20-0408 Wednesday “Daily Bugle”

20-0408 Wednesday “Daily Bugle”

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Wednesday, 8 April 2020

[No items of interest today.] 

  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP: “Food and Drug Administration (FDA) FEI and D and B Portals – Available for Use!”
  4. State/DDTC Announces Outage Notice
  5. EU Council Implements Regulation (EU) No 359/2011 in View of the Situation in Iran
  6. EU Council Decision (CFSP) 2020/512 Implements Restrictive Measures in Iran
  1. Export Compliance Daily: “Tech Industry Pushing Back on Potential Expanded Export Restrictions”
  2. Reuters: “Exclusive: U.S. Grants GE License to Sell Engines for China’s New Airplane”
  1. TLR: “Global Container Movement – Variables and Projections”
  2. Husch Blackwell: “OFAC Extends General License for Companies Doing Business with PDVSA Affiliate Nynas AB”
  3. Kirkland: “Six Things for Dealmakers to Know About How COVID-19 Could Affect CFIUS”
  4. Steptoe: “US and EU Sanctions Policies on Humanitarian Exports and COVID-19 Relief”
  5. Tuttle Law: “FDA Provides Updates to the Instructions for Filing Personal Protective Equipment and Medical Devices During COVID-19”
  1. ECTI Presents: Classifying Aircraft Part Technology Webinar: April 22
  1. Bartlett’s Unfamiliar Quotations
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[No items of interest today.] 

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Items Scheduled for Future Federal Register Editions  
(Source: Federal Register)

Treasury/OFAC; RULES; Inflation Adjustment of Civil Monetary Penalties; [Pub. Date: 9 Apr 2020]

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Commerce/BIS: (No new postings.)

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DHS/CBP: “Food and Drug Administration (FDA) FEI and D&B Portals – Available for Use”

(Source: DHS/CBP, 7 Apr 2020)
The Food and Drug Administration (FDA) would like to remind the import community to utilize two helpful tools, available at no cost to users, so complete and accurate information can be submitted to FDA in order to facilitate efficient processing of import entries.
An FDA Establishment Identifier or Firm Establishment Identifier (FEI) is an FDA system generated number used to identify a firm. At no cost to trade, the FDA FEI Portal allows the import community look-up and verify an entity’s FEI. Specifically, the FEI Portal assists users to identify:
FEI numbers associated with a specific address or
Address associated with a FEI number for a firm already in FDA’s firm inventory.
Users can sign up for an account, access the FEI Portal FAQ page (including how to use the portal) and log in to the portal by visiting: https://www.accessdata.fda.gov/scripts/feiportal/
The FDA DUNS Portal provides the import community, at no cost, the ability to look-up and/or validate DUNS number data needed for submission of import entries. Specifically, the portal allows:
Facility lookup: provides the ability to look-up a facility in the DUN & Bradstreet (D&B) database and obtain the associated DUNS number
Facility validation: provides the ability to validate a DUNS number and the associated business name and address in the D&B database.
Users can register for an account, access the User Guides and log in to the portal by visiting: https://fdadunslookup.com/
Transmitting complete and accurate information, including the FEI and DUNS number, ensures FDA database look-ups or inquiries can be conducted as quickly as possible, allowing for efficient processing of import entries. We encourage all users to take advantage of the portals.

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State/DDTC Announces Outage Notice 

State/DDTC, 7 Apr 2020)
The Defense Export Control and Compliance (DECCS) Registration and Licensing applications will be unavailable to industry from 6:00 AM (EST) through 8:00 AM (EST) Thursday, April 9 for scheduled system maintenance. Please ensure work in progress is saved prior to the scheduled downtime.

