Tag

of

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

Forbidden Places for Tourism and Trade

posted by Jennifer Diaz August 30, 2010 3 Comments

Please make plans to attend the Forbidden Place-Tourism and Trade  seminar on Friday, September 24, 2010. This seminar will take place at the J.W. Marriott Hotel, Miami, Florida. This half-day seminar will address a variety of recent regulations administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury. Topics to be addressed include travel to and trade with restricted countries, immigration aspects of tourism to sanctioned countries, and representing a client who is the subject of an investigation or penalty by the OFAC.

Click on this highlighted link for a pdf of the full brochure for the agenda of the event.  Our featured luncheon guest speaker is Charles Bishop, Sanctions Coordinator, OFAC.  Mr. Bishop has primarily been involved with administering the Cuban Assets Control Regulations, including license applications for Service Providers, Carrier Service Providers, Travel Service Providers, and Remittance Forwarders.

Please call The Florida Bar’s International Law Section at 850-561-5831 to register over the phone, fax your registration to 850-561-5816 or register on-line at www.floridabar.org/CLE.    Attorneys who attend will receive Continuing Legal Education (CLE) credits.

A block of rooms has been reserved at the J.W. Marriott Hotel Miami at the rate of $114 single/double occupancy. To make reservations, please call the hotel directly at (305) 329-3500. Reservations must be made by September 3, 2010 to assure the group rate and availability. Group rate is valid 3 days before and 3 days after the event, based on availability. After September 3rd, the group rate will be granted on a "space available" basis.

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

Maersk Pays $3 Million for Trading With Iran and Sudan

posted by Jennifer Diaz August 16, 2010 0 comments

Maersk Line, Ltd. paid the U.S. Office of Foreign Assets Control (OFAC) $3 million to settle allegations of violations of the U.S. trade embargo with Sudan and Iran that Maersk committed between 2003 and 2007.   How the world’s largest ocean transportation company committed such violations is a good story. How Maersk’s lawyer was able to limit the payment to $3 million is also important to understand.

According to the OFAC Enforcement Information for July 28, 2010,

OFAC’s investigation alleged that Maersk provided unlicensed shipping services for 4,714 shipments of cargo originating in or bound for Sudan and Iran. These services involved the transportation of such cargo on vessels owned, operated, and/or chartered by Maersk’s parent, A.P. Moller-Maersk A/S on at least one leg of the cargo’s journey to or from Sudan and Iran.

This is very interestingly worded by OFAC.  As A.P. Moller-Maersk A/S, a Danish conglomerate, is not bound by the U.S. laws regarding trade sanctions with Sudan and Iran, it could provide unrestricted vessels services in those countries.  If, however, any part of the cargo to or from those countries were transported on a U.S.-flagged vessel, then a violation of the U.S. laws would occur.  Cargo is often shifted from ship to ship between the port of departure and the port of delivery, and A.P. Moller -Maersk did not carefully trace the cargo from Sudan and Iran as well as it should have to prevent the cargo from touching a U.S.-flagged vessel.

Using OFAC’s Economic Sanction Enforcement Guidelines effective November 9, 2009, the penalty against Maersk could have been $61 million.  Even though Maersk did not voluntarily self-disclosure the violations to OFAC, the Settlement and payment of only $3 million reflects the mitigating factors of:

  • the non-egregious nature of the violation;
  • no violations by Maersk in the prior 5 years;
  • substantial and effective remediation measures were implemented by Maersk; and
  • substantial and full cooperation with OFAC officials during the investigation.

For non-U.S. based multinationals, compliance with U.S. trade laws and regulations enforced by OFAC and the export controls enforced by the Bureau of Industry and Security of the U.S. Department of Commerce is often confusing.   Moreover, if the world’s largest, most sophisticated shipping company, and one with an excellent reputation for service and integrity, is doing business with Iran and Sudan, what does that say about the effectiveness of the U.S. sanctions and trade embargo programs?

