Published October 14, 2016 by

DOJ’s Voluntary Self-Disclosure Guidance for Export Control & Sanctions

Department of Justice (DOJ) October 2, 2016 guidance reaffirms its position to treat U.S. export controls and sanctions violations as an attack on the U.S. national security and DOJ’s Yates Memo guiding prosecutors to “promote greater accountability for individual corporate defendants” such as directors and employees of the company.  Guidance also places jurisdictional chart for actors involved in voluntary self-disclosure (VSD). Ordinarily, when an organization voluntarily self-discloses violations of U.S. export controls and sanctions, it presents its VSD to the appropriate regulatory agency under the procedures set forth in the agency’s regulations. * * *  Business entities should continue to submit VSDs to the Department of State, Directorate of Defense Trade Controls (DDTC) for violations of the International Traffic in Arms Regulations (ITAR); to the Department of Commerce, Bureau of Industry Security (BIS) for violations of the Export Administration Regulations (EAR); and to the Department of the Treasury, Office of Foreign Assets Control (OFAC), for violations of U.S. sanctions regulations. But, submission to the particular agency may not be enough!  If violation is “done with knowledge that it is illegal,” then VSD should also be submitted to Counterintelligence and Export Control Section of the DOJ’s National Security Division.  Guidance goes…

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Product Regulation U.S. Federal Agencies

Department of Commerce Department of Justice Directorate of Defense Trade Controls Office of Foreign Assets Control

Published February 4, 2016 by

Lumber Liquidators Inc. Criminal Import Venture

In October 2015, Department of Justice published conviction and penalty information of Lumber Liquidators Inc.’ criminal activities (also available here). The fine is $13,150,000. According to February 2, 2016 Google Finance report, (holding) company’s market cap is about $354,470,000. This means that Lumber Liquidators Inc.’s criminal activities cost company 3.7 percent of its market cap (attorneys’ fees not included). According to DOJ, it is “the largest financial penalty ever under the Lacey Act.” Now that the Lacey Act criminal precedent is set to cost 3.7% of the corporate market cap, it is a good reason to revisit Lacey Act itself, especially since its has been over four years since LawCustoms published on the topic. In a nutshell, Lacey Act makes it unlawful to import, export, sell, acquire, or purchase fish, wildlife or plants that are taken, possessed, transported, or sold: 1) in violation of U.S. or Indian law, or 2) in interstate or foreign commerce involving any fish, wildlife, or plants taken possessed or sold in violation of State or foreign law. Lumber Liquidators Inc. pleaded guilty to violation of 18 U.S.C. § 542 (entry of goods by means of false statements). Lacey Act requires importer of to submit a…

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Product Regulation U.S. Federal Agencies U.S. Federal Courts

Animal and Plant Inspection Service Department of Justice Home & Garden Products Lacey Act

Published December 21, 2015 by

Antidumping Whistleblowers Revisited

Just over two years ago, LawCustoms published an article Antidumping Whistleblowers Beaware!  The article involved allegedly false declarations by importers designed to avoid antidumping duties, namely pencils.  Article emphasized the difficulty of proving false declaration activities to prevail under False Claims Act claim.  False Claims Act allows private whistleblowers to bring suit on behalf of federal government if they have knowledge of fraud, or failure to pay proper customs duties due to the Government.   Government may or may not intervene.  If court agrees with whistleblower’s allegations, that whistleblower is entitled to a portion of recover. While the previous article described unsuccessful whistleblower, this one focuses on relative success.  University Loft Company blew the whistle on its competitor University Furnishings for misclassification of wooden bedroom furniture from China.  Chinese wooden bedroom furniture is subject to some hefty antidumping duties.  With the help of Department of Justice, University Furnishings settled, and University Loft Company got $2.25 million for reporting alleged duty evasion activities. Perhaps, False Claims Act tide is turning in the antidumping duty world.  Perhaps University Loft had overcame hurdles that it’s pencil predecessor could not overcome: whistleblower’s statements must not have been publicly disclosed; whistleblower’s information should be based on direct (i.e. through…

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Product Regulation U.S. Federal Agencies

Antidumping Customs and Border Protection Department of Justice False Claims Act

Published October 25, 2013 by

Antidumping Whistleblowers Beaware!

Imposition of antidumping duties is a popular trade tool in the modern WTO regime.  When it comes to People’s Republic of China, asking the U.S. government to impose antidumping duty is even easier (due to its non-market economy status), and probably politically popular.  When these duties are imposed, the tariff rate can easily overshoot 100 percent range.  In case of Chinese origin pencils, for example, it would be over 114 percent.  High antidupimping duties are designed to prevent “dumping” of a product on the U.S. market.  Collaterally, these duties serve as the great incentive to circumvent the law, such as the antidumping duties law. This is exactly what the plaintiff has alleged in US v. Staples case.  The plaintiff complained to the court about various importers, such as Staples, Target, OfficeMax, and Industries for the Blind.  According to the plaintiff, these companies circumvented the law by incorrectly declaring the origin of Chinese pencils.  Since the antidumping duty is tied to the origin, changing the origin of the product can change the duty.  This is what the plaintiff said: Staples declared falsely on Customs entry documents that its pencils originated in Hong Kong, Malaysia, and Taiwan; Target falsely declared that its…

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Product Regulation Trade Agreements U.S. Federal Agencies U.S. Federal Courts

Antidumping Country of Origin Department of Justice

Published June 17, 2009 by

NYSBA’s overview of U.S. Foreign Corrupt Practices Act

International Section of the New York State Bar Association (NYSBA) has published a good article on FCPA in its 2009 Spring issue (subscription required), with its supplemental overview, of International Law Practicum. Perspectives of many experts on the contemporary effects of FCPA were introduced. Not only domestic DOJ actions, but also a frank view of British policy with respect to anti-bribery enforcement. In summary, the article echoes the recent trend of increased FCPA enforcement by DOJ and SEC. In light of very few cases, there is very little authoritative guidance, other than that of DOJ, which tends to construe the statute broadly. Panel of legal practitioners provides insight of what can private companies do in order to not run afoul with the statute, which includes views of how one can interpret an inappropriate payments and contracts or relationships with the government officials. Panelists also discussed the issue of knowledge, which is a constructive (as opposed to actual) and deals with question of probabilities. One of the panelist neatly broke the FCPA focus into 6 elements, which focus on the “(i) payment, offer, or promise of (ii) anything of value to (iii) certain – people – who include not just foreign…

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U.S. Federal Agencies

Department of Justice Foreign Corrupt Practices Act

Published March 27, 2009 by

FOIA Presumption of Openness

DOJ amended guidelines to executive agencies not to withhold information strictly for procedural reasons. This applies to CBP. The goal appears to be both accelerate administrative efficiency and narrow number of denials. Two years ago, I made a FOIA request to CBP at Dallas Fort Worth. It took them just under two months to respond. How this will play out remains to be seen. For more information go to http://www.justice.gov/opa/pr/2009/March/09-ag-253.html

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U.S. Federal Agencies

Department of Justice Freedom of Information Act