Tuesday, May 8, 2018

ZTE Barred by U.S. Government & ZTE Fights Back!


China-based Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd (collectively “ZTE”) entered a guilty plea and agreed to pay a combined penalty up to $1.19 billion to settle criminal and civil allegations that ZTE violated U.S. export control laws and U.S. sanctions by illegally shipping U.S.-origin items to Iran.

The record-breaking settlement agreement was with the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of Justice (“DOJ”), and the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”). The penalty assessed against ZTE included a $100,871,266 civil monetary penalty imposed by OFAC; a $430,488,798 in combined criminal fines and forfeitures; and a $661,000,000 penalty payable to BIS, of which $300,000,000 were suspended for a seven-year probationary period.

CBP Now Issuing Penalties for Wood Packaging Material Violations

Due to the increase in penalties for wood packaging material (WPM) violations – we thought it important to remind the importing community that CBP is issuing WPM penalties and the background as to why.

On September 25, 2017, CBP issued Cargo Systems Messaging Service (CSMS) #17-000609 informing importers of CBP’s intent to issue penalties for wood packaging material violations. In the message, CBP states all wood packaging material (WPM) imported into the United States must have been treated at the place of origin, and contain the appropriate marking upon importation.  CBP is trying to “prevent the introduction of exotic timber pests,” and is encouraging the importing community to look towards alternatives to WPM and to educate your supply chains about ISPM 15 requirements.

Right to Make Entry: Are You Entitled to Import Goods?

Prior to importing goods into the U.S. -it is essential to confirm that the Importer of Record listed on the entry actually has the "Right to Make Entry".

Who is entitled to make entry of goods?

Under U.S. law, the right to make entry for goods is held only by the importer of record.

The term importer of record, provided under Section 484 of the United States Code, was amended by Public Law 97-446.  Under those provisions, the importer of record is defined as

On the Brink of a Trade War: Trump’s New Tariff Plan on Chinese Imports

The Trump administration has engaged in a trade showdown with China, targeting more than $50 billion worth of products.  The administration’s actions are the result of investigations under Section 301 of the Trade Act of 1974 (“Section 301”) and Section 232 of the Trade Expansion Act of 1962 (“Section 232”). 
Section 301 

OFAC Increases Civil Monetary Penalties

On March 19, 2018, the Office of Foreign Assets Control (OFAC) adjusted its maximum civil monetary penalties for inflation (per the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015). The rationale for this increase is to maintain and improve the effectiveness and deterrent effect of civil monetary penalties. Any increase applies to penalties assessed after the effective date regardless of whether the violation occurred prior to such date
How much did civil monetary penalties increase?
Increases to penalties were assessed as follows:
  • Violations of the Terrorism Risk Insurance Program will be assessed a maximum penalty of $1,360,525 up from $1,333,312.
  • As codified at 31 C.F.R. § 598.701, any violation of the Foreign Narcotics Kingpin Designation Act and the Foreign Narcotics Kingpin Sanctions Regulations will be assessed a maximum penalty of $1,466,485 – increasing from its previous maximum penalty of $1,437,153.
  • A penalty amounting to the greater of $295,141 or twice the amount of the underlying transaction will be assessed for a violation of the International Emergency Economic Powers Act and any of the following:
    • Iranian Assets Control Regulations
    • Narcotics Trafficking Sanctions Regulations
    • Sudanese Sanctions Regulations
    • Weapons of Mass Destruction Trade Control Regulations
    • Zimbabwe Sanctions Regulations
    • Syrian Sanctions Regulations
    • Cote d’Ivoire Sanctions Regulations
    • Weapons of Mass Destruction Proliferators Sanctions Regulations
    • Darfur Sanctions Regulations
    • Democratic Republic of the Congo Sanctions Regulations
    • Belarus Sanctions Regulations
    • Lebanon Sanctions Regulations
    • Hizballah Financial Sanctions Regulations
    • Iraq Stabilization and insurgency Sanctions Regulations
    • Magnitsky Act Sanctions Regulations
    • Western Balkans Stabilization Regulations
    • Global Terrorism Sanctions Regulations
    • Terrorism Sanctions Regulations.
  • Violations of the Foreign Terrorist Organizations Sanctions Regulations will be assessed a penalty amounting to the greater of $77,909 or twice the amount of which a financial institution was required to retain possession or control pursuant to 31 C.F.R. § 597.701(b).
  • A penalty of $86,976 per violation on any person violating any license, order, or regulation issued under the Trading with the Enemy Act (TWEA), as codified at 31 C.F.R. § 501.701.
  • Finally, any violation of the Clean Diamond Trade Act and the Rough Diamonds Control Regulations will be assessed a penalty of $13,333, up from $13,066.
To read the final rule, click here: OFAC Final Rule on Inflation Adjustment of Civil Monetary Penalties.  For more information about this announcement please contact us at 305-456-3830 or via email at info@diaztradelaw.com.

