17-0731 Monday “Daily Bugle”

17-0731 Monday “Daily Bugle”

Monday, 31 July 2017

The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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  1. DoD, GSA, and NASA Seek Comments on Federal Acquisition Regulation: Buy American, Trade Agreements, and Duty-Free Entry
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. State/DDTC: (No new postings.)
  4. White House Releases Presidential Notice Concerning Continuation of National Emergency with Respect to Lebanon
  5. Singapore Customs Changes Prohibitions of Imports, Exports, Transshipments and Goods in Transit from or to Iran
  6. Singapore Customs Fines Marketing Manager for Counterfeiting Certificates of Origin and for False Statements
  1. Financial Tribune: “Canada Probes Saudi Use of Its Equipment in Crackdown”
  2. Reuters: “U.S. Considering Some Sanctions on Venezuela Oil Sector”
  3. Silicon Beat: “Amazon Under Federal Investigation Over Iran-Linked Sales and Person on Terrorism List”
  1. C.T. Cherniak: “Canadian Government Export Controls Policies Under a Microscope”
  2. M. Volkov: “The Perfect Compliance Combo: Culture and Controls”
  3. P. LeCour & T. Carlile: “EU to Build Framework for Sanctioning Malicious Cyber Actors”
  4. R.C. Burns: “Sausage Making Looks Good Compared to This Law”
  1. Dennis Farrell to Become an Export Compliance Consultant 
  2. Monday List of Ex/Im Job Openings 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (28 Jul 2017), DOD/NISPOM (18 May 2016), EAR (7 Jul 2017), FACR/OFAC (16 Jun 2017), FTR (19 Apr 2017), HTSUS (25 Jul 2017), ITAR (11 Jan 2017) 
  3. Weekly Highlights of the Daily Bugle Top Stories 


1. DoD, GSA, and NASA Seek Comments on Federal Acquisition Regulation: Buy American, Trade Agreements, and Duty-Free Entry
(Source: Federal Register, 31 July 2017.) [Excerpts.]
82 FR 35528-35530: Information Collection; Federal Acquisition Regulation: Buy American, Trade Agreements, and Duty-Free Entry
* AGENCY: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
* ACTION: Notice of request for public comments regarding an extension to an existing OMB clearance.
* SUMMARY: Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division (MVCB) will be submitting to the Office of Management and Budget (OMB) a request for revision and an extension to existing OMB clearances regarding the Buy American statute, Trade Agreements, and duty-free entry.
* DATES: Submit comments on or before September 29, 2017. …
* FOR FURTHER INFORMATION CONTACT: Ms. Cecelia L. Davis, Procurement Analyst, Acquisition Policy Division, GSA (202) 219-0202 or email cecelia.davis@gsa.gov.
  A. This information collection requirement pertains to information that an offeror must submit in response to the requirements of the provisions and clauses in FAR 52.225 that
relate to the following:
  * The Buy American statute (41 U.S.C. chapter 83 and E.O. 10582).
  * The Trade Agreements Act (19 U.S.C. 2501-2515), including the World Trade Organization Government Procurement Agreement and various free trade agreements.
  * The American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5) (Recovery Act).
  * Subchapters VIII and X of Chapter 98 of the Harmonized Tariff Schedule of the United States (19 U.S.C. 1202).
    a. 52.225-2, Buy American Certificate, as prescribed in FAR 25.1101(a)(2), requires the offeror to identify in its proposal supplies that do not meet the definition of domestic end product. The Buy American statute does not apply to acquisitions of commercial information technology.
    b. 52.225-4, Buy American–Free Trade Agreements–Israeli Trade Act Certificate, as prescribed in FAR 25.1101(b)(2)(i), requires separate listing of foreign products that are eligible under a trade agreement, and listing of all other foreign end products.
    c. 52.225-6, Trade Agreements Certificate, as prescribed in FAR 25.1101(c)(2), requires the offeror to certify that all end products are either U.S.-made or designated country end products, except as listed in paragraph (b) of the provision. Offerors are not allowed to provide other than a U.S.-made or designated country end product, unless the requirement is waived.
    d. Construction provisions and clauses:
     52.225-9, Buy American-Construction Materials
     52.225-10, Notice of Buy American Requirement–Construction Materials
     52.225-11, Buy American–Construction Materials under Trade Agreements
     52.225-12, Notice of Buy American Requirement–Construction Materials under Trade Agreements
     52.225-21, Required Use of American Iron, Steel and Manufactured Goods–Buy American–Construction Materials
     52.225-23, Required Use of American Iron, Steel and Manufactured Goods–Buy American–Construction Materials under Trade Agreements.
    The listed provisions and clauses, as prescribed in FAR 25.1102(a) through (e), provide that an offeror/contractor requesting to use foreign construction material due to unreasonable cost of domestic construction material shall provide adequate information to permit evaluation of the request.
    e. 52.225-8, Duty-Free Entry (formerly OMB clearance 9000-0022), as prescribed in FAR 25.1101(e), requires the contractor to notify the contracting officer when it purchases foreign supplies, in order to determine whether the supplies should be duty-free. In addition, all shipping documents and containers must specify certain information to assure the duty-free entry of the supplies. …
  C. Public Comments:
  Public comments are particularly invited on: Whether this collection of information is necessary for the proper performance of functions of the FAR, and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology. …
  Dated: July 25, 2017.

