Department of Homeland Security

1. Department of Homeland Security WESCCON Pacific Coast Council of Customs Brokers And Freight Forwarders Associations October 11-14, 2007

2. Department of Homeland Security Customs and Border Protection: Export Enforcement

3. Customs and Border Protection Philip Warker Chief, Manifest and Conveyance Office of Field Operations 202-344-2101 Email: philip.warker@dhs.gov

4. DHS Enforces all U.S. Export Control Laws • Munitions List - State Department’s Directorate of Defense Trade Controls • Dual-Use List - Commerce Department’s Bureau of Industry and Security • Embargoes - Treasury Department’s Office of Foreign Assets Control • Nuclear Materials & Technology - Nuclear Regulatory Commission

5. CBP’s Enforcement Tools • CBP Legal Authority: “Warrantless Search Authority” to conduct border searches of persons, merchandise or conveyances that cross or are about to cross an international border - without a warrant or probable cause. Border search authority includes inbound, in-transit and outbound searches.

6. CBP’s Enforcement Tools • Searches need not take place at the physical border, but at its “functional equivalent”, as well. • CBP can conduct a search thousands of miles from the border normally after a person or property has cleared an initial port of export. • This is referred to as “extended” border search authority.

7. Why CBP? • CBP has border search authority. • CBP is physically located at the borders and has authority to enforce export control regulations. • CBP is granted authority to inspect, search, detain and seize goods being exported without the proper authorizations (licenses, or license exemptions).

8. What is the Role of CBP for Exports? • To enforce other U.S. Government agency laws and regulations. • Inspect and examine cargo, passengers and export documentation. • Detain questionable shipments. • Seize shipments in violation of export control laws. • Interdict unreported currency, stolen vehicles, and other illegal exports.

9. What is the Role of CBP for Exports? • Utilizing and enhancing the capability of the Automated Export System (AES) to refine targeting effectiveness. • Preventing terrorist groups, rogue nations and other criminal organizations from obtaining U.S. Munitions List (USML) or Commerce Control List (CCL) commodities. • Enforce sanctions and embargoes against individuals, groups, organizations, and countries. • Increasing export compliance.

10. Code of Federal Regulations • Regulations CBP is responsible for enforcing • 19 CFR 192 (Customs & Border Protection) • 15 CFR Parts 1 – 799 (Department of Commerce) • 15 CFR Part 30 (U.S. Census Bureau) • 21 CFR Parts 1300-1399 (Drug Enforcement Administration) • 22 CFR Parts 120-130 (Department of State) • 27 CFR Parts 447-555 (Alcohol, Tobacco & Firearms) • 31 CFR Parts 200-end (Office of Foreign Asset Control)

11. If Advanced information Is Required • Shipper Requirements (19 CFR 192.14) • File via the Automated Export System • Receive System Acceptance in the form of the Internal Transaction Number (ITN) • Provide the ITN, or AES post-departure filing statement or AES exemption statement to the carrier when the cargo is delivered to the carrier • Carrier Requirements • Do not load any cargo without the ITN, the AES post-departure statement or the AES exemption statement

12. Trade Act of 2002 • The USPPI, or its authorized agent, must furnish to the outbound carrier a proof of electronic filing citation (the ITN), low risk exporter citation (currently, the Option 4 filing citation), or exemption statement, for annotation on the carrier’s outbound manifest, bills of lading or other export documentation covering the cargo being shipped – 19 CFR 192.14(3) • Date for compliance – The requirements of this section, including the pre-departure time frames for reporting export cargo information for required shipments, and the requirement of the ITN, will be implemented concurrent with the completion of the redesign of the AES commodity module and the effective date of the mandatory filing regulations that will be issued by the Department of Commerce 19 CFR 192.14(5)(e)

13. How does CBP conduct enforcement? • Risk-based Assessment • Shipper’s Export Declarations • Cargo manifests (Bills of lading, Invoices, Packing Lists, Hazmat Certs., Other shipping documentation) • Company History or the lack of history • Routing • Other paperwork

14. Examination of Cargo • CBP is looking to determine if the actual commodity matches the description on the paperwork (SEDs and manifests), and if any licenses or license exemptions are required for export. • Use of automated systems and databases

15. EXODUS Command Center (ECC) • ECC managed by ICE • Licensing authority rests with the Departments of State and Commerce • CBP Officers don’t have to be experts • Single Point of Contact for Officers for export licensing issues and port detentions/seizures of licensable exports • Liaison to the other federal agencies

16. Detentions/Seizures: A 6 Step Process • Relevant information referred to the ECC by CBP Officers; CBP must refer suspect shipments to the licensing authority, which can take time. • Port Inspection & Detentions – CBP Officers routinely examine export documents, Shippers Export Declarations, invoices, bills of lading, as well as the commodity. CBP Officers detain suspect shipments. • Referral to the Regulatory Office – The ECC forwards the information to the appropriate regulatory office for review and a licensing determination.

17. Detentions/Seizures: A 6 Step Process • Licensing Determination Made – The regulatory office makes a determination on the detained merchandise and provides the ECC with the information. • ECC Notifies the Port – The ECC then provides the port with the necessary information concerning the licensing determination. 6. Release or Seize – The CBP Officer then notifies the exporter of the determination and either releases or seizes the merchandise. After seizure the case is turned over to the Office of Fines, Penalties and Forfeitures.

18. Common Reasons for Detention/Seizure • If the commodity has been declared as under $2500 and invoicing or other documents show that it clearly is over $2500, the cargo is subject to seizure. • Exporters who fraudulently declare cargo as under $2500 in order to avoid completing AES filing will be referred to ICE or BIS for investigation. • Late filing of AES commodity data subjects the shipment to seizure. CBP has found that many times the USPPI has submitted the information to a third party for completion of the AES transmission. The third party, in turn, “batches” the transactions and they are filed on a daily basis. This process causes the AES filing to be either not in the system or late.

19. Common Reasons for Detention/Seizure • Claiming ITAR exemption rather than getting a Department of State License • Failure to file AES on USML goods • US Freight forwarders failing to obtain DSP-61 licenses for USML in-transit movements through the U.S. • Paperwork for a licensed commodity is not transmitted within the correct time frame and the commodity is at the dock

20. Common Reasons for Detention/Seizure • Indicating a license on the SED that has nothing to do with the shipment • For licensable cargo, using a forwarder that is not an approved freight forwarder • Exporters using the ITAR exemptions in situations where they do not apply • Failing to submit AES filing on DSP 61/ 73 exports • Failing to submit ECCN # on AES submissions • Submitting the wrong mode of transportation

21. Best Practices • AES Transmission and export documentation should match - AES transmission, commodity description(s), invoice(s) and packing slip(s) should match. Obvious discrepancies will at a minimum delay the export. • Respond quickly to FP&F notices of seizure, delayed responses can be costly. • Correct problems as quickly as possible. • Use the Correct Port Code - If the commodity reaches the dock and the AES transmission cannot be located for that port the shipment can be seized.

22. Best Practices • Voluntary Disclosure of items to be exported that were not properly imported -- Disclosure Statement to the State Department • Census Regulations violations sometimes lead to technical seizures; CBP is trying to minimize these but exporters or their agents should ensure that documentation is completed correctly • Be aware of attempted exports of stolen vehicles and report suspicious activity to CBP port management or ICE

23. CBP Priorities for Outbound • Apply risk management in order to facilitate legitimate exports and effectively target for violations; advanced information is key • Uniformity in Training, Information Sharing and Outreach • Automation of export process in cooperation with other agencies through the International Trade Data Systems (ITDS) Process

24. Department of Homeland Security QUESTIONS?