U.S.-CAMBODIA RELATIONS

Map Credit:  U.S. State Department
FROM:  U.S. STATE DEPARTMENT

Over the last several decades of the 20th century, the United States and Cambodia established, broke off, and reestablished relations as a result of armed conflict and government changes in Cambodia.

 Full diplomatic relations were established after the freely elected Royal Government of Cambodia was formed in 1993. In recent years, bilateral relations between the U.S. and Cambodia have deepened and broadened. The two countries have worked together to increase trade and address challenges from promoting regional security and democracy to expanding global health and development. The U.S. supports efforts in Cambodia to combat terrorism, reduce the prevalence of HIV/AIDS, build democratic institutions, promote human rights, foster economic development, eliminate corruption and trafficking in persons, achieve the fullest possible accounting for Americans missing from the Indochina conflict in the 1960s and 1970s, and to bring to justice those most responsible for serious violations of international humanitarian law committed under the 1975-79 Khmer Rouge regime.

U.S. Assistance to CambodiaCambodia is at peace after decades of conflict, although important challenges remain. Cambodia relies heavily on foreign assistance--about half of the central government budget depends on donor aid. U.S. assistance makes significant contributions to the country’s development. In 2010, U.S. Agency for International Development (USAID)-administered assistance was approximately $70 million for programs in health, education, governance, and economic growth.

Bilateral Economic RelationsCambodia's economy suffers from the legacy of decades of war and internal strife. The economy is heavily dollarized; the dollar and riel can be used interchangeably. The U.S. normalized economic relations with the country in 1992 and is one of Cambodia's major trading partners. Manufacturing output is concentrated in the garment sector, and garments dominate Cambodia's exports, especially to the U.S. and the European Union.

Cambodia's Membership in International OrganizationsCambodia became a member of the United Nations in 1955 following independence from France in 1953. Cambodia and the United States belong to a number of the same international organizations, including the UN, International Monetary Fund, World Bank, and World Trade Organization

U.S. DOJ REACHES AGREEMENT WITH ALABAMA SCHOOL DISTRICT ON RACE BASED EXTRACURRICULAR ACTIVITIES

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, August 3, 2012

Justice Department Reaches Agreement with Alabama School District to End the Use of Race in Extracurricular Activities

The Justice Department announced today that it reached an out-of-court agreement with the Escambia County School District in Alabama to end the use of race-based selection criteria for homecoming courts and other student activities in two of the district’s high schools.

In response to the department’s inquiry earlier this year, the district indicated that two of its high schools considered race in certain student elections. Escambia County High School permitted students to elect two homecoming queens and two homecoming attendants, one African-American and one not. Another school, W.S. Neal High School, had a similar longstanding practice of using race-based criteria for election of students to its Valentine’s Day courts.

To resolve the department’s concerns over these practices, the Escambia County Board of Education voluntarily adopted a district-wide non-discrimination policy for extracurricular activities. The policy will end the use of race-based election and selection criteria in all student activities. The agreement requires the district to fully implement and enforce its new non-discrimination policy, to notify parents and students of changes to student election practices and to provide compliance reports to the department for at least one year.

"We commend the Escambia County Board of Education for acting swiftly to abolish the use of race in student activities and to ensure that no student is denied participation in any extracurricular activity based on race," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "It is time for the once common practice of segregating students by race in school activities to come to an end."

The use of race-based selection and election criteria in public schools’ extracurricular activities, including homecoming courts, proms and similar activities is prohibited by Title IV of the Civil Rights Act of 1964, which bars public school districts, colleges and universities from discriminating against students on the basis of race, color, national origin, sex and religion. The department has challenged such practices in a number of school districts over the years, including, most recently, settling with the Nettleton School District in Mississippi in 2011 to abolish race-based selection and election procedures for class officers, homecoming courts and student superlatives.

30TH ANNIVERSARY OF LAUNCH OF DSCS SATELLITE

FROM: U.S. AIR FORCE SLPACE COMMAND
AFSPC Milestone: First DSCS Satellite Launch
8/5/2012 - Peterson Air Force Base, Colo. -- As Air Force Space Command approaches its 30th Anniversary on 1 Sep, here is a significant milestone from the command's history...

On 30 October 1982, the first Defense Satellite Communications System (DSCS-III) satellite was launched from Cape Canaveral AFS, Fla. As the backbone of the U.S. military's global satellite communications capabilities, the DSCS constellation provides nuclear-hardened, anti-jam, high data rate, long-haul communications to users worldwide.

DSCS supports the defense communications system, the Army's ground mobile forces, the Air Force's airborne terminals, Navy ships at sea, the White House Communications Agency, the State Department, and special users. Overall DSCS responsibility resides in the United States Strategic Command, but is supported by the 3rd Space Operations Squadron at Schriever AFB, Colo.

36 "GREEN" VEHICLES IN HAWAII

120730-N-UZ680-041 JOINT BASE PEARL HARBOR-HICKAM, Hawaii (July 30, 2012) Capt. John Coronado, commanding officer of Naval Facilities Engineering Command (NAVFAC) Hawaii, takes a two-passenger Vantage electric cargo van slow-moving vehicle (SMV) for a spin around the command's main transportation compound. The truck is one of 36 SMVs NAVFAC Hawaii purchased to replace the aging vehicles currently in service. (U.S. Navy photo by Thomas Obungen/Released)

FROM: U.S. NAVY
NAVFAC Hawaii Adds 36 Electric Vehicles to JBPHH Inventory
By Thomas Obungen, Naval Facilities Engineering Command Hawaii

Pearl Harbor (NNS) -- Naval Facilities Engineering Command (NAVFAC) Hawaii, Joint Base Pearl Harbor-Hickam's (JBPHH) installation transportation manager, officially added 36 electric Slow-Moving Vehicles (SMVs) to its inventory, July 30.

"These SMVs offer a safer and smarter alternative to the smaller, outdated neighborhood electric vehicles that have been in use for the past 10 years," said Capt. John Coronado, NAVFAC Hawaii commanding officer. "A range of 40 miles and maximum speed of 25 mph make them perfect for commuting in and around JBPHH, transporting people, tools, and supplies to keep our fleet ready."

The models, manufactured by Vantage Vehicle International, Inc., include two- and four-passenger trucks and cargo vans and have virtually the same capability as full-size automobiles. They also have hard doors, windshield wipers, air conditioning/heat, radio, and instrument gauges, which other SMVs do not. Vantage SMVs use conventional 110-volt charging cables; however, each one is also equipped with a roof-mounted solar panel to reduce time and resources at the charging station, while extending battery life and usage.

Distribution of the new vehicles will first be to commands that already have SMVs and power stations in place. NAVFAC Hawaii plans to purchase more vehicles in the future to keep up with the president's fossil fuel reduction mandate.

In addition, new charging stations supplemented by photovoltaic systems on their roofs are on track for installation at NAVFAC Hawaii's main transportation compound off USS Russell Avenue within the next year.

TASK FORCE ON CHILDREN EXPOSED TO VIOLENCE GOES BEFORE CONGRESS

Task Force co-chairs Robert Listenbee, Jr. and Joe Torre, and Melodee Hanes, Acting Administrator, Office of Juvenile Justice and Delinquency Prevention. Photo Credit: U.S. Department of Justice.FROM: U.S. DEPARTMENT OF JUSTICE
Attorney General Eric Holder’s Task Force on Children Exposed to Violence Briefs Congress
August 6th, 2012 Posted by Tracy Russo
The following post appears courtesy of Acting Assistant Attorney General for the Office of Justice Programs, Mary Lou Leary
Over the last year, the Attorney General’s Task Force on Children Exposed to Violence has traveled the country, listening to practitioners, policymakers, academics, concerned citizens, and victims. Its goal was to find out how violence and abuse are affecting our kids and our communities and to explore what actions we can take to prevent children’s exposure to violence and mitigate its effects. The problem is an urgent one, one Attorney General Eric Holder says "we can’t afford to ignore."
On Wednesday, July 25 the Task Force Co-Chairs went to Congress to report on its progress – to a standing-room only crowd of more than 100 people eager to learn how to stop the national epidemic of children’s exposure to violence.
Task force co-chairs Joe Torre, Yankee legend and executive vice president of baseball operations for Major League Baseball, and Robert Listenbee, Jr., chief of the Juvenile Unit of the Defender Association of Philadelphia, led the briefing, describing their comprehensive work since the task force launch in October 2011. They discussed many lessons learned through four public hearings in Baltimore, Albuquerque, Miami and Detroit and three listening sessions in Anchorage, Oakland and Joint Base Lewis-McChord outside Tacoma, WA.
The variety of sites gave the task force members the big picture of violence in America. "People think violence is an urban problem, but tribal area statistics are sometimes worse…while rural areas have difficulty getting resources," noted Co-chair Listenbee. The task force heard personal testimony from 65 people from 27 states and the District of Columbia. These included survivors of violence, young people, social service providers, medical personnel, researchers, practitioners, advocates, tribal and local officials, private foundation representatives, and community residents.
Torre, who established the Joe Torre Safe At Home Foundation to give children relief from violence in their homes, had everyone’s rapt attention when he described the impact of witnessing abuse as a child:
"It took decades before I finally started to talk about the violence in my childhood," he said. "And as the task force has heard from one person after another, things haven’t changed enough. Every child deserves a safe home, a safe school, and a safe community….They need our help. And we need their help. Children are a part of the solution. Awareness is a part of the solution. Some people think it’s just a part of society that we can’t do anything about. But we can do something about it. It’s our responsibility to take care of our kids. Even if they don’t have the same last name, they’re our kids."
The Attorney General often says that children’s exposure to violence is not an issue the Department of Justice – or any one agency or organization – can take on alone. It will take all of us – working together. And with the momentum we’ve generated through our Defending Childhood Initiative, the information and insights we’ve gained through the Task Force, and the tremendous support and leadership shown by everyone here, I know we will find a way to make America safer for our children.

