INTERNATIONAL TRADE: SANCTIONS AGAINST RUSSIA AND RUSSIA'S RETALIATORY ...

INTERNATIONAL TRADE: SANCTIONS AGAINST RUSSIA AND RUSSIA'S RETALIATORY ...: Posted by Attorney Norka M. Schell                     http://www.lawschell.com/International_Business.html This is an article publishe...

SANCTIONS AGAINST RUSSIA AND RUSSIA'S RETALIATORY TRADE ACTIONS AGAINST THE U.S.

Posted by Attorney Norka M. Schell                    http://www.lawschell.com/International_Business.html

This is an article published on the Department of Commerce and OFAC website yesterday.            "On August 6, the U.S. Department of Commerce (the “Commerce Department”) issued new regulations, implementing additional sanctions against Russia and introducing new restrictions on exports for its energy sector. These new regulations closely follow recently-imposed sanctions promulgated by the Treasury Department’s Office of Foreign Assets Control (“OFAC”), which prohibit the issuance of new medium- and long-term debt and, in some cases, new equity by U.S. Persons to designated Russia-related persons in the energy and financial sectors. Further, OFAC has continued to expand the Ukraine-related sanctions by adding various persons and entities to its Specially Designated Nationals (“SDN”) List. As a result of these sanctions, Russia is now taking certain retaliatory trade actions against the United States.

New Energy Sector Export License Requirements/Presumption of Denial

The new Commerce Department regulations: (i) add another Russian company (United Shipbuilding Corporation) to the Entity List; (ii) remove Russia’s favorable license review treatment under national security reasons for control; and (iii) institute a new license requirement for exports, reexports or in-country transfers of certain items subject to U.S. export controls for use in certain segments of Russia’s energy sector, with a presumption of denial for applications for such licenses. The license application requirements apply to the specified items where the (re)exporter knows or is informed by the Commerce Department that they will be used, directly or indirectly, in exploration or production of oil or gas from deepwater (greater than 500 feet) or Arctic offshore locations, or shale formations in Russia, or where the (re)exporter is unable to determine whether the item will be used in such projects.1

These specified items include a broad variety of oil/gas exploration or production equipment (identified by specific Schedule B Nos.) and the items identified in new ECCNs 0A998 and 8D999, and in previously-existing ECCNs 1C992, 3A229, 3A232, 6A991, and 8A992. Covered items include:

• Drilling rigs, parts for horizontal drilling, drilling and completion equipment, subsea processing equipment, Arctic-capable marine equipment, wireline and down hole motors and equipment, drill pipe and casing, software for hydraulic fracturing, high pressure pumps, seismic acquisition equipment, remotely operated vehicles, compressors, expanders, valves, and risers;
• Oil and gas exploration software and data;
• Software specifically designed for the operation of unmanned submersible vessels used in the Russian oil and gas industry;
• Commercial charges and devices containing energetic materials and nitrogen trifluoride in a gaseous state;
• Firing sets and equivalent high-current pulse generators;
• Certain neutron generator systems, including tubes;
• Detonators and multipoint initiation systems;
• Marine or terrestrial acoustic equipment capable of detecting underwater objects or positioning surface/underwater vessels, and specially designed parts and components; and
• Certain vessels, marine systems or equipment, and specially designed parts and components.

New Entity List Designations by Commerce Department

The addition of United Shipbuilding Corporation (a defense technology company) to the Entity List follows the addition of 11 other Russia-related entities to that List in July. Those entities included Joint-Stock Company Concern Almaz-Antey, state-owned enterprise Bazalt, Kalashnikov Concern, Joint-Stock Company Concern Radio-Electronic Technologies, and Feodosiya Enterprise.

These Entity List designations impose a license requirement for the export, reexport or foreign transfer of items subject to the Export Administration Regulations to the designated entities, with a presumption of denial.

OFAC Prohibitions on Issuance of New Debt and Equity to Identified Persons

On July 16, 2014, OFAC issued Directives 1 and 2 pursuant to Executive Order 13662 (“E.O. 13662”). The Directives apply to the persons identified on the new Sectoral Sanctions Identifications List (“SSI List”).

Directive 1 of E.O. 13662 prohibits U.S. persons from transacting in, providing financing for, or otherwise dealing in new debt with a maturity of longer than 90 days or new equity (“new debt” or “new equity”) for persons operating in Russia’s financial sector identified on the SSI List, their property, or their interests in property. Entities designated under Directive 1 encompass several Russian banks, including Bank for Development and Foreign Economic Affairs (Vnesheconombank), VTB Bank, Bank of Moscow, Gazprombank, and Russian Agricultural Bank.

