International business and trade lawyer, Jon P. Yormick, will be giving 2 presentations this month on international trade issues. On June 10, at the National Association of Credit Management 118th Credit Congress & Expo in Orlando, he will present Navigating Economic Sanctions…Successfully. Yormick’s presentation will be part of an Advanced level session, “International Export Compliance and Fraud Detection.” Co-panelists include the Director of International Trade Compliance for DHL Express Americas Region, a Partner from Bingham Greenebaum Doll LLP, and the Senior Investigator at ConSec Investigations.
On June 19, at the 2014 Upstate New York Trade Conference & Expo in Rochester, Yormick will present on the “deemed export” rule, economic sanctions, FCPA/Antibribery, and antiboycott regulations as part of the Conference’s Export Controls (EAR/ITAR) Track. He will join the U.S. Trade Compliance Manager from Idex Optics & Photonics to discuss these and other export control topics during the session, “Advanced Exporting Issues aka ‘A day in the Life of a Professional Exporter.’” Yormick will then join with other panelists for the “ITAR & EAR Roundtable: Overview of Export Control Reform and Q&A/Forum.” For more information and registration, visit http://bit.ly/LeKSuT.
Yormick is an experienced international business and trade attorney practicing in the areas Export Controls & Economic Sanctions, Customs & International Trade, and FCPA/Antibribery. He represents U.S. and foreign clients before the U.S. Department of Commerce, Bureau of Industry and Security (BIS), the U.S. Customs and Border Protection (CBP), the U.S. Department of Homeland Security, Immigration and Customs Enforcement (ICE), the U.S. Department of State, Directorate of Defense Trade Controls (DDTC), the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC), and the U.S. International Trade Commission (ITC) on import and export laws and regulations, including the Export Administration Regulations (EAR), and the International Traffic in Arms Regulations (ITAR). His clients include those in the advanced manufacturing, advanced materials, aerospace and defense, distribution, electronics, energy, medical device, oil/gas, pharmaceuticals, professional services, steel, textiles and apparel, and transportation/logistics sectors.
In 2014, Mr. Yormick was appointed by the Secretary of the U.S. Department of Commerce as a member of the Northern Ohio District Export Council, and he was selected to serve on the LL.M. Advisory Board of Case Western Reserve University School of Law. He is also a member of the U.S. Small Business Administration International Trade Task Force – Buffalo District Office. Since 2010, he has served as the Coordinator in Buffalo and Cleveland of the Export Legal Assistance Network, a nationwide network of attorney volunteers organized by the U.S. Department of Commerce, the SBA, and the Federal Bar Association to provide free initial consultations to identify key legal issues for exporting companies.
On April 23, international trade and business attorney, Jon Yormick, will present a webinar on Navigating Economic Sanctions Successfully for The Finance, Credit & International Business Association (FCIB). The 1-hour webinar begins at 11:00 am EST and is open to FCIB members and non-members.
In his presentation, Yormick will provide an update on the recent economic sanctions relating to events in Ukraine, discuss key U.S. economic sanctions regimes, discuss recent OFAC General Licenses and TSRA licenses that give companies certain business opportunities within the U.S. sanctions regimes for Iran and other countries subject to U.S. sanctions, and emphasize economic sanctions compliance, including lessons learned from recent OFAC and BIS civil penalty cases.
Yormick is an experienced international business and trade attorney practicing in the areas Export Controls & Economic Sanctions, Customs & International Trade, and FCPA/Anticorruption. He represents U.S. and foreign clients before the U.S. Department of Commerce, Bureau of Industry and Security (BIS), the U.S. Customs and Border Protection (CBP), the U.S. Department of Homeland Security, Immigration and Customs Enforcement (ICE), the U.S. Department of State, Directorate of Defense Trade Controls (DDTC), the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC), and the U.S. International Trade Commission (ITC) on import and export laws and regulations, including the Export Administration Regulations (EAR), and the International Traffic in Arms Regulations (ITAR). His clients include those in the advanced manufacturing, advanced materials, aerospace and defense, distribution, electronics, energy, medical device, oil/gas, pharmaceuticals, professional services, steel, textiles and apparel, and transportation/logistics sectors.
