Friday, November 30, 2012
U.S. DOD NOTIFIES SOUTH CAROLINA TROOPS OF POSSIBLE IDENTITY THEFT
FROM: U.S. DEPARTMENT OF DEFENSE
DOD Notifies Troops of South Carolina Cyber Intrusions
By Nick Simeone
American Forces Press Service
ASHINGTON, Nov. 28, 2012 - The Defense Department and South Carolina officials are notifying military members and families who paid state income taxes there that they may have been victims of information/identity theft as a result of several recent cyber intrusions.
South Carolina's Department of Revenue reported nearly four million Social Security numbers and several hundred thousand credit and debit card numbers belonging to current and former taxpayers may have been stolen during cyber intrusions in August and September.
While the vast majority of the personal data is believed to have been protected by encryption, state revenue officials said about 16,000 accounts were not, and that anyone who filed a South Carolina income tax return as far back as 1998 could be affected.
The intrusions were discovered last month, officials said. While South Carolina officials believe their system is now secure, Gov. Nikki Haley said the state is offering one year of free credit monitoring and identity protection to anyone who might have been exposed and applies for it. "The number of records breached requires an unprecedented, large-scale response," she said.
In addition to Social Security numbers and credit card information, defense officials said information usually found on the front of checks may also have been exposed.
DOD personnel and their family members who are current or former South Carolina taxpayers, especially those who are living abroad, are urged to visit www.ProtectMyId.com/SCDOR or contact Experian's national consumer assistance center at 1-866-578-5422 by January 31, 2013, to enroll in identity threat protection.
DOD Notifies Troops of South Carolina Cyber Intrusions
By Nick Simeone
American Forces Press Service
ASHINGTON, Nov. 28, 2012 - The Defense Department and South Carolina officials are notifying military members and families who paid state income taxes there that they may have been victims of information/identity theft as a result of several recent cyber intrusions.
South Carolina's Department of Revenue reported nearly four million Social Security numbers and several hundred thousand credit and debit card numbers belonging to current and former taxpayers may have been stolen during cyber intrusions in August and September.
While the vast majority of the personal data is believed to have been protected by encryption, state revenue officials said about 16,000 accounts were not, and that anyone who filed a South Carolina income tax return as far back as 1998 could be affected.
The intrusions were discovered last month, officials said. While South Carolina officials believe their system is now secure, Gov. Nikki Haley said the state is offering one year of free credit monitoring and identity protection to anyone who might have been exposed and applies for it. "The number of records breached requires an unprecedented, large-scale response," she said.
In addition to Social Security numbers and credit card information, defense officials said information usually found on the front of checks may also have been exposed.
DOD personnel and their family members who are current or former South Carolina taxpayers, especially those who are living abroad, are urged to visit www.ProtectMyId.com/SCDOR or contact Experian's national consumer assistance center at 1-866-578-5422 by January 31, 2013, to enroll in identity threat protection.
Thursday, November 29, 2012
U.S. DEPARTMENT OF LABOR SUES ANIMAL HIDE COMPANY FOR VIOLATIONS OF FAIR LABOR STANDARDS ACT
FROM: U.S. DEPARTMENT OF LABOR
US Labor Department sues Boston Hides & Furs Ltd., seeking at least $1 million in back wages and damages for underpaid, wrongfully fired workers
Chelsea, Mass., business also assessed $100,000 penalty for willful labor violations
BOSTON — Citing "knowing, deliberate and intentional" violations of federal wage and hour law, the U.S. Department of Labor has filed a lawsuit against Boston Hides & Furs Ltd. and company officials seeking at least $500,000 in back wages and an equal amount in liquidated damages for underpaid employees of the Chelsea wholesale animal hide business.
The department filed the lawsuit in federal court following an investigation by its Wage and Hour Division that found the employer committed willful and repeated violations of the minimum wage, overtime and record-keeping provisions of the federal Fair Labor Standards Act, including offering for shipment or sale "hot goods" produced in violation of the law during a period spanning at least three years. The suit also asserts that the company unlawfully retaliated against several workers by firing them after they cooperated with the federal investigation.
"The violations uncovered by this investigation reveal a disturbing disregard for the law," said Secretary of Labor Hilda L. Solis. "Such unacceptable behavior not only harms the workers involved, it also undercuts employers who obey the law."
The investigation found that 14 Boston Hides & Furs employees worked approximately 10 hours per day, six days per week processing hides and furs for shipping to tanneries. These workers were paid a daily cash wage of $50 to $70, which amounted to an hourly pay rate far below the federal minimum wage of $7.25 per hour. The employees also were not paid time and one-half the required state minimum wage of $8 applicable for those hours worked above 40 in a week. Additionally, the defendants failed to keep adequate records of the workers' employment, work hours and pay rates, and a representative of the defendants falsely told investigators that the company's payroll records included all employees.
Further, the defendants ordered employees to hide in a nearby house when Wage and Hour Division investigators first arrived at Boston Hides & Furs so they could not be interviewed. Investigators subsequently interviewed the workers. Two days later, the defendants fired the workers. During their employment, the workers were threatened and subjected to verbally abusive treatment on an ongoing basis, particularly when they asked about their pay rates.
"If you work, you are entitled to be paid the wages you earn — at a rate no less than the applicable minimum wage, with proper overtime pay — and to seek those wages without fear of retaliation or termination. It's that simple and it's the law," said Michael Felsen, the Labor Department's regional solicitor for New England. "If you're an employer, understand that if you cheat your workers on their pay, the U.S. Department of Labor will seek not only the withheld wages but an equal amount in liquidated damages for those workers. And if you fire your workers or otherwise retaliate against them because they cooperated with a Labor Department investigation, we will seek appropriate redress for that violation too."
In addition to back wages and liquidated damages, the department's suit seeks to permanently prohibit the defendants from future FLSA violations — including a prohibition against shipping any goods handled by workers who were paid in violation of the law — and compensatory and punitive damages for the workers on account of their unlawful firing. The Wage and Hour Division also has assessed $100,000 in civil money penalties against Boston Hides & Furs Ltd. for willful violations of the FLSA.
The suit has been filed in the U.S. District Court for the District of Massachusetts by the Labor Department's Regional Office of the Solicitor in Boston. The original investigation was conducted by the Wage and Hour Division's Boston District Office.
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour as well as time and one-half their regular rates for every hour they work beyond 40 per week. When the state minimum wage is higher than the federally mandated wage, and employees work more than 40 hours in a week, employees paid at the minimum permissible level are entitled to overtime compensation based on the higher state minimum wage.
The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for back wages and an equal amount in liquidated damages.
US Labor Department sues Boston Hides & Furs Ltd., seeking at least $1 million in back wages and damages for underpaid, wrongfully fired workers
Chelsea, Mass., business also assessed $100,000 penalty for willful labor violations
BOSTON — Citing "knowing, deliberate and intentional" violations of federal wage and hour law, the U.S. Department of Labor has filed a lawsuit against Boston Hides & Furs Ltd. and company officials seeking at least $500,000 in back wages and an equal amount in liquidated damages for underpaid employees of the Chelsea wholesale animal hide business.
The department filed the lawsuit in federal court following an investigation by its Wage and Hour Division that found the employer committed willful and repeated violations of the minimum wage, overtime and record-keeping provisions of the federal Fair Labor Standards Act, including offering for shipment or sale "hot goods" produced in violation of the law during a period spanning at least three years. The suit also asserts that the company unlawfully retaliated against several workers by firing them after they cooperated with the federal investigation.
"The violations uncovered by this investigation reveal a disturbing disregard for the law," said Secretary of Labor Hilda L. Solis. "Such unacceptable behavior not only harms the workers involved, it also undercuts employers who obey the law."
The investigation found that 14 Boston Hides & Furs employees worked approximately 10 hours per day, six days per week processing hides and furs for shipping to tanneries. These workers were paid a daily cash wage of $50 to $70, which amounted to an hourly pay rate far below the federal minimum wage of $7.25 per hour. The employees also were not paid time and one-half the required state minimum wage of $8 applicable for those hours worked above 40 in a week. Additionally, the defendants failed to keep adequate records of the workers' employment, work hours and pay rates, and a representative of the defendants falsely told investigators that the company's payroll records included all employees.
Further, the defendants ordered employees to hide in a nearby house when Wage and Hour Division investigators first arrived at Boston Hides & Furs so they could not be interviewed. Investigators subsequently interviewed the workers. Two days later, the defendants fired the workers. During their employment, the workers were threatened and subjected to verbally abusive treatment on an ongoing basis, particularly when they asked about their pay rates.
"If you work, you are entitled to be paid the wages you earn — at a rate no less than the applicable minimum wage, with proper overtime pay — and to seek those wages without fear of retaliation or termination. It's that simple and it's the law," said Michael Felsen, the Labor Department's regional solicitor for New England. "If you're an employer, understand that if you cheat your workers on their pay, the U.S. Department of Labor will seek not only the withheld wages but an equal amount in liquidated damages for those workers. And if you fire your workers or otherwise retaliate against them because they cooperated with a Labor Department investigation, we will seek appropriate redress for that violation too."
In addition to back wages and liquidated damages, the department's suit seeks to permanently prohibit the defendants from future FLSA violations — including a prohibition against shipping any goods handled by workers who were paid in violation of the law — and compensatory and punitive damages for the workers on account of their unlawful firing. The Wage and Hour Division also has assessed $100,000 in civil money penalties against Boston Hides & Furs Ltd. for willful violations of the FLSA.
The suit has been filed in the U.S. District Court for the District of Massachusetts by the Labor Department's Regional Office of the Solicitor in Boston. The original investigation was conducted by the Wage and Hour Division's Boston District Office.
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour as well as time and one-half their regular rates for every hour they work beyond 40 per week. When the state minimum wage is higher than the federally mandated wage, and employees work more than 40 hours in a week, employees paid at the minimum permissible level are entitled to overtime compensation based on the higher state minimum wage.
The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for back wages and an equal amount in liquidated damages.
Wednesday, November 28, 2012
TENTH ANNIVERSARY OF HCOC AGAINST BALLISTIC MISSILE PROLIFERATION
FROM: U.S. STATE DEPARTMENT
Tenth anniversary of the Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC)
Media Note
Office of the Spokesperson
Washington, DC
November 26, 2012
On the occasion of the tenth anniversary of the Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC), the United States recognizes the HCOC as an outstanding example of international cooperation and applauds the Code’s ongoing efforts to promote transparency and confidence building measures in the area of ballistic missiles.
Since it was launched on November 25, 2002, subscription to the HCOC has grown to 134 countries, and the Code has contributed significantly to international ballistic missile nonproliferation through its efforts to delegitimize such proliferation. The United States looks forward to continued close cooperation with all HCOC-Subscribing States to promote ballistic missile nonproliferation – and through it, global security – and encourages all countries that have not yet done so to subscribe to the Code.
Tenth anniversary of the Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC)
Media Note
Office of the Spokesperson
Washington, DC
November 26, 2012
On the occasion of the tenth anniversary of the Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC), the United States recognizes the HCOC as an outstanding example of international cooperation and applauds the Code’s ongoing efforts to promote transparency and confidence building measures in the area of ballistic missiles.
Since it was launched on November 25, 2002, subscription to the HCOC has grown to 134 countries, and the Code has contributed significantly to international ballistic missile nonproliferation through its efforts to delegitimize such proliferation. The United States looks forward to continued close cooperation with all HCOC-Subscribing States to promote ballistic missile nonproliferation – and through it, global security – and encourages all countries that have not yet done so to subscribe to the Code.
Tuesday, November 27, 2012
FORMER POLICE OFFICER SENTENCED FOR PROVIDING PROTECTION DURING A COCAINE SALE
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, November 16, 2012
Former Police of Puerto Rico Officer Sentenced to 181 Months in Prison for Providing Armed Security for Drug Transaction
WASHINGTON – A former Police of Puerto Rico officer was sentenced today to 181 months in prison for her role in providing armed security for a drug transaction, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico, and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Field Office.
Yamil Navedo Ramirez, 39, was sentenced today by U.S. District Judge Juan M. Perez-Gimenez in the District of Puerto Rico.
In May 2012, a federal jury in San Juan found Navedo Ramirez guilty of one count of attempting to possess with the intent to distribute more than five kilograms of cocaine and possession of a firearm in furtherance of a drug transaction. The jury acquitted her of one count of conspiracy to possess with the intent to distribute more than five kilograms of cocaine.
According to the evidence presented in court, Navedo Ramirez provided security on April 14, 2010, for what she believed was an illegal cocaine deal. In fact, the purported drug transaction was part of an undercover FBI operation. On that day, Navedo Ramirez provided armed protection for the deal and escorted the buyer in and out of the transaction.
Navedo Ramirez was charged in a superseding indictment unsealed on Oct. 28, 2010, along with 89 law enforcement officers in Puerto Rico and 44 other individuals charged as part of the FBI undercover operation known as Guard Shack.
In return for the security she provided, Navedo Ramirez received a cash payment of $2,000. Judge Perez Gimenez ordered the defendant to forfeit the $2,000 she received in exchange for providing security for the drug transaction.
The case was prosecuted by Trial Attorneys Kevin Driscoll and Monique Abrishami of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Friday, November 16, 2012
Former Police of Puerto Rico Officer Sentenced to 181 Months in Prison for Providing Armed Security for Drug Transaction
WASHINGTON – A former Police of Puerto Rico officer was sentenced today to 181 months in prison for her role in providing armed security for a drug transaction, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico, and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Field Office.
Yamil Navedo Ramirez, 39, was sentenced today by U.S. District Judge Juan M. Perez-Gimenez in the District of Puerto Rico.
In May 2012, a federal jury in San Juan found Navedo Ramirez guilty of one count of attempting to possess with the intent to distribute more than five kilograms of cocaine and possession of a firearm in furtherance of a drug transaction. The jury acquitted her of one count of conspiracy to possess with the intent to distribute more than five kilograms of cocaine.
According to the evidence presented in court, Navedo Ramirez provided security on April 14, 2010, for what she believed was an illegal cocaine deal. In fact, the purported drug transaction was part of an undercover FBI operation. On that day, Navedo Ramirez provided armed protection for the deal and escorted the buyer in and out of the transaction.
Navedo Ramirez was charged in a superseding indictment unsealed on Oct. 28, 2010, along with 89 law enforcement officers in Puerto Rico and 44 other individuals charged as part of the FBI undercover operation known as Guard Shack.
In return for the security she provided, Navedo Ramirez received a cash payment of $2,000. Judge Perez Gimenez ordered the defendant to forfeit the $2,000 she received in exchange for providing security for the drug transaction.
The case was prosecuted by Trial Attorneys Kevin Driscoll and Monique Abrishami of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Monday, November 26, 2012
U.S. JUSTICE DEPARTMENT FILES LAWSUIT AGAINST EBAY INC.
FROM: U.S. DEPARTMENT OF JUSTICE
WASHINGTON — The Department of Justice filed a civil antitrust lawsuit today against eBay Inc., alleging that it violated antitrust laws when it entered into an agreement not to recruit or hire Intuit Inc.’s employees. The department said that the agreement eliminated a significant form of competition to the detriment of affected employees who were likely deprived of access to better job opportunities and salaries.
The department’s Antitrust Division worked closely with the Office of the Attorney General of the State of California, which conducted its own investigation and filed a similar lawsuit today.
The department filed its lawsuit in U.S. District Court in the Northern District of California, in San Jose. The lawsuit seeks to prevent eBay from adhering to or enforcing the agreement and from entering into any similar agreements with any other companies. Intuit is already subject to a settlement prohibiting it from entering into such agreements as part of an earlier case with the department.
The department alleges the agreement, which was enforced at the highest levels of each company, barred either firm from soliciting each other’s employees, and for over a year barred at least eBay from hiring any employees from Intuit at all. In court papers, the department alleges that Meg Whitman, then eBay’s CEO, and Scott Cook, Intuit’s founder and executive committee chair, were intimately involved in forming, monitoring and enforcing the anticompetitive agreement. Cook was serving as a member of eBay’s board of directors at the same time he was making complaints about eBay’s recruiting of Intuit employees.
"eBay’s agreement with Intuit hurt employees by lowering the salaries and benefits they might have received and deprived them of better job opportunities at the other company," said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The Antitrust Division has consistently taken the position that these kinds of agreements are per se unlawful under the antitrust laws."