Directive 2 of E.O. 13662 separately prohibits U.S. Persons from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity for persons operating in Russia’s energy sector identified on the SSI List, their property, or their interests in property. Russian oil giant Rosneft and financial investment company Novatek have been designated under Directive 2. Neither entity appears on OFAC’s SDN List. However, Rosneft’s CEO, Igor Sechin, has been designated as an SDN. As such, U.S. Persons should be careful not to engage in any discussions or transactions with him (or any other SDN) when engaging in permitted transactions with an SSI entity.

While Directives 1 and 2 prohibit issuing new debt/new equity to the entities on the SSI List, other transactions with such entities by U.S. Persons are allowed, provided they do not involve SDNs.

New SDN OFAC Designations

In addition to publishing the SSI List and implementing Directives 1 and 2, OFAC has recently also added numerous individuals and entities to its SDN List, including Joint-Stock Company Concern Almaz-Antey, state-owned enterprise Bazalt, Kalashnikov Concern, Joint-Stock Company Concern Radio-Electronic Technologies, Feodosiya Enterprise, and United Shipbuilding Corporation, consistent with sanctions imposed by the Commerce Department. U.S. Persons are prohibited from engaging in any transactions with them or with any entity in which they hold a 50 percent, or more, ownership interest.

Putin Imposes Retaliatory Trade Sanctions

On August 6, Russia’s President Vladimir Putin issued a Presidential decree, ordering retaliatory sanctions on countries that have imposed restrictions on Russia. The Russian sanctions will implement a one-year ban on certain food, agricultural products, and raw materials. While the decree did not specify precisely which items will be restricted, additional sources indicate that these items may include cheese, fish, beef, pork, chicken, fruit, vegetables and dairy products from the U.S., the E.U., and other countries that have imposed sanctions against Russia. A final list is expected to be released shortly.

Best Practices

In light of the above, at this time, it is vital that, to the extent applicable, all companies impacted by the Russian sanctions:

• Abstain from engaging in any transactions with entities designated as SDNs by OFAC;
• Abstain from issuing covered new debt or equity to relevant entities identified on OFAC’s SSI List;
• Abstain from (re)exporting to Russia those goods which are set forth in the newest Commerce Department regulations for problematic end uses, unless they obtain proper licenses (which will almost always be denied);
• Ensure that all transactions are screened to identify whether an SDN, Entity List, or SSI List company is involved in the transaction; and
• Institute and maintain adequate procedures to prevent all potential violations".

Published In: Baker Hostetler, General Business Updates, Elections & Politics Updates,Energy & Utilities Updates,  and International Trade Updates.

INTERNATIONAL TRADE: NORTH AMERICAN FREE TRADE AGREEMENT ("NAFTA")

INTERNATIONAL TRADE: NORTH AMERICAN FREE TRADE AGREEMENT ("NAFTA"): By Norka M. Schell International Law Lawyer Law Offices of Norka M. Schell, LLC Tel. (212)564-1589 In a global economy, the movement of...

NORTH AMERICAN FREE TRADE AGREEMENT ("NAFTA")

By Norka M. Schell
International Law Lawyer
Law Offices of Norka M. Schell, LLC
Tel. (212)564-1589

In a global economy, the movement of persons across the borders is critical to the movement of goods and facilitation of investments. The United States-Canada Free Trade Agreement ("FTA"), implemented on January 1, 1989, provided for the freer movement not only of goods but also of business persons. With the North American Free Trade Agreement ("NAFTA"), implemented on January 1, 1994, the United States and Canada included Mexico in their preferential trading relationship. The goal of NAFTA is to eliminate all customs duties on all goods originating in Canada, Mexico, or the United States over a transition period. 

The purpose of NAFTA is to eliminate all customs duties on all goods originating in Canada, Mexico, or the United States over a transition period. 

As of January 1, 2008, all tariffs and quotas were eliminated on U.S. exports to Mexico and Canada under the NAFTA. 

The NAFTA provides coverage to services with the exception of aviation transport, maritime, and basic communications. The agreement also provide intellectual property rights protection in patent, trademark, and copyrighted material.

With regard to the movement of persons, the purpose of NAFTA is not to harmonize immigration regimes or create a common labor market or a passport union among the United States, Canada, and Mexico. Rather, each of the three countries intends to maintain its sovereignty over immigration to protect its domestic labor market. The NAFTA provisions affect only four categories of the business persons: (1) business visitors - admitted as 
B-1s; (2) traders and investors - admitted as E-1s and E-2s; (3) intra-company transferees - admitted as L-1s; and (4) professional - admitted as TNs.  

