U.S. Department of State Imposes Sanctions on Turkey’s Presidency of Defense Industries

On December 14, 2020, the U.S. Department of State imposed broad sanctions on Turkey’s Presidency of Defense Industries (also known as SSB) pursuant to Sections 231 and 235 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), including a prohibition on U.S. government agencies from providing U.S. export licenses and authorizations for transfers of goods and technology to SSB. This restriction was implemented by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC).

Moving forward, BIS and DDTC will not issue any licenses or authorizations for the export or re-export of items to SSB. DDTC has stated that current, valid, non-exhausted licenses and authorizations are not affected by this change in policy. Similarly, there is no indication that BIS will revoke current and valid export licenses. Accordingly, absent further action from BIS or DDTC, items moving under existing BIS or DDTC licenses are not affected by the SSB sanctions.

We are seeking guidance from the U.S. government as to whether exempt activity, such as Foreign Military Sales transactions, are affected by these sanctions. We will send an update when we hear back from the U.S. government on this issue.

Importantly, these sanctions target SSB, Turkey’s primary defense procurement entity, and some of its officers. This is not a country-wide embargo on Turkey or a broader restriction against business with the Turkish government. These new restrictions are only triggered to the extent that SSB or one of its officers is involved with a shipment.

We hope this is helpful, but please let us know if you have any questions.

To Sign or Not to Sign: The In Person Event Dilemma

GKG Law Associations Practice Leader Richard Bar was invited to serve as a panelist for the Association TRENDS Your Association, COVID-19 & The Future virtual two-day town hall event. Rich's panel, "To Sign or Not to Sign: The In Person Event Dilemma," took place on December 3 at 12:05 p.m. ET.

During this session, Rich and his co-panelists discussed some of the decisions associations currently face with in-person events amidst a pandemic. Key discussion points included language in hotel and convention contracts, force majeure, insurance and event layouts, and how best to proceed with events in the short and long term.

How to Create a Social Media Policy That Protects Your Association

GKG Law Principal Katie Meyer was interviewed for and quoted in the Associations Now article "How to Create a Social Media Policy That Protects Your Association," which published on December 2. The article covers the legal issues that can arise with social media use and the importance of having strong social media policies for volunteers and employees.

While many are concerned with posts misrepresenting the view of the association, Meyer said people often overlook the legal issues that can arise from inappropriate posts.

You have defamation, where people aren’t thinking and are stating something that is untrue about a person or a competitor,” Meyer said. “Confidentiality can be a problem. If employees or board members don’t understand what is confidential, sharing that online can create liability.

Having a good social media policy in place can help those posting for associations promote the organization and its initiatives without causing harm. The social media policy should include who can post on an association’s accounts, what they’re able to post, and how employees and board members should post when using their personal accounts.

For employees, this has been a big issue, not only what to do in a professional capacity, but what to do in a personal capacity,” Meyer said. While employees, volunteers, and board members can express opinions, it must be clear that they are, in fact, representing themselves and not the organization.

The article can be seen in its entirety here.

GKG Law Trade & Associations Of Counsel to Retire in December

Leading Washington, DC law firm GKG Law, P.C. announced today that after 58 years of practice, Trade & Professional Associations Practice Group Of Counsel Steven John Fellman will be retiring on December 31. GKG Law Principal and CFO Richard B. Bar will serve as the new direct point of contact for Fellman.

“It is bittersweet to bid Steve farewell. Steve more than deserves to start the next chapter of his life and enjoy retirement with his beautiful wife Linda and large, loving extended family. At the same time, it is a sad day for GKG Law and Steve will leave quite a void. Steve forever will remain a member of the GKG Law family,” said Bar. “It has truly been my honor to practice law with Steve, and his impact on our firm and the legal community is undeniable. Steve is a legendary attorney, wise leader and loyal advocate. We wish him the very best in his retirement.”

