Economic International Legal Considerations Essay Example

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The Export Administration Regulations (EAR) classify commodities, software, and technology into ten categories. Each category has multiple entries called Export Control Classification Numbers (ECCN), which can be found in Supplemental No. 1 to part 774 of the EAR known as the Commerce Control List (CCL). The CCL, together with the Country Chart in Supplement No. 1 to part 738, determines the items subject to export controls based on their technical specifications and destination country. Items listed on the CCL that are exempt from licensing under the Country Chart or classified as EAR99 (defined in section 734.3(c) of the EAR) are considered NLR and do not require a license.

The EAR applies different treatment to countries due to varying factors like national security, nonproliferation, or foreign policy. The need for a license may vary depending on the intended use or recipient involved in a transaction, especially concerning proliferation concerns. Part 744 of the EAR offers details on these requirements and licensing policies that include limitations on items and restrictions on U.S. individuals' actions.

The EAR encompasses more than just exports. Items that fall under the EAR are typically controlled for reexportation from one foreign country to another. An application for a license from BXA is only required for a small percentage of exports and reexports. Many items are either not listed on the CCL or, if they are, only need a license for a limited number of countries. Other transactions may qualify for one or more License Exceptions outlined in part 740 of the EAR. However, a license is mandatory for almost all exports to embargoed destinations like Cuba. Part 746 of the

EAR provides information on embargoed destinations and refers to additional controls imposed by the Office of Foreign Assets Controls of the Treasury Department.

Sometimes the EAR are called dual use regulations. Dual use refers to items that can be used for military, strategic, nuclear, and commercial purposes. It also includes items with purely civil uses. The term is used to differentiate the scope of the EAR from regulations of other agencies. For instance, the U.S. Department of State regulates exports of weapons and military-related items on the U.S. Munitions List, while the Department of Energy and the Nuclear Regulatory Commission oversee certain items for nuclear purposes. To learn more about the control of other agencies besides BXA, refer to Supplement No. 3 to part 730 of the EAR.

Instructions for utilizing the EAR

To determine your obligations, you should refer to part 732 of the EAR. The scope of the EAR, as defined in part 734, excludes certain publicly available technology and items under the jurisdiction of another agency. It is crucial to correctly classify your item in order to assess any licensing requirements under the EAR. You have two options: classifying your item based on the CCL or seeking assistance from BXA. It is important to follow the steps outlined in the EAR in order. Begin by considering the scope of the EAR (part 734), then review the ten general prohibitions (part 736), and finally examine license exceptions (part 740) to determine if a license is necessary.

The following actions are prohibited:

information. Whenever feasible, licensing decisions will be made solely by BXA, without involving other agencies. However, BXA may consult other U.S. departments and agencies when needed. Further information on the review policy for different controls can be found in parts 742 and 750.

To check the status of your pending certification request, advisory opinion, or license application, reach out to BXA. If you require an advisory opinion, call 202-482-4905 or fax 202-219-9179. For license applications and classification requests, contact BXA's System for Tracking Export License Applications (STELA) at 202-482-2752. STELA is an automated voice response system that provides real-time updates on any pending license application at BXA. Please note that only the applicant or their representative can request status information.

To avoid any delays in obtaining a license, it is recommended to implement preventive measures.

When completing a license application, a majority of rexporters encounter four common mistakes that are responsible for the majority of delays in processing applications:

Not signing the application, handwriting it instead of typing it, not adequately addressing section 22(j) regarding item description, and not adequately addressing section 21 regarding product end use or technical data can all cause delays in the application process. It is crucial to provide specific answers and include extra material if needed.

In emergency situations, the Department of Commerce may expedite the processing of an export license application. However, it is still necessary to submit an application. If you believe that your situation qualifies for emergency handling, please contact the Exporter Counseling Division at 202-482-4811 or by mail at the following address: U.S. Department of Commerce, Bureau of Export Administration, Office

of Exporter Services, Exporter Counseling Division, 14th Street and Constitution Avenue, NW, Room 2706, Washington, D.C. 20230. They can provide assistance with Export Clearance.

