The Department of State is amending the International Traffic in Arms Regulations (ITAR) to update the policy regarding Libya to reflect the additional modifications to the United Nations Security Council arms embargo of Libya adopted in September 2011. This rule was effective November 4, 2011.
Click here for full amendment and supplementary information.
Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Category VIII
As part of the President’s Export Control Reform effort, the Department of State proposes to amend the International Traffic in Arms Regulations (ITAR) to revise Category VIII (aircraft and related articles) of the U.S. Munitions List (USML) to describe more precisely the military aircraft and related defense articles warranting control on the USML.
The Department of State will accept comments on this proposed rule until December 22, 2011.
Source: http://www.gpo.gov/fdsys/pkg/FR-2011-11-07/html/2011-28502.htm
Control of Aircraft and Related Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML)
This proposed rule describes how articles the President determines no longer warrant control under Category VIII (aircraft and related items) of the United States Munitions List (USML) would be controlled under the Commerce Control List (CCL) in new Export Control Classification Numbers (ECCNs) 9A610, 9B610, 9C610, 9D610, and 9E610. In addition, this proposed rule would control military aircraft and related items now controlled under ECCNs also addresses license exception availability for items controlled by the five new ECCNs that would be created.
This is the second in a planned series of proposed rules describing how various types of articles the President determines, as part of the Administration’s Export Control Reform Initiative, no longer warrant USML control, would be controlled on the CCL and by the EAR. This proposed rule is being published in conjunction with a proposed rule of the Department of State, Directorate of Defense Trade Controls, which would amend the list of articles controlled by USML Category VIII.
In addition, this proposed rule would modify aspects of the Bureau of Industry Security’s (BIS) July 15, 2011 proposed rule by adding cross references to ECCNs 9A018, 9D018 and 9E018; by adding provisions relating to License Exception Strategic Trade Authorization (STA) eligibility to clarify that its scope extends to the United States Government, to any person in the United States, and to the “development” or “production” of items; and by including a general policy of denial for 600 series items for destinations that are subject to a United States arms embargo under the regional stability reasons for control.
Source: http://www.gpo.gov/fdsys/pkg/FR-2011-11-07/html/2011-28504.htm
SUMMARY: The Department of State is amending the International Traffic in Arms Regulations to include the Republic of the Sudan as a proscribed destination, pursuant to a United Nations Security Council arms embargo, and to clarify that this policy does not apply to the Republic of South Sudan.
This rule is effective November 9, 2011.
Source: http://www.gpo.gov/fdsys/pkg/FR-2011-11-09/html/2011-29041.htm
The Bureau of Industry and Security (BIS) publishes this final rule to amend certain requirements in the Export Administration Regulations (EAR) that apply to the Principality of Liechtenstein (Liechtenstein). In this final rule, BIS aligns license requirements and licensing policy under the EAR for Liechtenstein with those for Switzerland. As a result, for purposes of the EAR, Liechtenstein will be treated the same as Switzerland.
By virtue of a Customs Union Treaty with Switzerland, Liechtenstein has adopted the export controls implemented under Swiss law, including controls equivalent to those prescribed under multilateral regimes, and has authorized Switzerland to administer and enforce export controls within Liechtenstein’s territory. As a result of this arrangement, Liechtenstein and Switzerland serve as one territory for customs and export purposes. Having recently been made aware of the full scope of this arrangement and its consequences on export controls, BIS has determined that it is appropriate to codify the treatment of Liechtenstein and Switzerland as one territory for purposes of the EAR. This treatment of Liechtenstein is consistent with the effort of the United States to streamline licensing requirements where export controls prescribed by the multilateral regimes are implemented. This rule is effective November 14, 2011.
Source: http://www.gpo.gov/fdsys/pkg/FR-2011-11-14/html/2011-29357.htm
Flowserve Corporation, one of the world’s largest manufacturers of pumps, valves, seals and components, has settled 288 charges of unlicensed export and reexports that occurred from its Irving, TX location, and among ten of its international affiliates. Flowserve has agreed to pay a civil penalty totaling $2.5 million to settle charges for violating the EAR by making unlicensed exports and reexports to a number of countries, including China, Singapore, Malaysia, and Venezuela. BIS also alleged that six of Flowserve’s foreign affiliates caused the transshipment of EAR99 items to Iran and/or the reexport of EAR99 items to Syria. The transactions involved a total value of $2.15 million.