TO ALL MARTIANS: WE COME IN PEACE TO BLAST YOUR PLANET WITH A LASER

Image credit: NASA/JPL-Caltech
FROM: LOS ALAMOS NATIONAL LABORATORY
Los Alamos Laser Instrument Arrives on Red Planet’s Surface
LANL ChemCam to be tested soon and will begin probing Mars mysteries

LOS ALAMOS, NEW MEXICO, August 6, 2012—Los Alamos National Laboratory scientists are elated by Sunday’s successful landing of NASA’s Curiosity rover on Mars, and are ready to begin a nearly two-year-long mission that will use a rock-zapping laser device mounted on the mast of the SUV-sized rover to help unravel mysteries of the Red Planet. The ChemCam laser characterization instrument was developed at LANL and the French space institute, IRAP.

"I can’t describe the feeling when we realized that Curiosity had landed safely on the planet," said LANL planetary scientist Roger Wiens, principal investigator of the Mars Science Laboratory mission’s ChemCam team. "My own curiosity about Mars began when I was a boy, and having an instrument that I’ve handled land on the Martian surface fulfills a lifelong dream that started long ago with a backyard telescope. This is an extremely happy, fulfilling moment."

The ChemCam system is one of 10 instruments mounted on the MSL mission’s Curiosity rover—a six-wheeled mobile laboratory that will roam more than 12 miles of the planet’s surface during the course of one Martian year (98 Earth weeks). When ChemCam fires its extremely powerful laser pulse, it briefly focuses the energy of a million light bulbs onto an area the size of a pinhead. The laser blast vaporizes part of its target up to seven meters (23 feet) away.

The resultant flash of glowing plasma is viewed by the system’s 4.3-inch aperture telescope, which records the colors of light within the flash. These spectral colors are then interpreted by a spectrometer, enabling scientists to determine the elemental composition of the vaporized material. ChemCam also has a high-resolution camera that provides close-up images of an analyzed location. It can image a human hair from seven feet away.

The core ChemCam team is comprised of Los Alamos National Laboratory researchers and scientists from IRAP, a partner institution in Toulouse, France. Scientists from around the U.S., France, Canada, and the United Kingdom, along with post-doctoral researchers and students from LANL, round out the entire 45-person team.

Sometime around August 10 (sol 4 in Martian days after landing), the ChemCam team expects to take images of calibration targets mounted on the Rover. These initial tests will help scientists determine the integrity of the ChemCam system and the pointing capability of the rover’s mast, which supports ChemCam’s laser and telescope.

The ChemCam instrument is the first to perform active remote sensing on the surface of the Red Planet. It can deliver three laser pulses each second to a single area, or it can quickly zap multiple areas, providing researchers with great versatility for sampling the surface of the planet. The first few laser pulses remove dust that would otherwise obscure the target surface, enabling scientists to observe the underlying sample. In that sense, the laser is like a long arm that can reach out more than twenty feet and brush off a sample before analysis.

The laser can profile through and study surface coatings on rocks, which, Earth scientists have learned, can often provide important clues to climate and water interaction, and can indicate biological interaction with surface materials. ChemCam is designed to look for lighter elements such as hydrogen, carbon, nitrogen, and oxygen, all of which are crucial for life, as well as to determine abundances of other elements.

After firing its laser, the ChemCam system looks at the entire visible spectrum as well as portions on either side (the infrared and ultraviolet), which gives the instrument the ability to see any element in the periodic table. Researchers expect to take the first analyses of the Martian surface sometime on or after sol 11 or 12 (August 17-18). The system is designed to capture as many as 14,000 observations throughout the mission.

Curiosity is expected to investigate the Gale Crater located close to the equator near the boundary between the southern highlands and the more featureless northern low plains of Mars. The massive crater spans 96 miles in diameter, an area roughly equivalent to the size of Connecticut and Rhode Island combined. A towering mountain, informally named Mount Sharp, rises up nearly three miles above the crater floor. This mammoth feature will provide opportunities for ChemCam to sample geologic layers on the mountainside.

"The amazing thing about the mountain in Gale crater is that it appears from orbit to be entirely sedimentary material," said Nina Lanza, a post-doctoral researcher in LANL’s International, Space, and Response (ISR) division. "This is a collection of sedimentary layers that is nearly three times higher than the Grand Canyon is deep."

Probing this stratified geology with ChemCam could help researchers understand how the Red Planet transformed over time into a drier, less hospitable climate.

Los Alamos also has roles in other aspects of the Mars Science Laboratory. Dave Vaniman of LANL’s Earth and Environmental Sciences Division is deputy leader of another instrument called CheMin, which uses X-ray diffraction to determine the composition of mineral samples collected and dropped into a funnel on the Curiosity rover.

Los Alamos also provided radioisotope fuel processing and encapsulation for the rover's electrical power generator and heat source, called a Multi-Mission Radioisotope Thermoelectric Generator (MMRTG). The generator keeps the rover's battery charged night and day, giving Curiosity the potential of being the longest-operating, farthest-traveling, most-productive Mars surface mission in history.

Weighing nearly a ton, Curiosity is the largest rover ever deployed to another planet. Previously, NASA sent a pair of much smaller rovers, Spirit and Opportunity, to Mars in January 2004. Both rovers gathered a wide range of rock and soil data that have helped provide important information about the wet environments on ancient Mars that may have been favorable to supporting microbial life. The Opportunity rover continues to gather data and send images and information back to Earth—surpassing its planned mission by many years

FORMER ALABAMA GOVERNOR SIEGELMAN RE-SENTENCED FOR VARIOUS CRIMES

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, August 3, 2012
Former Alabama Governor Don Siegelman Re-Sentenced on Bribery, Conspiracy, Fraud and Obstruction of Justice Charges

WASHINGTON – Former Alabama Governor Don Siegelman was resentenced today to serve 78 months in prison for his role in bribery, conspiracy, fraud and obstruction of justice charges involving former HealthSouth CEO Richard M. Scrushy, announced Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division and Acting U.S. Attorney Louis V. Franklin Sr. of the Middle District of Alabama.

At a hearing today in Montgomery, Ala., in addition to the prison term, U.S. District Judge Mark Fuller ordered Siegelman to serve three years of supervised release and to pay a $50,000 fine. Siegelman was originally convicted by a federal jury in June 2006 of seven counts of an indictment, involving bribery, conspiracy to commit honest services mail fraud, honest services mail fraud and obstruction of justice.

In June 2007, Siegelman began serving a prison term on those convictions, but was released on bond in March 2008, pending an appeal in which two honest services mail fraud counts were reversed. All of the five remaining counts were upheld in two opinions of the Eleventh Circuit Court of Appeals, and the U.S. Supreme Court denied further appellate review. The district court reviewed and denied all of Siegelman’s various claims for a new trial prior to his re-sentencing today.

Siegelman stands convicted of bribery, conspiracy and honest services mail fraud arising from a scheme in which Scrushy paid $500,000 to control a seat on the state regulatory board governing HealthSouth. Siegelman further stands convicted of obstruction of justice arising from a federal investigation of an alleged pay-to-play scheme with Alabama businessman Clayton "Lanny" Young.

"The outcome of this case reflects the unflagging commitment of the Department of Justice to hold public officials accountable for corruption," said Assistant Attorney General Breuer. "The Criminal Division’s Public Integrity Section is determined to continue to vigorously pursue bribery cases involving federal, state and local officials."

