1. 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 Phone (954) Fax (954)

2. ACRONYMS
DOC
BIS
OEE
EAR
CCL
IEEPA
ECCN
SED
EEI
WMD
PSV
PLC

3. Hercaire RII AVS Digital Creations IGG Corporation SYNTEX
Illinois Tool Works Inc.
INDUSTRIAL SCIENTIFIC CORPORATION
HOUGHTON CHEMICAL INTERNATIONAL
AVS
IGG Corporation
Lawrence Livermore
National Laboratory
ATT Communications
Hercaire
Bet
Air
OMEGA
RII
Industries
TAL
CCP
SYNTEX
JML
FREIGHT
SWISSCO
ICS
INC
SIGMA-ALDRICH
Digital
Creations
PAN
AVIATION

4. Export Enforcement’s 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

5. Who Are We?
The enforcement arm of The Department of Commerce, Bureau of Industry and Security (BIS)

6. 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

7. Education Component of OEE’s Mission
The key to OEE’s 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

8. 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.

9. Preventive Measures
Check exporters and customers prior to issuing license
Check end-users and end-uses after shipment
Screen license applications
Review Shipper’s Export Declarations
Detentions/Seizures
Issue Temporary Denial Orders
Educate Exporters – Outreach, Update…

10. 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

11. Investigations and Sanctions
Criminal
Administrative
Sanctions:
Criminal fines and imprisonment
Civil fines and penalties (i.e. denial of export privileges, exclusion from practice, etc.)

12. CRIMINAL CRIMINAL PENALTIES
COMMERCE:
EAR - currently enforced under 50 U.S.C., sec (b), IEEPA. (EAA currently in lapse)
OTHER STATUTES:
Conspiracy, 18 U.S.C. sec. 371
Money Laundering, 18 U.S.C. 1956
And more….

13. Recent Cases
Mayrow General Trading
Armor Holdings
Ali Khan/Turbo Analysis

14. Mayrow General Trading
Trading of electronic components that were capable of being used in IED’s.

15. Armor Holdings
Exportation of CC items without licenses.

16. Ali Khan/Turbo Analysis
Exportation of aircraft parts to Iran.

17. 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

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

19. Increased OFAC Penalties
Penalties/Settlements Total USD
$3,504,533
$772,442,861
Future All of them 1 Arm and 1 Leg

20. Temporary Denial Orders (TDOs)
Notes:
This module explains the workings of the U.S. Export Enforcement organization.
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

21. 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

22. 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

23. 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.

24. 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.

25. 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.

26. 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.

27. 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.

28. 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).

29. 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

30. 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.

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

32. 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

33. POP QUIZ A) Panic and run out the back door. B) Shred baby shred.
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.

34. OUTREACH VISITS
The vast majority of outreach visits are productive/informative meetings, provided that:
1. You Maintain good records
s, 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……”

35. 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

36. 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/ That is of Concern That You Call us.

37. Contact BIS WE’RE 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

38. OFFICE OF EXPORT ENFORCEMENT
QUESTIONS

39. Is this item controlled by ITAR or the EAR?

40. OFFICE OF EXPORT ENFORCEMENT Hotline 1-800-424-2980
Miami Field Office
Phone (954)
Fax (954)
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