17-0519 Friday “Daily Bugle”

17-0519 Friday “Daily Bugle”

Friday, 19 May 2017

TOPThe 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

[No items of interest noted today.] 

  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. Commerce/Census: “Tips on How to Resolve AES Fatal Errors”
  4. DHS/CBP Announces ACE PRODUCTION Outage, 20-21 May
  5. DHS/CBP Posts EPA Tips for Filing PGA Message Set
  6. DHS/CBP Posts Notice Concerning Completed ACE Production PGA & Cargo Release Deployment
  7. DHS/CBP Updates ACE Export Manifest Documentation
  8. DoD/DSS Announces Knowledge Center PCL Will Be Closed on 26 May
  9. DoD/DSS Posts Notice on Finding Personnel Security Information on DSS Website
  10. State/DDTC: (No new postings.)
  11. EU Lays Down Supply Chain Due Diligence Obligations for Union Imports of Certain Natural Mineral Resources Originating from Conflict-Affected and High-Risk Areas
  1. Civil Liberties Union for Europe: “EU NGOs Call for Stronger Rights Protections for Dual-Use Exports”
  2. Financial Express: “India’s Export Control in Line with Wassenaar Arrangement: Government”
  1. M. Volkov: “The State of Mind of a White Collar Criminal”
  2. S.L. Fredericksen, J.B. Guerrero & G. Husisian: “The Foreign Corrupt Practices Act and the New Trump Administration: Your Top Ten Questions Answered” (Part III of III)
  3. S.Z. Wu, J. Han & V.B. Muthyala: “Chinese State Secrets: What Multinational Companies Need to Know”
  4. Gary Stanley’s ECR Tip of the Day
  5. R.C. Burns: ” Maria, Maria, I Just Met a Scam Named Maria”
  1. Friday List of Approaching Events
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (27 Jan 2017), DOD/NISPOM (18 May 2016), EAR (18 Apr 2017), FACR/OFAC (10 Feb 2017), FTR (19 Apr 2017), HTSUS (26 Apr 2017), ITAR (11 Jan 2017)
  3. Weekly Highlights of the Daily Bugle Top Stories 



[No items of interest noted today.] 

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. Ex/Im Items Scheduled for Publication in Future Federal Register Editions

Federal Register)
* U.S. Customs and Border Protection; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Ship’s Store Declaration [Publication Date: 22 May 2017.] 

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When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. However, if the shipment is rejected, a Fatal Error notification is received.
To help you resolve AES Fatal Errors, here are some tips on how to correct the most frequent errors that were generated in AES for this month.
Fatal Error Response Code: 136
  – Narrative: PR to US Requires PR Port of Export
  – Reason: The Country of Destination is reported as the Unites States and the Port of Export Code is not a Puerto Rican port.
  – Resolution: A Port of Export Code must be reported on shipments from Puerto Rico to the United States and it must be a Puerto Rican port. See Appendix D, Export Port Codes for a list of acceptable Port of Export Codes. Verify the Country of Ultimate Destination and Port of Export Code, correct the shipment and resubmit.
Fatal Error Response Code: 538
  – Narrative: Shipping Weight Must Be Greater Than Zero For MOT
  – Reason: The Mode of Transportation Code reported was one that identifies a Vessel, Rail, Truck, or Air shipment and the Shipping Weight was not reported.
  – Resolution: When the Mode of Transportation is Vessel, Rail, Truck or Air, the Shipping Weight must be reported. Verify the Mode of Transportation and Shipping Weight, correct the shipment and resubmit.
For a complete list of Fatal Error Response Codes, their reasons, and resolutions, see Appendix A – Commodity Filing Response Messages.
It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations. These errors must be corrected prior to export for shipments filed predeparture and as soon as possible for shipments filed postdeparture but not later than five calendar days after departure.
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
  – Online: www.census.gov/trade
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CSMS #17-000289, 19 May 2017.)
There will be an ACE PRODUCTION Outage Saturday evening, May 20, 2017 from 2200 ET to 0400 ET Sunday, May 21, 2017 for ACE infrastructure maintenance.
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CSMS #17-000288, 19 May 2017)
As a reminder, beginning May 18, 2017, the Harmonized Tariff Schedule (HTS) flagging for all Environmental Protection Agency (EPA) programs went into effect pursuant to CSMS #17-000253.

Filers need to submit the required information electronically using the PGA message set or disclaim using the appropriate code. To support submission of information, the Environmental Protection Agency (EPA) has provided a set of filing “Tips for Trade” highlighting import requirements, and providing summary overviews of how to file the PGA Message Set where the goods in question fall under the EPA’s regulatory authority for Pesticides, Toxic Substances, or Vehicles and Engines. They may be access through the following links:

  – Pesticides
  – Toxic Substances
  – Vehicles and Engines
  – Related CSMS No. 17-000253

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CSMS #17-000286, 19 May 2017.)
ACE PRODUCTION deployment this afternoon, May 18, 2017 from 1600 to 1625 ET, has been Completed for the following ACE Cargo Release and ACE PGA items:  

  – SE-8754 – Improve execution time for SE (Cargo Release) message processing.
  – PGAD-15061: on an SE – system is incorrectly rejecting non-type 06 EPA VNE entries.

Standalone cargo release filings (i.e. SE) are currently being rejected even if proper EPA VNE (Vehicles and Engine) data is provided on the incoming transaction. 

Help Desk tickets for shipments pending “FDA May Proceed” SO (Cargo Release) messages due to the above issues will be resolved by the ACE Technical staff so that there is no need to resubmit any EDI messages.

