16-1102 Wednesday “The Daily Bugle”

16-1102 Wednesday “Daily Bugle”

Wednesday, 2 November 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 
here for free subscription.  Contact us
for advertising inquiries and rates.

  1. Justice/DEA Seeks Comments on Application for Permit To Import Controlled Substances for Domestic and/or Scientific Purposes 
  2. President Continues National Emergency With Respect to Sudan 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. State/DDTC: (No new postings.) 
  1. Defense News: “India Changing Policy on Blacklisting of Foreign Defense Companies” 
  2. Reuters: “Philippines’ Duterte Rails at U.S. ‘Monkeys’ for Halting Gun Sale” 
  3. ST&R Trade Report: “WCO Releases 2017 Edition of Harmonized System Nomenclature” 
  1. A.D. Irwin & M.W. Mutek: “Proposed DoD Rule on Protection of Unclassified Technical Data Would Disqualify Contractors with Export Violations” 
  2. T. Murphy: “Post-Entry Preference Program Claims” 
  3. R.C. Burns: “OFAC Guidance To Publishers: Proceed At Your Own Risk” 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (28 Oct 2016), DOD/NISPOM (18 May 2016), EAR (17 Oct 2016), FACR/OFAC (17 Oct 2016), FTR (15 May 2015), HTSUS (30 Aug 2016), ITAR (12 Oct 2016) 


 EXIM_a11. Justice/DEA Seeks Comments on Application for Permit To Import Controlled Substances for Domestic and/or Scientific Purposes

81 FR 76383-76384: Agency Information Collection Activities; Proposed eCollection, eComments Requested; Extension Without Change of a Previously Approved Collection, Application for Permit To Import Controlled Substances for Domestic and/or Scientific Purposes
* AGENCY: Drug Enforcement Administration, Department of Justice.
* ACTION: 30-Day notice. …
* DATES: Comments are encouraged and will be accepted for 30 days until December 2, 2016.
* FOR FURTHER INFORMATION CONTACT: Michael J. Lewis, Office of Diversion Control, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-6812 or sent to OIRA_submissions@omb.eop.gov.
  – Title of the Form/Collection: Application for Permit to Import Controlled Substances for Domestic and/or Scientific Purposes pursuant to 21 U.S.C. 952.
  – The agency form number, if any, and the applicable component of the Department sponsoring the collection: DEA Form: 357. The applicable component within the Department of Justice is the Drug Enforcement Administration, Office of Diversion Control.
  – Abstract: Section 1002 of the Controlled Substances Import and Export Act (CSIEA) (21 U.S.C. 952) and Title 21, Code of Federal Regulations (21 CFR), Sections 1312.11, 1312.12 and 1312.13 requires any person who desires to import controlled substances listed in schedules I or II, any narcotic substance listed in schedules III or IV, or any non-narcotic substance in schedule III which the Administrator has specifically designated by regulation in Sec. 1312.30, or any nonnarcotic substance in schedule IV or V which is also listed in schedule I or II of the Convention on Psychotropic Substances, must have an import permit. To obtain the permit to import controlled substances for domestic and or scientific purposes, an application for the permit must be made to the DEA on DEA Form 357. …
   Dated: October 27, 2016.
Jerri Murray, Department Clearance Officer for PRA, U.S. Department of Justice.
* * * * * * * * * * * * * * * * * * * *

EXIM_a22. President Continues National Emergency With Respect to Sudan

(Source: Federal Register) [Excerpts.]
81 FR 76491: Continuation of the National Emergency With Respect to Sudan
On November 3, 1997, by Executive Order 13067, the President declared a national emergency with respect to Sudan and, pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706), took related steps to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States posed by the actions and policies of the Government of Sudan. On April 26, 2006, in Executive Order 13400, the President determined that the conflict in Sudan’s Darfur region posed an unusual and extraordinary threat to the national security and foreign policy of the United States, expanded the scope of the national emergency to deal with that threat, and ordered the blocking of property of certain persons connected to the conflict. On October 13, 2006, the President issued Executive Order 13412 to take additional steps with respect to the national emergency and to implement the Darfur Peace and Accountability Act of 2006 (Public Law 109-344).
The actions and policies of the Government of Sudan continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13067 of November 3, 1997, expanded on April 26, 2006, and with respect to which additional steps were taken on October 13, 2006, must continue in effect beyond November 3, 2016. Therefore, consistent with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency with respect to Sudan declared in Executive Order 13067.
(Presidential Sig.)
October 31, 2016.
* * * * * * * * * * * * * * * * * * * *


