Current Issues in Export Compliance

Transcription

1 Current Issues in Export Compliance Steven Stoddard U.S. Department of Commerce Beverly Demma IDEX Corporation Omari Wooden U.S. Census Bureau Mary Menz Harris Corporation HOSTED BY PRESENTED BY

2 Establishing New Territory 600-Series Commodities Munitions Control Division

3 CCL Categories 0 - Nuclear Materials, Facilities and Equipment and Miscellaneous 1 - Materials, Chemicals, Microorganisms, and Toxins 2 Material Processing 3 Electronics 4 Computers 5 - Telecommunications and Information Security 6 Lasers and Sensors 7 Navigation and Avionics 8 Marine 9 Propulsion Systems, Space Vehicles and Related Equipment return 3

4 Product Group Each category has the same five product groups: A End Items, Equipment, Accessories and Attachments, Parts, Components, and Systems B - Test, Inspection and Production Equipment C Materials D Software E Technology Terms are defined in part 772 return 4

5 Reasons for Control 0 National Security 1 Missile Technology 2 Nuclear Nonproliferation 3 Chemical and Biological 5 National Security or Foreign Policy 6 Wassenaar Arrangement Munitions List (WAML) or US Munitions List (USML) 9 Anti-terrorism, Crime Control, Regional Stability, Short Supply, UN Sanctions, etc. return 5

6 Wassenaar Arrangement Munitions List 1 - Smooth-bore weapons (less than 20 mm) 2 - Smooth-bore weapons (20mm or more) 3 - Ammunition and fuze setting devices 4 - Bombs, torpedoes, rockets, missiles, other explosive devices 5 - Fire control and related warning equipment 6 - Ground vehicles 7 - Chemical or biological toxic agents 8 - Energetic materials 9 - Vessels of war (surface or underwater) 10 - Aircraft, Lighter-than-air vehicles, UAV, aero-engines 11 - Electronic equipment, spacecraft and components 12 - High velocity kinetic energy weapon systems 13 - Armoured or protective equipment, constructions and components 14 - Specialized equipment for military training 15 - Imaging or countermeasure equipment 16 - Forging, castings and other unfinished products 17 - Misc equipment, material and libraries 18 - Production Equipment/Components 19 - Directed Energy Weapon 20 - Cryogenic/superconductive equipment 21 - Software (Product Group D) 22 - Technology (Product Group E) return 6

7 USML M1 Abrams Tank FMS DDTC The Dealer Armored hulls, armored turrets, and turret rings Active protection systems, parts and components Active protection systems are defensive systems that actively detect and track incoming threats and launch a ballistic, explosive, energy, or electromagnetic countermeasure(s) to neutralize the threat before contact with a vehicle Composite armor parts and components specially designed for the vehicles in this category; Reactive armor parts and components; Electromagnetic armor parts and components, including pulsed power parts and components Built in test equipment (BITE) to evaluate the condition of weapons or other mission systems for vehicles identified in this Category. This does not include BITE that provides diagnostics solely for a subsystem or component for the basic operation of the vehicle Gun mount, stabilization, turret drive, and automatic elevating systems, and parts and components Self-launching bridge components rated class 60 or above for deployment by vehicles enumerated in this category Rotary shock absorbers specially designed for the vehicles weighing more than 30 tons in this category Illustrative list only Reference Federal Register / Volume 6, No. 234 / Tuesday, December 6, 2011 / Proposed rules, page 76100

8 600 Series M1 Abrams Tank MCD CCL The Parts Vendor Ammunition Rack Transmission Brake Components Road Wheel Drive Controls Intercom System Particle Separator Environmental Control System and Components Vehicle Frame Deep water fording kits Tracks Specially Designed Motors Illustrative list only Reference Federal Register / Volume 76, No. 136 / Friday, July 15, 2011 / Proposed rules, page 41982

9 Anatomy of a new 600-series ECCN CCL Category 0-9 9A610 Last two characters (i.e. numbers) will generally track the Wassenaar Arrangement Munitions List (WAML) Product Group A-E The 600 series derives its name from the 3 rd character (i.e., number) of the ECCN. 9

10 Contact Information Munitions Control Division Director: Todd Willis, Deputy Director: Elena Love, Compliance Specialists: Steven Stoddard, Karen DiBenedetto, Mary Quach, 10

11 UPSTATE NY TRADE CONFERENCE 2016 Denied Party Screening Process

12 Denied Party Screening Compliance Headache # 1

13 Denied Party Screening Nowhere in the U.S. export regulations, (EAR or ITAR), is it explicitly stated a business must conduct Denied Party Screenings for its export transactions. Implicitly, the US Government expects you will know the who, what, when and where of the export transaction, which includes a review of all denial lists, (entities or countries).

