Thursday, September 27, 2012

Peter Quinter Featured in LexisNexis Export Compliance Article

Recent FedEx Export Enforcement Underlines Need for Proper Export Controls for All Companies  - By Dylan McGuire, LexisNexis In-House Advisory

Shipping giant FedEx’s recent agreement to pay $370,000 in fines to settle allegations that it violated U.S. export regulations by shipping computer equipment to a company in Dubai that allegedly used such equipment to make explosive devices used in Iraq and Afghanistan, highlights the importance of having proper export controls for U.S. companies that ship overseas, panelists at a recent webinar said.

“I don’t care how big a company you are, how small a company you are, how many lawyers you have on staff—compliance people on staff—sooner or later the chances are pretty good that every company is going to end up making a mistake or error or somehow commit a violation of law or regulation,” related to export regulations, said Peter Quinter of Gray Robinson speaking at a September 11, 2012 LexisNexis® Webinar entitled Understanding U.S. Export Regulations.

Peter Quinter, Esq.
(305) 416-6960
peter.quinter@gray-robinson.com
         
Quinter said that once the government suspects an export violation, its first step is often to issue an enforcement subpoena or a summons to the company.

“When the government issues an enforcement subpoena or summons or conducts any kind of investigation … you don’t know whether it’s going to result in a criminal prosecution, an administrative monetary penalty, or no action whatsoever. Be advised the government is not obligated to tell you—they may not know at that point. So, you should always suspect the worst—that it is a criminal investigation and to keep in mind that when someone contacts you, you’re not necessarily required to answer their questions.  The subpoena you are required to respond to, however.  How you respond and when you respond is of course up to you and your legal counsel,” said Quinter.

Failure to respond to an Office of Foreign Asset Controls (OFAC), Department of the Treasury, subpoena can result in substantial fines—an automatic fine of $20,000 for failure to respond and up to $50,000 if the value of the exported merchandise exceeds $500,000, Quinter said.

“Just because a subpoena asks for everything under the sun does not mean that you absolutely have to discuss or provide that documentation to OFAC,” he said.

Quinter pointed out that just about everybody who does business overseas is subject to OFAC regulations, but that companies that do business with Syria or Iran are particularly under scrutiny.  He said that all U.S. citizens, regardless of whether they are living in the country are elsewhere, may find themselves subject to OFAC regulations if they do business with those countries, due to ongoing sanctions programs.

He offered the following advice to companies under investigation by OFAC: “The government likes it when you cooperate.  There are many situations where the violator does not cooperate.  As a matter of fact, the violator often provides false information to the government, believe it or not.  So when the subpoena is issued by OFAC or BIS [Bureau of Industry and Security] to a company and they ask for certain documents, or ask for certain information and either the documentation or the information is falsified, the government doesn’t like that and will issue penalties based upon that alone.  They’ve actually gone after people criminally for lying to the government.”

Quinter recommended that an effective compliance program come from the top down.

“If you’re a substantial exporter, you should really have a written export management and compliance program, signed by the president and enforced by legal counsel or other compliance personnel.  It should a management commitment in writing, right from the top and provided to every employee, that says how important the export rules are. The government agencies like to see that,” he said.

He also recommended that companies engage in continuous risk assessment

“Someone should in the company should always be checking to see—not just initially when they install the program but routinely every six months or a year—that the risks are minimal,” he said.  He recommended that companies call into their sales department posing as an international company seeking to, for example, ship goods to Iran or Syria, to test how their personnel reacts.

He also recommended companies engage in ongoing training and awareness programs and keep accurate records of transactions and dealings.

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Thursday, September 13, 2012

The Red Sole Saga Continues....

Christian Louboutin's distinctive and high-fashion lacquered red sole shoes have been in the news frequently in the last month. A war is being waged over these famous red-soles.... one battle is being played out at our ports while the other is being played out in our courtrooms.


Look closely at the picture about and you'll notice the famous CBP green tape just below those famous red soles. On August 14, CBP import specialists and officers assigned to the Los Angeles/Long Beach seaport seized a total of five shipments arriving from China containing 20,457 pairs of ladies footwear, in violation of the Christian Louboutin trademark, with a domestic value of $57,490 and an estimated manufacturer’s suggested retail price of $18 million. CBP's first hint that something was wrong with the shipment - it was coming from China instead of Italy, where the legitimate Louboutins are produced.


