Proposed Legislation for Money Laundering Regulations on Art and Antiquity Dealers - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
James McAndrew to attend a meeting with the House Financial Services Committee, on behalf of his client base, to discuss their proposed legislation to add dealers in art and antiquity to the list of regulated financial institutions under the Bank Secrecy Act (1991). Such legislation would subject the art trade to enormous regulatory and reporting requirements that, if not done in accordance with financial industry standards, could result in significant fines ,penalties, and even criminal liability.
The House Financial Institutions and Consumer Credit Subcommittee held a hearing on April 27, 2018 to review the implementation of the Financial Criminal Enforcement Network’s (FinCEN) Customer Due Diligence (CDD) Rule from the point of view of financial institutions. A few weeks prior to this hearing, in a closed door session, prosecutors from the U.S. Department of Justice and the New York District Attorney’s Office gave testimony leading the Committee to believe that the art and antiquity trade is opaque thus requiring strict regulation and compliance for anti-money laundering and counter-terrorist financing (AML/CFT). Such AML/CFT compliance regulations are associated with financial institutions, not business or industry sectors. Legislation to impose AML/CFT regulations and reporting requirements on the art trade can have a significant detrimental effect. The only non-financial industry that FinCEN imposed AML/CFT compliance requirements in 2005 was dealers in jewelry, precious stones, and metals.
James McAndrew has extensive knowledge in AML/CFT compliance regulations. During his time as a Senior Special Agent with the U.S. Department of Homeland Security and legacy U.S. Customs Service’s Office of Investigations, he was assigned to Operation Eldorado for more than a decade, their money laundering division, and successfully concluded civil and criminal investigations for money laundering and terrorist financing, asset forfeiture, and for violations of the Bank Secrecy Act, The USA Patriots Act, and other related laws and regulations.
UPDATE: Additional Duty on Imports of Steel and Aluminum Articles under Section 232 - U.S. Customs & Border Protection
UPDATE: Additional Duty on Imports of Steel and Aluminum Articles under Section 232 of the Trade Expansion Act of 1962
REVISED VERSION WITH NEW FILING REQUIREMENTS FOR IMPORTS OF ALUMINUM AND STEEL FROM SOUTH KOREA
On March 8, 2018, the President issued Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum into the United States, under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862), providing for additional import duties for steel mill and aluminum articles, effective March 23, 2018. See the Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018. On March 22, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States. See the Federal Register, 83 FR 13355 and 83 FR 13361, March 28, 2018. On April 30, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States.
These duty requirements are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018.
COMMODITY: Steel mill and aluminum articles, as specified in the Presidential Proclamations.
COUNTRIES COVERED BY SECTION 232 IMPORT DUTIES: Please note that the Section 232 measures are based on the country of origin, not the country of export.
Steel: May 1, 2018 through May 31, 2018: All countries of origin except Canada, Mexico, Australia, Argentina, South Korea, Brazil and member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).
As of June 1, 2018: All countries of origin except Argentina, Australia, Brazil, and South Korea.
Quota for Steel Imports from South Korea: A separate CSMS will be issued with details on the quota on steel imports from South Korea.
Aluminum: May 1, 2018 through May 31, 2018: All countries of origin except Canada, Mexico, Argentina, Australia, Brazil and member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).
As of June 1, 2018: All countries of origin except Argentina, Australia, and Brazil.
Note: As of May 1, 2018, aluminum articles from South Korea are subject to the Section 232 import duties. Importers may receive a quota hold message for imports of such articles; however, a quota is not in effect for imports of aluminum from South Korea.
For both steel and aluminum, imports of United States origin are not covered by the Section 232 measures.
FILING INSTRUCTIONS: SPECIAL INSTRUCTIONS FOR IMPORTS OF ALUMINUM AND STEEL FROM SOUTH KOREA:
As noted above, only imports of steel from South Korea are subject to an absolute quota. However, until further notice, for all imports of aluminum and steel articles from South Korea, importers should submit a quota entry type code (entry types 02, 06, 07, 23, 32, or 38).