Lorin S. Curit, Director, Federal Acquisition Policy Division, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

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OGS_a12. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register

* Treasury/OFAC; NOTICES; B locking or Unblocking of Persons and Properties [Publication Date: 1 August 2017.]

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White House Releases Presidential Notice Concerning Continuation of National Emergency with Respect to Lebanon  

On August 1, 2007, in Executive Order 13441, the President declared a national emergency with respect to Lebanon pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions of certain persons to undermine Lebanon’s legitimate and democratically elected government and democratic institutions; contribute to the deliberate breakdown in the rule of law in Lebanon, including through politically motivated violence and intimidation; reassert Syrian control or contribute to Syrian interference in Lebanon; or infringe upon or undermine Lebanese sovereignty. These actions contribute to political and economic instability in Lebanon and the region.
Certain ongoing activities, such as continuing arms transfers to Hizballah that include increasingly sophisticated weapons systems, serve to undermine Lebanese sovereignty, contribute to political and economic instability in Lebanon, and continue to constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared on August 1, 2007, and the measures adopted on that date to deal with that emergency, must continue in effect beyond August 1, 2017. Therefore, in accordance 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 Lebanon declared in Executive Order 13441.
This notice shall be published in the Federal Register and transmitted to the Congress.

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Singapore Customs Changes Prohibitions of Imports, Exports, Transshipments and Goods in Transit from or to Iran

(Source: Singapore Customs
Singapore Customs has released Circular No. 11/2017, “
Changes to the Prohibitions of Imports, Exports, Transhipments and Goods in Transit from or to Iran.” Key takeaways
 are included below.
Changes to the Prohibitions of Imports, Exports, Transshipments and Goods in Transit from or to Iran
Customs had published the Regulation of Imports and Exports (Amendment) Regulations 2017 [FN/1] which will take effect on 31 Jul 2017. The amendments update the scope of prohibition on importation into, exportation from, or the transshipment or transit through Singapore of certain goods from or to Iran in our national controls as prescribed in the UNSC Resolution 2231 (2015).
The UNSC Resolution 2231 (2015) allows certain exports of nuclear-related items to Iran if the UNSC has given their prior in-principle approval. They are:

  i) items listed in the INFCIRC/254/Rev.12/Part 1
  ii) items listed in the INFCIRC/254/Rev.9/Part 2
  iii) any items if the state determines that they could contribute to reprocessing or enrichment-related or heavy water-related activities inconsistent with the Joint Comprehensive Plan of Action (JCPOA).
  UNSC Procurement Channel
The resolution endorsed the establishment of a dedicated “procurement channel” for the transfer of the nuclear-related items, materials, equipment, goods and technology to Iran as specified in sub-paras 2 (i), (ii) and (iii). Through this procurement channel, the UNSC will review and approve the export and re-export from Singapore to Iran of the above-mentioned items. These documents can be accessed on the UNSC website.
To seek the UNSC’s in-principle approval of such exports, you are required to submit a duly completed form and an end-user certification based on the templates provided by the UNSC to Customs. We will forward your request for in-principle approval to the UNSC Procurement Channel. The application form can be found at www.customs.gov.sg > Customs Forms & Service Links > Strategic Goods Control Forms > Application Form for Seeking In-principle Approval from the UNSC Procurement Channel. The end-user certification template can be found at www.customs.gov.sg > Customs Forms & Service Links > Strategic Goods Control Forms > End-user Certification Form for Seeking In-principle Approval from the UNSC Procurement Channel. As the UNSC will take some time to process your application, please submit them at least 2 months prior to the intended date of exportation. Please note that as these items are also controlled under the Singapore’s Strategic Goods (Control) Act, you are required to apply for a strategic goods permit together with your application for the UNSC’s in-principle approval. The procedures to apply for a strategic goods permit can be found on Customs’ website at www.customs.gov.sg > Businesses > Strategic Goods Control > Permit and Registration Requirements.
For re-exports, transshipment and transit from or through Singapore of the goods listed in sub-paras 2 (i), (ii) and (iii) please ensure that approval has been obtained from the UNSC Procurement Channel. Proof of the UNSC Procurement Channel’s approval must be submitted together with your strategic goods permit application for the particular shipment.
  Permit Application for Imports from and (Re-)exports to Iran
As per current practice, all other goods which are imported from, exported or re-exported to Iran would require a TradeNet® permit application to be submitted to Customs at least 3 working days before the intended date of shipment. You are also reminded to comply with any stipulated permit conditions.
Under the Regulation of Imports and Exports Act (RIEA), any person who contravenes any of these prohibitions shall be guilty of an offence and shall be liable to –

  a) a fine not exceeding S$100,000 or 3 times the value of the goods in respect of which the offence was committed, whichever is the greater, or to imprisonment for a term not exceeding 2 years or to both, on the first conviction; and
  b) a fine not exceeding S$200,000 or 4 times the value of the goods in respect of which the offence was committed, whichever is the greater, or to imprisonment for a term not exceeding 3 years or to both, on the second or subsequent conviction.
  [FN/1] Besides the prohibition of goods in relation to Iran, the Seventh Schedule of the Regulation of Imports and Exports Regulations also lists the prohibition of goods in relation to other countries or territories that are sanctioned by the UNSC.

