Mr. Joseph "Joe" Tosto, Jr., Export administration Specialist
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Transcript Mr. Joseph "Joe" Tosto, Jr., Export administration Specialist
August 15, 2012
Export Compliance
Cross Border Traffic
Joseph “JOE” Tosto, Jr.
Export Administration Specialist
WMTAaug15-2012
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Western Maquiladora
Trade Associaton
8:00am - 10:00am
August 15, 2012
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BIS
Bureau of Industry & Security
“DUAL USE” Items
Real World Examples
License Exception “TMP”
RED FLAGS
Summary
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**
$2,500 per Schedule B Rule **
has
NO bearing on BIS
Issued by Bureau of the Census, NOT BIS
Used for compiling export trade statistics
May also use Harmonized Tariff Schedule Number
*Schedule B book available on-line
www.census.gov/trade
For
Schedule B issues call
1-800-549-0595
Dual Use Exports
Term used to distinguish types of items covered
by EAR from those covered by Other
Government agencies with export licensing
authority.
In general, the term Dual Use serves to
distinguish EAR “Export Administration
Regulations” items that can be used both in
military and other strategic uses and in civil
applications.
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INK PENS to NUCLEAR COMPONENTS
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What Kind of Authorization is
Required to Export?
NO LICENSE REQUIRED
LICENSE EXCEPTION
LICENSE
VEU
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ON-LINE ACCESS
BIS home page
v
www.bis.doc.go
E-mail
notifications Service
Seminars
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ECCN EXAMPLES
How to
Build an
Airplane
encryption software
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Real World Examples
1C997 Ammonium nitrate, including fertilizers
2A226 Valves having all of the following
2B350 Chemical manufacturing facilities and
and fertilizer blends containing more than 15%
by weight ammonium nitrate….
characteristics (see list of items controlled)
equipment…..
The technical description of your items must be
known for accurate selection of ECCN.
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How to Classify Item
Company Engineer,
Chemist or other
Technical expert
The Manufacturer
Official Request to BIS
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Ten Categories in the CCL
(0 to 4)
ECCNs-Export Control Classification Numbers
0. Nuclear Materials, Facilities & Equipment and
Miscellaneous
1. Materials, Chemicals, Microorganisms &
Toxins
2. Materials Processing
3. Electronics Design, Development and
Production
4. Computers
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Ten Categories in the CCL
(5 to 9)
ECCNs-Export Control Classification Numbers
5. Telecommunications & Information
Security
6. Sensors and Lasers
7. Navigation and Avionics
8. Marine
9. Propulsion Systems, Space Vehicles and
Related Equipment
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ECCN Structure- Product Groups
5A101
Equipment,
assemblies
and
components
5B101
5C101
Test,
inspection and
production
equipment
Materials
5D101
5E101
Software
Technology
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EAR99 EXAMPLES
blank cd’s
Automobile
User’s
Manual
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If an item does not fall within a
specific ECCN, it is…
EAR99
Reminder:
Start at the beginning of each category
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Other factors can trigger a license
requirement
End
Use
End
User
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End users of concern
Denied Persons List
Supp. 2 to Part 764
Specially Designated Nationals List
www.treas.gov/ofac
Entity List
Supp. 4 to Part 744
Unverified End Users
BIS Home Page “Lists to Check”
General Orders
Part 736, Supplement 1
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End use concerns
Nuclear
Section 744.2
Chemical/Biological Weapons
Section 744.3
Missile
Section 744.4
Support of these activities by a U.S. Person
Section 744.6
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LICENSE EXCEPTIONS
BIS-748P
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License Exceptions
Part 740
Definition: An authorization that allows you to
export or reexport, under stated conditions,
items subject to the EAR that would otherwise
require a license.
Each license exception bears a three letter symbol
used for export clearance purposes.
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Can You Use a License
Exception?
Review general restrictions (Section 740.2)
Identify all applicable License Exception(s)
List based and transaction based
Use least restrictive exception that is available
Each “X” (license requirement) must be overcome
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COUNTRY GROUPS
(Part 740, Supplement No. 1)
A - Regime members
B - Less restricted
countries
C - Reserved
D - Countries of
concern
E – Embargoed*/
Terrorist Countries
* Not a complete list of
embargoed countries
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General Restrictions
(Section 740.2)
You may not use any License Exception if any one or more of the following
apply:
Your authorization to use a License Exception has been suspended or
revoked, or does not qualify for a license exception
Export or reexport is subject to one of the 10 General Prohibitions, is not
eligible for a license exception, and has not been authorized by BIS
The item is primarily useful for surreptitious interception of wire, oral or
electronic communications under 5A/5D980 unless for official use of an
agency of the US. Government
The item is a crime control and detection instrument (described in '742.7),
unless: export is to NATO, Australia, Japan, New Zealand; item is for official
use by personnel and agencies of the U.S. government under
'740.11(b)(2)(ii) of license exception GOV; certain shotguns and shells for
personal use
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General Restrictions, cont’d
(Section 740.2)
You may not use any License Exception if any one or more of the
following apply:
The item is controlled for missile technology (MT) reasons, with some
exceptions
The export or reexport is to a comprehensively embargoed destination (Cuba,
Iran, North Korea), unless specifically listed as available in Part 746 of the
EAR. Note: Syria, Lybia, Sudan have special controls.