According to the Executive Order, all property and interest in property that are in the U.S. currently or come within the U.S. or possession or control of a U.S. person (including foreign branches) are blocked for any person determined to be “responsible for or complicit in, or have engaged in, directly or indirectly” actions or policies that undermine the democratic processes or institutions in Ukraine; actions or policies that threaten peace, security, stability, sovereignty and the territory of Ukraine; or misappropriate Ukraine state assets. In addition, property is blocked for those determined to be a “leader of an entity that has, or whose members have” engaged in or materially assisted, sponsored, or provided financial, material, or technological support, or goods or services in support of such activities.
An entity is broadly defined as “partnership, association, trust, joint venture, corporation group, sub-group, or other organization.”
The Executive Order also suspends immigrant and non-immigrant entry into the U.S. of those determined to have participated in such activities.
Additionally, donations and other contributions of support to those determined to be involved in such activities are prohibited.
Lastly, the Executive Order prohibits any transaction that evades or attempts to evade or avoid the prohibitions, as well as any conspiracy to evade or avoid the prohibitions.
Noting that the transfer of funds and assets can be done instantaneously, the Executive Order also states that “no prior notice of a listing or determination made” pursuant to Executive Order shall be provided.
In light of this just released Executive Order, companies are urged to immediately review their business relationships in and with Russian and Ukrainian parties and take necessary actions to avoid possible violations of the Executive Order. Clearly, this is a developing situation and companies will need to actively monitor whether further sanctions will be imposed and their business relationships with individuals and entities that are or may be affected by this Executive Order.
For assistance with understanding and complying with this Executive Order, other economic sanctions laws, regulations, and Executive Orders, as well as representation before BIS and OFAC in investigations, civil penalty, and voluntary self-disclosures, please contact Jon P. Yormick, Attorney and Counsellor at Law, firstname.lastname@example.org or by calling +1.866.967.6425 (Toll free in Canada & U.S.), +1.216.928.3474, or Skype at jon.yormick.
The “deemed export” rule under the Export Administration Regulations (EAR) presents unique compliance challenges for universities, R&D centers, and any number of companies and organizations involved in high-tech fields.
In short, under the EAR, the release of export controlled technology to a foreign national is deemed to be an export to the country of which the foreign national is a citizen. A “release” includes giving a foreign national access to the controlled technology. The deemed export rule applies to foreign national employees who may be authorized to work in the U.S. under an H1-B, O, L-1 or other visa, as well as foreign national visitors, those employed by business partners, graduate assistants and other researchers and student interns. The deemed export rule does not apply, however, to foreign nationals who have become naturalized U.S. citizens; those who are legal permanent residents of the U.S. (have “green cards”). The rule applies equally to organizations with overseas operations, such as subsidiaries, JVs, affiliates, and other partners.
The sharing of or giving access to controlled technology, blue prints, formulations and the like with a foreign national during a meeting in a conference room, in an email or text message, in a Skype or phone call, are all considered to be a release under the deemed export rule. Therefore, just as an exporter of a commodity must determine whether its export controlled item is subject to licensing requirements or if it chooses to rely on an applicable export license exception, organizations that have controlled technology must similarly analyze whether a release of that technology, in whatever format and via whatever media, must also carefully analyze whether a deemed export license may be required before the release to the foreign national colleague can occur.
This week, a civil penalty settlement announcement made by the U.S. Department of Commerce, Bureau of Industry and Security (BIS), Office of Export Enforcement (OEE) gave organizations with controlled technology another reminder (perhaps a jolt for some) that violations of the deemed export rule are detectable and costly. In a press release, BIS announced that it reached a $115,000 civil settlement with a Santa Clara, California company resulting from five violations of the EAR’s deemed export rule.