Fellman served as managing partner of GKG Law for more than 10 years and also previously chaired the firm’s Trade & Professional Associations Practice Group. He spent much of his legal practice serving as a trade regulation attorney representing non-profit organizations and corporate clients in a wide variety of antitrust, competition, corporate governance, tax and public policy related issues. Fellman has defended clients in Federal Trade Commission, Department of Justice and antitrust actions in courts throughout the country. He has also represented clients in employment matters such as Fair Labor Standards Act interpretations, Americans with Disabilities Act litigation, employment contracts and wrongful discharge actions. He has acted as general and special counsel for associations in construction, laundry, professional services, insurance, financial services, motion picture theater and health care.

Fellman, a recognized voice within the industry, has presented nationwide at American Bar Association (ABA) and American Society of Association Executives (ASAE) events, and at legal and trade conferences. He has also published numerous articles on antitrust and non-profit organization law. He was co-author of several editions of the Antitrust Advisor, published by the West Group. He also served as a featured columnist for trade association journals and Association TRENDS. Fellman is a recipient of the Textile Rental Services Association’s prestigious Textile Member Achievement Award and the Association of Union Constructors’ prominent President’s Award.

Fellman earned his LL.B. from New York University and his BA from Williams College. He is admitted to practice in the District of Columbia and New York State. Before joining GKG Law, Fellman practiced as an FTC trial attorney.

He formerly chaired the Antitrust and Trade Association Committee of the Bar Association of the District of Columbia, the Trade Association Committee of the Antitrust Section of the ABA, and the Legal Section of the ASAE. He served as a council member of the ABA’s Antitrust Law Section for many years.

In his retirement, Fellman and his wife will split their time between Maryland and Florida. Moving forward, Fellman can be reached at 1sjfellman@gmail.com.

Two GKG Law Attorneys Retiring from Full-Time Practice in December

Leading Washington, DC law firm GKG Law, P.C. announced today that Of Counsel Steven John Fellman, who has been practicing law for 58 years, and Principal Edward D. Greenberg, who has been practicing law for 52 years, will be retiring from full-time practice on December 31. Greenberg will remain of counsel at GKG Law in 2021, advising the firm’s clients and partners as transportation-related needs arise.

“Ed and Steve are both brilliant attorneys who truly exemplify the firm’s commitment to client service and providing outstanding legal advice,” said GKG Law Principal and CFO Richard B. Bar. “Both Ed and Steve deserve the high esteem they receive from their peers in the legal community as well as their many longstanding clients. All of us at GKG Law will greatly miss Ed and Steve and their many contributions to GKG Law’s success over many decades. We wish them well in the next chapter of their lives and know that they will always remain part of the GKG Law family.”

Fellman served as managing partner of GKG Law for more than 10 years and also previously chaired the firm’s Trade & Professional Associations Practice Group. He spent much of his legal practice serving as a trade regulation attorney representing non-profit organizations and corporate clients in a wide variety of antitrust, competition, corporate governance, tax and public policy related issues. Fellman has defended clients in Federal Trade Commission, Department of Justice and antitrust actions in courts throughout the country. He has also represented clients in employment matters such as Fair Labor Standards Act interpretations, Americans with Disabilities Act litigation, employment contracts and wrongful discharge actions. He has acted as general and special counsel for associations in construction, laundry, professional services, insurance, financial services, motion picture theater and health care.

Fellman, a recognized voice within the industry, has presented nationwide at American Bar Association (ABA) and American Society of Association Executives (ASAE) events, and at legal and trade conferences. He has also published numerous articles on antitrust and non-profit organization law. He was co-author of several editions of the Antitrust Advisor, published by the West Group. He also served as a featured columnist for trade association journals and Association TRENDS. Fellman is a recipient of the Textile Rental Services Association’s prestigious Textile Member Achievement Award and the Association of Union Constructors’ prominent President’s Award.

Greenberg spent much of his legal career representing diverse groups of clients engaged in transportation and international trade in a wide variety of administrative, corporate, export controls, litigation, government contracts and white-collar issues. He has represented his individual and trade association clients before a large number of federal agencies, including the Federal Maritime Commission, Surface Transportation Board, Federal Railroad Administration, Federal Energy Regulatory Commission, Department of Transportation, Department of Justice, and various federal and state courts throughout the country. Among Greenberg’s corporate clients are major industrial rail shippers, oil companies, and numerous international freight forwarders. Further, Greenberg served as general counsel to the National Customs Brokers and Forwarders Association of America, Inc. for 35 years. American Shipper noted in this recent feature article that Greenberg’s work in this role “helped improve standing and recognition of the non-vessel-operating common carriers industry in Washington.”