OGS_a13. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

* State; NOTICES; Designations as Global Terrorists: Abu Ali Tabatabai, aka Abu Ali Tabtabai, aka Abu ‘Ali Al-Tabataba’i, aka Haytham ‘Ali Tabataba’i  [Publication Date: 3 November 2016.] 
* * * * * * * * * * * * * * * * * * * *

* * * * * * * * * * * * * * * * * * * *

* * * * * * * * * * * * * * * * * * * *


NWS_a16. Defense News: “India Changing Policy on Blacklisting of Foreign Defense Companies”
(Source: Defense News)
India will not implement blanket blacklisting of foreign defense companies charged with corruption under a newly finalized policy that likely will be made public this month, said an Indian Ministry of Defence (MoD) official.
Since 2005, India has blacklisted six overseas companies from operating here in response to allegations of corruption while doing business in the country. Instead of blocking a business from defense deals, India will impose an economic penalty on the company.
The MoD official would not say if those companies already blacklisted will be allowed to participate in future defense projects after the new policy is enacted. However, the official did say the MoD is in favor of allowing those companies to participate in defense projects so long as they agree to deferred prosecution. The official would not expand on this approach.
The ruling government believes the blanket blacklisting policy, which was used by the previous United Progressive Alliance government, led to shortages of ammunition and artillery guns and hampered the acquisition process, according to the official.
“Blanket blacklisting has not been the only or even the main cause of shortages, but it cannot be denied that this has caused problems in the past in such diverse areas as manufacture of ammunition and import of air defense guns,” said Amit Cowshish, a former financial adviser for the MoD.
Bhupinder Yadav, a retired Indian Army major general and defense analyst, was more specific: “The immediate impact of blacklisting has led to shortages of essential ammunition such as 125mm Fin Stabilized Armour Piercing Discarding Sabot, Bi-Modular Charge System for 155mm gun ammunition and anti-tank missiles, 30mm ammunition for Su-30 aircraft, [and] 23mm armor-piercing incendiary tracer.”
Between 2005 and 2012, some defense companies, including Singapore Technologies Kinetics, Israel Military Industries (now known as IMI Systems), Germany-based Rheinmetall Air Defence, and Corporation Defence of Russia, have been debarred from doing business in India for the next 10 years in response to corruption allegations. In 2005, Denel of South Africa was blacklisted, and in 2014 AgustaWestland’s contract for the purchase of VVIP helicopters was canceled following allegations of corruption. Finmeccanica and its group companies are now kept out of future defense projects.
Ankur Gupta, a defense analyst with Ernst and Young India, said: “A strict, no-nonsense policy to deal with irregularities should be put in place, but care should be taken that no step is taken to harm the effective use of already-inducted equipment.”
Another MoD official warned the “policy cannot be in contravention to the laws of the country and has to be harmonized. The [Indian] law ministry will have a strong say in this matter and that is what is taking time.” The official would not provide further detail.
Vivek Rae, MoD’s former director general of acquisition, said: “A new blacklisting policy is urgently required to remedy the situation, in line with international best practices in democratic countries, where blacklisting is not the default option.
“There are various options for penalizing companies who violate the law or indulge in corrupt practices. Major democratic military powers like USA, with high standards of transparency, have elaborate suspension and debarment procedures, which balance considerations of probity and integrity with considerations of national security.”
Stressing the need for a policy that will do away with blanket blacklisting, he added: “India needs to balance considerations of integrity with considerations of national security, based on international best practices. The sooner this is done, the better. India cannot occupy the high moral ground when the ground beneath its feet is slipping away rapidly.”
* * * * * * * * * * * * * * * * * * * *