According to the complaint, beginning no later than 2006, and lasting at least until 2009, eBay and Intuit entered an illegal agreement that restricted their ability to actively recruit employees from the other company, and for some period of time even restricted at least eBay from hiring any employees at Intuit. In 2007, the pact evolved into an agreement that eBay would not recruit Intuit’s employees. eBay’s recruiting personnel were instructed to not pursue potential applications that came from Intuit and to throw away such resumes, the department said.
As stated in the department’s complaint, eBay and Intuit are direct competitors for employees, including specialized computer engineers and scientists covered by the agreements at issue in the case.
The department said it was not necessary to name Intuit in today’s complaint because the company had previously been named in the division’s September 2010 lawsuit and settlement, and the relief the department obtained in the previous settlement is sufficient to prevent Intuit from entering into these types of agreements. In September 2010, the Antitrust Division filed a lawsuit against six high technology companies–Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar–over a series of bilateral agreements not to solicit each other’s employees. All six companies entered into a settlement which prohibited them from entering agreements to refrain from, or pressure others to refrain from, soliciting, recruiting, or otherwise competing for another firm’s employees. The Antitrust Division also filed a lawsuit against Lucasfilm in December 2010 for entering into a similar agreement with Pixar, and Lucasfilm entered into a similar settlement. The eBay case grew out of the same investigation.
eBay is a Delaware corporation with its principal place of business in San Jose. In 2011, eBay had revenues of $11.7 billion.
Intuit is a Delaware corporation with its principal place of business in Mountain View, Calif. In 2011, Intuit had revenues of $3.85 billion.
PUTTING AN END TO HUMAN TRAFFICKING
FROM: U.S. DEPARTMENT OF JUSTICE
The Fight to End Human Trafficking Contineus
November 21st, 2012
Posted by Tracy Russo
Deputy Attorney General James Cole met with Jada Pinkett Smith last week to discuss the department’s extensive efforts to end human trafficking. Ms. Pinkett Smith founded the organization,
Don’t Sell Bodies, to raise awareness about this global epidemic and advocate for victims of trafficking. Ms. Pinkett Smith was joined by former trafficking victims who now work to raise awareness and eliminate human trafficking, including Minh Dang and Withelma "T" Ortiz-Macey, Glamour magazine’s 2011 Woman of the Year.
During the meeting the group discussed remarks made by Deputy Cole before the INTERPOL General Assembly in Italy earlier this month, which largely focused on the department’s myriad of efforts to combat trafficking, including the links between transnational organized crime and human trafficking and the department’s prosecution and training efforts in this area.
Human trafficking cases are prosecuted by several Department of Justice components, including the Civil Rights Division and its specialized Human Trafficking Prosecution Unit, the Criminal Division through the Child Exploitation and Obscenity Section, and individual U.S. Attorney’s Offices. These cases are investigated by the Federal Bureau of Investigation, the Department of Homeland Security’s Immigration and Customs Enforcement/Homeland Security Investigations, and partners at the Departments of Labor and State.
In recent years we have demonstrated unprecedented success in fighting both labor and sex trafficking. We are bringing a record number of federal cases, while at the same time, more states than ever before have passed their own anti-trafficking laws. The department has increased the number of human trafficking prosecutions by more than 30 percent in forced labor and adult sex trafficking cases, while also increasing the number of convictions in Innocence Lost National Initiative cases by 30 percent.
Working with federal, state, local, and international law enforcement agencies, we recently secured the longest sentence ever imposed in a forced labor case. In United States v. Botsvynyuk, the lead defendant was sentenced to life in prison plus twenty years, and his co-conspirator was sentenced to twenty years, for their respective roles in an organized human trafficking scheme that held its victims in forced labor on cleaning crews in and around Philadelphia, Pennsylvania.
Just over a year ago, we initiated a pilot project of multi-agency Anti-Trafficking Coordination Teams (ACTeams) in six judicial districts in the United States. These task forces will prove the value of interagency coordination to address the scourge of human trafficking. In addition to the ACTeams, each U.S. Attorney now participates in some form of anti-trafficking task force.
In addition to our own federal prosecutions, the department’s grant making components are funding state and local law enforcement agencies and victim services organizations to support multidisciplinary, victim-centered task forces dedicated to investigating trafficking crimes and providing culturally-competent assistance to victims.
By taking a multi-disciplinary approach to combating human trafficking and working with our federal, state local and nonprofit partners we can ensure that victims obtain the services that they need and that offenders are prosecuted and sentenced to lengthy jail sentences.
The Fight to End Human Trafficking Contineus
November 21st, 2012
Posted by Tracy Russo
Deputy Attorney General James Cole met with Jada Pinkett Smith last week to discuss the department’s extensive efforts to end human trafficking. Ms. Pinkett Smith founded the organization,
Don’t Sell Bodies, to raise awareness about this global epidemic and advocate for victims of trafficking. Ms. Pinkett Smith was joined by former trafficking victims who now work to raise awareness and eliminate human trafficking, including Minh Dang and Withelma "T" Ortiz-Macey, Glamour magazine’s 2011 Woman of the Year.
During the meeting the group discussed remarks made by Deputy Cole before the INTERPOL General Assembly in Italy earlier this month, which largely focused on the department’s myriad of efforts to combat trafficking, including the links between transnational organized crime and human trafficking and the department’s prosecution and training efforts in this area.
Human trafficking cases are prosecuted by several Department of Justice components, including the Civil Rights Division and its specialized Human Trafficking Prosecution Unit, the Criminal Division through the Child Exploitation and Obscenity Section, and individual U.S. Attorney’s Offices. These cases are investigated by the Federal Bureau of Investigation, the Department of Homeland Security’s Immigration and Customs Enforcement/Homeland Security Investigations, and partners at the Departments of Labor and State.
In recent years we have demonstrated unprecedented success in fighting both labor and sex trafficking. We are bringing a record number of federal cases, while at the same time, more states than ever before have passed their own anti-trafficking laws. The department has increased the number of human trafficking prosecutions by more than 30 percent in forced labor and adult sex trafficking cases, while also increasing the number of convictions in Innocence Lost National Initiative cases by 30 percent.
Working with federal, state, local, and international law enforcement agencies, we recently secured the longest sentence ever imposed in a forced labor case. In United States v. Botsvynyuk, the lead defendant was sentenced to life in prison plus twenty years, and his co-conspirator was sentenced to twenty years, for their respective roles in an organized human trafficking scheme that held its victims in forced labor on cleaning crews in and around Philadelphia, Pennsylvania.
Just over a year ago, we initiated a pilot project of multi-agency Anti-Trafficking Coordination Teams (ACTeams) in six judicial districts in the United States. These task forces will prove the value of interagency coordination to address the scourge of human trafficking. In addition to the ACTeams, each U.S. Attorney now participates in some form of anti-trafficking task force.
In addition to our own federal prosecutions, the department’s grant making components are funding state and local law enforcement agencies and victim services organizations to support multidisciplinary, victim-centered task forces dedicated to investigating trafficking crimes and providing culturally-competent assistance to victims.
By taking a multi-disciplinary approach to combating human trafficking and working with our federal, state local and nonprofit partners we can ensure that victims obtain the services that they need and that offenders are prosecuted and sentenced to lengthy jail sentences.
Sunday, November 25, 2012
SEC BRINGS CHARGES AGAINST OPERATORS OF ALLEGED PRIME BANK SCHEME
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., Nov. 19, 2012 — The Securities and Exchange Commission today charged the operators of a long-running prime bank scheme with defrauding investors who were promised sky-high returns on loans to a secret European trust. It also is seeking an emergency court order to freeze the operators’ assets for the benefit of investors.
The SEC alleges that Billy W. McClintock, who lives in Florida, and Dianne Alexander, a former Georgia resident who now lives in California and also is known as Linda Dianne Alexander, raised $15 million from at least 220 investors in more than 20 states, primarily Georgia. McClintock portrayed himself as the "U.S. Director" of a secret European trust that had the power to create money and claimed to have appointed Alexander as a "U.S. Regional Director" for the trust. McClintock and Alexander led investors to believe that they could receive 38 percent annual interest on loans to the trust, provided they abide by the trust’s strict rules requiring secrecy. However, investor money was instead used to merely pay other investors, the hallmark of a Ponzi scheme.
"McClintock and Alexander pitched an investment opportunity that simply did not exist. They merely reshuffled funds between investors in a modern take on a classic prime bank scheme," said William P. Hicks, Associate Director of Enforcement in the SEC’s Atlanta Regional Office.
According to the SEC’s complaint filed in U.S. District Court for the Northern District of Georgia, McClintock and Alexander began conducting the scheme by at least 2004 and misrepresented or omitted facts about investment risks, expected returns, and how investor funds would be used. The complaint charges McClintock and Alexander with violating the securities registration, broker-dealer registration, and antifraud provisions of the U.S. securities laws and a related SEC anti-fraud rule.
The SEC’s complaint also names as relief defendants two entities that McClintock controls — MSC Holdings USA LLC, and MSC Holdings Inc. — and another entity controlled by Alexander — MSC GA Holdings LLC. The SEC believes the three firms may have received ill-gotten assets from the fraud that should be returned to investors.
Information on how to avoid prime bank frauds is available at: http://www.sec.gov/divisions/enforce/primebank.shtml and
http://investor.gov/investing-basics/avoiding-fraud/types-fraud/prime-bank-investments
The SEC’s investigation, which is continuing, has been conducted by Natalie M. Brunson and Lucy T. Graetz of the SEC's Atlanta Regional Office under the supervision of Aaron W. Lipson. Senior Trial Counsel Pat Huddleston II will lead the litigation. The SEC acknowledges the assistance of the U. S. Attorney's Office for the Northern District of Georgia and the Federal Bureau of Investigation’s Atlanta Division in this matter.
Washington, D.C., Nov. 19, 2012 — The Securities and Exchange Commission today charged the operators of a long-running prime bank scheme with defrauding investors who were promised sky-high returns on loans to a secret European trust. It also is seeking an emergency court order to freeze the operators’ assets for the benefit of investors.
The SEC alleges that Billy W. McClintock, who lives in Florida, and Dianne Alexander, a former Georgia resident who now lives in California and also is known as Linda Dianne Alexander, raised $15 million from at least 220 investors in more than 20 states, primarily Georgia. McClintock portrayed himself as the "U.S. Director" of a secret European trust that had the power to create money and claimed to have appointed Alexander as a "U.S. Regional Director" for the trust. McClintock and Alexander led investors to believe that they could receive 38 percent annual interest on loans to the trust, provided they abide by the trust’s strict rules requiring secrecy. However, investor money was instead used to merely pay other investors, the hallmark of a Ponzi scheme.
"McClintock and Alexander pitched an investment opportunity that simply did not exist. They merely reshuffled funds between investors in a modern take on a classic prime bank scheme," said William P. Hicks, Associate Director of Enforcement in the SEC’s Atlanta Regional Office.
According to the SEC’s complaint filed in U.S. District Court for the Northern District of Georgia, McClintock and Alexander began conducting the scheme by at least 2004 and misrepresented or omitted facts about investment risks, expected returns, and how investor funds would be used. The complaint charges McClintock and Alexander with violating the securities registration, broker-dealer registration, and antifraud provisions of the U.S. securities laws and a related SEC anti-fraud rule.
The SEC’s complaint also names as relief defendants two entities that McClintock controls — MSC Holdings USA LLC, and MSC Holdings Inc. — and another entity controlled by Alexander — MSC GA Holdings LLC. The SEC believes the three firms may have received ill-gotten assets from the fraud that should be returned to investors.
Information on how to avoid prime bank frauds is available at: http://www.sec.gov/divisions/enforce/primebank.shtml and
http://investor.gov/investing-basics/avoiding-fraud/types-fraud/prime-bank-investments
The SEC’s investigation, which is continuing, has been conducted by Natalie M. Brunson and Lucy T. Graetz of the SEC's Atlanta Regional Office under the supervision of Aaron W. Lipson. Senior Trial Counsel Pat Huddleston II will lead the litigation. The SEC acknowledges the assistance of the U. S. Attorney's Office for the Northern District of Georgia and the Federal Bureau of Investigation’s Atlanta Division in this matter.
Saturday, November 24, 2012
TAX PREPARER SENTENCED FOR FILING FALSE CLAIMS AND IDENTITY THEFT
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, November 19, 2012
New Mexico Man Sentenced to Prison for Stolen Identity Refund Fraud
Douglas Kuester, 43, a tax preparer from Silver City, N.M., was sentenced today to 48 months in prison for filing false claims and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was also ordered to pay $911,000 in restitution and will be on supervised release for three years after completing his prison sentence.
Kuester had pleaded guilty to the charges in May. He was originally indicted by a federal grand jury on Jan. 18, 2012, and has been in custody since his arrest on January 24.
According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself. Kuester also admitted to using an anonymizer to help conceal his filing of the false returns.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney Kenneth J. Gonzales commended special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Gregory P. Bailey, who prosecuted the case with assistance from the New Mexico U.S. Attorney’s Office.
Monday, November 19, 2012
New Mexico Man Sentenced to Prison for Stolen Identity Refund Fraud
Douglas Kuester, 43, a tax preparer from Silver City, N.M., was sentenced today to 48 months in prison for filing false claims and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was also ordered to pay $911,000 in restitution and will be on supervised release for three years after completing his prison sentence.
Kuester had pleaded guilty to the charges in May. He was originally indicted by a federal grand jury on Jan. 18, 2012, and has been in custody since his arrest on January 24.
According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself. Kuester also admitted to using an anonymizer to help conceal his filing of the false returns.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney Kenneth J. Gonzales commended special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Gregory P. Bailey, who prosecuted the case with assistance from the New Mexico U.S. Attorney’s Office.
SEC BRINGS CHARGES AGAINST 7 MEMBERS OF INSIDER TRADING RING
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., Nov. 19, 2012 — The Securities and Exchange Commission today charged three health care company employees and four others in a New Jersey-based insider trading ring of various high school friends generating $1.7 million in illegal profits and kickbacks by trading in advance of 11 public announcements involving mergers, a drug approval application, and quarterly earnings of pharmaceutical companies and medical technology firms.
The SEC alleges that Celgene Corporation's director of financial reporting John Lazorchak, Sanofi S.A.'s director of accounting and reporting Mark S. Cupo, and Stryker Corporation's marketing employee Mark D. Foldy each illegally tipped confidential information about their companies for the purpose of insider trading. Typically the nonpublic information involved upcoming mergers or acquisitions, but Lazorchak also tipped confidential details about Celgene's quarterly earnings and the status of a Celgene application to expand the use of its drug Revlimid. The trading was carefully orchestrated so there was usually someone acting solely as a non-trading middleman who received the nonpublic information from the insider and tipped others. They hoped to avoid detection with no direct connection between the insiders and the traders, and the insiders were later compensated for the inside information with cash payments made in installments to avoid any scrutiny of large cash withdrawals.
The SEC alleges that Cupo's friend Michael Castelli along with Lawrence Grum, who attended high school with Castelli, were the primary traders in the scheme. Among the ways that Castelli and Grum tried to hide their illegal conduct was by compiling binders of research to serve as a false basis for their trading. They actively traded in Celgene securities to create a pattern of long-standing positions in the stock. Grum reassured Cupo that discovery of the scheme and consequent legal action was unlikely due to limited government resources to police insider trading activity. Grum said, "At the end of the day, the SEC's got to pick their battle because they have a limited number of people and a huge number of investors to go after."
Daniel M. Hawke, Chief of the SEC Enforcement Division's Market Abuse Unit and Director of the Philadelphia Regional Office, said, "This is yet another case where wrongdoers believed they could outsmart investigators by creating an elaborate smokescreen to hide their insider trading. Such tactics as using middlemen to pass inside information and compiling research to falsely justify illegal trades will not prevent lawbreakers from getting caught."
The other two traders charged are Lazorchak's high school friends Michael T. Pendolino and James N. Deprado, who now live in New Hampshire and Virginia respectively. The others live in New Jersey. In a parallel criminal action, the U.S. Attorney's Office for the District of New Jersey today announced criminal charges against Lazorchak, Cupo, Foldy, Castelli, Grum, and Pendolino.