  – Related CSMS No. 17-000284
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CSMS #17-000290, 19 May 2017.)
U.S. Customs and Border Protection (CBP) has posted updated ACE Export Manifest Documentation to CBP.gov. The updated documentation includes: 

* CBP Export Manifest Implementation Guide – XML Manifest Message Specification
  – Removed extra set of Export Manifest appendices)
  – In Cert: May 16, 2017 and In Prod: May 17, 2017

* Export Manifest Appendices
  – Updated Appendix J – Response Codes 
  – Updated Appendix K – Action Codes added 2H and 2I / removed IR and DI
  – Updated Appendix G – Transportation Service Type Codes
  – In Cert: May 16, 2017 and In Prod: May 17, 2017

* ACE Exports Ocean X12 – 350 Customs Status Information – 350 Ocean 6050
  – In Segment X407 amended “Refer to the CAMIR Appendix D for valid disposition codes” to “Refer to the Export Manifest Appendix K – Action Codes for valid disposition codes” 
  – In Cert: May 16, 2017 and In Prod: May 17, 2017

* ACE Exports Rail X12 – 350 Customs Status Information – 350 Rail 7010
  – Segment X407 amended “Refer to the CAMIR Appendix D for valid disposition codes” to “Refer to the Export Manifest Appendix K – Action Codes for valid disposition codes” 
  – In Cert: May 16, 2017 and In Prod: May 17, 2017

* ACE Export Ocean CAMIR – Export Status Notifications from Customs and Border Protection
  – Record Identifier R02 amended “Refer to the CAMIR Appendix D for valid disposition codes” to “Refer to the Export Manifest Appendix K – Action Codes for valid disposition codes”
  – In Cert: May 16, 2017 and In Prod: May 17, 2017

* ACE Exports Rail X12 – 353 Customs Events Advisory Details – 353 Rail 6050
  – Labeled M7A to Not Used
  – M1501 Notification Entity Qualifier – 8, S, X – added a note that those are only supported by export Manifest system
  – In Cert: May 16, 2017 and In Prod: May 17, 2017

To review the updated ACE Export Manifest documentation, please click on the hyperlinks above or visit the “ACE Export Manifest Implementation Guides” page of CBP.gov.

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8. DoD/DSS Announces Knowledge Center PCL Will Be Closed on 26 May

(Source: DoD/DSS)
Personnel Security (PCL) inquiries (option #2) to include e-QIP authentication resets of the DSS Knowledge Center will be closed on Friday, 26 May 2017, for the purpose of conducting internal training to deliver the highest quality customer service to Industry and Government callers.
Normal operations for PCL and e-QIP inquiries will resume on Tuesday, 30 May 2017. Reminder, the PCL portion of the DSS Knowledge Center typically closes on the last Friday each month.

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9. DoD/DSS Posts Notice on Finding Personnel Security Information on DSS Website

(Source: DoD/DSS)
Looking for that Under Secretary of Defense for Intelligence (USD(I)) memorandum reminding DoD components that personnel security clearances (PCL) do not expire? Or the Common PCL Knowledge Center Inquiries web posting? We realize that it can be difficult to locate PCL information on the main DSS website due to the volume of updates and frequency in which items go into archive.
For that reason, we recommend looking for PCL-specific items on the Personnel Security Management Office for Industry (PSMO-I) website. You will find that PCL-specific news items will remain available for a much longer period of time and that relevant items are updated within the left menu, like the common PCL Knowledge Center Inquiries. Be sure to create a bookmark and check back frequently for the most recent information.

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10. State/DDTC: (No new postings.)

(Source: State/DDTC)

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11. EU Lays Down Supply Chain Due Diligence Obligations for Union Imports of Certain Natural Mineral Resources Originating from Conflict-Affected and High-Risk Areas

  – Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas.

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Last week, the Italian Coalition for Civil Liberties and Rights, together with Access Now, Amnesty International, Bahrain Center for Human Rights, Digitale Gesellschaft, Elektronisk Forpost Norge (EFN), Foundation for Information Policy Research, International Federation for Human Rights, Privacy International, and Reporters Without Borders, released a shared statement calling for strong human rights safeguards and clear security research exemptions as the EU updates its dual-use regulation.
Dual-Use Technology Regulation
The NGOs welcome the proposal, presented in September 2016, of the European Commission to update controls on the export of dual-use items – goods, software and technology that can be used for both civilian and military applications and/or can contribute to the proliferation of Weapons of Mass Destruction (WMD).
The organizations highlighted the need to stay on message as the proposal moves through the European Parliament and, later, into the trialogues.
  “The existing EU framework has failed to protect countless activists, human rights defenders, journalists, and regular users from the detrimental impact of cyber-surveillance technology,” said Lucie Krahulcova, EU policy associate at Access Now. “The Commission’s effort to bring attention to the impact of this technology on freedom of expression and privacy is laudable and should be broadly supported throughout the EU institutions.”
Four Key Components
While the organizations applaud the steps taken to strengthen the current EU regime, they argue that four key components must be improved if the regulation is to make a meaningful impact:
  – Human rights protections must be strengthened and have a definitive impact;
  – All relevant surveillance technology must be covered;
  – Greater transparency and reporting is needed;
  – Security research and security tools must be protected.
Notably, the organizations explicitly call for cryptography items to be removed from the list, and for no new items to be added where their inclusion undermines security research, such as forensics tools. In the statement, they argue that encryption is essential in supporting the safety and security of users, companies, and governments everywhere by strengthening the integrity of communications and systems.
‘Dark Industry’
With heightened media attention, there has been an increasing awareness regarding the controversial trade of cyber-surveillance technology in and out of Europe. MEP Marietje Schaake has previously said, “We are talking about a very grey, intransparent and dark industry.”
This assertion is supported by the ongoing in-depth investigation by De Correspondent entitled “Security for Sale“, and the Al Jazeera investigation “Spy Merchants: What is electronic surveillance?”
  “There is no debate about necessity here. EU member states have a responsibility under the UN Guiding Principles on Business and Human Rights to legislate in order to ascertain that business enterprises operate in a manner consistent with the state’s human rights obligations,” added Krahulcova.

