16-0914 Wednesday “The Daily Bugle”

16-0914 Wednesday “Daily Bugle”

Wednesday, 14 September 2016

The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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  1. DHS/CBP Seeks Comments on Modernizing the Customs Brokers Examination 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/Census: “ACE AESDirect Scheduled Outage, 17-18 Sep” 
  3. Commerce/Census: “Export License Number Validation for License Codes T10 and S94” 
  4. Commerce/BIS: (No new postings.) 
  5. President Terminates National Emergency Regarding the Situation in or in Relation to Côte d’Ivoire 
  6. State/DDTC: (No new postings.) 
  7. Treasury/OFAC Posts New Burma-related FAQ 
  1. Expeditors News: “Update: CBP Issues Guidance on Vessel Diversions for Hanjin Shipping Lines” 
  2. Reuters: “Obama Says U.S. Ready to Lift Myanmar Sanctions after Suu Kyi’s Visit” 
  3. ST&R Trade Report: “Broker License Exam Modernization Reflected in CBP Proposed Rule” 
  1. L. Nemer: “Export License Number or Exemption Code Required for All AESDirect Filings” 
  2. R.C. Burns: “Flowers for Ahmadinejad” 
  1. ECTI Presents United States Export Control (EAR/OFAC/ITAR) Seminar Series in Phoenix, AZ, 14-17 Nov 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (26 Aug 2016), DOD/NISPOM (18 May 2016), EAR (7 Sep 2016), FACR/OFAC (18 May 2016), FTR (15 May 2015), HTSUS (30 Aug 2016), ITAR (8 Sep 2016) 


EXIM_a11. DHS/CBP Seeks Comments on Modernizing the Customs Brokers Examination

81 FR 63149-63153: Modernization of the Customs Brokers Examination
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: Notice of proposed rulemaking.
* SUMMARY: This document proposes to update the U.S. Customs and Border Protection (CBP) regulations concerning the customs broker’s examination provisions. Specifically, this document proposes to transition to a computer automated customs broker examination, increase the examination fee to cover the increased cost of delivering the exam, and adjust the dates of the examination to account for the fiscal year transition period and payment schedule requirements.
* DATES: Comments must be received on or before November 14, 2016. …
* FOR FURTHER INFORMATION CONTACT: John Lugo, Broker Management Branch, Office of Trade, (202) 863-6015, John.lugo@cbp.dhs.gov.
   Customs brokers are private individuals and/or business entities (partnerships, associations or corporations) that are regulated and empowered by CBP to assist importers and exporters in meeting federal requirements governing imports and exports. Customs brokers have an enormous responsibility to their clients and to CBP that requires them to properly prepare importation and exportation documentation, file these documents timely and accurately, classify and value goods properly, pay duties and fees, safeguard their clients’ information, and protect their license from misuse.
   CBP currently licenses brokers who meet a certain set criteria. One criterion is that each prospective broker must first pass a broker license examination. CBP’s current paper based examination method will soon no longer be available and so CBP is shifting to an all-electronic examination. The all-electronic examination has some benefits to both CBP and the trade, such as a faster processing time, which lets examinees know their results more quickly and efficiently, and a significant reduction in administrative duties for CBP employees. However, administering this new electronic examination is also more expensive. Additionally, the current $200 fee does not cover the costs of the current paper examination. CBP is therefore proposing to increase the examination fee from $200 to $390 in order to fully cover all of CBP’s costs of administering the broker examination.
   CBP is also proposing to change the date of the semi-annual customs broker examination from the first Monday in October and April to the fourth Monday in October and April for easier administration. …
   Dated: September 8, 2016.
Jeh Charles Johnson, Secretary.
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OGS_a12. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

