17-0828 Monday “Daily Bugle”

17-0828 Monday “Daily Bugle”

Monday, 28 August 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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[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 Decreasing Unresolved Fatal Errors in the Automated Export System”
  4. DHS/CBP Announces Local Closure Day for Ports 2101, 5301, 5309, 5310, 5311, and 5312
  5. State/DDTC Publishes Name and Address Change Announcements
  6. White House Releases Presidential Executive Order on Imposing Sanctions with Respect to the Situation in Venezuela
  7. EU Amends Restrictive Measures Against North Korea
  1. The Hill: “Apple Removes Iranian Apps, Citing U.S. Sanctions”
  2. ST&R Trade Report: “Chinese and Russian Entities Sanctioned for Supporting North Korea”
  1. D.W. Burgett, S. Hadeka & A. Vanselow: “USTR Requests Input on Impact of Trade Agreements on Government Procurement”
  2. J. Reeves & K. Heubert: “Myth Busters: Common Misperceptions About Export Controls” (Part 1 of 2)
  3. Gary Stanley’s ECR Tip of the Day
  1. 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 (15 Aug 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 



[No items of interest noted today.]

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OGS_a11. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register

* Commerce; Industry and Security Bureau; NOTICES; Meetings: Regulations and Procedures Technical Advisory Committee [Publication Date: 29 August 2017.]

* Defense; Defense Acquisition Regulations System; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Inspection and Receiving Report [Publication Date: 29 August 2017.]

* Environmental Protection Agency; NOTICES; Automated Export System Filing Compliance Date for Hazardous Waste Exports [Publication Date: 29 August 2017.]

* President; EXECUTIVE ORDERS; Venezuela; Additional U.S. Sanctions (EO 13808) [Publication Date: 29 August 2017; Included in today’s Daily Bugle, item #6.]

* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 29 August 2017.]

* U.S. Customs and Border Protection; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals [Publication Date: 29 August 2017.]:
  – Automated Clearinghouse
  – Bonded Warehouse Regulations
  – Declaration of Person Who Performed Repairs
  – Entry Summary

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Commerce/Census: “Tips on Decreasing Unresolved Fatal Errors in the Automated Export System”

Have you ever wondered what it takes to decrease unresolved fatal errors in the Automated Export System (AES)? 
Here are a few tips to help you correct these unresolved fatal errors:
  (1) If you are an ACE AESDirect filer, become familiar with the information on the ACE AESDirect Resources webpage and the AESDirect User Guide. The most common unresolved fatal errors occur due to a lack of familiarity with the filing requirements within the AES. For example, you do not need to report a Transportation Reference Number if your mode of transport is not vessel or containerized vessel. Take time to review the many resources available to ensure accurate filing.
  (2) Review the AES Compliance and Fatal Error Reports that you receive from the U.S. Census Bureau and resolve all unresolved fatal errors in a timely basis. Failure to resolve fatal errors may result in fines/penalties and cargo is unable to be exported if fatal errors are unresolved as per FTR 30.9-Transmitting and Correcting Electronic Export Information.
  (3) Make sure the Census Bureau has the most current contact information for your company. This will prevent your company from having any undeliverable or unattended AES Compliance and Fatal Error Reports.
  (4) Familiarize yourself with the AESTIR Appendix A- Commodity Filing Response Messages. Appendix A provides the reasons and resolutions to all AES generated responses.
  (5) Ensure that you are subscribed to AES broadcast messages so you can receive the monthly “Tips on How to Resolve AES Fatal Errors” highlighting the most common fatal errors and resolutions.
For more information, contact the International Trade Management Division Call Center at 1-800-594-0595. Select option 1 for the Data Collection Branch.

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DHS/CBP Announces Local Closure Day for Ports 2101, 5301, 5309, 5310, 5311, and 5312

(Source: CSMS# 17-000517, 27 Aug 2017.)
Commercial trade operations at the Ports of 2101 (Port Arthur), 5301 (Houston Seaport), 5309 (Houston Airport), 5310 (Galveston), 5311 (Freeport), and 5312 (Corpus Christi) will be temporarily suspended on Monday, 28 August 2017, due to Hurricane Harvey.
On 28 August 2017, a local closure day is granted to all who file entries at the Ports of 2101 (Port Arthur), 5301 (Houston Seaport), 5309 (Houston Airport), 5310 (Galveston), 5311 (Freeport), and 5312 (Corpus Christi). 