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India’s export controls are in line with the Wassenaar Arrangement, one of the four non- proliferation regimes that prohibit the export of items of dual- use technology, a senior external ministry official said. The government came out with a Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) list on April 24, said Pankaj Sharma, joint secretary (Disarmament and International Security Affairs) of the Ministry of External Affairs.
The notification has come into effect on May 1. Export of dual-use (which can also be used for proliferation purpose) items and technologies is either prohibited or is permitted under a license. In foreign trade policy, dual-use items have been given the nomenclature of SCOMET.
  “Broadly speaking the Scomet list has been consolidated,” Sharma said, adding that category six of the Scomet list now recommends the Wassenaar Arrangements munitions list and the Wassenaar Arrangement dual-use list items. Sharma was speaking at a seminar on ‘Scomet update: Implications for the dual-use and defence industry’ organised by the FICCI.
With an aim to gain entry into four non-proliferation regimes, India has been aligning its export controls as per these groups. These groups are the Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Australia Group and the Wassenaar Arrangement. In 2016, India officially applied for membership of the NSG and gained entry to the MTCR.
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COMM_a214. M. Volkov: “The State of Mind of a White Collar Criminal”

(Source: Volkov Law Group Blog. Reprinted by permission.)
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
As a Chief Compliance Officer (CCO), it is important to consider the mindset of a criminal. Not to complete tasks and accomplish your objectives. Instead, it is important to understand the criminal mind, what makes them tick and why they engage in criminal behavior.
More specifically, when putting together a compliance program, a CCO should consider why an employee would steal, commit bribery or engage in other misconduct. I am not saying that a compliance program should assume that all of a company’s employees might or will engage in misconduct but it is worth considering how an employee decides to commit misconduct, and the ways in which they eventually commit to carrying out a criminal scheme.
There have been plenty of books, television shows, interviews and studies focused on white collar criminals. From my perspective, there is one telltale characteristic that cuts across most white collar criminals – a lack of empathy. In other words, a white collar criminal appears to have no ability to consider or even feel any empathy for a victim of his misconduct. If an employee starts to steal from a company, the employee is unlikely to feel any empathy for the company or any of its employees caused by his or her misconduct. Even in more specific cases where an executive steals from a pension fund, ruins numerous retirement funds or savings of innocent victims, the executive is unlikely to feel any empathy for the people who may have lost their savings or their retirement.
While in our day-to-day interactions with friends, family members and associates, we may be able to identify someone who may lack the ability to feel empathy, it is hard to apply this as a screen to managers and employees at a company. On the other hand, if any employee displays a significant lack of empathy, there may be cause for concern.
A second significant characteristic of a white collar criminal is the lack of remorse. A white collar criminal can usually mouth the words, and may even sound credible, but if you take the time to study the person, his or her behaviors over a period of time, the words will eventually sound empty.
We all know when our children, for example, do not really express remorse, and this same antenna can be used when dealing with managers and employees. It is fairly easy to spot when someone apologizes in a disingenuous manner, especially if they use the phrase, “I am sorry that you feel that way ….”
In my experience, there is an additional characteristic of a white collar criminal – the ability to rationalize his or her conduct. An employee stole close to a million dollars from a company. When asked about it, she became indignant because the company had “mistreated” her for years, and “taken her for granted.” By characterizing themselves as victims, these criminals are able to escape any feeling of remorse or even doubt about their conduct. They feel righteous about what they did and will only acknowledge some kind of responsibility when they face internal discipline and/or prosecution.
What does all of this man for the CCO? There are managers and employees who cannot regulate their conduct and will look for opportunities to circumvent rules and “game” the system. CCOs cannot persuade these bad actors to turn over a new leaf – they are unlikely to be persuaded or influenced.
As a result, CCOs have to commit to a different strategy – create an ethical culture where managers and employees will report misconduct. Of course, this is no guarantee for success, but creating a culture of compliance where managers and employees believe in the company’s mission and want to protect the company is the most effective strategy choice.
CCOs face unique challenges when attempting to regulate employee misconduct. No one is perfect and CCOs have to recognize that. Just by saying and instilling a culture of “do the right thing,” there is no guarantee that everyone in a company will follow that motto.

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. S.L. Fredericksen, J.B. Guerrero & G. Husisian: “The Foreign Corrupt Practices Act and the New Trump Administration: Your Top Ten Questions Answered” (Part III of III)

