THE JOURNAL OF EXPORT CONTROLS AND SANCTIONS

The WorldECR Export Controls & Sanctions Forum 2016

12-13 September, The Crystal Gateway Marriott, Washington, DC

Click here to download the Forum Brochure.

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Speakers & Presentations

Anthony Christino and Joe Cristofaro – sanctioned parties, issues arising

We’re delighted to announce that we will be joined at the conference by Anthony Christino, director of the Foreign Policy Division at the Bureau of Industry and Security (BIS) within the Department of Commerce, and Joe Cristofaro, Chairman of the End-user Review Committee at BIS, who will be outlining – and inviting questions on

  • the intersection between BIS and OFAC jurisdiction regarding sanctioned countries and designated end-users.
  • issues relating to transactions with subsidiaries of Entity List entities (whether you can, how you can) and how BIS positions compare to OFAC’s positions on entities owned/controlled by SDNs.

 

Satish Kini and Carl Micarelli – Update on key U.S. and EU sanctions developments: Caviar and cigars all round? Not quite!

Whichever of the current U.S. presidential candidates takes the helm of the world’s largest economic and military power in the November elections, a legacy of Barack Obama’s administration will be its departure from foreign policy positions long held by the United States (winning both cheers and jeers both domestically and in the world at large).

Key stand-outs are the effort to secure a deal with the Islamic Republic of Iran over its nuclear programme, the relaxation of sanctions against Burma/Myanmar as reward for its moves in the direction of pluralism and democracy, and the restoration of diplomatic ties with former Cold War adversary Cuba (while relations with Russia have become decidedly more frosty).

Every aspect of the State Department’s carefully crafted manoeuvres has its supporters and detractors, but also complexities. In this presentation, Satish Kini and Carl Micarelli, of the DC office of law firm Debevoise & Plimpton, look at the state of play of U.S. sanctions and the over/underlap with corresponding EU restrictive measures.

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Valentin Povarchuk – Navigating the new Iran sanctions regime: a corporate compliance perspective

While the broad scope of the Joint Comprehensive Plan of Action (‘JCPOA’) was known long before Implementation Day, the devil was in the detail: in this case, General License H, the OFAC authorisation for U.S.-owned or controlled entities (established or maintained outside of the United States) to do business with the Iranian government or entities under its control.

But – and there’s no surprise here – caveats apply, significantly limiting the involvement of U.S. parents in their subsidiaries’ Iranian operations. Indeed, multinational companies often must thread the needle if they want their non-U.S. subsidiaries to begin trading with Iran.

Some corporations have decided that their relations with subs are too entwined to permit them to do with business with Iran. Valentin Povarchuk, Trade Compliance Counsel at 3M Company, describes how 3M is navigating the complexities and potential pitfalls.

 

Marian Niestedt and Gerd Schwendinger –  A German perspective on EU trade controls:  policy and practice

Germany is Europe’s largest exporter of hi-tech goods and plant machinery – and traditionally a major business partner of Iran. Its main regulatory authority, BAFA, the entity which handles licence applications, has developed a reputation for interpreting EU sanctions and export controls with thoroughness and rigour.

This is all the more relevant since approximately 60% of all licence applications within the EU are handled by BAFA. Indeed, given Germany’s pre-eminent role in the EU economy, and its broader political influence both regionally and internationally, the importance of understanding German export control policy and procedure cannot be underestimated.

In their presentation, Marian Niestedt and Gerd Schwendinger, partners at the law firm GvW Graf von Westphalen, describe BAFA’s approach and outline the five must-knows for exporters from Germany and their partners.

 

Stacey Winters – The EU and U.S. export control regimes compared and the impact of BREXIT

There are obvious similarities between the U.S. and EU export control regimes: both maintain dual-use control lists based upon those of the Wassenaar Arrangement and other multilateral regimes, and there is broad consent between the U.S. government and the European Commission as to the foreign policy and security imperatives their systems are intended to realise.

But in other respects, such as the variance between the way the EU regulations are interpreted by Member States, very different approaches to licensing, attitudes to enforcement and monitoring, the EU regime is fundamentally different to its U.S. counterpart.

