Customs and International Trade Law Blog : International Trade Lawyer & Attorney : Becker & Poliakoff Law Firm : Customs Law, Border Protection

On April 18, 2013, the Office of Foreign Assets Control ("OFAC") announced its effort to streamline license processing procedures by accepting requests for licenses, license amendments, and interpretive guidance electronically. This will not only simplify the process for those that wish to travel to Cuba, this new electronic application program can also be used for applications to request the release of blocked funds and much more.

For those that are more "old school" - you still have the opportunity to submit applications by snail mail pursuant to 31 C.F.R. § 501.801.

The new electronic OFAC License Application Page will allow users to apply:

1. to travel to Cuba (for many, though not all, categories of travel to Cuba);
2. to export agricultural commodities, medicine, or medical devices to Sudan or Iran pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000;
3. for the release of a wire transfer blocked at a U.S. financial institution; and
4. for a license or interpretive guidance in all other circumstances (referred to generally as Transactional).

For those wishing to travel to Cuba in a jiffy, you must first consult an expert to review and assure you understand the Comprehensive Guidelines for License Applications to Engage in Travel-Related Transactions Involving Cuba.  Once you know that you can apply to OFAC for your specific category of travel - the next step is reviewing the online application page.

Thus far, the electronic form may be used to apply for licenses to travel to Cuba in the following categories of travel, which are not generally authorized pursuant to 31 C.F.R. 515:   

• Journalistic Activities
• Professional Research and Professional Meetings
• Religious Activities
• Support for the Cuban People
• Humanitarian Projects Activities of Private Foundations  
• Research or Educational Institutes Exportation
• Importation
• Transmission of Information or Informational Materials
• Licensed Exportations

The OFAC has stated that they intend to update the online application system in the future so that all the categories of travel (including family visits, educational activities, public performances, clinics, workshops, competitions, and exhibitions) may be applied for using this streamlined online process.

If you want to travel to Cuba, want to export agricultural commodities, medicine, or medical devices to Sudan or Iran, have funds blocked by OFAC, or want interpretive guidance from OFAC, assure you consult a regulatory expert so you have the best chance for success with OFAC.

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I'm thrilled to be included as a speaker in the upcoming Global Clinical Sourcing and Supply Summit in Philadelphia.  I've included all the pertinent details about the summit and even a discount for you, my loyal readers! 

WHAT: Global Clinical Sourcing and Supply Summit.  Includes a FDA Address by Domenic Veneziano, Director of FDA's Division of Import Operations and Policy, and Industry Perspectives by speakers from Merck, Novartis Pharmaceuticals Corporation, AstraZeneca, and much more. The full agenda may be seen here.

WHEN: March 4-5, 2013

WHERE: Radisson Plaza - Warwick Hotel, Philadelphia, PA

WHO: You will benefit by attending if you are a Vice President, Director, Manager, or other Senior Executive from a pharmaceutical or biotech company with responsibilities in: Clinical Supplies, Supply Chain Planning and Forecasting, Clinical Labeling, Clinical Sourcing, Procurement, Investigational Materials, Global Logistics, Clinical Contracting, Clinical Packaging

WHY: My portion of the Summit will cover an update on current import and export control, discussion of free trade agreements in place and top trading partners, top tips to utilize when importing or exporting to assure compliance with federal government laws and regulations, and how to effectively resolve issues from U.S. Customs and Border Protection (CBP) when importing. 

To give you EVEN MORE of an incentive, email me for the Promo Code to save $500 off the registration fee!  Offer expires on March 4, 2013 - so don't delay!