* Authors: Scott L. Fredericksen, Esq., sfredericksen@foley.com; Jaime B. Guerrero, Esq., jguerrero@foley.com; and Gregory Husisian, Esq., ghusisian@foley.com. All of Foley & Lardner LLP, Washington DC, Los Angeles, and Washington DC, respectively.
[Editor’s note: This client alert is part of a series of “top ten” articles on the future of key international trade and regulatory issues expected to change under the Trump administration. Due to space limitations, this alert is divided into three parts. Part I and Part II were posted in the daily Bugle of Wednesday, 17 May, and of Thursday, 18 May, respectively.]
9. “My firm acquires a lot of companies. What can I do to prevent purchasing potential FCPA violations?”
Liability for FCPA issues can effectively be purchased, as changes in corporate structures or control do not eliminate FCPA liability. The FCPA Resource Guide provides for the following tips to minimize risks (which are equally applicable to any high-risk legal regime):
  – Conduct thorough risk-based due diligence.
  – Ensure the acquiring company applies its code of conduct and compliance policies to the target as quickly as possible, or otherwise ensures that strong compliance is in place soon after the acquisition is complete.
  – Train the directors, officers, and employees of newly acquired businesses or merged entities regarding high-risk regulations and risks of its business model (which hopefully were identified as part of a searching due diligence inquiry prior to acquisition); consider training agents and business partners where the risk is high.
  – Conduct a compliance audit of all newly acquired or merged businesses as quickly as practicable.
  – Consider disclosing any issues discovered as part of the due diligence or post-acquisition compliance implementation to relevant regulatory authorities. [FN/34]
As can be seen, the recommendations center on the conduct of effective due diligence and the implementation of learnings found in that due diligence after the acquisition. The role of due diligence in this process cannot be overstated, as effective due diligence actually has seven rationales: (1) to determine the risk of the acquisition; (2) to ensure proper valuation of the acquired company; (3) to determine the potential liability for violations; (4) to minimize unexpected surprises; (5) to minimize liability for past conduct; (6) to identify future compliance issues; and (7) to assist in post-acquisition planning.
To avoid unpleasant surprises, the following are the general topics the due diligence inquiry should address:
  – Evaluating the risk profile of the target including, with regard to its industry, countries of sales and operation, the use of third parties/consultants/joint ventures, and so forth.
  – Evaluating the structure of the target’s operations, including its customer base, its non-U.S. operations and the countries in which it operates, sells, and to which it exports.
  – Determining how the target conducts business with third parties, what due diligence has been performed on them, and to what extent the target’s business relies on agents or distributors.
  – Determining the rigor of the target’s recordkeeping and accounting procedures.
  – Determining whether the target has appropriate compliance and training procedures.
  – Determining whether the target conducts periodic reviews and certifications of its third-party intermediaries and whether the target has contractual provisions which allow termination based upon suspected legal violations.
  – Determining whether the target has procedures to help identify red flags for high-risk areas (FCPA, export controls, sanctions, AML, and antitrust/fair competition, among others) with appropriate follow up.
  – Determining whether the target has been the subject of any investigation by any government that potentially could lead to significant risk and penalty exposure under legal regimes of concern.
  – Determining whether the target’s compliance structure is appropriate, including with regard to compliance resources located outside of headquarters, and whether it is run, in an independent fashion, by a senior management-level employee who is backed with appropriate resources.
  – Determining whether the target conducts periodic internal compliance assessments and compliance audits and follows up on identified compliance gaps with compliance improvements to identify known compliance issues.
A basic understanding of the operations of the target is required, which is determined by requesting basic background information, such as:
  – A list of countries where the target conducts business.
  – A list of countries where the target has sold directly or indirectly to foreign governments.
  – A list of companies that the target does business with that is owned by a foreign government.
  – Estimates of what percentage of the target’s business depends upon dealings with foreign governments and state-owned entities.
  – Copies of all contracts for purchases by, or sales to, state-owned entities and details regarding how these contracts were negotiated.
  – A list of any joint ventures or other arrangements with state-owned entities.
  – A list of any business relationships with government officials.
Compliance and Training
Information regarding the target’s training and compliance measures provides a window into the culture of the target. Discovering this type of information is accomplished by requesting the following information:
  – A description of the target’s anti-bribery compliance program and all its elements including training.
  – A copy of any materials provided to employees as part of their anti-bribery training.
  – A description and contents of any third-party FCPA compliance training.
  – A list of all red flags uncovered through the operation of the target’s anti-bribery compliance program.
Agents and Third Parties
Third parties cause many FCPA problems. To minimize this risk, the acquirer should seek information regarding:
  – Whether the target has hired any foreign officials as agents or in any other role, and whether any of these relationships are ongoing.
  – The due diligence procedures relating to the hiring of agents, the results of any due diligence performed, and a description of how any red flags discovered during the hiring of agents were addressed.
  – Any contracts with agents or other third parties including certifications of FCPA compliance.
  – Any past or present relationships between foreign officials and any agents hired by, or acting on behalf of, the target.
  – The services provided by any agents, the total compensation paid in relation to those services and the basis for establishing the compensation.
  – Any payments made to foreign officials for any reason including visits to conferences, trips and entertainment.
  – The procedures used to reimburse agents for entertainment of foreign officials.
  – Any hiring by the target of government officials as agents, consultants or in any other business capacity.
  – Any documents relating to the suspension of payments to agents or other third-party representatives, including information pertaining to the red flags that led to the suspension.
Dealing With Potential FCPA Issues
Where it appears that the target has paid bribes, there are a number of tough questions for the acquiring company to ask itself before proceeding. These include:
  – Is the conduct over? Are there likely other bribery situations that have not yet been discovered?
  – Will continuing bribes be required to maintain the acquired company’s business? Will ending the bribes significantly impact the target’s business?
  – If it appears that the acquirer will need to terminate personnel who were involved in the bribery, how important are these personnel to the operation of the target’s business? If they are demoted or dismissed, what is the impact on the business of the target?
  – Where it appears that third-party agents, consultants, representatives, distributors, joint venture partners and other business partners are involved, what will be the impact of reforming or ending relationships with those parties?
  – Where past bribes have been paid, does it appear that disbarment risks are raised such as the potential loss of government contracts or export licenses?
  – How will accounting and disclosure issues be dealt with after the closing?
  – Does the price for the target need to be adjusted in light of not only the known corrupt activities, but also those whose discovery might not occur until after closing? Is the possibility of future discoveries taken care of in the sale agreement, including the potential expense of investigations, voided contracts, lost business or other potential problems?
  – Is there the potential for shareholder class action or derivative suits?
Because due diligence is never perfect, acquirers need to consider protections in the event that potential violations are not discovered through the conduct of the due diligence. Contractual safeguards help reduce exposure to FCPA risks.