According to the SEC's complaint filed in U.S. District Court for the District of New Jersey, the scheme began in late 2007 when Lazorchak and Cupo, who were friends and colleagues at Sanofi, discussed Lazorchak's new position at Celgene where he'd have access to nonpublic information about mergers and acquisitions. Lazorchak told Cupo that he was initially working on Celgene's possible acquisition of another pharmaceutical company, Pharmion. Cupo discussed Lazorchak's position with Castelli, a friend with whom he attends winemaking club meetings. Castelli brought in Grum, who he considered a sophisticated trader with knowledge of the securities industry. Castelli and Grum devised the scheme in which Lazorchak tipped Cupo with nonpublic Celgene-related information. Cupo, as the middleman, tipped Castelli and Grum so they could illegally trade. Castelli and Grum paid Cupo for his tips, and gave Cupo money to pass along to Lazorchak for the initial tips. Lazorchak never knew the identities of Castelli or Grum, but was aware that Cupo was passing confidential Celgene information to other traders.
The SEC alleges that Lazorchak's high school friend Foldy entered the scheme in 2007, when Lazorchak tipped him with confidential details about the impending merger between Celgene and Pharmion, and Foldy illegally traded on the information prior to the public announcement of the deal. Lazorchak and Foldy devised and used code phrases while conversing to identify instances when Lazorchak was passing inside information or Foldy was seeking more details. After the illegal trading occurred and Foldy obtained illicit profits of $14,500, Lazorchak repeatedly demanded that Foldy compensate him for the inside information. Foldy ultimately paid Lazorchak at least $500 and later returned the favor with illegal tips of confidential information about a tender offer involving his employer, Stryker Corp. Lazorchak acted as a middleman and did not trade, instead tipping Pendolino so he could trade on the nonpublic information. Pendolino in turn tipped Deprado, who also traded. Lazorchak additionally tipped Cupo, who did not trade but acted as a middleman and tipped Castelli and Grum, who both traded.
The SEC alleges that Cupo began tipping inside information about his employer in late 2009, when he learned that Sanofi was planning to announce a tender offer to acquire another pharmaceutical company, Chattem Inc. Cupo learned of the imminent tender offer a few days prior to the public announcement, he tipped Castelli and Grum with the confidential details, and they both traded on the nonpublic information.
The SEC alleges that each of the defendants violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder and that Castelli and Grum violated Section 17(a) of the Securities Act of 1933. The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, financial penalties, and officer and director bars for Lazorchak, Cupo, and Foldy.
The SEC's investigation, which is continuing, has been conducted by Colleen K. Lynch, David W. Snyder and John S. Rymas, who are members of the Market Abuse Unit in the SEC's Philadelphia office. G. Jeffrey Boujoukos and Catherine E. Pappas are handling the litigation.
The SEC brought this enforcement action in coordination with the U.S. Attorney's Office for the District of New Jersey. The SEC also appreciates the assistance of the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, and the Options Regulatory Surveillance Authority.
Washington, D.C., Nov. 19, 2012 — The Securities and Exchange Commission today charged three health care company employees and four others in a New Jersey-based insider trading ring of various high school friends generating $1.7 million in illegal profits and kickbacks by trading in advance of 11 public announcements involving mergers, a drug approval application, and quarterly earnings of pharmaceutical companies and medical technology firms.
The SEC alleges that Celgene Corporation's director of financial reporting John Lazorchak, Sanofi S.A.'s director of accounting and reporting Mark S. Cupo, and Stryker Corporation's marketing employee Mark D. Foldy each illegally tipped confidential information about their companies for the purpose of insider trading. Typically the nonpublic information involved upcoming mergers or acquisitions, but Lazorchak also tipped confidential details about Celgene's quarterly earnings and the status of a Celgene application to expand the use of its drug Revlimid. The trading was carefully orchestrated so there was usually someone acting solely as a non-trading middleman who received the nonpublic information from the insider and tipped others. They hoped to avoid detection with no direct connection between the insiders and the traders, and the insiders were later compensated for the inside information with cash payments made in installments to avoid any scrutiny of large cash withdrawals.
The SEC alleges that Cupo's friend Michael Castelli along with Lawrence Grum, who attended high school with Castelli, were the primary traders in the scheme. Among the ways that Castelli and Grum tried to hide their illegal conduct was by compiling binders of research to serve as a false basis for their trading. They actively traded in Celgene securities to create a pattern of long-standing positions in the stock. Grum reassured Cupo that discovery of the scheme and consequent legal action was unlikely due to limited government resources to police insider trading activity. Grum said, "At the end of the day, the SEC's got to pick their battle because they have a limited number of people and a huge number of investors to go after."
Daniel M. Hawke, Chief of the SEC Enforcement Division's Market Abuse Unit and Director of the Philadelphia Regional Office, said, "This is yet another case where wrongdoers believed they could outsmart investigators by creating an elaborate smokescreen to hide their insider trading. Such tactics as using middlemen to pass inside information and compiling research to falsely justify illegal trades will not prevent lawbreakers from getting caught."
The other two traders charged are Lazorchak's high school friends Michael T. Pendolino and James N. Deprado, who now live in New Hampshire and Virginia respectively. The others live in New Jersey. In a parallel criminal action, the U.S. Attorney's Office for the District of New Jersey today announced criminal charges against Lazorchak, Cupo, Foldy, Castelli, Grum, and Pendolino.
According to the SEC's complaint filed in U.S. District Court for the District of New Jersey, the scheme began in late 2007 when Lazorchak and Cupo, who were friends and colleagues at Sanofi, discussed Lazorchak's new position at Celgene where he'd have access to nonpublic information about mergers and acquisitions. Lazorchak told Cupo that he was initially working on Celgene's possible acquisition of another pharmaceutical company, Pharmion. Cupo discussed Lazorchak's position with Castelli, a friend with whom he attends winemaking club meetings. Castelli brought in Grum, who he considered a sophisticated trader with knowledge of the securities industry. Castelli and Grum devised the scheme in which Lazorchak tipped Cupo with nonpublic Celgene-related information. Cupo, as the middleman, tipped Castelli and Grum so they could illegally trade. Castelli and Grum paid Cupo for his tips, and gave Cupo money to pass along to Lazorchak for the initial tips. Lazorchak never knew the identities of Castelli or Grum, but was aware that Cupo was passing confidential Celgene information to other traders.
The SEC alleges that Lazorchak's high school friend Foldy entered the scheme in 2007, when Lazorchak tipped him with confidential details about the impending merger between Celgene and Pharmion, and Foldy illegally traded on the information prior to the public announcement of the deal. Lazorchak and Foldy devised and used code phrases while conversing to identify instances when Lazorchak was passing inside information or Foldy was seeking more details. After the illegal trading occurred and Foldy obtained illicit profits of $14,500, Lazorchak repeatedly demanded that Foldy compensate him for the inside information. Foldy ultimately paid Lazorchak at least $500 and later returned the favor with illegal tips of confidential information about a tender offer involving his employer, Stryker Corp. Lazorchak acted as a middleman and did not trade, instead tipping Pendolino so he could trade on the nonpublic information. Pendolino in turn tipped Deprado, who also traded. Lazorchak additionally tipped Cupo, who did not trade but acted as a middleman and tipped Castelli and Grum, who both traded.
The SEC alleges that Cupo began tipping inside information about his employer in late 2009, when he learned that Sanofi was planning to announce a tender offer to acquire another pharmaceutical company, Chattem Inc. Cupo learned of the imminent tender offer a few days prior to the public announcement, he tipped Castelli and Grum with the confidential details, and they both traded on the nonpublic information.
The SEC alleges that each of the defendants violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder and that Castelli and Grum violated Section 17(a) of the Securities Act of 1933. The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, financial penalties, and officer and director bars for Lazorchak, Cupo, and Foldy.
The SEC's investigation, which is continuing, has been conducted by Colleen K. Lynch, David W. Snyder and John S. Rymas, who are members of the Market Abuse Unit in the SEC's Philadelphia office. G. Jeffrey Boujoukos and Catherine E. Pappas are handling the litigation.
The SEC brought this enforcement action in coordination with the U.S. Attorney's Office for the District of New Jersey. The SEC also appreciates the assistance of the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, and the Options Regulatory Surveillance Authority.
CO. TO PAY $4.1 MILLION PENALTY TO SETTLE CLEAN WATER ACT VIOLATIONS AT WASTE WATER TREATMENT PLANT
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, November 13, 2012
Roquette America Inc., to Pay $4.1 Million Penalty to Settle Violations of Clean Water Act at Its Keokuk, Iowa, Facility
Roquette America, Inc., has agreed to pay a $4.1 million civil penalty to settle alleged violations of the Clean Water Act and its National Pollutant Discharge Elimination System (NPDES) permit at its grain processing facility in Keokuk, Iowa, the Department of Justice and the Environmental Protection Agency (EPA) announced today.
As early as 2008, Roquette was aware that its waste water treatment plant was marginally adequate and that it could not handle spills or surges in loading. Instead of constructing additional containment structures for waste water surges, or routing spills to the waste water treatment plant, Roquette allowed the industrial waste to be discharged directly into the Mississippi River and Soap Creek.
"Roquette’s actions resulted in over a thousand permit violations and allowed the discharge of untreated industrial waste into the Mississippi River and another Iowa waterway even after it was informed on numerous occasions it was violating its state permit and federal law," said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. "This settlement holds Roquette accountable for its multiple violations of the nation’s Clean Water Act and requires sewer improvements, wastewater treatment upgrades, enhanced monitoring and independent compliance audits that will benefit public health and the environment for the people of Iowa for years to come."
"The magnitude of these violations warrants the magnitude of the penalty," said EPA Region 7 Administrator Karl Brooks. "The Mississippi River is a vital waterway, used by millions of Americans for commerce, recreation and drinking water. It is imperative that industrial facilities abide by their discharge permits to protect our valuable water resources."
The Iowa Department of Natural Resources has issued three administrative orders and eight notices of violation to Roquette since 2000. Despite these orders and notices, Roquette continued to overload its waste water treatment plant and failed to address the deficiencies at other portions of its facility, resulting in permit violations and illegal discharges of untreated industrial waste.
The Keokuk facility violated its NPDES permit at least 1,174 times, and on at least 30 occasions illegally discharged via storm drains resulting in at least 250,000 gallons of industrial waste being released into the Mississippi River and Soap Creek. In addition to these permit violations and illegal discharges, Roquette discharged partially treated industrial waste from its waste water treatment plant, and discharged steam condensate into Soap Creek through an unpermitted outfall.
In addition to paying the penalty, Roquette will complete other requirements valued at more than $17 million to further protect the Mississippi River and Soap Creek. Among these requirements are the completion of a sewer survey to identify possible discharge locations, the implementation of sewer modifications, the construction of upgrades to the wastewater treatment plant, and the performance of enhanced effluent monitoring. In addition, Roquette will obtain annual third party audits of its compliance with the operations and maintenance program, the Storm Water Pollution Prevention Program, the company’s NPDES permits, and the compliance requirements set out in the consent decree.
The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html
Tuesday, November 13, 2012
Roquette America Inc., to Pay $4.1 Million Penalty to Settle Violations of Clean Water Act at Its Keokuk, Iowa, Facility
Roquette America, Inc., has agreed to pay a $4.1 million civil penalty to settle alleged violations of the Clean Water Act and its National Pollutant Discharge Elimination System (NPDES) permit at its grain processing facility in Keokuk, Iowa, the Department of Justice and the Environmental Protection Agency (EPA) announced today.
As early as 2008, Roquette was aware that its waste water treatment plant was marginally adequate and that it could not handle spills or surges in loading. Instead of constructing additional containment structures for waste water surges, or routing spills to the waste water treatment plant, Roquette allowed the industrial waste to be discharged directly into the Mississippi River and Soap Creek.
"Roquette’s actions resulted in over a thousand permit violations and allowed the discharge of untreated industrial waste into the Mississippi River and another Iowa waterway even after it was informed on numerous occasions it was violating its state permit and federal law," said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. "This settlement holds Roquette accountable for its multiple violations of the nation’s Clean Water Act and requires sewer improvements, wastewater treatment upgrades, enhanced monitoring and independent compliance audits that will benefit public health and the environment for the people of Iowa for years to come."
"The magnitude of these violations warrants the magnitude of the penalty," said EPA Region 7 Administrator Karl Brooks. "The Mississippi River is a vital waterway, used by millions of Americans for commerce, recreation and drinking water. It is imperative that industrial facilities abide by their discharge permits to protect our valuable water resources."
The Iowa Department of Natural Resources has issued three administrative orders and eight notices of violation to Roquette since 2000. Despite these orders and notices, Roquette continued to overload its waste water treatment plant and failed to address the deficiencies at other portions of its facility, resulting in permit violations and illegal discharges of untreated industrial waste.
The Keokuk facility violated its NPDES permit at least 1,174 times, and on at least 30 occasions illegally discharged via storm drains resulting in at least 250,000 gallons of industrial waste being released into the Mississippi River and Soap Creek. In addition to these permit violations and illegal discharges, Roquette discharged partially treated industrial waste from its waste water treatment plant, and discharged steam condensate into Soap Creek through an unpermitted outfall.
In addition to paying the penalty, Roquette will complete other requirements valued at more than $17 million to further protect the Mississippi River and Soap Creek. Among these requirements are the completion of a sewer survey to identify possible discharge locations, the implementation of sewer modifications, the construction of upgrades to the wastewater treatment plant, and the performance of enhanced effluent monitoring. In addition, Roquette will obtain annual third party audits of its compliance with the operations and maintenance program, the Storm Water Pollution Prevention Program, the company’s NPDES permits, and the compliance requirements set out in the consent decree.
The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html
Friday, November 23, 2012
THE QUANTA RESOURCES SUPERFUND SITE MOVES FORWARD ON CLEANUP
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, November 19, 2012
Agreement Furthers Cleanup of the Quanta Resources Superfund Site in Edgewater, New Jersey
Another important step toward cleaning up the Quanta Resources Superfund site in Edgewater, N.J., was announced today by the Department of Justice and the U.S. Environmental Protection Agency (EPA). The agreement with Honeywell International Inc. and 23 other parties, embodied in a consent decree lodged today in federal court, requires the performance of pre-construction project design work and requires Honeywell to carry out the actual cleanup work under the EPA’s oversight. The cleanup of the Quanta Site is expected to result in its redevelopment.
After the design is completed and approved by EPA, the cleanup will proceed at the Quanta Site, which is located adjacent to the Hudson River. The work is expected to take approximately two to three years and cost $78 million.
Currently, soil and ground water at the site are contaminated with arsenic, lead, polycyclic aromatic hydrocarbons and volatile organic compounds resulting from over 100 years of industrial activities in the area. Exposure to these pollutants can have serious health effects, and in some cases, increase the risk of cancer.
"This agreement marks a major milestone toward finally cleaning up the industrial pollution legacy at the Quanta Site," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The settlement holds those responsible for the pollution accountable for the cleanup, and brings us closer to the future redevelopment of this site for the benefit of the people of New Jersey."
"The Superfund program operates on the principle that polluters should pay for the cleanups, rather than passing the costs to taxpayers," said EPA Regional Administrator Judith A. Enck. "The EPA searches for parties responsible for the contamination and holds them accountable. This agreement is an important part of that process and a step in the right direction."
The Quanta site, located on River Road at the intersection of Gorge Road in Edgewater, was built as a coal tar facility beginning in the 1880s. In the 1970s, the site’s "tank farm" was used to store waste oil prior to reprocessing. The state of New Jersey closed the facility in 1981 when some storage tanks were found to contain waste oil contaminated with polychlorinated biphenyls. The EPA supervised a series of emergency actions at the site that included safely removing and disposing of millions of gallons of waste oil, sludge and contaminated water from the tanks, and cleaning and dismantling the emptied tanks and piping.
Because of the nature and complexity of the contamination, the EPA divided the investigation and cleanup into two phases – one addressing the contaminated soil and ground water, and the other focused on contamination in the river and sediment. The plan to address the contaminated soil and ground water was finalized in July 2010. The EPA took public comment for 60 days and considered public input before selecting a cleanup plan. This phase of the cleanup is addressed in the consent decree lodged today. A separate study of the Hudson River and sediment contamination will lead to a subsequent cleanup plan for the next phase.
The site contains an estimated 150,000 cubic yards of contaminated soil requiring treatment to protect people that may come into contact with it. Among other steps, the EPA will solidify and stabilize areas of soil contaminated with oily liquid and arsenic by turning them into leak-proof blocks underground. Throughout the cleanup, monitoring, testing and further studies will be conducted to ensure the effectiveness of the remedy.
