REGULATORY COMPLIANCE NEWSLETTER – Vol. 0613-2008

Today's Items:

1. Focusing on the ITAR—A Seminar Series
2. EAR--Expansion of the Gift Parcel License Exception Regarding Cuba to Authorize Mobile Phones and Related Software and Equipment
3. BIS--Virginia Corporation Sentenced for Unlawful Export of Sensitive Electronic Components to China
4. BIS--Alexandria Man Sentenced for Illegal Export of Firearms Parts to Sudan
5. BIS--Temporary Denial Order Issued for Export of a U.S. Aircraft to Iran
6. BOC--Foreign Trade Regulations: Mandatory Automated Export System Filing for All Shipments Requiring Shipper's Export Declaration Information
7. USCR--Dominican Republic--Central America--United States Free Trade Agreement
8. USCR--Articles Assembled Abroad: Operations Incidental to the Assembly Process
9. USCR--Mandatory Pre-Departure Filing of Export Cargo Information Through the Automated Export System
10. USCR--Customs Broker License Examination Individual Eligibility Requirements
11. OFAC--International Emergency Economic Powers Act Civil and Criminal Penalties
12. OFAC--Additional Designation of Individuals Pursuant to Executive Order 13224
13. OFAC--Additional Designation of Individuals Pursuant to Executive Order 13224
14. OFAC--Changes to Identifying Information of Entity Designated on May 15, 2008, Pursuant to Executive Order 1312978
15. OFAC--Additional Designation of Entities Pursuant to Executive Order 12978
16. OFAC--Information for license holders under the Sudan program
17. OFAC--Civil Penalties Information
18. OFAC--Watch List Updates
19. Denied Parties Screening Update
20. Conferences

NEWS:

Focusing on the ITAR--A Seminar Series—Training in Defense Trade Regulatory Requirements and Practices

The Bureau of Industry and Security (BIS) issued a final rule that revises a license exception in the Export Administration Regulations to allow the export of mobile phones as gifts sent by individuals to eligible recipients in Cuba . The Bureau of Industry and Security (BIS) is taking this action to provide support for individuals to support democracy-building efforts for Cuba by enabling the free exchange of information among Cuban citizens and with persons in other countries. Effective Date: June 13, 2008.

Virginia Corporation Sentenced for Unlawful Export of Sensitive Electronic Components to China -- WaveLab, Inc., of Reston , Virginia , was sentenced to one year of supervised probation and a $15,000 fine, together with $85,000 in forfeiture previously ordered, for the unlawful export of electronic components to the People’s Republic of China . WaveLab pled guilty to offense on March 7, 2008. WaveLab admitted that it had knowingly and willfully exported hundreds of power amplifiers that could be used in satellite communication of data, voice, and video signals, as well as in wireless data communications. In addition to commercial uses, the power amplifiers had military applications and were therefore controlled for national security reasons for export to China . WaveLab admitted at its guilty plea that notwithstanding its knowledge of the licensing requirement, it failed to obtain a license for the export of more than 2,400 power amplifiers. The forfeiture of $85,000 represents an approximation of the profits obtained by WaveLab from the unlawful exports.

Alexandria Man Sentenced for Illegal Export of Firearms Parts to Sudan -- Khalid Ahmed, was sentenced to five months in federal prison, followed by five months in community confinement, a fine of $1,500, and three years of supervised release. He was also ordered to cooperate with immigration officials in any removal proceedings. Ahmed pled guilty on March 13, 2008, to unlawfully attempting to export firearms parts to Sudan in violation of federal law. Ahmed’s guilty plea stemmed from his attempt to export to Sudan components of an assault rifle without the requisite license issued by the U.S. Department of State. The investigation also revealed that Ahmed had purchased hundreds of export-controlled items, including tactical equipment, gun parts, and other items worth several thousand dollars, which had also been unlawfully exported to Sudan .