In her presentation, Deloitte partner and Global Export Controls and Sanctions Leader, Stacey Winters contrasts the U.S. and EU systems, drawing attention to the key divergences that every business must understand if it is to ensure compliance across both jurisdictions.

In addition, Stacey will consider the impact of ‘Brexit’ – the UK’s decision to quit the EU – on export controls and licensing, answering questions such as: How will intra-EU exports of dual-use goods be affected by BREXIT? Will long-established procedures, well understood by U.S. businesses, require wholesale revision?

 

Robert Shaw – Proliferation red flags and due diligence

The proliferation threat is as real as ever – and business is at the front line. But while compliance with the law may be (relatively) straightforward, identifying proliferators’ attempts to acquire controlled goods and divert them from their intended use is not.

Robert Shaw is the Program Director, Export Control and Nonproliferation Program (XNP) at the James Martin Center for Nonproliferation Studies at the Monterey Institute of International Studies, and a former senior export compliance manager for Toshiba America. Robert will present on state-of-the art best practices in detecting red flags and conducting due diligence in resolving them, with reference to research tools used to identify sanctions evasion related to UN-sanctioned North Korean firms operating in China.

 

Christos Linardarkis – Taking stock of Export Control Reform, present and future

The U.S. Export Control Reform Initiative – launched back in 2009 so as to more accurately address security threats while ensuring U.S. competitiveness – is part way through the second of its three phases. Many of the definitions and regulations that have distinguished and differentiated the Export Administration Regulations (‘EAR’) and the International Traffic in Arms Regulations (‘ITAR’) are now reconciled, and numerous items moved away from the U.S. Military List to the Commerce List. Compliance professionals affected by ECR (particularly those working in ITAR-focused industries) have largely adjusted to the implications of the changes. But are there more to come?

As the Obama Presidency nears completion, how far away is the Initiative from doing the same? And how is a change of Administration likely to affect the Initiative?

Christos Linardarkis, formerly Global Trade Compliance & ITAR Empowered Official for Koch subsidiary Molex, and now senior counsel at the Braumiller Law Group, outlines his thoughts on the future of ECR.

 

David Hardin – Life under a consent agreement

In 2013, Raytheon agreed to pay $8 million to address civil violations of the Arms Export Control Act and the International Traffic in Arms Regulations. Amongst these violations were failures to properly manage U.S. State Department-authorised agreements and temporary import and export authorisations. The State Department suspended half of the penalty on condition that the funds were used to undertake compliance measures.

As Senior Counsel for Global Trade Compliance in the Office of the General Counsel, David Hardin is well placed to describe the ongoing challenge of life under a consent agreement, including the implementation of new compliance structures to prevent similar violations, investigating possible violations during the consent agreement, and establishing an audit program to pre-empt possible violations.

 

Ajay Kuntamukkala and Lourdes Catrain – Intra-company transfers: Straightforward? Not always. But they needn’t be painful

Transferring controlled goods, services, and data and information between a company’s international locations should be straightforward – but as many compliance officers know all too well, it can prove to be a headache.

This presentation by Ajay Kuntamukkala and Lourdes Catrain of the Washington, DC and Brussels offices of international law firm Hogan Lovells is a step-by-step account of best practice in making intra-company transfers and describes how the process can be rendered less painful. The discussion will cover U.S. and EU requirements that apply to intra-company transfers, available exceptions and general licences, and practical tips for structuring compliance programmes.

 

Panel discussion – E-commerce compliance: the Elephant in the Room?

The tremendous growth in the use of the Internet as a tool for buying and selling (e-commerce) raises profound questions in the sanctions and export control compliance space, challenging key definitions (such as ‘what is a product’, and what is an ‘export’, what is ‘knowledge’ and what is ‘facilitation’.)

Thus, while the Internet can provide huge commercial opportunities and market reach, B2B e-commerce sales platforms, in particular, are liable to create vulnerabilities for companies that haven’t addressed the commensurate compliance aspects of their use.