"Today’s sentence is another welcomed step toward closure to a dark chapter in Alabama politics. Six years after the trial jury rendered its verdict, and the appellate courts reviewed the evidence, former Governor Don Siegelman remains convicted for the serious felonious crimes he committed while serving as governor of Alabama. The verdict, the appellate review and the sentence have energized my faith in our legal system and renewed my commitment to prosecute politicians who commit bribery, honest services mail fraud, conspiracy and obstruction of justice. I am very proud of the courage displayed by everyone who assisted in the prosecution of this very significant and important case," said Acting U.S. Attorney Franklin.

The case is currently being prosecuted by Acting U.S. Attorney for the Middle District of Alabama Louis V. Franklin Sr., a senior career prosecutor in the U.S. Attorney’s Office, and Richard C. Pilger, Director of the Election Crimes Branch of the Criminal Division’s Public Integrity Section.

After the cancer

After the cancer

NEWS FROM AFGHANISTAN AUGUST 6, 2012

120327-M-VH365-057 MANAS AIR FORCE BASE, Kyrgyzstan (March 27, 2012) U.S. Marines and Sailors assigned to Headquarters and Service Company, 1st Battalion, 7th Marine Regiment, Regimental Combat Team 6, are seated in a U.S. Air Force Boeing C-17 Globe Master III military transport aircraft at Manas Air Force Base, Manas, Kyrgyzstan. Marines and Sailors were in transition to Afghanistan to begin a 7-month deployment in support of Operation Enduring Freedom. (U.S. Marine Corps photo by Lance Cpl. Sean M. Searfus/Released)

FROM: U.S. DEPARTMENT OF DEFENSE
Airstrike Kills Several Insurgents in AfghanistanCompiled from International Security Assistance Force Joint Command News Releases

WASHINGTON, Aug. 6, 2012 - A coalition airstrike killed several insurgents during a search for a Taliban leader in the Achin district of Afghanistan's Nangarhar province today, military officials reported.

During the operation, an armed group of insurgents attempted to attack the Afghan and coalition troops, officials said. The security force positively identified the armed insurgents and engaged them with a precision airstrike.

While conducting a post-strike assessment, the security force confirmed the strike had killed several of the insurgent attackers, officials said. The security force also confirmed the strike had not injured any civilians or damaged any civilian property. The security force detained one suspected insurgent.

Also today in the Terayzai district of Khost province, an Afghan-led, coalition-supported force detained several suspects during a search for a Haqqani leader. The sought-after Haqqani leader has conducted several attacks against Afghan and coalition forces in recent months. He also is responsible for acquiring weapons for insurgents in the province.

In operations yesterday:

-- Haqqani network leader Hakimi was killed by a coalition airstrike in the Muhammad Aghah district of Logar province. Hakimi had served directly under the Haqqani leader for the Muhammad Aghah district and was directly involved in the transport of explosives and weapons to insurgents throughout the region. The airstrike did not injure any civilians or damage civilian property.

-- A coalition airstrike killed several insurgents during a search for a Haqqani leader in the Tsamkani district of Paktia province. The airstrike did not injure any civilians or damage any civilian property.

-- In Ghanzi province, a combined force found and cleared an improvised explosive device in the Gelan district and cleared another IED in the Ghazni district.

-- A combined force detained five insurgents who were emplacing an IED in Khost province's Sabari district.

-- A combined force detained five insurgents in Khost province's Gurbuz district.

-- A combined force discovered an ammunition cache in Khost province's Sabari district.

-- In Nangarhar province, a combined force detained two insurgents who were emplacing an IED in the Bati Kot district.

-- A combined force killed two insurgents and wounded two others in the Jani Khel district of Paktika province.

-- In Wardak province, a combined force found and cleared an IED in the Sayyidabad district and another in the Maidan Shahr district.

-- A combined force detained an insurgent who was found with IED-making materials in Wardak province's Maidan Shahr district.

-- In the Baraki Barak district of Logar province, a combined force killed an insurgent, detained several suspects and seized multiple weapons during an operation to arrest a Taliban leader.

In other news, Mufti Assad, also known as Mufti Punjabi, Abdul Qudus and Sufyan, the al-Qaida network leader for Kunar province, was killed Aug. 3 in an airstrike in the Watahpur district of Kunar province. Assad led dozens of al-Qaida affiliated fighters throughout eastern Afghanistan and provided IED training to insurgents. Yusuf, Assad's al-Qaida network deputy, also was killed in the airstrike. Yusuf, also known as Omar and Rayhman, was an IED expert who directed insurgent attacks across eastern Afghanistan.

CURIOSITY REPORT AFTER LANDING ON MARS

FROM: NASA
NASA's most advanced Mars rover, Curiosity, has landed on the Red Planet. The one-ton rover, hanging by ropes from a rocket backpack, touched down onto Mars early Monday EDT to end a 36-week flight and begin a two-year investigation. President Obama said the landing "will stand as a point of national pride far into the future."
After seven dramatic minutes of entry, descent, and landing, everyone will want to know: did Curiosity survive? There’s a possibility we won’t know. At least not right away.

During its descent through the atmosphere, Curiosity must switch to a new antenna for each transformation it makes. At each switch, we could lose lock on the signal for a short time. That won’t hurt the rover. It just means we won’t know what’s happening right way.

Even with a solid signal, the communications link direct to Earth only works during the first half of the rover’s descent. Why? Like Earth, Mars is spinning – and during landing, Curiosity and its landing site will disappear from view, like the sun setting.

Out of sight equals the end of direct radio contact.

BUT…NASA has two spacecraft orbiting Mars that can help.

For the second half of Curiosity’s descent, the Mars Odyssey orbiter is in a good place to pick up the rover’s signal and send it right back to Earth. To best hear Curiosity’s signal, Odyssey must rotate about an hour before landing.

That sounds easy, but engineers are asking Odyssey to perform a maneuver it’s never tried before. Will it work? Probably. But it’s not a sure thing.

If Odyssey doesn’t rotate successfully, never fear! The rover won’t be affected whatsoever! Once again, it just means we have to wait longer to hear from the rover.

Odyssey could perform as hoped, but we’re still not home free! Engineers always think of ‘what ifs.’ For instance, what if the rover lands on a slope? If so, the low flying Odyssey orbiter might not be able to pick up its signal.

Even if everything goes according to plan with Odyssey, there’s a final challenge: time. The rover may be standing safe on Mars, but Odyssey has to be quick in getting the signal. Odyssey is moving fast. It will only be in the line of sight to hear from the rover for a few minutes--perhaps no more than 5.

So the Mars Reconnaissance Orbiter plays the role of backup. It will also fly overhead to capture what happens and then store the landing data it collects onboard, for playback to Earth a few hours later. Engineers then have to decode the data, which takes several hours.

Sometime in the middle of the night for Curiosity’s mission team, it’s possible that the orbiter could tell us the rover’s fate.

Or, there are other scenarios where the rover might be perfectly safe, but we might not hear from it for three days.

That’s all to say: Curiosity’s landing is filled with drama and we’ll need lots of patience. No wonder they call this ‘rocket science.’


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U.S. Department of Defense Armed with Science Update

U.S. Department of Defense Armed with Science Update

Flag-Lowering Orders - Wisconsin National Guard Department of Military Affairs

Flag-Lowering Orders - Wisconsin National Guard Department of Military Affairs

DOD OFFICIALS EXPLAIN PACIFIC-ASIA DEFENSE

Photo Credit:  U.S. Navy.
FROM: U.S. DEPARTMENT OF DEFENSEBy Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press Service

WASHINGTON, Aug. 3, 2012 - The Defense Department remains focused on building and strengthening defense initiatives in the Asia-Pacific region to reach the goals outlined in the U.S. defense strategic guidance, senior DOD officials said here Aug.1

Robert Scher, deputy assistant secretary of defense for plans, and David F. Helvey, acting deputy assistant defense secretary for East Asia, testified before the House Armed Services Committee on U.S. force posture in the U.S. Pacific Command area of responsibility.

"The department continues to pursue a defense posture in the Asia-Pacific region that is geographically distributed, operationally resilient and politically sustainable," Scher said.

"More broadly, we are investing in defense activities, presence, posture and capabilities necessary to reassure allies and partners in the region and shape the security environment, while also providing forward capabilities appropriate to deter and defeat aggression," he said.

Scher noted force posture is only one of many priorities within the rebalancing toward the region.

Other initiatives, he said, include diplomatic efforts to strengthen bilateral alliances, deepening working relationships with emerging powers, engaging with multilateral institutions, expanding trade and investment, and advancing principles of democracy and human rights.

"Rebalancing to achieve these ends requires enhanced U.S., allied and partner military capabilities throughout the region," Scher said. "[Also a] U.S. forward presence of forces, and a more resilient military infrastructure to support effective U.S. power projection operations in the face of current and future security threats."

Scher said the department's plans include building up Guam as the strategic hub in the Western Pacific, expanding access to locations in Southeast Asia, Oceania and the Indian Ocean region, and investing in capabilities appropriate for deterring and defeating aggression while reassuring allies and partners.