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Singapore Customs Fines Marketing Manager for Counterfeiting Certificates of Origin and for False Statements

(Source: Singapore Customs Media Release, 28 July 2017.)
A marketing manager was sentenced by the [Singapore] State Courts on 28 July 2017 to a fine of $92,000 for counterfeiting certificates of origin (CO) [FN/1] and making false statements when applying for the COs. Yu Ximei, 51, a Chinese national, pleaded guilty to nine charges. Another 20 charges were taken into consideration in the sentencing.
Based on information provided by United States Customs and Border Protection (CBP), Singapore Customs initiated an investigation on Parfait International Pte Ltd (Parfait), which deals with the production of uncovered innerspring units used in the manufacture of mattresses and the export of uncovered innerspring units to the United States (U.S.). Investigations revealed that between January and February 2015, Yu counterfeited five COs by making changes to genuine COs obtained on earlier occasions, and provided these five counterfeited COs to one of Parfait’s customers in the U.S.
Between June 2013 and May 2015, Yu also furnished false statements, when applying for COs, that the innersprings Parfait exported to the U.S. originated from Singapore, instead of China, to avoid the anti-dumping duties. Yu also falsely declared the country of origin of Parfait’s shipments in permits declaration made to Singapore Customs. The value of the goods involved in this case amounted to over $615,000.
  “Counterfeiting COs and making false statements to obtain COs are serious offences under the Regulation of Imports and Exports Regulations,” said Mr Yeo Sew Meng, Assistant Director-General (Intelligence and Investigation), Singapore Customs.  “Singapore Customs will take stern enforcement action against errant traders,” said Mr Yeo, “to protect Singapore’s status as a secure and trusted global trade hub.”
  “CBP takes free trade agreement enforcement very seriously and appreciates Singapore Customs’ partnership in this effort. It is important for the trade community to know that there are consequences for making false claims,” said Ms. Brenda Smith, Executive Assistant Commissioner, U.S. Office of Trade, CBP. Under the Regulation of Imports and Exports Regulations, anyone found guilty of counterfeiting COs or furnishing false statements to the issuing authority to obtain the COs, will be liable on the first conviction to a fine not exceeding $100,000 or three times the value of the goods in respect of which the offence was committed, whichever is the greater, or imprisonment for up to two years, or both.
  [FN/1] A certificate of origin is a trade document that identifies the origin of the goods.

  [Editor’s Note: Ted Murphy of Baker McKenzie (
ted.murphy@bakermckenzie.com) offered the following remarks: “There are several interesting things about this case.  First, the prosecution was based on information supplied to Singapore Customs by U.S. Customs and Border Protection (CBP).  It appears that CBP may have uncovered the fraud on the U.S. side and then provided information about the exporter to the Singapore authorities.  Second, it appears that CBP may have uncovered the fraud when the U.S. importer/customer underwent a CBP audit.  See Headquarters Ruling #H270834 (March 2, 2017).”]

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Financial Tribune: “Canada Probes Saudi Use of Its Equipment in Crackdown”

Financial Tribune, 31 July 2017.) [Excerpts.]
Canada warned Saturday it was reviewing reports that Saudi Arabia is using Canadian armored vehicles in a crackdown in the kingdom’s Shiite-majority east.
  “We are looking at these claims very seriously… and have immediately launched a review,” Prime Minister Justin Trudeau, speaking in French, said in during a visit in central Canada, Daily Mail reported.
The Globe and Mail reported earlier that light armored vehicles sold by Canada to Saudi Arabia had been used against Shia civilians in a major operation in the town of Awamiya in Eastern Province.
Experts told the newspaper that vehicles appearing in photos and videos of the Saudi operations were Gurkha RPVs produced by Terradyne Armored Vehicles near Toronto. …
Trudeau’s Liberal government has had to defend this contract against criticism that it may have violated Canada’s export control rules that bar arms exports to countries with a poor human rights record and prohibit using these weapons against civilians. … 

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Reuters: “U.S. Considering Some Sanctions on Venezuela Oil Sector”