If you possess a BXA license or rely on a license exception in part 740 of the EAR, it is your responsibility to ensure the correct utilization of the license or exception and comply with all its terms and conditions.

If you export without a license from BXA or a license exception, it is your responsibility to make sure that the transaction is not subject to the EAR or that the export is classified as No License Required.

Both the Census Bureau's Foreign Trade Statistics Regulations (15 CFR part 30) and the Export Administration Regulations require individuals to submit the Shippers Export Declaration (SED) to the U.S. Government. Exceptions apply, but those who are required to submit an SED must follow the regulations stated in the Foreign Trade Statistics Regulations (FTSR). Additionally, they must provide the appropriate number of copies at the export port. For more information about FTSR or SED, please visit http://www.census.gov/foreign-trade/www on the Census Bureau's website.

In order to follow regulations, it is important to maintain export records for five years starting from the date of export, reexport, or any known diversion. For further details on export clearances, refer to part 758 of the EAR. To find out about recordkeeping requirements, consult part 762.

Where to Find Help

The Exporter Counseling Division is the main source of information for export licensing requirements and regulations. You can contact BXA's counselors by phone at 202-48-4811 or fax at 202-482-3617 to determine your licensing needs. More information

is available on BXA's website at http://www.bxa.doc.gov. The regulations can be found in the Code of Federal Regulations, specifically volume 15 starting at part 730. To obtain an updated version of the EAR, you can contact the National Technical Information Service order desk at 703-487-4630. You can also access the Export Administration Regulations through the EAR Electronic Market Place on the World Wide Web at http://w3.access.gpo.gov/bxa. Additionally, there are requirements regarding antidiversion, antiboycott, and antitrust.

The text presents the Antidiversion Clause.

The inclusion of a destination control statement on shipping documents is a requirement by the U.S. government to ensure that authorized destinations receive U.S. exports. This statement must be present in the commercial invoice and bill of lading (or air waybill) for most commercial shipments leaving the United States. Its main purpose is to notify the carrier and all foreign parties involved that the export can only be sent to specific destinations and should not be diverted against U.S. law.

However, shipments going to Canada for consumption or those made under certain general licenses are exempt from this requirement. If assistance is needed, individuals can obtain information on which statement to use from the Department of Commerce, an attorney, or a freight forwarder.

Goods exported under the authority of the Commerce Department must have a minimum statement confirming that they were exported from the United States in accordance with the Export Administration Regulations. Any unauthorized diversion of these commodities, technology, or software is strictly prohibited by U.S. law.

Antiboycott Regulations

The United States enforces a policy to oppose trade practices or boycotts created or enforced by foreign countries against nations

friendly to the United States. This policy is carried out through the antiboycott provisions of the Export Administration Act, which is enforced by the Department of Commerce, and the Tax Reform Act of 1977, enforced by the Department of the Treasury.

The text below provides an overview of regulations concerning U.S. agencies and individuals in relation to blacklisted companies and boycotted friendly countries due to foreign boycotts. These regulations include:
- Prohibition for U.S. agencies or individuals to refuse business with blacklisted firms and boycotted friendly countries if requested by foreign boycotts.
- Prohibition for U.S. individuals from engaging in discrimination, or agreeing to discriminate, against fellow Americans based on race, religion, sex, or national origin in order to comply with a foreign boycott.
- Imposition of restrictions on U.S. individuals from disclosing information about their business relationships with boycotted friendly foreign countries or blacklisted companies as a response to boycott requirements.
- Requirement for public disclosure of requests for compliance with foreign boycotts.
- Obligation for U.S. individuals to notify the Commerce Department of any receipt of boycott requests and publicly declare whether they have complied with such requests.

The anti-boycott provisions of the Export Administration Act apply to all individuals in the United States, including intermediaries involved in exporting, as well as foreign subsidiaries that are effectively controlled by American companies and officials.

The Office of Antiboycott Compliance (OAC) in the Department of Commerce investigates corporate activities and provides regulatory interpretations and guidance to private sector entities on compliance concerns. OAC uses an automated system to report boycott-related data to Congress and the public. For inquiries about antiboycott regulations, U.S. firms can contact OAC at

202-482-2381 or by sending a letter to the Office of Antiboycott Compliance, Bureau of Export Administration, Room 6098, U.S. Department of Commerce, Washington, DC 20230.