NWS_a27. Reuters: “Philippines’ Duterte Rails at U.S. ‘Monkeys’ for Halting Gun Sale”
(Source: Reuters)
Philippine President Rodrigo Duterte chided the United States on Wednesday for halting the planned sale of 26,000 rifles to his country, calling those behind the decision “fools” and “monkeys” and indicating he might turn to Russia and China instead.
Duterte’s tirades against the former colonial power are routine during his speeches and he said on Wednesday he once believed in Washington, but had since lost respect for what is the Philippines’ biggest ally.
The U.S. State Department halted the sale of the assault rifles to the Philippine police after staff from U.S. Senator Ben Cardin’s office said he would oppose it, Senate aides told Reuters on Monday.
Aides said Cardin, the top Democrat on the U.S. Senate Foreign Relations Committee, was reluctant for the United States to provide the weapons given concern about human rights violations in the Philippines during Duterte’s bloody, four-month-old war on drugs.
  “Look at these monkeys, the 26,000 firearms we wanted to buy, they don’t want to sell,” Duterte said during a televised speech.  
“Son of a bitch, we have many home-made guns here. These American fools.”
More than 2,300 people have been killed in police operations or by suspected vigilantes as part of Duterte’s anti-narcotics effort, which was the lynchpin of his election campaign.
Duterte has vented his anger at the United States for raising concerns about the extra-judicial killings.  
“That’s why I was rude at them, because they were rude at me,” he said.
According to procedures in Washington, the State Department informs Congress when international weapons sales are in the works. Aides said the State Department had been informed Cardin would oppose the deal during the pre-notification process, thus effectively halting the sale.
  “Committee staff told State that Cardin would block it if it was sent forward. They haven’t sent it. Does that mean it has been stopped? I guess that depends on your definition. It would be highly unusual for State to move it forward with explicit opposition,” a Senate aide said on Wednesday.
On Tuesday, State Department spokesman John Kirby said he was barred from commenting on the status of the sale, while stressing the U.S. commitment to the important U.S.-Philippines alliance.
  “The department is restricted under federal regulations from commenting on the status of commercial export license approvals of proposed commercial defense sales,” Kirby said at a daily news briefing.
  “So we’re going to stay also committed to working closely with members of Congress to deliver security assistance to our allies and partners worldwide, including the Philippines,” he said.
The Philippine police chief, Ronald dela Rosa, who has expressed disappointment that police might not get the M4 rifles, held a news conference where he showed a letter from the supplier, SIG Sauer, saying it had been advised by State that the application for the export license was proceeding normally.
If it does not go ahead, dela Rosa said, “We have many options and it’s their loss, not ours, if the report is true.”
Duterte reiterated that Russia and China had shown willingness to sell arms to the Philippines, but he would wait to see if his military wanted to continue using U.S. weapons.  
“Russia, they are inviting us. China also. China is open, anything you want, they sent me brochure saying we select there, we’ll give you.  
  “But I am holding off because I was asking the military if they have any problem. Because if you have, if you want to stick to America, fine.  
“But, look closely and balance the situation, they are rude to us.”
* * * * * * * * * * * * * * * * * * * *

NWS_a38. ST&R Trade Report: “WCO Releases 2017 Edition of Harmonized System Nomenclature”
The World Customs Organization has published here the 2017 edition of the Harmonized System Nomenclature, which will enter into force Jan. 1, 2017. This edition comprises a total of 5,387 separate groups of goods identified by a six-digit code, up from 5,205 in the 2012 edition.
The 2017 HS includes 242 sets of amendments, including 85 in the agricultural sector, 45 in the chemical sector, 22 in the wood sector, 15 in the textile sector, six in the base metal sector, 25 in the machinery sector, 18 in the transport sector, and 26 in a variety of other sectors. According to the WCO, highlights of these changes include the following.
Fish and Fishery Products
. Amendments for fish and fishery products are designed to further enhance the coverage of species and product forms that need to be monitored for food security purposes and better management of resources. These include a split by more detailed product forms for crustaceans, mollusks, and other invertebrates such as cuttlefish and squid.
Forestry Products
. The amendment for forestry products aims to enhance the coverage of wood species to get a better picture of patterns of trade, including in endangered species. In particular, separating the data on tropical wood trade will both focus attention on the issue of tropical wood use and clarify data on non-tropical hardwoods. New subheadings are also created for the monitoring and control of certain products of bamboo and rattan.
Anti-malarial Products
. One amendment aims at detailed information for several categories of products that are used as anti-malarial commodities.
. There are new subheadings for specific chemicals controlled under the Chemical Weapons Convention, certain hazardous chemicals controlled under the Rotterdam Convention, and certain persistent organic pollutants controlled under the Stockholm Convention. New subheadings have also been introduced for the monitoring and control of pharmaceutical preparations containing ephedrine, pseudoephedrine, or norephedrine and for alpha-phenylacetoacetonitrile, a pre-precursor for drugs.
Other Changes
. Headings 6907 (unglazed ceramic products) and 6908 (glazed ceramic products) were merged because the main subheadings within these headings concern products that are essentially no longer manufactured and the industry and trade no longer make a distinction between unglazed and glazed ceramic products. New products with a very high trade volume are classified under subheadings 6907.90 and 6908.90.
Advances in technology are reflected in the amendments for newsprint, light-emitting diode lamps, multi-component integrated circuits, and hybrid, plug-in hybrid, and all-electric vehicles. The amendments include clarification of texts to ensure uniform application of the nomenclature. For example, monopods, bipods, tripods, and similar articles are regrouped in a new heading 9620.
* * * * * * * * * * * * * * * * * * * *