[No items of interest noted today.]  
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This message is intended for ACE AESDirect filers ONLY. If you are not an ACE AESDirect filer, you are not affected by this outage.
The outage is effective 10:00pm EST Saturday, September 17 – 4:00am EST Sunday, September 18.
ACE AESDirect filers may submit shipments under the AES Downtime Policy. State Department licensable shipments cannot be exported under the AES Downtime Policy and must be held until the connection is restored and an Internal Transaction Number (ITN) is received. Once connection is brought back on-line after the outage, all shipments that were exported under the AES Downtime Policy must be filed along with any new AES transactions.
If you use the AES Downtime Policy for export, please contact the port from which you will be exporting. In lieu of the AES Proof of Filing citation, please use the AES Downtime citation, which consists of the phrase AESDOWN, your individual company’s Filer ID, followed by the date.
For example: AESDOWN 123456789 09/17/2016
Please see the CBP web site for further information on the AES Downtime Policy.
For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.
  – Telephone: (800) 549-0595, select option 1 for AES
  – Email: askaes@census.gov
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The Automated Export System (AES) will begin validating the format of the Case ID reported in the Export License Number field on Sunday September 11, 2016 as documented in the Automated Export System Trade Interface Requirements’ (AESTIR) Appendix F – License and License Exemption Type Codes and Reporting Guidelines for License Code T10 (OFAC Specific Licenses) and S94 (Foreign Military Sales).
Respectively, AES will generate and send Response Code 809 for License Code T10 and Response Code 568 for License Code S94 as a verify message when the format is not correct. Please review Appendix A – Commodity Filing Response Messages for more information.
For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.
  – Telephone: (800) 549-0595, select option 1 for AES
  – Email: askaes@census.gov
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OGS_a56. President Terminates National Emergency Regarding the Situation in or in Relation to Côte d’Ivoire
(Source: WhiteHouse.gov)
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), section 5 of the United Nations Participation Act, as amended (22 U.S.C. 287c), and section 301 of title 3, United States Code,
I, BARACK OBAMA, President of the United States of America, find that the situation that gave rise to the declaration of a national emergency in Executive Order 13396 of February 7, 2006, with respect to the situation in or in relation to Côte d’Ivoire, including the massacre of large numbers of civilians, widespread human rights abuses, significant political violence and unrest, and attacks against international peacekeeping forces leading to fatalities, has been significantly altered by the progress achieved in the stabilization of Côte d’Ivoire, including the successful conduct of the October 2015 presidential election, progress on the management of arms and related materiel, and the combating of illicit trafficking of natural resources. Accordingly, and in view of the removal of multilateral sanctions by the United Nations Security Council in Resolution 2283, I hereby terminate the national emergency declared in Executive Order 13396, revoke that order, and further order:
Section 1. Pursuant to section 202(a) of the NEA (50 U.S.C. 1622(a)), termination of the national emergency declared in Executive Order 13396 shall not affect any action taken or proceeding pending not finally concluded or determined as of the date that this order is effective, any action or proceeding based on any act committed prior to such date, or any rights or duties that matured or penalties that were incurred prior to such date.
Sec. 2. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Sec. 3. This order is effective at 8:00 a.m. eastern daylight time on September 14, 2016.
September 14, 2016.
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OGS_a67. State/DDTC: (No new postings.)
(Source: State/DDTC)
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OGS_a78. Treasury/OFAC Posts New Burma-related FAQ
(Source: Treasury/OFAC)
OFAC has posted a
new frequently asked question in connection with the President’s announcement on changes to U.S. policy with respect to Burma:
Q: How will OFAC implement the changes to the Burma sanctions program announced by the President on September 14, 2016? Are the changes effective immediately?
A: The President has announced his intention to terminate the national emergency with respect to Burma. His decision will be legally effective when he issues a new Executive Order terminating that national emergency and revoking the Burma Executive Orders. At that time, the sanctions imposed under OFAC’s Burmese Sanctions Regulations will no longer be in effect. OFAC will formally remove the Burmese Sanctions Regulations from the Code of Federal Regulations and take other administrative actions as necessary. Other departments and agencies will implement additional changes that will be announced on their websites as appropriate.
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NWS_a19. Expeditors News: “Update: CBP Issues Guidance on Vessel Diversions for Hanjin Shipping Lines”
(Source: Expeditors News)
On September 13, 2016 U.S. Customs and Border Protection (CBP) released Cargo Systems Messaging Service (CSMS) #16-000814, an update to previously issued CSMS #16-000788 providing additional guidance on how to handle vessel diversions for Hanjin Shipping Lines cargo.
In an effort to limit the number of potential disruptions to arriving Hanjin Shipping vessels and cargo, CBP has provided two updated process scenarios to assist the trade, “and CBP identify procedures to follow to prevent disruptions.”
These additional scenarios include:
   – Entry has been filed, cargo has been released by CBP but terminal operator will not allow it to leave the terminal due to payment issues. Importers are requesting entry cancellations to avoid payment of duties etc. based on the 10 day entry summary clock.
   – Cargo for export has been loaded on board a foreign flagged vessel at a U.S. port. Vessel is now at a subsequent U.S. port and to avoid issues, the exporter/carrier is requesting permission to unload the export cargo in the U.S.
The full CSMS, including the list of possible scenarios can be accessed here.
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NWS_a210. Reuters: “Obama Says U.S. Ready to Lift Myanmar Sanctions after Suu Kyi’s Visit”