U.S. Food and Drug Administration (FDA)

Pills That Will Make You Smarter, Lose Weight, and Cure Cancer

posted by Jennifer Diaz July 18, 2010 1 Comment

All those dietary supplements advertised on television and readily available on the Internet claim to do one thing or another.  Taking certain pills allegedly will make you smarter, give you a burst of energy, end problems with erectile dysfunction, or even cure cancer. The United States Food and Drug Administration (FDA) is the primary Federal agency responsible for protecting the American consumer from such false claims.  The FDA does this through its Office of Regulatory Affairs (ORA), and pursues criminal investigations through its Office of Criminal Investigations (OCI). 

The mission of the Office of Criminal Investigations (OCI) is to conduct and coordinate investigations of suspected criminal violations of the Federal Food, Drug, and Cosmetic Act (FDCA). OCI has an office at FDA Headquarters in Rockville, Maryland, and field offices around the United States.  For example, the Miami Field Office is located in Ft. Lauderdale, Florida, and covers 8 Southeastern States, plus Puerto Rico and the U.S. Virgin Islands.  Special Agents of the OCI investigate street level distribution of counterfeit, unapproved, and designer drugs, major organized illicit diversion of prescription drugs, fraudulent schemes involving ineffective AIDS, cancer, and Alzheimer cures, large scale product substitution conspiracies, application and clinical investigator fraud, and health frauds involving harmful FDA-regulated drugs and medical devices.

In Miami, Florida, two importers were recently arrested for importing cheese contaminated with Staphylococcus aureus, making the food adulterated.  A conviction for introducing contaminated food into the United States may result in 3 years in prison and a fine of $250,000.

Whenever contacted by a Special Agent of the FDA’s OCI, be sure to contact an attorney knowledgeable in FDA laws, regulations, policies, and procedures.

EPA

Pep Boys Paid $5 Million to Settle Case with EPA for Illegal Importation of Motor Vehicles and Generators

posted by Jennifer Diaz June 18, 2010 0 comments

Now that summer is here, air conditioners and generators are on our minds.  It is likely the AC unit or generator that was installed in your home or office was imported into the United States, and made in China.  The EPA has very specific requirements regarding the importation of generators and  motor vehicle engines, including ATVs, snowmobiles, motorcycles, and anything else with a non-road spark ignition engine.  EPA is concerned about enforcing emissions standards under the Clean Air Act, and so should you.

EPA regulations regarding the importation of motor vehicles are enforced by U.S. Customs and Border Protection, which will stop, examine, and seize any engine not exactly complying with detailed EPA requirements, including proper labels displayed on the engine part.  All such importers should be aware of, and timely, accurately and completely submit EPA Form 3520-21 (EPA Declaration Form for Vehicles and Equipment Subject to Federal Air Pollution Regulations).  Failure to do so will result in the seizure of the imported merchandise by U.S. Customs, and penalties against the importer up to $37,500 per vehicle/engine in violation.  Seizures are resolved by filing a Petition with the appropriate U.S. Customs’ Fines, Penalties, and Forfeitures Office, and by negotiating and then signing an Administrative Settlement Agreement with the Air Enforcement Division of the EPA.

The aggressive enforcement of EPA’s regulations of 40 CFR Parts 86 and 90 were demonstrated in the recent settlement by Pep Boys which has agreed to pay the EPA $5 million, implement a corporate compliance program, and export over 15,000 non compliant vehicles and generators.

NAFTAU.S. Customs and Border Protection (CBP)

If You are an Owner or Officer of an Importer, This Blog Post is for You

posted by Jennifer Diaz February 28, 2010 0 comments

In one of the most important recent decisions, the U.S. Court of International Trade dismissed a case filed against the CEO of his importing company that had made false statements to U.S. Customs and Border Protection in the entry documents.  This Court decision has significant implications for every owner, officer, and manager of any company involved in importing merchandise into the United States.

The chronology of the case is somewhat familiar.  In 2002, Tip Top Pants, Inc., imported from Mexico 954 dozen men’s pants, and claimed NAFTA duty free treatment.  Customs issued a Request for Information (CBP form 28), and then a Notice of Action (CBP Form 29) denying the NAFTA claim.  Customs then issued a Pre-Penalty Notice against both Tip Top Pants and its CEO, Mr. Nigri, alleging negligence, and assessing a penalty of $55,000.  Tip Top filed a response to the Pre-Penalty Notice.  Customs then issued a final Penalty Notice. Tip Top Pants filed with Customs another petition seeking cancellation or mitigation of the penalty.  Customs never responded to that Petition filed by Tip Top Pant’s attorney.