Reuters, 31 July 2017.)
The Trump administration is considering imposing U.S. sanctions on Venezuela’s vital oil sector in response to Sunday’s election of a constitutional super-body that Washington has already denounced as a “sham” vote, U.S. officials said.
The measures, which could be announced as early as Monday, are not expected to include a ban on Venezuelan oil shipments to the United States — one of the harshest options — but could block sale of lighter U.S. crude that Venezuela mixes with its heavy crude and then exports, the officials told Reuters.
While no final decisions have been made, the officials, who spoke on condition of anonymity, said the United States could also target further senior Venezuelan officials. But the timing of any new individual sanctions, such as those imposed on 13 Venezuelan figures last week, remained uncertain.
Other options still under consideration, the officials said, include various measures to restrict access by the Venezuelan government and state oil company PDVSA to the U.S. banking system, the sources said.
But it was not clear whether the U.S. administration was ready to take such action or would instead hold it in reserve if further escalation is deemed necessary following the Venezuelan ballot, which was widely boycotted and sparked deadly protests. Washington has backed the Venezuelan opposition’s view that the vote is intended to cement dictatorship.
The new round of sanctions is intended to make good on President Donald Trump’s threat of “strong and swift economic actions” if Venezuelan President Nicolas Maduro went ahead with Sunday’s election of a controversial new congress, the officials said.
But the U.S. response, though expected to be the toughest yet against Maduro’s leftist government since Trump took office, is also being calibrated to avoid causing further suffering to the Venezuelan people or seriously damaging U.S. economic interests, the officials said.
The White House did not immediately respond to a request for comment. … 

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Silicon Beat: “Amazon Under Federal Investigation Over Iran-Linked Sales, Including to Person on Terrorism List”

Silicon Beat, 28 July 2017.) [Excerpts.]
Under federal investigation for possibly violating U.S. sanctions against Iran, Amazon has admitted to selling consumer goods to at least one person on the government’s black list of people and entities associated with terrorism.
In its quarterly financial report filed July 28, the Seattle e-commerce giant revealed that it had sold about $300 worth of consumer goods to someone designated under Executive Order 13224, which covers people and entities believed to be terrorists or supporters of terrorism. A February regulatory filing from Amazon noted another sale or group of sales to a person covered under that counter-terrorism order, amounting to $1,300. It was unclear whether that customer was the same as the person mentioned in the latest filing, or whether the person or people named in the executive order are linked to Iran.

Amazon’s July 28 filing outlines other, higher-value sales that may have violated the Iran Threat Reduction and Syria Human Rights Act or other U.S. sanctions and export-control laws. The company said the Commerce and Treasury departments are investigating the Iran-linked sales and those to the person or people named in the executive order, and may impose penalties against the firm. … 

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11C.T. Cherniak: “Canadian Government Export Controls Policies Under a Microscope”

(Source: LexSage PC)
* Author: Cyndee Todgham Cherniak, Esq., LexSage PC, cyndee@lexsage.com, 416-307-4168.
On July 28, 2017, Global Affairs Canada issued a statement of concern relating to escalating violence in eastern Saudi Arabia. In the Statement entitled “Canada concerned by escalating tensions in eastern Saudi Arabia“, Global Affairs stated:
  “Canada is concerned by the escalating violence in eastern Saudi Arabia, which has resulted in civilian and security force casualties. We recognize that Saudi Arabia faces security challenges, but we urge local authorities to work with all communities to defuse tensions. All such challenges must be addressed in a manner that abides by international human rights law.
  “In light of recent executions and the decision of the supreme court of Saudi Arabia to uphold the death sentences of 14 individuals, Canada reiterates its firm opposition to the death penalty, in all cases, everywhere.
  “Canada will continue to closely monitor the situation. Canadians expecting to travel to the region are advised to check Travel Advice and Advisories (www.Travel.gc.ca) for the latest information.”
The words and phrases “Saudi Arabia” and “civilian casualties” and “human rights laws” were enough to trigger renewed questions about the Government of Canada’s export controls polices and approvals of export permits for certain military equipment and technology to certain countries.  The current situation in Saudi Arabia should bring to mind concerns raised only a year ago about whether Canada should approve export permits for military goods and technology destined for use in Saudi Arabia due to the human rights record of the Kingdom of Saudi Arabia.
Last year, Professor Turp commenced a judicial review of the minister of Foreign Affairs’ approval of export permits to Saudi Arabia and attempted to halt the sale of certain General Dynamics Land Systems Canada light armoured vehicles (LAVs) (see Turp v. Minister of Foreign Affairs, 2017 FC 84).  The Court ultimately dismissed the application for judicial review on the grounds that the Minister has legal authority to issue the permits and had reasonably considered the relevant facts.  We wrote an article about the Federal Court of Canada decision in Turp earlier this year – See Canada’s Minister of Foreign Affairs Has Broad Export Controls Discretion Says Federal Court.
In 2016, Global Affairs posted a March 21, 2016 “Secret” Memorandum for Action to the Minister of Foreign Affairs regarding the sale of light armoured vehicles to Saudi Arabia.  It was posted on the Global Affairs Canada web-site along with an April 11, 2016 Notice.  The Memorandum is significant because it sets out the Canadian process for reviewing politically sensitive export permits, such as those relating to LAV sales to Saudi Arabia.
Fast forward to today.  It should have been expected that reporters and Amnesty International Canada (and other public interest or activist organizations) would raise questions about sales of Canadian goods to Saudi Arabia as soon as the news of the violence in eastern Saudi Arabia broke. Where any Canadian goods used by Saudi Arabia against its own citizens during the current violence?  Is there news media of the government actions and what does the video, footage or photos indicate?  Is there a Canada connection – because you cannot do anything after the goods have been sold and exported to Saudi Arabia.
Steven Chase is a reporter who has followed this issue closely for Canada’s Globe and Mail newspaper.  I have spoken to Steven Chase in the past about Canada’s export controls laws. I expected to see Steven Chase asking all the right questions of all the right people.  On July 28, 2017, Steven Chase and Robert Fife published an online article entitled “Ottawa calls for investigation into Saudi Arabia’s apparent use of Canadian-made armoured vehicles against citizens” in which they detail their investigation into the use of Canadian made LAVs and the government’s statements in response to facts uncovered. Steven Chase and Robert Fife write:
Military equipment experts consulted by The Globe identified the machines appearing in these videos and photos as Gurkha RPVs, produced by Terradyne Armored Vehicles in Newmarket, Ont., just north of Toronto.
Steven Chase and Robert Fife went straight to the office of Canada’s Minister of Foreign Affairs and were informed that:
The government is actively seeking more information about Saudi Arabia’s current efforts to deal with its security challenges, the reports of civilian casualties, and the reports that Canadian-made vehicles have been used by Saudi Arabia in its current security operations, … Canada will review all available information as it determines an appropriate course of action.
Canada’s CBC is also covering this story.  Levon Sevunts published an online article entitled “Ottawa ready to review Saudi arms deal amid crackdown” in which he writes about the following statements made by Global Affairs spokesperson John Babcock:
  – “Minister of Foreign Affairs Chrystia Freeland is “deeply concerned about this situation and has asked officials to review it immediately.”
  – “If it is found that Canadian exports have been used to commit serious violations of human rights, the minister will take action.”
  – “The end use and end user of exports, as well as regional stability and human rights, are essential considerations in the authorization of permits for the export of military goods from Canada.”
  – “The government has expressed its concerns to the Kingdom of Saudi Arabia that its internal security operations be conducted in a manner consistent with international human rights law.”
Canadian aerospace and defence companies should expect changes to Canada’s export controls policies relating to military equipment relating to sales to Saudi Arabia and other countries with human rights abuse concerns.  The human rights record of a government is a consideration (behind the scenes) at Global Affairs Canada, Export Controls Division, when reviewing export permit applications.  Most, if not all, exports of military equipment require an export permit be obtained prior to the export of the goods and technology.  As is set out in great detail in the Memorandum, exports permit applications are reviewed by a number of Canadian government departments and political cases end up on the Minister’s desk (with a research memo and recommendations attached).
There are questions whether foreign subsidiaries or sister companies of Canadian companies are restricted by Canada’s Export and Import Permits Act (the legislation setting out Canada’s export prohibitions and requirements to obtain an export permit).  Changes to Canada’s export controls laws are currently before the government.  See:
What the news reports and scrutiny by human rights organizations tell Canadian export controls experts and Canadian companies who make and sell aerospace and defence equipment and technology is that the spotlight has a stronger light now (more than ever before).

