Fine for Improper Wire Transfer

The Office of Foreign Assets Control (OFAC) announced that it had fined the New York branch of the National Bank of Pakistan $28,800 in connection with seven wire transfers made by the Bank in an amount totaling $55,952.14 to an entity on OFAC’s Specially Designated Nationals and Blocked Persons List. The transfers went to Kyrgyz Trans Avia, an airline headquartered in Bishkek, Kyrgyzstan. The transfers were from or to an account denominated “LC Aircompany Kyrgyztransavia.” Although the SDN List contains references to both Kyrgyz Trans Avia and Kyrgyztransavia, the Bank’s screening software failed to identify the match.

OFAC noted that the base amount for the penalty under its guidelines was $64,000. That the error was a software error, meaning that no one at the Bank was aware of the violation, was considered a mitigating factor. But this mitigation still resulted in a substantial fine equal to approximately half of the funds transferred and far more than any profits the bank made on the wire transfers.

U.S. Senator John McCain Moves to Ease Arms Embargo on Vietnam

Senator John McCain, R-Ariz., announced a plan to introduce legislation to ease a decades long ban on selling weaponry to Vietnam; a decision that the Senator said was directly linked to China’s growing aggression in the Pacific.

Senator McCain also called for the Pentagon to keep China away from this year’s Rim of the Pacific (RIMPAC) exercise in response to a series of reclamation projects that has ignited controversy in the South China Sea.

McCain referred to China’s actions as “a blatant violation of international law” and warned the nation is making a
“serious mistake” that is driving other nations in the region toward alignment with the United States. “Their actions have united the countries in the region in a way that was unheard of a short time ago,” McCain told reporters, echoing comments made earlier in the week by U.S. Secretary of Defense Ash Carter.

U.S. State Department Publishes Proposed Rule Tightening On-Line Publication of Technical Data

The U.S. State Department has issued two statements confirming its intention to act as gatekeeper for when Americans can legally publish online data that could allow someone to digitally fabricate a gun.

The U.S. State Department published a proposed rule change that would require prior approval for the online publication of any ITAR restricted “technical data.” In a separate notice, the U.S. State Department warned the controversial gun access group Defense Distributed that it will require the group to get specific permission from the government before publishing its 3-D printable gun files online.

The agency’s statement warns that publishing those weapon files to the Internet, with its global connections, could amount to violating the International Trade in Arms Regulations (ITAR) by exporting controlled weapons data to a foreign country – hardly different, by its definition, from sending missile schematics to Iran. The Legal Affairs column within this issue contains a deeper discussion of this issue.

U.S. Customs to Assist International Travelers with CBP Form 4457

Hunters travelling internationally from the U.S. typically do not need an export license for their rifles, when certain conditions are met. With the advent of export reform and online management of all transactional paperwork, the U.S State Department is requiring all exporters to file notice of exports on the Automated Export System (AES), an online system used by export professionals to documents outbound international shipments.

Generally speaking, the AES system is not available to individuals outside of the export community. There is little reason for the casual international hunter to become AES trained so that an AES filing may be performed for an once-in-a-lifetime hunt.

In response, U.S. Customs announced that its officers will help travelers with firearms fill out CBP Form 4457 “to ensure that no traveler attempting to legally take their firearm out of the country experiences significant delays.” Form 4457 is a registration of exported goods designed to permit them to be returned to the United States without payment of duties or complying other regulatory requirements.