17-0919 Tuesday “Daily Bugle”

17-0919 Tuesday “Daily Bugle”

Tuesday, 19 September 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. Justice/ATF Seeks Comments on Notification of Change of Mailing or Premise Address 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. Commerce/Census Posts Guidance to Export Goods for Humanitarian Relief to Hurricane Affected Areas
  4. DHS/CBP Updates ACE and PGA Documentation Available on CBP.gov
  5. State/DDTC: (No new postings.)
  6. Germany BAFA Posts September Issue of Export Control Newsletter
  1. Expeditors News: “Implementation of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA)”
  2. ST&R Trade Report: “Hong Kong Rules, Deemed Exports, Licensing Among Recommended Changes for BIS”
  1. M. Volkov: “Four Signs of a Poor Relationship Between a CCO and the Board”
  2. Foley & Lardner LLP: “Diwali: An Opportune Time for an Anti-Corruption Compliance Reminder”
  3. Gary Stanley’s ECR Tip of the Day
  1. ECTI Presents “Fundamental Research Exclusion: Your Guide to Properly Applying It” Webinar, 9 Nov 
  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 (30 Aug 2017) 
  3. Weekly Highlights of the Daily Bugle Top Stories 


. Justice/ATF Seeks Comments on Notification of Change of Mailing or Premise Address

82 FR 43791: Agency Information Collection Activities; Proposed eCollection eComments Requested; Notification of Change of Mailing or Premise Address
* AGENCY: Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
* ACTION: 30-Day notice. …
* DATES: Comments are encouraged and will be accepted for an additional 30 days until October 19, 2017.
* FOR FURTHER INFORMATION CONTACT: If you have additional comments, particularly with respect to the estimated public burden or associated response time, have suggestions, need a copy of the proposed information collection instrument with instructions, or desire any other additional information, please contact Shawn Stevens, ATF Industry Liaison, Federal Explosives Licensing Center, either by mail at Federal Explosives Licensing Center, 244 Needy Road, Martinsburg, WV 25405 or by email at Shawn.Stevens@atf.gov. Written comments and/or suggestions can also be directed to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention Department of Justice Desk Officer, Washington, DC 20503 or sent to OIRA_submissions@omb.eop.gov.
  – The Title of the Form/Collection: Notification of Change of
Mailing or Premise Address. …
  – Component: Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Justice. …
  – Abstract: Per 27 CFR 555.54, licensees and permittees whose mailing address will change, must notify the Chief, Federal Explosives Licensing Center, at least 10 days before the change. This information collection will be used by the ATF to identify the correct location of both explosives licensees/permittees, and the address where their explosive materials are being stored, for purposes of inspection. This information will also be used to notify permittee/licensees about any changes in regulation or law that may affect their business activities. …
   If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., 3E.405A, Washington, DC 20530.
   Dated: September 14, 2017.
Melody Braswell, Department Clearance Officer for PRA, U.S. Department of Justice. 

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

* Commerce; Census Bureau; RULES; Foreign Trade Regulations; Associate Director for Economic Programs [Publication Date: 20 September 2017.]

* State; NOTICES; 
Designations as Global Terrorists [Publication Date: 20 September 2017.]:
  – Brandon-Lee Thulsie, aka Sallahuddin Thulsie, aka Salahuddin ibn Hernani
  – Tony-Lee Thulsie, aka Yakeen Thulsie, aka Yaqeen ibn Hernani, aka Yakeen, aka Simba
* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 20 September 2017.]
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. Commerce/Census Posts Guidance to Export Goods for Humanitarian Relief to Hurricane Affected Areas