CBP is extending an additional day, without penalty, for any entry summaries and payments of duties that are due on 28 August 2017 for Ports 2101 (Port Arthur), 5301 (Houston Seaport), 5309 (Houston Airport), 5310 (Galveston), 5311 (Freeport), and 5312 (Corpus Christi).

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State/DDTC Publishes Name and Address Change Announcements

(Source: State/DDTC)

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White House Releases Presidential Executive Order on Imposing Sanctions with Respect to the Situation in Venezuela

(Source: White House)
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, in order to take additional steps with respect to the national emergency declared in Executive Order 13692 of March 8, 2015, and particularly in light of recent actions and policies of the Government of Venezuela, including serious abuses of human rights and fundamental freedoms; responsibility for the deepening humanitarian crisis in Venezuela; establishment of an illegitimate Constituent Assembly, which has usurped the power of the democratically elected National Assembly and other branches of the Government of Venezuela; rampant public corruption; and ongoing repression and persecution of, and violence toward, the political opposition, hereby order as follows:
Section 1.  (a)  All transactions related to, provision of financing for, and other dealings in the following by a United States person or within the United States are prohibited:
    (i)    new debt with a maturity of greater than 90 days of Petroleos de Venezuela, S.A. (PdVSA);
    (ii)   new debt with a maturity of greater than 30 days, or new equity, of the Government of Venezuela, other than debt of PdVSA covered by subsection (a)(i) of this section;
    (iii)  bonds issued by the Government of Venezuela prior to the effective date of this order; or
    (iv)   dividend payments or other distributions of profits to the Government of Venezuela from any entity owned or controlled, directly or indirectly, by the Government of Venezuela.
  (b)  The purchase, directly or indirectly, by a United States person or within the United States, of securities from the Government of Venezuela, other than securities qualifying as new debt with a maturity of less than or equal to 90 or 30 days as covered by subsections (a)(i) or (a)(ii) of this section, respectively, is prohibited.
  (c)  The prohibitions in subsections (a) and (b) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the effective date of this order.
Sec. 2.  (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.
  (b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 3.  For the purposes of this order:
  (a) the term “person” means an individual or entity;
  (b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
  (c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States; and
  (d) the term “Government of Venezuela” means the Government of Venezuela, any political subdivision, agency, or instrumentality thereof, including the Central Bank of Venezuela and PdVSA, and any person owned or controlled by, or acting for or on behalf of, the Government of Venezuela.
Sec. 4.  The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including promulgating rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to implement this order.  The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions to other officers and executive departments and agencies of the United States Government.  All agencies of the United States Government shall take all appropriate measures within their authority to carry out the provisions of this order.
Sec. 5.  For those persons whose property or interests in property are affected by this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual.  I therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 13692, there need be no prior notice of a listing or determination made pursuant to this order.
Sec. 6.  This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Sec. 7.  This order is effective at 12:01 a.m. eastern daylight time on August 25, 2017.
August 24, 2017.

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EU Amends Restrictive Measures Against North Korea

* Council Regulation (EU) 2017/1501 of 24 August 2017 amending Regulation (EC) No 329/2007 concerning restrictive measures against the Democratic People’s Republic of Korea
* Council Decision (CFSP) 2017/1504 of 24 August 2017 amending Decision (CFSP) 2016/849 concerning restrictive measures against the Democratic People’s Republic of Korea

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The Hill: “Apple Removes Iranian Apps, Citing U.S. Sanctions”

(Source: The Hill, 25 Aug 2017.) [Excerpts.]
Apple is aggressively taking Iranian-based apps out of its App Store, citing U.S. sanctions against the country.
Over the last several days, the Cupertino, Calif.-based technology giant has removed apps created by developers based in Iran from its mobile app store. The now-removed programs include ride-hailing app Snapp, meal delivery app Delion and online store Digikala. …
  “Under the U.S. sanctions regulations, the App Store cannot host, distribute, or do business with apps or developers connected to certain U.S. embargoed countries,” Apple said in its email to developers affected by the changes, obtained by The New York Times. “This area of law is complex and constantly changing. If the existing restrictions shift, we encourage you to resubmit your app for inclusion on the App Store.”
Apple did not respond to The Hill’s request for comment. …
As Apple takes Iranian apps down, their Android counterparts remain untouched so far in the Google Play app store.
  “As a U.S. company, we remain committed to full compliance with U.S. export controls and sanctions,” a Google spokesperson said. “We remain equally committed to continue exploring how we can help more people around the globe use technology to communicate, find and create information.” … 