Aside from Honeywell International Inc., the other parties that have agreed to the consent decree are, for the most part, waste oil generators whose wastes were disposed of at the Quanta site. They include: BASF Corporation; Beazer East Inc.; BFI Waste Systems of New Jersey Inc.; BorgWarner Inc.; Buckeye Pipe Line Co. LP; Chemical Leaman Tank Lines Inc. (now Quality Carriers); Colonial Pipeline Co.; Consolidated Rail Corp.; Exxon Mobil Corp; Ford Motor Company; General Dynamics Land Systems Inc.; Hess Corp.; Miller Brewing Co.; NEAPCO Inc.; Northrup Grumman Systems Corp.; Petroleum Tank Cleaners Inc.; Rome Strip Steel Co. Inc.; Quanta Resources Corp.; Stanley Black & Decker Inc.; Textron Inc.; and United Technologies Corp.
Monday, November 19, 2012
Agreement Furthers Cleanup of the Quanta Resources Superfund Site in Edgewater, New Jersey
Another important step toward cleaning up the Quanta Resources Superfund site in Edgewater, N.J., was announced today by the Department of Justice and the U.S. Environmental Protection Agency (EPA). The agreement with Honeywell International Inc. and 23 other parties, embodied in a consent decree lodged today in federal court, requires the performance of pre-construction project design work and requires Honeywell to carry out the actual cleanup work under the EPA’s oversight. The cleanup of the Quanta Site is expected to result in its redevelopment.
After the design is completed and approved by EPA, the cleanup will proceed at the Quanta Site, which is located adjacent to the Hudson River. The work is expected to take approximately two to three years and cost $78 million.
Currently, soil and ground water at the site are contaminated with arsenic, lead, polycyclic aromatic hydrocarbons and volatile organic compounds resulting from over 100 years of industrial activities in the area. Exposure to these pollutants can have serious health effects, and in some cases, increase the risk of cancer.
"This agreement marks a major milestone toward finally cleaning up the industrial pollution legacy at the Quanta Site," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The settlement holds those responsible for the pollution accountable for the cleanup, and brings us closer to the future redevelopment of this site for the benefit of the people of New Jersey."
"The Superfund program operates on the principle that polluters should pay for the cleanups, rather than passing the costs to taxpayers," said EPA Regional Administrator Judith A. Enck. "The EPA searches for parties responsible for the contamination and holds them accountable. This agreement is an important part of that process and a step in the right direction."
The Quanta site, located on River Road at the intersection of Gorge Road in Edgewater, was built as a coal tar facility beginning in the 1880s. In the 1970s, the site’s "tank farm" was used to store waste oil prior to reprocessing. The state of New Jersey closed the facility in 1981 when some storage tanks were found to contain waste oil contaminated with polychlorinated biphenyls. The EPA supervised a series of emergency actions at the site that included safely removing and disposing of millions of gallons of waste oil, sludge and contaminated water from the tanks, and cleaning and dismantling the emptied tanks and piping.
Because of the nature and complexity of the contamination, the EPA divided the investigation and cleanup into two phases – one addressing the contaminated soil and ground water, and the other focused on contamination in the river and sediment. The plan to address the contaminated soil and ground water was finalized in July 2010. The EPA took public comment for 60 days and considered public input before selecting a cleanup plan. This phase of the cleanup is addressed in the consent decree lodged today. A separate study of the Hudson River and sediment contamination will lead to a subsequent cleanup plan for the next phase.
The site contains an estimated 150,000 cubic yards of contaminated soil requiring treatment to protect people that may come into contact with it. Among other steps, the EPA will solidify and stabilize areas of soil contaminated with oily liquid and arsenic by turning them into leak-proof blocks underground. Throughout the cleanup, monitoring, testing and further studies will be conducted to ensure the effectiveness of the remedy.
Aside from Honeywell International Inc., the other parties that have agreed to the consent decree are, for the most part, waste oil generators whose wastes were disposed of at the Quanta site. They include: BASF Corporation; Beazer East Inc.; BFI Waste Systems of New Jersey Inc.; BorgWarner Inc.; Buckeye Pipe Line Co. LP; Chemical Leaman Tank Lines Inc. (now Quality Carriers); Colonial Pipeline Co.; Consolidated Rail Corp.; Exxon Mobil Corp; Ford Motor Company; General Dynamics Land Systems Inc.; Hess Corp.; Miller Brewing Co.; NEAPCO Inc.; Northrup Grumman Systems Corp.; Petroleum Tank Cleaners Inc.; Rome Strip Steel Co. Inc.; Quanta Resources Corp.; Stanley Black & Decker Inc.; Textron Inc.; and United Technologies Corp.
Thursday, November 22, 2012
MAN SENTENCED FOR STOLEN IDENTITY REFUND FRAUD
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, November 19, 2012
New Mexico Man Sentenced to Prison for Stolen Identity Refund Fraud
Douglas Kuester, 43, a tax preparer from Silver City, N.M., was sentenced today to 48 months in prison for filing false claims and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was also ordered to pay $911,000 in restitution and will be on supervised release for three years after completing his prison sentence.
Kuester had pleaded guilty to the charges in May. He was originally indicted by a federal grand jury on Jan. 18, 2012, and has been in custody since his arrest on January 24.
According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself. Kuester also admitted to using an anonymizer to help conceal his filing of the false returns.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney Kenneth J. Gonzales commended special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Gregory P. Bailey, who prosecuted the case with assistance from the New Mexico U.S. Attorney’s Office.
Monday, November 19, 2012
New Mexico Man Sentenced to Prison for Stolen Identity Refund Fraud
Douglas Kuester, 43, a tax preparer from Silver City, N.M., was sentenced today to 48 months in prison for filing false claims and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was also ordered to pay $911,000 in restitution and will be on supervised release for three years after completing his prison sentence.
Kuester had pleaded guilty to the charges in May. He was originally indicted by a federal grand jury on Jan. 18, 2012, and has been in custody since his arrest on January 24.
According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself. Kuester also admitted to using an anonymizer to help conceal his filing of the false returns.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney Kenneth J. Gonzales commended special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Gregory P. Bailey, who prosecuted the case with assistance from the New Mexico U.S. Attorney’s Office.
Wednesday, November 21, 2012
MORE COMPANIES JOIN MILITARY SPOUSE EMPLOYMENT PARTNERSHIP
FROM: U.S. DEPARTMENT OF DEFENSE
Military Spouse Hiring Program Gains 30-plus Companies
By Terri Moon Cronk
American Forces Press Service
WASHINGTON, Nov. 14, 2012 - More than 30 companies and organizations joined the Military Spouse Employment Partnership here today as part of the White House-sponsored Joining Forces effort to help unemployed spouses find jobs.
The newly inducted businesses, which join 129 other companies, were brought into the program at the partnership's third such ceremony. Inductees at today's Washington Navy Yard event represented businesses including fitness centers, banks, a hotel chain and a major soft-drink company.
The partnership's members include small and large, local, national and international businesses, officials said.
"We appreciate your patriotism and your understanding that investing in military spouses makes military families, service members and national defense strong," Charles E. Milam, acting deputy assistant secretary of defense for military community and family policy, told the new partnership members.
"Statistics will show that you'll be reaching into a rich talent pool," Milam said. "Military spouses are well-educated; many have degrees in fields such as science, math and information technology, which create innovation in today's global economy."
Milam added that the members' commitment is a key component to military families' improved quality of life.
The partnership seeks to mitigate the challenges of military life by helping spouses find and maintain rewarding careers despite frequent relocations, said Frederick E. Vollrath, who is performing the duties of the assistant secretary of defense for readiness and force management.
Vollrath reminded the new inductees of the "core tenets" they've agreed to abide by in the partnership:
-- Increasing job opportunities while maintaining employment status for spouses who relocate to new duty stations;
-- Providing career promotion opportunities for those who help their employer meet its goals and objectives;
-- Supporting spouses' pay equity on par with their training, work experience and credentials; and
-- Telling their corporate counterparts about their support and commitment to military spouses.
"We count on you to spread the word," Vollrath said.
The partnership and its business members are vital to the military community because of spouses' high unemployment rates and historically low wages, he said.
Despite their hard-to-find skills and high levels of education and training, Vollrath said, military spouses "face a 26-percent unemployment rate and a 25-percent wage gap compared to their civilian counterparts."
And while 77 percent of military spouses -- including men, and not just women, he pointed out -- want or need to work, frequent relocation is often a barrier to establishing or continuing a career, Vollrath said. That inability to find and retain jobs because of relocation issues "compromises the quality of life of military families and the readiness of the military force," he said.
The military spouse is tech-savvy, adaptable and resilient; a strong leader, skilled multitasker and a team player who is mature and effective under pressure, Vollrath said.
And only recently, the partnership's business members have become a large part of a national solution to the challenges of military spouse employment, he added.
Vollrath listed examples such as the Presidential Study Directive-9 report, "Strengthening Our Military Families: Meeting America's Commitment," which was published in January 2011 and highlighted the need for the federal government to help develop spouse career and education opportunities.
"But the government can't do this in a vacuum," Vollrath said. So, a goal was set to increase those opportunities through public-sector jobs.
"The Department of Defense looked at programs that were working well, and leveraged the successful partnerships created under the Army Spouse Employment Partnership," he said. In June 2011, the program was expanded to add Navy, Marine Corps and Air Force spouses.
In less than a year and a half, the partnership's hiring figures have been "phenomenal," said Vollrath, noting that more than 54,000 jobs were posted in October alone, and nearly 816,000 vacancies have been posted since June 29, 2011.
Partner members have hired more than 32,000 military spouses during that time, he added.
"Today, you join a vibrant, active and focused partnership," Vollrath told the newest business inductees. "You will provide employment connections that help military spouses find and maintain rewarding careers."
Military Spouse Hiring Program Gains 30-plus Companies
By Terri Moon Cronk
American Forces Press Service
WASHINGTON, Nov. 14, 2012 - More than 30 companies and organizations joined the Military Spouse Employment Partnership here today as part of the White House-sponsored Joining Forces effort to help unemployed spouses find jobs.
The newly inducted businesses, which join 129 other companies, were brought into the program at the partnership's third such ceremony. Inductees at today's Washington Navy Yard event represented businesses including fitness centers, banks, a hotel chain and a major soft-drink company.
The partnership's members include small and large, local, national and international businesses, officials said.
"We appreciate your patriotism and your understanding that investing in military spouses makes military families, service members and national defense strong," Charles E. Milam, acting deputy assistant secretary of defense for military community and family policy, told the new partnership members.
"Statistics will show that you'll be reaching into a rich talent pool," Milam said. "Military spouses are well-educated; many have degrees in fields such as science, math and information technology, which create innovation in today's global economy."
Milam added that the members' commitment is a key component to military families' improved quality of life.
The partnership seeks to mitigate the challenges of military life by helping spouses find and maintain rewarding careers despite frequent relocations, said Frederick E. Vollrath, who is performing the duties of the assistant secretary of defense for readiness and force management.
Vollrath reminded the new inductees of the "core tenets" they've agreed to abide by in the partnership:
-- Increasing job opportunities while maintaining employment status for spouses who relocate to new duty stations;
-- Providing career promotion opportunities for those who help their employer meet its goals and objectives;
-- Supporting spouses' pay equity on par with their training, work experience and credentials; and
-- Telling their corporate counterparts about their support and commitment to military spouses.
"We count on you to spread the word," Vollrath said.
The partnership and its business members are vital to the military community because of spouses' high unemployment rates and historically low wages, he said.
Despite their hard-to-find skills and high levels of education and training, Vollrath said, military spouses "face a 26-percent unemployment rate and a 25-percent wage gap compared to their civilian counterparts."
And while 77 percent of military spouses -- including men, and not just women, he pointed out -- want or need to work, frequent relocation is often a barrier to establishing or continuing a career, Vollrath said. That inability to find and retain jobs because of relocation issues "compromises the quality of life of military families and the readiness of the military force," he said.
The military spouse is tech-savvy, adaptable and resilient; a strong leader, skilled multitasker and a team player who is mature and effective under pressure, Vollrath said.
And only recently, the partnership's business members have become a large part of a national solution to the challenges of military spouse employment, he added.
Vollrath listed examples such as the Presidential Study Directive-9 report, "Strengthening Our Military Families: Meeting America's Commitment," which was published in January 2011 and highlighted the need for the federal government to help develop spouse career and education opportunities.
"But the government can't do this in a vacuum," Vollrath said. So, a goal was set to increase those opportunities through public-sector jobs.
"The Department of Defense looked at programs that were working well, and leveraged the successful partnerships created under the Army Spouse Employment Partnership," he said. In June 2011, the program was expanded to add Navy, Marine Corps and Air Force spouses.
In less than a year and a half, the partnership's hiring figures have been "phenomenal," said Vollrath, noting that more than 54,000 jobs were posted in October alone, and nearly 816,000 vacancies have been posted since June 29, 2011.
Partner members have hired more than 32,000 military spouses during that time, he added.
"Today, you join a vibrant, active and focused partnership," Vollrath told the newest business inductees. "You will provide employment connections that help military spouses find and maintain rewarding careers."
Tuesday, November 20, 2012
U.S. MEDAL OF HONOR WINNER SAYS HIRE VETS
FROM: U.S. DEPARTMENT OF DEFENSE
Medal of Honor Recipient Urges Businesses to Hire Vets
By Terri Moon Cronk
American Forces Press Service
WASHINGTON, Nov. 16, 2012 - The Marine Corps' first living Medal of Honor recipient from the Iraq and Afghanistan wars told a gathering of U.S. business leaders here yesterday that hiring veterans is a mutually beneficial practice.
Dakota Meyer was a keynote speaker at the U.S. Chamber of Commerce's fifth annual "Business Steps Up: Hiring Our Heroes" event.
"If you want to thank a veteran," Meyer told the audience, "I can tell you how: Hire him."
Meyer said companies that hire veterans are taking advantage of "an opportunity for both," not performing an act of charity.
"I want to tell you you're not giving these guys anything," he told the employers. "You're providing them an opportunity that will also help you out. And once you give them an opportunity and hold them accountable, I can guarantee you these men and women have been in way worse circumstances than your company will ever be in. And they're going to be the ones that make a difference and stand out."
Meyer acknowledged that young veterans fresh out of the military often find it difficult to talk to employers.
"Military guys are a team," he said. "There's no 'I' -- they don't talk about themselves. It's teamwork. It's a team effort. So how can they pitch themselves to you and tell what they're good at? It's hard."
Meyer used his own background as a Marine Corps sniper to illustrate his point.
"Give me a show of hands of how many employers need a sniper," he said. When no hands were raised, he tried again.
"How many employers are looking for teamwork, promptness, accountability, and managing personnel in stressful environments?" he asked. "I'd say quite a few. And that's what every single veteran who raises his right hand to serve our military can bring to the table. They've proven it."
Meyer also suggested that employers look at an honorable discharge after four years in the military as equivalent to a college degree. "It's just a different skill set," he said. "[Service members] are going out making a difference and being held accountable every single day."
He used his own story as an example of a young veteran who needed a job when he returned home.
"How did I get here? As a 24-year-old with a high-school education and sergeant in the Marine Corps, this is not what I expected my life would be about a year ago," he said.
A recruiter who challenged him in high school led him to sign up with the Marine Corps, he said. After basic training and a tour in Iraq, Meyer said his gunnery sergeant needed five volunteers to go to Afghanistan. He said he'd go.
"I remembered what happened on Sept. 11, and Afghanistan is where I wanted to go. It's personal," he said. "So I went over there and met my team. Everything was going good -- we were a team. We went into a village on Sept. 8, 2009, and that's where I lost my team that day."
Published accounts describe a Taliban ambush that trapped local villagers and U.S. service members in a valley in Afghanistan's Kunar province. Reportedly against orders, Meyer manned the turret while another service member drove a Humvee into the firefight, searching for Meyer's teammates.
Along the way, Meyer and the driver drove into the valley, continually rescuing Afghan villagers and American service members, and returning in five trips, saving more than 30 lives. Once he found his teammates deep in the valley, Meyer recovered the remains of all of them except for one, who reportedly was never found.
When Meyer got a phone call two years later from President Barack Obama notifying him that he'd receive the Medal of Honor, Meyer told his commander in chief he didn't want it.
"You take the worst day of my life and now I'm getting recognized for it, and I'm getting a call from the president telling me I'm going to receive the highest medal the country can give," he said. "I told him, 'I'm not accepting this for being a failure.' And the president said, 'Dakota, it's bigger than you.'