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12M. Volkov: “The Perfect Compliance Combo: Culture and Controls”

(Source: Volkov Law Group Blog. Reprinted by permission.)
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
Compliance practitioners divide their commentary and insights into two general categories – ethical culture and compliance controls. It is easy to divide compliance issues into these two categories. Ethical culture articles are a little less concrete; compliance controls are practical and focused on policies and procedures.
A compliance program cannot be deemed effective, however, unless there is a combination of these two important functions. An ethical culture is the most effective compliance control. Employees in ethical companies are far less likely to engage in misconduct, and much more likely to report someone else who they suspect is engaged in misconduct. This basic principle is a critical control that applies across-the-board in every aspect of a compliance program and the company’s business.
Compliance policies and procedures are critical to promote an ethical culture and provide important mechanisms to mitigate risk and ensure proper accounting and use of funds. As I frequently say, you can design compliance policies and procedures that are works of art, efficient and well drafted; however, in the absence of a commitment to a culture of compliance and ethical conduct, the policies and procedures are unlikely to succeed. Compliance controls by themselves are insufficient to achieve an effective ethics and compliance program.
Culture and controls go hand in hand. One cannot be effective without the other. Chief compliance officers that focus on one area to the detriment of the other are going to struggle. I have seen examples of both extremes. An effective ethics and compliance program depends on a careful and sensitive balance of these two objectives.
It is easy to see how each of these objectives reinforce the other. An ethical culture depends on specific policies and procedures to guide important compliance functions. A third-party intermediary cannot be engaged without completing the due diligence process. Of course, the company will apply ethical business principles when it engages the third party. Before that, however, the company has to follow its due diligence controls to ensure proper screening and analysis.
A company’s culture of ethics is a fundamental requirement to ensure that employees follow compliance policies and procedures. It is always surprising that employees can avoid a policy or procedure without any serious consequences. Just ask yourself how many third parties were engaged without completing any due diligence process. Or examine how many vendors or suppliers were engaged without going through the onboarding process.
In a company with a strong ethical culture, the rates of compliance with policies and procedures are likely to be much higher than companies that have weak ethical cultures. Employees are likely to perceive a rule-based compliance program differently than a balanced combination of ethical culture and compliance controls.
A company’s balance between these two basic strategies may vary in different countries – some areas may be more rule-based, while others may work more effectively by emphasizing ethical values and principles. The differences may not be significant but the emphasis can be important depending on the audience and specific local conditions.