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ST&R Trade Report: “Chinese and Russian Entities Sanctioned for Supporting North Korea”

The Treasury Department’s Office of Foreign Assets Control has designated 16 companies and individuals in response to North Korea’s ongoing development of weapons of mass destruction, violations of United Nations Security Council resolutions, and attempted evasion of U.S. sanctions. OFAC states that these companies and individuals (1) assist already-designated persons who support North Korea’s nuclear and ballistic missile programs, (2) deal in the North Korean energy trade, (3) facilitate North Korea’s exportation of workers, and (4) enable sanctioned North Korean entities to access the U.S. and international financial systems.
Any property or interests in property of the newly-designated entities that are in the possession or control of U.S. persons or within the U.S. is blocked and U.S. persons are generally prohibited from dealing with these entities.

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D.W. Burgett, S. Hadeka & A. Vanselow: “USTR Requests Input on Impact of Trade Agreements on Government Procurement”

Hogan Lovells)
* Authors: David W. Burgett, Esq.,
david.burgett@hoganlovells.com; Stacy Hadeka, Esq.,
stacyhadeka@hoganlovells.com; and Annie Vanselow, Esq.,
annie.vanselow@hoganlovells.com. All of Hogan Lovells, Washington DC.
On August 21, 2017, the Department of Commerce (Commerce) and the Office of the United States Trade Representative (USTR) issued a
request for public comment on the impact of government procurement provisions of U.S. trade agreements on U.S. manufacturers and suppliers. Prompted by President Trump’s ”
Buy American and Hire American” Executive Order (E.O.), the request seeks to understand how domestic preference laws affect participation of U.S. manufacturers and suppliers in the Federal procurement process. Noting the significance of reciprocity in the global trading arena, the request also asks for industry input concerning the “costs and benefits” of trade agreements, and related laws, from those U.S. manufacturers and suppliers competing in foreign government procurement markets. Comments are due by September 18, 2017.
The President’s Executive Order
Designed to further the Administration’s “America First” agenda, the “Buy American and Hire American” E.O., which we
previously analyzed, aims to maximize the Federal government’s use of goods, products, and materials produced in the United States by requiring agencies to increase monitoring, enforcement, and compliance with Buy American Laws [FN/1] while minimizing the use of waivers.
The E.O. mandates that agencies assess Buy American Laws and provide specific recommendations regarding ways to strengthen those laws and develop policies to maximize the use of materials produced in the United States. It also directed the Secretary of Commerce and the USTR to conduct a review of the effects of U.S. Free Trade Agreements (U.S. FTAs) and the World Trade Organization’s Government Procurement Agreement (GPA) on the implementation of domestic procurement preferences.
The Administration’s Memorandum
As part of the E.O.’s initiatives and prior to the USTR’s release of its request for comment, the Office of Management and Budget (OMB), issued a
memorandum to Federal agencies entitled, “Assessment and Enforcement of Domestic Preferences in Accordance with Buy American Laws” on June 30, 2017. The memo directs agencies to address three primary areas bearing upon Federal procurement:
Oversight of Buy American Laws: Agencies must assess “the monitoring of, enforcement or, implementation of, and compliance with Buy American Laws.” The memo requires agencies to provide a report addressing 1) any procedures and guidance that the agency has developed “to assist the workforce in meeting the requirements of Buy American Laws and the application of the Trade Agreement Act (TAA)”; 2) any internal reviews conducted in the last two fiscal years regarding compliance with such laws; 3) any marketing and outreach that the agency has taken to promote and enhance visibility for the acquisition workforce of products that are compliant with Buy American Laws; and 4) any training tools or resources that the agency uses to ensure the acquisition workforce understands the parameters and technical mechanics of Buy American Laws and the TAA.
Enforcement of Buy American Laws and Waiver Usage: Agencies are required to analyze the use of waivers within their agencies by type and impact on domestic jobs and manufacturing.
Steps to strengthen implementation of Buy American Laws: Agencies must “develop and propose policies to ensure that, to the extent permitted by law, Federal financial assistance awards and Federal procurement maximize the use of materials produced in the United States, including manufactured products; components of manufactured products; and materials such as steel, iron, aluminum, and cement.” The memo also instructs agencies to address ways to improve current agency practices bearing upon oversight of Buy American Laws.
Procurement Trade Agreements