Flowserve and its affiliates will also be required to conduct external audits of their compliance programs and submit the results to BIS. Flowserve’s voluntary disclosure of its violations in late September 2011 significantly reduced its penalty amount.
Violations by Flowserve’s international affiliates:
Flowserve GB Ltd. (United Kingdom)
Twenty-six charges of engaging in prohibited conduct of unlicensed exports and reexports to Iran and Syria. Penalty: $405,000
Flowserve Spain
Causing, aiding, or abetting unlicensed exports to Iran. Penalty: $20,000
Flowserve Singapore
Engaging in prohibited conduct of unlicensed exports and reexports controlled for chemical and biological weapons proliferation reasons. Penalty: $510,000.
Flowserve Netherlands
Engaging in unlicensed exports to Iran and Syria. Penalty: $310,000.
Flowserve Hamburg
Unlicensed exports to Iran and reexporting pumps and pump components to Syria. Penalty: $125,000.
Flowserve S.A.S. France
Unlicensed exports to Iran. Penalty: $210,000.
Flowserve Pompes S.A.S. (France)
Unlicensed exports to Iran, reexporting pumps and pump components to Syria. Penalty: $135,000.
Flowserve Canada
Reexporting pumps and pump components controlled for chemical and biological weapons proliferation reasons to Taiwan and Singapore. Penalty: $25,000.
Flowserve Australia
Reexporting valves and valve components controlled for chemical and biological weapons proliferation reasons to Indonesia. Penalty: $5,000.
Worthington S.r.l. (“Flowserve Italy”)
Reexporting pumps and pump components controlled for chemical and biological weapons proliferation reasons to Saudi Arabia. Penalty: $30,000.
Flowserve’s home base in Irving, Texas, has also been penalized $725,000 for failure to comply with reporting requirements. In a related case, OFAC settled charges with Flowserve alleging 58 separate violations of its Iranian, Cuban and Sudanese sanction programs. Flowserve agreed to remit an additional $502,408 to OFAC to resolve the charges.
Texas Armoring Corporation, of San Antonio, TX, has agreed to pay $300,000 to settle charges stemming from five export violations, which include:
Despite receiving several notices from its freight forwarding company describing the required export licenses, Texas Armoring Corporation went ahead with its illegal exports. TAC did not voluntarily disclose their violations and now faces monetary penalties as well as a required external audit of its export compliance program.
In addition to the monetary penalty, the company agreed to have an independent party to conduct an audit of its export compliance program and report its findings to the Commerce Department.
Finally, in the settlement agreement the company also agree to send its CEO and its export compliance person to export compliance training. Now that is what I call cruel and unusual punishment. ECTI is happy to see that the government is now forcing people to do export compliance training!
The complete settlement information may be viewed here.
In October 2009, Toll Global Forwarding, Inc., of Springfield Gardens, NY, acted as a freight forwarder and arranged for the export EAR99 electronic components, valued at $6,041, from the United States to Solid State Physics Lab in India, which is listed on BIS’s Entity List. Toll Global’s actions caused, aided and abetted an act prohibited by the Regulations and must pay a fine of $27,000. Toll Global did not voluntarily self-disclose their actions. Toll Global Forwarding doesn’t seem to learn from their mistakes.
The complete settlement agreement may be found here.
On 14 occasions between September 2006 and October 2007, Essex Group exported $381,700 worth of “aromatic polyamide-imide solution,” an item controlled for national security reasons, from the United States to the People’s Republic of China. Essex Group of Fort Wayne, IN, self-disclosed their violations to BIS and have received a penalty of $200,000.
Complete settlement may be viewed here.
The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced that the freight forwarding company Ram International Inc. (Ram) of St. Louis, MO, has agreed to pay a $40,000 civil penalty to settle allegations that it committed two violations of the Export Administration Regulations (EAR).
BIS alleges that on two occasions in 2006, Ram’s Elk Grove Village, IL office aided and abetted the unlicensed export of salvage scrap electrolytic tin plate steel to Allied Trading Company in Karachi, Pakistan, without the required BIS licenses. Allied is included on the Commerce Department’s Entity List which names certain foreign persons — including businesses, research institutions, government and private organizations, individuals, and other types of legal persons– that are subject to license requirements for the export, reexport and/or transfer in-country of specified items.
The Commerce Department Assistant Secretary for Export Enforcement, David W. Mills, commended the BIS Office of Export Enforcement Chicago Field Office for its work on the investigation.
Source: http://www.bis.doc.gov/news/2011/bis_press09162011.htm
