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ACRONYMS

Office of Export Enforcement Bureau of Industry and Security (BIS) U.S. Department of Commerce Special Agent Jonathan Barnes Miami Field Office 200 E. Las Olas Blvd Suite 2060 Ft. Lauderdale, FL 33301 Phone (954) 356-7540 Fax (954) 356-7549. DOC BIS OEE EAR CCL IEEPA. ECCN SED EEI WMD

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ACRONYMS

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  1. Office of Export EnforcementBureau of Industry and Security (BIS)U.S. Department of CommerceSpecial Agent Jonathan BarnesMiami Field Office200 E. Las Olas Blvd Suite 2060Ft. Lauderdale, FL 33301Phone (954) 356-7540 Fax (954) 356-7549

  2. DOC BIS OEE EAR CCL IEEPA ECCN SED EEI WMD PSV PLC ACRONYMS

  3. AVS AVS HOUGHTON CHEMICAL INTERNATIONAL Bet Air Illinois Tool Works Inc. INDUSTRIAL SCIENTIFIC CORPORATION IGG Corporation Lawrence Livermore National Laboratory ATT Communications Hercaire RII OMEGA TAL Industries CCP SYNTEX JML FREIGHT SWISSCO ICS INC SIGMA-ALDRICH Digital Creations PAN AVIATION

  4. Export Enforcement’s Mission & Goals Advance national security, foreign policy and economic interests by ensuring effective export controls and promoting US strategic technology leadership • Regulate export of sensitive goods/technologies • Assist other countries in strengthening export controls • Enforce export control, anti-boycott and public safety laws • Support/enable continued U.S. technological leadership in key business/technology sectors

  5. Who Are We? The enforcement arm of The Department of Commerce, Bureau of Industry and Security (BIS)

  6. BIS: Office of Export Enforcement Objective: Keeping the most sensitive goods out of the most dangerous hands Priorities: - WMD Proliferation - Terrorism/Terrorist Support - Unauthorized Military/Government Use

  7. Education Component of OEE’s Mission • The key to OEE’s mission is educating the exporting community about preventing violations and dealing with exporter responsibilities under the Export Administration Regulations through: • Company Outreach Visits • Seminars • Workshops

  8. The PARTNERSHIPbetween OEEand YOU 1) We can assist you in avoiding illegal transactions. 2) We can assist you in avoiding negative publicity. 3) We can assist you in avoiding fines and/or imprisonment • We can assist you in avoiding a situation where your company has to pay enormous costs for legal representation resulting from a criminal or administrative proceeding. Strengthening our partnership means working together to enhance our national security.

  9. Check exporters and customers prior to issuing license Check end-users and end-uses after shipment Screen license applications Review Shipper’s Export Declarations Detentions/Seizures Issue Temporary Denial Orders Educate Exporters – Outreach, Update… Preventive Measures

  10. Enforcement Sources • Confidential and Industry Sources • Intelligence Sources • PLC and PSV • Export Document Review (SED/EEI, Airway Bills, Bills of Lading, Invoices) • Public Sources - Newspapers, Trade Publications, Internet

  11. Investigations and Sanctions • Investigations: • Criminal • Administrative • Sanctions: • Criminal fines and imprisonment • Civil fines and penalties (i.e. denial of export privileges, exclusion from practice, etc.)

  12. CRIMINAL CRIMINAL PENALTIES COMMERCE: • EAR - currently enforced under 50 U.S.C., sec. 1705 (b), IEEPA. (EAA currently in lapse) OTHER STATUTES: • Conspiracy, 18 U.S.C. sec. 371 • Money Laundering, 18 U.S.C. 1956 • And more….

  13. Recent Cases Mayrow General Trading Armor Holdings Ali Khan/Turbo Analysis

  14. Mayrow General Trading • Trading of electronic components that were capable of being used in IED’s.

  15. Armor Holdings • Exportation of CC items without licenses.

  16. Ali Khan/Turbo Analysis • Exportation of aircraft parts to Iran.

  17. Criminal Penalties • “Willful Violations” • $250,000 fine for individuals and/or Ten years imprisonment • $1 Million or five times the value of the exports involved for firms

  18. Administrative Penalties • CIVIL AUTHORITIES • EAR - TITLE 15, C.F.R. Part 764 • CIVIL SANCTIONS • Fines: $11,000/violation prior to March 2006. $50,000/violation from March 2006 to October 2007. $250,000/violation after October 2007 • Denial of Export Privileges / Revocation of Export Licenses • Exclusion from practice

  19. Increased OFAC Penalties Penalties/Settlements Total USD 2008 99 $3,504,533 2009 27 $772,442,861 FutureAll of them 1 Arm and 1 Leg