Even though the disputed customs duties were subsequently paid by Tip Top Pants, Customs sued both Tip Top Pants, Inc. and its Chairman and CEO, Mr. Saad Nigri, for violating 19 U.S.C. 1592, by allegedly making material false statements or acts, or material omissions, in connection with the entry of the men’s pants from Mexico.

The Court took the unusual action of dismissing Mr. Nigri as a defendant in the case for two reasons.  The first reason is that Customs failed to respond to Tip Top Pant’s Petition, as required by 19 U.S.C. 1592(b)(2).  The second reason is that the Complaint filed with the Court by Customs did not specifically allege that Mr. Nigri personally committed any act or omission in violation of 19 U.S.C. 1592. As the Court stated, “[T]he complaint does not allege that Nigri did, or failed to do, anything whatsoever.” So, even if Tip Top Pants was negligent, its negligence could not be imputed to Mr. Nigri just because he was CEO of the company when the negligence occurred.

In a sentence that is certain to be cited by customs attorneys in petitions and court briefs, Judge Stanceu stated:

The [Priority Products] case does not hold that a party’s serving as an officer of a corporation at the time the corporation imports merchandise is, by itself, sufficient to establish that officer’s liability for acts committed by the corporation that are found to be in violation of Section 592.

The Court then issued an Order dismissing all claims by Customs against Mr. Nigri, personally.

A future blog post will let you know what happened with the negligence penalty case against Tip Top Pants, Inc.

ExportU.S. Bureau of Industry and Security (BIS)U.S. Office of Foreign Assets Control (OFAC)

Everything You Need to Know About Exporting

posted by Jennifer Diaz November 16, 2009 0 comments

In the next few weeks, I am giving lectures and doing a webinar on the general topic of export compliance.  In my legal practice over the past 20 years as a Customs and International Trade attorney, I am increasingly involved with clients on export compliance and penalty matters.  The laws and regulations have changed dramatically over the past few years, as has the name and number of Federal agencies enforcing them, plus the penalties for non-compliance are much higher now.

Please call (305) 260-1053 with any questions regarding the below seminar/webinar (or compliance generally).

(1) On Wednesday, November 18, from 9 to 12 noon at the Doubletree Miami Mart, on behalf of the Florida Customs Brokers and Forwarders Association, I am lecturing on complying with the Bureau of Industry and Security (BIS) requirements.  The seminar is entitled “Export Controls Compliance and Best Business Practices,” and it will cover everything from identifying the correct ECCN (Export Commodity Classification Number) in the Export Administration Regulations (EAR), to submitting an export license, to  the decrementing of the license by U.S. Customs and Border Protection, to interacting with Special Agents of the BIS’s Office of Export Enforcement conducting an investigation, to negotiating a favorable resolution after a Notice of Proposed Penalty has been issued against the company for an export violation.  I will also cover the various trade embargoes and sanctions with countries and foreign nationals and foreign organizations enforced by the Office of Foreign Assets Control (OFAC).  That means everything from Cuba to Zimbabwe and from Specially Designated Nationals (SDN) to narco-traffickers.   Violations of BIS and OFAC regulations may result in severe criminal punishment or monetary penalties in the millions of dollars, plus individuals have personal liability.

(2) This Thursday, November 19, from 6:30-8:15 p.m, at the University of Phoenix, 11410 NW 20th Street, Miami, on behalf of the South Florida Chapter of the National Association of Purchasing Management (NAPM), I will discuss “Export Controls Compliance and Penalties”. 

(3) On December 3, 2009, I will be a speaker in an “AES Compliance Webinar” from 12 noon to 1:30 p.m.  It is sponsored by the National Customs Brokers and Forwarders Association of America (NCBFAA) Educational Institute. To participate, simply go to www.ncbfaa.org and select “AES Compliance Webinar” under “Upcoming Events.” The webinar answers the questions of how, when, and why to file the required Electronic Export Information (EEI) using AESDirect.  U.S. Customs is now regularly issuing penalties against exporters or freight forwarders for not properly filing the EEI.  If you are wondering what happened to the old Shipper’s Export Declaration (SED) form, you should participate in this webinar that I am doing in cooperation with the U.S. Census Bureau.