Monthly Archives

April 2011

ExportU.S. Office of Foreign Assets Control (OFAC)

The Journal for Export Control Professionals

posted by Jennifer Diaz April 29, 2011 0 comments

I am pleased to introduce to you a new periodical, "World Export Controls Review – the journal of export controls and compliance," published by Brightlaw Media Ltd., London, England.  The first issue published in March 2011 is free.  The April 2011 publication contains my article entitled "Good Practice: Responding to an OFAC Administrative Subpoena" (available only upon request).

The publication reports on sanctions programs such as the United States has with Burma, Iran, and Libya, as well as general international trade topics such as "U.S. Tightens Controls on Foreign Workers" or "Evolving Intent Standards in U.S. Prosecutions". The publication is truly for the legal experts in international trade and export controls.


world ecr helps its readers stay on top of:

  • Developments in export control regulation and policy around the world,
  • Changing enforcement policies and practice governing export and re-export,
  • Legal implications of changing distribution technologies, 
  • Best practice in trade regulation compliance, and
  • Encryption, technology transfer and end-use and end-user controls.

I hope you enjoy reading the article, and will subscribe to the publication. 


2nd Conference of the Americas

posted by Jennifer Diaz April 26, 2011 0 comments

The International Bar Association’s 2nd Conference of the Americas takes place at the Mandarin Oriental Hotel, Miami, Florida, May 4-6, 2011. The inaugural Conference of the Americas took place in Mexico City in 2008.   The International Bar Association (IBA) is the largest legal organization in the world.

This Second Conference will again be the perfect opportunity for legal professionals from North America and South America to network, share information, and identify issues, concerns and opportunities across the Americas’ legal markets and jurisdictions.  The Program sessions are focused on 8 areas:

  1. The region in the aftermath of the financial crisis.
  2. Cartel enforcement and leniency programs.
  3. International trade.
  4. Taxation
  5. Dispute resolution.
  6. Energy issues and infrastructure.
  7. Social networking.
  8. General Counsel Forum.

This event is also supported by the International Law Section of the Florida Bar Association.  The Conference Program Co-Chairs are Pierre Bienvenu based in Montreal, Peter Quinter based in Miami, and Claudio Undurraga based in Santiago.  To register for the conference, please do so on-line.  For questions, please contact any of the three people above.

I look forward to seeing you in Miami.


New Export Enforcement Priorities Come with New Names at the Bureau of Industry and Security

posted by Jennifer Diaz April 17, 2011 0 comments

On April 14, 2011, in Washington, D.C., David Mills, the new Assistant Secretary for Export Enforcement, Bureau of Industry and Security (BIS), U.S. Department of Commerce, and his Special Advisor, Bob Rarog, explained the enforcement priorities of BIS. These priorities were established by Eric Hirschhorn, who was just sworn in as Under Secretary of the U.S. Commerce Department’s Bureau of Industry and Security (BIS) on April 2, 2010, after being appointed by President Obama. This event was part of the American Bar Association’s Section of International Law’s Export Controls and Economic Sanctions Committee.

David Mills, who has an excellent perspective from recently being a private practicing attorney, and was formerly the Chief of Licensing at the Office of Foreign Assets Control (OFAC), identified the three primary initiatives of export enforcement by the BIS.

1.  Efficiency – process administrative cases faster.

2.  Education – outreach program to exporting companies.

3.  Enforcement – going for the $250,000 maximum penalty or twice the value of the transaction, whichever is greater.

David Mills stated that where both OFAC and BIS have jurisdiction over a violation, it is best to file voluntary self disclosure simultaneously with both agencies.  Generally, Special Agents from the BIS’ Office of Export Enforcement will conduct the investigation thereafter.  Another interesting point was that the Obama Administration remains focused on Iran, preventing the proliferation of weapons of mass destruction (WMD), and prohibiting any transactions with Specially Designated Nationals (SDNs). This is consistent with the U.S. Department of Justice’s recent National Counter-Proliferation Initiative to increase the detection and prosecution of export control violations. For the past two years since this Initiative started, the number of criminal and civil cases targeting violations of the ITAR, EAR and trade sanctions have greatly increased. Federal agents from the FBI, Justice, BIS, ICE, OFAC, State and Defense have investigated and prosecuted companies and individuals for illegally exporting goods and technology not only to countries such as Iran, China and Cuba, but also to close allies such as Canada, Mexico, Taiwan and Israel. 

What surprised many of the legal experts listening to David Mills who practice in the area of export controls was the statement by Mr. Mills that the filing of voluntary self disclosure by the company with BIS will not necessarily protect the employees of that company. Mr. Mills was sending a message:

Willful or knowing, as opposed to inadvertent,  violations by individuals will be punished.

Mr. Mills clearly set forth a new policy:

Special Agents of BIS are directed to focus on investigating culpable individuals for criminal prosecution or civil penalties.

