According to the Financial Times, BAE will not be allowed to obtain any new export licenses after BAE’s settlement of bribery charges.

It [The US State Department] says it wants to establish what impact the UK armsmaker’s agreement last month with the Department of Justice will have on the enforcement of export controls of defence equipment.

The move could hamper BAE’s ability to export products with sensitive US-made content on key defence programmes.

Europe’s largest defence contractor pleaded guilty in a US district court on March 1 to charges that it conspired to defraud the US, made false statements about its anti-bribery compliance programme and violated arms control rules.

A State Department official confirmed that there was a “temporary administrative” hold on applications by BAE. “While we have resumed processing some BAE licences, other licences will continue to be delayed pending our issuance of a general policy. We anticipate this general policy will be completed soon.”

BAE’s plea agreement resulted in a $400 million dollar fine, after admitting guilt to charges that it “conspired to defraud the US, made false statements about its anti-bribery compliance programme and violated arms control rules.”

And, it is not yet clear whether the export license restrictions apply to BAE plc or its US subsidiary, BAE Systems Inc, or both. However, the DoJ has stated that the defense company’s US division was not involved in BAE’s criminal wrongdoing.

For more information, read the complete article at FT.com

From BIS:

Registration is now open and the agenda has been posted for the Export Control Forum, to be held on February 22-23, 2010 in Irvine, CA.

We have changed the format and venue this year in response to recommendations you have provided. The Export Control Forum will be held at the Hyatt Regency Hotel in Irvine, CA, and one registration will now cover the day-and-a-half program.

As in years past, day one of the Forum will feature key management, policy, legal, and licensing specialists from the Bureau of Industry and Security. We will also have representatives from the Bureau of the Census, and the Departments of Treasury, State and Defense.

Together, these speakers will provide updates on significant developments in the export control field. The day will conclude with a gala reception, offering you the opportunity to mingle and discuss issues of concern with the presenters and other participants.

On day two, you have the option to choose from one of two half-day sessions, dedicated to more in-depth discussion of selected topics.  This year, those sessions will be: “The Commodity Jurisdiction Process,” and “Blindsided: Export Controls That Can Catch You By Surprise.”

Please consult our website for additional details at http://www.bis.doc.gov/seminarsandtraining/irvine_feb_22_23_10.htm.  We hope to see you at the Forum next year.

Sign up for the BIS email notification service to receive updates like these.

10 General Prohibitions

1. Export and re-export of controlled items to listed countries.(Get your export licenses!)
2. Re-export and export from abroad of foreign-made items incorporating more than a de minimis amount of controlled U.S. content.
3. Re-export and export from abroad of the foreign-produced direct product of U.S. technology and software
4. Engaging in actions prohibited by a denial order.
5. Export or re-export to prohibited end-users or end-uses (aka Denied Parties)
6. Export or re-export to embargoed destinations.
7. Support of proliferation activities.
8. In transit shipments and items to be unladen from vessels or aircraft.
9. Violation of any order, terms and conditions.
10. Proceeding with a transaction with knowledge that a violation has occurred or is about to occur.

What do you think of the list? Any additions to these 10 or further explanation?

While much of the international waste trade is legal, sent to qualified overseas recyclers, a big chunk is not. For a price, underground traders make Europe’s waste disappear overseas.

Since 1995, paper, plastic and metal trash exported from Europe rose tenfold. Some of these exports are legal – often times recycling companies buy up waste to be cheaply recycled in Africa or China.

Half of these exports pass through Rotterdam port, where port inspectors are working diligently to combat illegal exports of waste products.

The Dutch have taken a lonely lead in inspecting waste exports and curbing the traffic, providing a rare window into the trade. They estimate that 16 percent of the exports are illegal. But in most ports where customs inspectors typically check imports far more thoroughly than exports, much probably passes through unnoticed.

The problem in the US is going virtually unnoticed – partly due to the fact that recycling requirements are not as strict, so there is less need to export waste, and partly due to the fact that the US places less export restrictions on waste products.