The following guidelines apply per Title 15, Part 30, Foreign Trade Regulations (FTR) when exporting goods for humanitarian relief to hurricane affected areas.
Questions regarding filing requirements for shipments to hurricane affected areas can be addressed by the U.S. Census Bureau’s International Trade Management Division Call Center at (800) 549-0595; select option 1 for Automated Export System inquiries, option 2 for commodity classification inquiries, or option 3 for trade regulation questions.  For further guidance please view the Census Bureau’s Export Training Videos.
Shipments donated for relief or charity that are valued over $2,500 per the designated Schedule B numbers listed below or shipments requiring a license must be filed in the Automated Export System (AES).  Shipments of donated food, medicine, and clothing do not require a license.  Shipments less than $2,500 are exempt from filing and the low value exemption, NOEEI 30.37(a), will be used.  The four Schedule B numbers filers use for these shipments are found in Chapter 98 of the Schedule B: Statistical Classification of Domestic and Foreign Commodities Exported from the United States are as follows:
Schedule B Numbers
  – 9802.10.0000: Commingled food products, donated for relief or charity by individuals or private agencies
  – 9802.20.0000: Medicinal and pharmaceutical products donated for relief or charity by individuals or private agencies
  – 9802.30.0000: All wearing apparel (including footwear and headwear) donated for relief or charity by individuals or private agencies, and used wearing apparel donated for relief or charity by government agencies
  – 9802.40.0000: Articles donated for relief or charity by individuals or private agencies, not elsewhere specified or included
Export Information Code (EIC)
The code to identify the type of export shipment or condition of the donated goods is CH- Shipments of goods donated for charity.
Determining the Value
Since the goods are not being sold, the value to be reported in the AES is the market value for the goods.  If the customer is unsure of the value, considerations should be given to cost if sold.  This can be an estimated value.  The value should closely align with what is being exported to avoid delays in shipping.  Please see section 30.6(a)(17) of the FTR regarding regulatory requirements for determining value.
Determining the U.S. Principal Party in Interest (USPPI)
The USPPI is the person or legal entity in the United States that receives the primary benefit, monetary or otherwise, from the export transaction.  The USPPI is responsible for filing or authorizing an agent to file the shipment information in the AES.  Organizations such as Red Cross, churches, etc. requesting donation of goods for export to hurricane affected areas are considered the USPPI for AES filing purposes.  Individuals directly exporting goods for humanitarian relief can also be the USPPI and are responsible for the AES filing.
Obtaining an EIN to register and file in AES
In order to file or authorize the filing of an AES record an Employer Identification Number (EIN) must be obtained from the Internal Revenue Service (IRS) for identification purposes. (See Federal Register Notice, Volume 74, Number 149, published Wednesday, August 5, 2009, pp. 38914.)   A Social Security Number (SSN) cannot be used in the AES as an identification number.  Therefore, if the exporter has an SSN he/she must obtain an EIN prior to registering and/or filing to the AES.  However, if a foreign entity is in the United States when the items are purchased or obtained for export, and does not have an EIN, it shall report a Dun & Bradstreet number, border crossing number, passport number or any other number assigned by the U.S. Customs and Border Protection.  For instructions on how to obtain an EIN go here. The approximate timeframes for receiving an EIN are as follows:
 Process Time frame
http://www.irs.gov, under ‘Online Services’, click on ‘Apply for an Employer Identification Number (EIN) Online
Approximately 15 minutes
Toll-Free Call 
(800) 829-4933
Approximately 15 minutes
Apply By FAX
(859) 669-5760 
4 business days
Apply By Mail
Internal Revenue Service Attn: EIN Operation Cincinnati, OH 45999 (Need Form SS-4)
4 weeks
How to access ACE AESDirect and submit the Electronic Export Information
  (1) Register for an Automated Commercial Environment (ACE) account
Register for an ACE account with your EIN here.
For additional guidance, please review How to Apply for An ACE Exporter Account.
  (2) Obtain username and password
You will receive an email to obtain your account’s username and password. Please note that the Shared Secret Value is the Account ID.
  (3) Disable your pop-up blocker before accessing ACE AESDirect
For additional guidance on how to disable your pop-up blocker, please verify your web browser’s Help section.
  (4) Access the ACE AESDirect portal
After obtaining your username and password, please log in to ACE here. Click on the Accounts tab. Change the View to Exporter and click GO. Under Select Task, click on “Submit AESDirect Filings”. Read through and agree to the Certification Statements to access ACE AESDirect.
  (5) Download the ACE AESDirect User Guide and Sample Shipment
The ACE AESDirect User Guide provides all the information necessary to get acquainted with the system. Also available is the Sample Shipment document, a screen-by-screen depiction of a mock shipment reported through the ACE AESDirect system. You can obtain additional reference resources, including walkthrough videos here.