He also stated that it is often an appropriate action for the company to terminate the employee who violates the laws of the United States.

U.S. Customs and Border Protection (CBP)

Todd Owen – U.S. Customs Commissioner Bersin’s Hand-Picked Leader in Los Angeles

posted by Jennifer Diaz April 10, 2011 0 comments

In my recent blog post entitled "The 3 Dirty Words Unspoken by U.S. Customs Commissioner Bersin", I  had advised that U.S. Customs and Border Protection Commissioner Alan Bersin had established some priorities.  One of the most prominent action steps already implemented by Commissioner Bersin was to reassign Todd Owen from his position as Executive Director for Cargo and Conveyance Security at CBP Headquarters in Washington, D.C. to become the new Director of Field Operations in Los Angeles, California.

In his former role, Mr. Owen was responsible for all cargo security programs and policies for CBP, including the National Targeting Center-Cargo, and the 100% scanning initiative. In Mr. Owen’s new position, he now has the responsibility over LAX, the ports of Los Angeles and Long Beach, as well as Las Vegas International Airport. 45% of the maritime cargo which enters the U.S. does so through LA/Long Beach.  By comparison, the next largest port is Port Elizabeth, at 11%.  LAX is also the second largest international airport behind JFK.

Many people first got to know Todd when he was appointed Director of the Customs-Trade Partnership Against Terrorism (C-TPAT), a position which he served from January 2005 to May 2006.  Todd has also held the position of Area Port Director in New Orleans, positions with CBP in Miami and Ft. Lauderdale, Florida, and started his career in 1990 as an Import Specialist in Cleveland, Ohio.  In addition to his impressive career achievements at CBP, he has excelled academically too.  Mr. Owen is a career member of the Senior Executive Service, and was a senior executive fellow at Harvard University’s John F. Kennedy School of Government. 

Todd’s professional background and personal characteristics fit squarely into what Commissioner Bersin appears to be promoting at CBP- persons with (1) technical knowledge, (2) a reputation for fairness, (3) a willingness to listen to the international trade community, and (4) a keen understanding of the joint objective of economic security and national security.

U.S. Customs and Border Protection (CBP)

The 3 Dirty Words Unspoken by U.S. Customs Commissioner Bersin

posted by Jennifer Diaz April 5, 2011 1 Comment

At the annual meeting of the National Customs Brokers and Forwarders Association of America in Phoenix, Arizona, on April 4, 2011, U.S. Customs and Border Protection Commissioner Alan Bersin gave a surprisingly frank speech.  He used the familiar phrases of "global supply chain security," the need "to protect the homeland from dangerous people and dangerous things," and "risk management".  Only after he finished 60 minutes of speaking did I realize that he omitted saying the three dirty words that were the bedrock of every CBP Commissioner since the tragic events of 9/11. 

Those three dirty words are "terrorism," "counter-terrorism," and "anti-terrorism." In a radical departure from prior leaders of CBP, Commissioner Bersin stated:

We need to drive transaction costs down 10-15% to become more competitive with China, Brazil, and India…I need your help in making this happen.

I was shocked! Did I really just hear the top manager of the primary border enforcement agency for the United States talk about business and not  terrorism?  If you were surprised by that, then the next quote will really grab you. Commissioner Bersin described the international transportation process for both importing and exporting as "a series of bureaucratic mazes."

I have met and talked with every Commissioner since Carol Hallett in 1989, , and have never heard such candid, outspoken, and straightforward talk from a Commissioner as I had heard yesterday. 

Commissioner Bersin said that with 60,000 CBP employees and a $11.5 billion annual budget, he has 3 priorities.

1.  Re-establishing the credibility between CBP and the international trade community.  To this end, Commissioner Bersin has dedicated one day a month as "Trade Day" to meet with the various international trade-related associations, such as the NCBFAA.  He also hired a new Director of the Office of Trade Relations, Maria Luisa O’Connell.

2.  Getting the Automated Commercial Environment (ACE) back on track after being in development for 15 years and spending $3 billion.  He hired Cindy Allen who previously was in charge of the National Educational Institute for the NCBFAA, and is a licensed customs broker.  He emphasized coordination with other Federal agencies (USDA, FDA, EPA) to expedite the international transportation of cargo because he stated that 2 of 3 detentions by CBP are for the purpose of enforcing other agency regulations.

3.  Account-based review by CBP focused on a single identification number rather than line by line review on an import entry.

Commissioner Bersin is not new to Federal Government, and is experienced in running large agencies such as the United States Attorney’s Office in Los Angeles, so I am very encouraged by his following assertion:

I don’t see economic prosperity as any different from our national security!

Finally, those of us who have understood that seem to have a friend in high places.  Now, if only Commissioner Bersin could get his friend, the TSA Administrator to stop requiring passengers to remove their shoes when going through security, then we would really have something to celebrate.