In acknowledgement of Greenberg’s pioneering work in transportation, he was selected by peers for inclusion in The Best Lawyers in America© 2020 and 2021 in the field of Transportation Law. He is currently a member of the American Bar Association, Association of Transportation Law, Transportation Lawyers Association, Maritime Administrative Bar Association and Energy Bar Association. He also served as a contributing editor for Inbound Logistics.

GKG Law Transportation Principal to Retire from Full-Time Practice in December

Leading Washington, DC law firm GKG Law, P.C. announced today that after 52 years of practice, Transportation, Trade &  Logistics Practice Group Principal Edward D. Greenberg will be retiring from his full-time law practice on December 31. Greenberg will remain of counsel at GKG Law in 2021, advising the firm’s clients and partners as transportation-related needs arise.

“It has been a privilege to practice law alongside Ed for the past 11 years and he will be greatly missed within the firm and by his clients,” said GKG Law Transportation, Trade & Logistics Principal Tom Wilcox. “Ed’s prolific career and accumulated expertise in many facets of transportation law is truly inspiring to other practitioners, and his solid reputation in the transportation industry is well-deserved. He will forever remain one of the heads of the GKG Law family.”

Greenberg spent much of his legal career representing diverse groups of clients engaged in transportation and international trade in a wide variety of administrative, corporate, export controls, litigation, government contracts and white-collar issues. He has represented his individual and trade association clients before a large number of federal agencies, including the Federal Maritime Commission, Surface Transportation Board, Federal Railroad Administration, Federal Energy Regulatory Commission, Department of Transportation, Department of Justice, and various federal and state courts throughout the country. Among Greenberg’s corporate clients are major industrial rail shippers, oil companies, and numerous international freight forwarders. Further, Greenberg served as general counsel to the National Customs Brokers and Forwarders Association of America, Inc. for 35 years. American Shipper noted in this recent feature article that Greenberg’s work in this role “helped improve standing and recognition of the non-vessel-operating common carriers industry in Washington.”

In recognition of Greenberg’s pioneering work in transportation, he was selected by peers for inclusion in The Best Lawyers in America© 2020 and 2021 in the field of Transportation Law. He is currently a member of the American Bar Association, Association of Transportation Law, Transportation Lawyers Association, Maritime Administrative Bar Association and Energy Bar Association. He also served as a contributing editor for Inbound Logistics.

Greenberg earned his JD from Catholic University School of Law and his BA from Johns Hopkins University. He is admitted to practice law in the District of Columbia, Maryland, the U.S. Supreme Court, Second U.S. Circuit Court of Appeals, Fifth U.S. Circuit Court of Appeals, Seventh U.S. Circuit Court of Appeals, Eleventh U.S. Circuit Courts of Appeals, U.S. Court of International Trade and the U.S. Court of Appeals for the D.C. Circuit.

New FMC Investigation on Demurrage and Detention Practices

On November 19, 2020, the Federal Maritime Commission (FMC) issued a supplemental order expanding the scope of Fact-Finding Investigation No. 29 (FF No. 29). As you may recall, the FMC opened FF No. 29 earlier this year in response to the disruptive effects COVID-19 has had on trade and for the purpose of identifying solutions for some of the issues. 85 Fed. Reg. 19146-19147 (April 6, 2020). That investigation was quickly followed by the FMC’s release of the long-awaited result of Fact Finding No 28, Interpretative Rule on Demurrage and Detention Practices under the Shipping Act, FMC Docket No 19-05 (April 28,2020). Commissioner Rebecca Dye was once again appointed as the Fact-Finding Officer authority to establish one or more supply chain innovation teams (Innovation Teams). The current supplemental order was approved by unanimous vote—Chairman Michael Khouri, Commissioner Daniel Maffei, Commissioner Louis Sola, and Commissioner Carl Bentzel all issued statements in support.
 
