Office of Export Enforcement Bureau of Industry and Security U'S' Department of Commerce Ronald B' O

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Office of Export EnforcementBureau of
Industry and SecurityU.S. Department of
CommerceRonald B. Orzel Special Agent in
Charge Chicago Field Office708-449-1600
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Illinois Tool Works Inc.
INDUSTRIAL SCIENTIFIC CORPORATION
IGG Corporation
Lawrence Livermore National Laboratory
ATT Communications
Hercaire
RII
OMEGA
TAL Industries
CCP
SYNTEX
JML FREIGHT
SWISSCO
ICS INC
SIGMA-ALDRICH
Digital Creations
PAN AVIATION
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Export Enforcements Mission

• Protect U.S. national security, homeland
  security, foreign policy, and economic interests
  through a law enforcement program.
• Export Enforcement accomplishes its mission
  through
• Preventative and investigative enforcement
  activities
• Pursuing appropriate criminal and administrative
  sanctions against export violators.

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Office of Export Enforcement

• The role of OEE
• Statutes and Penalties
• Recent Cases
• Questions Answers

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Who Are We?

• The enforcement arm of The Department of
  Commerce, Bureau of Industry and Security (BIS)

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Office of Export Enforcement Field Office Regions

Chicago
Boston
San Jose
New York
Washington
Dallas
Los Angeles
Houston RAC
Miami
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• OEE HQ [phone]
• Boston [phone] Chicago [phone]
• Dallas [phone] Houston [phone]
• Los Angeles [phone] Miami [phone]
• New York [phone] San Jose [phone]
• Washington, DC [phone]

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Education Component of OEEs Mission

• The key to OEEs mission is educating the
  exporting community about preventing violations
  and dealing with exporter responsibilities under
  the Export Administration Regulations through
• Company Outreach Visits
• Seminars
• Workshops

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Preventive Measures

• Check exporters and customers prior to issuing
  license
• Check end-users and end-uses after shipment
• Use watch list to screen license applications

• Review Shippers Export Declarations / ATS
• Review Visa Applications
• Detentions/Seizures
• Issue Temporary Denial Orders
• Educate Exporters - Outreach Seminars

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Enforcement Sources

• Industry Sources
• Sentinel Program
• Visa Application Review Program
• Export Document Review / ATS
  (SEDs, Airway Bills, Bills
  of Lading)
• Public Sources - Newspapers, Trade Publications
  and the Internet

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Investigations and Sanctions

• Investigations
• Criminal
• Administrative
• Sanctions
• Criminal fines and imprisonment
• Civil fines and penalties (i.e. denial of export
  privileges, exclusion from practice, etc.)

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CRIMINAL

• CRIMINAL PENALTIES
• COMMERCE
• EAR - currently enforced under 50 U.S.C., Sec.
  1705 (b), IEEPA (EAA currently lapsed and E.O.
  13222 continues the Regulations under IEEPA).
• OTHER STATUTES
• Conspiracy, 18 U.S.C. sec. 371
• Money Laundering, 18 U.S.C. 1956
• And more.

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Criminal Penalties

• Willful Violations
• For Individuals 250,000 fine and/or 10 years
  imprisonment
• March 2006 Enhanced IEEPA provides for 20
  years imprisonment
• For Corporations 500,000 fine
• October 16, 2007 Under the IEEPA Enhancement
  Act, the criminal penalty increased to 1 million
  fine for both Corporations and Individuals, and
  up to 20 years imprisonment.

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Administrative Penalties

• CIVIL AUTHORITIES
• EAR - TITLE 15, C.F.R. Part 764
• CIVIL SANCTIONS
• Fines 11,000/violation
• March 2006 Enhanced IEEPA - 50,000
• October 16, 2007 250,000 or twice the value
  of the transaction, whichever is greater.
  Applies retroactively.
• Denial of Export Privileges / Revocation of
  Export Licenses
• Exclusion from practice

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Temporary Denial Orders (TDOs)

• Department of Commerce is the only agency
  authorized to issue TDOs
• Designed to halt imminent violations
• Warns exporters consignees not to do business
  with these individuals firms
• Valid for 180 days and issued on ex parte basis
• Renewable

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Voluntary Self Disclosure

• Permitted under EAR Section 764.5
• Initiated by a company when a company identifies
  export violations
• Violations still investigated by OEE
• Great Weight Mitigating Factor