If that's not enough for you, I leave you with an additional TOP 10 Reasons to Attend: 

1. Hear directly from the FDA on Import processes and requirements
2. Optimize your communication strategies with clinical operations
3. Understand the risks and rewards with central versus local sourcing options
4. Ensure efficiency while meeting the expectations of sites, patients and regulators
5. Develop strategies to monitor the changing regulatory requirements in emerging markets
6. Analyze the complex logistical and distribution challenges in India
7. Effectively resolve U.S. Customs and Border Protection (CBP) issues
8. Establish a metrics-driven system to enhance contractor performance
9. Reengineer current packaging process to streamline efficiency
10. Navigate global quality, compliance and regulatory challenges

To give you EVEN MORE of an incentive, tell them Jennifer Diaz sent you by using Promo Code GCSSP5 and save $500 off the registration fee! Offer expires on March 4, 2013 - so don't delay!

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"Be Bold! Women in Transportation" will feature prominent women in the transportation, logistics and supply chain management industry. The purpose of the event is to inform about career opportunities and attract women and minorities to the transportation industry. 

I'm thrilled to moderate this event where you'll hear from top notch keynote speakers, Michelle Livingstone, VP of Supply Chain/Transportation at The Home Depot and Natalie Putnam, VP of Marketing at Ryder.

Join us to learn answers to the following questions:

1. Why aren't more women choosing Supply Chain/Transportation as a career?
2. How will jobs in Supply Chain/Transportation evolve over the next few years?
3. What does the logistics function look like within a manufacturing/distribution business? 
4. How have energy prices affected the Transportation Industry?

5. What impact does the changing demographics of the US have on opportunities for women in the supply chain field?

6. What is the role of sales and marketing in supply chain, logistics and transportation?

7. What is changing in business culture and what do  companies need to do to acquire talent?

8. What are the skills needed to be successful in the field of logistics today?

9. Why is a career in supply chain a good choice? 

The cost of luncheon is $30 in advance and $40 at the door. Click HERE to register. 

For more information contact Jorge Guerra.

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Last week, I attended a seminar hosted by U.S. Customs & Border Protection (CBP) at the Miami Free Zone regarding exportation of used vehicles such as cars and automobiles. Here are the highlights:

CBP's '72-Hour Rule'
CBP regulations require the exporter of a vehicle to submit all export documents to the port of entry from which the vehicle will be exported at least 72 hours prior to export. Documentation for U.S.-titled vehicles include an original certificate of title. For used, self-propelled vehicles  a current Certificate of Title or a Salvage Title issued by any jurisdiction in the United States is required.

What if the car has 'Foreign Title'?
For vehicles that are registered or titled abroad, the owner must provide to CBP the original document that provides satisfactory proof of ownership (with an English translation of the text if the original language is not in English), and two complete copies of that document (and translation, if necessary). Important Note: Failure to have translated copies on hand will result in CBP delaying your importation.

What if it’s a 'Junk' car?
Junk Cars mean vehicles not to be sold as a whole. Junk cars require salvage title or a certificate of destruction. Destruction documentation is provided on the state level. Note: Certificates of destruction can only be reassigned twice in the State of Florida.

What if there is a 'Lien'?
If the car has an issue with title, like a lien, the interested third-party (lien holder’s) must provide a letter of authorization. The letter may be either signed or a stamp is acceptable. Note: You cannot import or export an automobile with a lien without this documentation.

CBP Emphasized the following: To import a vehicle under 19 C.F.R. §192, the vehicle must be:

1. Used;
2. Self Propelled; and
3. Sold to someone other than a dealer.

What qualifies as ‘Used’?
Used” refers to “any self-propelled vehicle the equitable or legal title to which has been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser”. Note: Do not use the phrase ‘dealer to dealer’ when communicating with CBP because once a vehicle is classified as used once, CBP will never define it as ‘new’ again.

But what IS a ‘Self-Propelled’ vehicle’?
Self-propelled includes any automobile, truck, tractor, bus, motor home, self-propelled agricultural machinery, self-propelled construction equipment, self-propelled special use equipment, and any other self-propelled vehicle used or designed for running on land but not on rail. Snowmobiles, ATV’s, and motorcycles are also vehicles under CBP regulations.

