Details of Census' Proposed Rule to Implement Mandatory AES Filing for All Exports that Require SED Information (Part XII - Final)

(AES is the electronic method for filing the paper SED information directly with U.S. Customs and Border Protection (CBP) and Census. AESDirect is the Census' free Internet-based system for filing SED information with AES.)

This is Part XII, the final part of a multi-part series of summaries, which highlights Census' proposed regulations in 15 CFR 30.70 through 30.99 (Subpart H - Penalties). See future issues of ITT for additional parts.

Census states that it is proposing to create a new Subpart H to 15 CFR Part 30 in order to cover Foreign Trade Regulations (FTR) penalty provisions formerly addressed in 15 CFR 30.95. Census explains that new penalty provisions referenced in proposed Subpart H describe the increase in penalties imposed for violations from $100 to $1,000 per day of delinquency, to a maximum from $1,000 to $10,000 per violation.

Subpart H - Penalties:

Penalties for violating the Clean Diamond Trade Act

Census explains that Section 8(c) of the Clean Diamond Trade Act (Public Law (P.L.) 108-19) authorizes CBP and the Bureau of Immigration and Customs Enforcement (ICE), as appropriate, to enforce the laws and regulations governing exports of rough diamonds, including those with respect to the validation of the Kimberley Process Certificate by the exporting authority.

The Office of Foreign Assets Control (OFAC) also has enforcement authority pursuant to Section 5(a) of P.L. 108-19, Executive Order 13312, and Rough Diamonds Control Regulations (31 CFR Part 592). CBP, ICE, and OFAC, pursuant to Section 5(a) of P.L. 108-19, are further authorized to enforce provisions of section 8(a) of P.L. 108-19, that provide for the following civil and criminal penalties:

Civil penalties. A civil penalty not to exceed $10,000 may be imposed on any person who violates, or attempts to violate, any order or regulation issued under P.L. 108-19.

Criminal penalties. For the willful violation or attempted violation of any license, order, or regulation issued under P.L. 108-19, a fine not to exceed $50,000, would be imposed upon conviction, or;

If a natural person, imprisoned for not more than ten (10) years, or both;

If an officer, director, or agent of any corporation, imprisoned for not more than 10 years, or both.

Penalties for False or Fraudulent Reporting on or Misuse of AES

Criminal penalties. Proposed 30.71(a) would set for the following criminal penalties for false or fraudulent reporting on or misuse of AES:

Failure to file; submission of false or misleading information. Any person, including U.S. Principal Parties in Interest (USPPIs), authorized agents or carriers, who knowingly fails to file or knowingly submits, directly or indirectly, to the U.S. Government, false or misleading export information through the AES, would be subject to a fine not to exceed $10,000 or imprisonment for not more than five (5) years, or both, for each violation.

Furtherance of illegal activities. Any person, including USPPIs, authorized agents or carriers, who knowingly reports, directly or indirectly, to the U.S. Government any information through or otherwise uses the AES to further any illegal activity would be subject to a fine not to exceed $10,000 or imprisonment for not more than five (5) years or both for each violation.

Forfeiture penalties. Any person who is convicted under proposed Subpart H would, in addition to any other penalty, be subject to forfeiting to the U.S.:

Any of that person's interest in, security of, claim against, or property or contractual rights of any kind in the goods or tangible items that were the subject of the violation.

Any of that person's interest in, security of, claim against, or property or contractual rights of any kind in tangible property that was used in the export or attempt to export that was the subject of the violation.

Any of that person's property constituting, or derived from, any proceeds obtained directly or indirectly as a result of this violation.

Exemption. The criminal fines provided for in proposed Subpart H would exempt from the provisions of 18 U.S.C. 3571.

Civil penalties. Proposed 30.71(b) would set forth civil penalties for the following acts:

Filing false/misleading information, failure to file, furtherance of illegal activities, delayed filing violations. A civil penalty not to exceed $1,000 for each day's delinquency beyond the applicable period prescribed in 15 CFR 30.4, but not more than $10,000 per violation, could be imposed for failure to file information or reports in connection with the exportation or transportation of cargo.

Penalties for other violations. A civil penalty not to exceed $10,000 per violation may be imposed for each violation of provisions of this part other than any violation encompassed by proposed 15 CFR 30.71(b)(1). Such penalty could be in addition to any other penalty imposed by law.

Forfeiture penalties. In addition to any other civil penalties specified in proposed 15 CFR 30.71, any property involved in a violation could be subject to forfeiture under applicable law.

Civil penalty procedures. Proposed 15 CFR 30.72 would set forth the general civil penalty procedures, guidelines on the commencement of civil actions, information on applicable law for functions delegated to another agency and deposit of civil penalty payments in the general fund of the Treasury, as well as details on the applicable law for delegated function. This proposed section also contains the following information:

Remission and mitigation. Any penalties imposed under proposed 15 CFR 30.71(b)(1) and (b)(2) may be remitted or mitigated, if:

The penalties were incurred without willful negligence or fraud; or

Other circumstances exist that justify a remission or mitigation.

Enforcement. Proposed 15 CFR 30.73 would provide the following regulations with respect to enforcement:

Department of Commerce. The BIS's Office of Export Enforcement (OEE) could conduct investigations pursuant to proposed Subpart H (Penalties). In conducting investigations, OEE may, to the extent necessary or appropriate to the enforcement of proposed 15 CFR Part 30, exercise such authorities as are conferred upon OEE by other laws of the U.S., subject to policies and procedures approved by the Attorney General.

Department of Homeland Security. The ICE and CBP could enforce the provisions of proposed Subpart H (Penalties) or conduct investigations under 15 CFR Part 30.

Appendices Contain Format of AES Letter of Intent & Power of Attorney, Etc.

Appendix A to 15 CFR Part 30 would contain the proposed format for the AES Letter of Intent and Appendix B to 15 CFR Part 30 would contain sample formats for Power of Attorney and Written Authorization documents.

to implement provisions in the Foreign Relations Authorization Act, Public Law (P.L.) 107-228

(See ITT's Online Archives or 10/29/03 news, 03102910, for BP summary of the Census' advance notice of proposed rulemaking on these issues. See ITT's Online Archives or 02/18/05, 02/24/05, 03/02/05, 03/03/05, 03/04/05, 03/09/05, 03/10/05, 03/15/05, 03/18/05, 03/21/05, and 03/25/05 news, 05021810, 05022430, 05030215, 05030325, 05030415, 05030915, 05031025, 05031535, 05031815, 05032125, and 05032525, for Parts I - XI of BP's series of summaries on the proposed rule.)

- written comments due by 04/18/05

Census contact - C. Harvey Monk, Jr. (301) 763-2255

Census proposed rule (FR Pub 02/17/05, D/N 031009254-4355-02) available at

http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-2926.pdf