Archive for the ‘Federal Register’ Category
Wednesday, May 30th, 2007 by John Black
So, you pay a $100 million penalty for ITAR violations and the Directorate for Defense Trade Controls (DDTC) will give you a special deal so that your entire corporation is not debarred under the ITAR. Actually, that is a pretty good deal. If your corporation is debarred, then the general rules are it may not use any ITAR license or approved agreement and it may not use any ITAR exemptions. In addition, no other party may use a license, agreement, or exemption to export any items obtained from the debarred party. Clearly, a debarment is the kiss of death for a company heavily involved in the defense business.
ITT Night Vision in Roanoke, VA set the record for highest known settlement agreement for ITAR violations, and its problems continue, and maybe even the worse is yet to come.
But, for now, let’s talk about the ITAR debarment. DDTC possibly could have debarred the entire ITT Corporation, one of the biggest defense contractors in the United States. It appears that ITT Corporation was able to negotiate limits on the debarment DDTC imposed as a result of ITT Night Vision’s agreement to plead guilty to ITAR violations. Generally speaking, the debarment focuses on ITT Night Vision. (more…)
Posted in Defense Trade Controls, Federal Register, ITAR, Violations & Fines | Comments Off
Tuesday, April 17th, 2007 by John Black
Includes Chinese, Singaporean, Malaysian, and Mexican Entities
In the April 17, 2007, Federal Register the US State Department announced sanctions on 14 new entities due to actions that potentially make a material contribution to the development of Weapons of Mass Destruction in Iran and Syria. The sanctions prohibit export license approvals and US Government procurement from, assistance to, and exports to the listed entities. The sanctions have little impact on the newly listed entities in Syria and Iran because those countries are already subject to comprehensive US trade sanctions.
Bottom Line Issue:
These sanctions do not directly prohibit all transfers of items subject to US export/trade controls to the listed entities. As a practical matter, however, exporters and reexporters should add the listed entities to the prohibited parties list against which they screen their transactions because this notice creates a Red Flag that the listed entities may intend to transfer items to weapons programs in Iran and Syria. If you find a match, you should investigate the Red Flag to determine whether your items will be illegally diverted-if your investigation makes you comfortable that your items will not be diverted, document your investigation and proceed with the transaction. Alternatively, you might want to implement a simple policy of never doing business with the listed entities because they are members of this list, even though you could legally do business with them.
Specifically, the sanctions on the entities are:
- No department or agency of the U.S. Government may procure goods, technology or services from listed entities.
- No department of agency of the U.S. Government may provide assistance to listed entities.
- No department or agency of the U.S. Government may sell any item on the United States Munitions List to listed entities.
- No new licenses for transfer of items controlled under the EAR or the Export Administration Act of 1979 will be granted and all existing licenses will be suspended for transfer to listed entities.
The Listed Entities are:
- China National Precision Machinery Import/Export Corporation (CPMIEC) (China) and any successor, sub-unit, or subsidiary thereof
- Shanghai Non-Ferrous Metals Pudong Development Trade Co. Ltd. (China) and any successor, sub-unit, or subsidiary thereof
- Zibo Chemet Equipment Company (China) and any successor, sub-unit, or subsidiary thereof
- Challenger Corporation (Malaysia) and any successor, sub-unit, or subsidiary thereof
- Target Airfreight (Malaysia) and any successor, sub-unit, or subsidiary thereof
- Defense Industries Organization (DIO) (Iran) and any successor, sub-unit, or subsidiary thereof
- Hizballah and any successor, sub-unit, or subsidiary thereof
- Sokkia Singapore PTE Ltd. (Singapore) and any successor, sub-unit, or subsidiary thereof
- Army Supply Bureau (Syria) and any successor, sub-unit, or subsidiary thereof
- Syrian Air Force (Syria) and any successor, sub-unit, or subsidiary thereof
- Syrian Navy (Syria) and any successor, sub-unit, or subsidiary thereof
- Industrial Establishment of Defense (Syria) and any successor, sub-unit, or subsidiary thereof
- Challenger Corporation (Malaysia) and any successor, sub-unit, or subsidiary thereof
- Target Airfreight (Malaysia) and any successor, sub-unit, or subsidiary thereof
- Aerospace Logistics Services (Mexico) and any successor, sub-unit, or subsidiary thereof
- Arif Durrani (Pakistan)
The penalties will be in effect for 2 years unless the Secretary of State deems otherwise.
