Scopelitis International News - July 2019
July 30, 2019
Scopelitis International News - July 2019
Scopelitis has a long history of assisting transportation and logistics clients in an array of matters including international trade compliance, U.S. licensing, air cargo security, legal due diligence, international commercial transactions, and freight charge and cargo disputes. Members of the Firm’s international practice group have experience handling transactions involving more than 100 countries and have the ability to call upon nearly 300 legal and accounting firms around the world.
For more information on the latest in international transportation law, contact a member of Scopelitis’ International Transportation & Logistics Law team.
TSA’s Forthcoming Action Plan Program: How Will it Impact Enforcement?
The U.S. Transportation Security Administration (TSA) announced a new enforcement policy known as the “Action Plan Program.” Effective August 26, 2019, this new policy offers regulated parties subject to TSA’s jurisdiction the possibility of avoiding enforcement action (i.e., civil penalties) if they can reach an agreement on corrective actions to address the root cause of any security vulnerability or noncompliance with TSA’s security requirements. If so, the business may be able to resolve that vulnerability or noncompliance with administrative action instead of a civil enforcement action.
The Action Plan Program, which takes the place of other TSA programs such as the Voluntary Disclosure Program, offers regulated parties a strong incentive to cooperate with TSA’s efforts to bolster air cargo security, with the added motivation of avoiding possible liability for civil penalties.
Businesses subject to TSA’s jurisdiction should become familiar with the Action Plan Program. Contact Scopelitis with questions on this new policy and its potential impact on air-cargo compliance programs.
USMCA – Canada/US Ratification Still Needed
On June 19, 2019, Mexico became the first country to ratify the United States-Mexico-Canada Agreement (USMCA), which was signed by the United States, Canada, and Mexico in November 2018, and is the intended successor to the North American Free Trade Agreement (NAFTA). The Agreement will not become effective until the legislatures of Canada and the United States ratify it.
Although USMCA offers substantial benefits to Canada, particularly for its dairy industry, the Canadian legislature appears to be approaching ratification somewhat cautiously. Presumably, this is because they want to gauge the likelihood that the U.S. administration will be able to push ratification through this year and to allow time to evaluate any changes proposed during U.S. ratification discussions. The Canadian Parliament is in recess until September, so it seems unlikely that anything will happen before then.
In the U.S., the ratification of the USMCA is subject to considerable political pressures. The President regards the USMCA as a major trade accomplishment and wants approval before the 2020 election threatens to jam legislative action indefinitely. However, some legislators think that changes - particularly in the areas of enforcement, labor standards, and pharmaceuticals - are needed before considering ratification. If the U.S. does propose formal changes to the USMCA, delays would seem inevitable. Failure to fully ratify the USMCA in 2019 could mean an extended delay in effectiveness.
Brexit – The Uncertainty Continues
We know that the UK is currently scheduled to leave the EU on or before October 31, 2019, with or without an exit deal. There is, however, considerable support among UK citizens and lawmakers for requesting another delay in the exit date. That delay could allow the negotiation of an exit deal or even another referendum on Brexit itself. Newly elected UK Prime Minister Boris Johnson strongly favors exiting the EU by October 31st, deal or no deal. Johnson has even suggested he might suspend Parliament to avoid delay pressure by using a tactic called “proroguing” which procedurally would drag the Queen herself into the Brexit debate. Anticipating such a move, Parliament recently moved to block Mr. Johnson even before he took office by enacting a measure which would recall a suspended Parliament for a five-day period to allow time for debate on an exit delay.
Does this mean that it would be impossible for Mr. Johnson to force a no-deal exit in October? Not necessarily, but it will be more difficult. One thing is certain - if you are part of a supply chain that includes UK participants, contingency planning is long overdue.
Have You Scheduled Your Annual Compliance Check-Up?
Both the U.S. Department of Justice and the U.S. Treasury Department’s Office of Foreign Assets Control have recently issued guidance as to the factors they consider when evaluating corporate compliance programs. Both agencies stressed that the performance of continuous audits and updating of compliance programs is a key factor in determining whether a company is entitled to any leniency in the event of a violation. More importantly, an objective third party spot review of compliance data often yields clues that routine or infrequent tests don’t reveal. That information can enable management to head off a potential violation, or take advantage of the substantial benefits available through early reporting.
The Scopelitis International Transportation & Logistics Law team is uniquely qualified to conduct efficient, interim check-ups on a wide variety of international regulatory compliance programs that apply to transportation and logistics activities, including those addressing FCPA, TSA, OFAC, ITAR, FMC, Anti-boycott, BIS/EAR and Census compliance.
News from Scopelitis is intended as a report 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.
© Scopelitis, Garvin, Light, Hanson & Feary, P.C. 2019. All rights reserved.
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