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CSMS #17-000593, 19 Sep 2017.)
U.S. Customs and Border Protection (CBP) has posted updated Automated Commercial Environment (ACE) Automated Broker Interface (ABI) CBP and Trade Automated Interface Requirements (CATAIR) chapters and Partner Government Agency (PGA) documentation to CBP.gov. The updated documents include:

  – ACE Appendix B

In the Units of Measure section, added IN=Inch. In addition, added the following new sections/lists: Entry Types, Modes of Transportation codes and Equipment Description codes.

  – The ACE Agency Tariff Code to Agency Program Cross Reference document

The following code was added:

NM8 (SIM Seafood Import Monitoring Program specific data is required.)

  – New Cargo Release SO Status Notification Code 63 Inbond Deleted After Arrival and Release

On September 18, 2017, CBP will deploy Disposition Code 63 stating; “Inbond Deleted After Arrival and Release” in CERT environment. On October 17, 2017, disposition code 63 will be deployed to Production. Disposition code 63 will be sent to the trade as a warning. An update to the ACE Cargo Release SO Status Notification guide is forthcoming.

  – Appendix PGA

For the PG32 record, added code 11, place of Discharge. 

For US Fish and Wildlife Service (FWS), for the PG04 Unit of Measure, removed FWS-specific table since FWS does not use the PG04 record. 

For the Food and Drug Administration (FDA), for the PG26, FDA Units of Measure (Packaging Containers), changed Unit of Measure code, from IN=INGOT to ING=INGOT. This change for FDA will be implemented on October 26, 2017. Beginning October 26, 2017, FDA will no longer accept IN, and CBP will reject an entry if IN is transmitted in an FDA data set.

To download a copy of the updated ACE CATAIR and PGA documentation, please visit the “ACE Automated Broker Interface (ABI) CATAIR” and “ACE Features” pages of CBP.gov/ACE. You may also copy and paste the URLs above to your internet browser.

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. Germany BAFA Posts September Issue of Export Control Newsletter

(Source: German BAFA)
Key sections are included below. To read the entire newsletter, including the sections on the EU’s restrictive measures, click here.
National Law
9th Amendment of the Foreign Trade and Payments Ordinance
The ninth ordinance amending the Foreign Trade and Payments Ordinance (AWV) of 14 July 2017 adapted the procedure of foreign trade audits of company acquisitions to the increased challenges. In fact, the development of direct foreign investments in German companies, the growing importance of supply-relevant key infrastructures and the development of defence technology over the past years was taken into account; the national investment review law was substantiated against this background. This required an amendment of sections 55, 57, and 59 to 62 AWV.
Inside BAFA
Announcement of 9th Information Day on Export Control
This year the Information Day on Export Control will be held on Thursday, 7 December 2017, in the Marriott Hotel, Hamburger Allee 2, 60486 Frankfurt/Main. BAFA continues its successful series of events with this 9th information day.
Further details on the programme will follow soon. Registration is possible from 27 September 2017 at our Website.
Advance information on the revised announcement referring to End-Use Certificates and model forms
the following documents are published:
  – Revised announcement on End-Use Certificates, 
  – Editable model forms for End-Use Certificates (.odt format) and
  – Guidance on how to complete the model forms in English
You may find this under Endverbleibsdokumente (end-use documents).
The published model end-use certificates may be used immediately. If you have already requested your customers to submit the former end-use certificates they can still be used. For a period until 31 March 2018 end-use certificates of the previous standard are accepted. End-use certificates already submitted in due form are accepted. You need not request and present new end-use certificates.
As compared to the previous announcement of 12 February 2002, the area of military equipment and items under the firearms ordinance, on the one hand, and the area of all other exports and transfers subject to licensing, on the other, are now regulated in two separate announcements for reasons of clarity. The well-known principles governing the submission of End-Use Certificates continue to apply. This is also the case for exemptions from the required presentation of end-use certificates, e.g. in case of temporary exports.
To support you and your customers in completing the end-use documents, BAFA also published an English guide under “
” (forms). They distinguish – like the announcements – between the area of military equipment and the other goods. You can provide this guide to your customers and, in this way, support them in filling their end-use documents.
In addition, the model forms were published in Open-Document-Text format for download with the possibility of an IT-based completion. This new completion method is a real relief for you because the model form may be downloaded on your PC and be completed right away. BAFA has opted for a modular structure. It means that a few end-use documents can reflect a high number of different cases in a flexible manner. The model form consists of individual sections. The basic rule of a modular structure is: Complete the applicable sections only. It means that the end user can cross out a section or fill in “not applicable” if the respective case does not apply. It is not permitted to purge the section.