For imports of aluminum and steel articles from all other countries, continue to use non-quota entry type codes.
Steel Products: In addition to reporting the regular Chapters 72 & 73 of the Harmonized Tariff Schedule (HTS) classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty: 9903.80.01 (25 percent ad valorem additional duty for steel mill products)
Aluminum Products: In addition to reporting the regular Chapter 76 of the HTS classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty: 9903.85.01 (10 percent ad valorem additional duty for aluminum products)
Generalized System of Preferences (GSP) and African Growth and Opportunity Act (AGOA): GSP and AGOA-eligible goods that are subject to Section 232 duties may not receive GSP or AGOA duty preference in accordance with 19 USC 2463(b)(2).
On imports subject to Section 232 duties, in addition to the Section 232 duties, importers should pay the normal trade relations (column 1) duty rates and not submit the GSP Special Program Indicator (SPI) “A” or the AGOA SPI “D”
Although Brazil and Argentina are GSP countries, they are exempt from Section 232 per the Harmonized Tariff Schedule of the United States (HTSUS) Chapter 99, Subchapter III, U.S. Notes 16(a) and 19(a); therefore they may claim GSP.
Other Trade Preference Programs and Free Trade Agreements: Trade preference may be claimed for all preference programs with the exception of GSP and AGOA, as stated above. Importers making a trade preference claim under a program other than GSP or AGOA may continue to receive the preferential duty rate and any MPF exemption that may apply in accordance with 19 CFR 24.23(c). Section 232 duties must be paid on imports subject to Section 232 even if trade preferences apply.
Chapter 98: Imports subject to Section 232 duties imported under subheading 9802.00.60 shall be assessed Section 232 duties based upon the full value of the imported article.
Foreign Trade Zones: Any steel or aluminum article, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, subject to the Section 232 duties, that is admitted into U.S. foreign trade zones on or after 12:01 a.m. eastern daylight time on March 23, 2018, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading.
Any steel or aluminum article, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, subject to the 232 duties, that was admitted into U.S. foreign trade zones under "privileged foreign status" as defined in 19 CFR 146.41, prior to 12:01 a.m. eastern daylight time on March 23, 2018, will likewise be subject upon entry for consumption to any ad valorem rates of duty related to the classification under applicable HTSUS subheadings imposed by the Proclamations.
Aluminum or steel articles shall not be subject upon entry for consumption to Section 232 duties, merely by reason of manufacture in a U.S. foreign trade zone. However, articles admitted to a U.S. foreign trade zone in “privileged foreign status,” shall retain that status consistent with 19 CFR 146.41(e).
The merchandise covered by the additional duties and quota may also be subject to antidumping and countervailing duties.
Drawback: No drawback shall be available with respect to the Section 232 duties imposed on any aluminum or steel article.
FOR FURTHER INFORMATION: For more information, please refer to the Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States, Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018; the March 22, 2018 Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States. 83 FR 13355 and 83 FR 13361, March 28, 2018; and the April 30, 2018 Proclamations on Adjusting Imports of Steel and Aluminum into the United States.
Partial Ukraine-GSP Suspension Effective April 26, 2018
- U.S. Customs & Border Protection
In accordance with Presidential Proclamation 9687 of December 22, 2017 (Federal Register/Vol. 82, No. 247/Wednesday, December 27, 2017), articles of Ukraine listed in Annex III and entered or withdrawn from warehouse on or after April 26, 2018 have had their GSP eligibility suspended, and should not be entered with the benefit of the Generalized System of Preferences (GSP) benefits.
The complete Federal Register Notice, including Annex III, is available at https://www.gpo.gov/fdsys/pkg/FR-2017-12-27/pdf/2017-28144.pdf
ACE programming has been completed.
Questions should be addressed to the Trade Agreements Branch at FTA@dhs.gov
See attachments at:
ITA: OTEXA Announcment
- 04/27/2018 – The Office of the United States Trade Representative (USTR) is announcing the initiation of country practice reviews regarding compliance with the Generalized System of Preferences (GSP) eligibility criteria of India, Indonesia, and Kazakhstan. This notice includes the schedule for submission of public comments and a public hearing. Public comments due June 5, 2018; public hearing on June 19; and post-hearing briefs due July 17, 2018.
