1. Anti-Money Laundering

Selling overseas, or to customer who exports your product, may raise risk of recently unveiled anti-money laundering programs.

2. International Traffic in Arms Regulations ("ITAR")

The Arms Control Act and ITAR prescribe criminal penalties (fine of up to $ 1 million and/or imprisonment up to 10 years, 22 U.S.C. Sec. 2778(c)) for willful violations. In addition, ITAR violations may result in loss of export or import privileges (called "debarment"), 22 C.F.R. 127.7. Inadvertent violations should not generate penalties at the higher levels, but the government has discretion in these matters, and several violations have been reported prior to Sept. 11. For example, McDonald Douglas was fined by the Commerce Department for $2.1 million for selling China aerospace equipment which China installed at a military facility. It is expected that the Department of State will increase its scrutiny as a result of the events of Sept. 11.

In this global economy, companies buy and sell worldwide. Running afoul of ITAR's regulations can be unintentional. For example, it may not be a time to export top-ofthe- line PC's to certain Middle Eastern countries - when the PC's might be used to aid against USA military actions.

In addition to bullets, tanks, and the usual items which vendors consider to be of military use, ITAR applies to hardware, products, data, software, engineering designs and the like. Refer to the U.S. Munitions List 21 C.F.R. 121.

ITAR also regulates the importation of these items into the USA. Even Canada and other members of NATO countries are affected to some degree by ITAR. Refer to the Office of Defense Trade Controls at www.pmdtc.org.

3. Computer Hacking and RICO Prosecution

Under new anti-terrorism legislation, the USA Patriot Act, some computer crimes may be treated as terrorist acts which may be prosecuted under RICO, the federal racketeering statute. The RICO law was originally designed to battle organized crime. The provision will protect attempts to cause damage to commercial and business sites.

4. USA Patriot Act and the Dot-Com

The federal government is concerned that terrorists may be communicating their plans via e-mail and the Internet. The USA Patriot Act, a federal law signed by the President on October 26, gives federal law enforcement easier access to a computer user's Internet activity. If the credit professional is employed by a dot-com or telecom company, the Patriot Act may affect them as follows: cable companies providing Internet service are governed by wiretap laws; authorizes interception of a hacker's ecommunications; allows search and seizure of property without notice; Internet service providers may disclose information without a subpoena if information could save lives. It is unclear as to what will be the financial cost to dot-coms to comply with subpoenas and search warrants.

Douglas G Fox, GSCFM, CCE is a member of Mid-Atlantic NACM and is active in the Greater Delaware Valley Region and Philadelphia area.

Scott E. Blakeley is a principal of Blakeley & Blakeley LLP where he practices creditors' rights and bankruptcy law. He can be reached at sblakeley@bandblaw.com