The request for public comment by Commerce and the USTR addresses one of the E.O.’s mandates by seeking industry input “to better understand how the U.S. government procurement obligations under all U.S. free trade agreements and the GPA affect U.S. manufacturers’ and suppliers’ access to and participation in the domestic government procurement process.” This is a somewhat curious way of formulating the topic, since in general neither Buy American Laws nor trade agreements restrict or regulate whether U.S. manufacturers have access to U.S. procurements. Rather, they govern which foreign-made products have access to the Federal market. Perhaps a better way of summarizing what the request is trying to get at would be, how do trade agreements affect the competition faced by U.S. manufacturers in Federal procurements? And, what are the costs and benefits to the U.S. economy and U.S. taxpayers of such trade provisions?
Acknowledging that “reciprocal access to trading partners’ markets is an important motivation for including government procurement obligations in U.S. free trade agreements and for the United States’ membership in the GPA,” Commerce and the USTR are also seeking comment on how these obligations affect manufacturers and suppliers competing in foreign government procurement markets. Any modifications to current trade agreements lessening foreign access to the Federal market could also lead to reduced procurement of U.S. goods by foreign governments. The request for comment poses a series of questions on access to U.S. Federal and to foreign government procurement markets for U.S.-manufactured goods. In responding to the questions, commentators are requested to consider the impact with respect to:
  – Business opportunities that are made available;
  – Economic incentives that trade agreements and Buy American Laws provide;
  – How trade agreements impact business competitiveness, or increase or decrease competition, in government procurement opportunities;
  – How trade agreements affect companies’ (prime contractors’) supply chain and sourcing decisions for goods;
  – How Buy American or similar foreign requirements increase or decrease companies’ (prime contractors’) competitiveness in government procurement opportunities;
  – Administrative compliance costs tied to Buy American and similar government procurement policies; and
  – Additional costs relating to providing or otherwise proving the country of origin of goods provided.
It will be interesting to review the impact assessments that industry and other interested parties submit in response to the request. Perceived impacts are likely to vary by sector, due to varying coverage and restrictions of Buy American Laws and trade agreements, and due to differing market conditions and supply chains in those sectors.
Pharmaceuticals: The TAA is a major issue for pharmaceutical companies because over 80% of the world’s active pharmaceutical ingredients come from India and China, non-FTA countries. However, recognizing that innovator drugs under patent are available from only one source, the Department of Veterans Affairs recently liberalized its procurement policy with respect to the Federal Supply Schedule (FSS) by requiring such drugs to be offered for FSS contracts even if they have non-FTA country origin. If instead drugs were subject to the Buy American Act (BAA), a price evaluation preference would be applied to non-domestic offers, but that would have no impact if there is no U.S. final manufacturer. In theory there could be some inducement for more U.S. final manufacture, but the Federal market is small relative to the commercial market and might not be enough to affect many product sourcing decisions. The cost of components test would not apply, since drugs are commercial off-the-shelf items.
Information technology (IT) equipment: Congress has removed commercial IT products from coverage of the BAA. Therefore, the effect of the TAA in this field is not to liberalize trade, but to reduce the range of potential sources by making non-FTA countries ineligible. China is the country most affected, as most other major IT manufacturing countries are FTA signatories.
Other commercial items: While the BAA still requires U.S. manufacture for non-IT items, Congress has waived the cost of components test for commercial off the shelf (COTS) items. This is probably the area in which FTAs have had the greatest impact. The GPA and other FTAs open U.S. procurement on an equal basis to manufacturers located in the vast majority of significant U.S. trading partners. However, it is worth noting that the country that first comes to mind for low-cost manufacturing-China-is not one of them. Nevertheless, the economic impact is mitigated because government sales generally make up only a relatively small fraction of total commercial item sales. Therefore, sourcing and supply chain decisions by U.S. as well as non-U.S. companies tend to be driven far more by cost, quality, and reliability than by access to the Federal market. Therefore, it is doubtful whether application of the BAA standard rather than the TAA standard would result in relocation of much manufacturing to the United States. In some cases the BAA price preference would not be enough to enable a BAA product to win bids. Any benefit would have to be balanced against the increased cost to the taxpayer and the fact that the government would lose access to sophisticated technology manufactured in places such as Japan and Germany.