"[We will] expand our exercises, assistance efforts and other engagements with allied partner states in order to build trust capability and interoperability," he said. "Pursuing these and other capabilities offers the best prospect for protecting U.S. interests, not only in the Asia-Pacific region, but also elsewhere in the world."

Helvey pointed to the four key principles Defense Secretary Leon E. Panetta outlined during a key Asia security conference known as the Shangri-La dialogue that took place in Singapore in June.

"One, promoting international rules in order to advance peace and security in the region; two, deepening of bilateral and multilateral partnerships. Three, enhancing and adapting the U.S. military's enduring presence in the region; and four, investing in the capabilities needed to project power and to operate in the Asia-Pacific."

The Asia-Pacific region, Helvey said, provides an "unprecedented" opportunity for trade and investment since it is "home to some of the world's largest and fastest-growing economies, the world's largest populations and the world's largest militaries."

Helvey also said the region contains challenges such as maintaining freedom of navigation of the South China Sea, countering the proliferation efforts of North Korea, as well as seeking transparency in the military activities of key regional players, such as China.

Helvey also discussed the DOD plan regarding the realignment of U.S. Marines in the region aimed at reducing political pressures in Japan.

"The realignment plan sustains a U.S. Marine force presence in the Asia-Pacific region, establishes multiple, fully capable Marine air- ground task forces, and importantly increases our ability over time to train and exercise with allies and partners throughout the region," he said. "This approach maintains our forward capabilities, reduces our footprint in Okinawa, and in combination with other measures, should reduce the political pressures associated with our presence there, all while sustaining robust government-of-Japan financial support for the Marine Corps move to Guam."

Helvey noted the Department of Defense continues to work closely with Japan to implement the provisions of the April 27, 2012, two-plus-two joint statement. He then turned to the U.S.-South Korea alliance.

"The U.S.-Republic of Korea alliance continues to be a cornerstone of U.S. defense partnerships and posture in Northeast Asia," he said. "In accordance with the 2009 joint vision statement, we are realigning our forces on the Korean Peninsula to prepare for transition of wartime operational control to the ROK in December 2015. This transition will allow for the ROK to take the lead role in the combined defense of Korea, supported by an enduring and capable U.S. military force presence on the Korean Peninsula, in the region and beyond."

Other significant posture changes, he said, include the rotational deployments of the Marine Corps and U.S. Air Force units to Australia, as well as a littoral combat ship deployment to Singapore to strengthen U.S. engagement in the region through port calls and engagement of regional navies.

"They will also support the department's effort to counter transnational challenges and build partner capacity for maritime security, among other missions," Helvey said.

CFTC COMMISSIONER TESTIMONY ON ACCOUNTABILITY IN THE FUTURES MARKET

FROM: COMMODITY FUTURES TRADING COMMISSION
Testimony before the United States Senate Committee on Agriculture, Nutrition and Forestry, Washington, DC
CFTC Commissioner Jill E. Sommers

August 1, 2012 Good morning Chairman Chairwoman Stabenow, Ranking Member Roberts, and members of the Committee. Thank you for inviting me today to discuss "the Continuing Review of MF Global: Accountability in the Futures Markets." Over the past nine months the Commodity Futures Trading Commission has conducted a thorough analysis of the books and records of MF Global and continues to work closely with the Trustee in the SIPA bankruptcy proceeding to recover customer funds. We are also engaging in a comprehensive and ongoing enforcement investigation. It is imperative that the Commission, the industry, and the Congress identify and assess the causes for the collapse and shortfall in customer funds and take corrective action where possible. At Chairman Gensler’ s request, Commission staff has developed recommendations for enhancing Commission and designated self-regulatory organization (DSRO) programs related to the protection of customer funds, which includes changes to Commission rules governing futures commission merchants (FCMs), enhanced Commission oversight of DSROs, and possible statutory changes, among other things. We must do everything in our power to restore confidence in the futures markets so that producers, processors and other end-users of commodities can once again hedge their price risks without fear of their funds being frozen or lost.

On November 9, 2011, the Commission voted to make me the Senior Commissioner with respect to MF Global Matters. This authorizes me to exercise the executive and administrative functions of the Commission solely with respect to the pending enforcement investigation, the bankruptcy proceedings, and other actions to locate or recover customer funds or determine the reasons for shortfalls in the customer accounts. Today I would like to provide you with information regarding the SIPA proceedings, our ongoing coordination with the SIPA Trustee, current protections for customer funds, and regulatory oversight of FCMs. While I am unable to discuss the specifics of our ongoing enforcement investigation, I will provide a brief overview.

Dual Registration/SIPA ProceedingsMF Global, Inc. (MFGI), a subsidiary of MF Global Holdings Ltd., was a dually- registered BD-FCM, and therefore was subject to the jurisdiction of both the CFTC and the Securities and Exchange Commission (SEC). The Chicago Mercantile Exchange (CME) was the DSRO for MFGI’s futures market activities, and had primary responsibility for overseeing the FCM’s compliance with the capital, segregation and financial reporting obligations required by the CFTC. The Chicago Board Options Exchange and the Financial Industry Regulatory Authority were the SROs for MFGI’s securities market activities, and had primary responsibility for overseeing the BD’s compliance with

Under the Securities Investors Protection Act of 1970 (SIPA), the SEC has the authority to refer an entity registered as a broker-dealer (BD) to the Securities Investors Protection Corporation (SIPC) if there is reason to believe that the BD is in or is approaching financial difficulty. SIPC may initiate a liquidation proceeding to protect customers of an insolvent BD when certain statutory criteria are met. When a BD is also a registered FCM, as MFGI was, there is one dually-registered entity and the entire entity gets placed into liquidation. Because there is one entity, it is not possible to initiate a SIPA liquidation for the BD and a separate bankruptcy proceeding for the

FCM. Indeed, SIPA prevents a BD with even one securities customer from filing for bankruptcy without SIPA’s permission, and a SIPA liquidation proceeding acts to stay any other bankruptcy proceeding for the BD.

It is important to note, however, that when a dually-registered BD-FCM is placed into a SIPA liquidation proceeding, SIPA provides that the relevant provisions and protections of the Bankruptcy Code, the Commodity Exchange Act (CEA or Act) and the Commission’s regulations apply to the claims of commodity customers just as they would if the entity were solely an FCM and in a non-SIPA bankruptcy proceeding.

Coordination with the SIPA TrusteeThe Commission has worked closely with the SIPA Trustee, James Giddens, since the outset of the proceedings, to help protect MFGI’s former commodity customers. We have shared information and analysis, including analysis of the movement of commodity customer funds in order to identify potentially improper withdrawals and transfers, and to track down assets for the benefit of the commodity customers. The Commission’s staff has given the SIPA Trustee advice on the requirements of commodity broker liquidation laws, under Title 11 and CFTC regulations, to ensure that customers are protected. We have supported his efforts to return the maximum amount of customer property as quickly as possible, consistent with his obligations. As part of those efforts, we have filed a series of briefs in the bankruptcy court explaining how these laws must be applied to effect Congress’ and the CFTC’s design that customers be repaid in priority to other creditors. Throughout this process, the Commission has maintained, and will continue to maintain, an independent view of the best interests of commodity customers and the requirements of the law. The public interest has been served by this cooperation. The Commission and its staff continue to stand ready to work with the SIPA Trustee to achieve the goal of recovering additional funds for the benefit of MFGI commodity customers, both domestically and abroad.

Current Protections for Customer FundsSection 4d of the CEA and Commission regulations require an FCM holding customer funds to treat such funds as belonging to the customer at all times and to segregate from its own funds any money, securities or property deposited by its customers to margin, guarantee, or secure futures or options positions entered into on Commission designated contract markets (Section 4d funds). FCMs are prohibited from using a customer’s funds to margin or guarantee the trades or contracts of another customer, or of the FCM. The FCM may, however, commingle the funds of one futures customer with funds belonging to other futures customers in a single account or accounts. The FCM is required to maintain sufficient funds in segregated accounts to cover the net liquidating equity (i.e., total account balances due) of each of its customers at any given point in time.

The Act and regulations also require an FCM to hold in separate accounts (designated as "Part 30 secured accounts") customer funds deposited for trading futures and options listed on foreign boards of trade. The FCM may commingle the foreign futures funds deposited by one customer with the funds deposited by other foreign futures customers. An FCM may not, however, commingle Section 4d funds with Part 30 secured account funds.

Customers are required to post margin to support their futures and option positions. Generally, a customer deposits more than the minimum initial margin required for the positions established. The additional funds provide a buffer so a customer can place trades without posting additional margin and lessen the likelihood of repeated margin calls or having positions liquidated if margin calls are not met on a timely basis. In addition to customers depositing additional margin, in practice, FCMs typically maintain significant amounts of their own capital as "excess segregated funds." By doing this, one customer’s deficit due to market moves or unmet margin calls is covered by the FCM’s buffer and does not result in one customer’s funds being exposed to the credit risk of another customer. FCMs are not obligated to provide excess segregated funds, but given the legal obligation to have sufficient funds in segregated accounts at all times to cover all liabilities to customers, FCMs generally find it prudent to have a buffer.