Temporary Denial Order Issued for Export of a U.S. Aircraft to Iran -- The Bureau of Industry and Security (BIS) issued a Temporary Denial Order (TDO) suspending the export privileges of Galaxy Aviation Trade Company, three of its shareholders, and Iran Air for 180 days. Evidence obtained by BIS shows that the respondent parties were planning to re-export a U.S.-origin Boeing 747 cargo aircraft to Iran from Turkey in violation of the EAR. The U.S. Government maintains comprehensive economic sanctions on Iran as a result of Iran 's sponsorship of international terrorism and its pursuit of weapons of mass destruction. The order also imposes a non-standard denial on Ankair, a Turkish airline involved in the re-export, which only applies to any transactions involving this specific aircraft. Under the Denial Order, Galaxy Aviation Trade Company, its shareholders, and Iran Air, may not directly or indirectly participate in or benefit in any way from any transaction subject to the EAR. It is also a violation of the EAR for any person to participate in a transaction subject to the EAR involving a denied party. Ankair, under the non-standard Denial Order, may not participate in or benefit from any transaction involving the Boeing 747 at issue.

The U.S. Census Bureau (Census Bureau) issued a final rule to amend its regulations to implement provisions in the Foreign Relations Authorization Act. Specifically, the Census Bureau is requiring mandatory filing of export information through the Automated Export System (AES) or through AESDirect for all shipments where a Shipper's Export Declaration (SED) is required. Effective Date: July 2, 2008. Implementation Date: The Census Bureau will implement provisions of this rule on September 30, 2008. This will allow all affected entities sufficient time to come into compliance with this rule.

The Customs and Border Protection (CBP) issued an interim rule that amends title 19 of the Code of Federal Regulations ("CFR") on an interim basis to implement the preferential tariff treatment and other customs-related provisions of the Dominican Republic --Central America--United States Free Trade Agreement. Interim rule effective June 13, 2008; comments must be received by August 12, 2008.

The Customs and Border Protection (CBP) issued a final rule that amends the Customs and Border Protection ("CBP") Regulations in title 19 of the Code of Federal Regulations (19 CFR) in order to remove a provision that draws a distinction between preservative and decorative painting for purposes of the partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States ("HTSUS"). The change is made to conform the CBP Regulations with the holding of a court decision in which the regulatory distinction between preservative and decorative painting was found to be invalid. Effective Date: July 14, 2008.

The Customs and Border Protection (CBP) issued a notice to inform the public of the date when U.S. Customs and Border Protection (CBP) will require compliance with its regulations pertaining to the mandatory, pre-departure electronic filing of export information through the Automated Export System (AES). CBP regulations at 19 CFR 192.14 setting forth requirements for the advance electronic filing of export information by vessel, air, truck, and rail carriers provide a compliance date contingent upon the redesign of CBP's AES commodity module and the effective date of Department of Commerce (DOC) regulations pertaining to mandatory electronic filing of export information. Since the redesign of the AES commodity module is complete, and the DOC regulations were published as a final rule on June 2, 2008, with an effective date of July 2, 2008, and an implementation date of September 30, 2008, the CBP regulations must be complied with starting September 30, 2008. The compliance date for the CBP regulations pertaining to the mandatory, pre-departure electronic filing of export cargo information through the AES (19 CFR 192.14) is September 30, 2008.

The Customs and Border Protection (CBP) issued a notice of proposed rulemaking to amend the requirements that an individual must satisfy in order to take the written examination for an individual broker's license, as administered by Customs and Border Protection ("CBP"). This proposed rule would require that to take the written examination, an individual would be required to be a U.S. citizen on the date of examination who has attained the age of 21 prior to the date of examination and is not an officer or employee of the United States Government. The proposed amendments would more closely align the requirements for taking the written examination with the requirements an individual must satisfy in order to obtain a customs broker's license. As a result, this proposed rule would facilitate the overall customs broker licensing process by helping to ensure that those taking the examination are not automatically precluded from obtaining a license by reason of age, citizenship status, or employment. Comments must be received on or before July 28, 2008.