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EU Council Implements Regulation (EU) No 359/2011 in View of the Situation in Iran  

(Source: Official Journal of the European Union, 7 Apr 2020) [Excerpts]



The Council Of The European Union, Having regard to the Treaty on the Functioning of the European Union, 

Having regard to Council Regulation (EU) No 359/2011 of 12 April 2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Iran (1), and in particular Article 12(1) thereof,
Having regard to the proposal of the High Representative of the Union for Foreign Affairs and Security Policy,
(1) On 12 April 2011, the Council adopted Regulation (EU) No 359/2011.
(2) On the basis of a review of Council Decision 2011/235/CFSP, the Council has decided that the restrictive measures set out therein are to be renewed until 13 April 2021.
(3) The Council has also concluded that the entries concerning 82 persons included in Annex I to Regulation (EU) No 359/2011 should be updated.
(4) Annex I to Regulation (EU) No 359/2011 should therefore be amended accordingly,
Has Adopted This Regulation:
Article 1
Annex I to Regulation (EU) No 359/2011 is amended as set out in the Annex to this Regulation.
Article 2
This Regulation shall enter into force on the date of its publication in the Official Journal of the European Union.

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(Source: Official Journal of the European Union, 7 Apr 2020) [Excerpts] 
The Council Of The European Union, having regard to the Treaty on European Union, and in particular Article 29 thereof,
having regard to the proposal of the High Representative of the Union for Foreign Affairs and Security Policy, whereas:
(1) On 12 April 2011, the Council adopted Decision 2011/235/CFSP
(2) On the basis of a review of Decision 2011/235/CFSP, the Council considers that the restrictive measures set out therein should be renewed until 13 April 2021.
(3) The Council has also concluded that the entries concerning 82 persons included in the Annex to Decision 2011/235/CFSP should be updated.
(4) Decision 2011/235/CFSP should therefore be amended accordingly,
Article 1
Decision 2011/235/CFSP is amended as follows:
(1) in Article 6, paragraph 2 is replaced by the following:
This Decision shall apply until 13 April 2021. It shall be kept under constant review. It shall be renewed, or amended as appropriate, if the Council deems that its objectives have not been met.’;
(2) the Annex is amended as set out in the Annex to this Decision.
Article 2

This Decision shall enter into force on the date of its publication in the Official Journal of the European Union.

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(Source: Export Compliance Daily, 8 Apr 2020) [Excerpts]
Technology and semiconductor trade groups are objecting to increased export restrictions under consideration by the Trump administration, saying the controls could lead to industry uncertainty with significant impacts on semiconductor companies.
In an April 6 letter to Commerce Secretary Wilbur Ross, the groups urged the administration to request industry input before finalizing the rule, which reportedly includes three measures to tighten restrictions on China’s ability to obtain advanced U.S. technology. …
The administration has discussed the changes for months, which has included broader discussions on expanding Commerce’s export control jurisdiction to a broader array of foreign sales containing U.S. goods that go beyond exports to just Huawei. …
In the letter, the groups said a public comment period is “critical” to ensure the rule is designed to protect U.S. national security while also avoiding “unintended adverse consequences” on U.S. industry. …

NWS_a28. Reuters: “Exclusive: U.S. Grants GE License to Sell Engines for China’s New Airplane”

(Source: Reuters, 7 Apr 2020) [Excerpts]

The Trump administration on Tuesday granted a license to General Electric Coompany to supply engines for China’s new COMAC C919 passenger jet, a spokeswoman for the company said. …
Early this year, the United States was weighing whether to deny GE’s latest license request to provide the CFM LEAP-1C engine for the narrow-body COMAC jet, which is expected to go into service next year.
The U.S. Department of Commerce, which issues such licenses, declined to comment, saying it cannot discuss individual license applications. The White House also declined to comment. …

The license approval comes as U.S. officials have agreed to press forward with new measures to control high-tech exports to China, and to require foreign companies that use U.S. chipmaking equipment to obtain a license before supplying certain chips to China’s Huawei Technologies. …


COM_a19. TLR: “Global Container Movement – Variables and Projections”

