AES Changes Mandatory January 08, 2014
Usable mid-October 2014:
Pay particular attention to the Data Element!
Hong Kong Jeweler Fined Almost $2,000,000 for Undervaluing Imports to US
A Hong Kong jewelry company has been fined $800,000 for defrauding U.S. Customs of more than $1 million.
Fai Po Jewellery (H.K.) Co. LTD entered its plea and was sentenced Friday in U.S. District Court in Anchorage.
The company also must pay just over $1 million in restitution and the costs of the investigation, more than $144,000.
The U.S. attorney’s office for Alaska says in a release that the company prepared two invoices for every shipment of gold to U.S. buyers. One with the true amount was sent to the buyer, but a smaller invoice that undervalued the goods was sent with the shipment through customs.
Officials say by doing that, the company avoided full payment of U.S. Customs duties from March 2007 through October 2009.
U.S. Giving Up on Overseas X-ray Goal
Five years after Congress set a deadline for requiring all U.S.-bound shipping containers to be X-rayed overseas for nuclear weapons, customs officials have all but given up on the goal.
Customs and Border Protection officials scanned with X-ray or gamma-ray machines 473,380, or 4.1 percent, of the 11.5 million containers shipped in the fiscal year ended Sept. 30, according to the agency. That's essentially the same percentage of containers that were scanned in 2007, the year a Democratic-controlled Congress required that agents start vetting every container.
2-year waiver granted
Screening 100 percent of incoming containers would be almost impossible to implement now, cause huge delays and be less cost-effective than focusing only on suspicious cargo, customs officials say, even as the law's supporters insist the mandate is the only way to ensure the safety of the shipping system.
This year, Homeland Security Secretary Janet Napolitano, who oversees the customs agency, granted a two-year waiver from the requirement. Defending the decision last month before the House Homeland Security Committee, Napolitano said the mandate isn't practicable or affordable now.
Lawmakers favoring the mandate say they're concerned about terrorists detonating a nuclear or dirty bomb at a port, killing workers and rendering the port and surrounding area uninhabitable for years.
The selective approach "will not prevent all potential attacks inside the U.S., as it is not comprehensive and is subject to human error and weaknesses in our defense systems," said Rep. Jerrold Nadler, D-N.Y., who co-sponsored the scanning mandate.
Customs officials and business lobbying groups such as the U.S. Chamber of Commerce have said X-raying all containers would be too expensive, require cooperation from foreign countries that isn't forthcoming, and delay the flow of shipments.
Officials are now getting better information to help them zero in on containers that might have contraband, said Joanne Ferreira, a Customs and Border Protection spokeswoman.
"Targeting has become more refined," Ferreira said.
Port security and customs officials say they're taking all the precautions they can. Every container coming into the country must be scanned for radiation before it leaves the U.S. port.
Trucks line up at the Portsmouth, Va., port to pass through a structure resembling a tollbooth containing the radiation monitor. The devices' sensors sometimes flag a container with items such as bananas that have naturally occurring radiation, Virginia port officials say. The monitors can't always detect a nuclear or dirty bomb sheathed in lead, they say.
An X-ray produces an image that gives customs authorities a better idea if a container conceals a bomb, said Stephen Flynn, founding co-director of the George J. Kostas Research Institute for Homeland Security at Northeastern University in Boston.
If the current system of taking suspicious containers to a separate X-ray center were expanded to just 7 percent of all cargo, delays of 70 hours could occur, requiring a 2-acre lot to stack the backlogged freight, according to a 2011 University of Pennsylvania study co-written by Flynn.
A system in which less sensitive X-ray machines scan trucks as they drive through the entrance of an overseas port could be used for all cargo without delays, the report said.
Ports are less vulnerable because al Qaeda is more focused on planes than ships, said Stewart Baker, a former assistant secretary for policy at the Homeland Security Department.
"It's hard to kill a lot of people in mechanized modern ports," said Baker, a partner at the Steptoe & Johnson law firm in Washington. "Terrorists' enthusiasm for causing economic harm by blocking port infrastructure has been limited."
Guitar Maker to Pay $350,000 to Settle Charges of Lacey Act Violations
The Department of Justice announced Aug. 6 that a major guitar manufacturer will pay a $300,000 penalty as part of a deferred prosecution agreement settling allegations that the company violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India. The agreement also requires the company to implement a program to strengthen its compliance controls and procedures and pay a $50,000 "community service payment" to the National Fish and Wildlife Foundation that will be used to promote the conservation, identification and propagation of protected tree species used in the musical instrument industry and the forests where those species are found. In addition, the company will withdraw its claims to the wood seized in the course of the criminal investigation.
According to a DOJ press release, the guitar company purchased fingerboard blanks consisting of sawn boards of Madagascar ebony from a supplier who obtained them from an exporter in Madagascar. The harvest of ebony in, and export of unfinished ebony from, Madagascar was banned in 2006, and the company was made specifically aware of these restrictions following a 2008 trip to Madagascar by one of its employees. Nevertheless, the DOJ states, the company continued to place and receive orders for ebony fingerboard blanks with no further investigation or action on its part.