The Office of Foreign Assets Control (OFAC) is amending its regulations to reflect amendments to the penalty provisions of the International Emergency Economic Powers Act ("IEEPA") made by the International Emergency Economic Powers Enhancement Act (the "Act"). Effective June 10, 2008.

The Office of Foreign Assets Control (OFAC) is publishing the names of three newly-designated individuals whose property and interests in property are blocked pursuant to Executive Order 13224 of September 23, 2001, "Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism." The designation by the Director of OFAC of three individuals identified in this notice, pursuant to Executive Order 13224, is effective on June 5, 2008. The list of designees is as follows:

1. ABD AL-KHALIQ, Adil Muhammad Mahmud; 2. AL-SUBAIY, Khalifa Muhammad Turki; 3. JAFFAR `ALI, `Abd al-Rahman Muhammad

The Office of Foreign Assets Control (OFAC) is publishing the names of four newly-designated individuals whose property and interests in property are blocked pursuant to Executive Order 13224 of September 23, 2001, "Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism." The designation by the Director of OFAC of the four individuals identified in this notice, pursuant to Executive Order 13224, is effective on May 27, 2008. The list of additional designees is as follows:

1. ASHRAF, Haji Muhammad; 2. BAHAZIQ, Mahmoud Mohammad Ahmed; 3. LAKHVI, Zaki-ur-Rehman; 4. SAEED, Muhammad

The Office of Foreign Assets Control (OFAC) is publishing changes to the identifying information associated with one entity previously designated on May 15, 2008, pursuant to Executive Order 13405 of June 16, 2006, "Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus ." The changes by the Director of OFAC of the identifying information for the entity identified in this notice pursuant to Executive Order 13405 is effective on May 20, 2008. OFAC has made changes to the identifying information associated with the following entity previously designated on May 15, 2008, pursuant to the Order, the listing now appears as the following:

1. BELARUSIAN OIL TRADE HOUSE

The Office of Foreign Assets Control (OFAC) is publishing the names of 12 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 nine persons previously designated pursuant to Executive Order 12978. The designation by the Director of OFAC of the 12 entities identified in this notice pursuant to Executive Order 12978 is effective on May 20, 2008.

The list of additional designees is as follows: 1. A K DIFUSION S.A. PUBLICIDAD Y MERCADEO; 2. A K EDUCAL S.A. EDUCACION CON CALIDAD; 3. ADMINISTRACION DE RECURSOS FINANCIEROS E.U.; 4. ARTURO QUINONEZ LTDA.; 5. B R C S.A.; 6. COMERCIALIZADORA CGQ LTDA.; 7. GRUPO INVERSOR PRINCIPE DE VERGARA S.L.; 8. LA HOLANDA S.A.; 9. PROMOTORES DE BIENES RAICES S.A.; 10. RIOS JIMENEZ S. EN C.S.; 11. SERPROVIS S.A. SERVICIOS Y PROVISIONES; 12. VALERO Y ASOCIADOS GABINETE JURIDICO S.L.

In addition, OFAC has made changes to the identifying information associated with the following nine persons previously designated pursuant to the Order they now appear as the following: 1. BARRERA RIOS, Alfonso; 2. BARRERA RIOS, Alvaro Enrique; 3. BARRERA RIOS, Victoria Eugenia; 4. ESPITIA ORTIZ, Mauricio Arturo; 5. QUINONES, Benedicto; 6. ROSERO ANGULO, German, Mexico; 7. VALERO JIMENEZ, Alejandro; 8. VALERO JIMENEZ, Luis Hernan; 9. VALERO SANCHEZ, Francisco Javier

The Office of Foreign Assets Control (OFAC) has issued Information for license holders under the Sudan program -- Information relevant to Sudanese Sanctions Regulations specific license and registration holders whose current licenses and registrations do not have expiration dates.