In the absence of a clear understanding of appropriate responses to the e-commerce challenge, this is an area that can keep a conscientious compliance officer awake at night!  Others take a head-in-the sand approach.

Indeed, it is the apocryphal Elephant in the Room – but one, which, in this session our panellists, Lillian Norwood of the Government Affairs, Export Regulation of IBM and Valentin Povarchuk, Trade Compliance Counsel, 3M Company, are prepared to meet head on.

Join them as they explore the challenges of meeting trade compliance obligations in the context of e-commerce, and benchmark best practices in response to these challenges.

 

Panel Discussion – Staying compliant through multiple jurisdictional layers; is it possible?

The challenge for a global business is to stay compliant in all the jurisdictions in which it operates, whether that’s as a distributor, manufacturer or service provider. But how is this done? And how are inconsistencies managed and resolved?

Each of our panellists has many years’ experience navigating the practical, legal and management issues that multinational business encounters. In this session, they will share thoughts and invite insight and discussion from delegates as they look for answers to key questions, such as:

  • How different are the perspectives of parent and subsidiary companies, when each is subject to the laws of a different country?
  • How much autonomy and responsibility for compliance decisions is it appropriate to allocate to different divisions of a company’s operations?
  • How should jurisdictional requirements be prioritised?
  • Is a single Internal Compliance Plan appropriate in the age of global business or a false comfort that ignores the reality of complex and conflicting regulatory frameworks and policy imperatives?

Moderating this session will be Jay Nash, Managing Director of Strategy & Development at SECURUS trade consultants. Jay and his SECURUS colleagues have experience of navigating export control regimes in more than 50 countries around the globe.

Joining Jay on the panel are:

  • Carmen Fellows, Senior Director, Global Trade Compliance, Finmeccanica North America and DRS Technologies, Inc;
  • Kevin Cuddy, Senior Manager International Trade Compliance, GE Corporate; and
  • Lila Rose, Global Trade Compliance Manager, Empowered Official at PolyOne Corporation.

 

Stephen Propst – Cuba Libre?

When President Barack Obama leaves office in November, the re-establishment of ties with Cold War foe Cuba will count amongst his crowning foreign policy achievements. The extensive embargo regime against the Caribbean country has been eased, creating opportunities for citizens of both countries.

But while U.S visitors can now spend more time and money on Caribbean island (and bring home more cigars), Cuba-bound companies need to be aware of the temptation for détente to invite complacency, and remember that (to quote the U.S. Treasury) ‘…the Cuba embargo remains in place. Most transactions between the United States, or persons subject to U.S. jurisdiction, and Cuba continue to be prohibited.’

Stephen Propst, whose groundbreaking papers regarding the authority of the President to modify the sanctions against Cuba are widely viewed as having provided the legal analysis supporting President Obama’s historic changes to the U.S. embargo against Cuba, explains the dos and don’ts of business with the island.

 

Andrea Berger – International responses to the North Korea threat

Increasingly bellicose rhetoric and repeated weapons testing has seen the world ratchet up its response to the threat posed by the DPRK.  In the first six months of 2016 alone, the UN, EU,  U.S., Japan and Canada have all introduced tougher, more far-reaching sanctions on the country and its Supreme Leader, Kim Jong-un.

Andrea Berger, Deputy Director of the Proliferation and Nuclear Policy programme at the Royal United Services Institute (‘RUSI’) in London, outlines the measures imposed by the international community and interprets who they might impact and how.

 

Carl Micarelli – OFAC: friend or foe?

Weekly – sometimes daily – the Office of Foreign Assets Control (‘OFAC’) alerts the world to its actions: designating entities and individuals, publishing licences, announcing settlements and penalties.

In concert with actions taken by other offices, each represents an articulation of how the United States government perceives and responds to the exigencies of its foreign policy and security threats and needs. On account of the constraints OFAC places on how, where, and with whom, business is able to transact, this small bureau within the mighty U.S. Treasury commands the attention of lawyers and businesses alike in the sanctions space.