What is NOT a 'Self-Propelled' vehicle?
Jet skis and boats fall under ‘watercraft’, and are not required to be presented as used vehicles under 19 CFR § 192. CBP does not consider trailers vehicles because they are not self-propelled. Trailers must be attached to a self-propelled vehicle to qualify. Trains are not considered vehicles, either.

What does “Someone Other Than a Dealer” mean?
A ‘dealer’ is defined at the state level in state laws. The ultimate purchaser cannot be a dealer. “Ultimate purchaser” means the first person, other than a dealer purchasing in his capacity as a dealer, who in good faith purchases a self-propelled vehicle for purposes other than resale. The thing to remember here is the ultimate purchaser cannot be a dealer. Note: A dealer cannot reassign title to itself. Further, Non-dealers cannot reassign Manufacturer’s Statement of Origin (MSO). If you are a dealer, you can reassign the same MSO over and over again and it is okay. More information on CBP’s vehicle importing regulations can be found here.

For more information regarding the requirements for exporting used vehicles and solutions to CBP compliance issues, contact attorney Jennifer Diaz at (305) 260-1053 or JDiaz@becker-poliakoff.com.

Jennifer Diaz is the Chair of the Customs and International Trade Department at Becker & Poliakoff, P.A. She earned her J.D. from Nova Southeastern University Shepard Broad Law Center. Jennifer is admitted to practice law in the state of Florida and is board-certified in International Law by the Florida Bar.

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Exporting your Motor Vehicle out of the U.S. - A Quick Guide

So you are moving abroad and want to bring your car with you? To comply with the provisions of 19 CFR Part 192, you will need to report this export to the Federal Government by presenting both the vehicle itself as well as a specific set of documents to U.S. Customs and Border Protection (CBP) at least three (3) days prior to export.

The following documents are required when exporting a traditional used motor vehicle abroad:

1. Original Certificate of Title
2. Original Letter of Intent - for vehicles exported by sea or air, a letter provided by the carrier and identifying the date of export (be aware of 72 hour rule), destination, vehicle owner, vehicle identification number, and authorized signature
3. Export Power of Attorney - If the owner of the vehicle to be exported is not presenting the documents to CBP, a CBP Export Power of Attorney must be submitted and notarized, identifying the person submitting the documentation and signed by and identifying the ultimate purchaser/owner and the vehicle (by VIN).
4. Letter of Authorization - If the vehicle to be exported is owned by a corporation, company or business entity, it must be accompanied by a notarized letter on official business letterhead authorizing an agent to act on its behalf.
5. Lienholder Authorization - if the vehicle is leased or has a lien against it, there must be specific authorization allowing for the export of the vehicle on company letterhead.
6. Copy of the photo identification of the person presenting the export documents.
7. Copy of the photo identification of the owner of the vehicle if different from the presenter.

As always, if you are unsure, consult with a professional. Penalties for failure to comply with CBP’s export requirements, aside from the inability to export your vehicle, could include monetary fines, liquidated damages, seizure of the vehicle, and/or demand for redelivery of the vehicle.

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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.

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. 

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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.

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Sometimes it is beneficial for an exporter to voluntarily self-disclose its export violations to the U.S. Government.  Maybe an exportation of an item occurred without first obtaining the necessary license, or maybe the item was shipped to a company overseas other than allowed in a license. Both situations are violations of the Export Administration Regulations, and both violations could result in $250,000 penalties against the exporter. By voluntarily self-disclosing the violation, the exporter would reduce, and might even eliminate, such a penalty.

For a suspected violation of 15 CFR 764.2 of the Export Administration Regulations (EAR) enforced by the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, an exporter may submit a voluntary self-disclosure (popularly known as a "VSD") to the Office of Export Enforcement of BIS at its Washington, D.C. headquarters office.  The contents of what must be included in a VSD are established in 15 CFR 764.5.