(Source: Reuters)
Myanmar’s Aung San Suu Kyi called on Wednesday for the lifting of economic sanctions against her country, and President Barack Obama, in their first White House meeting since she became her country’s leader, said the United States was ready to do so.
  “The United States is now prepared to lift sanctions that we have imposed on Burma for quite some time,” Obama said, with Suu Kyi sitting next to him in the Oval Office.
  “It is the right thing to do in order to ensure that the people of Burma see rewards from a new way of doing business and a new government.”
Suu Kyi’s trip capped a decades-long journey from political prisoner to national leader after her party won a sweeping electoral victory last year.
With Suu Kyi no longer an opposition figure, the United States has been weighing a further easing of sanctions against Myanmar, formerly known as Burma, as Obama looks to normalize relations with a country Washington shunned when it was ruled by a military junta.
  “We think that the time has now come to remove all the sanctions that hurt us economically,” Suu Kyi said, noting that the U.S. Congress had supported her country by backing sanctions in the past to put pressure for democratic reforms.
As Suu Kyi arrived at the White House, Obama issued a statement saying he would reinstate Myanmar to the Generalized System of Preferences (GSP), which provides duty-free treatment for goods from poor and developing countries.
Myanmar was removed from GSP benefits in 1989 following pro-democracy uprisings a year earlier that were brutally suppressed by the ruling military junta.
That move, combined with the lifting of sanctions, “will give the United States, our businesses, our non-profit institutions greater incentive to invest and participate in what we hope will be an increasingly democratic and prosperous partner for us in the region,” Obama said.
The United States eased some sanctions against Myanmar earlier this year to support political reform but maintained most of its economic restrictions with an eye toward penalizing those it views as hampering the democratically elected government.
With Suu Kyi in Washington, officials in Myanmar said the government there was making a push to overhaul rules on new foreign investment this week.
New investment approvals have fallen since Suu Kyi took power in April and some businesses and investors have criticized her for failing to prioritize the economy.
Separately, a group of 46 non-governmental organizations circulated a letter they wrote to Obama on Monday expressing concern about reports of plans to ease sanctions on Myanmar while human rights abuses by the military and against Rohingya Muslims persisted.
  “While incremental progress is being made in Burma, it is vital that the U.S. continue to act in support of Burma’s people, particularly those still suffering under the current government,” the letter said.
  “To lift sanctions prior to tangible change for suffering communities would be a disservice to those vulnerable peoples who deserve international protection,” it said.
On Wednesday, U.S. Senator Bob Corker, the chairman of the influential Senate Foreign Relations Committee, criticized what he described as Suu Kyi’s “dismissive” reaction to concerns he had raised about her country’s record on human trafficking.
  “After witnessing her lack of regard for Burma’s dismal track record on this issue, I plan to pay very close attention to her government’s efforts to prevent innocent human beings from being trafficked and sold into forced labor and sex slavery,” Corker said in a statement released to Reuters after a breakfast meeting with Suu Kyi and Vice President Joe Biden.