The scope of the representations and warranties should be negotiated to protect the acquirer against any wrongdoing committed not only by the target company, but also by its agents, its subsidiaries and affiliates, and perhaps even its existing shareholders. To the extent specific risks are identified during the due diligence phase, representations and warranties can be tailored to target identified risks.
In addition, indemnification mechanisms also can provide important protections if there are losses following completion of the transaction. Material adverse changes and conditions precedent clauses also can enable acquirers to abandon transactions where corrupt activities are identified before the transaction has been completed. If corrupt activities occur or are suspected during the transaction or before the closing, the acquirer should have the ability to pull out from the transaction or to carve out the affected portion of the business.
Ultimately, the steps taken to mitigate compliance risks need to be tailored to address the specific risks of the transaction, which is why effective due diligence is important. Conducting comprehensive due diligence before committing to a deal, particularly for targets operating in high-risk jurisdictions, is an important protection from the high-risk FCPA enforcement environment.
10. “Compliance sounds complicated! Has anyone ever thought of putting together a twelve-step program to provide guideposts for an effective risk mitigation?”
The author of this client alert has an international compliance guide that includes just such a twelve-step program; a copy is available by request. [FN/35] The headlines of this twelve-step program are as follows:
  – Step 1: Secure Buy-In at the Top. This includes not only taking steps to secure the appropriate “tone at the top” and support for compliance efforts, but also securing adequate resources to support compliance efforts.
  – Step 2: Perform a Risk Assessment. The second step for most organization is to perform a risk assessment (a survey of the company’s operations to determine the exposure of the organization to various forms of regulatory risk, considering both the likelihood and severity of possible violations and the current enforcement priorities of the relevant authority). Once the risk assessment is complete, the results should be carefully evaluated to determine where the areas of greatest compliance concern lie through the preparation of a company-wide risk profile, which can guide the allocation of compliance resources.
  – Step 3: Survey Current Controls. Step 3 involves surveying current compliance procedures and internal controls to determine whether the compliance measures in place properly cover the circumstances that may put the organization at risk of violations.
  – Step 4: Identify Available Resources. After an inventory of compliance procedures in place has occurred, a key next step is to ensure the organization has not fallen into the classic compliance trap of over-promising and under-delivering by imposing compliance requirements and then failing to implement them. To avoid these and other promise-resource mismatches, the company should, with a clear and open mind, compare its identified risk profile with the inventory of current policies and internal controls to determine whether there are any gaps between the two. Funding adequate to cover all necessary compliance efforts should be in place and, if not, should become a funding priority.
  – Step 5: Assess Local Oversight. The state of compliance as envisioned at corporate headquarters, and the actual state of compliance, as implemented in the field, diverges far too often. It is often necessary, at least in larger companies, to set up a compliance infrastructure that includes compliance liaisons and various local resources that can ensure effective implementation of compliance dictates. These resources also can be invaluable in identifying compliance lapses before they grow and become a large problem.
  – Step 6: Create a Written Compliance Policy. It is an unfortunate fact that Step 6-the drafting of the compliance manual-is often Step 1 for many companies. But there is considerable groundwork to cover before the organization should begin the actual drafting of the compliance manual, including the performance of a risk assessment and establishment of the culture of compliance. The written manual should accurately summarize the regulations, using plain language that employees without legal training can readily follow. The focus should be on readability and tailoring the policy to the risk and business profile of the company, not trying to cover every nuance of the legal regime at issue.
  – Step 7: Establish Internal Controls. Although internal controls (called standard operating procedures at some companies) are one of the three pillars of compliance (along with the written policy and training), they often are the most neglected. But internal controls provide procedures that are essential to implement the dictates of the compliance program. Systematizing compliance through internal controls also gives the company the ability to audit compliance and determine how effective the procedures actually are.
  – Step 8: Training, Training, Training. The basic task of training is to ensure, in conjunction with a well-written compliance program and appropriate internal controls, that employees and agents have sufficient knowledge to recognize red flags and other problematic situations, and understand what they need to do to comply with regulations and company policy. The goal is not to create legal experts all across the company; rather, it is to sensitize people to the law so they know when to seek counsel from the appropriate compliance or legal personnel. No compliance regime will be successful unless the appropriate individuals are identified and trained regarding the company’s compliance efforts and the operation of its compliance program.
  – Step 9: Integrate Outsiders. Outsiders-third parties who act (or could be construed as acting) for the organization-are often a key source of risk. Companies accordingly should take steps to ensure that outsiders acting on their behalf are trained in the key compliance requirements, whether through the imposition of an obligation of the outside actor to receive training or through direct integration of the outsider into the company’s compliance program.
  – Step 10: Auditing and Checkups. It is difficult to have a strong compliance program unless it is regularly tested and probed, with the results analyzed to come up with compliance improvement action items. As companies realize the dangers of letting their compliance program run on auto-pilot, it has become common for companies to use risk-based auditing principles to determine the countries, divisions, subsidiaries, and third parties who should be monitored through audits and compliance check-ups. Companies that do so reap considerable compliance dividends.
  – Step 11: Monitor Red Flags. The identification of red flags and ensuring appropriate follow-up are the keystones to a well-functioning compliance system. One of the most important tasks when implementing international compliance, accordingly, is to train relevant stakeholders regarding the transactions and conduct that are suspicious given the regulatory requirements.
  – Step 12: Communicate with Board & Senior Management. In corporations that set the proper compliance tone, board-level involvement is regular and institutionalized. The key areas for board-level involvement include thorough oversight of compliance initiatives, quarterly reports of compliance activities, and special communications for potentially serious matters. Compliance conversations with senior management should be routine and compliance counsel consistently heeded.
(III) Conclusion
The international climate for U.S.-based multinational companies and non-U.S. based companies that sell into the United States has never been more uncertain. This client alert is the seventh of a series of Articles that is being prepared to help companies navigate the uncertain international trade and regulatory environment. Future “Ten Question” articles related to the transition to a new Administration already cover international trade issues (NAFTA, International Trade (antidumping and countervailing duty) actions, and Customs); international investment (changes in how the Committee of Foreign Investment in the United States (CFIUS) evaluates investment in the United States, concerns of PE firms); and international regulatory issues (cybersecurity, white collar enforcement and, here, the FCPA). Future client alerts will cover the Office of Foreign Asset Controls (OFAC economic sanctions) and Export Controls and anti-money laundering.
  [FN/34] FCPA Resource Guide at 29.
  [FN/35] Please contact Gregory Husisian at +1 202.945.6149 or ghusisian@foley.com to receive a copy.