COMM_a19. A.D. Irwin & M.W. Mutek: “Proposed DoD Rule on Protection of Unclassified Technical Data Would Disqualify Contractors with Export Violations”
* Source: Andrew D. Irwin, Esq., airwin@steptoe.com, 202-429-8177; and Michael W. Mutek, Esq., mmutek@steptoe.com, 202-429-1376. Both of Steptoe & Johnson LLP.
On October 31, 2016, the Department of Defense (DoD) issued a proposed rule entitled, Withholding of Unclassified Technical Data and Technology from the Public Disclosure.  Public comments are due on December 30, 2016.
The proposed rule establishes DoD policy, assigns responsibilities, and prescribes procedures for the dissemination and withholding of certain unclassified technical data and technology subject to the ITAR and EAR.  The regulation applies to DoD components, their contractors, and grantees and is meant to control the transfer of technical data and technology contributing to the military potential of any country or countries, groups, or individuals that could prove detrimental to US national security or critical interests.
For the purposes of this regulation, DoD has taken the view that public disclosure of technical data and technology is the same as providing uncontrolled foreign access.  Therefore, this rule instructs DoD employees, contractors, and grantees to ensure unclassified technical data and technology that discloses technology or information with a military or space application may not be exported without authorization, and should be disseminated consistent with US export control laws and regulations.
Although DoD states this rule does not modify or supplant the ITAR or the EAR, and further notes that this rule does not apply to commercial relationships unrelated to DoD programs, data, or information in the public domain or approved for public release by DoD, in practical effect the proposed rule further injects DoD into the field of export regulation.  Specifically, the rule notes that in order for a contractor to receive technical data associated with DoD procurements, the contractor will have to complete a DD 2354 Military Critical Technology Agreement to the US-Canada Joint Certification Office, and will be required to mark and treat export controlled information associated with DoD programs in accordance with various DoD directives.  Although the proposed rule adds several new sub-requirements regarding treatment of export controlled information from DoD, the baseline requirements for submitting an authorization request to receive DoD technical data in and of themselves, are not new and have been specified in DoD publications such as DoD Directive 5230.5 (albeit apparently not in the CFR explicitly), for a number of years.
What is new and significant is the requirement that when a DoD component is in receipt of “substantial and credible information” that a qualified US contractor has violated US export controls, violated its certification, made a certification in bad faith, or omitted or misstated a material fact, the DoD component will temporarily revoke the US contractor’s qualification to receive export controlled information from DoD.  

The same will be true of Canadian contractors who the rule requires submit a similar certification.  Notably, the certification on the DD2354 states that a contractor does not employ persons who have violated export control laws and does not specify whether administrative/civil violations (which are common in the defense industry), are carved out from the certification.  

The rule goes on to note that the DoD component may delay such temporary revocations with the potential to compromise a US government investigation.  When there is a temporary revocation, however, the DoD component is supposed to notify the contractor and the Undersecretary of Defense for Acquisition, Technology and Logistics (USD (AT&L)).  The contractor will then be given an opportunity to respond in writing to the information upon which the temporary revocation is based before being disqualified.  Any US contractor whose qualification has been temporarily revoked may present information to the DoD component showing that the basis for revocation was in error or has been remedied and be reinstated.  When the basis for a contractor’s temporary revocation cannot be removed within 20 working days, the DoD component will recommend to the USD (AT&L) that the contractor be disqualified from receiving export controlled information from DoD.  Further, after receipt of substantial and credible information that a qualified US contractor has violated US export control law, the DoD component must notify the appropriate law enforcement agency.
The disqualification requirement, if implemented in the final (or an interim) rule, will no doubt be controversial.  While the proposed rule itself does not call for contractors to voluntarily disclose export violations to DoD, it is conceivable any company that submits a voluntary disclosure to the State or Commerce Departments (or the National Security Division of the Department of Justice pursuant to its recent guidance) in connection with a DoD contract might face temporary revocation of its right to receive controlled technical data from DoD associated with contracts upon which it is working or bidding, if the export control agencies, or the Department of Justice, were to notify DoD of the voluntary disclosure.  