The penalty announcement will likely increase calls for reform of the Lacey Act Amendments of 2008, which among other things prohibits the importation of plants and plant products (including wood) that are harvested and exported in violation of any foreign law. The guitar maker’s chief executive officer is among those supporting the Retailers and Entertainers Lacey Implementation and Enforcement Fairness (RELIEF) Act (H.R. 3210), which would clarify that the Lacey Act only prohibits the importation of wood products harvested in violation of foreign laws that pertain to plants. Other changes in this bill, which was approved by the House Natural Resources Committee and placed on the House calendar last month, including (1) exempting plant products imported or manufactured before May 22, 2008, from Lacey Act requirements, (2) providing that individuals who have wood that violates the Lacey Act amendments but do not know it would not be penalized and their property could not be confiscated, (3) limiting the penalty for a first-time Lacey Act violation involving a plant product to a $250 fine for all violations in a single offense (as long as it was not knowingly committed), (4) requiring the federal government to compile a database of forbidden wood sources on the Internet, and (5) limiting the requirement to declare the genus and species of imported plant material on an import declaration to solid wood and items imported only for commerce.
Copyright , Sandler, Travis & Rosenberg, P.A. Originally published in the August 07, 2012 issue of the Sandler, Travis & Rosenberg Trade Report. Free subscription available. www.strtrade.com.
OCEANAIR Note: The wood was seized. For any questions, please contact Richard Somers or William Connolly of OCEANAIR Inc at 781-286-2700.
Bureau of Industry & Security (BIS) Enforcement Statistics
"In 2011, the Office of Export Enforcement’s investigations resulted in the conviction of 29 individuals, who received prison sentences totaling 572 months. There were criminal convictions of 10 companies. With individuals being convicted three times as often as companies, you are seeing our emphasis on individual responsibility. These cases resulted in the imposition of $20.2 million in criminal fines and $2.1 million in forfeitures. In 2012 we are on track to meet or exceed those numbers.
Concerning administrative enforcement actions, in 2011 Export Enforcement and our Office of Chief Counsel resolved 39 cases, which imposed a total of $8.5 million in fines. A total of 26 export denial orders were imposed. These denial orders included Temporary Denial Orders as well as permanent denial orders.
So far in 2012, we have resolved 24 administrative cases, which imposed $6.4 million in fines and 24 export denial orders. This underscores the importance of the variety of enforcement tools we at BIS bring to the table. Criminal and administrative sanctions, including fines, denial orders and placement on BIS’s Entity List, can be pursued independently or in conjunction with each other, depending upon the circumstances of a particular case.
But importantly for many in this audience, not all of our investigations ended with the imposition of criminal and administrative penalties. In 2011 the Office of Export Enforcement issued 227 Warning Letters. This year to date, OEE has issued 181 Warning Letters."
Source: Davis Mills, Assistant Commerce Secretary for Export Enforcement, 2012 BIS Update Conference.
FDA Revises Regulations on Medical Device Registration and Listing
The Food and Drug Administration has issued a final rule that, effective Oct. 1, will amend its regulations to reflect a number of changes made by the FDA Amendments Act of 2007.
Electronic Submission. Domestic and foreign medical device establishments must submit their registration and device listing information by electronic means through the FDA Unified Registration and Listing System. The FDA notes that device establishment owners and operators having been using FURLS since it became operational on Oct. 1, 2007. The FDA is only granting waivers from this requirement for those owners or operators for whom electronic registration and listing is not reasonable.
Information from Foreign Establishments. This rule reflects the requirement in the Bioterrorism Act of 2002 that foreign establishments whose medical devices are imported or offered for import into the U.S. must identify all importers known to them and the name of each person who imports or offers to import their device into the U.S. Specific definitions for these two new categories of information are being added to the regulations.
Exemptions Eliminated. The FDA is eliminating the exemptions from the registration and listing requirements for (1) foreign establishments whose medical devices enter a foreign-trade zone and are re-exported from the FTZ without entering U.S. commerce and (2) devices imported under 21 USC 381(d)(3).
Contract Manufacturers and Sterilizers. All contract manufacturers and contract sterilizers are required to register their establishments and list their devices.
Identification of Exempt Devices. FURLS requires exempt devices to be identified by product code rather than by classification name and number. The product code is already requested for such devices, and this change to the regulation codifies the existing practice.
Operations Reporting. Owners or operators only need to identify the operations or activities their establishments engage in as part of their device listings, not as part of their registrations, because FURLS has been designed to automatically migrate the information provided in the device listing to the registration.
Copyright , Sandler, Travis & Rosenberg, P.A. Originally published in the August 01, 2012 issue of the Sandler, Travis & Rosenberg Trade Report. Free subscription available. www.strtrade.com.
For additional questions, please contact Richard Somers or William Connolly of OCEANAIR Inc at 781-286-2700.