Procedurally, once a properly filed VSD is received by the BIS, it is investigated by a Special Agent from the Office of Export Enforcement. If a penalty or other sanction is contemplated, the case is referred to an attorney with the Office of Chief Counsel of BIS.  The BIS attorney will contact the exporter's attorney, eventually resulting in a written Settlement Agreement between the exporter and the BIS.  Negotiating the terms of the Settlement Agreement is critical.

The Obama Administration is actively pursuing export control reforms. Importantly, Kevin Wolf, Assistant Secretary of Commerce for Export Administration, on November 9, 2010, at the Global Trade Controls Conference in London, England, stated:

Enforcement will become an even higher priority...We have long promoted the submission of voluntary self-disclosures (VSDs).  We view VSDs, along with internal compliance programs, as important mitigating factors. 

There will always be occasional errors by exporters.  Exporters should consult with knowledgeable and experienced international trade attorneys before submitting a VSD.  With more enforcement, there are sure to be more investigations and more penalties assessed by the Government against exporters, and likely more VSDs submitted to the Government by exporters.

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Pinnacle Aircraft Parts, Inc., based in Miami, Florida, just paid $225,000 to the U.S. Office of Foreign Assets Control ("OFAC") regarding OFAC's investigation of a jet engine that may have been shipped to Iran.  This case is unique in that OFAC did not assess the fine because the jet engine was actually shipped to Iran, but because Pinnacle Aircraft Parts failed to properly comply with it subpoena to provide all records about that shipment.

OFAC certainly has the authority to issue an administrative subpoena, and to demand documents for any alleged sale of a jet engine to Iran. See 31 CFR Section 501.602, which states:  

Every person is required to furnish under oath, in the form of reports or otherwise, from time to time and at any time as may be required by the Director, Office of Foreign Assets Control, complete information relative to any transaction,...

Pinnacle received such a subpoena demanding "all correspondence and other documents" related to the payment and transportation of the jet engine.  Through its outside legal counsel, Pinnacle provided 260 pages of responsive documents, however, according to the OFAC's Enforcement Information notice for November 16, 2010. 

[Pinnacle] failed to submit a copy of a post-sale e-mail - which Pinnacle had provided to its [legal] counsel - indicating that the aircraft engine was likely destined for Iran...

OFAC determined that the failure to produce the responsive document was "egregious", resulting in almost the maximum penalty of $250,000. OFAC concluded that Pinnacle "knowingly withheld" the relevant documentation. Pinnacle's unfortunate reliance on the incorrect advice of its outside legal counsel, usually a huge mitigating factor, only resulted in a 10% discount.

I have only one question for the lawyer or law firm that advised its client not to disclosure the e-mail to OFAC:  Did you attend the International Law Section of the Florida Bar's September 24, 2010 seminar on OFAC at which I discussed this very topic?  See prior Blog post dated August 30, 2010 entitled "Forbidden Places for Tourism and Trade".

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I have been an international trade attorney for over 20 years.  In that time, I have represented a few thousand companies involved in the importation, exportation, and international transportation of merchandise.  I have seen respectful, efficient U.S. Government employees and the most uncaring bureaucrats, importers who care about the law and others who only care how to get around it, and customs brokers who always try to do the right thing and others who you wonder how they ever passed the broker exam and the background check.  I have listed the 10 Most Common Misconceptions in International Trade.

I have actually heard intelligent people who are CEOs or General Counsels of their companies say the most surprising things to me over the years. 

1.  It is ok to bring in up to $100 worth of Cuban cigars into the United States.

2.  Dietary supplements that are "all natural" are not regulated by the U.S. Food and Drug Administration (FDA), and, therefore, can make all kinds of medical claims.

3.  The U.S. Government does not care about the value of cargo being exported from the United States because there are no duties, taxes or fees paid to the U.S. Government on exports.

4.  If an airlines passenger brings into the United States over $10,000 in cash, the passenger must pay a tax to U.S. Customs or the IRS.

