Seminars and Workshops in Salt Lake City, LA and San Diego - Geat Bangs for the Bucks!

If you are a trade compliance/export control professional seeking hands-on, practical application and case study based focus. Programs this Fall are just exactly what you are looking for.

Check out the two-page flyers and more details on each event at:  http://www.scribd.com/doc/160960457/Fall-Salt-Lake-City-Flyer; http://www.scribd.com/doc/160963391/Fall-Los-Angeles-Flyer; http://www.scribd.com/doc/160964526/Fall-San-Diego-Flyer 

NOTE:  There are discounts for International Compliance Professional Association, District Export Council, World Trade Center, Chamber of Commerce members and others.  Details are included in the individual flyers.

The agendas for these high-quality lower-cost programs are a direct result of evaluations & feedback from prior attendees over the last ten years from similar events across the country. You are getting exactly what the majority of your counterparts have asked for.

A dedicated team of local, state, national and international Hosts, Sponsors, Partners and Speakers are focused on providing our community with timely, cost- effective, top-notch programs on in-the-trenches topics including jurisdiction & classification; audits & assessments; minimizing exposure, liability and risk; harmonized best practices and exceptions & exemptions.

These efforts are especially important in light of ongoing and evolving Export Control Reform (ECR) including the huge migration of defense articles from US Department of State jurisdiction to US Department of Commerce jurisdiction. The impact & implications of ECR are an integral part of each of the sessions.

Additionally, Keynote Speakers from the Federal Bureau of Investigation will address hot topics that include the threats to you and your organization of cyber crime, industrial espionage and all the latest on protection of trade secrets.

Each full-day ends with a hosted Networking Reception for attendees, speakers and organizers to give you additional time to ensure all your questions get answered. Further, all the programs include one-hour, no-cost, no-obligation, one-on-one sessions with presenters to discuss whatever is on your mind.

If you can’t access the flyers on scribd with the links included above, just send me an email at jpriecko@comcast.net and I’ll provide them directly to you.

Bogus Certification Proliferation - No One Should Be Surprised…

Here we go again as another provider gets on the self-created, self-administered, self-endorsed, self-proclaimed, for-profit certification bandwagon using self-developed and self-approved standards.

The latest, Certified Classification Specialist (CCLS), from the Global Trade Academy, in Princeton, New Jersey, appears to be like other invalid certifications out there with no publicized, credible, external, independent, unbiased, third-party validation by any authority with no conflicts of interest. 

Does that sound familiar?

Perhaps it’s time again to read August 2010, Export Practitioner article “Certificate vs. Certification: Buyer Beware.”  It’s available through The Export Practitioner website at http://www.exportprac.com.  

Much has not changed since it was written and you might as well get ready for more of these as organizations expand their efforts here or join in to increase revenue.  It’s apparently a lucrative marketplace as some practitioners seeking credibility have misplaced value in paying a lot of money and adding an acronym or multiple acronyms after their name. 

In this case, for a mere $2,499, after five days of training, reading the regulations/rules and passing a test, you too can become a CCLS.  There’s no indication on what the L stands for in the acronym, but it’s there.  Word has it they decided not to use CCS as that acronym was being used by another invalid certification provider.  It appears as though some of these for-profit vendors are working together to maximize the return on investment and not step on each others toes. 

After reading through the vendors many emails on the offering and reviewing online promotional material for the CCLS, many of the same concerns, problems and questions that have come up before in the lively discussions on bogus certifications apply here as well.

Again, it’s a timely reminder about thorough due diligence anytime you outsource anything.  Do not spend a penny until you are absolutely certain you have all the relevant facts to make the best and most informed decision possible.

If you can’t access or have problems getting to the article, please contact John Priecko, President and Managing Partner, Trade Compliance Solutions, at 703-895-1110, jpriecko@comcast.net, or Sam Gilston, Editor & Publisher, The Export Practitioner and Washington Tariff & Trade Letter, 301-570-4544, sgilston@comcast.net.

The Meggitt-USA, Inc. Settlement - Outsourcing Pitfalls and Due Diligence

Here are some of the important and notable quotes from the August 23, 2013, settlement between Meggitt-USA-Inc. and the US Department of State (DOS). 

 

“Respondent’s subsidiary, Endevco, disclosed that due to inadequate or incorrect guidance from an advisor, the company erred in its jurisdictional determination for some of its products.  As a result, Endevco, failed to obtain a license or other authorization for over one thousand shipments of various accelerometers.”  [Proposed Charging Letter (PCL), page 5, 2nd paragraph (para), first two sentences].

 

“In addition and as a result of a similar misjudgment by one of Endevco’s export consultants regarding jurisdiction, Meggitt Sensors & Controls Company Ltd., located in the People’s Republic of China, also received from Endevco several such ITAR-controlled manufacturing calibration systems… without authorization.”  [PCL, page 6, 2nd para, 1st sentence]

 

This is not the first case where State has noted bad guidance from an external source (i.e. an advisor, consultant or lawyer).  In this one they did not name names.  Perhaps they should have for our collective self-protection.

 

The lesson learned (again) is, whenever you outsource anything, due diligence is critically important! 