Making E-Commerce Safer: CBP Releases New E-Commerce Strategy

On December 1, 2016, we wrote about U.S. Customs and Border Protection’s (CBP) new E-Commerce and Small Business Branch, which was created to help consumers and merchants safely navigate the complexities associated with the steady rise of global e-commerce. CBP defines e-commerce as high-volume, low-value shipments purchased via electronic means. E-commerce shipments pose the same health, safety, and economic security risks as containerized shipments, but the volume is higher and growing. Additionally, transnational criminal organizations are shipping illicit goods to the U.S. via small packages due to a perceived lower interdiction risk and less severe consequences if the package is interdicted. 

In an effort to combat those risks and have a stronger trade posture in the e-commerce environment, the CBP released its e-commerce strategy. The new e-commerce strategy addresses the growing volume of imported small packages and the challenges it presents for the U.S. economy and security. 

 The strategy includes efforts to educate the public and trade community to ensure they understand their responsibilities as importers to comply with customs regulations. 

What New Challenges Does E-Commerce Pose to the U.S.

Wednesday, March 21, 2018

What Keeps You Up at Night - Webinars for Compliance Professionals

We took a poll to capture ALL of the topics that you wanted to learn about and decided to host 8 webinars for compliance professionals (FREE for clients) with leading experts on topics ranging from Importing 101/201, Exporting 201, to CTPAT, and FDA Compliance and more!

Check out our complete list of topics, and click on the topic for more information on the specific learning objectives of each webinar and your expert speakers.

Did I mention that clients of Diaz Trade Law and Diaz Trade Consulting join for FREEPlease email info@diaztradelaw.com for your code!

Wednesday, February 21, 2018

A Smoother Road to Exporting Vehicles: CBP’s New Electronic Validation Export Program

boatsIn our previous post “Knowing The Rules Of The Road: Exporting Cars From The U.S.”, we discussed CBP’s laws and regulations that must be followed to successfully export vehicles from the United States to foreign destinations. Failure to do so could result in the imposition of severe penalties — up to $10,000. Additionally, we provided a quick guide on how to export your vehicle form the United States, which provided all the documents required to successfully export your vehicle.

Tuesday, February 13, 2018

My Freight Forwarder Is Requesting A Shipper’s Letter of Instruction, Now What?

exportClients who export often ask us for guidance on whether to complete a Shipper’s Letter of Instruction (SLI). It’s important for our readers to understand the benefits of correctly completing the SLI provided to you by your freight forwarder.
The main benefit of an SLI is federal regulatory compliance! Prior to your goods being exported, Foreign Trade Regulations require a freight forwarder to transmit certain information to U.S. Customs and Border Protection on your behalf. To efficiently gather the required authorizations to act on your behalf and the information needed to be transmitted, the trade community developed a SLI.

Tuesday, February 6, 2018

FDA Takes New Steps in Oversight of Imported Foods

FDA-Inspection-Financial-RiskFDA announced that it has recognized the first accreditation body under the voluntary Accredited Third-Party Certification Program created by the FDA Food Safety Modernization Act (FSMA). The organization being recognized is ANSI-ASQ National Accreditation Board (ANAB), an organization jointly owned by the American National Standards Institute (ANSI) and the American Society for Quality (ASQ) based in Milwaukee, Wisconsin. This organization is being recognized because it met the applicable FDA requirements, validated through application review and on-site assessment.  FDA is recognizing ANAB for a five year term of recognition. (For more information on FDA’s standards for recognition, see: Key Facts about the Accredited Third-Party Certification Program)