Tuesday, November 30, 2010

Air Cargo Humor

The local newspaper asked for comments and suggestions concerning the use of more instrusive pat downs at airport security checkpoints. Suggestions included sending all baggage by express courier or a new baggage only airline for more efficient and faster service, having the military take over security, boycotting the airlines and inviting the Israelis to design our systems. The one that caught my attention was a little extreme, but definitely innovative. Instead of a scanning device, the booth passengers step into would become a detonating device. If explosives were detected, they would be detonated within the confines of the booth. The next announcements broadcast over the PA system would be for cleanup in the security area and the availability of seat on Flight 123.

While a little extreme for use on human beings, perhaps it is not so farfetched for packages. What if all packages or even just those suspected of containing explosives or coming from high risk areas passed through a detonation booth. If the machine detected explosive materials in packages like the ones containing the ink cartridges, the package would be immediately detonated within the confines of the booth. If that process slowed the flow of packages, the suspect package could be removed from the flow and taken to the specially designated detonation booth. If we are going to 100% scanning of packages, would the chance of innocent packages being blown to bits outweigh the cost of the new technology and the increased success in thwarting terrorist attempts? Perhaps the new detonating booth is already on the drawing board and coming to an airport and/or cargo facility near you!

Monday, November 22, 2010

Recent News In International Trade

CBP Requests Comments on CBP Form 28

On November 17, 2010, U. S. Customs and Border Protection issued a request for comments regarding CBP Form 28. The Request for Information, CBP 28, is used as an informal method for CBP to request and review import records when they need additional information not provided by the documentation submitted.

The comments should address:
(a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b) the accuracy of the agency's estimates of the burden of the collection of information;
(c) ways to enhance the quality, utility, and clarity of the information to be collected;
(d) ways to minimize the burden including the use of automated collection techniques or the use of other forms of information technology; and
(e) the annual costs burden to respondents or record keepers from the collection of information (a total capital/startup costs and operations and maintenance costs).

Comments should be submitted to U.S. Customs and Border Protection, Attn: Tracey Denning, Regulations and Rulings, Office of International Trade, 799 9th Street, NW., 5th Floor, Washington, DC 20229-1177.

H.R. 6410 Introduced - Requires 100% Screening on All-Cargo Aircraft

On November 16, 2010, a new air cargo security bill was introduced into the House of Representatives. H.R. 6410, the "Air Cargo Security Act," would require systems to be established for the inspection and screening of cargo traveling on all-cargo aircraft "operated by an air carrier or foreign air carrier in air transportation or interstate air transportation." The bill would require that the screening for cargo intended for all-cargo aircraft "provide a level of security commensurate with the level of security for the screening of passenger checked baggage." The bill also provides for training for air cargo handlers and regular inspection of air cargo facilities. consequences imposed for a facility not in compliance

If the bill is approved, 50 percent of the cargo intended for all-cargo aircraft will be inspected no later than 18 months after enactment and 100 percent screening of the cargo within three years of enactment.

Failure to Comply with OFAC Subpoena Results in $225,000 Fine

OFAC issued a subpoena to Pinnacle Aircraft Parts, Inc. related to an investigation into the company’s involvement in the sale of a jet engine that may have been ultimately destined for Iran. In response to the subpoena, Pinnacle did not supply a copy of an email that indicated the engine was destined for Iran. Obviously, the email might have shown awareness by the company, which could have provided the basis for criminal prosecution.

Although the email in question was provided to Pinnacle’s attorney, it was not included in the submission of documents requested by OFAC. Pinnacle decided not to produce the email based on the advice of counsel; however, they are legally responsible for compliance with the subpoena and the actions of their agents. The end result – a $225,000 fine issued by OFAC. The penalty was slightly mitigated based on Pinnacle’s reliance on the advice of counsel and prior good record.

FTA Update

The Generalized System of Preferences (GSP) and the Andean Trade Preference Act/Andean Trade Promotion and Drug Eradication Act (ATPA/ATPDEA) are scheduled to expire on December 31, 2010. Possible extension of these acts is being discussed in the House and Senate.

The U.S and Korea have not reached a final agreement on the U.S. - Korea FTA. Terms that have been subject of much discussion include unrestricted imports of automobiles and beef into South Korea. Given the impasse, an agreement will not likely be reached this year. President Obama pledges to keep moving forward so that this agreement may be ready for Congress in early 2011.

SAVE Award Winner

In 2009, President Obama introduced the SAVE Award (Securing American’s Value and Efficiency). The program seeks ideas from federal employees on how the make government more effective and efficient. Over 18,000 entries were received. The winner was Trudy Givens who works for the bureau of Prisons in Wisconsin. Trudy suggested“opt in” features for the approximately 8,000 copies of the Federal Register being mailed every day. Statute requires the government to make hard copies available; however, most of the public views them online. If recipients are allowed to opt-in to receive hard copies, the government could save printing and postage costs.

As this year’s winner, Trudy will have an opportunity to meet the President to discuss her idea with him. All of the SAVE Award submissions have been sent to the agencies for potential action and inclusion in the 2012 Budget. Last year, a total of 20 SAVE ideas representing millions of dollars in savings made it into the President’s FY2011 budget.

"If You See Something, Say Something"

The Department of Homeland Security announced the expansion of the “"If You See Something, Say Something" campaign. The phrase was originally implemented by New York City’s Metropolitan Transportation Authority after 9/11 and has spread to other cities across the country. The newest campaign encourages travelers and employees in the hotel industry to report indicators of terrorism, crime and other threats to the proper law enforcement authorities.

