Office of Export Enforcement Bureau of Industry and Security (BIS) U.S. Department of Commerce Special Agent Jonathan Barnes Miami Field Office 200 E. Las Olas Blvd Suite 2060 Ft. Lauderdale, FL 33301 Phone [phone] Fax [phone]

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Office of Export EnforcementBureau
of Industry and Security (BIS)U.S. Department of
CommerceSpecial Agent Jonathan BarnesMiami
Field Office200 E. Las Olas Blvd Suite 2060Ft.
Lauderdale, FL 33301Phone [phone] Fax
[phone]
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ACRONYMS

• DOC
• BIS
• OEE
• EAR
• CCL
• IEEPA

• ECCN
• SED
• EEI
• WMD
• PSV
• PLC

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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 Goals

• Advance national security, foreign policy and
  economic interests by ensuring effective export
  controls and promoting US strategic technology
  leadership
• Regulate export of sensitive goods/technologies
• Assist other countries in strengthening export
  controls
• Enforce export control, anti-boycott and public
  safety laws
• Support/enable continued U.S. technological
  leadership in key business/technology sectors

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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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BIS Office of Export Enforcement

• Objective
• Keeping the most sensitive goods out of the most
  dangerous hands
• Priorities
• - WMD Proliferation
• - Terrorism/Terrorist Support
• - Unauthorized Military/Government Use

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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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The PARTNERSHIP between OEE and YOU

• 1) We can assist you in avoiding illegal
  transactions.
• 2) We can assist you in avoiding negative
  publicity.
• 3) We can assist you in avoiding fines and/or
  imprisonment
• We can assist you in avoiding a situation where
  your company has to pay enormous costs for
  legal representation resulting from a criminal or
  administrative proceeding.
• Strengthening our partnership means working
  together to enhance our national security.

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Preventive Measures

• Check exporters and customers prior to issuing
  license
• Check end-users and end-uses after shipment
• Screen license applications

• Review Shippers Export Declarations
• Detentions/Seizures
• Issue Temporary Denial Orders
• Educate Exporters Outreach, Update

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Enforcement Sources

• Confidential and Industry Sources
• Intelligence Sources
• PLC and PSV
• Export Document Review
  (SED/EEI, Airway Bills, Bills of
  Lading, Invoices)
• Public Sources - Newspapers, Trade Publications,
  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 in lapse)
• OTHER STATUTES
• Conspiracy, 18 U.S.C. sec. 371
• Money Laundering, 18 U.S.C. 1956
• And more.

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Recent Cases

• Mayrow General Trading
• Armor Holdings
• Ali Khan/Turbo Analysis

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Mayrow General Trading

• Trading of electronic components that were
  capable of being used in IEDs.

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Armor Holdings

• Exportation of CC items without licenses.

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Ali Khan/Turbo Analysis

• Exportation of aircraft parts to Iran.

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Criminal Penalties

• Willful Violations
• 250,000 fine for individuals and/or
• Ten years imprisonment
• 1 Million or five times the value of the exports
  involved for firms

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Administrative Penalties

• CIVIL AUTHORITIES
• EAR - TITLE 15, C.F.R. Part 764
• CIVIL SANCTIONS
• Fines 11,000/violation prior to March 2006.
  50,000/violation from March 2006 to October
  2007.
• 250,000/violation after October 2007
• Denial of Export Privileges / Revocation of
  Export Licenses
• Exclusion from practice

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Increased OFAC Penalties

• Penalties/Settlements Total USD
• 2008 99 3,504,533
• 2009 27 772,442,861
• Future All of them 1 Arm and 1 Leg

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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 an individual or firm
• 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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How Do I Avoid This? Root Causes of Civil
Enforcement Cases

• 1. Incomplete Transaction Information
• 2. Ignoring Red Flags
• 3. Human Error
• 4. Incorrect SED/EEI Filing
• 5. Non-Compliance with License Conditions

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1. Incomplete Transaction Information

• Unknown end-user
• Unknown or inconsistent end-use
• Multiple parties to a transaction not listed
• Incorrect product classification
• Solution
• Identify all parties to a transaction, confirm
  legitimate intermediaries and ultimate consignees.