"But now I realize it is bigger than me," he continued. "So I decided I would accept the medal on behalf of all the men and women who served, on behalf of all the men and women and their families who have sacrificed so much for our country's freedom, and the men and women who are still out there doing it every single day."
Meyer said he knew that if he could take that opportunity and make a difference, he would have to do it.
"This is where the perfect fit came in," he said of his veteran-meets-employer experience. He signed on with the Chamber of Commerce and a car manufacturer, both of which also wanted to make a difference and help veterans find work.
"Greatness is a conscious choice," Meyer told the audience, referencing the book "Good to be Great" by Jim Collins. "To all the employers, every man, woman and their families who signed up to go fight for our country and volunteer to be in the military said they were going to be great for all of you all," he said. "To accept anything less than being great, and helping provide them an opportunity, is not OK with me. So the question is, 'Is it OK with you?'"
Medal of Honor Recipient Urges Businesses to Hire Vets
By Terri Moon Cronk
American Forces Press Service
WASHINGTON, Nov. 16, 2012 - The Marine Corps' first living Medal of Honor recipient from the Iraq and Afghanistan wars told a gathering of U.S. business leaders here yesterday that hiring veterans is a mutually beneficial practice.
Dakota Meyer was a keynote speaker at the U.S. Chamber of Commerce's fifth annual "Business Steps Up: Hiring Our Heroes" event.
"If you want to thank a veteran," Meyer told the audience, "I can tell you how: Hire him."
Meyer said companies that hire veterans are taking advantage of "an opportunity for both," not performing an act of charity.
"I want to tell you you're not giving these guys anything," he told the employers. "You're providing them an opportunity that will also help you out. And once you give them an opportunity and hold them accountable, I can guarantee you these men and women have been in way worse circumstances than your company will ever be in. And they're going to be the ones that make a difference and stand out."
Meyer acknowledged that young veterans fresh out of the military often find it difficult to talk to employers.
"Military guys are a team," he said. "There's no 'I' -- they don't talk about themselves. It's teamwork. It's a team effort. So how can they pitch themselves to you and tell what they're good at? It's hard."
Meyer used his own background as a Marine Corps sniper to illustrate his point.
"Give me a show of hands of how many employers need a sniper," he said. When no hands were raised, he tried again.
"How many employers are looking for teamwork, promptness, accountability, and managing personnel in stressful environments?" he asked. "I'd say quite a few. And that's what every single veteran who raises his right hand to serve our military can bring to the table. They've proven it."
Meyer also suggested that employers look at an honorable discharge after four years in the military as equivalent to a college degree. "It's just a different skill set," he said. "[Service members] are going out making a difference and being held accountable every single day."
He used his own story as an example of a young veteran who needed a job when he returned home.
"How did I get here? As a 24-year-old with a high-school education and sergeant in the Marine Corps, this is not what I expected my life would be about a year ago," he said.
A recruiter who challenged him in high school led him to sign up with the Marine Corps, he said. After basic training and a tour in Iraq, Meyer said his gunnery sergeant needed five volunteers to go to Afghanistan. He said he'd go.
"I remembered what happened on Sept. 11, and Afghanistan is where I wanted to go. It's personal," he said. "So I went over there and met my team. Everything was going good -- we were a team. We went into a village on Sept. 8, 2009, and that's where I lost my team that day."
Published accounts describe a Taliban ambush that trapped local villagers and U.S. service members in a valley in Afghanistan's Kunar province. Reportedly against orders, Meyer manned the turret while another service member drove a Humvee into the firefight, searching for Meyer's teammates.
Along the way, Meyer and the driver drove into the valley, continually rescuing Afghan villagers and American service members, and returning in five trips, saving more than 30 lives. Once he found his teammates deep in the valley, Meyer recovered the remains of all of them except for one, who reportedly was never found.
When Meyer got a phone call two years later from President Barack Obama notifying him that he'd receive the Medal of Honor, Meyer told his commander in chief he didn't want it.
"You take the worst day of my life and now I'm getting recognized for it, and I'm getting a call from the president telling me I'm going to receive the highest medal the country can give," he said. "I told him, 'I'm not accepting this for being a failure.' And the president said, 'Dakota, it's bigger than you.'
"But now I realize it is bigger than me," he continued. "So I decided I would accept the medal on behalf of all the men and women who served, on behalf of all the men and women and their families who have sacrificed so much for our country's freedom, and the men and women who are still out there doing it every single day."
Meyer said he knew that if he could take that opportunity and make a difference, he would have to do it.
"This is where the perfect fit came in," he said of his veteran-meets-employer experience. He signed on with the Chamber of Commerce and a car manufacturer, both of which also wanted to make a difference and help veterans find work.
"Greatness is a conscious choice," Meyer told the audience, referencing the book "Good to be Great" by Jim Collins. "To all the employers, every man, woman and their families who signed up to go fight for our country and volunteer to be in the military said they were going to be great for all of you all," he said. "To accept anything less than being great, and helping provide them an opportunity, is not OK with me. So the question is, 'Is it OK with you?'"
U.S. SECRETARY OF STATE CLINTON'S SPEECH ON 'ECONOMIC STATECRAFT'.
FROM: U.S. STATE DEPARTMENT
Delivering on the Promise of Economic Statecraft
Remarks
Hillary Rodham Clinton
Secretary of State
Singapore Management University
Singapore
November 17, 2012
SECRETARY CLINTON: Well, thank you very much. Thank you, President De Meyer, for welcoming all of us here to SMU. Thank you, Ambassador Adelman, for your exemplary service here in Singapore, strengthening and deepening the already very strong relationship between our two countries. Thank you also for the Minister of State and the Minister for Education and the Speaker of the Parliament for being here with us. And thanks to the American Chamber of Commerce and the U.S. ASEAN business council for helping to cosponsor this event.
It has been three years since I was last here with President Obama, when we came for our first APEC meeting. And that trip helped launch what has been called our pivot to the Asia Pacific. As Secretary of State, I have visited the region many times. And I was just in Australia with Secretary of Defense Panetta for our annual AUSMIN consultations with our Australian counterparts. Tomorrow I will join President Obama in Thailand. And then we will go together to Burma and on to Cambodia for the East Asia Summit.
Now, I think one of the questions that may be on your and others' minds is: "Why is the American President spending all this time in Asia so soon after winning re-election?" Well, the answer for us is very simple. Because so much of the history of the 21st century will be, is being, written in this region. America's expanded engagement represents our commitment to help shape that shared future. The strategic and security dimensions of our efforts are well known. But the untold story that is just as important is our economic engagement. Because it is clear that not only in the Asia Pacific but across the world, increasingly, economics are shaping the strategic landscape. Emerging powers are putting economics at the center of their foreign policies, and they are gaining clout less because of their size of their armies than because of the growth of their GDP.
For the first time in modern history, nations are becoming major global powers without also becoming global military powers. So, to maintain our strategic leadership in the region, the United States is also strengthening our economic leadership. And we know very well that America's economic strength at home and our leadership around the world are a package deal. Each reinforces and requires the other.
I must say this is a lesson that Singapore learned long ago. Today the non-stop flow of people, goods, and capital through this small nation is proof that a country does not need to be big to be mighty, to be respected, to be a real leader. Every country wants to do business in Singapore, so every country has a stake in cultivating good relationships with Singapore. With only 1/60 of the population of the United States, Singapore is our 15th largest trading partner. More than 2,000 American companies base their regional headquarters here. Two-way trade exceeded $50 billion for the first time last year. And U.S. direct investment surpassed $116 billion over the last decade. That makes Singapore's security and stability a vital interest for the United States. This connection between economic power and global influence explains why the United States is placing economics at the heart of our own foreign policy. I call it economic statecraft.
Now, these ideas are hardly new. After all, it was Harry Truman who said our relations, foreign and economic, are indivisible. But today that carries renewed urgency. Last year I laid out America's economic statecraft agenda in a series of speeches in Washington, Hong Kong, San Francisco, and New York. Since then, we have turned this vision into action in four key areas: first, updating our foreign policy priorities to take economics more into account; second, turning to economic solutions for strategic challenges; third, stepping up commercial diplomacy -- what I like to call jobs diplomacy -- to boost U.S. exports, open new markets, and level the playing field for our businesses; and fourth, building the diplomatic capacity to execute this ambitious agenda.
In short, we are shaping our foreign policy to account for both the economics of power and the power of economics. The first and most fundamental task is to update our foreign policy and its priorities for a changing world. For the last decade, as you know, the United States focused enormous time, resources, and attention on a war in Iraq that is now over, and a war in Afghanistan that is winding down. Responding to threats will, of course, always be central to our foreign policy. But it cannot be our foreign policy. America has to seize opportunities that will shore up our strength for years to come. That means following through on our intensified engagement in the Asia Pacific and elevating the role of economics in our work around the world.
Here in Asia the United States is taking concrete steps to protect and update an open, free, transparent, and fair economic system that has made the region's spectacular growth possible. Through APEC and ASEAN, we are working with partners like Singapore to improve regulatory standards, harmonize customs procedures, and reduce trade barriers. We've ratified a free trade agreement with the Republic of Korea that will improve competitiveness and transparency, while boosting American exports by as much as $10 billion a year. In negotiations with China and India on bilateral investment treaties, we are seeking a level playing field between American companies and their competitors, including state-owned enterprises.
And with Singapore and a growing list of other countries on both sides of the Pacific, we are making progress toward finalizing a far-reaching new trade agreement called the Trans-Pacific Partnership. The so-called TPP will lower barriers, raise standards, and drive long-term growth across the region. It will cover 40 percent of the world's total trade and establish strong protections for workers and the environment. Better jobs with higher wages and safer working conditions, including for women, migrant workers and others too often in the past excluded from the formal economy will help build Asia's middle class and rebalance the global economy. Canada and Mexico have already joined the original TPP partners. We continue to consult with Japan. And we are offering to assist with capacity building, so that every country in ASEAN can eventually join. We welcome the interest of any nation willing to meet 21st century standards as embodied in the TPP, including China.
The United States is also moving economics to the center of our agenda elsewhere in the world. For example, we want to improve our economic partnership with our allies in Europe. That is every bit as compelling to us as our security partnership through the NATO alliance. So, to that end, we are exploring negotiations with the European Union for a comprehensive economic agreement that would increase trade and spur growth on both sides of the Atlantic.
Africa. Africa is currently home to 7 of the world's 10 fastest-growing economies. I deliberately said that slowly because so many people look surprised when I say it. And so, we are changing the way we do business with Africa. Certainly regarding our development agenda, but also trying to do more to harness market forces and private-sector solutions for these growing African economies.
In Latin America, which remains the destination for 40 percent of all U.S. exports, we have ratified free trade agreements with Colombia and Panama, and we have begun discussions with a new group called the Alliance of the Pacific, formed by Mexico, Colombia, Peru, and Chile to expand their competitiveness in the global marketplace.
Now, our next step will be to transform these regional efforts -- the TPP, the EU agreement, our bilateral trade deals -- into a truly global vision. In the same way that the general agreement on trade and tariffs offered a global blueprint following World War II, we need new arrangements to take on the challenges that inhibit trade today, from non-tariff barriers to preferential treatment for state-owned enterprises.
As we do more to define our foreign policy priorities in economic terms, we also need to update the tools we use. So our second main area of action is finding ways to tap economic solutions for strategic challenges. Just look at what's happening now in Burma. The cost of economic sanctions and the benefits of rejoining the global economy helped spur the government to begin opening up. And we are very grateful to the wise counsel we received from Singapore along the way. The United States is responding not just with growing diplomatic engagement, but also with new economic ties that we believe will help encourage further political and market reforms, and thereby improve stability over time.
This July more than 70 executives from 38 leading U.S. companies visited as part of the U.S.-ASEAN business council delegation. And I understand that the American Chamber of Commerce here in Singapore led a similar trip in August. The United States is also supporting World Bank programs that will provide more than $80 million for infrastructure projects in the country's townships, and financial support for small businesses.
Burma is part of a region where progress has been slowed by insecurity and mistrust. But it doesn't have to be that way. As Burma opens up and establishes new ties to its neighbors, it could become a commercial hub linking markets in India and Bangladesh with Southeast Asia. An Indo-Pacific economic corridor powered by new energy and transportation infrastructure and fewer trade barriers could create jobs and help lift millions out of poverty. It could also promote stability and drive cooperation on shared challenges like narcotics and human trafficking, refugees, and natural disasters.
Now, this all might sound ambitious. And, I confess, it is. But we cannot shy away from big goals. The post-World War II generation that built the modern global order and established institutions and agreements that fostered unprecedented security and prosperity are really the examples we should be following, in those footsteps, thinking bigger, working harder to create the arrangements that will give us another 100 years of security and prosperity.
The same goes for another regional vision we call the New Silk Road, a web of trade and transportation links reaching from the steps of Central Asia to the southern tip of India. Forging stronger economic ties across this region is a key element in our long-term strategy for Afghanistan. If you look at the map, you see why Afghanistan has been fought over and part of the great game for so many generations because of its very strategic position right in the middle of this trading route.
So, even as we move forward with the security transition under NATO ISAF in 2014, and the end of our coalition combat mission, we are focused on shoring up Afghanistan's economic future, because we know that, without that, stability and security will certainly be elusive. This is a point that has too often been missed in serious foreign policy debates. The long, hard work of economic development may not be glamorous, but it is essential, even in war zones. And certainly the increasing economic relationship between India and Pakistan is good news, first and foremost for the Pakistani and Indian business people and consumers, but more generally with the hope that those kinds of ties can lead to even greater cooperation in the future.
We are also using new economic tools to address one of the world's preeminent security challenges: Iran. A broad coalition is revolutionizing how the international community enforces sanctions and builds pressure. We went after Iran's central bank and finance sector, and we reached out to private insurers, shippers, oil companies, and financial institutions to help us target pressure points that make it harder for companies and governments to do business with Iran.
Now we see results. Every major importer of Iranian oil has lowered their consumption. All 27 nations of the European Union have joined a boycott. In one year, Iran's oil exports are down by more than one million barrels a day, costing the Iranian Government at least $3 billion each month. And, in fact, because of increased production in other places in the world, we have not seen the spike in oil prices that so many people feared and predicted.
Now, regimes in places like Tehran and Pyongyang, that violate international norms and beggar their people in pursuit of greater military strength pose a stark contrast with emerging economic powers that are delivering benefits for their people.
The example of Iran also illustrates how powerful economic tools can be when we apply them both creatively and collectively. The Assad regime in Syria, Hezbollah, the Haqqani network, and others, are all vulnerable to sophisticated and meticulous market pressure. Someone has said that the threats we face are perhaps enhanced because of how interconnected we are in the world because of globalization. But so are the responses. And we have to be smarter about how we identify and use them through international cooperation, robust coalitions, and determined diplomacy.
The third major area of focus for economic statecraft is commercial diplomacy that boosts U.S. exports, opens new markets, and levels the playing field for American businesses. Let me hasten to say this is not just about American prosperity. Although, as you might guess, as the American Secretary of State, that ranks very high on my list of priorities. That is always our goal. But this is about finding more opportunities for all of us to prosper together. It's about helping the next wave of emerging economies achieve the same kind of growth that Singapore has enjoyed. It's about rebalancing the global economy so Americans export more, Asians import more, and we avoid financial crises and build middle classes.
So, the United States is stepping up our game, using our network of more than 270 embassies and consulates to advocate for American firms, and help achieve President Obama's goal of doubling U.S. exports in 5 years. With 95 percent of the world's customers living beyond our own borders, this has become an economic imperative. So our diplomats are working to make it easier for U.S. businesses to find answers and get advice about navigating markets. We're helping them connect with foreign partners and compete for contracts. And whenever a U.S. Government official travels overseas now, we try to include business events on our schedules. In fact, later today I will visit a General Electric aviation facility here in Singapore.
We are sending more trade missions, like the one I mentioned to Burma. And this summer I led the first delegation of American CEOs to the U.S.-ASEAN Business Forum in Cambodia. Three heads of state and more than a dozen key ministers were eager to engage with them. Back in Washington, we have convened conferences bringing together business leaders and government officials from more than 100 countries. We're proud to go to bat for the Boeings and Chevrons and General Motors and so many others. But we're also working to help industries large and small that have not been traditional exporters. Ultimately, this effort is more than hooking a big fish here and there. We want every company -- American, Singaporean, or any other -- to have that level playing field and a chance to compete on the merits. That is a recipe for shared prosperity.
