Global Knowledge®

Join Amber Road on Tuesday, May 21 at 2pm EDT for a complimentary webinar focusing on how trade compliance professionals can minimize personal risk. During Minimizing Exposure, Liability, and Risk in Trade Compliance, presenters will discuss the following topics:

• Common challenges Empowered Officials, senior management, and compliance professionals face on a daily basis
• What criteria should be considered when selecting a compliance manager
• Real world strategies for minimizing exposure, liability, and risk in trade compliance

Presenters will include:

• Brianna Woodsby, International Trade Manager, AFL
• Phil Rhoads, Trade Attorney, Rhoads & Reed PLLC
• John Priecko, President and Managing Partner, Trade Compliance Solutions

Join us to learn how to be better prepared to deal with the challenges that accompany such a demanding and dynamic career field. Register today!

This month the Justice Department and Securities and Exchange Commission (SEC) released a guide on maintaining compliance with the Foreign Corrupt Practices Act (FCPA). The FCPA, which makes it illegal for certain individuals to make payments to foreign officials to assist in obtaining or retaining business, has been largely criticized for being vague and overly punitive. This new guide is to serve as a reference for businesses seeking to comply with the law and the prosecutors charged with enforcement.

The FCPA was passed by Congress in 1977 with the goal of prohibiting US businesses from corrupting foreign officials. With a new focus on combatting international corruption, enforcement of the FCPA has recently become a priority. US companies, who are exposed to both civil and criminal penalties for violations, have complained that the statute’s tremendous breadth allows many law enforcement authorities to be overly aggressive and creative in their prosecution methods.

As a result of US companies requesting a clearer structure on compliance and prosecution processes, a 130-page FCPA compliance guide was released. The guide covers topics such as:

• Who and what is covered by the FCPA’s anti-bribery and accounting provisions
• The definition of a ‘foreign official’
• What constitutes proper and improper gifts, travel and entertainment expenses
• Facilitating payments
• The hallmarks of an effective corporate compliance program
• The different types of civil and criminal resolutions available in the FCPA context

With the increase in enforcement, companies need to implement an effective FCPA compliance plan. Businesses must ensure that their plan stays current with changing regulations and is regularly audited. Employees must participate in regular training sessions and learn how to spot potential FCPA violations. With combatting corruption cited as the Justice Department’s highest priority, companies cannot afford to ignore FCPA compliance.

For more information, check out this article.

On Monday the United States filed a complaint with the World Trade Organization against China for its alleged use of unfair subsidies to boost exports from its auto industry.

China gave over $1 billion to its auto part and motor vehicle sectors from 2009 to 2011, which US authorities say has given those exporters an unfair advantage in foreign markets. The program provides considerable subsidies to auto and auto parts producers located in specific regions, called “export bases.” The US argues that these subsidies violate WTO trade regulations because they severely distort trade, especially for producers in the US that compete directly with Chinese auto companies.

“The Obama administration is committed to protecting the rights of nearly 800,000 American workers in our $350 billion auto and auto parts manufacturing sector,” said Ambassador Ron Kirk. “We insist upon having a level playing field on which our world-class manufacturers can compete.”

The US has recently spearheaded a series of WTO enforcement actions against China, including disputes regarding automobiles, poultry products, steel and “rare earths,” a key component in many high-tech industries. The upcoming elections look to place more pressure on the Obama administration to seem tough on China, against Mitt Romney’s pledges to forge free trade pacts and label China a currency manipulator.
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Is your company struggling with the task of installing an Export Compliance Program (ECP)? We can help! This Wednesday, July 25, catch the third installment of Amber Road’s export compliance webinar series. Broadcasting live at 2pm EST, this webinar will show you how Export On-Demand can help with Shipment Screening & Documentation.

