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The United States maintains a complex system of controls and international trade regulations over the export of US goods and technology administered by various agencies of the federal government.

The Department of Commerce – in the Export Administration Regulations (“EAR”) and the Commerce Control List – has licensing authority over so-called “dual use” items. The EAR regulations potentially reach virtually any product or service that is to be exported (or re-exported from a foreign location).

The State Department – in the International Traffic in Arms Regulations (“ITAR”) – controls the export of any item, technology or service placed on the US Munitions List.

The Department of Treasury – through the Office of Foreign Assets Control – implements and administers sanctions and embargoes against specific countries (e.g., Cuba, Iran, Iraq, North Korea, Serbia, Sudan) and specially designated nationals and entities.

The Department of Homeland Security – through the Bureau of Customs and Border Protection – enforces all U.S. laws, including trade and immigration laws, at U.S. borders and ports of entry.

The Department of Energy enforces controls on nuclear, missile, chemical and biological weapons proliferation.

Expertise and Experience. Stephen H. LaCount (former Chair of the Nixon Peabody LLP Foreign Trade Controls Practice Team) has extensive experience in advising clients dealing with foreign trade controls administered by these federal agencies. Specific expertise includes:

  • Classification of goods, technology and services, obtaining licenses and other authorizations;
  • Transfer of technology and technical data; “deemed export” assessment; and cooperation with foreign nationals;
  • Conducting internal investigations and designing remedial measures;
  • Development and implementation of internal compliance and in-house training programs;
  • Negotiation of compliance settlements; and
  • Counseling on compliance with Antiboycott laws and Foreign Corrupt Practices Act

Mr. LaCount has written extensively on export control and national security developments. His client Alerts can be accessed in the Articles library.

National Security and Foreign Investment Review

The United States maintains an open and secure environment for foreign investment. Nonetheless, foreign investment, acquisition or merger activity with foreign companies, or debt financing from a foreign source, can trigger certain regulatory reviews and restrictions. Depending on the nature of the transaction, the US industry involved, and the profile of the acquired company, and the country of the investor, early involvement by legal counsel can be instrumental to ensure that the transaction is smoothly navigated through regulatory hurdles and consummated in a timely fashion.

Exon-Florio Filing and Review: Stephen LaCount has assisted domestic and foreign clients with the complexities of the Exon-Florio foreign investment filing and review process, including the application of the Defense Production Act of 1950.

Industrial Security Program: When a US defense contractor with access to classified or controlled unclassified information receives funding or investment capital from a foreign source, the US Industrial Security Program can be triggered. Under this program, the Defense Security Service (“DSS”) of the US Department of Defense monitors and regulates the amount of “foreign ownership, control or influence” (“FOCI”) present in a defense contractor under the provisions of the National Industrial Security Program (“NISPOM”). A US defense facility that has an unacceptable level of FOCI – posing significant national security risks - can face revocation, suspension or termination of its facility security clearance (with the consequence of disqualifying the contractor from consideration for further government contracts involving classified information).

Expertise and Experience. Stephen LaCount advises clients on FOCI mitigation and the intricacies of the NISPOM, the acquisition and maintenance of facility and personal security clearances, and implementing structures to eliminate or mitigate the level of FOCI (e.g., DSS-approved voting trusts, proxy agreements, special security agreements, corporate resolutions, technology control plans, formation of government security committees, and related communication and visitation protocols).

Stephen LaCount recently acted as regulatory counsel to Hampson Industries PLC, a publicly-traded UK aerospace company, in the company’s acquisition of Texstars Inc., a Texas-based defense contractor.

 
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