* Author:
Judy Haggin, Vice President of Compliance, Total Logistics Resource – 971-634-1477
The global shipping community is in the midst of an unprecedented state of flux.  While new information on the Covid-19 pandemic emerges daily, the supply chain continues to experience uncertainty as it struggles to keep up with industry changes. Vessel and air cargo capacity continue to decrease at an alarming rate.  All over the world, storage at terminals and warehouses are filling to capacity while cargo waits to be moved.
Experts are contemplating how the supply chain reached this point so quickly, and most importantly, how the current situation will be rectified. While the pandemic must be contained before accurate projections can be made, we can look at historical data and mitigating factors to provide a glimpse into what the future holds for the industry.  
Here are some of the factors that you should take into consideration when assessing how the current situation will play out:
COVID-19 Containment. This is the most obvious and important factor to consider. The sooner the virus is curbed, the sooner people can get back to work. The bottom line is COVID-19 has to be contained on a global scale before projections about economic recovery can be made with any kind of certainty.
Consumer Spending. Over 6.6 million Americans applied for unemployment benefits last week. When people are uncertain about their jobs and financial well-being, they tend to spend less money on products. This slowdown in the economy leads to product instability as purchases are delayed, reduced or cancelled. In turn, factory workforces are reduced. 
Blank Sailings. In the month of March, there were around 100 blank sailings.  Experts are predicting this number will more than double in April.  In the past, steamship lines have announced blank sailings 3-4 weeks in advance. In the current global shipping culture, the notice of lead time is shrinking to as little as 2-3 days. This puts enormous strain on worldwide cargo movement. When product and equipment movement is delayed, it adds to the already growing backlog at the ports and terminals.
Quarantines. There is a growing trend where vessels are quarantined at ports of call for up to two weeks if they come from an area heavily affected by  COVID-19. Countries are enacting different types of national legislation regarding the criteria for quarantined vessels and cargo. Additionally, if personnel at a terminal contracts the virus, individual quarantines are issued. Terminals may shut down for a number of days for cleaning and disinfecting. If this were to happen to a crew member on a vessel, it would essentially stop the movement of that particular ship until the entire crew team is cleared by the proper authorities.
Force Majeure. Steamship lines, freight forwarders, and terminals are now declaring force majeure. Since there is not an accepted definition of force majeure under common law, its application varies on a case by case basis. Declarations of force majeure will become increasingly more common as the global supply chain slows down due to lack of space, equipment, and product availability.
Routing Changes. Now more than ever, steamship lines are contemplating creative ways to move cargo. Some lanes are being eliminated, while others are being shortened by deleting or altering ports of call.  There are even routes being extended in duration in order to keep cargo moving.  Will these changes be permanent or are they temporary? In due time, each steamship line will decide what the best course of action is for their respective company.
With all this uncertainty, there are some known factors that will no doubt shape what the post-Covid-19 shipping industry will look like. To begin with, the massive amounts of inventory sitting at terminals will cause a temporary rush of cargo movement and delivery. Many experts say this surge will last around a month. Manufacturers, factories, and industries as a whole will begin to return to work. However, it will take 2-3 months before companies will be able to produce their goods at their normal, pre-pandemic pace. Companies will have to wait on materials, product orders, and fix personnel issues (i.e. re-hiring, navigating “stay at home” restrictions) before becoming fully functional again.
The projected slowing will most likely put strain on the annual “back-to-school” season as retailers rush to backfill their inventory. Even with this mini-boost to the economy, it is very likely that the global supply chain will still have lingering effects from the lack of equipment and vessel space. In addition, not every country will recover at the same rate. Countries will experience different economic factors as they loosen Covid-19 restrictions at varying times. This type of procrastination could cause the Thanksgiving and Christmas retail seasons to experience capacity issues as well. 
Each facet of the economy, from governments to individual companies, can have an effect on cargo movement. Experts currently project it could be from Q4 of 2020 up to Q2 of 2021 before the global supply chain returns to somewhat normal operations. It is prudent to plan at least 2-3 years into the future, while also taking into consideration the current state of the supply chain and professional forecasting guidance.