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NWS_a311. ST&R Trade Report: “Broker License Exam Modernization Reflected in CBP Proposed Rule”

(Source: ST&R Trade Report)
U.S. Customs and Border Protection is proposing to update its regulations concerning the customs broker’s license examination by transitioning to an automated exam, increasing the exam fee, and adjusting the dates of the exam. Comments on this proposed rule are due no later than Nov. 14.
A person (an individual, corporation, association, or partnership) must hold a valid customs broker’s license and permit to transact customs business on behalf of others. An exam may be conducted to assess an applicant’s qualifications for a license. 19 CFR part 111 sets forth the regulations regarding broker licensing and permitting, the qualifications required of applicants, and the procedures for applying, including exam procedures and requirements.
To modernize these regulations CBP is proposing to make the following changes:
  – removing the reference to a “written” exam to allow for greater flexibility in test administration and the April 2017 transition to automated exams, which will be held at private testing centers and administered by professional proctors
  – removing the requirement for the exam to be graded at CBP headquarters
  – changing the dates of the exam from the first Monday in April and October to the fourth Monday in April and October to provide greater predictability in years where federal budgets are uncertain
  – publishing additional notice of each exam on the CBP website to increase transparency and the availability of exam information
  – increasing the exam fee from $200 to $390 to recover the costs associated with administering the exam once it is made electronic
  – removing the provision providing for a special exam when a partnership, association, or corporation loses the member or officer with the individual broker’s license required by the regulations, which has never been used
  – directing applicants who fail to appear for an exam to the Broker Management Branch within the Office of Trade instead of the port director
  – directing applicants wishing to appeal a failing exam grade to the Broker Management Branch instead of Trade Policy and Programs

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COMM_a112. L. Nemer: “Export License Number or Exemption Code Required for All AESDirect Filings”

* Author: Lisa Nemer, Shipping Solutions,
One thing that has come as a surprise to some exporters as they have transitioned to AESDirect via the ACE Portal is that a license number or exemption code is required for all line items, even if they are C33-No License Required items.
The funny thing about the AESDirect system, however, is that it will reject your shipment if you are missing the license number or exemption code, but when you review the line item to see what is wrong, it will fill in the proper code for you. All you need to do is save the item, and the error goes away.
You can avoid all that funny business by entering a license number or exemption code before clicking the Submit Filing button. If the item does not require a license number, AES specifies the exact exemption code to use for each license type. For example, for license type C33-No License Required, you must submit an exemption code of NLR.
Below is a chart showing whether a license is required for a particular license type, and if not, what the proper code is for submitting to AESDirect.

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COMM_a213. R.C. Burns: “Flowers for Ahmadinejad”
Export Law Blog
. Reprinted by permission.)
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC, 202-624-3949,
The Office of Foreign Assets Control (“OFAC”) yesterday fined a company a whopping $4,320,000 for selling things to Iran. Oh wow, you say, this must have been some really bad stuff like, say, high-powered computers or drones, right? Yep, really dangerous stuff – flower seeds. As in, the things you bury in your backyard and hope sprout up as zinnias.
Well, okay, so maybe they didn’t sell anything dangerous. The company, which is PanAmerican Seed in Illinois, must have sold like a billion dollars worth of seeds, right? Um, we don’t know the value of the seeds. For some reason OFAC won’t say. This is odd because OFAC almost always says what the value of the shipments was. OFAC does say something surpassingly strange about the dollars involved, something it’s never said before. In aggravating factor 4, OFAC says this:
PanAm Seed engaged in this pattern of conduct over a period of years, providing over $770,000 in economic benefit to Iran.
Now this is definitively not the value of the shipment. If $770,000 was the price of the exported goods, then PanAmerican which, presumably, was paid for the seeds by people in Iran, got the $770,000 benefit, or at least however much of that price represented its profit. I suppose this means the profit Iranians made after planting the seeds and selling the flowers, although how OFAC figured that out is rather hard to discern. And if the profits made by Iranians on the seeds is the economic benefit to Iran, then the value of the shipments had to be well south of that figure.
Why OFAC would go to such length to obfuscate the value of the shipments is unclear. Leaving aside that we are talking about petunia seeds here, PanAmerican Seed, at least if OFAC is to be believed, did not behave well. Apparently, it knew what it was doing; it concealed the ultimate destination of the shipments; it refused to cooperate with OFAC when it was turned in; and it apparently provided “inaccurate, misleading, or incomplete” information to OFAC.
In any event, it still seems that OFAC has better things to do than to tiptoe through the tulips in Tehran.
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14. ECTI Presents United States Export Control (EAR/OFAC/ITAR) Seminar Series in Phoenix, AZ, 14-17 Nov
(Source: Jill Kincaid; jill@learnexportcompliance.com)