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. Expeditors News: “Implementation of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA)”

(Source: Expeditors News, 18 Sep 2017.)
On September 14, 2017, Canada Border Services Agency (CBSA) issued Customs Notice 17-30 regarding the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) that will go into effect on September 21, 2017.
The CBSA notice covers the implementation, tariff provisions, proof of origin, shipping requirements, refunds, updates, and additional information and provides several links for more in-depth information on the agreement. CETA will essentially eliminate the customs duties on all imports from a European Union (EU) country or other CETA beneficiary, either immediately upon implementation of the agreement, or through a tariff phase-out

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9. ST&R Trade Report: “Hong Kong Rules, Deemed Exports, Licensing Among Recommended Changes for BIS”

The Bureau of Industry and Security’s Regulations and Procedures Technical Advisory Committee recently submitted to new BIS officials Mira Ricardel, under secretary of commerce for industry and security, and Richard Ashooh, assistant secretary for export administration, a number of recommendations for updating regulations and improving efficiency and processes.

These recommendations include the following.
Practices and Procedures
  – Remove the new
support documentation requirements
for exports of specific controlled items to or through Hong Kong, which BIS felt was needed to minimize or eliminate the numerous illegal export diversions occurring from Hong Kong but in reality requires companies to “fix a problem that is owned by the Hong Kong government” and “has no added benefit to U.S. exporters”
  – Create and implement license exception ICT (intra-company transfer) or another type of authorization (e.g., trusted exporter program) that would provide a licensing alternative for deemed exports for companies that have robust export internal control programs
  – Initiate a dialogue among BIS, the Directorate of Defense Trade Controls, and the Defense Technology Security Administration in an effort to improve the efficiency of the dual-use export license review and approval process and accelerate export licensing cycle times
  – Provide that if BIS or another agency feels a letter of assurance is needed to support an approved export license, the need to obtain an LOA should be included in a license condition as opposed to asking applicants to delay the license application process while they wait for a consignee to provide a signed LOA
  – Move Vietnam from country group D:1 to country group B in the Export Administration Regulations
  – Transfer the management and enforcement of the anti-boycott laws, which are only tangentially related to exports, from the Commerce Department to the Treasury Department, which would require an act of Congress
  – Simplify license exception AVS to clearly allow U.S. aircraft overflight and temporary landing as long as there is no change of ownership
  – Allow exporters to meet with the BIS Office of Export Enforcement in settlement discussions rather than just communicating through counsel, which “violates due process and fundamental fairness” and prevents those with the most knowledge about the case from getting together
  – Eliminate or significantly streamline pre-shipment inspection, as it is “a major problem for those manufacturing overseas to bring new products to the U.S. for inspections that do not seem very meaningful”
  – Eliminate reporting except for encryption licensing arrangements
  – Increase control levels, which are not keeping up with changes in individual usage or markets
  – Remove outdated controls at regular intervals given that technological change continues to eclipse regulatory schemes
  – Clarify the application of BIS definitions for technology transfers, as it is “very difficult in practice for developers jointly working on a product to determine where a line is crossed to require a license”
  – Allow self-classification of chips, chipsets, etc. similar to software products, as these are typically for mass market items in widespread use and formal classification may slow product adoption
  – Revise the treatment of open source and open object items to EAR99 rather than control them under export control classification number 5D002
  – Move the classification of mass market and EAR 740.17(b) ENC unrestricted items to EAR99, as the classification of mainstream software products is no longer warranted
  – Eliminate the open cryptographic interface restriction, which “unfairly discriminates against proprietary software and gives a competitive advantage to open source products”
High-Performance Computers
  – Raise the control threshold, which has remained static for more than 20 years and threatens sales of U.S. computers, and index it to future increases in the Wassenaar Arrangement control threshold
  – Clarify that export licenses are not required if a product is being used for administrative uses unrelated to sanctioned activity
Other Controls
  – Modify the EAR and the International Traffic in Arms Regulations to enable BIS licensing of EAR-jurisdiction items that are part of foreign military sales cases
  – Create a harmonized definition of technology or technical data to relieve companies working with EAR, ECCN 600 series, and ITAR items from having to unnecessarily control and license large parts of their technology

