Category: Trade Security

If you’ve ever had to deal with this section of the ITAR, you understand that these provisions are not the clearest and are in much need of a fulsome overhaul. I have not had enough time to review all of it. A clear set of definitions, for example, would go a long way in advising companies on how to set up proper procedures or identifying issue areas in existing matters. And based on what I have read, they are planning to make extensive changes to the “broker” and “brokering” definitions.

And just in case your wondering how important brokering rules happen to be under the ITAR regime, and they are, recall that earlier this year the U.S. Government announced that BAE Systems plc had settled a case with the State Department’s Directorate of Defense Trade Controls (DDTC) for a tune of $79 million for alleged violations of the ITAR brokering provisions. You can read more about the BAE Consent Agreement by following this link.

Will trade security practitioners have a firmer footing moving forward in 2012 as to what constitutes a broker or brokering activities? We will post a more detailed review of the proposed regulation in the near future, but I think we will. The BAE case set some interesting precedent and, coupled with these proposed regulations, as well as the Obama Administration’s ongoing export control reform efforts, we should be better equipped to advise clients on these matters.

In the meantime, please send us your views and comments on the proposed regulation.

 

1. Water-pipe tobacco (24)
2. Biodiesel (27 and 38)
3. Mercury compounds (28)
4. Water-jet cutting machines (85)
5. Video game machines (95)

The WCO’s recommendation includes 204 amendments in 53 different HS chapters, affecting 108 different headings and 39 legal notes. These changes are intended to update the nomenclature or clarify the classification of particular goods. More detailed information about these changes refer to the United States International Trade Commission’s Final Report to the President dated June 2010.

According to the federal government, once the President signs and approves the changes to the Harmonized Tariff Schedule of the United States (HTSUS), the Foreign Trade Division of the U.S. Census bureau will make changes to the Schedule B and Automated Export System (AES). A free version of the Schedule B can be found on-line at: www.census.gov/scheduleb.

AES users will need to download new tables for import and export codes as usual in January 2012. There will be a 30 day grace period during which AES will accept the old HS codes. This grace period is expected to end on January 31, 2012. Using old HS codes after January 31, 2012 will result in transaction failures for your AES filings.