The supplemental order is in response to discussions with industry stakeholders who have expressed concerns regarding certain vessel operating common carrier (VOCC) practices and regulations pertaining to empty container returns, demurrage, and detention. The information obtained indicates that VOCCs that call on the ports of Los Angeles/Long Beach (LA/LB) or New York/New Jersey (NY/NJ) may be engaging in unreasonable practices in violation of former section 10(d)(1) of the Shipping Act, now 46 USC 41102(c). In other words, numerous NVOCCs and shippers alleged that the carriers and marine terminal operators (MTOs) had not reformed their practices, and that demurrage and detention procedures were still being abused, notwithstanding an extensive record and the FMC’s clear signal that significant change was necessary. Chairman Khouri’s statement of support also indicated that certain carrier billing practices—as previously mentioned in the FMC’s Notice of Inquiry—will also be investigated in FF No. 29.
 
The FMC’s supplemental order comes just days after GKG Law submitted a letter to the FMC on behalf of the NCBFAA—in conjunction with 48 other national trade associations—requesting that it use its authority to order the carriers and MTOs to cease imposing demurrage and detention during times of extreme congestion. This, of course, is one of those times. The virtually unprecedented volumes of cargo being received at the LA/LB and the NY/NJ ports, coupled with the shortage of labor and chassis, inefficient management of the Southern California Pool of Pools, and the lack of communication by the carriers has led to the imposition of demurrage and detention charges in excess of $150 million this year alone.
 
As COVID-19 and the subsequent extreme congestion at the ports has greatly impacted the shipping industry, we encourage you to participate and provide comments. The FMC is encouraging all industry stakeholders—shippers, NVOCCs, MTOs, VOCCs, truckers, and others—to participate in the investigation. Anyone wishing to participate can do so by submitting information and/or comments to Commissioner Dye at ff29@fmc.gov. We recognize that there is often a sensitivity and reluctance to go public with complaints against the carrier and MTO's practices, however, comments can be submitted confidentially in a way that only the Commission would have access to details that could serve to identify parties.
 
Please contact a member of the GKG Law team if you have any questions or would like assistance in drafting/submitting comments.

Federal Income & Excise Tax Implications of Personal & Entertainment Use of Business Aircraft

On November 19, GKG Law's Keith Swirsky and Troy Rolf hosted the webinar Federal Income & Excise Tax Implications of Personal & Entertainment Use of Business Aircraft. During this one-hour session, presenters discussed the federal income and excise tax issues that arise due to personal and entertainment use of business aircraft, such as income inclusion rules, excise tax implications of reimbursements, and how personal use impacts operating expense and depreciation deductions. Keith and Troy advised on common strategies that help aircraft owners and passengers to minimize negative tax consequences arising from personal or entertainment use of a business aircraft. 

A recording from this webinar can be found here and slides are attached below.

 

PDF FilePersonal & Entertainment Use of Business Aircraft Slides

Assessing and Managing the Inherent Risks to Your Certification Program

GKG Law's Rich Bar served as a featured speaker at the Institute for Credentialing Excellence's (ICE) 2020 ICE Virtual Exchange on November 10. Rich and his co-presenters, American Board for Certification In Orthotics, Prosthetics, and Pedorthics Executive Director Catherine Carter and National Commission for the Certification of Crane Operators Director of Operations Joel Oliva, discussed Assessing and Managing the Inherent Risks to Your Certification Program

The ICE Exchange is an annual gathering for the credentialing community to exchange ideas on industry trends and best practices, connect with each other, and participate in high quality education. In 2020, the Exchange offered sessions covering the following tracks: Alternative Credentials; Business of Certification; Credentialing Innovations; Marketing and Communications; Security, Records, and Data Management; Standards and Accreditation; and Test Development and Administration.