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2. Ignoring Red Flags

• Person placing the order is unfamiliar with
  product or information regarding end-use
• Inappropriate end-user banks, overseas freight
  forwarders, etc.
• Conflicting information on sales documentation
  and export routing correspondence.
• Solution
• Ask questions and inquire further if you have
  concerns.

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3. Human Errors

• Pressure to meet sales goals and rush order
  processing
• New or inexperienced personnel with too little
  training
• Poor communication with sales staff and foreign
  distributors
• No written compliance program
• Solution
• Increase training and cross train personnel.
  Ensure export guidelines and classifications are
  current. Create a compliance program.

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4. Incorrect SED/EEI Filing

• Wrong ECCN entered on SED/EEI
• Improper use of NLR (No License Required)
  exemption
• Incorrect Ultimate Consignee
• Typographical errors
• Solution
• Seek assistance from BIS and ensure correct
  classifications. Amend when errors occur.

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5. Non-Compliance with License Conditions

• Failure to identify all conditions on issued
  license
• Failure to identify any conflict of conditions
  with sales transaction.
• Solution
• Resolve any conflicts before proceeding with
  transaction. Even if this means amending the
  license!
• Notify intermediate and ultimate consignees of
  the BIS license conditions.
• Submit all reporting as required by BIS license.

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Deemed Exports

• A deemed export" is an export of technology
  or source code (except encryption source code)
  that is "deemed" to take place when it is
  released to a foreign national within the United
  States. See 734.2(b)(2)(ii) of the Export
  Administration Regulations (EAR).

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Deemed Exports

• Technology is "released" for export when it is
  available to foreign nationals for
• visual inspection (such as reading technical
  specifications, plans, blueprints, etc.)
• when technology is exchanged orally
• made available by practice or application under
  the guidance of persons with knowledge of the
  technology

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Deemed Exports

• Export license 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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Future Outlook

• Increase Security (National, Industrial,
  Technological, etc.)
• Increased Partnership opportunities with Industry
  
• More agents and more targeted emphasis
• Focused enforcement on key areas

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When You Find a Violation

• Notify management
• Identify and contain immediate violation
• Conduct internal audit for scope of problem
• Initiate a self-disclosure report to OEE

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POP QUIZ

• What should you do if and OEE Special Agent
  knocks on your door?
• A) Panic and run out the back door.
• B) Shred baby shred.
• C) Close the blinds, unplug the phone, turn off
  the lights, hide under your desk and
  assume the fetal position.
• D) All of the above.
• E) None of the above.

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OUTREACH VISITS

• The vast majority of outreach visits are
  productive/informative meetings, provided that
• 1. You Maintain good records
• Emails, notes, follow up conversations.
• 2. You can actually find the files the agents are
  interested in reviewing
• please bring us your files involving exports of
  pressure transducers to India in October of

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What an Agent Wants to Know When They Visit

• You have an effective Compliance Program
  because
• Steps you are taking to Screen End-Users
• The various Safeguards you have Implemented
• What are the Responsibilities of Each Person in
  your group

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At the Conclusion of the Outreach Visit we are
Hoping for Two Things

• You Take the appropriate Steps to
  Develop/Maintain an Effective Compliance Program
• You Develop a Comfort Level With OEE so That
  When You Receive an RFQ/email That is of Concern
  That You Call us.

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Contact BISWERE 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

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OFFICE OF EXPORT ENFORCEMENT

• QUESTIONS

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Is this item controlled by ITAR or the EAR?
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OFFICE OF EXPORT ENFORCEMENTHotline
1-800-424-2980

• Miami Field Office
• Phone [phone]
• Fax [phone]
• For more information or to receive regular email
  updates, please visit our website at
• www.bis.doc.gov