Military equipment: This is an extremely large U.S. export sector. It is little affected by FTAs, because there are national defense carve outs. Instead, this sector is governed by bilateral memoranda of understanding between the U.S. Department of Defense and the defense ministries of allied countries, including all NATO nations and Israel. These provide for reciprocal free trade. Historically the major systems manufacturers and integrators have opposed content restrictions, for multiple reasons. One is that the companies are major exporters and have more to gain than to lose by open government procurement. Another is that major systems are incredibly complex, having hundreds of thousands of components, and tracking component origin can be an administrative nightmare with little countervailing benefit. On the other hand, there may be some U.S. specialty component manufacturers who would prefer to be protected against foreign competition. There are carve-outs for congressionally-imposed preferences for U.S. textiles and clothing, food, specialty metals, and other niche goods. These restrictions are not affected by trade agreements.
Other non-commercial items: This is a relatively small category of goods. Since the cost of components test applies to it, the proportion of products that are eligible is smaller than for commercial items. Conversely, by waiving the BAA, FTAs have a correspondingly larger liberalizing impact for this category of goods. However, even companies that do some or all of their manufacturing in the United States do not necessarily favor Buy American because it limits their ability to source components elsewhere to meet competition.
Steel: A lot of steel goes into state and local highway and transit projects funded in part by Department of Transportation grants. Grant restrictions, including US-melted steel requirements, are carved out of FTAs. Interestingly, some U.S. as well as foreign steel producers are also excluded because raw materials may come from other countries. Thus, these restrictions benefit some U.S. producers and disadvantage others.
Construction material: The BAA regime for construction materials parallels that for supplies. Unmanufactured materials must be produced in the U.S. Manufactured materials must be manufactured in the U.S. Non-COTS manufactured materials are subject to the additional requirement that U.S. components represent at least 50% of total component cost. Nearly all Federal projects are over the applicable FTA monetary thresholds, however, where the TAA makes construction materials from any FTA country acceptable. Application of the BAA could benefit some U.S. makers of building materials, but it could make business more complicated and expensive for general contractors and their customers.
Software: To date, software has been little affected by trade restrictions or trade liberalization. This is attributable in part to the fact that Buy American Laws generally pre-date the software industry and there are no general restrictions specifically targeting software. Customs and Border Protection decisions hold that recording of software onto media is a substantial transformation of the media. Consequently, it is a simple matter to establish compliant origin at the point of recording, regardless of the fact that development work many have occurred in multiple other countries.
Services: FTAs have had little impact with respect to services, for several reasons. First, Buy American Laws generally aim at manufactured goods, certain commodities (e.g., steel, textiles, specialty metals), and infrastructure (especially highways and transit), not services. Therefore, even though procurement FTAs apply to services, there are few potentially waivable limitations in the first place. Second, the rule of origin for services only requires that the service provider be established (have a permanent place of business) in the United States or an FTA country. This is easy to comply with for any company doing international business, so there is little impact on who can compete for service work among FTA countries. Third, many types of services must be provided at the customer site regardless of any trade requirements (e.g., construction, custodial work, landscaping, maintenance). Some others, such as call centers, cloud computing, and software development, lend themselves easily to remote sourcing.
Small businesses: Small business preferences are carved out from U.S. FTAs, so the FTAs have no impact on them. Small business preferences (which benefit only small businesses operating in the United States) are a sore point with U.S. trading partners, but it is uncertain how much impact they actually have on trade. It is questionable how many overseas small businesses have the resources to participate in U.S. government procurements, even if permitted to compete for U.S. small business set-asides. Canadian small businesses, many of which do sell in the U.S. market, are probably most affected.
The request for comment is a step in pursuit of the Administration’s “Hire American-Buy American” agenda. The Administration may find that industry does not universally share the President’s view that the GPA and other FTAs are “bad deals” for U.S. industry and the U.S. economy. Changes to the U.S. FTAs or the GPA may have varying impacts on the different industry sectors. Regardless of any policy preferences or prescriptions that may be offered by commenters, one can hope that responses will contribute to a more evidence-based discussion on the proper approach to future trade agreements or potential revision of current pacts.
  [FN/1] The E.O. defines “Buy American Laws” to mean “all statutes, regulations, rules, and Executive Orders relating to Federal procurement or Federal grants including those that refer to “Buy America” or “Buy American” that require, or provide a preference for, the purchase or acquisition of goods, products, or materials produced in the United States, including iron, steel, and manufactured goods.”

