International business and trade attorney, Jon P. Yormick, who also serves as Special Counsel for Phillips Lytle LLP, will speak at a Northeast Ohio Trade & Economic Consortium (NEOTEC) seminar on the “Foreign Corrupt Practices Act and International Due Diligence.” The event will take place on Tuesday, October 6, 2015 from 8:30 a.m. – Noon, at Corporate College East, 4400 Richmond Road, Cleveland, Ohio. He will be joined by Christopher Weiss, Global Due Diligence Consultant with The Kreller Group.
The seminar will address compliance requirements under the FCPA and recent case developments, including a summary of the U.S. Department of Justice’s recent announcement that it will focus on individual liability. Messrs. Yormick and Weiss will also provide an overview of major antibribery laws in Brazil, Canada, and the UK, discuss the international due diligence process, and how to manage the bribery/corruption and information risks involved in doing business with foreign companies.
For more information and registration, visit http://bit.ly/1LSEuC3.
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.
Lost in the Headlines about FCPA Violations, one Northeast Ohio Company Settles an Export Control Civil Penalty Case
On October 22, the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) announced they had reached an agreement with Diebold, Inc. to settle allegations that the company violated the Foreign Corrupt Practices Act (FCPA). The ATM manufacturer, headquartered in North Canton, Ohio, settled with the DOJ and SEC by agreeing to pay nearly $50 million to resolve allegations that it violated the FCPA by bribing government officials in China and Indonesia and falsifying records in Russia in order to obtain and retain contracts to provide ATMs to state-owned and private banks in those countries. According to the DOJ press release, the company made payments and provided gifts and non-business travel to bank employees, recording leisure travel for bank employees as “training.” The DOJ acknowledged that Diebold cooperated in the investigation, including making a voluntary disclosure regarding the FCPA violations.
A few weeks later, in mid-November Cleveland-based Park-Ohio Holdings, Inc. stated in its quarterly SEC filing that it received a subpoena from the SEC in August in connection with a third-party and that the DOJ was conducting a criminal investigation of the third-party. According to the company’s SEC filing, the third-party paid a foreign tax official on behalf of the company in 2007 and that the activity “implicates” the FCPA. The country where the payment was made was not identified.
In the middle of those reports, on October 25, the U.S. Department of Commerce, Bureau of Industry and Security (BIS), released a settlement agreement and order relating to GrafTech International Holdings, Inc., with global headquarters in the Cleveland suburb of Parma. The company settled 12 proposed charges that it exported without required licenses, agreeing to pay $300,000.00 and complete an external audit of its export controls compliance program and those of three overseas operations. While the case did not result in eye-catching multi-million dollar penalties, it is noteworthy nonetheless.
BIS alleged that on four occasions between 2007 and 2009, GrafTech violated the export control regulations when it exported CGW grade graphite to China without an export license. The graphite was classified under ECCN 1C107.a and controlled for missile technology reasons. The shipments had a value of approximately $276,000.00. BIS also alleged that on eight occasions between 2007 and 2010, GrafTech exported CGW grade graphite to India, without required export licenses. The value of those shipments totaled approximately $248,000.00. The settlement agreement stated that GrafTech made a voluntary self-disclosure regarding the violations. Notably, in April 2010, BIS, Office of Technology Evaluation, issued Critical Technology Assessment: Fine Grain, High Density Graphite which addressed U.S. export controls, among other key topics. That report can be found here.
As mentioned, in addition to the $300,000.00 penalty, GrafTech agreed to complete an external audit export controls compliance program and the compliance programs’ three subsidiaries, located in France, Italy, and South Africa. The settlement agreement and BIS order did not detail the involvement of the subsidiaries in the violations, if any, but it can be presumed that the company’s export controls compliance program at each location were a concern to BIS.
According to the terms of settlement, GrafTech must hire a third-party consultant with expertise in U.S. export control law to conduct the audit with respect to all exports and re-exports of items on the Commerce Control List (CCL). The audit must cover a twelve-month period preceding the date of the order and must be delivered to BIS within eighteen (18) months. The order also requires the company to identify actual or potential violations by any of the four entities being audited, including the directive that GrafTech “promptly provide copies of the pertinent air waybills and other export control documents and supporting documentation” to BIS.
Why there is an apparent recent rash of enforcement actions involving Northeast Ohio companies doing business globally is a mystery. Certainly, these revelations should be a “wake-up call” for companies in the region that conduct business globally and have global operations. More broadly, of course, these reports emphasize the need for all U.S. companies to re-double their FCPA and export control compliance efforts in order to avoid costly civil and criminal penalties, additional enforcement expenses, and the reputational harm that violations can cause.
For assistance with understanding and complying with 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., firstname.lastname@example.org or by calling +1.866.967.6425 (Toll free in Canada & U.S.) or +1.216.928.3474.