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13. P. LeCour & T. Carlile: “EU to Build Framework for Sanctioning Malicious Cyber Actors”

* Authors: Pablo LeCour, Esq.,
; and Tina Carlile, Esq.,
. Both of Deloitte, London, UK.
The European Council (EC) has announced that it will create a policy framework for responding to malicious cyber activities aimed at European Union (EU) member states, according to a June 2017 statement titled “Cyber attacks: EU ready to respond with a range of measures, including sanctions.” [FN/1] The new framework points to an expanding scope for EU sanctions, with possible impacts for businesses operating in Europe and abroad.
The proposed framework will allow the EU to respond to malicious cyber activity using any of the measures stipulated in its Common Foreign and Security Policy, which notably include economic and financial sanctions. In practice, this could mean new EU-wide sanctions against persons, entities, or countries suspected of cyber attacks against EU member states. The EU is still formulating its policy framework in this area – meaning that no new sanctions are immediately pending.
  Prospects for future sanctions
It is unclear if the EC’s announcement was made in reaction to any particular cyber incident, but recent statements from EU member states would suggest that the measures may be intended to deter and respond to attacks from persons and entities affiliated with the Russian government.
The U.S. government has already sanctioned Russian actors in response to malicious cyber activities, including the Main Intelligence Directorate (a.k.a. GRU), the Federal Security Service (a.k.a. FSB), and several other entities and individuals. The EU is currently sanctioning Russia for its 2014 annexation of Crimea, but has not yet imposed cyber-related sanctions despite a number of cyber incidents over the past two years. [FN/2]
It remains unclear how closely potential EU cyber sanctions would mirror existing sanctions imposed by the U.S. government. The EU and U.S. have traditionally not been fully aligned in their sanctions design and implementation, and that trend may hold for cyber-related sanctions. EU sanctions decisions will depend on a number of factors, not least “the broader context of the EU external relations with the State concerned.” [FN/3]
  [FN/1] European Council, “Cyber attacks: EU ready to respond with a range of measures, including sanctions,” Press release 357/17, 19 June 2017, accessed online
  [FN/2] Francesco Guarascio, “EU gears up for propaganda war with Russia,” Reuters, 19 March 2015, accessed online
; Roland Oliphant, Rory Mulholland, Justin Huggler, and Senay Boztas, “How Vladimir Putin and Russia are using cyber attacks and fake news to try to rig three major European elections this year,” The Telegraph, 13 February 2017, accessed online
  [FN/3] Council of the European Union, “Draft Council Conclusions on a Framework for a Joint EU Diplomatic Response to Malicious Cyber Activities (“Cyber Security Toolbox”) – Adoption,” 7 June 2017, accessed online

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14R.C. Burns: “Sausage Making Looks Good Compared to This Law

Export Law Blog
. Reprinted by permission.)
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC,
, 202-508-6067).
The Russia Sanctions Review Act of 2017, which may or may not get vetoed by the White House, has now passed both the House and the Senate as sections 215 and 216 of the euphoniously named Countering America’s Adversaries Through Sanctions Act ( or the “CATS Act”)(seriously?). Section 216 attempts to circumscribe the authority of the White House to alter sanctions on Russia without a sign-off by Congress.  I doubt anyone will be surprised to learn that the bill is a confusing mess that likely will not accomplish its purpose, unless its purpose is simply to tell voters that Congress means business, very serious business.
The legislation requires the President to file a report with Congress before he acts “to terminate” Russia sanctions, acts “to waive the application” of the sanctions against specific persons or takes “a licensing action that significantly alters United States’ foreign policy with regard to the Russian Federation.”  Depending on whether this action is intended to significantly alter U.S. foreign policy with respect to Russia, the legislation sets forth a 30- or 60-day review period by Congress – 30 days if no; 60 days if yes.   The proposed action may not take effect within the review period unless specifically authorized by a joint resolution of both house of Congress.
Alert readers (or basically anyone other than members of Congress) will immediately see the hole in this scheme – a hole big enough to fire a Nork  No-Dong missile through.  That hole is the general license, a concept which dates back at least to the general license for Cuba travel issued by the Carter administration in 1977 (i.e. seven years before Mark Zuckerberg was even born).  A “general license” with respect to Russia sanctions is definitely not a “termination” of them.   And whether a particular general license “significantly alters United States’ foreign policy” with regard to Russia, well that’s a judgment call on which reasonable people could always disagree and on which no court will ever venture an opinion.
The Federal Register notice granting the broad general license to engage in activities otherwise prohibited by Russia sanctions will simply note that in the considered opinion of OFAC the general license, which OFAC reserves the right to withdraw at any time, does not significantly alter U.S. foreign policy towards Russia.   And if Congress disagrees with that administrative determination, what is it going to do?  Arrest OFAC? Scream and holler on C-SPAN?  No, it will do what it always could have done before and without passing the CATS Act – pass a law reversing the general license.
Your tax dollars at work.

