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Scopelitis International News - December 2018

by Braden K. Core, Jacob R. Fisher, John  N. Hove, Nathaniel G. Saylor

Dec 18, 2018


Scopelitis International eNews – December 2018

CANINE CARGO SCREENING. U.S. law requires that all cargo transported on passenger aircraft into or out of the U.S. must be screened using methods commensurate to those used to screen passengers. To help meet that mandate, many forwarders and cargo-handling companies, as well as air carriers, have been authorized to screen cargo pursuant to the Transportation Security Administration’s Certified Cargo Screening Program. On November 27, 2018, TSA announced that it would begin accepting applications for businesses to become registered as private third-party canine screening providers under TSA’s Third-Party Canine-Cargo (“3PK9-C”) program. While TSA has itself operated canine screening teams for some time, the deployment of third-party private canine screening teams is a new and welcome development for companies that screen cargo. Authorized cargo screening companies will soon be able to utilize this new “technology” to screen cargo, which may improve cargo throughput and efficiency (depending on the type and -volumes of air cargo handled) while bolstering air-cargo security. Many cargo-screening companies are actively exploring this new method of screening cargo for transportation by air.

FREIGHT FORWARDER CONTRACT ISSUES. In our last newsletter, we began a series on freight forwarder agreements with a caution about how various governing laws can dramatically change interpretation of the agreement. This month, we’re addressing the settlement of disputes. Under the often used “mutual agency agreement”, third-party agents provide needed services which are similar to those offered by the U.S. forwarder – customs clearance and final mile delivery for inbound shipments, or pickup and export formalities for outbound shipments. Often these agreements are incomplete or ambiguous on key terms and portrayed as non-negotiable. However, a provision that should always be checked and negotiated if necessary is dispute resolution. The place where disputes will be heard and disposed of (sometimes called “venue”) is critical. If the agreement names a location that is impractical geographically or that offers unreliable arbitration or litigation options, then the agreement may be effectively unenforceable. Selecting a venue location that is reasonably accessible to both parties and has a well-established legal system is essential for an agreement that is intended to reflect mutual cooperation. If a U.S. venue is not acceptable to the non-U.S. party, the U.S. forwarder should insist on a neutral, well-regarded dispute resolution location to ensure fair access to contractual remedies. There are several factors to consider when selecting a dispute settlement venue but for illustration purposes, frequently chosen alternative venues include London, Singapore, Paris, Dubai and Hong Kong.

NEW GDPR GUIDELINES. On November 23, 2018, the European Data Protection Board (“EDPB”) issued new draft Guidelines clarifying the territorial scope of the EU’s General Data Protection Regulation (“GDPR”). Among the clarifications provided, the following three may be of particular interest to U.S.-based transportation and logistics businesses: (1) A data controller outside the EU won’t be subject to the GDPR just because its website can be accessed in the EU. However, if that data controller has a permanent employee or agent in the EU that manages significant business activities, then GDPR compliance may be required. (2) Providing goods and services from outside the EU to individuals who happen to be in the EU won’t necessarily mean the GDPR applies. Generally, goods or services must be intentionally directed or targeted toward individuals in the EU in order for the GDPR to apply. (3) When a data controller subject to the GDPR uses a non-EU processor that is not otherwise subject to the GDPR, that relationship will not automatically make the data processor directly subject to the GDPR. However, the data controller will have to contractually require the data processor to comply with certain aspects of the GDPR. The draft Guidelines are available on the EDPB website at:

FCPA M&A DILIGENCE GUIDANCE. In a speech given on July 25, 2018, U.S. Department of Justice (“DOJ”) Deputy Assistant Attorney General Matthew S. Miner confirmed on behalf of the DOJ that companies that discover potential Foreign Corrupt Practice Act (“FCPA”) violations in connection with a merger or acquisition and self-disclose those violations to the DOJ will be entitled to the benefits of the DOJ’s FCPA Corporate Enforcement Policy (the “Policy”). That means there will be a strong presumption that the DOJ will decline to prosecute the company for the reported FCPA violations provided the company cooperates with any subsequent investigation and takes appropriate remediation steps. The company will still be responsible for paying any applicable disgorgement, forfeiture, and restitution amounts. Previously, DOJ guidance indicated that in such situations the DOJ “may” decline to bring enforcement actions. Miner indicated that the purpose of the announcement was to provide companies a greater level of certainty in deciding whether or not to proceed with a merger or acquisition and in deciding how to address any potential FCPA violations identified during the course of due diligence activities.

For more information on the latest in international transportation law, contact a member of Scopelitis’ International Transportation & Logistics Law team - Nathaniel Saylor, Braden Core, John Hove, or Jake Fisher, or your Scopelitis contact.



Scopelitis practice area newsletters are intended as reports to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.

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