Assets Control (OFAC) is publishing the names of two newly-designated entities whose property and interests in property are blocked pursuant to Executive Order 12978 of October 21, 1995, "Blocking Assets and Prohibiting Transactions with Significant Narcotics Traffickers." In addition, OFAC is publishing changes to the identifying information associated with three persons previously designated pursuant to Executive Order 12978. The designation by the Secretary of the Treasury of the two entities identified in this notice pursuant to Executive Order 12978 is effective on March 7, 2007. In addition, the changes to the listings of persons previously designated pursuant to Executive Order 12978 are also effective on March 7, 2007.

The list of additional designees is as follows:

1. C.W. SALMAN PARTNERS; 2. SALMAN CORAL WAY PARTNERS

In addition, OFAC has made changes to the identifying information associated with the following three persons previously designated pursuant to the Order:

1. SAIEH JASSIR, Abdala; 2. SAIEH MUVDI, Moises Abdal; 3. SAIEH JAMIS, Carlos Ernesto;

The Bureau of Industry and Security (BIS) issued a rule that amends the Export Administration Regulations (EAR) by making a technical correction to the contact information for the Drug Enforcement Administration. In addition, this rule amends the EAR by making corrections inadvertently omitted in three rules previously published in the Federal Register: the August 31, 2006, final rule implementing the rescission of Libya's designation as a state sponsor of terrorism; the November 20, 2006, final rule imposing foreign policy controls on surreptitious communications intercepting devices; and the January 26, 2007, final rule imposing restrictions on exports and reexports of luxury goods to the Democratic People's Republic of Korea (North Korea). This rule is effective April 24, 2007.

The Office of the United States Trade Representative (USTR) issued a notice that pursuant to Section 205(b) of the Dominican Republic--Central America--United States Free Trade Agreement Implementation Act (the Act), USTR is providing notice of their determination that the Dominican Republic is an eligible country for purposes of retroactive duty treatment as provided in Section 205 of the Act. Effective Date: April 17, 2007.

DENIED PARTIES UPDATE:

The following entities were added to the Denied Persons List. The full list of changes can be accessed at the OCR web site.

· *ENTIRE COUNTRY , KOREA, NORTH

Privileges affected: In accordance with recent United Nations (UN) Security Council resolutions and the foreign policy interests of the United States, the United States Government is imposing restrictions on exports and reexports of luxury goods to the Democratic Peoples Republic of Korea (North Korea), and is continuing to restrict exports and reexports of nuclear or missile-related items and other items included on the Commerce Control List (CCL). BIS will also generally approve applications to export or reexport: non-food, non-medical humanitarian items (e.g., blankets, basic footwear, heating oil, and other items meeting subsistence needs) intended for the benefit of the North Korean people; items in support of United Nations humanitarian efforts; and agricultural commodities and medical devices that are determined not to be luxury goods. BIS will review on a case-by-case basis applications to export and reexport all other items subject to the EAR.

Effective date: 06/19/00, Expiration date: UNTIL RESCINDED

F.R. Date: 04/24/2007, Citation: 61 FR 12723; 65 FR 38147; 72 FR 3722; 72 FR 20221



· *ENTIRE COUNTRY* , LIBYA

Privileges affected: Implementation in the Export Administration Regulations of the United States' Rescission of Libya's Designation as a State Sponsor of Terrorism. Determination and Waiver of Application of Section 908(a)(1) of the Trade Sanctions Reform and Export Enhancement Act of 2000 with Respect to Libya. Export of goods, software or technology (including technical data or other information) to Libya from the United States is authorized, provided that the export is licensed or otherwise authorized by the Department of Commerce's Bureau of Industry and Security under the Export Administration Regulations.

Effective date: 04/24/96, Expiration date: UNTIL RESCINDED

F.R. Date: 04/24/2007, Citation: 61 FR 12723; 69 FR 58247; 71 FR 51714; 72 FR 20221



· Aerospace Logistics Services, MEXICO

Privileges affected: Pursuant to Sections 2 and 3 of the Iran and Syria Nonproliferation Act (Pub. L. 109-112), the U.S. Government determined on December 22, 2006 that the measures authorized in Section 3 of the Act shall apply to the said foreign persons and any successor, sub-unit, or subsidiary thereof. These measures shall be implemented by the responsible departments and agencies of the United States Government and will remain in place for two years from the effective date, except to the extent that the Secretary of State may subsequently determine otherwise.

Effective date: 12/28/06, Expiration date: 12/27/2008

F.R. Date: 04/23/2007, Citation: 72 FR 606; 72 FR 20158

EXPORT CONTROL STATEMENT

The exporter shall incorporate the following statement as an integral part of the bill of lading, and the invoice whenever defense articles on the U.S. Munitions List are to be exported. The verbiage in the AS400 has recently been changed to reflect the correct format as follows:

“These commodities are authorized by the U.S. Government for export only to [country of ultimate destination] for use by [end-user]. They may not be transferred, transshipped on a non-continuous voyage, or otherwise be disposed of in any other country, either in their original form or after being incorporated into other end-items, without the prior written approval of the U.S. Department of State.”

Please contact CorpOps for additional information.