A customer may withdraw excess margin funds or use such funds as the customer deems appropriate. This would include using the funds for non-futures related transactions with the FCM. If the excess funds held by the FCM are used in a manner directed by the customer such that the funds are not maintained in a segregated or secured account, the funds would not have the protections afforded customer funds under the Bankruptcy Code and Part 190 of the Commission’s regulations.

FCMs are also free to withdraw excess funds in Section 4d accounts deposited by and belonging to the FCM. At no time, however, may an FCM withdraw customer funds from a Section 4d account to use those funds for its own purposes, regardless of any intention to replace them at a later date or time.

Oversight of FCMsFCMs are subject to CFTC-approved minimum financial and reporting requirements that are enforced in the first instance by a DSRO, for example, the CME, or the National Futures Association. DSROs also conduct periodic compliance examinations on a risk-based cycle every 9 to 15 months.

Determining compliance with segregation requirements is a mandatory part of each examination. Examinations also include a review of the depository acknowledgement letters, the account titles of segregated accounts, verifying account balances, and ensuring that investment of customer funds is done in accordance with Commission regulations.

FCMs are required to file monthly unaudited financial reports with the Commission and the DSRO. These reports include the FCM’s segregation, secured and net capital schedules, and any "further material information as may be necessary to make the required statements and schedules not misleading." Each financial report must be filed with an oath or attestation, and for a corporation, the oath must be by the Chief Executive Officer or the Chief Financial Officer. FCMs must also file annual certified financial reports with the Commission and the DSRO. The audits require, among other things, that if an auditor resigns or is replaced, the FCM is required to notify the Commission of certain disagreements with statements made in reports prepared by the prior auditor. The FCM is also required to request that the prior auditor provide a letter stating whether the auditor agrees with the statements made by the FCM in its notice to the Commission. Auditors also must test internal controls to identify, and report to the Commission, any "material inadequacy" that could reasonably be expected to: inhibit a registrant from completing transactions or promptly discharging responsibilities to customers or other creditors; result in material financial loss; result in material misstatement of financial statements or schedules; or result in violation of the Commission’s segregation, secured amount, recordkeeping or financial reporting requirements.

Ongoing InvestigationThe Commission’s Division of Enforcement is also actively engaged in the investigation concerning the shortfall of customer funds. Staff is interviewing witnesses and reviewing documents, as well as other information. They are proceeding as expeditiously as they can. As the Committee will understand, I cannot disclose any specific details of the investigation because they are nonpublic, and because I do not want to prejudice any potential enforcement action. In general, however, depending on the specific facts and circumstances, a shortfall in customer segregated funds could amount to a violation of the CEA and Commission regulations including those that: (1) govern segregated funds; (2) prevent theft of customer money; (3) require our registrants to properly supervise accounts; (4) prevent making false statements; and (5) prohibit deceptive schemes. Depending on the specific facts and circumstances, the Commission could file an enforcement action against corporate entities and/or individuals who have violated the CEA or regulations. In addition, depending on the specific facts and circumstances, individuals could also be liable if they are "control persons" of a company that violated the law. A "control person" generally refers to management. Depending on the specific facts and circumstances, an enforcement action could be filed against individuals who "aid and abet" violations by companies. Finally, Commission regulations impose obligations on accountants who audit FCMs and on the banks that hold customer segregated funds for FCMs. My mention of these particular provisions does not in any way limit the Division’s investigation or the relief we can seek, nor does it indicate that the Division has reached any conclusions.

Generally, the Commission has the authority to, among other things, seek and impose civil monetary penalties, require a defendant to disgorge ill-gotten gains, obtain restitution for customers and obtain other injunctive relief. In terms of civil monetary penalties, the Commission can seek the greater of three times the defendant’s gain, or a set amount, which is currently $140,000 per violation. Civil monetary penalties are paid to the U.S. Treasury, while restitution is paid to victims who suffered losses.

The Commission is a civil enforcement agency, so we cannot seek imprisonment as a sanction in an enforcement action. However, a willful violation of the CEA, or our regulations, is a federal crime, which can be prosecuted by a United States Attorney. We do not have any say in whether or not the criminal authorities prosecute, and I understand that they have a higher burden of proof than we have.

ConclusionI understand the severe hardship that MF Global’s bankruptcy has caused for thousands of customers who have not yet been made whole. These customers may have correctly understood the risks associated with trading futures and options, but never anticipated that their segregated accounts were at risk of suffering losses not associated with trading. The shortfall in customer funds was a shock to the markets from which we have not yet recovered.

I believe the Commission can make improvements to our regulatory oversight of FCMs and DSROs to help restore confidence in the futures markets, and I will work with the Commission and Congress to implement the rules necessary to enhance our ability to protect market users and to foster open, competitive, and financially sound markets.

U.S. STATE DEPARTMENT PROFILE OF PORTUGAL

Map From:  U.S. State Department
FROM:  U.S. STATE DEPARTMENT
PROFILE Geography
Area: 92,391 sq. km.; includes continental Portugal, the Azores (2,333 sq. km.) and Madeira Islands (828 sq. km.); slightly smaller than the State of Indiana; located in Europe's southwest corner bordered by Spain (North and East, 1,214 km.) and the Atlantic Ocean (West and South, 1,793 km.).
Major cities: Lisbon (capital, metropolitan area pop. 2.1 million); Porto (metropolitan area pop. 1.9 million).
Terrain: Mountainous in the north; rolling plains in the central and southern regions.
Climate: Maritime temperate (Atlantic-Mediterranean); average annual temperature is 61°F. Temperatures may drop into the low 30s (°F) at night during the coldest months, with daytime highs in the 50s and 60s. The remainder of the year is normally sunny with minimal rainfall. Days are pleasant, with temperatures seldom exceeding 95°F, except in the southern interior of the country; afternoons and evenings are breezy, with nighttime temperatures in the 60s and low 70s; May-October (dry and warm), November-April (cool with rain and wind in the north, mild in the south).

People
Nationality: Noun and adjective--Portuguese (singular and plural).
Population (2011 est.): 10.6 million. Ages 0 to 14 years--1.6 million (male 830,611; female 789,194). Ages 15 to 24 years--1.2 million (male 609,177; female 585,072). Ages 25 to 64 years--5.9 million (male 2,917,633; female 3,013,120). Ages 65 years and over--1.9 million (male 787,967; female 1,099,715).
Population density: 114 per sq. km. (44 per sq. mi.).
Annual population growth rate (2008 est.): 0.8%.
Ethnic groups: Homogeneous Mediterranean stock with small minority groups from Africa (Angola, Cape Verde, Mozambique), South America (Brazil), and Eastern Europe (Ukraine, Romania).
Religion: Roman Catholic 92%, Protestant 4%, atheists 3%, others 1%.
Language: Portuguese.
Education: Years compulsory--12. Literacy (2008)--94.9%.
Health (2010): Birth rate--9.5/1,000 (1.07 male/female). Death rate--10.0/1,000. Infant mortality rate--2.5/1,000. Life expectancy--79.2 years.
Work force (2010): 5.57 million. Government and services (59.8%); industry and manufacturing (28.5%); agriculture and fishing (11.7%).

Government
Type: Republic.
Constitution: Effective April 25, 1976; revised 1982, 1989, 1992, 1997, 2001, 2004, and 2005.
Branches: Executive--president (head of state), Council of State (presidential advisory body), prime minister (head of government), Council of Ministers. Legislative--unicameral Assembly of the Republic (230 deputies): PS=74, PSD=108, PCP=14, CDS/PP=24, BE=8, PEV=2. Judicial--Supreme Court, District Courts, Appeals Courts, Constitutional Tribunal.
Major political parties: Socialist Party (PS); Social Democratic Party (PSD); Portuguese Communist Party (PCP); Popular Party (CDS/PP); Left Bloc (BE); Green Party (PEV).
Administrative subdivisions: 18 districts (Lisbon, Leiria, Santarem, Setubal, Beja, Faro, Evora, Portalegre, Castelo Branco, Guarda, Coimbra, Aveiro, Viseu, Braganca, Vila Real, Porto, Braga, Viana do Castelo); 2 autonomous island regions (the Azores and Madeira).