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MS_a115. Dennis Farrell to Become an Export Compliance Consultant

(Source: Editor)
Dennis Farrell has left Analog Devices to open Grand Slam Export Consulting. Contact Dennis at (603) 566-6382 or denfarrell@yahoo.com

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MS_a216. Monday List of Ex/Im Job Openings

(Source: Editor)  
Published every Monday or first business day of the week. Please send openings in the following format to jobs@fullcirclecompliance.eu.
#” New listing this week:
* Acteon Group Ltd.; Norwich, Suffolk, or London, UK;
Head of Compliance; or email
Mike Pay
* Advanced Micro Devices (AMD); Austin TX; 
Import/Export Compliance Manager
; Requisition ID: 24061

Akin Gump Strauss Hauer & Feld LLP; Washington DC; 
International Trade and Customs Specialist
; Requisition ID: 147

* Amazon; Mexico City, Mexico; Mexico Trade Compliance Program Manager; Requisition ID: 520481 
* Amazon; Seattle WA;
NA Compliance Analyst; Requisition ID: 256357

* Ansell; Iselin NJ;
Senior Specialist NA Trade Compliance; Requisition ID: IRC6513

* Bemis Company; Neenah WI;
Director – Global Trade Compliance
; Requisition ID: REQ_13735

* Berry Plastics Corporation; Evansville IN;
International Trade Compliance Administrator
; Requisition ID: 4054

# Boeing; Saint Louis MO (and other locations);
Trade Control Specialist; Requisition ID: 1700011280

* Cobham Advanced Electronic Solutions; Exeter, NH, Plainview, NY, Eatontown, NJ, or Lansdale, PA;
Export Compliance Manager
; Charles Trokey

DRS Technologies; Dayton OH;
Senior Trade Compliance Manager 

* Eaton; Titchfield, United Kingdom;
Global Trade Manager (Trade Compliance); Requisition ID: 020681

* Erickson Inc.; Portland OR;
Trade Compliance Manager
Joanna Rafiner-Jarboe
; Requisition 2017-2267

* Esterline CMC Electronics; Montreal, Quebec, Canada;
Senior Manager Trade Compliance; Requisition ID: 9971BR

* Expeditors; Sunnyvale CA;
Customs Compliance Specialist
* Export Solutions Inc.; Melbourne FL; Trade Compliance Specialist;

* Fluke; Everett WA; 
Trade Compliance Manager
; Requisition ID: FLU005544

* General Atomics Aeronautical Systems, Inc.; San Diego CA; 

International Trade Compliance Analyst (ITC) / Export Import Specialist / Global Trade Administrator
; Requisition ID: 12252BR

General Dynamics Land Systems; Sterling Heights, MI; Site Lead/Compliance OfficerRequisition ID: 

General Dynamics Land Systems; Sterling Heights, MI; Compliance Officer


* George Washington University; Washington DC;
Research Compliance Officer, Export Control
; Requisition ID: PI97906765

Harsco; Columbia, SC; 
Import/Export Specialist

* Indiana Mills & Manufacturing, Inc.; Westfield, IN;
International Trade Compliance Manager 
* Johnson and Johnson; Skillman, NJ;
Export Trade Compliance Lead

* KPMG; Antwerp, Brussels;
Manager Global Trade & Customs – SAP GTS
; 122756BR

* Lutron; Coopersburg PA;
Trade Manager-Export
; Requisition ID: 2926
* L-3 Technologies; Arlington VA;
Sr. Mgr. Corporate Customs Compliance
; Requisition ID: 087862
# L-3 Technologies; Los Angeles, CA; Sr. Trade Compliance Specialist; Requisition ID: 085768

* Mars – Wrigley; Chicago IL; 
Global Trade Compliance Analyst (Corporate Export)
; Requisition ID: 69452

* Maxim Integrated; Dallas TX;
Manager, Global Trade
; 3304BR

* Medtronic; Heerlen, The Netherlands;
Trade Compliance Analyst
; Requsition ID: 16000DYY

* Medtronic; Wash DC; Global Trade Lawyer;  
; Requisition ID: 170002ON

* Meggitt PLC; Maidenhead, UK;
Trade Compliance Officer 
* Momentive Performance Materials, Inc.; Waterfield, NY;
Manager, Global Trade Compliance 
NetApp; Singapore; Trade Compliance Mananger – APAC; Requisition ID 43338BR

* North Dakota State University; Fargo ND;
Director for Research Integrity Compliance; Requisition ID: 1700372

* Northrop Grumman; Falls Church VA; 
International Trade Compliance Analyst 3/4
; Patricia Vives, 
; Requisition ID: 17011893

* Northrop Grumman Corporation; Herndon VA;
International Trade Compliance Analyst 3/4; Requisition ID: 17001180

* Northrop Grumman Sperry Marine; New Malden, UK;
Trade Compliance Coordinator

* Premier Farnell Organisation; Leeds, UK;
Trade Compliance Specialist – Europe
; Requisition ID: 4301
* Raytheon; (El Segundo CA, McKinney TX, Dallas TX, Marlborough MA, or Washington D.C.);
Senior Manager of Global Trade Management
; Requisition ID: 98724BR

* Raytheon; Rosslyn, VA; 
Export Trade Compliance Specialist; Requisition ID: 97978BR