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11J. Reeves & K. Heubert: “Myth Busters: Common Misperceptions About Export Controls” (Part 1 of 2)

(Source: Reeves & Dola LLP)
* Authors: Johanna Reeves, Esq., jreeves@reevesdola.com; and Katherine Heubert, Esq., khebuert@reevesdola.com. Both of Reeves & Dola LLP.
[Editor’s Note: Stay tuned tomorrow for Part 2 of this Myth Busters installment.]
It’s a regular refrain, but one worth repeating – export controls are not always intuitive. We see time and again a regular misunderstanding of certain standard export control requirements. Whether you are new to the game, or a long-time player, it is always good to refresh yourself on the basics.
False! The requirement to register with the U.S. Department of State, Directorate of Defense Trade Controls (DDTC) pursuant to the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Pts. 120-130, isn’t dependent exclusively on whether one engages in export activities.
The ITAR requires two types of registrations: (1) registration with DDTC as a manufacturer or exporter of defense articles; or (2) registration with DDTC as a broker of defense articles. The regulations at 22 C.F.R. § 122.1 outline the registration requirements for persons engaged in the business of manufacturing, exporting, or temporarily importing defense articles, or engage in furnishing a defense service. The regulations at 22 C.F.R. § 129.3 outline the registration requirements for persons engaged in the brokering activities. Under the ITAR, a “person” includes a natural person as well as a corporation, business association, partnership, society, trust, or any other entity, organization or group, including government entities.
Fundamental Rule
: A U.S. person engaged in the business of manufacturing ITAR-controlled defense articles (refer to the U.S. Munitions List in 22 C.F.R. § 121.1 for articles that are currently controlled as defense articles), must register with DDTC, regardless of whether that business engages in export activities. Pursuant to the registration regulations, it only requires one occasion of a listed activity to trigger the registration requirement. Additional information on registration, as well as step-by-step instructions is available on DDTC’s Registration homepage. Please also refer to DDTC’s guidance on the Applicability of the ITAR Registration Requirement to Firearms Manufacturers and Gunsmiths.
Important Note: There are no corresponding registration requirements under the U.S. Department of Commerce regulations known as the Export Administration Regulations (EAR).
False! The regulations state that an applicant must be registered with DDTC pursuant to Part 122 of the ITAR prior to submitting an application. Specifically, 22 C.F.R. §122.1(c) states in part, “[r]egistration does not confer any export rights or privileges. It is generally a precondition to the issuance of any license or other approval under [the ITAR], unless an exception is granted by [DDTC].”
Similarly, the regulations covering registration for brokers make it clear that, with few and limited exceptions, “any person who engages in brokering activities (see §129.2) is required to register with the Directorate of Defense Trade Controls. Registration under this section is generally a precondition for the issuance of approval for brokering activities required under this part 129 or the use of exemptions.”  (22 C.F.R. § 129.3(a)).
Fundamental Rule
: Being registered with DDTC is not a license or authorization to engage in any sort of exporting, temporary imports, or brokering activity under the ITAR, nor is it identification of a certain skill-set. Being registered under the ITAR is just the first step, and once registered with DDTC, a person may apply for an authorization or utilize an exemption (more on this below) to engage in an export, temporary import, or brokering activity subject to the ITAR.
This one is a bit tricky. Generally speaking, as outlined in the discussion above, you must be registered with DDTC to use an ITAR exemption. In fact, many ITAR exemptions invoke the eligibility requirements of 22 C.F.R. §120.1 as a precondition for their use. For example, see Sections 123.4 (temporary import license exemptions), 123.16 (exemptions of general applicability), and 125.4 (exemptions for technical data exports). However, the ITAR does contain a few exemptions that can be used without being registered. For example, unregistered individuals may use certain exemptions found in §123.17 (exports of firearms, ammunition, and personal protective gear).
Fundamental Rule
: Most ITAR license exemptions require registration with DDTC, and all ITAR exemptions contain conditions for use. When utilizing an ITAR license exemption, be sure to read the entire section to confirm the proposed transaction meets all the eligibility requirements of the particular exemption. 
A license exemption under the ITAR, or a license exception under the Commerce Department regulations known as the Export Administration Regulations (EAR), only relieves the requirement for obtaining approval for a particular export, temporary import, or brokering activity from the agency with jurisdiction over the activity. Use of a license exemption or exception does not remove an item from government control for export, whether it is under the ITAR or the EAR. In fact, it is important to note that items and information exported under a license exemption or exception are nevertheless subject to the same restrictions on re-exports and re-transfers as those items shipped under a license. In other words, just because a license number is not associated with a transaction doesn’t mean it is no longer subject to U.S. export controls. This is an excellent example of how use of exemptions/exceptions can be more complex than obtaining an export license. Because there is no license number attached to a shipment, and no prior government review of the transaction, it is vital that U.S. exporters conduct adequate due diligence of their customers and proposed end-use, and make their customers aware of the limitations associated with the shipment.
Fundamental Rule
: All items in the United States are controlled for export in some manner. It is incumbent on the U.S. exporter to determine which rules apply. An exemption or exception simply alleviates the requirement from getting a license from the controlling U.S. government agency.
We suspect this misconception is due to confusion over the word “commercial” as it relates to export controls. Just because something is available in the civilian marketplace does not mean that it is exempt from U.S. export controls, specifically the ITAR. A prime example of this is firearms. As many of our readers know, firearms have both military and civilian end-uses. However, firearms are specifically enumerated in USML Category I and, as such, are ITAR-controlled regardless of their civilian or commercial uses. If an item is listed on the USML, then it is ITAR controlled, commercial or civilian availability notwithstanding.
Fundamental Rule
: As noted above, all items in the United States are controlled for export in some way. Just because an item is widely available for civilian use, it does not mean it is free from U.S. export controls.

