International Trade Law News /title <!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> <html xmlns="http://www.w3.org/1999/xhtml" xml:lang="en" lang="en"> <meta name="verify-v1" content="6kFGcaEvnPNJ6heBYemQKQasNtyHRZrl1qGh38P0b6M=" /> <head> <title>International Trade Law News

August 13, 2015 

International Sanctions Lawyer Glen Kelley Joins Jacobson Burton Kelley PLLC



Today, international trade law firm Jacobson Burton PLLC added leading international sanctions lawyer Glen N. Kelley as a member, opening a New York office and changing the name of the firm to Jacobson Burton Kelley PLLC. 

The firm's website has changed to www.jbktradelaw.com

Glen has 14 years of experience in US economic and financial sanctions, trade controls, anti-corruption and anti-money laundering law. He advises financial institutions, private equity firms, and companies across a range of sectors including oil and gas, defense, automotive, aviation, manufacturing, chemicals, food and pharmaceuticals. 

At Jacobson Burton Kelley, Glen will work in tandem with fellow members Douglas N. Jacobson and Michael L. Burton to advise US and non-US companies and financial institutions on compliance, transactional and enforcement matters. 

Michael Burton said “Glen is a first-rate sanctions and trade controls practitioner with a depth and breadth of experience that complements and builds upon our existing offering.” Michael added, “I know that our clients will find, as Doug and I have, that Glen is a capable, effective advisor who is always a pleasure to work with.” 

“I have known and worked with Glen for many years and I am tremendously pleased that he is joining our firm,” said managing partner Doug Jacobson. “With our combined experience, and the opening of our New York office, we are now even better able to provide our clients with efficient and cost-effective solutions to their most complex trade law issues.” 

Commenting on his move to Jacobson Burton Kelley, Glen said “I welcome the opportunity to join two of the most experienced and well known export controls and sanctions practitioners in the US. I look forward to working closely with Doug and Michael to help our clients navigate the ever more challenging requirements of US sanctions and trade law.” 

Glen was previously the chair of the regional leaders of the global sanctions and trade group of a leading international law firm. He has also served as an Attorney Adviser in the US Department of State, receiving Honor Awards for his work on matters involving Iran and Iraq. 

About the Firm 

Jacobson Burton Kelley PLLC is a Washington, DC and New York based international trade law firm that advises US and non-US companies and financial institutions on international trade law. Our practice includes export controls, economic and trade sanctions, US customs, imports and trade remedies, anti-bribery and anti-money laundering law, and other trade regulatory matters. We guide our clients through strategy, licensing, compliance and enforcement issues that arise in their business operations, exports and imports and cross-border transactions. 

Jacobson Burton Kelley is a member of the Trusted Trade Alliance, and has a strategic alliance with Los Angeles-based attorney Abby Walsh, founder of the True Compliance Group.

August 12, 2015 

World ECR Releases Special Report: "U.S.A. 2015: Key Trends and Challenges in Export Controls and Sanctions"

The London-based journal of export controls and sanctions, World ECR, recently released a special report focusing on U.S. export controls and sanctions issues.

The report, entitled U.S.A. 2015: Key trends and challenges in export controls and sanctions, includes three in-depth pieces which cover topics of particular relevance to the export control and sanctions landscape: 

  • The impact of evolving U.S.-Cuba and U.S.-Iran relations 
  • The effectiveness of U.S. export control reform
  • The challenges that digital technology poses for compliance
It also includes a piece introducing legal advisors who specialize in export controls and sanctions.

The report features quotes from Jacobson Burton PLLC attorneys Doug Jacobson and Michael Burton and a profile of the firm, as well as quotes from and profiles of other prominent U.S.-based lawyers and firms in the export controls and sanctions field. The full report can be accessed below.

Please note that World ECR is hosting "The World ECR Export Controls and Sanctions Forum 2015" in the Washington, D.C. area on September 21-22, 2015. The forum, which will be held at the Crystal Gateway Marriott Hotel, will include presentations and sessions on a variety of U.S. and non-U.S. export control and sanctions topics. More information on this program can be found here.