Yet in too many places businesses trying to break into markets face resistance, including trade barriers that are going up not along national borders, but behind them. And these obstacles stem from political choices, not market forces. And it will take serious and sustained diplomacy to address them. Wherever companies face discrimination, the United States will stand up for the rules of an open, free, transparent, and fair economic system, and we expect all like-minded economies to share that responsibility.
Now, recently we saw a break-through when India retooled its policy on foreign direct investment. Their old rules barred companies that carry multiple brands in one store -- like Wal-Mart, Target, and Costco, or similar foreign companies -- from doing retail business in the Indian market. That limited competition. But, more than that, it prevented the kind of knowledge transfer and supply chain modernization that India needs. So we and -- I should note -- other countries, as well, raised this issue with India's leaders at the highest level for years. And we are pleased that Delhi has now agreed to loosen its restrictions.
But to take advantage of a more level playing field, American businesses must step up, too. Here in Singapore, U.S. firms operate on every corner. But elsewhere, too many are sitting on the sidelines. I hear it over and over when I travel: "Where are the American businesses?" And at a time when America's domestic growth depends more than ever on our ability to compete internationally, this has to change. And when U.S. businesses do compete, we want to work with them to make sure their suppliers at every link in the chain are meeting international standards like labor rights, intellectual property, and environmental impact.
And, finally, a level playing field means lowering the barriers that keep women from fully participating in the global economy. You knew I would get to that, didn't you? Mountains of evidence make this so abundantly clear. No nation can achieve the kind of growth that we all want and need if half the population never gets to compete. And we cannot afford any longer to exclude the energy and talent that women add to our economies.
The World Bank has done some ground-breaking research on this, pointing out what it would mean to tear down the barriers, some of them still very explicit. There are countries that deny women credit, there are countries that prevent women from opening businesses or running them without male fronts. There are countries that prevent women from inheriting businesses. There are so many still existing legal barriers. And then, of course, there are the attitudinal and cultural barriers that are somewhat less obvious, but no less difficult. And in the World Bank's research, tearing down all those obstacles would raise GDP everywhere in the world, including in my own country. In my own country it would be by nine percent.
So, think about what this would mean in a time where we are still facing global economic problems. And so I always say that we've got to do more, not just because it's the right thing to do, but because we cannot afford not to do it.
The fourth and final area we are focused on is making sure America's diplomats and development experts have all the skills and support they need to actually implement economic statecraft. So, we are focused on recruiting, retaining, and rewarding the most talented people we can find. I appointed the State Department's first-ever chief economist. And I combined our work on energy, the environment, and economics under a single under secretary position to maximize synergy and cooperation. We are ramping up our training curriculum for economic officers, and developing new tools and incentives to help them do their jobs. Now, these kinds of changes unfold over years, but they show a commitment to match our practices to our priorities. And they will help hard-wire economic statecraft into American foreign policy.
Now, let me offer three quick examples that really show the intersection of economics and security. Let's start with cyber theft. Now, most countries outlaw breaking into the headquarters of a company to steal proprietary information. Yet when it comes to cyber theft of that same material, many look the other way or even encourage it. This is more than just bad international behavior. It is bad economics. If we set a precedent that cyber theft is acceptable, everyone will eventually suffer. So I named the State Department's first coordinator for cyber issues, and we are advancing concerted strategies to address these really legitimate and troubling concerns.
Next, on energy. We know energy can be a source of healthy competition, with countries racing to develop new technologies and renewables. But it can also be a source of conflict, fueling corruption and instability. And how the world uses energy is a key factor as to whether we will finally address the threat of climate change. So we have created at the State Department a new Bureau of Energy Resources, and made this issue a priority in our diplomacy.
And finally, the resurgence of state capitalism: a challenge at once economic and strategic. Now, state-owned or state-supported enterprises are not necessarily problematic in all cases. But they do often lack the transparency and accountability that come with private boards and investors. And then, diplomatic challenges arise when states abuse their economic advantage to bully their neighbors or box out competitors, like when we see countries cut off gas flows in the middle of winter over a political disagreement. So, the State Department, working with seven other U.S. Government agencies, launched a comprehensive study on state capitalism. And in the coming weeks, we should see a final report with detailed recommendations for how we engage on the challenges posed.
Now, let me add that many of the questions that I have discussed today about the relationship between strategic and economic issues deserve deeper study. Perhaps, President De Meyer, at this institution. Almost a new foreign policy discipline. And I hope scholars at think tanks and universities will help us explore the implications and design more effective responses.
The ambitious agenda we've been working on, and that I have described to you today, will require a sustained commitment from secretary to secretary, from president to president. And the United States has to keep asking tough questions of ourselves and our partners around the world. We need to form coalitions of like-minded nations that deal in the changing dynamics of power and influence. And, as economic strength and global power converge, all countries need to think about the way their domestic decisions reverberate on the international stage. And that is especially true in my own country.
When I was traveling through Asia last summer, during the height of the debate over the debt ceiling back home, leaders from across the region pulled me aside to ask if the U.S. Congress would actually allow America to default on our debt. Let's be clear. The full faith and credit of the United States should never be in question. Today, as Washington gears up for another round of budget negotiations, I am again hearing concerns about the global implications of America's economic choices. Now, I am out of politics, but let me assure you that, for all the differences between the political parties in my country, we are united in our commitment to protect American leadership and bolster our national security. Reaching a meaningful budget deal is critical to both. It will shore up our ability to project economic power around the globe, strengthen our position in the competition of ideas, shaping the global marketplace, and remind all nations that we remain a steady and dependable partner. For us, this is a moment, once again, to prove the resilience of our economic system, and reaffirm America's leadership in the world.
As Ambassador Adelman said, "I've been in the business of advancing American leadership for a long time now. I've seen the ups and downs firsthand, our greatest triumphs and our wrenching heartbreaks. And through it all, I've only grown more convinced that our global leadership depends on our economic strength, and more confident that the United States has what it takes to keep leading in the 21st century."
This much is clear: the future belongs to those who can anticipate opportunities, who follow the trend lines, not just the headlines, countries like Singapore, which transformed itself into an Asian tiger in the decades after independence, and continues to innovate and excel. Global leadership is not a birthright. Not a birthright for the United States or any nation. It must be constantly tended and earned anew. Americans' ability, however, to reinvent ourselves has been a national strength since the first settlers arrived in search of new shores and new opportunities. It is part of our DNA. It is part of who we are, as Americans. And I know the United States will rise, as we always have, to meet the challenges of this new international landscape, firm in our purpose, innovative in our approach, and unwavering in our determination to succeed. And we look forward to a future of peace and prosperity and opportunity for all. Thank you. (Applause.)
Delivering on the Promise of Economic Statecraft
Remarks
Hillary Rodham Clinton
Secretary of State
Singapore Management University
Singapore
November 17, 2012
SECRETARY CLINTON: Well, thank you very much. Thank you, President De Meyer, for welcoming all of us here to SMU. Thank you, Ambassador Adelman, for your exemplary service here in Singapore, strengthening and deepening the already very strong relationship between our two countries. Thank you also for the Minister of State and the Minister for Education and the Speaker of the Parliament for being here with us. And thanks to the American Chamber of Commerce and the U.S. ASEAN business council for helping to cosponsor this event.
It has been three years since I was last here with President Obama, when we came for our first APEC meeting. And that trip helped launch what has been called our pivot to the Asia Pacific. As Secretary of State, I have visited the region many times. And I was just in Australia with Secretary of Defense Panetta for our annual AUSMIN consultations with our Australian counterparts. Tomorrow I will join President Obama in Thailand. And then we will go together to Burma and on to Cambodia for the East Asia Summit.
Now, I think one of the questions that may be on your and others' minds is: "Why is the American President spending all this time in Asia so soon after winning re-election?" Well, the answer for us is very simple. Because so much of the history of the 21st century will be, is being, written in this region. America's expanded engagement represents our commitment to help shape that shared future. The strategic and security dimensions of our efforts are well known. But the untold story that is just as important is our economic engagement. Because it is clear that not only in the Asia Pacific but across the world, increasingly, economics are shaping the strategic landscape. Emerging powers are putting economics at the center of their foreign policies, and they are gaining clout less because of their size of their armies than because of the growth of their GDP.
For the first time in modern history, nations are becoming major global powers without also becoming global military powers. So, to maintain our strategic leadership in the region, the United States is also strengthening our economic leadership. And we know very well that America's economic strength at home and our leadership around the world are a package deal. Each reinforces and requires the other.
I must say this is a lesson that Singapore learned long ago. Today the non-stop flow of people, goods, and capital through this small nation is proof that a country does not need to be big to be mighty, to be respected, to be a real leader. Every country wants to do business in Singapore, so every country has a stake in cultivating good relationships with Singapore. With only 1/60 of the population of the United States, Singapore is our 15th largest trading partner. More than 2,000 American companies base their regional headquarters here. Two-way trade exceeded $50 billion for the first time last year. And U.S. direct investment surpassed $116 billion over the last decade. That makes Singapore's security and stability a vital interest for the United States. This connection between economic power and global influence explains why the United States is placing economics at the heart of our own foreign policy. I call it economic statecraft.
Now, these ideas are hardly new. After all, it was Harry Truman who said our relations, foreign and economic, are indivisible. But today that carries renewed urgency. Last year I laid out America's economic statecraft agenda in a series of speeches in Washington, Hong Kong, San Francisco, and New York. Since then, we have turned this vision into action in four key areas: first, updating our foreign policy priorities to take economics more into account; second, turning to economic solutions for strategic challenges; third, stepping up commercial diplomacy -- what I like to call jobs diplomacy -- to boost U.S. exports, open new markets, and level the playing field for our businesses; and fourth, building the diplomatic capacity to execute this ambitious agenda.
In short, we are shaping our foreign policy to account for both the economics of power and the power of economics. The first and most fundamental task is to update our foreign policy and its priorities for a changing world. For the last decade, as you know, the United States focused enormous time, resources, and attention on a war in Iraq that is now over, and a war in Afghanistan that is winding down. Responding to threats will, of course, always be central to our foreign policy. But it cannot be our foreign policy. America has to seize opportunities that will shore up our strength for years to come. That means following through on our intensified engagement in the Asia Pacific and elevating the role of economics in our work around the world.
Here in Asia the United States is taking concrete steps to protect and update an open, free, transparent, and fair economic system that has made the region's spectacular growth possible. Through APEC and ASEAN, we are working with partners like Singapore to improve regulatory standards, harmonize customs procedures, and reduce trade barriers. We've ratified a free trade agreement with the Republic of Korea that will improve competitiveness and transparency, while boosting American exports by as much as $10 billion a year. In negotiations with China and India on bilateral investment treaties, we are seeking a level playing field between American companies and their competitors, including state-owned enterprises.
And with Singapore and a growing list of other countries on both sides of the Pacific, we are making progress toward finalizing a far-reaching new trade agreement called the Trans-Pacific Partnership. The so-called TPP will lower barriers, raise standards, and drive long-term growth across the region. It will cover 40 percent of the world's total trade and establish strong protections for workers and the environment. Better jobs with higher wages and safer working conditions, including for women, migrant workers and others too often in the past excluded from the formal economy will help build Asia's middle class and rebalance the global economy. Canada and Mexico have already joined the original TPP partners. We continue to consult with Japan. And we are offering to assist with capacity building, so that every country in ASEAN can eventually join. We welcome the interest of any nation willing to meet 21st century standards as embodied in the TPP, including China.
The United States is also moving economics to the center of our agenda elsewhere in the world. For example, we want to improve our economic partnership with our allies in Europe. That is every bit as compelling to us as our security partnership through the NATO alliance. So, to that end, we are exploring negotiations with the European Union for a comprehensive economic agreement that would increase trade and spur growth on both sides of the Atlantic.
Africa. Africa is currently home to 7 of the world's 10 fastest-growing economies. I deliberately said that slowly because so many people look surprised when I say it. And so, we are changing the way we do business with Africa. Certainly regarding our development agenda, but also trying to do more to harness market forces and private-sector solutions for these growing African economies.
In Latin America, which remains the destination for 40 percent of all U.S. exports, we have ratified free trade agreements with Colombia and Panama, and we have begun discussions with a new group called the Alliance of the Pacific, formed by Mexico, Colombia, Peru, and Chile to expand their competitiveness in the global marketplace.
Now, our next step will be to transform these regional efforts -- the TPP, the EU agreement, our bilateral trade deals -- into a truly global vision. In the same way that the general agreement on trade and tariffs offered a global blueprint following World War II, we need new arrangements to take on the challenges that inhibit trade today, from non-tariff barriers to preferential treatment for state-owned enterprises.
As we do more to define our foreign policy priorities in economic terms, we also need to update the tools we use. So our second main area of action is finding ways to tap economic solutions for strategic challenges. Just look at what's happening now in Burma. The cost of economic sanctions and the benefits of rejoining the global economy helped spur the government to begin opening up. And we are very grateful to the wise counsel we received from Singapore along the way. The United States is responding not just with growing diplomatic engagement, but also with new economic ties that we believe will help encourage further political and market reforms, and thereby improve stability over time.
This July more than 70 executives from 38 leading U.S. companies visited as part of the U.S.-ASEAN business council delegation. And I understand that the American Chamber of Commerce here in Singapore led a similar trip in August. The United States is also supporting World Bank programs that will provide more than $80 million for infrastructure projects in the country's townships, and financial support for small businesses.
Burma is part of a region where progress has been slowed by insecurity and mistrust. But it doesn't have to be that way. As Burma opens up and establishes new ties to its neighbors, it could become a commercial hub linking markets in India and Bangladesh with Southeast Asia. An Indo-Pacific economic corridor powered by new energy and transportation infrastructure and fewer trade barriers could create jobs and help lift millions out of poverty. It could also promote stability and drive cooperation on shared challenges like narcotics and human trafficking, refugees, and natural disasters.
Now, this all might sound ambitious. And, I confess, it is. But we cannot shy away from big goals. The post-World War II generation that built the modern global order and established institutions and agreements that fostered unprecedented security and prosperity are really the examples we should be following, in those footsteps, thinking bigger, working harder to create the arrangements that will give us another 100 years of security and prosperity.
The same goes for another regional vision we call the New Silk Road, a web of trade and transportation links reaching from the steps of Central Asia to the southern tip of India. Forging stronger economic ties across this region is a key element in our long-term strategy for Afghanistan. If you look at the map, you see why Afghanistan has been fought over and part of the great game for so many generations because of its very strategic position right in the middle of this trading route.
So, even as we move forward with the security transition under NATO ISAF in 2014, and the end of our coalition combat mission, we are focused on shoring up Afghanistan's economic future, because we know that, without that, stability and security will certainly be elusive. This is a point that has too often been missed in serious foreign policy debates. The long, hard work of economic development may not be glamorous, but it is essential, even in war zones. And certainly the increasing economic relationship between India and Pakistan is good news, first and foremost for the Pakistani and Indian business people and consumers, but more generally with the hope that those kinds of ties can lead to even greater cooperation in the future.
We are also using new economic tools to address one of the world's preeminent security challenges: Iran. A broad coalition is revolutionizing how the international community enforces sanctions and builds pressure. We went after Iran's central bank and finance sector, and we reached out to private insurers, shippers, oil companies, and financial institutions to help us target pressure points that make it harder for companies and governments to do business with Iran.
Now we see results. Every major importer of Iranian oil has lowered their consumption. All 27 nations of the European Union have joined a boycott. In one year, Iran's oil exports are down by more than one million barrels a day, costing the Iranian Government at least $3 billion each month. And, in fact, because of increased production in other places in the world, we have not seen the spike in oil prices that so many people feared and predicted.
Now, regimes in places like Tehran and Pyongyang, that violate international norms and beggar their people in pursuit of greater military strength pose a stark contrast with emerging economic powers that are delivering benefits for their people.
The example of Iran also illustrates how powerful economic tools can be when we apply them both creatively and collectively. The Assad regime in Syria, Hezbollah, the Haqqani network, and others, are all vulnerable to sophisticated and meticulous market pressure. Someone has said that the threats we face are perhaps enhanced because of how interconnected we are in the world because of globalization. But so are the responses. And we have to be smarter about how we identify and use them through international cooperation, robust coalitions, and determined diplomacy.