GKG Law Submits Comments To FMC Addressing Shipping Act Violation

GKG Law Principal Ed Greenberg and Associate Kristine Little submitted the below comments to the Federal Maritime Commission (FMC) on behalf of the National Customs Brokers and Forwarders Association of America (NCBFAA) in response to the agency’s Notice of Inquiry (NOI) that was looking into the propriety of steamship line billing practices. In a growing number of instances, carriers have been dunning customs brokers and ocean forwarders for freight charges and demurrage/detention bills even though the brokers or forwarders are not actually a party to the contract of carriage. The carriers have justified these practices by broadly defining the term “merchant” to include anyone who provides services to the shipper, consignee or beneficial cargo owner. These comments explain why that practice is unreasonable and violates the Shipping Act, and requests that the FMC issue a specific rule prohibiting any continued conduct of this nature.
 


Re: Docket No. 20-16 — Notice of Inquiry; Vessel-Operating Common Carrier Definition and Application of the Term ‘‘Merchant’’ in Bills of Lading

Dear Secretary Dickon:

The National Customs Brokers and Forwarders Association of America (“NCBFAA” or “Association”), submits these comments in response to the Federal Maritime Commission’s (“FMC” or “Commission”) notice of inquiry (“NOI”) published in this docket on October 14, 2020 (84 Fed Reg. 65042).

The NCBFAA, together with its over 1,000 members and 28 regional associations, is the national trade association representing the interest of freight forwarders, NVOCCs and customs brokers in the ocean shipping industry. The NCBFAA’s members are involved in the transportation and/or logistical arrangements for approximately 90% of the cargo that moves into and out of the United States by ocean. Accordingly, the NCBFAA’s members are directly affected by the billing practices of vessel operating common carriers (“VOCC”).

The NCBFAA appreciates the opportunity to provide comments and the Commission’s efforts to ensure that VOCC billing practices align with contractual responsibilities and are reasonable under 46 U.S.C. § 41102(c). In the FMC’s investigation of demurrage and detention practices of vessel operators in Docket No. 19-05, Interpretive Rule on Demurrage and Detention Under the Shipping Act, several parties raised concerns regarding the propriety of how the VOCCs’ bills of lading define the term “merchant.” As those definitions generally include third parties such as “anyone acting on behalf of the shipper or consignee,” the comments included complaints about having been dunned for these charges even if their only role was to act as an ocean forwarder or customs broker. In this NOI, the Commission is seeking additional comments as to whether VOCCs are inappropriately assessing charges on third parties who have not directly contracted with the VOCC or assented to be bound by the contract of carriage.

As a matter of principal, it is well established that holding non-contracting parties liable for unpaid charges goes against general contract law principles. Case law establishes that a party cannot enforce a contract against another party who has not agreed to be bound by its terms and conditions. See, e.g., UP v. Ametex, Inc., 104 F.3d 558 (3rd Cir. 1997). Yet, certain VOCCs appear at times to be holding non-contracting parties—who have no interest in the cargo, are acting only as agent of the beneficial cargo owners (“BCO”) and/or typically appear on the bills of lading only as a Notify Party or Forwarding Agent—liable for unpaid charges.

The NCBFAA’s understanding is that many, if not most, VOCC bills of lading define the term “merchant” to include “anyone acting on behalf” of the shipper, consignee or anyone with a beneficial interest in the cargo. To be clear, the NCBFAA is not disputing a VOCC’s right to seek payment for charges from persons that have a contractual relationship with the VOCC and are listed as the shipper and/or consignee on the VOCC’s master bill of lading (“MBL”). Moreover, to the extent a third party has an interest in the goods, the NCBFAA acknowledges that applying the definition of merchant to those third parties may be defensible and appropriate.

The NCBFAA believes, however, that to the extent the term “merchant” is applied to non-contracting parties that have no beneficial interest in cargo in an attempt to collect charges, this would be an unreasonable practice in violation of section 10(d)(1) of the Shipping Act of 1984 (“Shipping Act”) (46 U.S.C. § 41102(c)). Yet recent actions by VOCCs indicate that they have expanded the definition of the term “merchant” to mean any entity involved in the shipment, e.g. customs brokers, forwarders or any party listed as the Notify Party on the MBL.