Treasury Encourages Taxpayers To Check Withholding Amount -
U.S. Department of Treasury
Washington – As a result of the Tax Cuts and Jobs Act, many Americans will see more money in their paychecks due to changes that include the increase in the standard deduction and lower tax rates and brackets. Treasury wants to encourage all taxpayers to check their paycheck withholdings to ensure they have the correct amount withheld for their personal tax profile.
We urge taxpayers to visit the IRS Withholding Calculator at IRS.gov/withholding to determine how many withholding allowances to claim. If the calculator results suggest a change in withholding, a taxpayer should complete a new W-4 form, downloadable from the IRS website, and submit it to his or her employer.
“This is a pivotal and exciting time for American workers,” said Treasury Secretary Steven Mnuchin. “The ‘paycheck checkup’ will allow employees to keep more of their hard earned money, which is why we passed the Tax Cuts and Jobs Act.”
Altaba, Formerly Known as Yahoo!, Charged With Failing to Disclose Massive Cybersecurity Breach; Agrees To Pay $35 Million - U.S. Security & Exchange Commission
The Securities and Exchange Commission today announced that the entity formerly known as Yahoo! Inc. has agreed to pay a $35 million penalty to settle charges that it misled investors by failing to disclose one of the world’s largest data breaches in which hackers stole personal data relating to hundreds of millions of user accounts.
According to the SEC’s order, within days of the December 2014 intrusion, Yahoo’s information security team learned that Russian hackers had stolen what the security team referred to internally as the company’s “crown jewels”: usernames, email addresses, phone numbers, birthdates, encrypted passwords, and security questions and answers for hundreds of millions of user accounts. Although information relating to the breach was reported to members of Yahoo’s senior management and legal department, Yahoo failed to properly investigate the circumstances of the breach and to adequately consider whether the breach needed to be disclosed to investors. The fact of the breach was not disclosed to the investing public until more than two years later, when in 2016 Yahoo was in the process of closing the acquisition of its operating business by Verizon Communications, Inc.
“We do not second-guess good faith exercises of judgment about cyber-incident disclosure. But we have also cautioned that a company’s response to such an event could be so lacking that an enforcement action would be warranted. This is clearly such a case,” said Steven Peikin, Co-Director of the SEC Enforcement Division.
Jina Choi, Director of the SEC's San Francisco Regional Office, added, “Yahoo’s failure to have controls and procedures in place to assess its cyber-disclosure obligations ended up leaving its investors totally in the dark about a massive data breach. Public companies should have controls and procedures in place to properly evaluate cyber incidents and disclose material information to investors.”
The SEC’s order finds that when Yahoo filed several quarterly and annual reports during the two-year period following the breach, the company failed to disclose the breach or its potential business impact and legal implications. Instead, the company’s SEC filings stated that it faced only the risk of, and negative effects that might flow from, data breaches. In addition, the SEC’s order found that Yahoo did not share information regarding the breach with its auditors or outside counsel in order to assess the company’s disclosure obligations in its public filings. Finally, the SEC’s order finds that Yahoo failed to maintain disclosure controls and procedures designed to ensure that reports from Yahoo’s information security team concerning cyber breaches, or the risk of such breaches, were properly and timely assessed for potential disclosure.
Verizon acquired Yahoo’s operating business in June 2017. Yahoo has since changed its name to Altaba Inc.
Yahoo neither admitted nor denied the findings in the SEC's order, which requires the company to cease and desist from further violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and Section 13(a) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-11, 13a-13, and 13a-15.
The SEC’s investigation, which is continuing, has been conducted by Tracy S. Combs of the Cyber Unit and supervised by Jennifer J. Lee and Erin E. Schneider of the San Francisco office.
Earlier this year, the SEC adopted a statement and interpretive guidance to assist public companies in preparing disclosures about cybersecurity risks and incidents