For more information on NAFTA, please contact our firm to speak with a lawyer. 

INTERNATIONAL TRADE: DON'T LET YOUR BUSINESS IMPORT TROUBLE

INTERNATIONAL TRADE: DON'T LET YOUR BUSINESS IMPORT TROUBLE: By:  Norka M. Schell        NYC International Lawyer        Law Offices of Norka M. Schell, LLC        11 Broadway, Suite 615        New...

DON'T LET YOUR BUSINESS IMPORT TROUBLE

By:  Norka M. Schell
       NYC International Lawyer
       Law Offices of Norka M. Schell, LLC
       11 Broadway, Suite 615
       New York, NY 10004
       Tel. (212)564-1589
       www.lawschell.com

With very few exceptions, all goods imported into the United States must be declared with the United States Customs Service and are subject to duties under the Harmonized Tariff Schedule of the United States (HTSUS). Duties vary with the type of merchandise, its value, its origin, and a number of other factors. Penalties for violating Customs laws or procedures can be quite substantial.

Despite the very high duties (which may be higher than the corporate tax rate), few importers give Customs law questions the same thought spent on tax planning or other issues. This is a mistake. The reality for any importer is that duties and fines imposed for Customs law violations add an extra layer of cost to the item imported and correspondingly reduce the item's competitive worth in the domestic marketplace.

The combination of GATT, NAFTA, and the Customs Modernization Act has made some of the most substantial changes in Customs law in years; and new regulations with substantial changes in Customs procedures are coming out almost daily.

If you do any significant volume of importing business, the Law Offices of Norka M. Schell, LLC can assist you. Our lawyers are creative and resourceful. Contact our Firm at (212)564-1589 to schedule a consultation with a lawyer.

FORMER RABOBANK TRADER PLEADS GUILTY FOR SCHEME TO MANIPULATE YEN LIBOR

Posted by NYC Attorney Norka M. Schell

FOR IMMEDIATE RELEASE CRM

TUESDAY, JUNE 10, 2014 (202) 514-2007 

WWW.JUSTICE.GOV 

FORMER RABOBANK TRADER PLEADS GUILTY

FOR SCHEME TO MANIPULATE YEN LIBOR

WASHINGTON – A former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) Japanese Yen derivatives trader pleaded guilty today for his role in a conspiracy to commit wire and bank fraud by manipulating Rabobank’s Yen London InterBank Offered Rate (LIBOR) submissions to benefit his trading positions.

Attorney General Eric H. Holder, Assistant Attorney General Leslie R. Caldwell of theJustice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

Today, a criminal information was filed in the Southern District of New York charging Takayuki Yagami, a Japanese national, with one count of conspiracy to commit wire fraud and bank fraud. Yagami pleaded guilty to the information before United States District Judge Jed S. Rakoff in the Southern District of New York.

“With this guilty plea, we take another significant step to hold accountable those who fraudulently manipulated the world’s cornerstone benchmark interest rate for financial gain,” said Attorney General Eric Holder. “This conduct distorted transactions and financial products around the world. Manipulating LIBOR effectively rigs the global financial system, compromising the fairness of world markets. This plea demonstrates that the Justice Department will never waver, and we will never rest, in our determination to ensure the integrity of the marketplace and protect it from fraud.”

Today, a criminal information was filed in the Southern District of New York charging Takayuki Yagami, a Japanese national, with one count of conspiracy to commit wire fraud and bank fraud. Yagami pleaded guilty to the information before United States District Judge Jed S. Rakoff in the Southern District of New York.

“With this guilty plea, we take another significant step to hold accountable those who fraudulently manipulated the world’s cornerstone benchmark interest rate for financial gain,” said Attorney General Eric Holder. “This conduct distorted transactions and financial products around the world. Manipulating LIBOR effectively rigs the global financial system, compromising the fairness of world markets. This plea demonstrates that the Justice Department will never waver, and we will never rest, in our determination to ensure the integrity of the marketplace and protect it from fraud.”

“Manipulating financial trading markets to create an unfair advantage is against the law,” said Assistant Director in Charge Parlave. “Today’s guilty plea further underscores the FBI’s ability to investigate complex international financial crimes and bring the perpetrators to justice.

The Washington Field Office has committed significant time and resources including the expertise of Special Agents, forensic accountants and analysts to investigate this case along with our Department of Justice colleagues. Their efforts send a clear message to anyone contemplating financial crimes: think twice or you will face the consequences.”  See release here.