* Saab Defense and Security USA LLC; Syracuse NY;
Senior Import/Export Analyst
; Requisition ID: USA_00413

* Science and Engineering Services, LLC; Huntsville AL;
Export Compliance Specialist
bob.davis@ses-i.com; Requisition ID: 157
* Sierra Nevada Corporation; Arlington, VA; 
International Trade Compliance Analyst II; Req ID: R0003259

* SIRE: Noord-Brabant province, the Netherlands;
Trade Compliance Expert; Requisition ID: 33934

# Tesla Motors; Fremont CA; 
Global Supply Manager – International Logistics
; Requisition ID: 49362

* ThermoFisher Scientific; Breda, the Netherlands;
Import/Export Specialist – EMEA CMD Commercial Offices
; Requisition ID: 44930BR

* UBC; Monheim, Germany;
Manager Customs and Trade Compliance 
* Ultra Electronics; Greater London, United Kingdom;
International Trade and Export Compliance Specialist

* United Technologies Corporation, UTC Aerospace Systems; Troy OH;
Sr. Manager, Intl Trade Compliance
; Requisition ID: 44065BR 
United Technologies Corporation, Climate Controls & Security; Palm Beach Gardens, FL;
Audit & Corrective Action Specialist
; Requistion ID: 50789BR

* United Technologies Corporation, Climate Controls & Security; Palm Beach Gardens, FL; 
Audit & Corrective Action Specialist
; Requistion ID: 50789BR

* University of North Carolina; Chapel Hill, NC;
Export Control Officer 

* VAG; Mannheim, Germany;
Trade Compliance Manager (m/w)
; Contact: Mr. Florian Uhl, +49 621 749 – 1870

Vertiv (formerly Emerson Network Power); Columbus, OH,  
International Trade Management (ITM) Senior Specialist
; Req #1700001087

* Vigilant; Unknown location in the U.S.;
BioTech/Pharmaceutical Global Trade Analyst

* Xilinx, Inc.; San Jose, CA, US;
Global Trade Compliance Program Manager; Requisition ID: 153811

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* Milton Friedman (31 Jul 1912 – 16 Nov 2006; was an American economist who received the 1976 Nobel Prize in Economics for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.)
  – “We have a system that increasingly taxes work and subsidizes nonwork.”
* Thorstein Veblen (Thorstein Bunde Veblen, born Torsten Bunde Veblen; 30 Jul 1857 – 3 Aug 1929; was a Norwegian-American economist and sociologist. He was famous as a witty critic of capitalism, and is famous for the idea of “conspicuous consumption,” performed to demonstrate wealth or mark social status. Veblen explains the concept in his best-known book, The Theory of the Leisure Class.
  – “In point of substantial merit the law school belongs in the modern university no more than a school of fencing or dancing.”
* Emily Bronte (Emily Jane Brontë; 30 Jul 1818 – 19 Dec 1848; was an English novelist and poet, best known for her only novel, Wuthering Heights, now considered a classic of English literature. Emily was the third-eldest of the four surviving Brontë siblings, between the youngest Anne and her brother Branwell. She wrote under the pen name Ellis Bell.)
  – “A person who has not done one half his day’s work by 10 a.m. runs a chance of leaving the other half undone.”
Monday is pun day:
Q. What’s the safest vitamin you can take?
A. Vitamin B9.
  – David Bauguess, Grand Junction, CO
Q. Why did the vampire drop his girlfriend?
A. She wasn’t his type.
  – Edward Lawrence, Richardson, Texas

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

The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.  Changes to applicable regulations are listed below.
: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War
  – Last Amendment: 15 Jan 2016: 81 FR 2657-2723: Machineguns, Destructive Devices and Certain Other Firearms; Background Checks for Responsible Persons of a Trust or Legal Entity With Respect To Making or Transferring a Firearm. 
: 19 CFR, Ch. 1, Pts. 0-199
  – Last Amendment: 28 Jul 2017: 82 FR 35064-35065: Technical Corrections to U.S. Customs and Border Protection Regulations
  – 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 cancelled Supp. 1 to the NISPOM  (Summary here.)

: 15 CFR Subtit. B, Ch. VII, Pts. 730-774

  – Last Amendment: 7 July 2017: 
82 FR 31442-31449: Revisions to the Export Administration Regulations Based on the 
2016 Missile Technology Control Regime Plenary Agreements. 

: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 16 Jun 2017: 82 FR 27613-27614: Removal of Burmese Sanctions Regulations 
: 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 (18 July 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, Census/AES guidance, and to many errors contained in the official text. 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: 25 Jul 2017: Harmonized System Update 1706, containing 834 ABI records and 157 harmonized tariff records.
  – HTS codes for AES are available
  – HTS codes that are not valid for AES are available
  – Last Amendment: 11 Jan 2017: 82 FR 3168-3170: 2017 Civil Monetary Penalties Inflationary Adjustment
  – The only available fully updated copy (latest edition: 10 Jun 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 800 footnotes containing amendment histories, 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 the Daily Bugle Top Stories” published 

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* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, John Bartlett. The Ex/Im Daily Update is 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 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.

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