The first two webinars in the series covered the first two steps a company should take when building an ECP: Restricted Party Screening and Product Classification. Once centralized data management and RPS programs have been established, companies can use Export On-Demand to:

• Process an order
• Create pre-mapped shipping documents
• File with the U.S. Census Bureau’s Automated Export System (AES)
• Screen shipments to manage and react to changes in the supply chain in a timely manner

Webinar Presenters:

• Steve Keighley, Solutions Consultant, Amber Road
• Scott Byrnes, VP of Marketing, Amber Road

Don’t miss the final webinar of the series. Register today!
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On June 28th, Pratt & Whitney Canada Corporation (PWC) pleaded guilty to violating the Arms Export Control Act and to making false statements regarding its illegal export of US-origin military software to China. This software was used in the development of the Z-10, China’s first modern military attack helicopter. PWC, along with its parent company, defense contractor United Technologies Corporation (UTC), and UTC’s US-based subsidiary Hamilton Sundstrand Corporation (HSC), will have to pay more than $75 million as part of a settlement with the Justice and State Departments.

Beginning in the 1980’s, China sought to develop a military attack helicopter. After the US Congress imposed a prohibition upon licenses for the export of defense articles to China in 1990, China began developing the attack helicopter under the disguise of a civilian helicopter in order to receive Western assistance.

PWC began supplying illegal Z-10 engines to China in 2000, despite knowing that they were assisting in the development of an attack helicopter. The software used to test and operate these engines was produced by HSC in the US and modified for a military helicopter application, therefore making it a defense article that required a US export license. PWC failed to disclose these illegal exports to the US government until 2006, when an investor group recognized the illegal business activity. When making a disclosure to the State Department, PWC made numerous false statements, including that they were unaware that the Z-10 program involved a military helicopter.

The Justice Department has charged UTC, PWC, and HSC with the following counts:

• Count One charges PWC with violating the Arms Export Control Act
• Count Two charges PWC, UTC, and HSC with making false statements to the US government
• Count Three charges PWC and HSC with failure to inform the US government of exports of defense articles to China in a timely manner

Under the agreement, the companies must pay $75 million and retain an Independent Monitor to assess their compliance with export laws for the next two years.

ICE Director Morton has this to say about the case:

This case is a clear example of how the illegal export of sensitive technology reduces the advantages our military currently possesses. American military prowess depends on lawful, controlled exports of sensitive technology by U.S. industries and their subsidiaries, which is why ICE will continue its present campaign to aggressively investigate and prosecute criminal violations of US export laws relating to national security.

 

To read the Department of Justice press release, click here: http://1.usa.gov/N1FoRC

According to the Bureau of Industry and Security (BIS), ING Bank N.V. has agreed to forfeit $619 million to the Justice Department and the New York County District Attorney’s Office for illegally moving billions of dollars through the US financial system on behalf of Cuban and Iranian sanctioned entities. ING Bank is held responsible for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA), as well as violating New York state laws by illegally moving over $2 billion dollars through the US financial systems via more than 20,000 transactions between the early 1990s and 2007. This fine is the largest ever against a bank in connection with an investigation into US sanctions violations.

ING Bank executed this scheme through tactics including:

• eliminating payment data that would have revealed the involvement of sanctioned countries and entities
• advising sanctioned clients on how to conceal their involvement in U.S. dollar transactions
• threatening to punish certain employees if they failed to take specified steps to remove references to sanctioned entities in payment messages

Most upsetting is that these illegal activities occurred with the knowledge and encouragement of members of both the legal and compliance departments.

The bank has also entered a parallel settlement agreement with the Office of Foreign Assets Control (OFAC). As part of the agreement, ING will be required to conduct a full review of its policies and procedures to ensure that its compliance program is functioning effectively.

To read the entire Bureau of Industry and Security (BIS) press release, click here.

For information on Amber Road’s Restricted Party Screening solution, which enables companies to automate the screening process, click here.

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Join Amber Road and American Shipper on Wednesday, June 20 at 2pm EDT for a webinar that will discuss findings from the second annual Import Operations & Compliance Benchmark Study, published by American Shipper and BPE Global. Key topics will include:

• Regulatory compliance policies and practices
• Import operations management and outsourcing
• Supporting technologies solutions and functionality
• Organizational structures and policies
• Training and education

Panelists for The Secrets to Import Success: Best Practices in Managing Import Operations & Compliance include:

• Nathan Pieri, SVP, Marketing and Product Development, Amber Road
• Andrea Appell, Director, BPE Global

Click here to register.