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July 24, 2015 

Questions and Answers on the Iran Nuclear Agreement (JCPOA) and Impact on Iran Sanctions

By Doug Jacobson, Jacobson Burton PLLC

Here are answers to some of the frequently asked questions we have been receiving from US and non-US companies following the July 14, 2015 announcement of the Joint Comprehensive Plan of Action (JCPOA) between the P5+1 countries and Iran on Iran's nuclear program.

What would you advise companies now wanting to trade with Iran? 

Answer: The key piece of advice I have been providing to clients following the July 14, 2015 JCPOA announcement is to have realistic expectations, to understand the limited scope of the US sanctions relief contained in the JCPOA, the major hurdles in the way of its implementation, and to avoid media reports that contain general information only. We should not expect to see any US sanctions relief for several months, and most likely not until mid 2016. Sales and marketing staff should work very closely with their in-house and outside compliance resources to determine what is permissible and what is not. In the meantime, and for the next few months, the activity with Iran that was prohibited on July 13, 2015, the day before the announcement, remains prohibited today and until further notice from the Treasury Department's Office of Foreign Assets Control (OFAC). 

What misconceptions are out there that need to be corrected regarding sanctions on Iran? 

Answer: For most US-based companies, even if the JCPOA is approved by Congress and after several months is implemented in full, there will be little impact on US companies. The US agreed to lift only selected sanctions on Iran, such as secondary (extraterritorial) nuclear sanctions that restrict the activities of non-US persons with Iran. This means there will be relief only from sanctions on transactions outside the United States, not involving US persons or products sourced from the US. The US primary sanctions that prohibit most US goods from being exported to Iran and generally prohibit US persons from engaging in transactions with Iran will remain in effect until modified by the US Congress. In other words, once this agreement is implemented, which will not be until early 2016, US policy will be very similar to what it was in 2010, which is before the US secondary sanctions on Iran were first imposed. 

What mistakes do companies need to avoid in connection with potential business with Iran? 

Answer: Companies must avoid relying on rumors and unofficial information. They must make decisions based on specific guidance provided by the US Office of Foreign Assets Control, the Bureau of Industry and Security and other US regulatory agencies. Just because a competitor may be undertaking an activity in Iran or involving Iranian entities does not mean that it is compliant with US laws or the laws of other countries. The broad sanctions imposed on Iran by the EU and many other countries will also remain unchanged for the next several months and some countries, such as Canada, have indicated that they may choose to maintain the existing sanctions. 

On what sectors of the Iranian economy will the sanctions be lifted first and what sectors will take longer? 

Answer: For US based companies, the only significant changes to the current primary sanctions on Iran, once implemented in 2016, will be to allow for the sale and lease of commercial passenger aircraft and related parts to Iran for civilian end-use, upon receipt of a license from OFAC. In addition, OFAC will license non-US entities that are owned or controlled by a US person, such as a non-US subsidiary of a US company, to engage in activities with Iran that are consistent with the JCPOA. It is not yet clear whether OFAC will issue a general license authorizing such transactions or if each company will need to obtain its own specific license. In addition, the US will again allow the importation into the US of Iranian-origin carpets and food, which were permitted from 2000 through 2010. The US secondary (extraterritorial) sanctions relief will affect the activities of non-US companies in many other sectors in Iran, including energy, metals, automotive and shipping, insurance and banking. 

Will the JCPOA impact the current US policy on exports of permitted medical and agricultural products to Iran?

Answer: No. As noted, there will be limited changes on the US primary sanctions on Iran. OFAC's licensing policy for food, medicine, medical devices and agricultural commodities will not change under the JCPOA. As a result, the exports of these items still require a general or specific license to be exported to Iran. It is possible, although not certain, that payments for authorized items through European or Asian banks may be easier as a result of the JCPOA but direct Iran-US banking transactions will remain prohibited. In addition, there are many ports in Iran that will remain off limits due to the port operators being on the SDN List. The sanctions relief in the JCPOA is not expected to change the current policy since those sanctions were imposed for non-nuclear reasons.