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12Gary 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,
Items not specifically controlled for MT reasons can also be controlled under section 744.3 of the EAR (“catch-all”, or EPCI, controls). Items require a license if they will be used in the design, development, production, or use of:
  – Rocket systems (including ballistic missile systems, space launch vehicles, and sounding rockets) or unmanned aerial vehicles (including cruise missile systems, target drones, and reconnaissance drones) capable of a range of at least 300 km for use in or by a country listed in group D:4 (see Supp. No. 1 to EAR Part 738);
  – Any rocket system or unmanned aerial vehicles in a D:4 country where system characteristics or use are unknown;
  – Any rocket systems or unmanned aerial vehicles for the delivery of chemical, biological, or nuclear weapons to anywhere in the world, except by governmental programs for nuclear weapons delivery of NPT Nuclear Weapons States that are also members of NATO.

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MS_a213. 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 or amended 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

* Amazon; Seattle WA; NA Compliance Analyst; Requisition ID: 256357
# American Showa, Inc.; Columbus, OH (Rickenbacker); Import/Export Clerk; Please contact Mattie Robinson for details.

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

* Autodesk; San Rafael CA; 
Export Compliance Manager
; Requisition ID: 17WD24183

* Baylor University; Waco, TX;
Manager/Director of Export Compliance; Vacancy ID S030428

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

* Carpenter Technology Corporation; Reading, PA;
Senior Specialist, International Trade Compliance

# Columbia Helicopters; Aurora, Oregon;
Trade Compliance Specialist; 17-0080

* Elbit Systems of America; NH, TX, AL;
Licenses and Agreement Officer; 2017-5671

 Esterline Technologies Corporation;
Bellevue, WA;
Manager, Trade Compliance Investigations and Disclosures

* Expeditors; Sunnyvale CA;
Customs Compliance Specialist
* Export Solutions Inc.; Melbourne FL; Trade Compliance Specialist;
Wilsonville, OR; Billerica, MA
Director, Global Customs Compliance
Wilsonville, OR; Billerica, MA; Arlington, VA; 
Sr. Corporate Counsel, Global Trade Compliance
Wilsonville, OR/Billerica, MA; 
Senior Director, Dual-Use Licensing

* 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; Compliance Officer


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

Harris Corporation; Clifton, New Jersey;
Trade Compliance Analyst
; Requisition ID: ES20171608-20394 

Harsco; Columbia, SC; 
Import/Export Specialist

* Henderson Group Unlimited, Inc.; Alexandria, VA;
Defense Controls Analyst – Office of Defense Trade Controls Licensing

* Indiana Mills & Manufacturing, Inc.; Westfield, IN;
International Trade Compliance Manager 

Intel Corporation; Gdansk, Poland or Swindon/High Wycombe, England, UK;
EMEA Export Project Manager / Trade Specialist
; Job ID JR0033212; OR contact 
Joy Robins
* Jet Propulsion Laboratory; Pasadena, CA;
Export Compliance Advisor III