 

More than one vendor in the trade compliance/export control community (even some who claim they are experts) is willing to mislead, make false and unsubstantiated claims, misrepresent what they offer, say anything, do anything and provide you a faulty product or service with a smile on their face.  They are happy to take your money (the more the better for them), but doesn’t the ball end-up in your organization’s and your court when it comes to following bad advice or using the faulty product or service?

 

Don’t buy the hype!   Do your homework and make sure you are getting exactly what you want and what you paid for from a credible/reliable source that actually knows the regulations and knows what they are doing. Using your network of honest, proven and trusted professionals to sanity check things will also pay big dividends. 

 

The bottom line is you do not have to follow bad advice.  Likewise, you can reject or not use a faulty product or service.  Isn’t accepting a wrong course of action from a provider who leads you down the primrose path just as much your fault as theirs?

 

For all the Meggitt-USA, Inc.-US Department of State settlement documents, go to http://www.pmddtc.state.gov/compliance/consent_agreements/meggitt.html. 

The DDTC-Aeroflex Inc. Settlement - Deja Vue All Over Again…

First, if you are a trade compliance professional, you need to read the complete Proposed Charging Letter (PCL), Consent Agreement and Order in this case to thoroughly appreciate what happened and the lessons learned.

Central to this settlement is the systemic and long standing nature of the violations based on improper jurisdiction and classification.  Does that sound familiar in light of previous DDTC settlements?

Essentially the Respondent did not know what they were doing.

As the PCL states:  “In making proper jurisdiction and classification determinations the DDTC Commodity Jurisdiction procedure is the only US Government method of determining whether an article or service is covered by the USML. Note the word “only.” 

Further, “Respondent and subsidiaries failed to understand the Department of Commerce can only classify items subject to the Export Administration Regulations.”  Note the words “only” and  “failed to understand.”  Additionally, “A Department of Commerce commodity classification is not a jurisdictional determination for purposes of the Arms Export Control Act.”  Note the word “not.”  Well Dah!

The question is how many more organizations have made, are making and/or will make similar mistakes and like Aeroflex learn the lessons the hard way? 

BOTTOM LINE:  Making correct jurisdiction and classification decisions are critical to avoid export violations and lots of adverse visibility.  They are also fundamental to any sound export compliance program.  In the context of evolving Export Control Reform, experience, knowledge and skills in this area are even more important.

If you get it wrong or got it wrong, there is significant exposure, liability and risk.  In the current invigorated enforcement environment, education and training here are critical!  If you blow it, you and your organization could face and suffer a wide range of negative consequences, just like Aeroflex, and others before them have done.

All the DDTC-Aeroflex settlement documents are available at http://www.pmddtc.state.gov/compliance/consent_agreements/Aeroflex.htm.
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Did You Miss It?

The US Department of Commerce (DOC), Bureau of Industry and Security (BIS), finished their annual three-day 2013 Update Conference on Export Controls and Policy in Washington DC today on a high note.  The concluding Roundtable Discussions and the Q&A at many of the Main Conference Sessions were particularly outstanding! 

The theme of Update this year is “Fulfilling the Promise.”  Perhaps a more appropriate title is “Fulfilling the Promise-A Work in Progress.”  Nevertheless, DOC and BIS leadership along with a dedicated conference team did a great job coordinating, executing the event and laying important groundwork for Export Control Reform (ECR) and the migration of thousands of articles from State Department to Commerce Department jurisdiction.

Most of the presentations are already available on the newly designed BIS website at http://www.bis.doc.gov/.  Do yourself and your organization a big favor-- download them, review them and share the information broadly with counterparts.  They include a great deal of excellent, timely and useful ECR related material that will help you and your organization make what could be a very turbulent transition!  

 

Three Raytheon Settlements Provide Insight into Evolving Perspectives on Compliance and Enforcement at the Directorate of Defense Trade Controls (DDTC

If you only read the most recent Raytheon-DDTC settlement documents you do not get a complete picture of their compliance culture, history over the last 15 years, how the State Department used to handle cases and how they approach them now, especially in the area of mandated compliance measures.

If you want some valuable additional insight and telling trend information, check out the one page Raytheon-DDTC Settlements Summary/Comparison at http://www.scribd.com/doc/152123272/Raytheon-DDTC-Settlements-Summary
or http://www.slideshare.net/jpriecko/raytheon-ddtc-settlements-summary-070613.

It provides an interesting side-by-side comparison of the April 2013, February 2003 and October 1999 Raytheon settlements with the DDTC. A few significant differences are worth noting. Is there one thing in particular that seems most obvious?

What do you attribute the differences over time to? What do you think are the most important takeaways when considering all three of the Raytheon-DDTC settlements?

April 30, 2013, Raytheon Settlement Summary - Important Lessons Learned

A concise one-page summary of the April 30, 2013, US Department of State settlement with the Raytheon Company is now available online at: http://www.slideshare.net/jpriecko/raytheon-043013-settlement-summary-060613

or at http://www.scribd.com/doc/151713277/April-2013-Raytheon-Settlement-Summary. 

It is a bite-size tool in a template format summarizing material facts from the Proposed Charging Letter, Consent Agreement and Order.  For more on the lessons learned and key takeaways, read the narrative introductory text on either of the above sites.