In their presentation, Carl Micarelli and Satish Kini, of international law firm Debevoise & Plimpton, explore the focus of the agency, how to respond to its enquiries, and the possible impact of the upcoming U.S. presidential election on its activities.

 

Crystal Pryor – Shifting perspective: Japan’s re-evaluation of its defence export control regime

For nearly half a century, Japan has adhered to its ‘Three Principles’ policy, which effectively prohibited most arms exports from the country. The current administration recently revised the policy, signalling the potential for a new role in regional affairs, and carrying important ramifications for Japanese industry and perhaps competitors.

Crystal Pryor, Postdoctoral Fellow at Harvard University, reviews the recent changes in policy and asks what the impact of them might be in the region and for international defence companies, worldwide.

 

George Tan – South East Asian export controls come of age: update on Thailand, Philippines and beyond

For years, export control regimes in much of South East Asia were under discussion, but largely remarkable by their absence. That’s changing – in part, in response to concerns about diversion risk but also because export control regimes are seen as attractive to outside investors.

At the beginning of the decade, Malaysia enacted its Strategic Trade Act. Since then, both Thailand and the Philippines have announced that they, too, will have export control frameworks in place before too long, creating new compliance obligations not only for domestic companies, but foreign parent companies and investors.

Singapore-based, George Tan, director of Global Trade Security Consulting, and one of only a very few people to possess a holistic appreciation of Asian strategic trade controls, assesses the state of play – and describes how SE Asian export controls are, or will be, structured and enforced.

 

Erin Murphy and Peter Kucik – Burma/Myanmar: opportunities yes, but challenges remain

Burma/Myanmar was regarded as a pariah state since before the 1990 election – won by Aung San Suu Kyi – in which the ruling military junta refused to cede power. From that time on, Aung San Suu Kyi, frequently held under house arrest by the authorities, became a potent, indeed iconic, symbol of democratic values and change.

But the junta was dissolved in 2011, and in new 2015 elections the National League for Democracy won sweeping majorities in the country’s bicameral parliament.

Burma/Myanmar has been rewarded for its reform efforts with major relaxations of sanctions imposed by the United States and the European Union, and investors are keen to exploit its mineral wealth and growing market. But challenges for U.S. companies seeking opportunities in the resource rich SE Asian country do remain, as Erin Murphy and Peter Kucik of Inle Advisory Group explain.

 

Cyndee Todgham Cherniak – Five things U.S. general counsel ought to know about Canadian trade controls

Canada is generally considered to be passive in terms of trade controls in comparison with the United States.  Well, things are getting more dynamic.

Cyndee Todgham Cherniak, of Toronto-based specialist trade law firm LexSage, outlines recent key developments in Canadian trade controls and regulation that all U.S. general counsel should be aware of, including:

  • Changes to Canada’s economic sanctions against Iran and Russia
  • Changes to Canada’s export controls against Belarus
  • Recent cases under the Special Economic Measures Act
  • Recent cases under the Export and Import Permits Act
  • Update on developments under the Trudeau government

 

Ryan Lynch Cathie – All change for India

India’s recent accession to the Missile Technology Control Regime (‘MTCR’) – and speculation that it may yet join the Nuclear Suppliers Group (‘NSG’)  – has further emphasised the country’s commitment to international export control standards. Less well-known is the increasing interest amongst Indian companies in sharing, disseminating and adopting best practice.

At the heart of the country’s export control system is its list of ‘SCOMET’ (Special Chemicals, Organisms, Materials, Equipment and Technologies) items, which in the past year has seen noteworthy revisions.

In his presentation, Ryan Lynch Cathie, Managing Director of Products and Innovation at Securus Strategic Trade Solutions, outlines these and other important changes to the Indian export control regime over the past year.

 

 

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location

Crystal Gateway Marriott Hotel
1700 Jefferson Davis Highway
Arlington,  Virginia 22202
USA

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EU AND U.S. SANCTIONS UPDATES

PANEL DISCUSSIONS: Staying compliant through multiple jurisdictional layers; is it possible?
* E-commerce compliance: the Elephant in the Room?

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