  20. Temporary Denial Orders (TDOs) • Department of Commerce is the only agency authorized to issue TDOs • Designed to halt imminent violations • Warns exporters & consignees not to do business with an individual or firm • Valid for 180 days and issued on ex parte basis • Renewable

  21. Voluntary Self Disclosure • Permitted under EAR Section 764.5 • Initiated by a company when a company identifies export violations • Violations still investigated by OEE • “Great Weight” Mitigating Factor

  22. How Do I Avoid This? Root Causes of Civil Enforcement Cases 1. Incomplete Transaction Information 2. Ignoring Red Flags 3. Human Error 4. Incorrect SED/EEI Filing 5. Non-Compliance with License Conditions

  23. 1. Incomplete Transaction Information • Unknown end-user • Unknown or inconsistent end-use • Multiple parties to a transaction not listed • Incorrect product classification Solution: • Identify all parties to a transaction, confirm legitimate intermediaries and ultimate consignees.

  24. 2. Ignoring Red Flags • Person placing the order is unfamiliar with product or information regarding end-use • Inappropriate end-user: banks, overseas freight forwarders, etc. • Conflicting information on sales documentation and export routing correspondence. Solution: • Ask questions and inquire further if you have concerns.

  25. 3. Human Errors • Pressure to meet sales goals and rush order processing • New or inexperienced personnel with too little training • Poor communication with sales staff and foreign distributors • No written compliance program Solution: • Increase training and cross train personnel. Ensure export guidelines and classifications are current. Create a compliance program.

  26. 4. Incorrect SED/EEI Filing • Wrong ECCN entered on SED/EEI • Improper use of NLR (No License Required) exemption • Incorrect Ultimate Consignee • Typographical errors Solution: • Seek assistance from BIS and ensure correct classifications. Amend when errors occur.

  27. 5. Non-Compliance with License Conditions • Failure to identify all conditions on issued license • Failure to identify any conflict of conditions with sales transaction. Solution: • Resolve any conflicts before proceeding with transaction. Even if this means amending the license! • Notify intermediate and ultimate consignees of the BIS license conditions. • Submit all reporting as required by BIS license.

  28. Deemed Exports A “deemed export" is an export of technology or source code (except encryption source code) that is "deemed" to take place when it is released to a foreign national within the United States. See §734.2(b)(2)(ii) of the Export Administration Regulations (EAR).

  29. Deemed Exports Technology is "released" for export when it is available to foreign nationals for: • visual inspection (such as reading technical specifications, plans, blueprints, etc.) • when technology is exchanged orally • made available by practice or application under the guidance of persons with knowledge of the technology

  30. Deemed Exports • Export license required under the "deemed export" rule when both conditions are met: • Intend to transfer controlled technologies to foreign nationals while in the United States; and • Transfer of the same technology to the foreign national's home country would require an export license.

  31. Future Outlook • Increase Security (National, Industrial, Technological, etc.) • Increased Partnership opportunities with Industry • More agents and more targeted emphasis • Focused enforcement on key areas

  32. When You Find a Violation • Notify management • Identify and contain immediate violation • Conduct internal audit for scope of problem • Initiate a self-disclosure report to OEE

  33. POP QUIZ What should you do if and OEE Special Agent knocks on your door? A) Panic and run out the back door. B) Shred baby shred. C) Close the blinds, unplug the phone, turn off the lights, hide under your desk and assume the fetal position. D) All of the above. E) None of the above.

  34. OUTREACH VISITS The vast majority of outreach visits are productive/informative meetings, provided that: • 1. You Maintain good records • Emails, notes, follow up conversations…. • 2. You can actually find the files the agents are interested in reviewing • “please bring us your files involving exports of pressure transducers to India in October of……”

  35. What an Agent Wants to Know When They Visit • You have an effective Compliance Program because…… • Steps you are taking to Screen End-Users • The various Safeguards you have Implemented • What are the Responsibilities of Each Person in your group

  36. At the Conclusion of the Outreach Visit we are Hoping for Two Things: • You Take the appropriate Steps to Develop/Maintain an Effective Compliance Program • You Develop a Comfort Level With OEE so That When You Receive an RFQ/email That is of Concern That You Call us.

  37. Contact BISWE’RE HERE TO HELP! • If you have questions about product classification, call BIS Exporter Services • If you have questions about Red Flags or other potential enforcement problems call BIS Office of Export Enforcement (OEE) • Check the BIS Website for current information about regulations, denied parties and listed entities

  38. OFFICE OF EXPORT ENFORCEMENT QUESTIONS

  39. Is this item controlled by ITAR or the EAR?

  40. OFFICE OF EXPORT ENFORCEMENTHotline 1-800-424-2980 Miami Field Office Phone (954) 356-7540 Fax (954) 356-7549 For more information or to receive regular email updates, please visit our website at : www.bis.doc.gov

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