* What: United States Export Control (EAR/OFAC/ITAR) Seminar Series in Phoenix, AZ
* When: EAR/OFAC Seminar: Nov 14-15, 2016; ITAR Seminar: Nov 16-17, 2016
* Where: Phoenix, AZ: Sheraton Crescent Hotel
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker Panel: Scott Gearity, Greg Creeser & Steve Wagner
* Register: Here, or Jessica Lemon, 540-433-3977, jessica@learnexportcompliance.com.
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* Nas (Nasir bin Olu Dara Jones, 14 Sep 1973, better known by his stage name Nas, is an American hip-hop recording artist, record producer, actor and entrepreneur.)
  – “Your look reflects what’s happening in your mind. You gotta have some swag to you.”

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. Are Your Copies of Regulations Up to Date?
(Source: Editor)

The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.  Changes to applicable regulations are listed below.
: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War
  – Last Amendment: 15 Jan 2016: 81 FR 2657-2723: Machineguns, Destructive Devices and Certain Other Firearms; Background Checks for Responsible Persons of a Trust or Legal Entity With Respect To Making or Transferring a Firearm 
: 19 CFR, Ch. 1, Pts. 0-199
  – Last Amendment: 26 Aug 2016: 81 FR 58831-58834: Administrative Exemption on Value Increased for Certain Articles 

  – Last Amendment: 18 May 2016: Change 2: Implement an insider threat program; reporting requirements for Cleared Defense Contractors; alignment with Federal standards for classified information systems; incorporated and canceled Supp. 1 to the NISPOM  (Summary here.)

  – Last Amendment: 7 Sep 2016: 81 FR 61595-61612: Russian Sanctions: Addition of Certain Entities to the Entity List 

: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 18 May 2016: 81 FR 31169-31171: Burmese Sanctions Regulations   
: 15 CFR Part 30
  – Last Amendment: 15 May 2015; 80 FR 27853-27854: Foreign Trade Regulations (FTR): Reinstatement of Exemptions Related to Temporary Exports, Carnets, and Shipments Under a Temporary Import Bond 
  – HTS codes that are not valid for AES are available
  – The latest edition (9 Mar 2016) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and footnotes containing case annotations, practice tips, and Census/AES guidance.  Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR.
, 1 Jul 2016: 19 USC 1202 Annex.  (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment: 30 Aug 2016; Harmonized System Update (HSU) 1612, containing 4,692 ABI records and 935 harmonized tariff records.  
  – HTS codes for AES are available
  – HTS codes that are not valid for AES are available
INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130 (Caution — The ITAR as posted on GPO’s eCFR website and linked on the DDTC often takes several weeks to update the latest amendments.)
  – Latest Amendment: 8 Sep 2016; 81 FR 62004-62008: 22 CFR Parts 120, 125, 126, and 130; Public Notice: 9672; RIN: 1400-AD70; International Traffic in Arms: Revisions to Definition of Export and Related Definitions
  – The only available fully updated copy (latest edition 8 Sep 2016) of the ITAR with all amendments is contained in Bartlett’s Annotated ITAR (“BITAR”), by James E. Bartlett III.  The BITAR contains all ITAR amendments to date, plus a large Index and over 700 footnotes containing case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text.  Subscribers receive updated copies of the BITAR in Word by email, usually revised within 24 hours after every ITAR amendment.  The BITAR is the essential tool of the ITAR professional.  The BITAR is available by annual subscription from the Full Circle Compliance website.  BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please contact us to receive your discount code.

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* The Ex/Im Daily Update is a publication of FCC Advisory B.V., edited by James E. Bartlett III and Alexander Bosch, and emailed every business day to approximately 7,500 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOJ/ATF, DoD/DSS, DoD/DTSA, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

* INTERNET ACCESS AND BACK ISSUES: The National Defense Industrial Association (“NDIA”) posts the Daily Update on line, and maintains back issues since August, 2009 here.

* RIGHTS & RESTRICTIONS: This email contains no proprietary, classified, or export-controlled information. All items are obtained from public sources or are published with permission of private contributors, and may be freely circulated without further permission. Any further use of contributors’ material, however, must comply with applicable copyright laws.

* CAVEAT: The contents of this newsletter cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.

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