COM_a210. Husch Blackwell: “OFAC Extends General License for Companies Doing Business with PDVSA Affiliate Nynas AB”

* Principal Author:
Cortney O’Toole Morgan, Esq., 1-202-378-2389, Husch Blackwell LLP
The U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) recently issued
General License 13E (“GL 13E”), authorizing certain activities involving Nynas AB, a Swedish manufacturer of specialty oils owned in part by PDVSA, Venezuela’s state-owned oil company, which would normally be prohibited by Executive Order 13850 (“E.O. 13850”). The notice issued by OFAC indicates that Nynas AB “is engaged with OFAC on a proposed corporate restructuring that could potentially result in significant changes to Nynas AB’s ownership and control.” As a result, the general license is being extended until May 14, 2020 to allow Nynas AB additional time to “complete the engagement.”
Effective April 3, 2020, GL 13E replaces and supersedes
GL 13D by extending certain authorized transactions through May 14, 2020 where the only Government of Venezuela entities involved are Nynas AB or any of its subsidiaries. Companies which relied on GL 13D for transactions should now reference GL 13E. OFAC notes that GL 13E does not authorize the following:
(1) Any exportation or reexportation of any goods, services, or technology, directly or indirectly, by U.S. persons wherever located or from the United States to the Government of Venezuela, other than to Nynas AB or any of its subsidiaries;
(2) Any transactions or dealings related to the exportation or reexportation of diluents, directly or indirectly, to Venezuela;
(3) Any transactions or dealings related to the purchase or acquisition of Venezuelan-origin petroleum or petroleum products, directly or indirectly, by Nynas AB or any of its subsidiaries; and
(4) Any transactions or activities otherwise prohibited by the Venezuelan Sanctions Regulations, or any other part of 31 C.F.R. Chapter V.

Kirkland: “Six Things for Dealmakers to Know About How COVID-19 Could Affect CFIUS”

Kirkland & Ellis, 7 Apr 2020)