The Association is aware of a number of instances in which various VOCCs have utilized the “anyone acting on behalf of this Person” language to dun customs brokers and ocean forwarders for demurrage, detention and other charges. Indeed, VOCCs have used this or similar language to hold non-contracting parties jointly and severally liable for charges.

For example, one of our members—who acted only as a customs broker—reported receiving a bill from the VOCC for approximately $65,000 on door deliveries because the importer BCO (or the trucker engaged by the VOCC) refused to pay the detention (per diem) charges. The VOCC took the position that due to the age of the invoices, these bills were the responsibility of the customs broker and stated that their refusal to pay the charges would be reported to various credit agencies. Comments filed in this docket by Welke Customs Brokers USA, Inc. (“Welke”) describe a similar situation. There Welke was acting as the customs broker on behalf of the importer of record, they had no relationship or contractual agreement with MSC. Despite this, MSC demanded payment from Welke for outstanding charges and opened an account in their name without their consent. MSC insisted that the outstanding charges were their responsibility and threatened legal action. The dispute went on for months and was only resolved when Welke collected monies from the shipper and remitted payment to MSC.

Moreover, this is not an issue that is limited to demurrage and detention charges. One of our members, who again was only acting as a customs broker, and presumably the notify party on a bill of lading to which it was not actually a party, was dunned by a VOCC for the costs of restowage of cargo when the container that arrived at a U.S. port was overweight. The VOCC billed them for various services associated with that overweight situation asserting that they were a responsible party under the bill of lading.

To aggravate the situation, some VOCCs go so far in their collection practices to threaten or actually impose a “No Business Hold” on parties that challenge the carrier’s imposition of these charges. For customs brokers this means that all imports handled by the broker are essentially frozen—including shipments where no outstanding charges are due, thereby, adversely affecting the broker’s business simply because a customer listed the broker as a Notify Party. In some instances, the broker elects to pay the charges rather than fight with the carrier, even if they have no means of recovering those charges for which they are not legally responsible from any other party.

Section 41102(c), formerly Section 10(d)(1) of the Shipping Act, provides that a regulated entity “may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.” The Association recognizes that for an entity to be found in violation of § 41102(c), the entity must engage in the unjust or unreasonable practice on a “normal, customary, and continuous basis.” See Docket 18-06, Interpretive Rule, Shipping Act of 1984, (December 17, 2018) (83 Fed. Reg. 64478). However, as the VOCCs appear to have uniformly adopted this wording of the merchant definition and are on numerous occasions unreasonably applying it against parties with whom they have no contractual right to do so, the test recently enunciated in this Interpretative Rule has been satisfied.

In Docket No. 19-05, the FMC explained that one of its goals was to “emphasize the importance of ocean carriers and marine terminal operator bills aligning with contractual responsibilities.” 85 Fed. Reg.29662. At that time, the Commission declined to address whether a VOCC billing an inappropriate party was an unreasonable practice and concluded that this was better addressed on a case-by-case basis. We respectfully suggest that it is time to revisit at least this limited issue. In the Association’s view, the current misuse of the VOCC’s ability to unilaterally establish adhesion bill of lading provisions, buttressed by their unilaterally promulgated rules tariffs, demonstrate the need for the Commission to put a stop to this unreasonable practice of dunning parties for transactions on which they have no contractual relationship simply because of their economic leverage.

In summary, the NCBFAA believes that the Commission should issue a rule or specific guidance stating that the use and definition of the term “merchant” should be consistently and reasonably applied to parties either directly named in the specific contract of carriage or that have a demonstrable beneficial interest in the cargo. Without guidance to the contrary, this growing problem will fester and legitimize VOCCs to continue to improperly assess demurrage, detention and other charges against inappropriate third parties just because they may have the economic leverage to coerce brokers, forwarders or other third parties to pay.

The NCBFAA appreciates the opportunity to submit these comments to this NOI.

Respectfully Submitted,
Edward D. Greenberg
Kristine O. Little

Attorneys for THE NATIONAL CUSTOMS BROKERS AND FORWARDERS ASSOCIATION OF AMERICA, INC.

Copyright © 2025. All Rights Reserved.