In the United States, more states are passing laws that require the recycling of goods, especially electronics. But because the United States places fewer restrictions on trash exports and monitors them far less than Europe, that increasing volume is flowing relatively freely overseas, mostly legally, experts say. Up to 100 containers of waste from the United States and Canada arrive each day, according to environmental groups and local authorities in Hong Kong.

Another problem Rotterdam port faces is that more imports are scanned than exports – in most ports around the world. Outgoing shipments are seen as less of a hazard than incoming. So, although they try to stop them before they leave, containers oftentimes leave undetected from other EU ports.

Exporters must be careful in complying with all export regulations, especially as the EU enacts more “green” laws to protect the environment. Taking the easy way out, as this article mentions, can cost up to $22,000 per infraction or, in the case of repeat offenders, criminal prosecution.

Additionally, the article highlights how exporters must know their trading partners. Handing your waste off to a company that promises to export it at a cheap rate can also get you into legal trouble, as these repeat offenders can also be denied parties.

To read the entirety of this great feature, visit: “Smuggling Europe’s Waste to Poorer Countries” at the New York Times.

BIS explains their reasoning in a recent news release on their website:

Evidence obtained by BIS shows that Mahan Airways continues to disregard U.S. export controls. BIS evidence also shows that Mahan Airways has violated the Export Administration Regulations (EAR) and the TDO involving re-exports to Iran of U.S. origin aircraft and that such violations have been significant, deliberate and covert, and there is a likelihood of future violations.

For additional information view the BIS news release.

The EAR plays an important role in trade compliance, and the penalties for violating these regulations can range from denial of export privileges like the above to corporate fines and even imprisonment.

The Bureau of Industry and Security has issued orders suspending export privileges for the following individuals.

• Export privileges for Andrew Ward Freyer of La Quinta, Calif., have been suspended until Dec. 17, 2017, due to Freyer’s conviction on five counts of violating the International Emergency Economic Powers Act and one count of conspiracy involving exporting, re-exporting, selling and supplying valves from the U.S. to Iran through Australia without first obtaining the required authorization from the Treasury Department’s Office of Foreign Assets Control.

• Export privileges for Bertrand Lalsingh of Hollywood, Fla., have been suspended until Feb. 8, 2013, after Lalsingh pled guilty to knowingly and willfully exporting an EOTech 553 holographic weapon sight, an item designated as a defense article in Category I of the U.S. Munitions List, from the U.S. to Germany without having first obtained authorization from the Department of State.

The source documents are available at STRtrade.

Introduction to Automating Export Compliance

According to research by the AberdeenGroup, companies using an automated export compliance system are 1.5 times more likely to report 0% of exports held up at customs. This video highlights how applying an export management system can ease your export pains and help establish compliance to avoid penalties, delays and fines. Watch it online now!

Of note:

• On May 14, 2009, Joseph Piquet was sentenced 60 months in prison and two years of probation based on his role in a conspiracy to purchase high-tech, military-use electronic components (such as high power amplifiers for use in early warning radar) from a domestic corporation, and to then ship the items to Hong Kong and the People’s Republic of China without first obtaining the required export licenses.

• On March 12, 2008, MTS Systems Corporation of Eden Prairie, Minnesota, pled guilty to two counts of Title 18 United States Code Section 1018, False Certification or Writing, in connection with MTS’ submission of two license applications to the Department of Commerce.

Total fines for these violations plus another 2006 export violation: $836,000

• On March 10, 2004, Thomas Campbell Butler, MD, a professor at Texas Tech University, was sentenced to two years in prison, three years of supervised release, and criminal fines and restitution totaling more than $50,000 for export violations, false statements, theft, embezzlement, fraud, and mail and wire fraud.

Butler was arrested in January 2003 for falsely reporting to the FBI that 30 vials of bubonic plague bacteria that had been destroyed by Butler were missing and presumed stolen from his university laboratory.