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10. M. Volkov: “Four Signs of a Poor Relationship Between a CCO and the Board”

(Source: Volkov Law Group Blog. Reprinted by permission.)
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
Chief Compliance Officers (CCOs) have to devote more time to establish and maintain a positive relationship with the corporate board or audit/compliance committee. CCOs have a lot of responsibilities and feel a lot of pressure to address internal operational issues. It is easy to “ignore” the importance of a positive relationship with the corporate board.
A CCO who has a strong relationship with the company’s board has an important trump card than can be played on important issues – resources, senior management cooperation, or other significant issues. In the absence of such a relationship, CCOs can end up toiling too much time and attention to issues “beneath” them and get lost in details.
There are four important indicators of a weak CCO-board relationship:
  (1) No CCO Training of Board: A CCO has to conduct at least annual training of the board on ethics and compliance issues. Such training should not be the same content as provided to employees but should be tailored to the audience. One hour at a minimum should be set aside for the training program.
If the board rejects such training or the CCO fails to request a training session, the CCO’s relationship with the board is troubled. A CCO has to ensure access to the board for this training session as a critical opportunity to promote the importance of compliance and educate the board on its oversight responsibilities.
  (2) Inadequate Opportunities and Time Before the Board: A CCO has to personally report to the board or audit/compliance committee at least quarterly on significant ethics and compliance issues.  Such reporting should last a minimum of 30 minutes and preferably between 45 and 60 minutes.
A CCO who submits written reports to the board and does not personally appear before the board cannot perform adequate reporting obligations. A written report will not suffice.
A personal appearance for less than 30 minutes does not provide adequate time for a presentation and meaningful discussion of issues. If a CCO’s report does not include a comprehensive review of issues, ongoing projects, and detailed reports on important issues, a board cannot exercise appropriate oversight responsibilities.
  (3) No Executive Session: Equally important is the opportunity to conduct an executive session with the board. During an executive session, the board chair usually asks the CCO if there are any issues to be discussed. The CCO should not be reluctant to raise even if there is some question about the importance of the issue. It is better to raise the issue rather than keep silent unless there are potential political repercussions within the company.
  (4) No Informal Communications with Board or Audit/Compliance Committee Chair: A CCO has to spend time, outside of the formal board or audit/compliance committee meeting, to informal discussions with the board or committee chair. In fact, many CCOs will meet informally once a month with the board or committee chair for coffee or a meal to discuss issues. Some CCOs have the ability to pick up the phone and schedule a call with the board or committee chair. A CCO has to devote time to cultivating such a relationship so that the CCO can informally raise issues of concern without brining the specific issue to the formal board or committee meeting.
These four issues are critical indicators. Of course, there are other factors to be considered. For example, a board or committee member who has prior compliance experience is a natural board or committee member to cultivate.
CCOs who operate with some of the weaknesses outlined above need to address the issue. Some of the weaknesses outlined above should be addressed personally with the board or committee chair.   A CCO cannot ignore these issues and must take action.

