Trade law compliance: New wrinkle in export control wins support of shippers

Patrick Burnson, Executive Editor -- Logistics Management, 8/18/2008

SAN FRANCISCO—Trade compliance attorneys and freight intermediaries are saying that ongoing federal efforts to increase enforcement of export laws and regulations will get a boost from legislation introduced by Rep. Brad Sherman, D-Calif. earlier this month.

 “The Export Control Improvements Act (H.R. 6828) proposes to make significant changes to the U.S. export environment,” noted spokesmen for the trade compliance law firm, Sandler Travis and Rosenberg in Los Angeles. “It strengthens the export enforcement authority of the departments of Homeland Security and Commerce, and implements stricter controls on countries that pose unacceptable risks of diversion of dual-use commodities.”

Spokesmen added that it also suspends the Validated End-User program and includes a number of provisions aimed at modernizing the Automated Export System.

In an interview with LM, the general counsel of the National Customs Brokers and Freight Forwarders Association (NCBAA) said this legislation makes sense.

“Lawmakers have listened to our concerns and have come up with a sensible compromise that will keep us secure and at the same time—able to do our business,” observed Ed Greenberg.

 Federal Authority: H.R. 6828 would grant permanent export enforcement authority to the DOC and DHS. The DOC’s Office of Export Enforcement, U.S. Customs and Border Protection, and U.S. Immigration and Customs Enforcement would be authorized to conduct investigations and searches and to detain, seize, and forfeit merchandise within the United States and abroad.   

The DOC would be required to designate “countries of diversion concern,” which would be subject to additional export restrictions such as more stringent license application review policies, stricter licensing restrictions and more frequent end-use/end-user checks. Countries falling within this new category could be designated in new Country Group C of the Export Administration Regulations.

Special scrutiny will be paid to the UAE and Malaysia, noted Greenberg, adding that this “makes sense.”

The two countries that have long been recognized as potential transshipment hubs, and therefore vulnerable to the unlawful diversion of dual-use items to rogue nations that posing proliferation and terrorism concerns

“While it is unlikely that the House will take action on H.R. 6828 this year in view of the tight legislative calendar ahead of Congress’ adjournment for the presidential election, Sandler, Travis and Rosenberg, P.A., is closely following developments regarding this bill,” said firm spokesmen.