The third major area of focus for economic statecraft is commercial diplomacy that boosts U.S. exports, opens new markets, and levels the playing field for American businesses. Let me hasten to say this is not just about American prosperity. Although, as you might guess, as the American Secretary of State, that ranks very high on my list of priorities. That is always our goal. But this is about finding more opportunities for all of us to prosper together. It's about helping the next wave of emerging economies achieve the same kind of growth that Singapore has enjoyed. It's about rebalancing the global economy so Americans export more, Asians import more, and we avoid financial crises and build middle classes.
So, the United States is stepping up our game, using our network of more than 270 embassies and consulates to advocate for American firms, and help achieve President Obama's goal of doubling U.S. exports in 5 years. With 95 percent of the world's customers living beyond our own borders, this has become an economic imperative. So our diplomats are working to make it easier for U.S. businesses to find answers and get advice about navigating markets. We're helping them connect with foreign partners and compete for contracts. And whenever a U.S. Government official travels overseas now, we try to include business events on our schedules. In fact, later today I will visit a General Electric aviation facility here in Singapore.
We are sending more trade missions, like the one I mentioned to Burma. And this summer I led the first delegation of American CEOs to the U.S.-ASEAN Business Forum in Cambodia. Three heads of state and more than a dozen key ministers were eager to engage with them. Back in Washington, we have convened conferences bringing together business leaders and government officials from more than 100 countries. We're proud to go to bat for the Boeings and Chevrons and General Motors and so many others. But we're also working to help industries large and small that have not been traditional exporters. Ultimately, this effort is more than hooking a big fish here and there. We want every company -- American, Singaporean, or any other -- to have that level playing field and a chance to compete on the merits. That is a recipe for shared prosperity.
Yet in too many places businesses trying to break into markets face resistance, including trade barriers that are going up not along national borders, but behind them. And these obstacles stem from political choices, not market forces. And it will take serious and sustained diplomacy to address them. Wherever companies face discrimination, the United States will stand up for the rules of an open, free, transparent, and fair economic system, and we expect all like-minded economies to share that responsibility.
Now, recently we saw a break-through when India retooled its policy on foreign direct investment. Their old rules barred companies that carry multiple brands in one store -- like Wal-Mart, Target, and Costco, or similar foreign companies -- from doing retail business in the Indian market. That limited competition. But, more than that, it prevented the kind of knowledge transfer and supply chain modernization that India needs. So we and -- I should note -- other countries, as well, raised this issue with India's leaders at the highest level for years. And we are pleased that Delhi has now agreed to loosen its restrictions.
But to take advantage of a more level playing field, American businesses must step up, too. Here in Singapore, U.S. firms operate on every corner. But elsewhere, too many are sitting on the sidelines. I hear it over and over when I travel: "Where are the American businesses?" And at a time when America's domestic growth depends more than ever on our ability to compete internationally, this has to change. And when U.S. businesses do compete, we want to work with them to make sure their suppliers at every link in the chain are meeting international standards like labor rights, intellectual property, and environmental impact.
And, finally, a level playing field means lowering the barriers that keep women from fully participating in the global economy. You knew I would get to that, didn't you? Mountains of evidence make this so abundantly clear. No nation can achieve the kind of growth that we all want and need if half the population never gets to compete. And we cannot afford any longer to exclude the energy and talent that women add to our economies.
The World Bank has done some ground-breaking research on this, pointing out what it would mean to tear down the barriers, some of them still very explicit. There are countries that deny women credit, there are countries that prevent women from opening businesses or running them without male fronts. There are countries that prevent women from inheriting businesses. There are so many still existing legal barriers. And then, of course, there are the attitudinal and cultural barriers that are somewhat less obvious, but no less difficult. And in the World Bank's research, tearing down all those obstacles would raise GDP everywhere in the world, including in my own country. In my own country it would be by nine percent.
So, think about what this would mean in a time where we are still facing global economic problems. And so I always say that we've got to do more, not just because it's the right thing to do, but because we cannot afford not to do it.
The fourth and final area we are focused on is making sure America's diplomats and development experts have all the skills and support they need to actually implement economic statecraft. So, we are focused on recruiting, retaining, and rewarding the most talented people we can find. I appointed the State Department's first-ever chief economist. And I combined our work on energy, the environment, and economics under a single under secretary position to maximize synergy and cooperation. We are ramping up our training curriculum for economic officers, and developing new tools and incentives to help them do their jobs. Now, these kinds of changes unfold over years, but they show a commitment to match our practices to our priorities. And they will help hard-wire economic statecraft into American foreign policy.
Now, let me offer three quick examples that really show the intersection of economics and security. Let's start with cyber theft. Now, most countries outlaw breaking into the headquarters of a company to steal proprietary information. Yet when it comes to cyber theft of that same material, many look the other way or even encourage it. This is more than just bad international behavior. It is bad economics. If we set a precedent that cyber theft is acceptable, everyone will eventually suffer. So I named the State Department's first coordinator for cyber issues, and we are advancing concerted strategies to address these really legitimate and troubling concerns.
Next, on energy. We know energy can be a source of healthy competition, with countries racing to develop new technologies and renewables. But it can also be a source of conflict, fueling corruption and instability. And how the world uses energy is a key factor as to whether we will finally address the threat of climate change. So we have created at the State Department a new Bureau of Energy Resources, and made this issue a priority in our diplomacy.
And finally, the resurgence of state capitalism: a challenge at once economic and strategic. Now, state-owned or state-supported enterprises are not necessarily problematic in all cases. But they do often lack the transparency and accountability that come with private boards and investors. And then, diplomatic challenges arise when states abuse their economic advantage to bully their neighbors or box out competitors, like when we see countries cut off gas flows in the middle of winter over a political disagreement. So, the State Department, working with seven other U.S. Government agencies, launched a comprehensive study on state capitalism. And in the coming weeks, we should see a final report with detailed recommendations for how we engage on the challenges posed.
Now, let me add that many of the questions that I have discussed today about the relationship between strategic and economic issues deserve deeper study. Perhaps, President De Meyer, at this institution. Almost a new foreign policy discipline. And I hope scholars at think tanks and universities will help us explore the implications and design more effective responses.
The ambitious agenda we've been working on, and that I have described to you today, will require a sustained commitment from secretary to secretary, from president to president. And the United States has to keep asking tough questions of ourselves and our partners around the world. We need to form coalitions of like-minded nations that deal in the changing dynamics of power and influence. And, as economic strength and global power converge, all countries need to think about the way their domestic decisions reverberate on the international stage. And that is especially true in my own country.
When I was traveling through Asia last summer, during the height of the debate over the debt ceiling back home, leaders from across the region pulled me aside to ask if the U.S. Congress would actually allow America to default on our debt. Let's be clear. The full faith and credit of the United States should never be in question. Today, as Washington gears up for another round of budget negotiations, I am again hearing concerns about the global implications of America's economic choices. Now, I am out of politics, but let me assure you that, for all the differences between the political parties in my country, we are united in our commitment to protect American leadership and bolster our national security. Reaching a meaningful budget deal is critical to both. It will shore up our ability to project economic power around the globe, strengthen our position in the competition of ideas, shaping the global marketplace, and remind all nations that we remain a steady and dependable partner. For us, this is a moment, once again, to prove the resilience of our economic system, and reaffirm America's leadership in the world.
As Ambassador Adelman said, "I've been in the business of advancing American leadership for a long time now. I've seen the ups and downs firsthand, our greatest triumphs and our wrenching heartbreaks. And through it all, I've only grown more convinced that our global leadership depends on our economic strength, and more confident that the United States has what it takes to keep leading in the 21st century."
This much is clear: the future belongs to those who can anticipate opportunities, who follow the trend lines, not just the headlines, countries like Singapore, which transformed itself into an Asian tiger in the decades after independence, and continues to innovate and excel. Global leadership is not a birthright. Not a birthright for the United States or any nation. It must be constantly tended and earned anew. Americans' ability, however, to reinvent ourselves has been a national strength since the first settlers arrived in search of new shores and new opportunities. It is part of our DNA. It is part of who we are, as Americans. And I know the United States will rise, as we always have, to meet the challenges of this new international landscape, firm in our purpose, innovative in our approach, and unwavering in our determination to succeed. And we look forward to a future of peace and prosperity and opportunity for all. Thank you. (Applause.)
Monday, November 19, 2012
CUSTOMS AND STRATEGIC TRADE CONTROLS ENFORCEMENT
FROM: U.S. STATE DELPARTMENT
Why Should Customs Focus on Strategic Trade Controls Enforcement?
Remarks
Simon Limage
Deputy Assistant Secretary for Nonproliferation Programs , Bureau of International Security and Nonproliferation
World Customs Organization
Brussels, Belgium
November 15, 2012
(As Prepared)
Ladies and Gentlemen:
Good afternoon! I am privileged to discuss the evolving role of Customs in strategic trade enforcement with such a diverse and distinguished audience! I would like to extend my thanks to the World Customs Organization (WCO) for hosting this important, first-of-its-kind, conference. The United States enjoys a fruitful partnership with the WCO in enhancing global customs enforcement and trade facilitation capabilities. This conference offers a unique opportunity to develop an enhanced understanding of the risks to international trade and global security posed by the proliferation of advanced technologies and materials used in developing weapons of mass destruction -- or WMD. We also hope this conference serves as a first step toward developing universal strategic trade enforcement standards.
Today, I will describe the challenges we face in combating the abuse of legitimate trade channels for proliferation of WMD-related materials and technologies, the critical role of Customs services in addressing these challenges, and the possible role of the WCO for your consideration.
Challenges
First, what are some of the challenges associated with preventing the proliferation of weapons of mass destruction (WMD), including their means of delivery?
WMD proliferation is among the gravest threats to global security and regional stability. Proliferant states and terrorist networks continue to seek to acquire mankind’s most deadly and destructive weapons. We have complicated their efforts by growing numbers of potential supplier countries adopting international best practices in regulating trade in such strategic commodities. These best practices include implementing national legislation that requires authorization process for export or transit of strategic items, as well as compliance with the United Nations Security Council Resolutions, including UNSCR 1540, requiring states to control and prevent various proliferation-related transfers.
The proliferators and their support networks, however, are responding in increasingly creative ways, exploiting the vulnerability of the interconnected global trading system. They obscure the actual destination of their illicit shipments by using circuitous shipping routes and multiple intermediate transshipments. They cover up the true end-users of strategic goods on shipping declarations by providing false names of companies or agents, some of which exist only on paper. They state false end-uses for controlled good – such as listing chemical weapons precursors as goods "for production of pesticides." They seek out liberal trading environments and unsuspecting suppliers to circumvent existing trade restrictions. In short, they exploit well-intentioned trade facilitation efforts as a vehicle to undermine the international nonproliferation regime.
These challenges are compounded by ever-increasing pressure to expedite trade transactions and lower trade barriers to spur economic development. Yet supply chains must be made secure in the face of WMD proliferation, illicit trade, terrorism, and other forms of transnational crime. These competing interests necessitate finding the proper balance between strategic trade control and trade facilitation.
It is hard to overestimate the contribution of national Customs services to the fight against WMD proliferation. I also would suggest that implementing international strategic trade control best practices provides Customs services an effective means of bridging these demanding and sometimes competing responsibilities: to secure the global supply chain against proliferation threats while contributing to greater trade efficiency and economic development.
Strategic trade controls best practices include establishing a comprehensive strategic trade control system resting on several key principles. One is the establishment of a transparent and comprehensive legal framework consistent with the guidelines and control lists of the four multilateral regimes and relevant Security Council Resolutions. This framework identifies proliferation-sensitive dual-use and munitions items and enables regulation of their export, re-export, transit and transshipment.
Another key principle is effective enforcement. This includes harmonized customs clearance procedures; effective means to detect, identify, interdict, seize, and dispose of proliferation sensitive cargo; and the capacity to investigate customs and border security violations and prosecute offenders.
The third principle of comprehensive strategic trade controls is government-industry partnership, including government efforts to educate the industry about its obligations and encourage compliance.
Finally, the fourth principle of effective strategic trade control system is cooperation and information exchange with domestic and international partners, including mutual assistance on customs and border security issues.
These strategic trade control principles are fully consistent with the two pillars and the core elements of the WCO’s own Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) and draw directly on existing WCO security and facilitation measures and initiatives developed by national Customs administrations.
Specifically, within the Customs-to-Customs pillar, the SAFE Framework calls for a risk management approach to address safety and security. It relies on the sharing of advance electronic information prior to export and import for optimal use of inspection resources and improved revenue collection. Likewise, effective strategic trade enforcement relies on the employment of proliferation risk profiles to detect consignments of proliferation concern through targeted examination of outbound cargo based on advance information sharing. Accordingly, automation of customs functions serves both traditional customs enforcement objectives and Customs’ growing role in strategic trade management.
The improved cooperation between Customs and the private sector called for under the second pillar of the SAFE Framework also is central to strategic trade enforcement. After all, industry – including manufacturers, exporters, freight-forwarders and shippers – bears critical responsibility in the fight against proliferators and is a key source of intelligence on WMD acquisition efforts. Customs services can play a major role in enhancing industry’s awareness of transaction risks associated with strategic goods and provide industry with the tools to detect suspicious orders and customers. For example, in 2001, Homeland Security Investigations launched Project Shield America designed to prevent illicit export of WMD technologies from the United States. Since then, U.S. agents have conducted over 21,000 outreach events with U.S. technology suppliers in order to improve their awareness of proliferation risks, reduce the risk of unintentional transfers, and solicit their cooperation in combating proliferation threats.
Customs also can play a role in providing incentives for industry compliance with enforcement regulations. The SAFE Framework calls for establishment and mutual recognition of authorized economic operator (AEO) programs to achieve end-to-end supply chain security and reward responsible traders. In the United States, our program is called Customs-Trade Partnership against Terrorism (C-TPAT). C-TPAT was launched in 2002 and is available to freight carriers, brokers, manufacturers, and traders, who import goods into the United States. The United States also has already signed Mutual Recognition arrangements with several countries and the EU, which means that the AEO validation of a company in one country is recognized in the other.
While not explicitly set forth in the SAFE Framework, Customs cooperation with other national, regional, and international organizations that have trade and border security responsibilities has been emphasized by WCO leaders. To ensure a timely, coordinated response to transnational security threats, the WCO has engaged many international organizations. In strategic trade enforcement, Customs’ capacity to classify strategic commodities and assess the risks associated with their import, export, or transit of these goods also depends on interagency coordination and information exchange between law enforcement and licensing agencies. Such coordination also facilitates analysis of traders involved in transactions with controlled commodities as well as their potential end-users.
Customs administrations have important powers that exist nowhere else in government - the authority to inspect cargo and goods shipped into, through, and out of a country, and to refuse or expedite entry or exit of goods. Given these unique authorities and expertise, Customs can and should play a central role in strategic trade enforcement. Full implementation of the SAFE Framework will strengthen a Customs service’s ability to detect, identify and interdict illicit shipments of proliferation concern; however, officers must be aware that proliferation trade is distinct from other forms of smuggling. For example:
Controlled dual-use goods have legitimate commercial applications, which make it easier to hide them in the flow of legitimate commercial traffic.
Denying export of such technical items may have a seriously detrimental economic impact on the originating country.
Outside technical assistance may be needed to determine if an item has WMD-related applications and should be interdicted.
Officers should be alert to questionable end-users for a product.
For effective targeting of proliferant shipments, Customs services may require more information than broad consignment descriptions and product specifications.
Given the transnational nature of WMD procurement, investigating these violations may require special investigative powers and close coordination between Customs, industry, and their interagency counterparts at home and abroad.·
Thus, controlling dual-use goods is more challenging and requires development of comprehensive, layered strategic trade control standards and the establishment of dedicated, interagency-based Customs enforcement units for WMD targeting, detection, and interdiction.
The WCO’s Role
This leads me back to the WCO as the appropriate vehicle for developing universal strategic trade enforcement standards.
First, the WCO has the membership and thus the participation of 178 Customs administrations, representing 99 percent of global trade and most major suppliers of proliferation technologies.[1] As such, it offers the best platform for legal and institutional reform necessary to develop and implement these standards.
Second, as an international capacity-building organization, the WCO has a mandate to assist its member states in satisfying their obligations under UN Security Council Resolution 1540.
Third, Full implementation of the SAFE Framework by WCO members will create institutional basis and capabilities that may be applied to strategic trade enforcement.