Economy
GDP (2010 est.): €160.3 billion (approx. $208 billion).
Annual growth rate (2010 est.): 0.91%.
Per capita GDP (2010 est.): €18,453 (approx. $23,965).
Avg. inflation rate (2010 est.): 1.2%.
Services (75.4% gross value added): Wholesale and retail trade; hotels and tourism; restaurants; transport, storage and communication; real estate; banking and finance; repair; government, civil, and public sectors.
Industry (22.3% gross value added): Textiles, clothing, footwear, wood and cork, paper, chemicals, auto-parts manufacturing, base metals, dairy products, wine and other foods, porcelain and ceramics; glassware, technology; telecommunications.
Agriculture (2.3% gross value added): Livestock, crops, fish.
Trade (2010): Exports--€36.8 billion (approx. $28.3 billion): machinery and tools 14.9%; textile materials, clothing and footwear 13.7%; vehicles and other transport materials 12.4%; wood, cork, paper and wood pulp 9.2%; other 49.8%. Imports--€55 billion (approx. $42.3 billion): machinery and tools 16.3%; oil products 14.7%; vehicles and other transport material 14.1%; chemical products 10%; agricultural products 9.5%; other 35%. Export partners--Spain (26.6%); Germany (13.9%); France (11.8%); United Kingdom (5.5%); Angola (5.2%); Netherlands (3.8%); Italy (3.8%); United States (3.6%); Belgium (2.9%); Brazil (1.2%); other (22%). EU 27 (74%). Import partners--Spain (31.2%); Germany (13.9%); France (7.3%); Italy (5.7%); Netherlands (5.1%); United Kingdom (3.8%); Belgium (2.9%); China (2.8%); Nigeria (2.4%); Brazil (1.8%); other (23.1%). EU 27 (75.6%).
U.S. trade with Portugal (2010): Exports--$1 billion: transportation equipment (21.9%); computer and electronic products (15.2%); agricultural products (7.7%); machinery (7.5%); all others (47.7%). Imports--$2.1 billion: mineral fuels, oils (28.5%); transportation equipment (10.2%); wood products (7.9%); paper (6.6%); all others (46.8%).
Foreign direct investment (FDI, 2010): Incoming FDI by industry--wholesale and retail 39.3%; manufacturing 24.4%; financial and insurance activities 18.2%; information and communication activities 5.6%; consultancy, scientific, and technical activities 3.1%; real estate 1.2%; construction 1%; electricity, gas, water 0.6%; other 6.6%. Incoming FDI by country in euros (total €35 billion; approx. $26.9 billion)--Germany 18.3%; France 16.7%; United Kingdom 13.8%; Spain 13.6%; Netherlands 10.3%; Luxembourg 7%; Brazil 5.5%; Switzerland 5.2%; Belgium 2.4%; Ireland 1.8%; other 5.4%. Portuguese FDI abroad by country in euros (total €6.8 billion; approx. $5.2 billion)--Luxembourg 18.5%; Brazil 17.1%; Spain 13.5%; Netherlands 12.1%; Angola 3.3%; Poland 3.2%; United States 2.7%; United Kingdom 1.9%; Romania 1.5%; France 1.3%; other 24.9%.
Exchange rate: (2009) U.S. $1 = 0.74 EUR (€); (2010) U.S. $1 =0.77 EUR.

HISTORY
Portugal is one of the oldest states in Europe. It traces its modern history to A.D. 1140 when, following a 9-year rebellion against the King of Leon-Castile, Afonso Henriques, the Count of Portugal, became the country's first king, Afonso I. Afonso and his successors expanded their territory southward, capturing Lisbon from the Moors in 1147. The approximate present-day boundaries were secured in 1249 by Afonso III.

By 1337, Portuguese explorers had reached the Canary Islands. Inspired by Prince Henry the Navigator (1394-1460), explorers such as Vasco da Gama, Bartolomeu Dias, and Pedro Alvares Cabral made explorations from Brazil to India and Japan. Portugal eventually became a massive colonial empire with vast territories in Africa (Angola, Mozambique, Cape Verde, Guinea Bissau, Sao Tome) and Latin America (Brazil), and outposts in the Far East (East Timor, Macau, Goa).

Dynastic disputes led in 1580 to the succession of Philip II of Spain to the Portuguese throne. A revolt ended Spanish hegemony in 1640, and the House of Braganca was established as Portugal's ruling family, lasting until the establishment of the Portuguese Republic in 1910.

During the next 16 years, intense political rivalries and economic instability undermined newly established democratic institutions. Responding to pressing economic problems, a military government, which had taken power in 1926, named a prominent university economist, Antonio Salazar, as finance minister in 1928 and prime minister in 1932. For the next 42 years, Salazar and his successor, Marcelo Caetano (appointed prime minister in 1968), ruled Portugal as an authoritarian "corporate" state. Unlike most other European countries, Portugal remained neutral in World War II. It was a charter member of NATO, joining in 1949.

In the early 1960s, wars against independence movements in Portugal's African territories began to drain labor and wealth from Portugal. Professional dissatisfaction within the military, coupled with a growing sense of the futility of the African conflicts, led to the formation of the clandestine "Armed Forces Movement" in 1973.

The downfall of the Portuguese corporate state came on April 25, 1974, when the Armed Forces Movement seized power in a nearly bloodless coup and established a provisional military government.

GOVERNMENT AND POLITICAL CONDITIONS
Portugal moved from authoritarian rule to parliamentary democracy following the 1974 military coup against Marcelo Caetano, whose rule embodied a continuation of the long-running dictatorship of Antonio Salazar. After a period of instability and communist agitation, Portugal ratified a new constitution in 1976. Subsequent revisions of the constitution placed the military under strict civilian control; trimmed the powers of the president; and laid the groundwork for a stable, pluralistic liberal democracy, as well as privatization of nationalized firms and the government-owned media. Portugal joined the European Union (EU) in 1986 and has moved toward greater political and economic integration with Europe ever since.

The four main branches of the national government are the presidency, the prime minister and Council of Ministers (the government), the Assembly of the Republic (the parliament), and the judiciary. The president, elected to a 5-year term by direct, universal suffrage, also is commander in chief of the armed forces. Presidential powers include confirming the prime minister and Council of Ministers; dismissing the prime minister; dissolving the assembly to call early elections; vetoing legislation, which may be overridden by the assembly; and declaring a state of war or siege. The Council of State, a presidential advisory body, is composed of six senior civilian officers, former presidents elected under the 1976 constitution, five members chosen by the assembly, and five selected by the president.

The government is headed by the prime minister, who is nominated by the assembly for confirmation by the president. The prime minister then names the Council of Ministers. A new government is required to present its governing platform to the assembly for approval.

The Assembly of the Republic is a unicameral body composed of 230 deputies. Elected by universal suffrage according to a system of proportional representation, deputies serve terms of office of 4 years, unless the president dissolves the assembly and calls for new elections. The national Supreme Court is the court of last appeal. Military, administrative, and fiscal courts are designated as separate court categories. A nine-member Constitutional Tribunal reviews the constitutionality of legislation.

The Azores and Madeira Islands have constitutionally mandated autonomous status. A regional autonomy statute promulgated in 1980 established the Government of the Autonomous Region of the Azores; the Government of the Autonomous Region of Madeira operates under a provisional autonomy statute in effect since 1976. Continental Portugal is divided into 18 districts, each headed by a governor appointed by the Minister of Internal Administration.

Current Administration
Socialist Party (PS) Prime Minister Jose Socrates resigned in March 2011 after his minority government’s austerity plan was rejected by the parliament. Rising unemployment and unsustainable public sector deficits led his caretaker government to seek a May 2011 EU/International Monetary Fund bailout agreement. Social Democratic Party (PSD) Prime Minister Pedro Passos Coelho’s government took office following June 5, 2011 parliamentary elections. Since then, the new government has been largely preoccupied with the implementation of broad austerity measures pursuant to the agreement.

Social Democrat Anibal Cavaco Silva, a center-right candidate and former prime minister (1985-1995), won the Portuguese presidential election on January 22, 2006 with 50.6% of the vote, becoming Portugal’s first center-right head of state in 3 decades. He was re-elected on January 23, 2011 with 53% of the vote and was sworn in on March 9, 2011.

Principal Government Officials
President of the Portuguese Republic--Anibal Cavaco Silva
Prime Minister--Pedro Passos Coelho

Minister of State and Finance--Vitor Gaspar
Minister of State and Foreign Affairs--Paulo Portas
Minister of National Defense--Jose Pedro Aguiar Branco
Minister of Internal Administration--Miguel Macedo
Minister of Justice--Paula Teixeira da Cruz
Minister of Parliamentary Affairs--Miguel Relvas
Minister of Economy and Labor--Alvaro Santos Pereira
Minister of Agriculture, Oceans, Environment and Territorial Administration--Assuncao Cristas
Minister of Health--Paulo Macedo
Minister of Education and Science--Nuno Crato
Minister of Solidarity and Social Security--Pedro Mota Soares

President of the Government of the Autonomous Region of the Azores--Carlos Cesar
President of the Government of the Autonomous Region of Madeira--Alberto Joao Jardim
Ambassador to the United States--Nuno Brito

Portugal maintains an embassy in the United States at 2012 Massachusetts Avenue, NW, Washington, DC 20036; tel. 1-202-350-5400; fax 1-202-462-3726 and consulates general in New York City, Boston, San Francisco, and Newark, NJ; consulates in Providence, RI and New Bedford, MA; and honorary consulates in Honolulu, Los Angeles, Houston, New Orleans, Chicago, Philadelphia, Miami, San Juan, and Waterbury, CT. The Portuguese National Tourist Office in the United States is located at 590 Fifth Avenue, New York, NY 10036 (tel: 1-212-354-4403).