* Principal Author:
Mario Mancuso, Esq., 1-202-389-5070, Kirkland & Ellis
The Committee on Foreign Investment in the United States (“CFIUS,” or the “Committee”) is currently maintaining its operations, despite the massive disruption caused by the social distancing guidelines implemented in response to the novel coronavirus (“COVID-19”). To date, CFIUS has issued no changes to its policies and procedures because of the pandemic, and CFIUS staff remain actively involved in the review of transactions that are currently pending before the Committee. Over the next few weeks, we anticipate that the most significant challenge for CFIUS will be managing timely on-site access to relevant classified information, which is critical to maintaining CFIUS’ ability to start new cases and conclude action on active reviews.
Consistent with our anecdotal observations over the last few weeks, recent economic data for March confirm that M&A activity has substantially declined as a result of the current market dislocation and ongoing volatility associated with the response to COVID-19. Despite this precipitous decline, CFIUS continues to be a gating issue for many cross-border transactions and potential delays in obtaining CFIUS approval have added even more uncertainty to transaction parties’ risk calculus.
Below are six things for dealmakers to know about how the COVID-19 pandemic may affect current and future considerations for transactions that may – or may not – be notified to CFIUS.
(1) CFIUS remains open, but some critical operations are slowing down
In particular, CFIUS is taking more time to accept new cases and start its initial 45-day review of cases. The CFIUS regulations generally do not prescribe a timeline for when the Committee must accept a new case, unless the parties stipulate that CFIUS has jurisdiction to review their case. In such circumstances, CFIUS is expected to accept the case within 10 days – but the CFIUS regulations permit an extension under certain circumstances (e.g., resource shortages, etc.). Accordingly, all parties to new CFIUS submissions need to allocate sufficient time for potential delay as CFIUS grapples with reduced office operations, and ensure that transaction documents properly account for such potential delays (e.g., through a potential extension of a transaction’s outside date). Parties should still submit their new filings as soon as practicable because CFIUS will likely try to clear any backlog in roughly the same order as filings are submitted.
(2) CFIUS continues to actively review and investigate its existing caseload
While CFIUS regulations provide authority to suspend CFIUS’ review of active cases when the U.S. government closes due to lapses in appropriations, there is no authority in the current regulations for CFIUS to suspend its reviews under the current circumstances. CFIUS, however, may utilize its discretion to push more cases into the second-stage investigation period to allow additional time to complete action on pending cases. Under these circumstances, parties – even foreign investors from closely allied countries who have previously obtained approval quickly – should be prepared for a possible second-stage 45-day investigation period.
(3) CFIUS may temporarily change the way it resolves short-form declarations.
Pursuant to CFIUS regulations, the Committee can take one of four actions upon completing its review of a declaration: (i) issue an affirmative clearance indicating that CFIUS has concluded all action on the matter; (ii) issue a “no-action” letter explaining that CFIUS was unable to conclude all action on the basis of the declaration and inviting the parties to submit a voluntary notice if they want CFIUS to conclude action on the matter; (iii) request that the parties submit a voluntary notice; or (iv) unilaterally initiate a full review. To help allocate limited resources, CFIUS could stop providing affirmative clearances for declarations. Parties that have already submitted declarations, as well as those who are currently considering doing so, should consider the potential delays associated with receiving a no-action response or a request for a full filing if CFIUS is unable to conclude action on a declaration in the current environment.
(4) The U.S. government’s response to COVID-19 may prompt CFIUS to expand its notion of national security
. While CFIUS has long been concerned with the security of sensitive U.S. government supply chains, such concerns historically focused on protecting the defense industrial base and IT sectors. CFIUS has also been interested in reviewing transactions involving health care company targets, but its concerns in such cases have generally focused on the protection of U.S. citizens’ sensitive personal data. The COVID-19 pandemic will likely push CFIUS to combine its concerns about the security of supply chains with an expanded focus on the health care sector. In addition, transaction parties should expect heightened political scrutiny at this critical intersection too. We anticipate that this expanded area of concern will likely last longer than the current pandemic.
(5) CFIUS will continue to review non-notified M&A activity and will likely increase scrutiny of foreign investment into companies experiencing financial distress as a result of COVID-19.
CFIUS will continue to monitor and track non-notified transactions even while working remotely because most of such efforts require no access to classified information. CFIUS could even further expand its efforts in this regard to utilize extra off-site capacity. Moreover, CFIUS may also subject foreign investments in sensitive U.S. businesses under distress associated with COVID-19 to additional scrutiny. As always, transaction parties should carefully assess the financial, reputational and other risks associated with a decision not to file voluntarily a transaction that is otherwise subject to CFIUS’ jurisdiction (i.e., the risk that CFIUS could make a future inquiry, pre- or post-closing, and take potential action).
(6) Imposition of filing fees may be delayed
On March 9, 2020, the U.S. Department of the Treasury published proposed regulations that would establish, for the first time ever, a filing fee for many voluntary notices submitted to CFIUS. While the proposed regulations remain subject to revisions, they will likely affect parties’ risk allocation decisions and, as a technical matter, increase CFIUS scrutiny of the valuation of transactions subject to the new fees. In light of the current environment and the need to carefully allocate CFIUS resources, the implementation of these proposed regulations could be delayed.