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July 21, 2015 

U.S. GSP Renewal and Refund Update

By Doug Jacobson, Jacobson Burton PLLC

As a result of the recent renewal by Congress of the expired Generalized System of Preferences (GSP) program, US Customs and Border Protection (CBP) has announced that the normal GSP process will resume on July 29, 2015. On that date, U.S. importers will be able to have their customs brokers file entry summaries on imports of GSP eligible products without the payment of estimated duties.

In addition, because GSP was renewed retroactively to July 31, 2013, US importers are now eligible to receive retroactive benefits on GSP eligible imports that entered the U.S. between July 31, 2013 and July 29, 2015. 


However, because Bangladesh and Russia have lost their GSP eligibility, retroactive and future GSP benefits on imports from Bangladesh and Russia are not eligible for refunds or future GSP claims.


CBP has also posted a list of GSP-related frequently asked questions, which can be found here.


CBP’s instructions for obtaining GSP refunds are set forth below.


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US GSP Refund Process


A. Automation


Recognizing the impact that retroactive renewal and consequent numerous re-liquidations will have on both importers and CBP, CBP developed a mechanism to facilitate refunds for entries submitted during the lapse period  using the Special Program Indicator (SPI) for GSP (with the letter "A," "A+," or "A*") as a prefix to the tariff number. We expect to begin automated processing of these shortly after the effective date.


B. Formal/Informal Entries


CBP will liquidate or reliquidate all affected entry summaries and refund any duties deposited (without interest) for items qualifying for GSP and for which requests for liquidation or reliquidation are timely filed. Field locations will not issue GSP refunds except as instructed to do so by CBP Headquarters.


If as stated above, an ABI entry summary was filed with payment of estimated duties using the Special Program Indicator (SPI) for GSP (with the letter "A," "A+," or "A*") as a prefix to the tariff number, no further action by the filer is required; filings with the SPI "A," "A+," or "A*" will be treated as confirming requests for refunds.


If an ABI entry summary was filed with payment of estimated duties without the use of the SPI "A," "A+," or "A*" as a prefix to the tariff number, a refund of duties deposited must be requested in writing as described below for non-ABI entry summaries.


Non-ABI filers must request a refund in writing from the Port Director at the port of entry by December 28, 2015, regardless if they previously designated a refund on the Customs Form 7501 by using the SPI "A," "A+," or "A*" code. The request may cover either single entry summaries or all entry summaries filed by an individual filer at a single port. To expedite refunds, CBP recommends the following information be included in each letter:


A statement requesting a refund, as provided by section 201 of Title II of the Trade Preferences Extension Act of 2015;


An enumeration of the entry numbers and line items for which refunds are requested; and

The amount requested to be refunded for each line item and the total amount owed (not including interest) for all entry summaries.

C. Mail Entries


The addressees on mail entries must request a refund of GSP duties (not including interest) and return it, along with a copy of the CF 3419A, to the appropriate International Mail Branch (address listed on bottom right hand corner of CF 3419A). It is essential that a copy of the CF 3419A be included, as this will be the only means of identifying whether GSP products have been entered and estimated duties and fees have been paid.


D. Baggage Declarations and Non-ABI Informals


If travelers/importers wrote a statement directly on their Customs declarations (CF 6059B) or informal entries (CF 363 or CF 7501) requesting a refund (not including interest), no further action by the traveler/importer will be required; the statement will be treated as a conforming request for a refund. Failure to request a refund in this manner does not preclude a traveler/importer from otherwise making a timely request in writing, as described above for non-ABI filers.


Goods Eligible for Retroactive Benefits


The GSP reauthorization provides retroactive benefits only to goods from a country that is a beneficiary of the GSP program as of July 29, 2015. As such, this would exclude countries such as Bangladesh and Russia that lost eligibility between July 31, 2013 and July 29, 2015.

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July 01, 2015 

BIS Export Controls Update Conference to be Held in Washington, DC from November 2-4, 2015


The US Department of Commerce’s Bureau of Industry and Security (BIS) finally announced that the annual BIS Update Conference on export controls, which has been held in July for the past few years, will be held in Washington, DC from November 2-4, 2015.  

BIS Update has taken on more importance in the export controls community since many defense articles that were once subject to the ITAR are now subject to the jurisdiction of the Export Administration Regulations administered by BIS. 