ECONOMY
The Portuguese economy experienced boosts when Portugal joined the European Union in 1986 and the European Monetary Union (EMU) in 1999. In recent years, however, it suffered from sluggish to negative growth, a ballooning budget deficit, and low productivity and competitiveness, which, exacerbated by the onset of the euro zone debt crisis, led to record-high spreads on sovereign debt and downgrades in credit ratings. On May 3, 2011, Portugal’s Socialist caretaker government reached agreement with the European Commission, European Central Bank, and International Monetary Fund (IMF)--"the troika"--on a €78 billion (approx. $111 billion), 3-year bailout package that required Portugal to implement comprehensive austerity measures, including privatization of state-owned enterprises and measures to reform its labor market and justice sector. The package was approved by EU and euro zone finance ministers in mid-May. The new PSD-led government of Prime Minister Coelho took office in June 2011. The troika has given the Portuguese Government high marks for its implementation of the agreement, while identifying gaps and areas for improvement. Although workers have organized protests and strikes to oppose austerity measures, demonstrations have been relatively nonviolent. Nevertheless, Portugal’s economic future depends heavily on wider euro zone developments.

Before the economic crisis, Portugal's membership in the EU had contributed to stable economic growth, largely through increased trade fostered by Portugal’s low labor costs and an influx of EU funds for infrastructure improvements. Portugal's subsequent entry into the EMU brought exchange rate stability, lower inflation, and lower interest rates. Falling interest rates, in turn, lowered the cost of public debt and helped the country achieve its fiscal targets. Until 2001, average annual growth rates consistently exceeded those of the EU average. However, a dramatic increase in private sector loans led to a serious external imbalance, with large capital account deficits that year. De-leveraging by Portuguese banks to meet the June 2011 EU requirement to increase core tier-one capital ratios above 9% has caused bank lending to tighten.

The Government of Portugal managed to keep the budget deficit under 3% in accordance with the euro zone's Stability and Growth Pact during 2002-2004. However, in 2005 Portugal’s budget deficit surged to a high of 5.9%. Subsequently, the government undertook efforts to bring the budget situation under control. In 2006, the government reduced the deficit to 4.1%, mainly through revenue-generating measures, including increased collection enforcement and higher taxes. The 2007 budget further reduced the deficit to 3.1% of GDP, through spending cuts and structural reforms. In 2009, however, the budget deficit soared to 10.1% of GDP as a result of a more than 11% drop in tax revenue. Portugal’s public debt reached 93% of GDP in 2010, with a projected increase to 97.3% of GDP in 2011.

Helped in part by a wider EU recovery, the Portuguese economy grew by 2.74% in 2007, up from 1.4% the previous year. But a slowing regional economy saw the Portuguese economy contract by 0.35% in 2008 and by 2.1% in 2009. Although GDP grew 0.91% in 2010, it contracted 1.6% in 2011 and is projected to contract 3.2% in 2012 as a result of higher taxes and public wage cuts introduced under the government’s austerity program.

Unemployment is expected to rise in coming years and reach 12.5% in 2011, 13.8% in 2012, and 14.2% in 2013, up from 7.6% in 2008, 9.5% in 2009, and 10.8% in 2010.

The service sector, which includes public service, wholesale and retail trade, tourism, real estate, and banking and finance, is now Portugal's largest employer, having overtaken the traditionally predominant manufacturing and agriculture sectors since the country joined the EU in 1986. EU expansion into Eastern Europe has negated Portugal's historically competitive advantage of relatively low labor costs, particularly in the manufacturing and agriculture sectors. Since 2009, governments have been working to change Portugal's economic development model from one based on public consumption and public investment to one focused on exports, private investment, and development of the high-tech sector.

Due to weak economic growth, Portugal has lost ground relative to the rest of the EU since 2002. Portugal's 2010 per capita GDP stood at 80 Purchasing Power Standards (PPS) compared to the EU-27 average of 100 PPS, leaving the country in last place among its Western European counterparts after accounting for price differences (but ahead of EU’s newest members). Now among the weaker economies in the EU, and the third euro zone member (after Greece and Ireland) to request a bailout, Portugal aims to reduce its budget deficit to 5.9% (from 9.1% in 2010) of GDP in 2011, 4.5% in 2012, and 3% in 2013. In accordance with the terms of its bailout agreement, Portugal has until 2014 to bring its budget deficit back below the mandated 3% euro zone limit. In 2010, the government implemented a series of austerity measures, including cutting public sector wages, reducing attrition replacement hiring, decreasing pension benefits for early government retirement, and increasing taxes. The government’s 2012 budget, considered the most demanding in 30 years, includes salary cuts for public sector employees, benefit cuts, and tax hikes. The government seeks to impose fiscal discipline and further reduce its deficit over the next 3 years through structural reform measures, as agreed upon with the EU and IMF.

FOREIGN RELATIONS
Portugal has been a significant beneficiary of European Union funding and is a strong proponent of European integration.

Portugal has consistently supported EU expansion, including entry talks with Turkey. Of Portugal’s three foreign policy priorities (EU, transatlantic ties, Lusophone states), the EU is the most important. EU policies and regulations increasingly direct Portuguese law and policy, and Portuguese foreign policy is increasingly influenced by a need for EU consensus. Portugal is a member of the "Schengen" passport-free zone.

Portugal joined the United Nations in 1955 and holds a non-permanent Security Council seat for 2011-2012, having previously served on the Council in 1979-80 and 1997-98. Portugal is an active participant in UN organizations, and is seeking a seat on the Human Rights Council for 2014-2017. Portuguese forces participate in many UN operations, including Congo, Guinea, Lebanon, and Timor-Leste.

Portugal is a founding member of NATO; it is an active member of the alliance, and Portuguese forces participate in NATO operations in Afghanistan and Kosovo. Portugal hosted the 2010 NATO Summit.

Portugal is a key member of the Community of Portuguese-Speaking Countries (CPLP), an organization headquartered in Lisbon intended to unite Lusophone nations and discuss promoting the Portuguese language as well as political and economic linkages. Portugal is also a member of the Community of Democracies (CD) and has participated in a series of Ibero-American summits. Portugal was a strong advocate of independence for Timor-Leste, a former Portuguese colony, and has provided troops and money to Timor-Leste in close cooperation with the United States, Asian allies, and the United Nations.

U.S.-PORTUGUESE RELATIONS
Bilateral ties date from the earliest years of the United States. Following the Revolutionary War, Portugal was among the first countries to recognize the United States. On February 21, 1791, President George Washington opened formal diplomatic relations, naming Col. David Humphreys as U.S. minister. The oldest continuously-operating U.S. Consulate in the world, since 1795, is in Ponta Delgada on the island of Sao Miguel in the Azores.

Contributing to the strong ties between the United States and Portugal are the sizable Portuguese communities in Massachusetts, Rhode Island, New Jersey, California, and Hawaii. The latest census estimates that 1.3 million individuals living in the United States are of Portuguese ancestry, with a large percentage coming from the Azores. There are about 20,000 Americans living in Portugal.

The United States-Portugal defense relationship is strong and enduring. The current U.S.-Portugal Agreement on Cooperation and Defense (ACD) was signed in 1995; however, a U.S. military forward presence at Lajes Field, in the Azores, extends back to World War II. U.S. Air Forces Europe's 65 Air Base Wing, in close cooperation with the Portuguese Air Force, ensures that Lajes Field remains an important logistic hub for U.S. Transportation Command, U.S. European Command, and NATO Allies. Access to Lajes Field is a key component of U.S. European Command’s engagement in Portugal. This access supports deployed U.S. forces throughout Europe, the Middle East, Asia, and Africa. U.S. missions supported by a presence at Lajes Field include counterterrorism, humanitarian, and combat operations in Afghanistan and Iraq. Portugal values the transatlantic alliance and advocates within the European Union and NATO for strong European ties with the United States, particularly on defense and security issues. The Portuguese Government is open to greater cooperation with U.S. Africa Command to synchronize engagement efforts, and to enhance bilateral and multilateral cooperation with the U.S. on the African continent. Portugal hosted a NATO Joint Command Lisbon until June 2011, when NATO command structure reforms agreed at the 2010 Lisbon NATO Summit took effect. Also as part of the restructuring agreement, Naval Striking and Support Forces NATO (STRIKFORNATO) will be transferred from Italy to Portugal. This is NATO’s premier maritime battle staff and the Alliance’s primary link for integrating U.S. maritime forces into NATO operations.