Fourth, the revised Kyoto Convention includes a non-binding annex on Free Trade Zones (FTZs), which are recognized by the WCO as posing a risk of exploitation by proliferators, terrorists, and organized crime organizations. Annex D identifies best practices concerning management of Free Trade Zones that could provide a good baseline for the adoption of binding international standards related to effective regulation of strategic trade in these environments.
Fifth, WCO’s unifying standards and capacity building assistance would help mitigate the risk of proliferators seeking to exploit WCO members who are not party to multilateral export control regimes and have no explicit controls on trade in strategic commodities for illicit trafficking in these items.
Sixth, the WCO is the only organization with a clear international mandate to pursue integration of strategic trade controls with other customs control functions. This holistic approach is essential in order to facilitate global trade while strengthening the nonproliferation regime.
Benefits
I recognize that calling for Customs services to assume additional responsibilities for strategic trade enforcement while Customs administrations are already under pressure to meet so many threats may seem difficult. Yet I would stress that strategic trade enforcement is complementary to the economic development, trade facilitation, and traditional enforcement objectives already embraced by the WCO. Some have already embraced these responsibilities. For instance, the European Union adopted a security amendment to its Customs Code in 2011, introducing mandatory submission of advanced electronic cargo declarations. This development was beneficial for both strategic trade enforcement and trade facilitation as it resulted in better risk analysis and expedited process and release times for legitimate shipments.
The Netherlands established a specialized customs enforcement team responsible for ensuring compliance with international sanctions, embargoes, and UN resolutions and violations involving dual-use and defense goods. Maltese Customs has adopted a memorandum of understanding with the Malta Free Port in order to facilitate coordinated approach to combating illicit trade. In 2009, Homeland Security Investigations collaborated with Royal Canadian Mounted Police in preventing the export of twenty pressure transducers, which can be used in the gas centrifuge process used in uranium enrichment. Their joint investigation and interdiction was a result of a tip received during a Project Shield America presentation to industry. Earlier this year, an East Asian partner interdicted 70kg of vanadium, a controlled material that can be used to make jet engines, missile casings, and superconducting magnets, concealed among a shipment of fruits. There are many other examples of Customs services taking a proactive role in strategic trade enforcement and working with industry and international counterparts to secure international supply chains against proliferator networks.
The security benefits of these enforcement efforts are evident. But implementation of effective strategic trade controls also produces tangible economic benefits. For example, the harmonization of regulatory framework with respect to strategic goods promotes exports by leveling the playing field for domestic exporters of high technologies. A more coordinated interagency export process is a step towards development of single window systems that cut the time and bureaucratic requirements of doing business and increase economic competitiveness. In addition, greater transparency and efficiency of Customs operations reduce operational losses associated with diversion and theft of legitimate consignments, while enhanced detection and interdiction capacities enable Customs to combat illicit smuggling efforts. Moreover, our experience shows that implementing stringent national strategic trade enforcement measures increases the confidence of trading partners, foreign investors, and domestic industry by creating a safe and transparent trading environment.
Resources
One of the central tenets of President Obama’s "Prague Agenda," unveiled in 2009, is denying non-state networks and proliferant states access to WMD-related materials and technologies.
The United States government is prepared to provide technical assistance in support of the WCO’s strategic trade control initiatives, particularly development of universal strategic trade enforcement standards. The U.S. Department of State’s Export Control and Related Border Security Program – known as EXBS – works with partner governments and international agencies to establish, strengthen, and enforce responsible strategic trade management systems consistent with international norms. Tomorrow you will hear a presentation about EXBS’s efforts to build enforcement capacity, foster international cooperation, and develop partnerships that create what we call the "network of nonproliferators."
This afternoon, you will hear about the U.S. Department of Energy’s International Nonproliferation Export Control Program that aims to increase border security officials’ capabilities to detect and identify and interdict trafficking in strategic commodities. U.S. Customs and Border Protection (CBP) and Homeland Security Investigations have long-term cooperation agreements and technical assistance programs with a number of foreign partners. We hope to share our experience in managing strategic trade with the World Customs organization in this important effort.
I’m confident we can forge closer partnerships to prevent the spread of weapons of mass destruction while enjoying the benefits of liberalized trade. We look forward to cooperating with you as our countries continue the important work of strengthening strategic trade control enforcement. Thank you. I look forward to your questions and ideas.
Why Should Customs Focus on Strategic Trade Controls Enforcement?
Remarks
Simon Limage
Deputy Assistant Secretary for Nonproliferation Programs , Bureau of International Security and Nonproliferation
World Customs Organization
Brussels, Belgium
November 15, 2012
(As Prepared)
Ladies and Gentlemen:
Good afternoon! I am privileged to discuss the evolving role of Customs in strategic trade enforcement with such a diverse and distinguished audience! I would like to extend my thanks to the World Customs Organization (WCO) for hosting this important, first-of-its-kind, conference. The United States enjoys a fruitful partnership with the WCO in enhancing global customs enforcement and trade facilitation capabilities. This conference offers a unique opportunity to develop an enhanced understanding of the risks to international trade and global security posed by the proliferation of advanced technologies and materials used in developing weapons of mass destruction -- or WMD. We also hope this conference serves as a first step toward developing universal strategic trade enforcement standards.
Today, I will describe the challenges we face in combating the abuse of legitimate trade channels for proliferation of WMD-related materials and technologies, the critical role of Customs services in addressing these challenges, and the possible role of the WCO for your consideration.
Challenges
First, what are some of the challenges associated with preventing the proliferation of weapons of mass destruction (WMD), including their means of delivery?
WMD proliferation is among the gravest threats to global security and regional stability. Proliferant states and terrorist networks continue to seek to acquire mankind’s most deadly and destructive weapons. We have complicated their efforts by growing numbers of potential supplier countries adopting international best practices in regulating trade in such strategic commodities. These best practices include implementing national legislation that requires authorization process for export or transit of strategic items, as well as compliance with the United Nations Security Council Resolutions, including UNSCR 1540, requiring states to control and prevent various proliferation-related transfers.
The proliferators and their support networks, however, are responding in increasingly creative ways, exploiting the vulnerability of the interconnected global trading system. They obscure the actual destination of their illicit shipments by using circuitous shipping routes and multiple intermediate transshipments. They cover up the true end-users of strategic goods on shipping declarations by providing false names of companies or agents, some of which exist only on paper. They state false end-uses for controlled good – such as listing chemical weapons precursors as goods "for production of pesticides." They seek out liberal trading environments and unsuspecting suppliers to circumvent existing trade restrictions. In short, they exploit well-intentioned trade facilitation efforts as a vehicle to undermine the international nonproliferation regime.
These challenges are compounded by ever-increasing pressure to expedite trade transactions and lower trade barriers to spur economic development. Yet supply chains must be made secure in the face of WMD proliferation, illicit trade, terrorism, and other forms of transnational crime. These competing interests necessitate finding the proper balance between strategic trade control and trade facilitation.
It is hard to overestimate the contribution of national Customs services to the fight against WMD proliferation. I also would suggest that implementing international strategic trade control best practices provides Customs services an effective means of bridging these demanding and sometimes competing responsibilities: to secure the global supply chain against proliferation threats while contributing to greater trade efficiency and economic development.
Strategic trade controls best practices include establishing a comprehensive strategic trade control system resting on several key principles. One is the establishment of a transparent and comprehensive legal framework consistent with the guidelines and control lists of the four multilateral regimes and relevant Security Council Resolutions. This framework identifies proliferation-sensitive dual-use and munitions items and enables regulation of their export, re-export, transit and transshipment.
Another key principle is effective enforcement. This includes harmonized customs clearance procedures; effective means to detect, identify, interdict, seize, and dispose of proliferation sensitive cargo; and the capacity to investigate customs and border security violations and prosecute offenders.
The third principle of comprehensive strategic trade controls is government-industry partnership, including government efforts to educate the industry about its obligations and encourage compliance.
Finally, the fourth principle of effective strategic trade control system is cooperation and information exchange with domestic and international partners, including mutual assistance on customs and border security issues.
These strategic trade control principles are fully consistent with the two pillars and the core elements of the WCO’s own Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) and draw directly on existing WCO security and facilitation measures and initiatives developed by national Customs administrations.
Specifically, within the Customs-to-Customs pillar, the SAFE Framework calls for a risk management approach to address safety and security. It relies on the sharing of advance electronic information prior to export and import for optimal use of inspection resources and improved revenue collection. Likewise, effective strategic trade enforcement relies on the employment of proliferation risk profiles to detect consignments of proliferation concern through targeted examination of outbound cargo based on advance information sharing. Accordingly, automation of customs functions serves both traditional customs enforcement objectives and Customs’ growing role in strategic trade management.
The improved cooperation between Customs and the private sector called for under the second pillar of the SAFE Framework also is central to strategic trade enforcement. After all, industry – including manufacturers, exporters, freight-forwarders and shippers – bears critical responsibility in the fight against proliferators and is a key source of intelligence on WMD acquisition efforts. Customs services can play a major role in enhancing industry’s awareness of transaction risks associated with strategic goods and provide industry with the tools to detect suspicious orders and customers. For example, in 2001, Homeland Security Investigations launched Project Shield America designed to prevent illicit export of WMD technologies from the United States. Since then, U.S. agents have conducted over 21,000 outreach events with U.S. technology suppliers in order to improve their awareness of proliferation risks, reduce the risk of unintentional transfers, and solicit their cooperation in combating proliferation threats.
Customs also can play a role in providing incentives for industry compliance with enforcement regulations. The SAFE Framework calls for establishment and mutual recognition of authorized economic operator (AEO) programs to achieve end-to-end supply chain security and reward responsible traders. In the United States, our program is called Customs-Trade Partnership against Terrorism (C-TPAT). C-TPAT was launched in 2002 and is available to freight carriers, brokers, manufacturers, and traders, who import goods into the United States. The United States also has already signed Mutual Recognition arrangements with several countries and the EU, which means that the AEO validation of a company in one country is recognized in the other.
While not explicitly set forth in the SAFE Framework, Customs cooperation with other national, regional, and international organizations that have trade and border security responsibilities has been emphasized by WCO leaders. To ensure a timely, coordinated response to transnational security threats, the WCO has engaged many international organizations. In strategic trade enforcement, Customs’ capacity to classify strategic commodities and assess the risks associated with their import, export, or transit of these goods also depends on interagency coordination and information exchange between law enforcement and licensing agencies. Such coordination also facilitates analysis of traders involved in transactions with controlled commodities as well as their potential end-users.
Customs administrations have important powers that exist nowhere else in government - the authority to inspect cargo and goods shipped into, through, and out of a country, and to refuse or expedite entry or exit of goods. Given these unique authorities and expertise, Customs can and should play a central role in strategic trade enforcement. Full implementation of the SAFE Framework will strengthen a Customs service’s ability to detect, identify and interdict illicit shipments of proliferation concern; however, officers must be aware that proliferation trade is distinct from other forms of smuggling. For example:
Denying export of such technical items may have a seriously detrimental economic impact on the originating country.
Outside technical assistance may be needed to determine if an item has WMD-related applications and should be interdicted.
Officers should be alert to questionable end-users for a product.
For effective targeting of proliferant shipments, Customs services may require more information than broad consignment descriptions and product specifications.
Given the transnational nature of WMD procurement, investigating these violations may require special investigative powers and close coordination between Customs, industry, and their interagency counterparts at home and abroad.·
Thus, controlling dual-use goods is more challenging and requires development of comprehensive, layered strategic trade control standards and the establishment of dedicated, interagency-based Customs enforcement units for WMD targeting, detection, and interdiction.
The WCO’s Role
This leads me back to the WCO as the appropriate vehicle for developing universal strategic trade enforcement standards.
First, the WCO has the membership and thus the participation of 178 Customs administrations, representing 99 percent of global trade and most major suppliers of proliferation technologies.[1] As such, it offers the best platform for legal and institutional reform necessary to develop and implement these standards.
Second, as an international capacity-building organization, the WCO has a mandate to assist its member states in satisfying their obligations under UN Security Council Resolution 1540.
Third, Full implementation of the SAFE Framework by WCO members will create institutional basis and capabilities that may be applied to strategic trade enforcement.
Fourth, the revised Kyoto Convention includes a non-binding annex on Free Trade Zones (FTZs), which are recognized by the WCO as posing a risk of exploitation by proliferators, terrorists, and organized crime organizations. Annex D identifies best practices concerning management of Free Trade Zones that could provide a good baseline for the adoption of binding international standards related to effective regulation of strategic trade in these environments.
Fifth, WCO’s unifying standards and capacity building assistance would help mitigate the risk of proliferators seeking to exploit WCO members who are not party to multilateral export control regimes and have no explicit controls on trade in strategic commodities for illicit trafficking in these items.
Sixth, the WCO is the only organization with a clear international mandate to pursue integration of strategic trade controls with other customs control functions. This holistic approach is essential in order to facilitate global trade while strengthening the nonproliferation regime.
Benefits
I recognize that calling for Customs services to assume additional responsibilities for strategic trade enforcement while Customs administrations are already under pressure to meet so many threats may seem difficult. Yet I would stress that strategic trade enforcement is complementary to the economic development, trade facilitation, and traditional enforcement objectives already embraced by the WCO. Some have already embraced these responsibilities. For instance, the European Union adopted a security amendment to its Customs Code in 2011, introducing mandatory submission of advanced electronic cargo declarations. This development was beneficial for both strategic trade enforcement and trade facilitation as it resulted in better risk analysis and expedited process and release times for legitimate shipments.
The Netherlands established a specialized customs enforcement team responsible for ensuring compliance with international sanctions, embargoes, and UN resolutions and violations involving dual-use and defense goods. Maltese Customs has adopted a memorandum of understanding with the Malta Free Port in order to facilitate coordinated approach to combating illicit trade. In 2009, Homeland Security Investigations collaborated with Royal Canadian Mounted Police in preventing the export of twenty pressure transducers, which can be used in the gas centrifuge process used in uranium enrichment. Their joint investigation and interdiction was a result of a tip received during a Project Shield America presentation to industry. Earlier this year, an East Asian partner interdicted 70kg of vanadium, a controlled material that can be used to make jet engines, missile casings, and superconducting magnets, concealed among a shipment of fruits. There are many other examples of Customs services taking a proactive role in strategic trade enforcement and working with industry and international counterparts to secure international supply chains against proliferator networks.
The security benefits of these enforcement efforts are evident. But implementation of effective strategic trade controls also produces tangible economic benefits. For example, the harmonization of regulatory framework with respect to strategic goods promotes exports by leveling the playing field for domestic exporters of high technologies. A more coordinated interagency export process is a step towards development of single window systems that cut the time and bureaucratic requirements of doing business and increase economic competitiveness. In addition, greater transparency and efficiency of Customs operations reduce operational losses associated with diversion and theft of legitimate consignments, while enhanced detection and interdiction capacities enable Customs to combat illicit smuggling efforts. Moreover, our experience shows that implementing stringent national strategic trade enforcement measures increases the confidence of trading partners, foreign investors, and domestic industry by creating a safe and transparent trading environment.
Resources
One of the central tenets of President Obama’s "Prague Agenda," unveiled in 2009, is denying non-state networks and proliferant states access to WMD-related materials and technologies.
The United States government is prepared to provide technical assistance in support of the WCO’s strategic trade control initiatives, particularly development of universal strategic trade enforcement standards. The U.S. Department of State’s Export Control and Related Border Security Program – known as EXBS – works with partner governments and international agencies to establish, strengthen, and enforce responsible strategic trade management systems consistent with international norms. Tomorrow you will hear a presentation about EXBS’s efforts to build enforcement capacity, foster international cooperation, and develop partnerships that create what we call the "network of nonproliferators."
This afternoon, you will hear about the U.S. Department of Energy’s International Nonproliferation Export Control Program that aims to increase border security officials’ capabilities to detect and identify and interdict trafficking in strategic commodities. U.S. Customs and Border Protection (CBP) and Homeland Security Investigations have long-term cooperation agreements and technical assistance programs with a number of foreign partners. We hope to share our experience in managing strategic trade with the World Customs organization in this important effort.
I’m confident we can forge closer partnerships to prevent the spread of weapons of mass destruction while enjoying the benefits of liberalized trade. We look forward to cooperating with you as our countries continue the important work of strengthening strategic trade control enforcement. Thank you. I look forward to your questions and ideas.
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