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16. S.Z. Wu, J. Han & V.B. Muthyala: “Chinese State Secrets: What Multinational Companies Need to Know”

(Source: Kobre & Kim LLP)
* Authors: Shaun Z. Wu, Esq., Esq., shaun.wu@kobrekim.com.hk; John Han, Esq., john.han@kobrekim.com.hk; and Vasu B. Muthyala, Esq., vasu.muthyala@kobrekim.com.hk. All of Kobre & Kim LLP, Hong Kong.
Multinational companies in China used to have the luxury of focusing their regulatory efforts primarily on compliance with the laws of their home countries, relegating China’s state secrets laws to something only of concern to local firms. However, as China bolsters its anti-corruption efforts, and given the recent increase in cases that apply China state secret laws to foreign companies, multinationals can no longer afford to take this approach.

To avoid running afoul of China state secret laws and facing potentially serious repercussions, understanding these laws is essential. Unauthorized possession of state secrets (including possession by a foreigner) and the transfer of state secrets outside of China constitute a violation of these laws. The penalties can be severe and can range from public surveillance to imprisonment. Here are the key points that multinational companies operating in China should keep in mind when navigating state secrets and the laws governing them:

  (1) There is no succinct definition of a “state secret.” China’s state secret laws identify six categories of state secrets – matters involving 1) national defense, 2) foreign affairs, 3) major policy decisions, 4) national economic and social development, 5) science and technology and 6) state security – and a catch-all provision covering “other matters that are classified as state secrets by the national State Secrets Bureau,” with no limitation on what those matters might be. The law does not specify the definition of each category, instead, it includes all matters that, if leaked, are likely to prejudice the state security and national interests in the fields of politics, economy, national defense and foreign affairs. Without any clarification on what each category encompasses, the scope of what constitutes a state secret remains broad. As a result, non-Chinese companies operating in sensitive industries must exercise caution as they face the continued uncertainty of whether certain information will fall under the definition.
  (2) Consider the source, not just the nature, of the information. The source of the information – such as the person or entity that developed it, who is funding the development, and whether that information has any commercial or strategic value – can determine whether it qualifies as a state secret. Though there is no definitive rule, one view is that if the Chinese government has developed the information or funded the development of such information, or controls the entity which funds the development of the information and the information has commercial or strategic value, there is a very real likelihood that it may qualify as a state secret.
  (3) Exercise increased caution when dealing with state-owned enterprises (SOEs). Any commercially sensitive information obtained from a domestic Chinese enterprise, particularly an SOE, could potentially be regarded as a state secret, even if it is seemingly mundane or contains industry-standard data. A document containing a state secret could appear innocuous to an uninitiated foreign company, especially if it includes information that is crucial to the foreign company’s day-to-day operations. Information on strategic industries, such as natural resources, energy, military or defense, is at highest risk for containing state secrets.
  (4) Beware of the ever-evolving nature of state secrets. Chinese authorities have been known to retroactively classify information as a state secret, meaning a violation can occur involving information that was not classified as secret at the time of its disclosure. This creates substantial risk for any person or company handling China-sourced documents, particularly those relevant to sensitive industries and SOEs.
Chinese authorities take a broad view of regulating information deemed to be state secrets, and all companies operating there are subject to compliance with the laws governing this type of information. Therefore, when doing business in China on matters involving state secrets, multinational companies should ensure they exercise caution and seek guidance from experienced counsel.

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17. Gary Stanley’s ECR Tip of the Day

(Source: Defense and Export-Import Update; available by subscription from
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059,
  “Unclassified information” in EAR § 734.18 relating to cloud computing refers to information not classified in accordance with Executive Order 13526, 75 FR 707; 3 CFR 2010 Comp., p. 298, or a comparable predecessor or successor order.

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18. R.C. Burns: “
Maria, Maria, I Just Met a Scam Named Maria”

Export Law Blog
. Reprinted by permission.)
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC,
, 202-508-6067)
Last September, I wrote about the designation by the Office of Foreign Assets Control (“OFAC”), under the Transnational Criminal Organization (TCO) program, of Paul Davis, Pac-Net and related entities along with a number of officers, directors and employees of those companies. Prior to these designations, only ten individuals and entities (comprising seven organizations) had ever been designated under the TCO program. The original post focused on the nightmare that this would cause for the hundreds of thousands of people with the misfortune to be named Paul Davis.
But there was another fascinating aspect to this story.   The reason for the designations involved, at least in part, Pac-Net’s processing of payments by U.S. citizens, principally uneducated, elderly or otherwise vulnerable, in the Maria Duval psychic scam. Although the $180 million dollars this scam obtained from its victims pales in comparison with Bernie Madoff’s $20 billion Ponzi scheme, it still ranks as one history’s biggest swindles. Victims, found on so-called “sucker lists” compiled by other direct mailers who have sold over-priced junk to people, received letters signed by Maria Duval claiming that she had a personal vision involving the recipient and that she would be glad to share that – for a fee, of course. The real Maria Duval, a small-time French psychic fraudster, claims that she sold her name some years ago to a mysterious Swiss consortium which was responsible for the larger scam. (Read the fascinating details here.)
Earlier this week OFAC de-listed Raffaella Ferrari, who was the director, administrator, or shareholder for several PacNet-linked companies in Italy and the United Kingdom. Last month, OFAC removed two other individuals associated with Pac-Net from the SDN List. No reason is given for these removals, but the relative rapidity with which they occurred, at least when compared with the normally glacial speed required to be removed from the SDN List, suggests that these individuals were probably victims of a “block-first-ask-questions-later” approach used by OFAC for the original designations. The large number of individuals designated certainly suggested the possibility that OFAC targeted anyone that the agency could identify as having any connection to Pac-Net.
In connection with the designations, OFAC put on its website a frankly rather silly, and not very useful, organizational chart complete with pictures of some of the individuals involved with Pac-Net. Interestingly, not one of the three now-unblocked individuals was important enough to appear in the chart’s photographic rogues gallery. This may explain the reason for their rapid unblocking better than anything else.

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. Friday List of Approaching Events

(Sources: Event sponsors.) 
Published every Friday or last publication day of the week. Send events to
, composed in the below format:

* DATE: PLACE; “TITLE;” SPONSOR; WEBLINK; CONTACT (email and phone number)

#” New listing this week:   
Continuously Available Training:
* Executive Masters: “
International Trade Compliance
;” University of Liverpool;
+44 (0) 20 768 24614
* E-Seminars: “
US Export Controls” / “Defense Trade Controls
;” Export Compliance Training Institute;
* On-Line: “
Simplified Network Application Process Redesign (SNAP-R)
;” Commerce/BIS; 202-482-2227
* E-Seminars: “
Webinars On-Demand Library
;” Sandler, Travis & Rosenberg, P.A.
Training by Date:

* May 22-24: San Diego CA; ”
ITAR/EAR Boot Camp;” American Conference Institute

* May 22: Webinar; “
Regulatory Updates: Town Hall Series Q&A Teleconference
;” Dept. of Commerce/Census Bureau

* May 23: Chicago IL; ”
2017 Global Trade & Commercial Compliance Update;” Baker McKenzie; Eunkyung Kim Shin, +1 312 861 8211,

* May 23-24: Detroit MI; ”
Complying with U.S. Export Controls;” Dept. of Commerce/Bureau of Industry and Security

* May 23: Tampa FL; “AES Compliance Seminar;” Dept. of Commerce/Census Bureau; itmd.outreach@census.gov 