The company’s violations included the unauthorized release of export controlled manufacturing technology to a Russian national engineer working at its U.S. headquarters. This occurred in 2007. The unauthorized release involved drawings and blueprints for parts, identification numbers for parts, and development and production technology. The information is used for a product in hard disk drive manufacturing. The controlled technology was stored on a server at the company’s headquarters. (Best Practice Tip: store controlled technology on U.S. servers only, not abroad and not in the cloud). The company “released” the controlled technology to its Russian national engineer by providing the employee with a login ID and password “that enabled him to view, print, and create attachments.” After that occurred, the company applied for a deemed export license from BIS, but continued to store controlled technology on its server and failed to take steps to deny access of the technology to its Russian national while the license application was pending. This resulted in charges of knowingly violating the EAR on three occasions. Apparently, those applying for the license failed to inform the IT department to disable the engineer’s login or otherwise deny access to the controlled technology. In 2010, a similar release violation occurred when a Chinese national working in the company’s Shenzhen, China subsidiary accessed similar controlled technology on the company’s server in California using a login ID and password to open an attachment containing the technology.
The company voluntarily disclosed its violations to BIS. But it should be recalled that for many visa categories used to employee foreign nationals in the U.S. Part 6 of the I-129 requires the applicant to certify compliance with the EAR (and ITAR), including obtaining an export license when necessary and not releasing or giving access to the controlled technology to the foreign national employee. In other words, BIS and U.S. Citizenship and Immigration Services (USCIS) have information available to help detect and penalize deemed export violations in addition to information provided to BIS through a voluntary self-disclosure (VSD).
In announcing the penalty, BIS stated that the company’s failure to prevent access while the deemed export license was pending was considered to be an aggravating factor in determining the penalty. There can be no doubt that BIS is serious about protecting U.S. technology that is subject to export controls, enforcing the deemed export rule, and penalizing violators. “Deemed export compliance is a top priority for the Bureau of Industry and Security,” said David W. Mills, Assistant Secretary of Commerce for Export Enforcement. “Today’s settlement highlights the need for companies to be vigilant to prevent the unauthorized release of U.S. technology and data.”
The BIS case documents can be accessed here, http://1.usa.gov/1jCWCEk.
For assistance with understanding and complying with the deemed export rule, sections of the Export Administration Regulations (EAR) or other export controls and economic sanctions, as well as representation before BIS in investigations, civil penalty, and voluntary self-disclosure matters, please contact Jon P. Yormick, Esq., email@example.com or by calling +1.866.967.6425 (Toll free in Canada & U.S.) or +1.216.928.3474.
International trade and business attorney, Jon Yormick, will discuss Export Control Reform (ECR) and economic sanctions in 2 separate presentations in Buffalo next month.
On January 15, the Law Offices of Jon P. Yormick Co. LPA is co-sponsoring a 2-hour workshop, Export Control Reform, Revisited, with Mohawk Global Trade Advisors and Daemen College. The event will be held at Daemen College, with check-in beginning at 8:30 am. The program will run from 9:00-11:00 am. In addition to Jon, the workshop will feature Jim Trubits of Mohawk Global Trade Advisors, and Rae Perrott of Moog, Inc. They will discuss and share experiences with the recently implemented ECR from the perspectives of a global exporting company, a freight forwarder, and legal counsel. The focus will be on the transition of defense articles from the ITAR to the EAR, new AES documentation requirements, and tips for export compliance based on lessons learned from recent consent decrees. The cost is $35 and includes breakfast. For registration, contact Abby Frank at 315.552.3001 or at firstname.lastname@example.org.
Also on January 15, Jon will give a presentation at the Buffalo World Trade Association’s monthly dinner meeting. The BWTA was founded in 1921 and has the mission of expanding international business knowledge and activity of U.S. and Canadian companies in the Buffalo Niagara region. In his presentation, Navigating Economic Sanctions Successfully, Jon will discuss economic sanctions regimes, OFAC General Licenses and TSRA licenses that give companies certain business opportunities within the U.S. sanctions regimes, and emphasize economic sanctions compliance, including lessons learned from recent OFAC and BIS civil penalty cases. The meeting will be held at the Millennium Hotel, 2040 Walden Ave., with cocktails beginning at 5:30 and dinner at 6:30 pm. For registration and membership information, visit www.bwta.us.