BDG International
October 2010

Anti-Boycott Charges Yield $80,700 in Civil Penalties

The Bureau of Industry and Security announced recently that four companies have agreed to pay a total of $80,700 in civil penalties to settle charges that they violated the anti-boycott provisions of the Export Administration Regulations.

These provisions prohibit U.S. persons from taking certain actions with the intent to comply with, further or support unsanctioned foreign boycotts, including furnishing information about business relationships with or in a boycotted country or with blacklisted persons. In addition, the receipt of certain boycott requests must be reported to BIS.

The four companies at issue were alleged to have committed various violations of these provisions, including furnishing certificates regarding the blacklist status of vessels, certifying that goods were not of Israeli origin, agreeing to refuse to do business with another person pursuant to a request from a boycotting country, and failing to report boycott-related requests.

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Foreign Regulatory Changes That Could Affect U.S. Exports

According to the National Institute of Standards and Technology, the World Trade Organization has been notified by the following countries of proposed regulatory changes that may affect U.S. exports of the products indicated. More detailed information on the nature of the proposed changes can be accessed on the NIST. https://tsapps.nist.gov/notifyus/data/index/index.cfm
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Export Control Understanding and Compliance by SMEs Subject of BIS Inquiry

In yet another measure seeking to boost exports as part of the president’s National Export Initiative, the Bureau of Industry and Security is requesting public comments by Dec. 6 on the extent to which small and medium-sized enterprises understand and comply with export controls maintained pursuant to the Export Administration Regulations.

BIS anticipates that the input it receives “will help it administer and enforce export controls in a manner consistent with U.S. national security while facilitating and even increasing legitimate trade involving SMEs and the exporting community in general.”

Under the NEI, BIS is seeking to increase the number of SMEs that export over the next five years. Given SMEs’ strategic position in export trade, BIS states, the EAR must continue to address their concerns in a manner that promotes compliance without adversely affecting competitiveness.

The information gathered via this inquiry will therefore be used to evaluate the need for innovations and revisions that will enhance SMEs’ understanding of and compliance with the EAR.
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High-Energy X-Ray Cargo Inspection Systems Move Closer to Installation at Ports of Entry

The installation of high-energy X-ray cargo inspection systems at U.S. sea and land ports of entry appears set to proceed after U.S. Customs and Border Protection issued a finding that the deployment and operation of these systems will have no significant impact on the human environment.

CBP states that HEXRIS fill a unique niche in the type of tools used to scan cargo containers for illicit drugs, currency, guns and weapons of mass destruction because they are capable of penetrating dense cargo loads that cannot otherwise be examined with other technologies such as gamma imaging systems or low-energy X-ray systems.
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Foreign Regulatory Changes - Cont'd

  • Container number
  • El Salvador – poultry products, fish and fishery products
  • Finland – thermal insulation in construction, ventilation products for buildings, construction products
  • Japan – fire extinguishers, pesticides
  • Kenya – noise emission and exposure, planting materials, cement waterproofing compounds, ammonium sulphate, phosphate fertilizers, fruit flavored drinks, cotton, fertilizers, moisture content of timber, information technology, wood preservatives, water for lead acid batteries
  • Qatar – tobacco products
  • Switzerland – telecommunication equipment

Incoterms 2010 revision comes into effecton on January 1 , 2011. To keep up with the rapid expansion of world trade and globalization, the INCOterms rules are revised about once a decade.

On January 1, 2011 a comprehensive revision of ICC's (International Chamaber of Commerce) Incoterms rules applying to billions of dollars of business transactions will come into effect, a major step in helping international trade professionals ensure legal certainty and save both time and money

  • Post-9/11 cargo security regulations
  • The 2004 revision of the United States' Uniform Commercial Code • New Institute Cargo Insurance Clauses
  • Replacement of paper documents with electronic ones Delivery, with respect to revenue recognition compliance
  • The elimination of DDU, DES, DEQ and DAF
  • The addition of DAT and DAP

There will now be a total of 11 terms instead of 13, with 2 new additions, DAP and DAT and 4 deletions, DAF, DDU, DEQ and DES.

Incoterms 2010 applicable for all modes of transport:

EXW : ex works
FCA : free carrier
CPT : carriage paid to
CIP : carriage and insurance paid to
DAT : delivered at terminal – NEW!
DAP : delivered at place – NEW!
DDP : delivered duty paid

Incoterms 2010 only applicable for sea and inland waterway transport:

FAS : free alongside ship
FOB : free on board
CFR : cost and freight
CIF : cost, insurance and freight

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Export Control - Cont'd

Among other things, BIS is requesting comments on the following issues.

• the principal challenges SMEs face in trying to comply with the EAR, including any challenges that SMEs uniquely face and approaches to overcoming these challenges

• the value of current BIS outreach, education and counseling to SMEs in understanding and complying with the EAR

• ways to improve or expand SMEs’ awareness, knowledge and understanding of the EAR and increase their capacity to comply

• data, including comparative international data, that support comments and recommendations related to the above items and provide examples of effective methods of administering and enforcing export controls with special attention to SMEs

High Energy X-Ray - Cont'd

CBP also asserts that HEXRIS will assist in fulfilling the statutory requirement for 100% scanning of containers entering the U.S. CBP and Department of Homeland Security officials have frequently indicated that meeting the current July 2012 deadline for this goal is virtually impossible with existing resources and technology.

In a Senate committee hearing last December Homeland Security Secretary Janet Napolitano pointed out that there is currently no technology that can effectively and automatically detect suspicious anomalies within cargo containers that should trigger additional inspection and that expanding screening with available technology would slow the flow of commerce and drive up costs to consumers without bringing significant security benefits. HEXRIS, CBP seems to suggest, is one way these technological challenges can be overcome.

The National Environmental Policy Act of 1969 requires federal agencies to evaluate the environmental implications of any proposed major action that could significantly affect the quality of the human environment.

CBP has therefore prepared a final programmatic environmental assessment documenting its review of the potential effects of the deployment and operation of HEXRIS on climate, soils, water quality, air quality, vegetation, wildlife, noise, infrastructure, aesthetics and radiological health and safety at the ports.

Based on this PEA, CBP has issued a finding of no significant impact, meaning that no further analysis of the environmental effects of HEXRIS deployment and operation is required. The final PEA and FONSI will be available for review through Nov. 5.

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Explosion on the M/V Lisco Gloria

More than 200 passengers and crew were evacuated after the Lithuanian-flagged ferry caught fire near the German island of Fehmarn in the Baltic Sea. Some 28 people were injured and 23 were still in hospital, a police spokesman said.

All the injuries were light and most were from smoke inhalation, he said. The passenger and car ferry M/V Lisco Gloria was en route from the northern city of Kiel to the Lithuanian port of Klaipeda when an explosion occurred on the upper deck around midnight, said the German Central Command for Maritime Emergencies based in Cuxhaven.

A technical defect in one of the trucks on the ferry may have started the fire, the police spokesman said.