* May 24-25: Annapolis MD; “
‘Benchmarking Your ITAR/EAR Compliance Programs’ featuring Gerry Horner, Commerce/BIS; Byron Angvall, The Boeing Company and Christine Lee, UTC
; 866-238-4018 / 410-757-1919

* May 24-25: Scottsdale AZ; ”
2017 West Coast Trade Symposium;” Dept. of Homeland Security/Customs and Border Protection

* May 25: Detroit MI; ”
U.S. Munitions List to Commerce Control List;” Dept. of Commerce/Bureau of Industry and Security

* Jun 1: Webinar; ”
Identifying Agents for Customs Purposes – Traps for the Unwary Importer;” Sandler, Travis & Rosenberg, P.A.;

* Jun 1: Webinar; ”
Hot Topics in Export Controls and Sanctions Investigations;” Miller & Chevalier;

* Jun 5-7: Boston MA; “
Basics of Government Contracting
;” Federal Publications Seminars

* Jun 5-8: Wash DC; “
United States Export Control (EAR/OFAC/ITAR) Seminar
;” ECTI;
; 540-433-3977

# Jun 6: Eindhoven, the Netherlands; ”
Training Export Control;” evofenedex

* Jun 6: Webinar; “
Managing Supply Chain Risks
;” Volkov Law Group

* Jun 7: London UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;

# Jun 7 & 14: Webinar; ”
EAR Technology Classifications: Learning By Doing;” ECTI; 540-433-3977

* Jun 8-9: Seattle WA; ”
Complying with U.S. Export Controls;” Dept. of Commerce/Bureau of Industry and Security

* Jun 11-13: Dublin IRL; “ICPA Dublin Conference;”
International Compliance Professionals Association;

* Jun 12-14: Arlington VA; ”
8th Advanced Forum on DCAA & DCMA Cost, Pricing, Compliance & Audits;” American Conference Institute

* Jun 12-15: San Francisco; “
United States Export Control (EAR/OFAC/ITAR) Seminar
;” ECTI;
; 540-433-3977

* Jun 12: Shanghai China; “
5th Advanced China Forum on Import Compliance
;” American Conference Institute

* Jun 13: Philadelphia PA; “AES Compliance Seminar;” Dept. of Commerce/Census Bureau; itmd.outreach@census.gov 

* Jun 13: Webinar; ”
Using Incoterms® Properly to Avoid Disputes;” Sandler, Travis & Rosenberg, P.A.;

* Jun 14: Frankfurt am Main, Germany; “BAFA / BIS Export Control and Compliance Update 2;” Bundesamt für Wirtschaft und Ausfuhrkontrolle  

* Jun 14: Kegsworth, Derby UK; “Intermediate Seminar;” UK/BIS Export Control Organisation; denise.carter@bis.gsi.gov.uk 

* Jun 15: Kegsworth, Derby UK; “
Beginners Workshop
;” UK/BIS Export Control Organisation;
* Jun 15: Kegsworth, Derby UK; “
Making Better License Applications
;” UK/BIS Export Control Organisation;
* Jun 15: Kegsworth, Derby UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;

* Jun 20: The Hague; “
Trade Controls: Current Challenges and Critical Issues from a US and EU Perspective
;” Netherlands International Chamber of Commerce

* Jun 20: Webinar; ”
International Payment Options 101;” Sandler, Travis & Rosenberg, P.A.;

* Jun 21-22: Miami FL; ”
Miami Forum on Anti-Corruption;” American Conference Institute

* Jun 21: Brussels, Belgium; “Export Controls and Economic Sanctions: US & EU Update 2017;” International Chamber of Commerce Belgium

# Jun 22: Sydney, Australia; “
ITAR, EAR and AU Export Controls Training
;” Defence Connect

* Jul 10-12; Baltimore MD; “
2017 Summer Back to Basics Conference
;” Society for International Affairs

* July 11-12: Seattle WA; “ITAR/EAR Boot Camp;” spalmer@exportcompliancesolutions.com; 866-238-4018 / 410-757-1919

* Jul 17-19: Hilton Head Island SC; “
Basics of Government Contracting
;” Federal Publications Seminars

* Jul 26-27: Oklahoma OK; ”
Complying with U.S. Export Controls;” Dept. of Commerce/Bureau of Industry and Security

* Jul 26-27
: Seattle WA; “
2017 Export Controls Conference
;” Dept. of Commerce/U.S. Commercial Service, Dept. of Homeland Security/Homeland Security Investigations, Seattle University, Dorsey & Whitney LLP

* Aug 2-3: Los Angeles; ”
Complying with U.S. Export Controls;” Dept. of Commerce/Bureau of Industry and Security

* Aug 14-16: McLean VA; “
Basics of Government Contracting
;” Federal Publications Seminars

* Sep 4-9: Galveston TX;
ICPA Conference at Sea;”

International Compliance Professionals Association;

* Sep 6: Nashville TN; “AES Compliance Seminar;” Dept. of Commerce/Census Bureau; itmd.outreach@census.gov 

* Sep 12-13: Annapolis MD; “ITAR/EAR Boot Camp;” spalmer@exportcompliancesolutions.com; 866-238-4018 / 410-757-1919

* Sep 12-13: Louisville KY; ”
Complying with U.S. Export Controls;” Dept. of Commerce/Bureau of Industry and Security

* Sep 12-13: Milpitas CA; ”
Complying with U.S. Export Controls;” Dept. of Commerce/Bureau of Industry and Security

* Sep 12-13: Wash DC; “Interactive Export Controls Workshop;” ECTI; jessica@learnexportcompliance.com; 540-433-3977

* Sep 14: Milpitas CA; “
Encryption Controls;”
Dept. of Commerce/Bureau of Industry and Security

* Sep 18-21: Austin TX; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
; 540-433-3977

* Sep 18-20: Las Vegas NV; “
Basics of Government Contracting
;” Federal Publications Seminars

* Sep 20-22: Houston TX; ”
Advanced Topics in Customs Compliance Conference;” Deleon Trade LLC

* Sep 27-28: Rome, Italy; “
Defence Exports 2017
;” SMi

* Oct 2-5: Columbus OH; “University Export Controls Seminar;” ECTI; jessica@learnexportcompliance.com; 540-433-3977