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After losing an appeal in British courts, Christopher Tappin was extradited from the U.K. and brought to the U.S. on February 24^th.  Mr. Tappin, a British businessman, faces charges in connection with a scheme to illegally export parts used in Hawk surface-to-air missile systems to Iran.  On March 5^th, a United States federal grand jury indictment was handed down. Mr Tappin was charged with one count each for: conspiracy to illegally export defense articles, aiding and abetting the illegal export of defense articles, and conspiracy to conduct illegal financial transactions.  If convicted, Mr. Tappin faces up to 20 years in prison.
 
Mr. Tappin was investigated by The Bureau of Immigration & Customs Enforcement (ICE), which is an agency within the U.S. Department of Homeland Security.  ICE established a front company for the purpose of detecting potential illegal exports.  U.S. authorities allege that an associate of Mr. Tappin dealt with the front company to purchase items which were then exported to Iran via the Netherlands.
 
To read more about this case, click here.
 
This case illustrates the extent to which the U.S. government will go to convict people (and companies) that commit export violations.  It further demonstrates that anyone can be extradited and charged for violations of U.S. export control laws, regardless of their place of residency, and even if there are no equivalent laws in their country of citizenship.
 
Ensuring compliance with government export rules and regulations is a complex process.  Effectively screening against restricted party lists, determining license requirements, and generating the necessary documentation for a shipment is often a challenge for exporters.
 
Learn how your company can automate (and simplify) these complex processes.  Check out Amber Road’s Trade Export brochure.
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President Obama recently signed an executive order, establishing the Interagency Trade Enforcement Center (ITEC) within the U.S. Trade Representative (USTR).  The Obama administration is aimed at doubling exports by the year 2015, and this new agency will help facilitate that goal.
 
According to Ron Kirk, Ambassador of USTR, the ITEC is among the most significant commitment of resources and expertise since the establishment of the USTR. The purpose of the Interagency Trade Enforcement Center will be to coordinate U.S. trade rights under international agreements, monitor unfair trade practices, as well as identify and eliminate foreign trade barriers. These tasks will hopefully curb the production of counterfeit and unsafe goods and improve market access for U.S. exporters. The ITEC will also strengthen trade enforcement of intellectual property laws.
 
Chairman of the House Trade Working Group, Rep. Mike Michaud (D-Maine), said, “Signing this order brings us one more important step closer to the level of trade enforcement we need to counter the predatory practices of countries like China.”
 
Based on the signed executive order, the mission and function of The Interagency Trade Enforcement Center will be to:
 
(a) serve as the primary forum within the Federal Government for USTR and other agencies to coordinate enforcement of U.S. trade rights under international trade agreements and enforcement of domestic trade laws;
 
(b) coordinate among USTR, other agencies with trade related responsibilities, and the U.S. Intelligence Community the exchange of information related to potential violations of international trade agreements by our foreign trade partners; and
 
(c) conduct outreach to U.S. workers, businesses, and other interested persons to foster greater participation in the identification and reduction or elimination of foreign trade barriers and unfair foreign trade practices.
 

On October 12, the United States Congress ratified several landmark free trade agreements (FTAs) with South Korea, Colombia and Panama. While still awaiting the President’s signature, which is expected, these agreements are sure to usher in a new level of trade activity with these countries.

Proponents list a host of benefits from FTAs, including:

• Expanded access to markets for both goods and services
• Greater protection of intellectual property rights
• Growth in jobs that would accompany the opening of new markets

Management Dynamics offers a comprehensive Free Trade Agreement (FTA) management solution that provides solicitation and qualification in order to determine if a company’s product is eligible for preferential treatment. This can have a significant impact on the applicable duties for their products resulting in reduced total landed costs.

To learn more, read the full press release.
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