Sun Microsystems has agreed to pay $291,000 in fines to settle U.S. Commerce Department charges that the server maker violated rules in exporting equipment to China and Egypt. Several of the 24 charges stemmed from exporting without a license a 14-processor E5000 server to a Chinese military customer, the Changsha Institute of Science and Technology, the Commerce Department said in letters to Sun and in a statement Monday. Other charges included exporting a server to a military customer in Egypt without a license; failing to send the government copies of shipping information; altering a document after the Commerce Department issued a subpoena; and exporting computer upgrades to Colombia and Venezuela but not being able to verify the ultimate recipients. Sun agreed to the settlement "without admitting or denying the allegations," the Santa Clara, Calif.-based company said in a statement. In addition, Sun said it has strengthened its monitoring of exports to ensure full compliance with laws. Sun disclosed the export violation charges in September 2002 and said in May 2003 it was in settlement negotiations. Sun headquarters is paying $269,000, while two Hong Kong subsidiaries--Sun Microsystems China and Sun Microsystems California--each paid $11,000. In addition, Sun had its export privileges revoked for a year, but under the settlement terms the revocation is suspended. In addition, Automated Systems--another Hong Kong company that the Commerce Department said was involved in the export to the Changsha Institute of Science and Technology--will pay a $22,000 fine as part of a settlement, the department said.

By Stephen Shankland Staff Writer, CNET News.com

2008-07-01T09:32:38.235-04:00 CBP Posts Statement in Defense of Searches of Laptop Computers and Other Digital Devices In defense of U.S. Customs and Border Protection's (CBP) policy regarding the search of laptop computers and digital devices possessed by travelers returning to the U.S. from abroad, CBP Deputy Commissioner Jayson Ahern posted an article on Leadership Journal, the Department of Homeland Security's blog. The post states that:

Our ability to inspect what is coming into the United States is central to keeping dangerous people and things from entering the country and harming the American people. One of our most important enforcement tools in this regard is our ability to search information contained in electronic devices, including laptops and other digital devices, for violations of U.S. law, including potential threats.

These searches have helped limit the movement of terrorists, individuals who support their activities, and other threats to national security. During border inspections of laptops, CBP officers have found violent jihadist material, information about cyanide and nuclear material, video clips of Improvised Explosive Devices (IEDs), pictures of high-level Al-Qaeda officials, and other material associated with people seeking to do harm to our country.

The article also notes that:

It is not our intent to subject legitimate travelers to undue scrutiny, but to ensure the safety of the American public. In conducting these searches, we are fully dedicated to protecting the civil rights of all travelers. Similar to our efforts with respect to vehicles, suitcases, backpacks, hard-copy documents, and conveyances, our examinations of laptops and other digital devices are consistent with longstanding constitutional authorities at the border and have been affirmed by federal courts throughout the country, including most recently the U.S. Court of Appeals for the Ninth Circuit.

Moreover, CBP officers adhere to strict constitutional and statutory requirements, including the Trade Secrets Act, which explicitly forbids federal employees from disclosing, without lawful authority, business confidential information they may access as part of their official duties. We also protect information that may be uncovered during examination as well as private information that is not in violation of any law.

We have a responsibility to ensure that any item brought into the country complies with the law and is not a threat to the American public. To treat our inspections of digital media at the border differently from any other documents or conveyances would give terrorists and criminals an advantage they should not have and that our nation cannot afford.

Last week, the Senate Judiciary Committee's Subcommittee on the Constitution, Civil Rights and Property Rights held a hearing earlier on "Laptop Searches and Other Violations of Privacy Faced by Americans Returning from Overseas Travel." At the hearing, subcommittee chairman Russell Feingold (D-WI) expressed concern that the Department of Homeland Security did not send a witness to testify and criticized the written statement that CBP provided to the Subcommittee.

Douglas N. Jacobson

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Mandatory AES Rule Effective Today This is a reminder that today is the effective date of the the final rule issued by the Census Bureau on June 2, 2008 requiring that all Electronic Export Information (formerly known as Shipper's Export Declarations or SEDs) be filed via the Automated Export System (AES) prior to the departure of the cargo from the U.S.

The Census Bureau has adopted a 120 day implementation period. During the 120-day implementation phase, the Census Bureau will use “informed compliance” to reach out to filers identified as violating provisions of the AES rule. Parties submitting paper SEDs after September 30, 2008 will be considered to be in violation of the Foreign Trade Regulations and can be subject to monetary penalties.

The new AES filing deadlines for non-USML shipments set forth in the final rule are:

Sea: 24 hours prior to departure
Truck: 1 hour prior to truck arriving at U.S. border
Air: 2 hours prior to scheduled departure time
Rail: 2 hours prior to train arriving at U.S. border
Mail: 2 hours prior to export

Pursuant to section 123.22(b) of the ITAR, the AES filing deadlines for USML shipments remain as follows:

Air: 8 hours prior to scheduled departure time
Truck: 8 hours prior to truck arriving at U.S. border
Rail: 24 hours prior to train arriving at U.S. border
Sea: 24 hours prior to departure

In addition, for those using AESDirect to file EEI should be aware that starting on October 1, 2008 AESDirect will have heightened security measures and user authentication practices. These changes include:

- Individual User Account Administration
- Stronger Password Requirements
- Shorter Password Expiration Time frames
- Automatic Inactive Account Deactivation
- Session Timeout/Concurrent Login Limit
- Account Lockout after 3 Unsuccessful Logins
- New Account Administration Functions

Douglas N. Jacobson

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