CHS Inc. SEC filing discloses FCPA violations.

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Tell me more about the CHS FCPA violation:
In an August 31, 2018 Form 10-K filing with the United States Securities and Exchange Commission (SEC), CHS Inc. disclosed FCPA violations related to:

“a small number of reimbursements the Company made to Mexican customs agents in the 2014-2015 time period for payments the customs agents made to Mexican customs officials in connection with inspections of grain crossing the U.S.-Mexican border by railcar. We are fully cooperating with the government, including with the assistance of legal counsel, which assistance includes investigating other areas of potential interest to the government. We are unable at this time to predict when our or the government agencies’ review of these matters will be completed or what regulatory or other outcomes may result.”

The full 10-K filing can be found here (link opens in a new window).

Who is CHS?
CHS is a Fortune 100 business based in Minnesota and operates food processing and wholesale, farm supply, Cenex brand fuel, financial services, and retail businesses. CHS employs 12,000 people and are also large operators in grain, soybean and sunflower production and transport.

What is the FCPA?
In short – the Foreign Corrupt Practices Act of 1977 was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Payments, promises to pay or even authorization for payment is a violation and the definition of a foreign official is also very broad.

What does the FCPA have to do with importers and exporters?
Everything! The FCPA applies to all U.S. persons and many of our clients have FCPA risks without even knowing they do. FCPA violations and penalties are severe and individuals have also been found to be personally liable for violations that were committed by the company. The CHS FCPA violations highlight just some of the risks US based exporters face when doing business (exporting) overseas.

FCPA consultation and audit at no obligation or cost to you.
If you don’t have a FCPA compliance program in place or have not updated your compliance program – call experienced trade and compliance attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

The FCPA penalties and compliance risk to you and your company is high, call David Hsu today.

 

 

“Never Trump” letter denies Covington Partner of ZTE Monitorship

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As reported by the National Law Journal – Peter Lichtenbaum, co-chair of Covington & Burling’s international trade and finance practice was originally set to become the compliance monitor overseeing the US settlement with ZTE Corporation. However, federal officials rescinded the offer arter learning Mr. Lichtenbaum signed a “Never Trump” letter prior to the 2016 presidential election.

Instead, Roscoe Howard, former U.S. attorney in Washington and now a white-collar defense partner at Barnes & Thornburg will be compliance monitor.

As part of ZTE’s settlement with the US government, ZTE is required to retain a team of compliance coordinators monitored by the Department of Commerce’s Bureau of Industry and Security for a period of 10 years.

How you can protect your company in light of the new China tariffs.

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Since “List 1” of the tariffs on Chinese goods became effective on July 6th, we’ve had many calls from importers, forwarders and brokers on the best practices moving forward. Here’s a quick summary of what any importer should do regarding their imports of Chinese goods –

  1. Apply for a company-specific exclusion from the tariffs. The U.S. Department of Commerce (Commerce) has published procedures for doing so on their website. The current approved exclusions are from steel tariffs with more exclusions to follow as Lists 2 and 3 take effect likely later this year.
  2. Review your classifications of imported merchandise. There may be more appropriate HTSUS numbers that your merchandise can be entered under and not subject to duties.
  3. Companies can also use the rules of origin to see if imported merchandise can be from another country other than China. This could result from moving the manufacture location, or moving the location of the “substantial transformation” of those goods.
  4. Adjust the valuation of the merchandise. See if the imported goods are properly valued.
  5. If merchandise is imported to the US for export out of the US, be sure property TIB, IT, T&E bonds are filed.
  6. No one likes surprises – it is best for importers, compliance, supply chain, sales and accounting to notify company management of potential tariff changes and the economic impact these new tariffs will have on profit and costs.

If you have any questions or want to know how your company can protect itself from these new duties, contact experienced trade attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.