U.S.-Portuguese trade is relatively small, with the United States exporting $1 billion worth of goods in 2010 and importing an estimated $2.1 billion. While total Portuguese trade has increased dramatically over the last 10 years, the U.S. percentage of Portugal's exports and imports has been growing at a slower rate. The Portuguese Government is seeking to increase technology and service exports, as well as traditional products (textiles and footwear) to the United States and is encouraging greater bilateral investment. U.S. firms play significant roles in the pharmaceutical, computer, and retail sectors in Portugal, but their involvement in the automotive manufacturing sector has declined in recent years.

Pursuant to the 1995 ACD, a U.S.-Portugal Standing Bilateral Commission meets semi-annually to review all aspects of the bilateral relationship, including defense cooperation, science and technology cooperation, bilateral trade and investment, cooperation in the Azores, justice and home affairs, political and diplomatic cooperation, and consular issues.

U.S. EXPORT-IMPORT BANK: MINORITY OWNED AND WOMAN-OWNED BUSINESS FINANCING TOPS $500 MILLION

FROM:  U.S. EXPORT-IMPORT BANK
Ex-Im Bank Sets New Record of $500 Million in Export Financing for Minority-Owned and Woman-Owned Businesses
WASHINGTON, D.C. --- This fiscal year for the first time, the Export-Import Bank of the United States (Ex-Im Bank) has set an all-time single-year record of more than $500 million in export financing for minority-owned and woman-owned businesses in the United States. The Bank’s financing has supported more than 400 transactions and an estimated 3,000 American jobs across the country.

Ex-Im Bank employs a business-development team devoted exclusively to assisting minority-owned and woman-owned businesses. The team provides resources on how to access global markets and use Ex-Im’s export financing to break into or expand export sales.

"In this tough economy, increasing exports is essential for growth and prosperity. Ex-Im Bank has reached a new height in support of minority-owned and woman-owned companies, but we need to do more," said Ex-Im Bank Chairman and President Fred P. Hochberg. "Our dedicated staff can assist these firms, many of which are small businesses, in accessing the financing products to provide them with the funds to expand and the confidence that they will be paid for foreign sales."

Success Stories

Maya Williams, president and founder of Morganna’s Alchemy, LLC of Port Richey, Fla., sought the Bank’s assistance after learning about export-finance products at an Ex-Im Bank Global Access for Small Business forum in Tampa, Fla. The company is both a minority-owned and a woman-owned small business that manufactures medicinal and botanical skin care products from plant extracts, including those formulated to treat many different ethnic skin types. With exports already comprising 80 percent of total sales, the company was looking to grow its international business further.

Williams met with Ex-Im Bank staff and a local insurance agent who moved quickly. The company was approved for a $250,000 Ex-Im Bank small-business multibuyer export-credit insurance policy to help it offer favorable credit terms to foreign buyers and expand sales.

Today, Morganna’s Alchemy has 20 wholesalers in five countries. With the Ex-Im Bank policy, it is now able to offer 60-day payment terms to its foreign customers. The expected growth from the resulting sales will help the company expand into a new facility and add three new jobs.

"Ex-Im Bank has provided my company with insurance to grow and do business overseas with no worries," said Williams.

AR Chem Tex Industries LLC, of Edinburg, Texas, exports chemical-treatment products and equipment such as soap sticks for gas wells. The company was seeking to enter new foreign markets but did not have the ability to finance that expansion. The company’s president, Art Lopez, attended an Ex-Im Bank Global Access forum in Weslaco, Texas, where he learned about Ex-Im Bank’s financing products for small business.

AR Chem Tex received a $500,000 loan from Frost National Bank backed by an Ex-Im Bank working capital loan guarantee to finance its business expansion. AR Chem also was approved for a $500,000 small-business multibuyer insurance policy for the financing and risk protection of its foreign receivables. Both products helped the company increase sales to Mexico and Venezuela as well as begin exporting to Argentina and Colombia. As a consequence, the company has hired one new employee and plans to hire more as foreign sales continue to grow.

"We hadn’t expanded into new markets because of limited capital and difficulty financing our products," said Lopez. "Now that we have financing from Ex-Im Bank, we are selling in new markets in Latin America."

Ex-Im Bank has seen the majority of its increased authorizations for minority-owned and woman-owned businesses in the manufacturing and transportation-industry sectors. Among these businesses, the Bank’s small-business multibuyer insurance was the most popular product, followed by working capital loan guarantees. The Bank anticipates additional authorizations for transactions in the pipeline for minority-owned and woman-owned businesses in the fourth quarter of FY 2012.

BRISTOL-MYERS SQUIBB EXEC. CHARGED BY SEC WITH INSIDER TRADING OF STOCK OPTIONS

FROM: SECURITIES AND EXCHANGE COMMISSIONOn August 2, 2012, the Securities and Exchange Commission charged an executive at Bristol-Myers Squibb with insider trading on confidential information about companies being targeted for potential acquisitions. His illegal trading took place as recently as just weeks ago.

The SEC alleges that Robert D. Ramnarine, who lives in East Brunswick, N.J., made more than $300,000 in illegal profits by misusing nonpublic information he obtained while helping Bristol-Myers Squibb evaluate whether to acquire three other pharmaceutical companies. He used multiple personal brokerage accounts to illegally trade in stock options of these potential target companies. Prior to some trading, Ramnarine conducted Internet research from his Bristol computer to determine whether he could be detected by regulators. He searched for such phrases as "can stock option be traced to purchaser" and "illegal insider trading options trace" and viewed such articles as "Ways to Avoid Insider Trading." Ramnarine even viewed a press release on the SEC’s website announcing an enforcement action arising from illegal trading in call options in advance of an acquisition announcement.

The SEC is seeking a court order to freeze Ramnarine’s brokerage account assets. In a parallel criminal action, the U.S. Attorney’s Office for the District of New Jersey announced the arrest of Ramnarine today.

According to the SEC’s complaint filed in federal court in New Jersey, Ramnarine is an executive in the treasury department at Bristol-Myers Squibb. He conducted his insider trading schemes from August 2010 to July 2012, illegally trading in stock options of Pharmasset Inc., Amylin Pharmaceuticals Inc., and ZymoGenetics Inc. in advance of announcements that those companies would be acquired.

The SEC alleges that just as Bristol was finalizing its agreement with ZymoGenetics in late August 2010, Ramnarine started to buy out-of-the-money call options. A call option is a security that derives its value from the underlying common stock of the issuer and gives the purchaser the right to buy the underlying stock at a specific price within a specified period of time. Typically, investors will purchase call options when they believe the stock of the underlying securities is going up. Ramnarine made $30,551 in illegal profits by trading ZymoGenetics call options in advance of a Sept. 7, 2010 public announcement that Bristol-Myers Squibb was acquiring ZymoGenetics.

The SEC further alleges that in advance of a Nov. 21, 2011 announcement that Pharmasset would be acquired by Gilead Sciences Inc., Ramnarine bought Pharmasset call options based on material, nonpublic information that he obtained from participating in Bristol-Myers Squibb’s evaluation of a possible acquisition of Pharmasset. This was part of an auction process conducted by Pharmasset and its investment bankers during the weeks before the Gilead-Pharmasset announcement. Ramnarine made $225,026 in illegal profits when he sold the calls immediately after the public announcement of Pharmasset’s sale.

According to the SEC’s complaint, Ramnarine very recently sold or "wrote" put options and purchased call options in advance of a June 29, 2012 announcement by Bristol-Myers Squibb that it would acquire Amylin. A put option is a security that derives its value from the underlying common stock. When investors sell or "write" puts, they obligate themselves to sell the underlying security at a certain price before the expiration date. Investors usually write puts when they believe the price of the underlying stock price is moving up. Ramnarine’s trades were based on material nonpublic information that he obtained by working on financing and capital structure matters as part of Bristol’s due diligence process leading up to the acquisition announcement. Ramnarine made $55,784 in illegal profits by trading Amylin put and call options in advance of the public announcement.

The SEC alleges that Ramnarine violated Section 17(a) of the Securities Act of 1933 and Sections 10(b) and (14)(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The SEC is seeking disgorgement of ill-gotten gains with prejudgment interest, a financial penalty, an officer-and-director bar, a permanent injunction, and an order freezing the assets in Ramnarine’s brokerage accounts.

The SEC has coordinated its action with the U.S. Attorney’s Office for the District of New Jersey, and also appreciates the assistance of the Options Regulatory Surveillance Authority and Federal Bureau of Investigation.