CBP is not the only enforcer of Louboutin's trademark.  After Louboutin entered into a major legal battle with its competitor, Yves St. Laurent (YSL), the district court determined that the red-sole mark was invalid because a "monopoly on the color red would impermissibly hinder competition amongst other participants."  This was mostly overturned just this week, as the U.S. Court of Appeals for the Second Circuit found that Louboutin had the right to trademark its red soles, as long as the color of the sole contrasted with the rest of the shoe.  The appellate court held that the doctrine of aesthetic functionality is a valid defense in the Second Circuit in cases “where protection of the mark significantly undermines competitors’ ability to compete in the relevant market” (emphasis in original). A mark is aesthetically functional if granting exclusive protection to the feature “would put competitors at a significant non-reputation-related disadvantage,” citing TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 32-33 (2001).The appellate court concluded that the red, lacquered outsole had acquired limited secondary meaning "as a distinctive symbol that identifies the Louboutin brand."

The greatest lesson from this saga, for all producers of distinctive goods, is the importance of working with an attorney to register your trademark with the U.S.P.T.O. and then record those registered marks with CBP’s Intellectual Property Rights e-Recordation system. Christian Louboutin has U.S. Customs and Border Protection policing its brand from Chinese counterfeiters at our country's borders, while the Federal Court system protects its product's distinctiveness from legitimate big-pocket competitors. This kind of protection is invaluable for any manufacturer, designer, producer, or importer - just follow the saga of the red-sole shoes.

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For any questions or comments regarding these topics, please contact:

Peter Quinter, Shareholder and Chair
Customs and International Trade Law Group
GrayRobinson, P.A.
1221 Brickell Avenue
Suite 1600
Miami, Florida 33131
Office: (305) 416-6960
Mobile: (954) 270-1864
Peter.Quinter@Gray-Robinson.com

Monday, September 10, 2012

Export Compliance Bootcamp - Join Us!


I am pleased to invite you to join me on September 24th in Miami and/or on September 27th in Fort Lauderdale for a informative event - our Export Compliance Bootcamp









Complying With U.S. Export Controls
Fundamentals of the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR)

Who Should Attend
All those involved in the export process: U.S. Manufacturers and Sellers (U.S. Principal Parties in Interest), Freight Forwarders, Exporting Carriers, Consolidators, etc.

AGENDA

How to Protect Yourself in an Enforcement Proceeding.
Peter Quinter, GrayRobinson, P.A. 

Export Controls Basics (Agencies, Jurisdiction, Scope and Regulations).
Albert Saphir, Principal, ABS Consulting

Screen or Risk Being Fined - Why denied party screening is important.
Elayne Garber, OCR Services 

Export Compliance - a government perspective.
Jonathan Barnes, Bureau of Industry and Security (BIS), U.S. Department of Commerce


LEARN

  • How to avoid shipping to denied parties, whether your product needs an export license, and how to apply for one.
  • Which government agency has jurisdiction over export controls for your products.
  • Automated Export System (AES) Requirements.
  • How to handle criminal and civil investigations, including summonses and subpoenas.
  • How to respond to proposed penalties for EAR and ITAR violations.

LOCATIONS

MIAMI
Monday, September 24th
GrayRobinson
1221 Brickell Avenue
Suite 1600
8:30 a.m. - Check-in/registration
9:00 a.m. to 12:00 p.m. - Program


FORT LAUDERDALE
Thursday, September 27th
GrayRobinson
401 E. Las Olas Boulevard
Suite 1850
8:30 a.m. - Check-in/registration
9:00 a.m. to 12:00 p.m. - Program


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Cost is $50 and includes seminar materials, breakfast, and lunch. NCBFAA credit will be offered and parking validated. For more information and to register, email:

MIAMI
Monday, September 24, 2012

miamirsvp@gray-robinson.com
FORT LAUDERDALE
Thursday, September 27, 2012

fortlauderdalersvp@gray-robinson.com

Any questions, please contact Yesy Rojas at 954-761-7486.