14 Denied Party Screening (con t) Compliance Headache # 2

15 Denied Party Screening Next Steps Review the government websites to understand the extent of your responsibilities:

16 Denied Party Screenings Understand what parties must be screened Customers Suppliers and Subcontractors Ship-to-parties, ultimate and intermediate consignees Brokers and freight forwarders Banks and other financial institutions Intermediaries and service providers Pay-to and Pay-from parties End users if known Employees and visitors to your facility Joint Venture partners Other transaction parties as appropriate

17 Denied Party Screening Understand when to conduct screenings Dependent on the nature and risk of your business EAR vs ITAR Entry of new customers into the customer database Acceptance of new orders Set-up of new vendors/suppliers whether domestic or foreign Prior to shipment of goods Hiring of new employees Periodic re-screening of existing customer or supplier database

18 Denied Party Screening Compliance Headache # 3

19 Denied Party Screening Manual vs Automated The government provides multiple lists for review BIS: Denied Persons List, Entity List, Unverified List DDTC: Statutorily & Administratively Debarred Parties OFAC: Specially Designated Nationals and Blocked Parties List Consolidated Screening List Manual method Takes time and knowledge of what you are looking for

20 Denied Party Screening Automated method 3 rd party vendor provided module that reviews all of the governments lists More up front cost but in the end easier to review if you understand the program parameters Failures versus False Positives

21 Denied Party Screening Bottom Line Understand your responsibility Understand what you must review and when Document the rationale behind denying the release of a shipment Maintain records of what you reviewed may be electronic or hard copy

22 Denied Party Screening

23 Export Compliance - Transitioning to the ACE Platform Omari Wooden Assistant Division Chief, Trade Outreach and Regulations June 10, 2016

24 EXPORT REPORTS AES-201 Filer Transactions AES-202 USPPI Transactions AES-203 USPPI Agent-Filed Routed Transactions

25 EXPORT REPORTS Three ACE Export Reports are available: Filers can view all information they have filed USPPIs can view All information filed where their EIN is listed as the USPPI ID Those elements they provided for Routed Export Transactions Free with no limitation on how often you can obtain them Data available for 5 years plus current year On demand and scheduled reports available with customizable features

26

27

28 Refactored AESDirect 35

29 29

30 30

31 31

32 32

33 33

34 WHAT S DIFFERENT? Legacy AESDirect One EIN per account Refactored AESDirect (ACE Portal) Multiple EINs allowed per account Slower responses Immediate responses allow you to see any fatal error immediately New codes may take days to update New codes updated immediately 34

35 OUTREACH AND TRAINING ACE Accounts and Reports Webinar (3/17) ACE Portal Filing Webinar (10/23) Multiple Q&A sessions in recorded from November 35

36 OUTREACH AND TRAINING Educational Videos Using the ACE Secure Data Portal How to Request a New Account Requesting an ACE Portal Exporter Account for Existing Users Requesting Access to EIN data for ACE Export Accounts 36

37 ACE RESOURCES ACE Account Quick Reference Guide ACE Reports Manual

38 CONTACT INFORMATION General questions about AES and AESDirect Data Collection Branch option 1 askaes@census.gov General questions about vetting process & COA Trade Outreach Branch option 5 exportreports@census.gov Technical questions about ACE Accounts and Reports CBP Account Service Desk , option 1, then option 2 ACE.Support@cbp.dhs.gov

39 39

40 Record Keeping The ability to produce records CONFIRMING a compliant export has the same importance as properly completing the export. Export regulations require exporters to maintain records Guidance: ITAR CFR (State Department) EAR Part 762 (Commerce Department) Key Documents Invoice Shipper s Letter of Instruction (SLI) AES Summary Air Waybill License (if applicable) End User Certificate (if applicable) Certifications (Part 130) Technology to Connect, Inform and Protect TM Presentation Title 40

41 Record Keeping (continued) Exporter must be able to produce hard copies of records upon U.S. Government request. Retention period is five (5) years after the last activity associated with the export. Technology to Connect, Inform and Protect TM Presentation Title 41

42 Place image here (10 x 3.5 ) AUDITS AND ASSESSMENTS MARY C. MENZ Vice President, Corporate Trade Compliance HARRIS.COM #HARRISCORP

43 Trust But Verify Technology to Connect, Inform and Protect TM Presentation Title 43

44 Purpose Audits and assessments are a critical requirement for measuring the effectiveness of a trade compliance program. Trade Compliance activities are supported by all business functions (i.e. engineering, operations, Human Resources, Sales & Marketing) therefore, the scope of review will affect all these departments. U.S. Government regulators consider regular audits and assessments an integral component of a compliance program. Technology to Connect, Inform and Protect TM Presentation Title 44

45 Areas of Focus General Understanding of Compliance Program Interviews/surveys Training Records Review Policies/Procedures/Process Classification/jurisdiction rating, rationale, records Denied Party Screening Supplier Certification Authorizations Licenses/Proviso Compliance Exemptions/Exceptions Technology to Connect, Inform and Protect TM Presentation Title 45

46 Areas of Focus (continued) Transactions Foreign Travel Foreign Visitors Technical Data Exports Shipments Imports Violations Implementation of remedial actions identified as the result of a violation Technology to Connect, Inform and Protect TM Presentation Title 46

47 Recommendations Establish a regular, consistent schedule for audits and assessments. Determine the specific focus areas on a rotating basis If a violation has occurred, include a review of the remedial plan 6-12 months after implementation Technology to Connect, Inform and Protect TM Presentation Title 47

48 THANK YOU SPONSORS EXHIBITOR LIST Littler Mendelson, P.C. Digital Rochester SEKO Worldwide Global NY, Empire State Development Export-Import Bank of the U.S. U.S. Small Business Administration U.S. Department of Commerce Mohawk Global Logistics Language Intelligence ER Select LLC CentriLogic Wells Fargo Bank ALT Translations, LLC High Tech Rochester Brockport Small Business Development Center St. John Fisher College PC Results Inc. Monroe County Economic Development SPEED Global Services