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

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

* Meggitt PLC; Simi Valley, CA;
Trade Compliance Officer
* Meggitt PLC; Akron, OH;
Import Specialist;

NetApp; Singapore; Trade Compliance Mananger – APAC; Requisition ID 43338BR

* Nissan/Kelly Services; Franklin, TN;
CONTRACT Position – Contract Customs Compliance Analyst;
frankie.bryson@nissan-usa.com; Requisition ID: 55224BR

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

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

* Northrop Grumman Sperry Marine; New Malden, UK;
Trade Compliance Coordinator
* Northrop Grumman; Herndon, VA;
International Trade Compliance 5; Requisition ID: 17018159
# Northrop Grumman; Herndon, VA;
Manager, International Trade Compliance 2; Requisition ID: 17017794
# Northrop Grumman; Herndon, VA;
Manager, International Trade Compliance 2; Requisition ID: 17014690
# Northrop Grumman; Rolling Meadows, IL;
International Trade Compliance Analyst 3; Requisition: 17015695
# Northrop Grumman; Huntsville, AL;
International Trade Compliance Analyst 3; Requisition ID: 17013824
OSI Optoelectronics; Hawthorne, CA; Manager, Global Trade Compliance; Requisition ID# 12235; or contact Kim Butcher, Senior Talent Acquisition Partner;

* Raytheon; Arlington, VA;
Export License and Compliance Manager; Requisition ID: 97599BR
# Raytheon; Tucson, AZ;
Export Compliance – Agreements Authorization Owner; Requisition ID: 99909BR
# Raytheon; McKinney, TX; Principal Global Trade Licensing; Requisition ID: 101234 BR

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

* The Safariland Group; Jacksonville, FL; 
Import/Export Director
; Requisition ID: 2017-1855

* 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 I
 ; Req ID: 
# Sierra Nevada Corporation; Arlington, VA; 
International Trade Compliance Manager I
; Req ID: 

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

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

# Ultra Electronics; Loudwater, United Kingdom;
International Trade Manager

* United Technologies Corporation, UTC Aerospace Systems; Chula Vista CA; 
ITC Operational Excellence Manager
; Requisition ID: 49904BR

* United Technologies Corporation, UTC Aerospace Systems; Troy OH;
Sr. Manager, Intl Trade Compliance
Requisition ID: 44065BR 

United Technologies Corporation, UTC Aerospace Systems; Chula Vista CA; 
ITC Specialist
; Requisition ID: 51240BR

United Technologies Corporation, UTC Aerospace Systems; Chula Vista CA;
ITC Specialist
; Requisition ID: 51710BR

* United Technologies Corporation, UTC Aerospace Systems; Chula Vista CA; 
Sr Eng, ITC
; Requisition ID: 48780BR

* United Technologies Corporation, UTC Aerospace Systems; Westford MA;

Sr Analyst, ITC
; Requisition ID: 51450BR

* 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

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

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* Georg Hegel (Georg Wilhelm Friedrich Hegel, 27 Aug 1770 – 14 Nov 1831; was a German philosopher and an important figure of German idealism. While primarily influential within the continental tradition of philosophy, Hegel’s writings have become increasingly influential in the analytic tradition as well. His canonical stature within Western philosophy is universally recognized.)
  – “Genuine tragedies in the world are not conflicts between right and wrong. They are conflicts between two rights.”
* Johann Wolfgang von Goethe (28 Aug 1749 – 22 Mar 1832; was a German writer and statesman. His works include epic and lyric poetry; prose and verse dramas; memoirs; an autobiography; literary and aesthetic criticism; treatises on botany, anatomy; and four novels.  His famous play, Faust, is considered by many to be Goethe’s magnum opus and the greatest work of German literature.)
  – “Knowing is not enough; we must apply. Willing is not enough; we must do.”
  – “He is happiest, be he king or peasant, who finds peace in his
Monday is Pun Day.
Q. What happens to you if you don’t pay the bill from your exorcist?
A. You get re-possessed!
  – G. G. Vadnais, Saint Paul, MN
Q. What did the buffalo say when his son left for college?
A. Bison!
  – Jane Taeger, LCB

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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 

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

– Last Amendment: 15 Aug 2017: 
82 FR 38764-38819: Wassenaar Arrangement 2016 Plenary Agreements Implementation

: 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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