Pakistan

Well, it seems to me that export compliance might be a good topic for the next annual meeting of US valve company executives and lawyers. Commerce Department law enforcement agents have found the valve industry to be a reliable source for a steady stream of violations. Just when I think maybe the stream will dry up, the valve industry offers up another victim.

Hmmm, “Valve Industry Export Control Update” has a nice ring to it…

The Commerce Department’s Bureau of Industry and Security (BIS) charged Cole-Parmer Instrument Co. for committing 10 violations of the Export Administration Regulations (EAR) for illegally exporting valves to China and Pakistan. Cole-Parmer Instrument Co. was forced to pay a civil penalty of $55,000 for violating the Regulations.

More information:

E2004.pdf (PDF)

Here is a rundown of changes to US Government trade control policy for certain countries:

India and Pakistan ITAR Licensing Policy

In a Federal Register Notice dated June 20, DDTC declared that defense export licenses to India and Pakistan would now be reviewed on a case-by-case basis. According to information posted on the www.pmddtc.state.gov website, the previous licensing policy had been one of denial.

Rwanda Licensing Policy Changes

Both DDTC and EAR changed their regulations to loosen restrictions surrounding the lifting of the UN Arms Embargo on Rwanda. The ITAR changes essentially enunciate a new case-by-case license policy for the Government of Rwanda only. For all non-Government exports, all other 126.1 ITAR proscribed country restrictions remain, including a policy of denial for licenses. Likewise, exemptions may not be used for non-Government end users.

Burma

On July 29, 2003, President Bush issued an Executive Order that place further trade restrictions on Burma (a.k.a. Myanmar). Previous to this order, the Foreign Assets Control regulations restricted investment by US firms in Burma. The Executive Order expands Burma trade restrictions. First the order freezes all assets of the Government of Burma that enter the US or are in the possession of US Persons (which includes US branch offices overseas). Second, all imports from Burma into the United States (but not exports or reexports to Burma) are prohibited effective August 28, 2003. The order also prohibits the export or import of financial services. The order contains restrictions of any facilitation of any activity by a third person that a US person could not engage in.

So you may continue to export commercial products to Burma, but dealing with the Government and Government entities will be tricky as Government assets are frozen and related financial services, such as confirming or negotiating a Letter of Credit, are restricted. No barter deals: imports into the US from Burma will soon be prohibited. Burma continues to remain an ITAR proscribed country, so defense article exports are prohibited.

Iraq

On June 27, OFAC formally amended its regulations on Iraq that now basically allow most EAR99 and “xx991″ export and reexports to Iraq under a General License. We described these changes last month, and this regulation adds nothing new.

The US Government has taken several steps to implement President Bush’s executive order waiving export and trade sanctions on India and Pakistan. The United States decided to relax its sanctions against India and Pakistan because of their cooperation in the US antiterrorism campaign. Bush’s executive order of September 22, 2001 effects both the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR), as well as trade US trade financing rules.

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In the aftermath of the September 11, 2001 terrorist attack against the United States, President Bush used export and trade controls to punish targeted “terrorists” and reward countries that have cooperated with the new US antiterrorism campaign.

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In the August 24, 2001 Federal Register President Bush announced that he has decided to approve exports of US helicopter parts and armored personnel carrier parts to Pakistan. Bush cited special circumstances as his reason for overriding the laws that prohibit the approval of licenses for exports of military items to Pakistan. The special circumstances are that the parts are intended for use by Pakistan in its deployment in Sierra Leone in support of UN peacekeeping operations.