* Principal Author: Wendy Wysong, Esq., 1-202-429-8092, Steptoe & Johnson LLP
Exporters, non-governmental organizations, financial institutions, and individuals that are subject to US jurisdiction may require a license from the US Treasury Department’s Office of Foreign Assets Control (OFAC) to support COVID-19 relief efforts in territories subject to comprehensive US sanctions (e.g., Crimea, Cuba, Iran, North Korea, Syria) and territories whose governments are subject to stringent US sanctions (e.g., Venezuela).
The purpose of this advisory is to provide exporters, financial institutions, shipping companies, non-governmental organizations (NGOs), and other entities or individuals (especially US Persons, as defined below) with a brief summary of humanitarian general licenses (GLs) that may apply to their transactions, services, and other activities.
A chart of relevant GLs is found below.[FN/1] (Click here for an online, interactive version of the chart. A printable version is also available here.)
In some cases, OFAC’s jurisdiction overlaps with that of the US Commerce Department’s Bureau of Industry and Security (BIS), which administers the Export Administration Regulations (EAR), 15 C.F.R. Parts 730-774, for any “item,” i.e., commodities, software, or technology, that is “subject to the EAR.”[FN/2]
When is an OFAC License Required?
Generally speaking, an OFAC GL is required when a transaction is subject to OFAC’s administrative jurisdiction, which includes most transactions involving (i) US Persons, (ii) the US financial system, and (iii) certain US-origin items and services.
“US Persons” are defined to include all US citizens or permanent residents (i.e., green card holders), regardless of location; (ii) all entities organized under US law (including their foreign branches); and (iii) all persons in the United States, regardless of their nationality. For the purposes of OFAC’s Cuba and Iran sanctions, OFAC’s administrative jurisdiction also extends to foreign entities owned or controlled by US Persons.[FN/3]
The US financial system includes (i) US financial institutions; (ii) foreign branches of US financial institutions; (iii) US-based branches of foreign financial institutions; (iv) US-based correspondent accounts; and (v) for the purposes of OFAC’s Iran and Cuba sanctions, foreign entities or branches owned or controlled by US financial institutions.[FN/4]
Where OFAC has not issued a GL covering a proposed export subject to US jurisdiction, the exporter may file an application to request an OFAC-specific license.[FN/5]
“Incidental” and “Necessary” Transactions Also Authorized
As a general rule, OFAC’s jurisdiction-based (i.e., primary) sanctions regulations authorize transactions that are “ordinarily incident to a licensed transaction and necessary to give effect thereto.”[FN/6] This authorization covers funds transfers, insurance, shipping transactions, and other types of transactions, provided the underlying export falls within the scope of a GL. In certain circumstances, this authorization may permit exports, reexports, or transfers (in country) of items subject to the EAR that are regulated by BIS, but careful examination of each OFAC sanctions program should be undertaken. This authorization generally does not apply to transactions involving a person named on the OFAC List of Specially Designated Nationals and Blocked Persons (the SDN List), blocked property of SDNs, or other transactions excluded by the terms of the relevant GL, which, for example, may limit dealings with departments, branches, or instrumentalities of a foreign government that is blocked by OFAC, even if not included on the OFAC SDN List.
Persons who are subject to US jurisdiction who engage in transactions that are not authorized by a GL – even transactions involving humanitarian goods or services – can violate OFAC’s primary sanctions. It is essential to review the relevant GL carefully to ensure an underlying export or reexport is covered and authorized. For example, several OFAC GLs do not authorize US banks to process payments for humanitarian exports by non-US persons.
US Secondary Sanctions
Generally, US secondary sanctions contain statutory exemptions for humanitarian trade that does not involve persons on the SDN List (in particular, persons designated as Specially Designated Global Terrorists). OFAC has published this position in multiple statements and advisories. Nevertheless, depending on the circumstances, significant transactions for the export or reexport of humanitarian goods to Iran could potentially be subject to secondary sanctions risk if those transactions involve the Central Bank of Iran (CBI) or other SDNs, as implied in OFAC’s guidance on the Iran humanitarian mechanism discussed below.
With respect to Iran, the US Treasury Department has published GL Number 8 (GL-8) and also issued a guidance on “Financial Channels to Facilitate Humanitarian Trade with Iran and Related Due Diligence and Reporting Expectations” (also known as the “humanitarian mechanism”).[FN/7] The humanitarian mechanism allows non-US persons engaged in payments related to humanitarian exports to Iran to receive written confirmation from the US Treasury Department that those payments will not result in a secondary sanctions designation under, inter alia, Executive Order (EO) 13846. (For more information on GL-8 and transactions involving the CBI, read Steptoe post on our International Compliance Blog.)
