US Exporters Fined for Selling Film to China
California export company, Valtex International Corporation, was sentenced to five years probation and ordered to pay a $250,000 criminal fine for exporting metalized polymide film to China. Metalized polymide film is a dual-use good with ballistic missile applications. It requires an export license to be exported to China, which Valtex failed to obtain. Alexanyan was sentenced to 3 years probation and a $12,000 criminal fine. In addition, Chief Judge James Rosenbaum ordered that Valtex president and owner, Vladimir Alexanyan, be forbidden from engaging in any international business activities during his probationary period. Separately, on January 12, 2005, the Commerce Department reached a settlement with Valtex and Alexanyan concerning related administrative violations of the Export Administration Regulations. Valtex agreed to pay an administrative penalty of $77,000 while Alexanyan agreed to an $88,000 administrative penalty. As part of the civil settlement, Valtex agreed to implement an export management system not later than December 29, 2005.
Bush Freezes US Assets of Organizations Involved in Weapons of Mass Destruction
On June 28, Pres. Bush signed an Executive Order to freeze the assets of businesses or individuals who are believed to be doing business with Iran, North Korea or Syria and may be promoting the proliferation of weapons of mass destruction (WMD). The order designates eight organizations specifically, and gives the Secretary of State, the Attorney General, and other relevant agencies, a charge to identify any other organization it believes is related to the eight designated organizations. All assets of such organizations in, or passing through, the U.S. are now frozen. For a list of the eight organizations and other details of this Order, refer to the White House press release at: http://www.whitehouse.gov/news/releases/2005/06/20050629.html or contact Conan Grames at cgrames@kmclaw.com.
Recent Developments with China’s Exchange Rate Policies
In the June issue of the iiBulletin, we reported that Congress had introduced a bill (H.R. 3004) that would require the Treasury Secretary to analyze China’s exchange rate policies and report within 60 days on whether these policies were in violation of either the General Agreement on Tariffs and Trade (GATT) or the International Monetary Fund (IMF) agreements. China's policy of keeping its currency pegged to the US dollar along with its accumulation of large amounts of foreign currency reserves strongly suggested that the RMB was undervalued against the dollar. Against this backdrop, China announced in July that the RMB will no longer be strictly linked to the dollar. Instead, it will float against a basket of currencies. This change had the immediate effect of strengthening the RMB by 2.1%, to a rate of 8.11 to the dollar.
Prior to this recent development, economists had estimated that the RMB was undervalued against the US dollar by as much as 40%. Import tariffs of the People's Republic of China currently average about 15%. Assuming the estimate of 40% undervaluation of the Chinese RMB against the dollar was correct, the effect of moving toward a free and open currency market could be more than twice as large as the effect of eliminating every tariff that the People's Republic of China imposes on United States goods. Just how far China’s currency market will move towards being completely free and open remains to be seen.
This month, the European Parliament rejected one of the most controversial pieces of legislation in its history: a proposed law that would have created a single system for patenting software throughout the European Union. This leaves each nation of the European Union free to maintain independent patent laws. As Europe struggles to find an appropriate middle ground in the software patent debate, inventors remain subject to hundreds of different laws as they try to protect their work in an increasingly connected world. Click here for more information.
The Supreme Court determined that using patented inventions in preclinical testing is exempted from infringement, even if the results are not ultimately included in a submission to the FDA (i.e., in an IND or NDA). The Supreme Court explained that the exemption from infringement extends to all uses of patented inventions that are reasonably related to the development and submission of “any information” under the FDCA. Click here for more information.
Elan Pharmaceuticals, Inc. (Elan), a California company, recently agreed to pay $31,000 to settle charges that it was exporting controlled biological toxins to Belgium in violation of the Export Administration Regulations (EAR). As part of the settlement, Elan also agreed to perform an internal audit of its export compliance program. Click here for more information.
Kirton & McConkie represented Alianza Global Communication Services (“Alianza”), a telecommunications provider of Voice over Internet Protocol (VoIP) services, in the establishment of their operations in the Mexican market in the year 2004. As a result of their success in Mexico, Alianza decided to increase their operations and recently closed a $2 million funding round, receiving capital from nearly 15 investors. Kirton & McConkie assisted in the legal aspects of Alianza’s funding efforts. Alianza is determined to become the leading provider of VoIP services to the business market in Mexico;
“We are overjoyed with the generous financial support our investors have provided to the company,” said Alianza CEO Brian Beutler. “At this stage, creating a first mover advantage in the market is critical to our success. With this funding, Alianza will be able to expand its customer acquisition efforts and accelerate its penetration into the Mexican telecommunications market.”
Alianza is changing the face of global communications by delivering innovative VoIP-based services to small and medium-sized businesses across the world. Kirton & McConkie has advised Alianza in various aspects of their business, such as corporate and tax restructuring, employment relations and international operations. Alianza is headquartered in Orem, Utah, and has offices in Monterey, Mexico, and Mexico City.
For more information, please visit Alianza’s website at www.alianza.com, or contact Gabriel Sanchez of Kirton & McConkie at csanchez@kmclaw.com.