5.  If an importer uses a customs broker to file an entry with U.S. Customs and Border Protection, and some false information is provided to U.S. Customs, only the customs broker is liable to U.S. Customs, not the importer.

6.  No one gets hurt by importing, buying and selling counterfeit merchandise.

7.  If some food product is marked with "Made in America" it must be good, but if it is marked "Made in China" it must be bad.

8.  Is an imported item is marked "Made in Vietnam" or "Made in Malaysia" or "Made in America" then if really must have been manufactured or produced in the identified country, and no other.

9. Since it is illegal to sell military items to places such as North Korea and Iran, if a U.S. company ships those items to a friendly country such as Australia or England, and the buyer in those countries then re-export them to North Korea or Iran, the U.S. company has done nothing wrong.

10.  A product manufactured in India, transported to Mexico, and then imported into the United States from Mexico should enter duty free under NAFTA because Mexico, Canada, and the United States are all members of the North American Free Trade Agreement (NAFTA).

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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.

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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?

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To the dismay of the local international trade community, three international freight forwarding companies and their owners are being criminally prosecuted for illegally exporting merchandise to a company in Paraguay. The company in Paraguay had been designated a "Specially Designated Global Terrorist" by the United States Government.  Exporters and forwarding companies sending any cargo to such a company, even Sony PlayStation video games, would be in violation of the law. 

In an Indictment dated October 1, 2009, Case No. 09-20852-CR-GOLD, the United States Attorneys' Office in Miami charged three Miami freight forwarding companies and their owners with violating the International Emergency Economic Powers Act (IEEPA),50 U.S.C. 1701 et seq., 18 U.S.C. 554 (fraudulently exporting from the United States), 18 U.S.C. 371 (conspiracy), and 13 U.S.C. 305 (knowingly submitting false Shippers Export Declarations or information through the Automated Export System (AES).

In summary, the Government has alleged that the Paraguay company paid an Ohio distributor of Sony PlayStations to ship those items to the freight forwarding companies in Miami. Once in Miami, according to the Indictment, the freight forwarders and their owners allegedly created documents falsely identifying the address of the company in Paraguay because they knew they could not ship the Sony PlayStations to the real address.  The real address of the company in Paraguay, according to the Indictment, had been designated by the Office of Foreign Assets Control (OFAC) as a Specially Designated Global Terrorist.  The designated terrorist was Galeria Page, an office mall in Ciudad del Este, Paraguay.

The case was investigated by the Miami office of the U.S. Immigration and Customs Enforcement (ICE) which issued a Press Release.  According to the Penalty Sheet filed with the Indictment, the maximum penalty for the individual owners of the freight forwarding companies who were arrested for the alleged violations is 20 years imprisonment. 

To obtain a copy of the Indictment which was just unsealed on February 26, 2010, please contact me at pquinter@becker-poliakoff.com or (954) 270-1864.

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Bank accounts are more frequently being frozen or seized by the Federal Government.  The typical allegation by the Federal Government is that the money in those bank accounts were the proceeds of money laundering.  Often, the owners of the seized bank accounts were somehow connected to shipping cargo to, receiving cargo from, or doing business with Colombia.  The owners of the seized bank accounts then typically receive a letter from U.S. Customs and Border Protection advising of the seizure, and the procedure to attempt to get the money back.

Money laundering typically means that the money in the bank account was seized because Immigration and Customs Enforcement (ICE) believes it was generated from the sale of illegal drugs.  ICE refers to this type of financial crime as "Trade-Based Money Laudering."  So, for example, if a company in Colombia received money from the sale of drugs, and then purchased some merchandise from a U.S. company, and paid that U.S. company, the money received by the U.S. company could be seized as the proceeds of certain unlawful activity set forth in the money laundering law at 18 U.S.C. 1956.  The allegation of money laundering is sometimes accompanied by an allegation of filing a false shipper's export declaration or Automated Export System (AES) with U.S. Customs, in violation of 15 CFR section 30.7.

