UAE

BIS announced on August 14, 2008 that Reson A/S (RAS), a Denmark company that sells underwater acoustic equipment globally, has agreed to pay $119,250 in civil penalties. The company voluntarily disclosed 29 violations involving unlicensed exports and reexports of underwater navigation equipment to destinations in South Africa, Singapore, UAE, Mozambique, Taiwan, Russia and India between 2002 and 2006.

In addition to RAS’s penalties, its subsidiaries were also fined. Reson, Incorporated of California will pay $83,000, Reson Offshore Limited of the UK ($9,900), and a former subsidiary Underwater Surveys of Cape Town, South Africa ($29,700) for their involvement regarding the violations.

More information:

BIS News Release

Cooper Tools Industrial Ltda. has been issued a civil monetary penalty amounting to $27,000 for engaging in transactions with a boycotted country, committing 15 violations of Section 760.2(d) of the EAR. The violations were related to transactions with Kuwait and United Arab Emirates.

Details from Department of Commerce (PDF)

— Hannah Bandalan

In late March, 2007, the Department of Treasury released the most current list of countries which require, or may require, cooperation with an international boycott within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986.

The list includes:

• Kuwait
• Lebanon
• Libya
• Qatar
• Saudi Arabia
• Syria
• United Arab Emirates
• Yemen

Republic of Iraq is not on this list but its status is currently under review by the Department of Treasury and it may be added in the future.

Source:

• Federal Register - April 3, 2007 (Volume 72, Number 63, Page 15934)

In an effort to send a signal to Iran, the State Department is seeking Congressional approval to sell arms to US allies in the Persian Gulf. Countries such as Saudi Arabia, Qatar, Kuwait, Bahrain, Oman and the United Arab Emirates could have their defenses bolstered through the purchase of sophisticated air and missile defense systems, advanced early warning radar aircraft and light coastal combat ships. It is also believed that Northrop Grumman’s E-2D Hawkeye 2000 early warning aircraft is under consideration for sale. The United Arab Emirates had tried to acquire this aircraft in 2003 but the deal fell through due to the US Navy’s hesitation to sell the necessary communication software.

US officials have been rather quiet about the proposed arms sales. This could be due to the concern that building up Iran’s neighbors could bring the US closer to an Iranian confrontation. Officials state the need for Congressional support and the need for a low level of publicity from the countries involved as the reason for being so tight-lipped. Several countries have been reticent about agreeing to sales because of the fear of sending a message of aggression to Iran.

Source:

• The Boston Globe - boston.com March 21, 2007, Author: Farah Stockman

It doesn’t pay to ignore letters from the Bureau of Industry and Security (BIS). That is the lesson learned by the Mohammad Al-Mashan Group (MAMG) according to the September 22, 2006 Federal Register.

The BIS letter contained 2 charges against MAMG of engaging in conduct violating the Export Administration Regulations (EAR). Specifically, the charges alleged that MAMG transferred an uncooled infrared camera, which is subject to the regulations, to an individual from the United Arab Emirates in violation of a BIS license condition. The second charge alleged that, additionally, MAMG had knowledge, or reason to know, that a violation would subsequently occur in connection with the item; specifically, that the BIS license authorizing the export of said camera prohibited the resale, transfer, or re-export of the camera to any entity other than those listed on the license as approved end users.

In October of 2005, the BIS mailed the notice of the charges in a registered letter to the last known address of MAMG. The Regulations require a response to such a letter within 30 days. To date no response has been received from MAMG and the letter was returned to the BIS as undeliverable. After 30 days have passed, the BIS can file a Motion for Default Order recommending a company in violation of the Regulations be denied export privileges. Such an order was filed against MAMG in July, 2006. The failure of MAMG to respond in the allotted time constituted a waiver of their “right to appear” and the allegations in the charging letter were found to be fact, per the Regulations.

Subsequently, MAMG was denied export privileges for a period of 10 years. The denial was ordered by Mark Foulon, Acting Under Secretary of Commerce for Industry and Security, upon his review of the facts.

So, you got limited export compliance resources and your probably use only a small part of that pool for compliance with the antiboycott regulations. We can’t get you more resources such as time and money, but we can tell you to focus your antiboycott compliance resources on your business activities that involve these countries:

• Kuwait
• Lebanon
• Libya
• Qatar
• Saudi Arabia
• Syria
• United Arab Emirates
• Republic of Yemen

( Iraq is not on the list at this time but remains under review by the Department of the Treasury.)

On September 26, 2006 , the U.S. Department of the Treasury published a notice in the Federal Register announcing that the above countries may require cooperation with an international boycott according to the Internal Revenue Code of 1986, the Arab League boycott of Israel , the same unsanctioned boycott covered by the Export Administration Regulations antiboycott rules. The Commerce Department has not recently put in writing an acknowledgement that its antiboycott regulations focus only on the Arab boycott of Israel , but informally Commerce Antiboycott officials may be willing to admit that is the case. (Quite a few years ago Commerce published an article in its newsletter “The OEL Insider” that stated that it interprets the EAR antiboycott rules to apply only to the Arab boycott of Israel.)

In the October 15, 2003 Federal Register the Treasury Department published a notice identifying 10 countries that may require cooperation with an international trade boycott not sanctioned by the United States. The ten countries are:

Bahrain, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, Republic of Yemen.

Companies in these countries may require that you comply with the Arab League boycott of Israel. If you are a US company, a US citizen/resident, or a subsidiary of a US company, compliance with the secondary and tertiary levels of the Arab boycott of Israel may be a violation of US antiboycott rules found in the Export Administration Regulations and section 999(b)(3) of the Internal Revenue Code of 1986.

Generally speaking, the key provisions of the US antiboycott rules prohibit US persons from complying with the Arab boycott of Israel. Prohibited cooperation could include 1) refusing to do business with a company or country; and 2) supplying information about your business relationship with other companies or countries.

This list is useful in that it highlights the countries from which you are most likely to receive prohibited boycott requests or inquiries. You should focus your antiboycott compliance procedures on these countries. Please note, however, that EAR antiboycott issues may also arise when dealing with any country, but you also pay close attention to Indonesia, Bangladesh, Pakistan, Iran, India, Ethiopia, and Eritrea.