Moreover, various other regulations regarding cybersecurity and controlled unclassified information call for contractors to report breaches to the disseminating agency (such as DoD), even when in the view of the contractor there may be a credible argument that those breaches are not themselves export violations.  Therefore, it is possible that DoD will take the view such breaches are in fact export violations and DoD is therefore required to contact the Departments of State or Commerce, or the Department of Justice.  For more information on this topic, see our October 31 advisory.  

Thus, companies that have strong compliance programs and disclose potential violations, or have appropriate mechanisms for complying with cyber-reporting requirements, may inadvertently find themselves subjected to multi-agency follow-up inquiries and that their ability to perform or win DoD contracts has been impacted.  Furthermore, the scope of the revocation, i.e., corporate-wide or just the affected business unit/subsidiary, as well as the scope of the “substantial and credible information” standard are unclear and merit clarification as do a number of other aspects of this potentially impactful rule.
* * * * * * * * * * * * * * * * * * * *

COMM_a210. T. Murphy: “Post-Entry Preference Program Claims”
(Source: Author)

* Author: Ted Murphy, Esq., Baker & McKenzie, ted.murphy@bakermckenzie.com, 202-452-7069

There are some recent developments in the world of post-entry preference program claims that we wanted to make sure you were aware of, as they could provide meaningful refund opportunities. A recent decision by the U.S. Court of International Trade (CIT) raised serious concerns about the legality of U.S. Customs and Border Protection’s 2014 policy limiting the filing of post-importation claims for preferential tariff treatment under a number of programs, including GSP, AGOA, the US FTAs with Australia, Bahrain, Israel, Jordan, Morocco and Singapore, the Pharmaceutical Products Agreement, and others (“the 2014 Policy”). It is now being reported that CBP may have abandoned the 2014 Policy altogether.

There are two key outcomes from this development. First, post-entry claims under certain preferential duty programs may now be raised for the first time in a protest. Second, for companies which have filed protests asserting such claims, there may be an opportunity to revive such protests and obtain the duty savings, regardless of how long ago such protests were filed.


Preferential duty programs (such as free trade agreements, GSP and the like) can be grouped into two buckets when it comes to post-entry preference claims-the programs which explicitly authorize post-entry claims (e.g., NAFTA), and those which do not. When it comes to asserting post-entry preference claims for the second bucket of programs, CBP has, since 2014, taken the view that such claims could only be made prior to liquidation. In other words, for this second group of programs, a preferential duty claim could not be raised for the first time in a protest. Once an entry was liquidated, the window for claiming a duty preference was closed.

In August, the CIT issued an opinion in a case captioned, Zojirushi America Corp. v. United States, which questioned the legality of CBP’s 2014 Policy. The CIT said that the 2014 Policy was based on a misreading of two key Federal Circuit cases. Both of those cases had addressed post-entry claims for NAFTA (which belongs to the first bucket of preferential duty programs), and according to the CIT, it was a mistake for CBP to try and apply the outcome of those cases to post-entry claims made under preferential duty programs falling in the second bucket.

Zojirushi was dismissed by the CIT for lack of jurisdiction, because the Court found that the importer had not followed the appropriate course to get into court. The importer claimed that it could not follow the traditional course for bringing a customs case at the CIT, because CBP would not deny its protests. Instead, its protests had been “rejected as non-protestable”, leaving the protests in a state of limbo- having been neither allowed nor denied.

The Court pointed out that there is a way to get your protest denied, even where CBP merely rejects them. Namely, an importer can file a request for “accelerated disposition”. Any such protest that is not granted within 30 days is deemed to be denied, thereby satisfying one of the prerequisites for getting into court.

Interestingly, there is no limit on the time for requesting accelerated disposition on a protest that has not been denied. In other words, any protest that (1) has not been approved or denied, or (2) has been rejected as non-protestable, can be “revived” by filing a request for accelerated disposition. At the very least, the request for accelerated disposition will trigger a deemed denial, which will in turn start the 180-day clock for filing a summons with the CIT.