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11. Foley & Lardner LLP: “Diwali: An Opportune Time for an Anti-Corruption Compliance Reminder”

(Source: JD Supra, LLC)
This year, India celebrates Diwali on October 19, 2017. “The Festival of Lights,” as Diwali (or Deepavli) is commonly called, is celebrated across India with great aplomb, joy and, of course, delicious sweets. Diwali signifies the victory of light over darkness and, traditionally, family, friends and business acquaintances will often exchange gifts as part of the festivities. Apart from the Diwali cheer, however, the provision of gifts to Indian public servants can also present risk under the U.S. Foreign Corrupt Practices Act (FCPA) of 1977 and Indian law.
Diwali conveniently provides a fitting opportunity to review the legal framework and best practices surrounding the provision of gifts under U.S. and Indian law. The hope is that, with this guidance, your company can focus more on celebrating Diwali than worrying about compliance risks.
What’s the Risk?
The exchange of business courtesies, such as providing gifts, meals, entertainment and travel, can help strengthen existing relationships, foster new opportunities and express respect and appreciation for business partners. However, companies run the risk of triggering the FCPA and Indian anti-corruption laws if their provision of business courtesies to Indian public servants crosses a line into conduct that could be characterized as bribery, or if it lends to the appearance of attempting to induce a breach of trust or impartiality on the part of the public servant.
While the U.S. Department of Justice (DOJ) and Securities Exchange Commission (SEC) have recognized that a “small gift or token of esteem is often an appropriate way for business people to display respect for each other” and “[i]tems of nominal value … are unlikely to improperly influence an official, and, as a result, are not, without more, items that have resulted in enforcement action by DOJ or SEC,” companies continue to find themselves in the FCPA-enforcement crosshairs for inappropriate or excessive gift-giving. [FN/1] Indeed, many recent FCPA enforcement actions have involved excessive gift-giving, travel accommodations and entertainment to foreign officials. [FN/2]
Likewise, India’s Prevention of Corruption Act (PCA) of 1988 regulates the provision of gifts or other things of value to Indian public servants. As detailed below, public servants in India are further subject to Conduct Rules established by their respective services or organizations, which set specific threshold limits as the value of business courtesies that they may accept.
Who Qualifies as a Public Servant under Indian Law?
Section 2(c) of the PCA has a fairly exhaustive definition of a public servant. A public servant includes all government officials, local authorities, judicial officers, any holder of office to perform a public duty and – worth highlighting – all employees of government-owned or government-controlled entities.
The PCA’s definition of “public servant” overlaps with the FCPA’s definition of a “foreign official.” Thus, for compliance purposes, companies should assume public servants under Indian law would be deemed foreign officials under the FCPA.
What Regulations Govern Gift-Gifting to Indian Public Servants?
The FCPA does not set any fixed values or limits on permissible gift giving to foreign officials. Rather, in the FCPA Guide, the DOJ and SEC identify some hallmarks of appropriate gift-giving. Specifically, gifts must be of “modest value” and may be provided “when the gift is given openly and transparently, properly recorded in the giver’s books and records, provided only to reflect esteem or gratitude, and permitted under local law.” [FN/3]
Under Indian law, the PCA prohibits “any gratification whatsoever, other than legal remuneration” when such gratification is given with the intention to (i) motivate, influence or reward a public servant to perform or forbear performance of an official act; (ii) show favor or disfavor to any persons; or (iii) render, or attempt to render, any service or disservice to a public servant. The provision of gifts or hospitality to public servants, in any amount, may thus qualify as a bribe under Indian law if provided with the intent to influence a public servant into performing (or not performing) his or her public duties. To this extent, the PCA’s prohibition against giving gifts for improper purposes aligns with the FCPA’s restrictions on gift-giving.
In India, every public servant is also governed by the Conduct Rules of his or her service or organization. And, in contrast to the FCPA, the Conduct Rules do establish specific threshold limits on the value of business courtesies that can be accepted by the public servant and the circumstances under which he or she can accept them. For example, the All India Services (Conduct) Rules, 1968, cover public servants in the Indian Administrative Services and the Indian Police Service; employees of the state-owned Oil and Natural Gas Corporation (ONGC) are governed by the ONGC Conduct, Discipline, and Appeal Rules, 1994 (Amended 2011); and government ministers of both the Union and the States are governed by the Code of Conduct for Ministers. These threshold values vary among the different services and organizations, based on the class and seniority of the recipient public servants, and can range broadly between 500 – 25,000 Rupees (approximately $8 – $375 U.S. dollars).
Gift-Giving Best Practices for India
When providing Diwali gifts or other business courtesies to public servants in India, companies should read the Conduct Rules alongside the applicable provisions and objectives of the PCA and the FCPA. The following bullet points offer some best practices to consider when developing gift-giving policies and procedures for companies (or subsidiaries) operating in India:
  – Companies should review the Conduct Rules applicable to the public servants who may receive gifts or other business courtesies from the company and maintain a system of tracking and communicating to employees the specific threshold limits of allowable gift-giving to these public servants.
  – Company executives and employees should receive periodic training on business courtesies/gifts and entertainment policies, and should be instructed to confirm the threshold values for each class of public servant before giving a gift or extending hospitality to him or her.
  – Threshold values of allowable gift-giving should be communicated in Indian Rupees, to ensure clarity and to avoid potential misunderstandings due to fluctuating foreign exchange rates.
  – Gifts should never be given with the expectation of, or as a reward for, the public servant taking a favorable official action that benefits the company.
  – Gifts should be of modest value (subject to the threshold limits noted above). Gifts of cash or cash equivalents (e.g., gift cards, shopping cards) should not be provided.
  – Gifts should not be provided by non-Indian companies, contracting with the Indian government, to public servants who are involved with official dealings relating to those contracts.
  – Employees should consult with legal counsel before providing gifts to public servants with whom the company has official dealings or to public servants with regulatory oversight of the company.
  – Employees should not provide gifts that have been specifically requested by public servants and should notify their supervisors of any such requests.
  – Gifts should be accurately documented and reported in the company’s books and records, including identifying recipients who qualify as public servants (and, accordingly, foreign officials under the FCPA) in order to satisfy the FCPA’s books and records and internal controls provisions.
  – U.S.-based compliance officers with responsibility for India should mark their calendars and follow up with their Indian counterparts on compliance procedures and process at least four-to-six weeks in advance of Diwali.

