Comments on: BIS Whacks Small Freight Forwarder With Huge Penalty http://www.exportlawblog.com/archives/551 Latest News on DDTC, BIS, OFAC, and other export law matters Fri, 10 Feb 2012 10:06:23 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Jim Dickeson http://www.exportlawblog.com/archives/551/comment-page-1#comment-86307 Jim Dickeson Sat, 29 Aug 2009 03:30:40 +0000 http://www.exportlawblog.com/?p=551#comment-86307 Cajun, I'm a forwarder, and wary of General Prohibition 10 (15 CFR 736.2(b)(10)): "You may not sell, transfer, export, reexport, finance, order, buy, remove, conceal, store, use, loan, dispose of, <b>transport, forward, or otherwise service</b>, in whole or in part, any item subject to the EAR and exported or to be exported with knowledge that a violation of the Export Administration Regulations, the Export Administration Act or any order, license, License Exception, or other authorization issued thereunder has occurred, is about to occur, or is intended to occur in connection with the item." Since a great many exporters don't know their ECCN from a hole in the ground, forwarders (well, the good forwarders) have to pick up the slack. Now what I continue to wonder in this is whether the forwarder had a Power of Attorney to cover his, uh, hole in the ground; if he had showed himself as the USPPI; or if these were routed export transactions and the forwarder was therefore the U.S. agent for the FPPI (read 15 CFR 758.3(b)). Cajun,

I’m a forwarder, and wary of General Prohibition 10 (15 CFR 736.2(b)(10)):

“You may not sell, transfer, export, reexport, finance, order, buy, remove, conceal, store, use, loan, dispose of, transport, forward, or otherwise service, in whole or in part, any item subject to the EAR and exported or to be exported with knowledge that a violation of the Export Administration Regulations, the Export Administration Act or any order, license, License Exception, or other authorization issued thereunder has occurred, is about to occur, or is intended to occur in connection with the item.”

Since a great many exporters don’t know their ECCN from a hole in the ground, forwarders (well, the good forwarders) have to pick up the slack.

Now what I continue to wonder in this is whether the forwarder had a Power of Attorney to cover his, uh, hole in the ground; if he had showed himself as the USPPI; or if these were routed export transactions and the forwarder was therefore the U.S. agent for the FPPI (read 15 CFR 758.3(b)).

]]> By: LDM http://www.exportlawblog.com/archives/551/comment-page-1#comment-86194 LDM Fri, 28 Aug 2009 22:11:27 +0000 http://www.exportlawblog.com/?p=551#comment-86194 Hillybilly raises a good point (as he often does). I've often felt that many companies pay the fine rather than fight the charges. It takes too long and is too expensive to fight the government. Not to mention the other consequences to be considered. I'm referring to the damage to reputation, stockholders perception and vendor reactions and the myriad other ways even being charged can damage an individual or company. There have been a couple of cases mentioned here where individuals have put up a defense and I am eager to see if their stories have a happy ending. Hillybilly raises a good point (as he often does). I’ve often felt that many companies pay the fine rather than fight the charges. It takes too long and is too expensive to fight the government. Not to mention the other consequences to be considered. I’m referring to the damage to reputation, stockholders perception and vendor reactions and the myriad other ways even being charged can damage an individual or company. There have been a couple of cases mentioned here where individuals have put up a defense and I am eager to see if their stories have a happy ending.

]]> By: Cajun http://www.exportlawblog.com/archives/551/comment-page-1#comment-86078 Cajun Fri, 28 Aug 2009 16:01:21 +0000 http://www.exportlawblog.com/?p=551#comment-86078 Why would the forwarder be responsible for screening the end user? I thought that was the responsibility of the Exporter/USPPI? I's assume forwarders would possibly screen vessel carriers, but are thy supposed to screen end users too? Why would the forwarder be responsible for screening the end user? I thought that was the responsibility of the Exporter/USPPI? I’s assume forwarders would possibly screen vessel carriers, but are thy supposed to screen end users too?

]]> By: Hillbilly http://www.exportlawblog.com/archives/551/comment-page-1#comment-86032 Hillbilly Fri, 28 Aug 2009 14:07:10 +0000 http://www.exportlawblog.com/?p=551#comment-86032 Leaving aside that pesky question of whether the expiration of the EAA according to its clear terms constitutes a emergency occurring outside the United States that justifies invoking emergency powers un IEEPA, 50 USC 1701, for year after year, an issue that really hasn't been clearly settled yet for reasons I'm always delighted to discuss, the charges in this case simply aren't warranted. Aiding and abetting is not a statutory offense even under 50 USC 1705(a) as rewritten by IEEPA Enhancement Act, and certainly wasn't in 2006 when acts involved were alleged to have occurred, nor were they part of the EAA of 1969 as it existed in 1977, if you want to apply the opinion in Quinn. The Administrative Procedures Act, 5 USC 558(b) provides that "A sanction may not be imposed or a substantive rule or order issued except within jurisdiction delegated to the agency and as authorized by law." This enforcement action was ultra vires. BIS has jumped the reservation, again, and they're gambling that no one will have the courage or the money to stop them. Leaving aside that pesky question of whether the expiration of the EAA according to its clear terms constitutes a emergency occurring outside the United States that justifies invoking emergency powers un IEEPA, 50 USC 1701, for year after year, an issue that really hasn’t been clearly settled yet for reasons I’m always delighted to discuss, the charges in this case simply aren’t warranted. Aiding and abetting is not a statutory offense even under 50 USC 1705(a) as rewritten by IEEPA Enhancement Act, and certainly wasn’t in 2006 when acts involved were alleged to have occurred, nor were they part of the EAA of 1969 as it existed in 1977, if you want to apply the opinion in Quinn. The Administrative Procedures Act, 5 USC 558(b) provides that “A sanction may not be imposed or a substantive rule or order issued except within jurisdiction delegated to the agency and as authorized by law.” This enforcement action was ultra vires. BIS has jumped the reservation, again, and they’re gambling that no one will have the courage or the money to stop them.

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