Persons who, or companies which have their bank accounts frozen or seized are entitled to know the reasons for such a severe action by the Federal Government. They are also entitled to challenge the actions by the Federal Government through the administrative petition process with U.S. Customs and Border Protection or by going to Federal Court. Legitimate business persons whose bank accounts have been frozen or seized by ICE or through a Seizure Warrant should contact a knowledgeable attorney to pursue having their money returned to them promptly.

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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 (954) 985-4101 or e-mail (pquinter@becker-poliakoff.com)  to RSVP or with any questions regarding the below seminar/webinar.

(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.

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Lesson of the day -  Don’t make an intentionally false or misleading statement to the U.S. Commerce Department's Bureau of Industry and Security (BIS)! Carol Wilkins apparently did, and will now pay $15,000 to the BIS. Important to note is that this export manager was fined individually. RF Micro Devices, Inc., the company Carol worked for, was fined $190,000 separate and apart from Carol. 

From at least 2002-2003, a responsibility of Carol’s was export control compliance for RF Micro Devices, Inc. The company had exported spread-spectrum modems which are properly classified as ECCN 5A001 to China.  Yet, the company did not obtain the required license from the BIS.

The BIS Charging Letter discussed Ms. Wilkins' false or misleading statement to the BIS. During the course of a BIS investigation, she allegedly told a BIS Special Agent that all product classifications were confirmed by an outside consultant to be EAR99 (no export license required). Apparently the consultant disagreed, and even kept the documentation in which the consultant had specifically advised Carol that the items were not EAR99.  Carol might not have realized how resourceful the BIS Agents could be as she may not have realized that BIS Agents would confirm her statements to them by doublechecking with the consultant. Even I was always taught "trust but verify".  BIS is no different in this case. 

Whenever you are going to be interviewed by a Special Agent of BIS or any other Federal law enforcement agency, always remember two things: (1) tell the truth, and (2) seek the advice of legal counsel. 

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 Exporting motor vehicles from the United States to foreign destinations is a common occurrence at many ports around the country, including South Florida’s ports. Whether exporting vehicles for business or personal use, it is important to know the procedures that U.S. Customs (“CBP”) expects you to follow. Not paying attention to the “rules of the road” can result in the seizure of your vehicle(s), and the imposition of hefty penalties.

If you are in the business of exporting cars, or plan to export a car to a foreign country for personal use, it is important to know two different sets of rules. Part 192 of Title 19 of the Code of Federal Regulations (“CFR”) contains the rules for exporting used vehicles. Used vehicles include any vehicle where legal title has been transferred by a manufacturer, distributor, or dealer to the person buying the car. These regulations explain the basic requirements for how to export cars, including the documentation that must be presented to CBP, such as a Power of Attorney, where a company or individual is shipping a motor vehicle on behalf of someone else. The regulations also describe how much it will cost in penalties if a person fails to submit the right documentation, or no documentation at all. The penalties can be severe - up to $10,000 where CBP determines the car was stolen, or the vehicle identification number (“VIN”) has been tampered with.

The second set of rules that you need to know are the port-specific requirements imposed by CBP. This can be tricky because the rules at different ports are not always the same. CBP's Miami Seaport Vehicle Export Section has published a helpful Information Bulletin to assist exporters. The Bulletin describes where, when and how an individual must present documentation for exporting a vehicle from the Port of Miami. The Bulletin also contains a list of the most likely reasons that CBP will reject the export documentation, and prohibit a person from exporting a vehicle.

Anybody who desires to export a motor vehicle should know these rules and follow them carefully. The rejection of documentation by CBP can cause unnecessary delays and additional transactional costs, including storage fees. Failing to follow the rules of the road can even result in seizure of the vehicle(s) by the Government, and the assessment of significant penalties against the exporter. 

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