  [FN/1] A Resource Guide to the U.S. Foreign Corrupt Practices Act, (the “FCPA Guide”), U.S. Department of Justice and Securities & Exchange Commission, November 14, 2012, available

  [FN/2] See, e.g., Avon Products, Inc., ($8 million in gifts, cash, travel, meals and entertainment to Chinese government officials); FLIR Systems, Inc. ($40,000 in gifts and travel to Saudi Arabian officials); and NCH Corporation ($44,545 in cash, gifts, meals and entertainment to employees of China state-owned companies).
  [FN/3] Id., p. 15.

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12. Gary Stanley’s ECR Tip of the Day

(Source: Defense and Export-Import Update; available by subscription from
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059,
For export control purposes under the U.S. Department of Commerce’s Export Administration Regulations (“EAR”), foreign countries are separated into five country groups designated by the symbols A, B, C, D, and E. (see Supplement No. 1 to part 740 of the EAR for a list of countries in each Country Group.)

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* What: Fundamental Research Exclusion: Your Guide to Properly Applying It
* When: Nov. 9, 2017; 1:00 p.m. (EST)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Jennifer Saak
* Register: Here or Danielle McClellan, 540-433-3977, danielle@learnexportcompliance.com.

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* William Golding (Sir William Gerald Golding CBE; 19 Sep 1911 – 19 Jun 1993; was a British novelist, playwright, and poet. Best known for his novel Lord of the Flies, he won a Nobel Prize in Literature. The Times ranked Golding third on their list of “The 50 greatest British writers since 1945”.)
  – “The journey of life is like a man riding a bicycle. We know he got on the bicycle and started to move. We know that at some point he will stop and get off. We know that if he stops moving and does not get off he will fall off.”

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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: 30 Aug 2017: 82 FR 41172-41173: Temporary Modification of Category XI of the United States Munitions List
  – The only available fully updated copy (latest edition: 12 Sep 2017) of the ITAR with all amendments is contained in Bartlett’s Annotated 

, 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
. 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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