Antitrust Laws

In the United States and foreign countries such as the European Union, Canada, Mexico, Japan, and Australia, antitrust laws demonstrate a dedication to fostering competitive economies. Their purpose is to guarantee that resources are allocated efficiently by permitting consumers to obtain affordable goods and services while also enabling businesses to maintain profitability. When U.S. companies export to these nations, they must comply with their respective antitrust laws.

The U.S. antitrust laws do not have a specific set of requirements, but they establish general principles to evaluate the legality of business transactions based on specific facts and conditions. Certain trade restraints are considered definitively illegal under these laws, referred to as per se violations. Such violations encompass agreements and conspiracies to manipulate prices, competitors dividing markets, and certain group boycotts and tying arrangements.

The rule of reason legal standard is used to evaluate restraints of trade in the United States. This standard requires showing that certain actions occurred and had a negative impact on competition. Factors considered under the rule of reason include business justification, effect on market prices and output, barriers to entry, and the market shares of those involved.

Regarding exports by U.S. companies, there are specific limitations in U.S. courts for the per se and rule of reason tests. The Export Trading Company Act (also known as the Foreign Trade Antitrust Improvements Act) under Title IV states that an activity must have a direct, substantial, and reasonably foreseeable effect on domestic

or import commerce of the United States or on the export commerce of a U.S. person to be challenged under the Sherman Antitrust Act or the Federal Trade Commission Act. This provision clarifies when overseas activities of U.S. exporters can be disputed under these two antitrust statutes.
Under Title III of the Export Trading Company Act, with agreement from both the Department of Commerce and the U.S. Department of Justice, an export trade certificate of review can be issued to provide limited immunity from federal and state antitrust laws.
While most international business transactions do not raise concerns about antitrust issues, various types of transactions can lead to such concerns.

The following are ways in which companies can expand internationally:
- Establishing distribution arrangements abroad
- Forming joint ventures for research, manufacturing, construction, and distribution
- Obtaining licenses for patents, trademarks, copyrights, and know-how
- Engaging in mergers and acquisitions with foreign firms
- Securing agreements and concessions for procurement of raw materials.

The chapter entitled Chapter 16 offers a comprehensive examination of the possible antitrust issues that can arise from such transactions, both domestically and internationally. If there are any antitrust concerns in the U.S. or other nations, it is advisable to consult experienced antitrust lawyers for guidance and assistance.

If a business transaction is not subject to an export trade certificate of review, the Antitrust Division of the Department of Justice can offer guidance on antitrust concerns. To begin the business review process, send a letter outlining the proposed transaction and requesting assessment on its adherence to antitrust laws to the Antitrust Division. The Department of Justice's Antitrust Enforcement Guidelines for International Operations (1995) cover various

aspects of federal antitrust enforcement policies related to international transactions.The Foreign Corrupt Practices Act is a regulation that governs corrupt practices conducted by individuals or businesses from the United States in foreign countries.

The law prevents any U.S. company, as well as its associates, from providing or pledging money or valuable items to foreign officials, political parties, or candidates for foreign political positions in return for business advantages. It is also prohibited to make a payment with the understanding that some or all of it will be indirectly given to foreign officials, parties, or candidates to aid the company in acquiring or retaining business. Knowledge within this context encompasses being consciously aware or intentionally disregarding the situation.

The antibribery provisions have an exception for facilitating payments related to routine governmental action. This exception includes actions similar to the examples listed in the statute.

The defense against an accusation of violating the Federal Corrupt Practices Act (FCPA) can be based on the argument that the payment was legal according to the written laws and regulations of the foreign country or that it was made in order to showcase a product or fulfill a contractual obligation.

Companies can be fined up to $2 million, while individuals such as officers, directors, employees, agents, and stockholders may face fines of up to $100,000 and imprisonment for a maximum of five years. The Attorney General has the authority to take legal action against domestic concerns resulting in fines of up to $10,000. Similarly, the Securities and Exchange Commission (SEC) has the power to take legal action against issuers that may lead to fines of up to $10,000.