The item is “Space qualified” with an ECCN listed in '740.2(a)(7)
The item is controlled under ECCN 2A983, 2D983 or 2E983 (explosives
detection), with some exceptions
Certain Micromachined Angular Rate Sensors
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Temporary Imports, Exports and
Reexports:
TMP
(Section 740.9)
Temporary Exports and Reexports
…One (1) year…
Tools of trade
Kits with replacement parts
Exhibition and demo
Inspection and calibration
Return of unwanted shipments
Items refused entry
Containers – not what is in container
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Temporary Imports, Exports and Reexports:
TMP
(Section 740.9)
Export of Items Temporarily in the U.S.
Assembly in Mexico -Maquiladora-
Temporary Exports to U.S. Subsidiary, affiliate or facility in
Country Group B. (Mexico is in Country Group B)
Exports of Items Temporarily in the U.S.
Item “withdrawal for export” from Bonded warehouse
Item moving “T+E” Transportation + Entry
Item moving “IE” Immediate Export
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ASSEMBLY IN MEXICO
Maquiladora Transactions, exported to
Mexico under Customs entries that require
return to the U.S. after processing, assembly,
or incorporation into end products by
companies, factories, or facilities
participating in Mexico’s in-bond
industrialization program; provided that all
resulting end-products (or the commodities)
are returned to the U.S.
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TEMPORARY EXPORT to U.S.
subsidiary, affiliate or facility in Mexico
Components, parts, tools or test equipment
exported by a U.S. Person to its subsidiary,
affiliate or facility in Mexico, that is owned or
controlled by the U.S. person, provided items
exported temporarily are not transferred or
reexported to a country other than the U.S.,
without prior authorization by BIS. Note: U.S.
person is defined in Part 740.9 (ix) (B); Ineligible
commodities or software, sensitive Nuclear
Activity per Part 744.2.
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Items Moving in transit though the
U.S.
Subject
to conditions, authorizes
export of items moving in transit
through U.S. under a
“Transportation and Exportation”
(T+E) or “Immediate Exportation”
(I.E.) customs entry made at a U.S.
Customs office.
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Exports of Items Temporarily in the
U.S.
Exporting Foreign Origin Items temporarily
in U.S. moving in transit through U.S,
withdrawn from a Bonded Warehouse in
U.S. under “withdrawal for export” customs
entry is considered: “moving in transit”. It
is not considered “moving in transit” if
withdrawn under any other type of customs
entry or broken for processing. Part 740.9 (b)
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Record keeping
Part 762
Provides audit trail—FIVE (5) years!!
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RED FLAGS
There are twelve (12) RED FLAGS covered
Supplement No. 3 to Part 732 of the EAR.
We will now review the twelve (12) RED
FLAGS
RED
- Hand Out -
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KNOWLEDGE
Part
736, General Prohibitions, (10)
Proceeding with transactions with knowledge that a
violation has occurred or is about to occur….
And ….
Part
772, Definitions of Terms…. Are both
parts of the EAR you, your staff and all associated
with your transactions must be aware of.
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Bureau of Industry and security
Office of Export Enforcement
Our Mission
Keep the most sensitive
goods out of the most
dangerous hands.
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Bureau of Industry and security
Office of Export Enforcement
Office of Export Enforcement
OEE routinely works with
various U.S. intelligence
and defense agencies for
threat assessment and the
enforcement of U.S.
Export Laws.
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Penalties
Criminal:
10/20 years imprisonment
$250,000 fine ($1,000,000
corporation)
Civil:
$11,000/$50,000 per violation
$120,000 per national security
violation
Denial of export privileges
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SUMMARY
Be positive your items (products, test
equipment, software & technology are properly
classified ---ECCN or EAR99--Use the EAR, follow the steps in Part 732
When making decisions, use WEB PAGE:
www.bis.doc.gov
current EAR “Export Administration
Regulations”
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Contacts
Western Regional Offices:
(949) 660-0144 , (408) 998-8806
Washington D.C.
(202) 482-4811- dial “0”
Fine Print: The CFR “Code of Federal Regulations”,
EAR are the Regulations. Base your decisions on
the Regulations and have an export compliance
program that is updated and current!
ATTEND our Seminars, Updates and
EXPORT CONTROL FOURM!
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Bureau of Industry and security
Office of Export Enforcement
Office of Export Enforcement
HOTLINE 1-800-424-2980
If your
competitor, or any
PERSON is
breaking the law,
help them find a
new home.
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Optimistically Yours,
Contact me for specific “challenges” you may
face in complying with current Export
Administration Regulations!
Joe Tosto, Jr., (949)660-0144 x 122
[email protected]
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