Header graphic for print

Global Trade Law Blog

Timely Updates and Analysis on Key International Trade Law Issues

$8 Million Penalty for Weak ITAR Compliance: How the Price of Maintenance Beats the Cost of Repair

By Sheppard Mullin on Posted in Arms Exports, Export Controls, International

By: Reid Whitten

On April, 30, 2013, Raytheon Company, a major military electronics and weapons manufacturer, agreed with the U.S. Department of State to pay $8 million in civil penalties and remedial expenditures to settle alleged violations of the International Traffic in Arms Regulations (ITAR).  The size of the penalty catches the eye, but beyond the whopping number is a sizeable lesson to be drawn from such enforcement actions: when a company forgoes the expense of maintaining its ITAR compliance system, it risks paying a much greater price if a breakdown occurs.

Continue Reading

U.S. Sanctions Target Russian Corruption, Human Rights Violations

By Sheppard Mullin on Posted in Foreign Corrupt Practices Act (FCPA), Magnitsky, Office of Foreign Assets Control (OFAC), Sanctions

By: Thad McBride

Asserting that “the protection of human rights … is not left exclusively to the internal affairs of [any one] country,” in December 2012 the United States enacted the Sergei Magnitsky Rule of Law Accountability Act of 2012 (the “Magnitsky Act”).  Under the law, the President is required to identify individuals found to be involved in human rights violations and impose targeted sanctions on them.  Interestingly, as discussed below, these sanctions seem to be based in significant part on concerns about corruption in Russia.  While the U.S. government continues to aggressively enforce the Foreign Corrupt Practices Act with respect to parties giving bribes, the Magnitsky Act suggests that Congress may seek to employ economic sanctions to target recipients of corrupt payments.

Continue Reading

OFAC Gets Hot, Bothered on Iran and Cuba: How Economic Sanctions Work Today

By Sheppard Mullin on Posted in Office of Foreign Assets Control (OFAC)

By: Scott Maberry and Mark Jensen

People who practice U.S. economic sanctions law like to talk about how sanctions are policy-oriented, or an engine of U.S. foreign policy.  Whereas some laws may be more opaquely political, economic sanctions and embargoes seem to express most bluntly how international leverage works through regulation.  And yet, a few recent regulatory developments show that the direction that sanctions take is not always predictable.
Continue Reading

New “Beast” Rules Lessen the Export Control Burden

By Sheppard Mullin on Posted in Arms Exports, Bureau of Industry and Security (BIS), Directorate of Defense Trade Controls (DDTC), Dual Use Exports, Export Administration Regulations (EAR), Export Controls, Exports

By: Scott Maberry, Curtis Dombek, and Cheryl Palmeri

On April 16, 2013, the U.S. Departments of State and Commerce published the first in a series of final rules, amending the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR) in accordance with President Obama’s 2009 Export Control Reform (ECR) initiative.[1] This is a significant milestone in export reform.  The ECR aims to focus U.S. government efforts on controlling the export of sensitive technologies while streamlining exports of defense-related items to U.S. allies and partners around the world.

Continue Reading

Upcoming Speaking Engagements

By Sheppard Mullin on Posted in Events

Scott Maberry will moderate a compliance roundtable discussion on June 25, 2013, as part of the ITAR Summit at the Hotel Monaco in Washington, D.C.

Scott and his co-panelists will discuss “What Keeps You Up at Night?  Addressing the Top 5 Export Compliance Challenges Facing the Defense Industry in an Evolving Regulatory Environment.”

For more information, please click here.

Continue Reading

Census Changes Foreign Trade Regulations: New Filing Requirements

By Sheppard Mullin on Posted in Customs, Exports, Imports

By: Thad McBride and Matthew Riemer

On Thursday, March 14, the Census Bureau published a final rule (available here) implementing changes to the Foreign Trade Regulations (FTR), 15 C.F.R. Part 30.  The final rule includes long-awaited revisions to the post-departure filing program commonly referred to as Option 4.  Census is also requiring mandatory filing of export information through the Automated Export System (AES) or through AESDirect for all shipments of temporary exports.  The final rule also implements remedial changes to the FTR to improve clarity and to correct errors. Continue Reading

Gentlemen, Start Your Engines: The Race for Riches in U.S.–EU Trade Begins with a Mandate from the European Commission

By Sheppard Mullin on Posted in International

By: Reid Whitten

The European Union and United States comprise 40% of global economic output and the trade relationship between them is the largest in the world. Tariffs between the two partners are already low (only 4% on average) and the long-lived peaceful commerce across the Atlantic has held on through boom and bust.  So if trade agreements aim to free up the flow of trade between regions and increase economic activity and wealth on both sides, what policy change could promise potential gains of nearly $200 billion shared between the two economies? Continue Reading

Streamlining the System: More Baby Steps Toward Reducing Export Compliance Burdens

By Sheppard Mullin on Posted in Arms Exports, Export Controls, International

By: Scott Maberry and Reid Whitten

Since 2011, President Barack Obama’s administration has actively pursued export control reform designed to reduce the regulatory burdens on U.S. companies and enhance U.S. national security (as reported here).  On March 7, 2013, the Administration notified Congress of the first in a series of amendments to the U.S. Munitions List.  The next day, March 8, 2013, the White House released Executive Order 13637 to update delegations of presidential authority over the administration of export and import controls.  Also on March 8, the White House issued a fact sheet on the implementation of export control reform.  These steps, though small, mark clear progress in the President’s Export Reform Initiative. Continue Reading

Line in the Sand: Siemens Argentina Case Limits Personal Jurisdiction Under the FCPA

By Sheppard Mullin on Posted in Foreign Corrupt Practices Act (FCPA)

By: Thad McBride and Cheryl Palmeri

A New York federal district court judge has dismissed a Foreign Corrupt Practices Act (“FCPA”) claim against a former executive of Siemens, S.A. Argentina and Siemens Transportation Systems for lack of personal jurisdiction.  The U.S. Securities and Exchange Commission (“SEC”) brought the civil FCPA enforcement action against Herbert Steffen for his role in an alleged scheme by which Siemens paid bribes to top government officials in Argentina to secure a project to create national identity cards. Continue Reading

Pay Attention to the Man Behind the Curtain: The Mysterious Methods to CFIUS Approval

By Sheppard Mullin on Posted in Committee on Foreign Investment in the United States (CFIUS)

By: Reid Whitten

On February 25, 2013, the Chinese state oil company, CNOOC, closed a $15.1 billion deal to take over Canadian oil company, Nexen.  Along with interests in the Canadian oil sands of Alberta and offshore production in west Africa and the North Sea, CNOOC will acquire more than 200 drilling leases in the Gulf of Mexico, a primary source of U.S. oil.  According to Nexen, its existing assets in the area include facilities producing more than 15,000 barrels of oil per day in 2012, with notable exploration potential for future growth. Continue Reading