The Office of Foreign Assets Control (OFAC) issued a Release of Civil Penalties Information - OFAC enforcement information

The Office of Foreign Assets Control (OFAC), Department of Treasury announced revisions to their watch list on May 27 and 30, June 5, 2008. Entities have been added in the notice and information on existing parties on the watch list has been updated with new addresses and branch offices.

DENIED PARTIES SCREENING 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* , SUDAN
  Privileges affected: Trade and humanitarian assistance in the Specified Areas of Sudan are no longer prohibited (and no longer require a pecific license or registration), provided that these activities do not involve Sudans petroleum or petrochemical industries or any property or interests in property of the Government of Sudan. The Specified Areas of Sudan are identified as Southern Sudan, Southern Kordofan/Nuba Mountains State, Blue Nile State , Abyei, Darfur, and marginalized areas in and around Khartoum . Marginalized areas are defined as the following official camps for internally displaced persons: Mayo, El Salaam, Wad El Bashir, and Soba (06/06/2008). OFAC is revising the general license for certain publishing activities contained in the Sudanese Sanctions Regulations. (ETC)
  Effective date: 06/09/99, Expiration date: UNTIL RESCINDED
  F.R. Date: 10/31/2007, Citation: 62 FR 59989; 69 FR 75468; 70 FR 34060; 72 FR 12980; 72 FR 50047; 72 FR 61513
• A K DIFUSION S.A. PUBLICIDAD Y MERCADEO , Calle 28N No. 6BN-54, Cali , COLOMBIA
  Privileges affected: NIT # 900015699-8 (Colombia).
  Effective date: 05/20/08, Expiration date: UNTIL RESCINDED
  F.R. Date: 05/27/2008, Citation: 73 FR 30446
• A K EDUCAL S.A. EDUCACION CON CALIDAD , Calle 28N No. 6BN-54, Cali , COLOMBIA
  Privileges affected: NIT # 900015704-7 (Colombia).
  Effective date: 05/20/08, Expiration date: UNTIL RESCINDED
  F.R. Date: 05/27/2008, Citation: 73 FR 30446

CONFERENCES:

BIS

Title: How To Develop an Export Management and Compliance Program
Date: June 26-27, 2008
Location: Atlantic City, NJ

Title: How To Develop an Export Management and Compliance Program
Date: July 9-10, 2008
Location: San Jose, CA

Title: Essentials of Export Controls
Date: July 22, 2008
Location: Washington, DC

Title: How To Classify Your Item
Date: July 23, 2008
Location: Washington, DC

International Trade Compliance Strategies, LLC -- http://www.itcstrategies.com/

Unz & Co. Seminars – http://www.unzco.com/

Title: Export Operations & Procedures, Export Controls & Licensing, Introduction to the International Traffic In Arms Regulations (ITAR), ITAR Licensing Workshop
Date: June 16-20, 2008
Location: Atlantic City, NJ

Title: Import Operations & Procedures, Tariff Classification under the Harmonized System Training Workshop, U.S. Customs Audit & Compliance Assessment, Understanding & Implementing C-TPAT
Date: June 23-27, 2008
Location: Woodbridge, NJ

Title: International Logistics
Date: June 26, 2008
Location: Woodbridge, NJ

Title: Import Operations & Procedures, Tariff Classification under the Harmonized System Training Workshop, U.S. Customs Audit & Compliance Assessment, Understanding & Implementing C-TPAT
Date: July 8 -11, 2008
Location: Boston, MA

Title: Export Operations & Procedures, Export Controls & Licensing, NAFTA & Other Free Trade Agreements, Classification under the Schedule B, Developing Export Management & Compliance System
Date: July 14-18, 2008
Location: Washington, DC

DL Exports International

For a list of seminars please visit http://www.dlexports.com/

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Disclaimer:

This newsletter is not intended to provide legal guidance. Adherence to this decision does not relieve the exporter of the statutory responsibilities of complying with the applicable statutes, regulations, policies and procedures of the U.S. Government

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