Source:
Posted in China, Defense Trade Controls, EAR, Federal Register, Malaysia, Nonproliferation & Nuclear, Sanctions, Singapore, State Dept | Comments Off
Tuesday, April 3rd, 2007 by John Black
In late March, 2007, the Department of Treasury released the most current list of countries which require, or may require, cooperation with an international boycott within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986.
The list includes:
- Kuwait
- Lebanon
- Libya
- Qatar
- Saudi Arabia
- Syria
- United Arab Emirates
- Yemen
Republic of Iraq is not on this list but its status is currently under review by the Department of Treasury and it may be added in the future.
BOTTOM LINE:
The Treasury Department’s list is related to the antiboycott issues for companies who claim foreign tax credits when they file their tax returns, and does not legally have a direct link to the comprehensive antiboycott rules in the Export Administration Regulations. As a practical matter, however, for EAR compliance US persons (as defined the EAR antiboycott rules) should focus their antiboycott compliance resources on transactions and activities involving the above-listed countries who actively participate in the Arab League’s secondary and tertiary boycotts against Israel.
Source:
Posted in Antiboycott, EAR, Federal Register, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, Treasury Dept, UAE, Yemen | Comments Off
Tuesday, February 27th, 2007 by Scott Gearity
This is a new GPO beta site for integrating Federal Register notices almost immediately into the full body of the CFR.
e-CFR site
Posted in Federal Register, USA Regulations | Comments Off
Wednesday, February 7th, 2007 by Jill Kincaid
In the February 7, 2007’s Federal Register, the State Department amended section 126.1 of the ITAR to include Venezuela in the list of countries not cooperating fully with anti-terrorism efforts. This just makes the policy announced last year officially a part of ITAR 126.1.
The Secretary of State determined that Venezuela, along with Cuba, Iran, North Korea and Syria, would be placed on the list beginning October 1, 2006. The AECA prohibits the sale or licensing of defense articles and services to those countries on the list for the term of one fiscal year beginning October 1, 2006. Additionally, the State Department issued a policy of denial of the export or transfer of defense articles to and revocation of existing authorizations for Venezuela on August 17, 2006.
Federal Register notice
Posted in DDTC, Defense Trade Controls, Federal Register, ITAR, State Dept, Terrorism, USA Regulations, Venezuela | Comments Off
Wednesday, February 7th, 2007 by Jill Kincaid
On February 7, 2007, the Department of State amended the ITAR regarding its trade policy with Libya. In May of 2006, the US rescinded Libya’s designation as a state sponsor of terrorism. As a result of this, Libya has been removed from sections 126.1(a) and 126.1(d) of the ITAR and added to 126.1(k). This specifies the following:
“It is the policy of the United States to deny licenses, other approvals, exports or imports of defense articles and defense services destined for or originating in Libya except, on a case-by-case basis, for:
- Non-lethal defense articles and defense services,
- Non-lethal safety-of-use defense articles (e.g., cartridge actuated devices, propellant actuated devices and technical manuals for military aircraft for purposes of enhancing the safety of the aircrew) as spare parts for lethal end-items.”
As Libya is still proscribed in 126.1, exemptions other than 123.17 do not apply with respect to articles originating in or for export to Libya. Also, in terms of proposed sales, the requirements of 126.1 still apply.
Federal Register notice
Posted in Aerospace, Defense Trade Controls, Federal Register, ITAR, Libya | Comments Off
Wednesday, December 27th, 2006 by Jill Kincaid
DDTC is losing patience with the increasing volume of “low quality” applications that they have been receiving. In the past, they may have corrected minor mistakes, but they assure companies that they will not be doing that from this point. Examples of mistakes that they have been seeing with increasing frequency include:
- “The country name on a license application does not match the country on the supporting documentation.