* Oct 12: Boston MA; ”
AES Compliance Seminar;” Dept. of Commerce/Census

* Oct 22-24: Grapevine TX; “
Annual ICPA Fall Conference
;” International Compliance Professional Association;

* Oct 23-24: Arlington VA; “
2017 Fall Advanced Conference
;” Society for International Affairs

* Oct 30-Nov 2: Phoenix AZ; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
;” ECTI;
; 540-433-3977

* Nov 5-7: Singapore; ”
ICPA Singapore Conference;”
International Compliance Professionals Association;

* Nov 6-8: Chicago IL; “Basics of Government Contracting;” Federal Publications Seminars

* Nov 7: Norfolk, VA; “AES Compliance Seminar;” Dept. of Commerce/Census Bureau; itmd.outreach@census.gov 

* Nov 9-10: Shanghai, China; ”
ICPA China Conference;”
International Compliance Professionals Association;

* Nov 13-16: Wash DC; “ITAR Defense Trade Controls / EAR Export Controls Seminar;” ECTI; jessica@learnexportcompliance.com; 540-433-3977

# Nov 16: Nijkerk, the Netherlands; ”
Training Export Control;” evofenedex

* Dec 4-7: Miami FL; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
;” ECTI;
; 540-433-3977

* Dec 5: San Juan PR; “
AES Compliance Seminar in Spanish
;” Dept. of Commerce/Census

* Dec 6: Wood Ridge NJ; “
AES Compliance Seminar
;” Dept. of Commerce/Census Bureau;

* Dec 7: Laredo, TX; “AES Compliance Seminar in Spanish;” Dept. of Commerce/Census Bureau; itmd.outreach@census.gov 

* Dec 11-13: Sterling VA; “
Basics of Government Contracting
;” Federal Publications Seminars

* Mar 11-14: San Diego CA; ”
ICPA Annual Conference;”
International Compliance Professionals Association;

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


. Bartlett’s Unfamiliar Quotations

(Source: Editor)

* Ho Chi Minh (19 May 1890 – 2 Sep 1969; born Nguyễn Sinh Cung, was a Vietnamese Communist revolutionary leader who was prime minister (1945-55) and president (1945-69) of the Democratic Republic of Vietnam (North Vietnam). He was a key figure in the foundation of the Democratic Republic of Vietnam in 1945, as well as the People’s Army of Vietnam and the Việt Cộng during the Vietnam War.)
  – “You will kill 10 of our men, and we will kill 1 of yours, and in the end it will be you who tire of it.”

* Mustafa Kemal Ataturk (19 May 1881 – 10 Nov 1938, was a Turkish army officer, revolutionary, and founder of the Republic of Turkey, serving as its first President from 1923 until his death in 1938.)
  – “No country is free unless it is democratic.”

* Honore de Balzac (20 May 1799 – 18 Aug 1850, was a French novelist and playwright. The novel sequence, La Comédie Humaine, which presents a panorama of post-Napoleonic French life, is generally viewed as his magnum opus.)
  – “Laws are spider webs through which the big flies pass and the little ones get caught.”

Friday Funnies:

An Irishman who had been stranded on a deserted island for over 10 years saw a speck on the horizon. He thought to himself, “Could it be a ship?” Suddenly, there strode from the surf a shapely figure clad in a black wet suit. Putting aside the scuba tanks and mask and zipping down the top of her wet suit, there stood a drop-dead gorgeous woman! She walked up to the stunned castaway and said, “Tell me, sir, how long has it been since you’ve had a good cigar?” “Ten years,” replied the amazed Irishman. With that, she unzipped a waterproof pocket on the left sleeve of her wet suit and pulled out a fresh package of cigars and a lighter. He took a cigar, slowly lit it, and took a long drag. “Praise the Almighty,” said the castaway, “That is so good! I’d almost forgotten how great a smoke can be!” “And how long has it been since you’ve had a drop of good Irish Whiskey?” asked the blonde. Trembling, the castaway replied, “Ten years.” Hearing that, the blonde unzipped a pocket on her right sleeve and removed a flask and handed it to him. He opened the flask and took a long drink. “‘Tis nectar of the gods!” shouted the Irishman. “Truly fantastic!” At this point the gorgeous blonde started to slowly unzip the long front of her wet suit, right down the middle. She looked at the trembling man and asked, “And how long has it been since you played around?” With tears in his eyes, the Irishman fell to his knees and sobbed, “Faith and begorrah! Don’t tell me you’ve got a set of golf clubs in there too!”
   — Michael Finefrock, Charleston, South Carolina

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EN_a221. 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: 27 Jan 2017: 82 FR 8589-8590: Delay of Effective Date for Importations of Certain Vehicles and Engines Subject to Federal Antipollution Emission Standards [New effective date: 21 March 2017.]; and 82 FR 8590: Delay of Effective Date for Toxic Substance Control Act Chemical Substance Import Certification Process Revisions
[New effective date: 21 March 2017.]

  – 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: 18 Apr 2017: 82 FR 18217-18220: Revision to an Entry on the Entity List)

: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 10 Feb 2017: 
82 FR 10434-10440: Inflation Adjustment of Civil Monetary Penalties 
: 15 CFR Part 30
– Last Amendment: 
19 Apr 2017: 
82 FR 18383-18393: Foreign Trade Regulations: Clarification on Filing Requirements 
  – HTS codes that are not valid for AES are available 
  – The latest edition (19 Apr 2017) 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 Jan 2017: 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: 26 Apr 2017: Harmonized System Update 1703, containing 2,512 ABI records and 395 harmonized tariff records.
  – HTS codes for AES are available

  – HTS codes that are not valid for AES are available
: 22 C.F.R. Ch. I, Subch. M, Pts. 120-130
  – Latest Amendment: 11 Jan 2017: 82 FR 3168-3170: 2017 Civil Monetary Penalties Inflationary Adjustment
  – The only available fully updated copy (latest edition 8 Mar 2017) 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, 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.  

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. Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor)

Review last week’s top Ex/Im stories in “Weekly Highlights of Daily Bugle Top Stories” posted here.

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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 8,000 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 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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