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Red Flags
Red Flags

• The customer or its address is similar to one of
  the parties found on the Commerce Department's
  BIS's list of denied persons
• The customer or purchasing agent is reluctant to
  offer information about the end-use of the item
• The product's capabilities do not fit the buyer's
  line of business, such as an order for
  sophisticated computers for a small bakery
• The item ordered is incompatible with the
  technical level of the country to which it is
  being shipped, such as semiconductor
  manufacturing equipment being shipped to a
  country that has no electronics industry

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Red Flags

• The customer is willing to pay cash for a very
  expensive item when the terms of sale would
  normally call for financing.
• The customer has little or no business
  background.
• The customer is unfamiliar with the product's
  performance characteristics but still wants the
  product.
• Routine installation, training, or maintenance
  services are declined by the customer.
• Delivery dates are vague, or deliveries are
  planned for out of the way destinations.

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Red Flags

• A freight forwarding firm is listed as the
  product's final destination.
• The shipping route is abnormal for the product
  and destination.
• Packaging is inconsistent with the stated method
  of shipment or destination.
• When questioned, the buyer is evasive and
  especially unclear about whether the purchased
  product is for domestic use, for export, or for
  reexport.

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What are Deemed Exports?

• The Export Administration Regulations (EAR)
  define a deemed export as
• the release of technology or source code subject
  to the EAR to a foreign national in the United
  States.
• Such release is deemed to be an export to the
  home country of the foreign national.
• Situations that can involve release of U.S
  technology or
  software include
• - Tours of laboratories
• - Foreign national employees involved in
  certain research,
• development, and manufacturing activities
• - Foreign students or scholars conducting
  research
• - Hosting of foreign scientists
• ? Visual inspection, oral exchange, practice or
  application under
• guidance of persons with knowledge release.

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Deemed Exports

• An export license may be required under the
  "deemed export" rule when both conditions are
  met
• Intend to transfer controlled technologies to
  foreign nationals while in the United States and
  
• Transfer of the same technology to the foreign
  national's home country would require an export
  license.

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• BIS ANTIBOYCOTT ENFORCEMENT
• Impetus of U.S. antiboycott law Arab League
  boycott of Israel
• Antiboycott Provisions of EAR (Part 760 of Export
  Administration Regulations www.bis.doc.gov/Antiboy
  cottCompliance/part760oac.pdf) prohibit certain
  conduct in support of boycotts by foreign
  countries against countries friendly to U.S.
• Examples -Refusing or agreeing to refuse to do
  business with a boycotted country or
  blacklisted person
• -Discrimination for a boycott purpose against
  a U.S. person based on race, religion, sex, or
  national origin
• -Furnishing or agree to furnish information
  about a boycotted county or blacklisted person
• Exceptions Certain specific activities that
  would otherwise be prohibited are allowed
  such as
• -Agreement not import goods from boycotted
  country to boycotting country
• -Positive certificate stating origin of goods
• Reporting Requirement Requests to comply with
  boycott must be reported
• Form 621P found at www.bis.doc.gov/AntiboycottCom
  pliance/BoycottRequestReportingForm
• Compliance begins with being alert to possible
  violations
• Call Office of Antiboycott Compliance Advice
  Line 202 482-2381
• Visit www.bis.doc.gov/AntiboycottCompliance

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• Enforcement Statistics (FY2005)
• 31 criminal convictions
• 7.7 million in criminal fines
• 69 administrative cases
• 6.8 million in administrative
• penalties
• 22 Denial Orders

• Enforcement Statistics (FY2006)
• 34 criminal convictions
• 3.3 million in criminal fines
• 104 administrative cases
• 13.1 million in administrative penalties
• 37 Denial Orders

For Selected Cases See BIS Major Cases List
Dont Let This Happen To You Both
at the BIS Website at www.bis.doc.gov
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When You Find a Violation

• Notify management
• Identify and contain the immediate violation
• Conduct an internal audit to identify the scope
  of the problem
• Initiate a self-disclosure report to the Office
  of the Director of OEE in Washington, DC

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Contact BISWE ARE HERE TO HELP!

• If you have questions about product
  classification, call BIS Exporter Services
• If you have questions about Red Flags or other
  potential enforcement problems call BIS Office of
  Export Enforcement (OEE)
• Check the BIS Website for current information
  about regulations, denied parties and listed
  entities. The Website is www.bis.doc.gov
• Export Counseling Division
• 202-482-4811 Wash. D.C.
• 949-660-0144 California

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OFFICE OF EXPORT ENFORCEMENTHotline
1-800-424-2980Chicago Field Office 708-449-1610

• If your competitor is breaking the law-
• Help him find a new home.