- No purchase order attached to a license application.
- The value on the license application is not the same as the value on the purchase order.
- Technical Assistance Agreement requests to change the terms of other companies’ TAAs.
- Submission of agreements and agreement amendments without submission of an original empowered official certification letter.
- Proposing to provide defense services to a foreign government without a TAA.
- Submission of agreements and agreement amendments without the required Part 130 statement.
- Continually making late applications and evoking (without adequate justification) national security reasons for immediate case adjudication.
- Submitting multiple TAAs and licenses when one TAA would do.
- Poorly documented commodity jurisdiction requests.
- Incomplete and deficient registration requests.”
(taken from Federal Register Vol. 71, Number 234)
In a message from the DDTC Managing Director, he warns that making mistakes like these demonstrates an “inadequate” understanding of export control regulations and a potentially at-risk export compliance program. Mistakes are being made across the spectrum —by large companies and small ones.
(I didn’t realize that DDTC’s delays in processing applications is all the fault of the applicants. Live and learn. —John Black)
Posted in DDTC, Defense Trade Controls, Export License, Federal Register, State Dept, TAA | Comments Off
Monday, October 30th, 2006 by John Black
They don’t have much money in Haiti, so your marketing department might not be impressed to hear that State revised the ITAR in the October 4, 2006 Federal Register to allow approvals of applications for security units under the command of the Government of Haiti, or under the command of the United Nations (UN) and UN-authorized missions. The ITAR now also allows for approvals of exports of personal protective clothing for use by personnel from the UN and other international organizations, representatives of the media, and development workers and associated personnel.
If you are thinking about using an ITAR exemptions to export to Haiti I would say contact DDTC to make sure the recipient is eligible. The Federal Register notice says “All shipments of arms and related materials consistent with such exemptions shall only be made to Haitian security units as designated by the Government of Haiti, in coordination with the U.S. Government.” That means you do not get to decide who is eligible.
Posted in DDTC, Defense Trade Controls, Federal Register, ITAR, USA Regulations | Comments Off
Saturday, September 30th, 2006 by Jill Kincaid
On Saturday, September 30, 2006, President Bush signed into law the Iranian Freedom Support Act. In addition to codifying existing sanctions against Iran, this act added significant new ones, targeting Iran’s efforts at nuclear proliferation, as well as the companies that assist them.
The act requires the President to impose these sanctions on any company or individual who knowingly provides goods, services or technologies to Iran which would aid them in acquiring, or developing, nuclear, chemical or biological weapons.
It is mandatory that the President impose sanctions on violating companies, but he does have the flexibility to choose among six separate sanctions. They are:
- Withholding Ex-Im Bank financing and credit
- Denial of export licenses
- Prohibiting loans in excess of 10 million dollars to the sanctioned party
- Prohibiting the sanctioned person form acting as a repository of government funds or from serving as a primary dealer of US debt instruments
- Prohibiting the US government from procuring goods and services from the sanctioned person
- Imposing any other sanctions under the International Emergency Economic Powers Act
Offending companies must be published in the Federal Register. No company has been listed yet, but it is likely that Russian and Chinese companies who have assisted Iran with nuclear facilities and missile technology will be among the first.
Posted in Chemical & Biological Weapons, Defense Trade Controls, Federal Register, Finance & Banking, Iran, Nonproliferation & Nuclear, Sanctions | Comments Off
Friday, September 1st, 2006 by John Black
What Happened & What You Need to Do
On August 31, 2006, the Commerce Department published regulations that move Libya off the small list of countries subject to severe US export and reexport controls. Generally speaking, the Export Administration Regulations (EAR) now treat Libya similar to countries such as the PRC, Russia, and Armenia. (more…)
Posted in Aerospace, BIS, Commerce Dept, EAR, Federal Register, Information Technology, Libya, Telecommunication, Terrorism, USA Regulations | Comments Off