Just this week, it has been reported that Zojirushi took the Court’s advice. It went back to CBP and requested accelerated disposition for all of its rejected protests. CBP could have denied the protests, or just waited 30 days until they were deemed denied, giving Zojirushi a path back to court. Instead, we understand that CBP has relented with respect to its 2014 Policy, and has decided to allow these protests, rather than denying them. While this change in policy by CBP has not been formally announced, we believe that a similar outcome is likely available to any importer with similar facts.

What To Do Now

  (1) Make a note of this change in the law. If you need to make a post-entry preference claim under a preferential program in the second bucket (i.e., a program which does not include an explicit post-entry refund provision), you may now seek to do so by filing a protest, which extends the period available to file the claim.
   (2) Review your records to identify any protests that your company may have filed that were “rejected as non-protestable”, particularly protests that were rejected for the reasons set out in CBP’s 2014 Policy.
* * * * * * * * * * * * * * * * * * * *

COMM_a311. R.C. Burns: “OFAC Guidance To Publishers: Proceed At Your Own Risk”
Export Law Blog
. Reprinted by permission.)
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC, 202-624-3949,
Last week, the Office of Foreign Assets Control (“OFAC”) issued guidance which expands the scope of the various general licenses, embodied in its rules, relating to publishing activities with nationals of sanctioned countries. OFAC has always taken the absurd position that editing and formatting for publication documents prepared by individuals in sanctioned countries was not covered by the informational materials exemption in the Berman Amendment. Instead, according to OFAC, it was a provision of a service to the sanctioned country and required a license. In its most ridiculous incarnation, OFAC, for a period of time, insisted that publication of anything other than “camera-ready” copy of materials authored by an individual in a sanctioned country required an OFAC license. Why OFAC did not carry this nonsensical logic to its final extreme and say that picking a book from a warehouse shelf before exporting it to a sanctioned country was also a “service” requiring a license has always been unclear.
After years of newspapers openly defying these rules publishing stories from Iranian (and other) dissidents in versions that the newspapers typeset instead of the typewritten copy sent by the dissidents, OFAC ultimately in 2004 amended the rules to add a general license permitting certain editing, translation, formatting and typesetting activities by publishers. Each of these rules, however, provided that these activities could not be performed on behalf of sanctioned governments of their officials.
The new guidance states what should have been more or less obvious: that the prohibition did not cover written materials authored by government officials in their personal capacity. But OFAC appears not to have been able to resist the opportunity to take back more than it gave, noting that it was up to the publisher to decide in what capacity the government official was writing and, worse, that it would not provide any guidance by issuing specific licenses in difficult cases.
Indeed, it is the policy of OFAC not to grant applications for specific licenses authorizing transactions to which the provisions of an outstanding general license are applicable.
And even though OFAC says that it won’t offer help on determining the government official’s capacity, it does not provide any safe harbor for a publisher that makes a good faith mistake. Nope. Any such mistake would lead to significant civil penalties, currently maxed out at $284,582 per violation.
Oh, you reply, why not just apply for licenses anyway in questionable cases? You can provide all the information relating to the capacity in which the government official is writing; and then, when OFAC returns or denies the application, you will have your answer. That assumes, of course, that OFAC will return such an application rather than just file it away in an archive for the next century or so.
Is anyone else offended by an agency saying, as it seems to have done here, that you must abide by our rules but we refuse to provide any guidance on the proper interpretation of our rules?
* * * * * * * * * * * * * * * * * * * *


* * * * * * * * * * * * * * * * * * * *

. 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: 28 Oct 2016: 81 FR 74918: New Mailing Address for the National Commodity Specialist Division, Regulations and Rulings, Office of Trade; Technical Correction  

  – 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: 17 Oct 2016: 81 FR 71365-71367: Cuba: Revisions to License Exceptions  

: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 17 Oct 2016: 81 FR 71372-71378: Cuban Assets Control 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: 12 Oct 2016: 81 FR 70340-70357: Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Category XII and associated sections.
  – The only available fully updated copy (latest edition 12 Oct 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, footnotes to amendments that will take effect on 15 November and 31 December, plus a large Index and over 750 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 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.

* * * * * * * * * * * * * * * * * * * *


* 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.

* 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.

* SUBSCRIPTIONS: Subscriptions are free.  Subscribe by completing the request form on the Full Circle Compliance website.

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

Scroll to Top