Tuesday, November 9, 2010

Focus on Fakes

Have you ever seen someone at a flea market selling Rolex watches for $70 or NFL shirts for $5? If it sounds too good to be true, then it probably is too good to be true. Intellectual property comes in many forms, from writings of an author to the new product developed by an inventor. Federal law provides rights to owners of these writings, products and processes to protect them from being misappropriated by others.

Protection of intellectual property encourages creativity that is essential to continued growth and success of our economy. Without protection, companies and individuals may not be as willing to invest the time and money necessary to develop innovative new products that enhance, and in many cases, save our lives. Unfortunately, unethical criminal behaviors have created an increase in counterfeit and pirated goods that inhibit creativity and threaten profitability of legitimate creators. Trade in counterfeit goods such as CDs, clothing and drugs cost the true owners around the world billions of dollars annually.

Today's technological advancements and the ability of foreign manufacturers to produce lower cost goods present unlimited opportunities for distribution of goods that are authorized by the IPR owner. However, this same technology and low cost production provide the same opportunities for supplying products that infringe on intellectual property rights. For example, anyone with a computer equipped with a CD and/or DVD burner and a stack of discs can illegally copy and distribute protected works, such as music and movies.

Both the domestic and international protection of intellectual property has become increasingly more difficult. While the U.S. has well-defined laws for protection of intellectual property, not all countries provide or enforce the protection of intellectual property. This lack of protection and enforcement has led to widespread unauthorized copying and use of unlicensed marks to supply the market with goods that violate intellectual property rights.

Some of the statistics provided by CBP show that footwear, clothing, purses and electronics are some of the most frequent items imported in violation of intellectual property rights. Goods such as soaps, pharmaceuticals and electronics can be safety hazards and pose dangers to consumers if not manufactured according to our standards. China was the top trading partner for IPR seizures in FY 2009 accounting for 79% of the total value of goods seized. Footwear was the top commodity seized in FY 2009, which accounted for 38% of the entire value of infringing goods.

The enforcement of intellectual property rights has become one of CBP’s top priorities. CBP is dedicated to protecting against the importation of goods, which infringe/violate
Intellectual Property Rights (IPR). The aggressive enforcement program devotes substantial resources to target, intercept, detain and seize goods in that violate intellectual property laws. CBP has an online reporting system that allows the public to report potential violations, eAllegations.

Click HERE to check out this interesting shopping website, then cast your vote using the poll at the top right side of the page.

Would this website be something that CBP might have an interest in?

__I’m going shopping!

Monday, November 1, 2010

Will Terrorist Threats Change Cargo Security Rules?

Thanks to tips from Saudi Arabian authorities, two boxes containing explosive devices were quickly found and taken into custody without any injuries or damage to property. A question many of us may be contemplating is how these recent events affect importers, exporters, carriers and individuals.

The bombs found in the toner cartridges late last week serve as a wakeup call that Al Qaeda is alive, active and has found a new target – cargo carriers. Previously, it was thought that passenger aircraft were more likely targets. These packages did travel on passenger planes; however, they were destined transport via FedEx and UPS, known for shipment by cargo-only aircraft.

While experts are not 100% certain, they believe that the intent may have been to detonate the bombs in flight. Cargo shipped on passenger aircraft has been subject to more intense screening than cargo on freighters; however, the recent events will likely increase the level of screening for all cargo on all air carriers. Yemen pledged to tighten security at all of its airports and to inspect every piece of cargo and luggage at the airports.
CNN reports that cargo carriers such as, FedEx and UPS will be required to perform more thorough inspections before accepting any package. What else can be done to prevent other potentially deadly shipments?

Increased inspection slows movement of cargo and increases cost. Hopefully, our allies will support a higher level of scrutiny, as the hatred against Americans endangers their own citizens. Regardless of where the bombs were intended to detonate, they could have exploded anywhere along the journey. With increased focus on Yemen, will Al Qaeda set up shop in a country receiving less scrutiny?

Notice that this terrorist event was not an example of a breach of security related to a major importer or exporter. The packages were not shipped to or from an importer or exporter that would normally participate in C-TPAT or other security programs, but instead a shipped from an individual to a synagogue. To complicate matters more, the terrorists are using more sophisticated at techniques to disguise the bombs. There is some question as to whether the bombs would have been found even if the packages had been screened using x-rays, dogs or other techniques.

Implemented by the TSA, Congress mandates that 100 percent of shipments on passenger planes go through screening; however, the rule does not apply to packages on cargo planes, those not carrying passengers. The rules for cargo on passenger aircraft cover domestic and outbound international flights. Air cargo security processes and regulations vary by country. Congress intended for this rule to cover international inbound flights, but it is taking more time for the U.S. to convince other countries to agree to and implement a similar air cargo inspection processes. Cargo carriers such as UPS and FedEx have their own set of security rules and processes. Cargo may not be inspected, depending on the shipper, destination, origin or other information that triggers suspicion.

On a final note, another issue to consider is the use of stolen identities to ship the bombs. The two women originally arrested in the plot have been released, claiming their identities had been stolen. Along with more intense security exams, the use of stolen identities should be a big concern. Wouldn’t the terrorists like to claim victory by shipping explosives using an American’s identity? If you’ve ever been the victim of identify fraud, can you imagine what it would be like to have your name associated with a terrorist plot? The hassles you endured from collection agencies, the bank and vendors would pale in comparison.

Stay tuned! This incident is likely to generate more robust security measures for all cargo, including packages shipped cargo planes.