An investigation into Butler’s report uncovered that Butler had earlier exported a related set of bubonic plague bacteria to Tanzania in September 2002 without the required licenses.

Total penalties: $87,400  and his export privileges were denied for a period of 10 years.

Ensure Export Compliance:

Companies need to implement an export management system to protect their export privileges and ultimately brand reputation. An Export Compliance solution automates the international sales order management process including restricted party screening (RPS), export license determination and tracking, shipping document generation and government reporting.

OFAC charged that DHL violated OFAC regulations, mainly dealing with recordkeeping, for thousands of shipments to Iran and Sudan between 2002 and 2006.

BIS charged that on eight occasions between June 2004 and September 2004, DHL caused, aided and abetted acts prohibited by EAR when it transported items subject to the EAR from the United States to Syria, and that with regard to 90 exports between May 2004 and November 2004, DHL failed to retain air waybills and other export control documents required to be retained under Part 762 of the EAR.

OFAC charged that DHL violated various OFAC regulations between 2002 and 2006 relating to thousands of shipments to Iran and Sudan. Like DHL’s EAR violations, its OFAC violations primarily involve DHL’s failure to comply with applicable recordkeeping requirements.

As a result, DHL will be paying the $9.44 million as well as conducting external audits on exports to Syira, Iran, and Jordan from March 2007 to December 2011.

This case is also the largest joint settlement for BIS and OFAC. For the complete details, visit the BIS Website:  DHL Signs $9.44 Million Joint Settlement Agreement with BIS and OFAC

Screen for Denied Parties & Sanctioned Countries

Restricted Party Screening is a must-have procedure for any company engaging in global trade. The risks associated with not having a system in place are becoming increasingly large when you consider the possible sanctions,fines and penalties that are being dealt by the Department of Homeland Security, BIS, and OFAC. The first step to achieving this is implementing a program focused on Trade Partner screening.

Management Dynamics’ offers a Restricted Party (RPS) On-Demand solution that provides a secure, comprehensive method to automate this process, enabling companies to quickly screen their customers, suppliers and other trading partners against all restricted party lists from governmental institutions worldwide.

Learn more about denied party screening by downloading the white paper, Six Best Practices to Improve Compliance with a Restricted Party Screening Solution.

The State Department issued a statement Wednesday saying Air Shunt Instruments Inc. signed a consent agreement this week and agreed to pay a civil penalty of $100,000.

Officials say the penalty will be suspended because the company already has applied $70,000 to remedial compliance measures, and agreed to spend $30,000 on independent audits and security training for staff.

More alarming is this:

Former Vice President for International Sales John Nakkashian was charged with violating the Arms Export Control Act and vanished during a 2007 investigation.

Read the complete article online at the SFGate.

Maintain Export Compliance

Don’t risk violating customs compliance regulations! Our Export Compliance solution automates the international sales order management process including restricted party screening (RPS), export license determination and tracking, shipping document generation and government reporting.

U.S. District Judge Tom Varlan said UT professor emeritus J. Reece Roth could have caused “harm to the security of the United States” by allowing foreign national students, one from China and one from Iran, to work on a contract to produce technology to be used on unmanned Air Force drones.

Varlan noted that the Air Force was forced to scrap the research out of fear it had been compromised, although there was no testimony at Roth’s trial last year that any foreign government actually had accessed the information or that Roth ever had tried to sell or give the information to foreign governments.

Roth repeatedly has said he did not believe that mere research and the results of that research violated the Arms Export Control Act. However, Varlan said testimony showed Roth continued to allow foreign national students access to restricted data and even took various reports to China with him after he was twice warned by UT officials about the law.

Read the complete news article from KnoxNews.com

Read the Department of Justice’s Press Release.

White Paper: 6 Best Practices to Improve Compliance with a Restricted Party Screening Solution

Prevent trading with denied parties and embargoed countries. Automatically receive updates and re-screen suppliers, customers, visitors, and employees. Read the Restricted Party Screening Best Practices white paper.