In addition, because BIS has played a key role in the new sanctions imposed on Russia and Crimea, as well as in the changes to the US embargo on Cuba, those topics will likely be on the agenda.

As in the past, there will likely be speakers from OFAC on sanctions-related matters. 

Use the search box on the right side of this page to see summaries of prior BIS Update conferences. 

Further details on registration will soon be posted on the BIS website: http://tinyurl.com/o6ehphn.

May 18, 2015 

BIS Issues Guidance on Due Diligence to Prevent Unauthorized Transshipment and Reexport of Export Controlled Items to Russia.

By Doug Jacobson and Michael Burton, Jacobson Burton PLLC
 
Today the Bureau of Industry and Security (BIS) published guidance to exporters on the type of due diligence that should be undertaken by companies to prevent the unauthorized transshipment and reexport of export controlled items to Russia that are subject to the Export Administration Regulations (EAR).  

As a preamble to its guidance, BIS noted that it:

remains concerned about efforts by front companies and other intermediaries, who are not the true final end users, to transship or reexport U.S.-origin items to the Russian Federation in violation of these measures and other export controls. Even prior to the imposition of restrictions based on the situation in Crimea, front companies and other intermediaries obtained U.S.-origin items that may require a license to Russia through intermediate countries subject to a more favorable licensing policy under the Export Administration Regulations (EAR). A salient example is Wassenaar Arrangement dual-use items controlled under the EAR for National Security (NS) reasons. 
The following is an annotated summary of the BIS Russia guidance. Note that much of the guidance is not Russia specific, but is applicable to exports and reexport transactions involving sanctioned or restricted countries:
  • As described in Supplement No. 3 to Part 732 of the EAR [which includes BIS's "know your customer" and red flags guidance], whenever a person who is clearly not going to be using the item for its intended end use (e.g., a freight forwarder) is listed as an export item’s final destination, the exporter has an affirmative duty to inquire about the end use, end user, and ultimate destination of the item to ensure the transaction complies with the EAR.
  • Exporters should pay attention to any information that may indicate an unlawful diversion is planned. This may include discrepancies in the destination country and the country from which an order is placed or payment is made. 
  • When inquiring into the ultimate destination of the item, an exporter should consider e-mail address and telephone number country codes and languages used in communications from customers or on a customer’s website. The exporter should also research the intermediate and ultimate consignees and purchaser, as well as their addresses, using business registers, company profiles, websites, and other resources. 
  • Exporters should pay attention to the countries a freight forwarder serves, as well as the industry sectors a distributor or other non-end user customer supplies. The exporter should then determine whether a license is required based on the likely country of ultimate destination and end use and end user. 
  • Exporters should consider not only the list-based license requirements specified in Supplement No. 1 to Part 738 of the EAR (the Commerce Country Chart) in conjunction with item’s classification specified in Supplement No. 1 to Part 774 of the EAR (the Commerce Control List), but also the end use and end user controls in Part 744 and the embargoes and special controls in Part 746. 
  • If the exporter continues to have any doubts or concerns surrounding the end use, end user, or country of ultimate destination after exercising due diligence, the exporter should present all relevant information to BIS in the form of a license application or refrain from the transaction.
While not included in the BIS guidance, we recommend to our clients that they obtain end-use certificates in connection with all export transactions. Such end-use certificates should specifically mention the current Russia end-use restrictions contained in in the EAR. Such end-use certificates are also useful since they can be provided to freight forwarders and US Customs and Border Protection in order to facilitate authorized transactions intended for Russia.

May 12, 2015 

US Trade Security Steering Group Conducting Online Deemed Export Survey

The Washington, DC-based Trade Security Steering Group (TSSG), which supports a range of public-private initiatives to more effectively mitigate international security risks while enhancing the export competitiveness of high-performing companies, is conducting an online survey on deemed export licensing issues.

Feedback from companies, universities, and other organizations across the exporting community is requested to assist the TSSG in formulating a proposal to reform the deemed export licensing system.

The anonymous survey can be found here: http://j.mp/TSSGSurvey and will only take a few minutes to complete. 

The deadline for completing the survey is May 15, 2015. 


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