We note that the OFAC guidance does not mandate that the non-US persons or financial institutions use the humanitarian mechanism outlined in the guidance. However, by using the mechanism, non-US exporters and financial institutions may be able to get assurance from OFAC that the transactions involving Iran would not subject the participants to designation risk under US secondary sanctions.[FN/8]
EU Sanctions and Humanitarian Trade
Unlike the wide-ranging measures used in the past, the European Union does not have comprehensive trade embargoes in place, but has rather shifted to a more targeted approach. Even the most restrictive EU sanctions regimes, for example the EU sanctions targeting North Korea, do not strictly restrict humanitarian trade. Consequently, the European Union has not needed to adopt any exemptions from its sanctions frameworks in order to support COVID-19 relief efforts.
However, humanitarian aid granted in the context of the COVID-19 crisis may be affected by an Implementing Regulation[FN/9] issued by the European Commission due to concerns about the continued availability of medical equipment in the European Union. According to these rules, exports of specified personal protective equipment,[FN/10] whether or not originating in the European Union, to most non-EU countries are subject to authorization. Export authorizations shall be granted by the competent authorities of the EU Member State where the exporter is established and shall be issued in writing or by electronic means. (For more information on the European Union’s measures regarding trade with medical equipment, read Steptoe Client Alert.)
Nevertheless, the European Union continues to provide humanitarian aid to third countries. For example, on March 23, 2020 the European Union’s chief diplomat, Josep Borrell, announced that the bloc would send around €20 million in humanitarian aid to Iran.[FN/11] A week later, France, Germany, and the United Kingdom announced[FN/12] the first transaction enabling the export of medical goods worth €500,000 from Europe to Iran had been carried out through the financial channel called the Instrument in Support of Trade Exchanges (INSTEX). This is a big step, as the INSTEX mechanism, set up to shield lines of trade with Iran from US sanctions, had failed to operate since its creation in early 2019. Now that the first transaction is complete, INSTEX and its Iranian counterpart Special Trade and Finance Instrument (STFI) will work on more transactions and enhancing the mechanism. The European Union also supported requests by Iran and Venezuela for support from the International Monetary Fund.[FN/13]
[FN/1] The Appendix provides a non-exhaustive summary of GLs contained in OFAC’s Cuban Assets Control Regulations (CACR), 31 CFR Part 515, Iranian Transactions and Sanctions Regulations (ITSR), 31 CFR Part 560, North Korea Sanctions Regulations (NKSR), 31 CFR Part 510, Syrian Sanctions Regulations (SSR), 31 CFR Part 542, and Ukraine-Related Sanctions Regulations (URSR), 31 CFR Part 589, Venezuela Sanctions Regulations (VSR), 31 CFR Part 591, as well as select provisions of the EAR.
[FN/2] Additional, temporary restrictions may apply to the export of certain items from the United States that are needed to fight the COVID-19 pandemic, which are beyond the scope of this alert.
[FN/3] Pursuant to Section 7121 of Title LXXI of the National Defense Authorization Act for Fiscal Year 2020, OFAC is expected to issue regulations extending its North Korea sanctions to foreign entities owned or controlled by US financial institutions.
[FN/4] Id.
[FN/6] CACR §515.421; ITSR §560.405; NKSR §510.404; SSR §542.404; URSR §589.404; and VSR §591.404.
[FN/8] To date, only Switzerland has publicly instituted an arrangement for exports to Iran (the Swiss Humanitarian Trade Arrangement (SHTA)) under the auspices of the US Treasury Department’s humanitarian mechanism. Parties making use of SHTA may have additional disclosure obligations to the Swiss government, in addition to the US Treasury Department.)

* Author: George R. Tuttle, Esq., 1-415-254-5986, Tuttle Law
In CSMS #42272898, dated April 5, 2020, the U.S. Food and Drug Administration (FDA) published an update to CSMS #42168200 for instructions regarding the submission of entry information for personal protective equipment (PPE) and certain other devices.
Following the instructions outlined below will help facilitate the import process for all affected products, but particularly for products related to the COVID-19 public health emergency.
Non-FDA-Regulated General Purpose Personal Protective
Equipment (Masks, Respirators, Gloves, Etc.)
The FDA does not regulate PPE for general purpose or industrial use (i.e., products that are not intended to prevent disease or illness). For these types of products, entry information should not be transmitted to the FDA. Importers should transmit entry information to CBP using either:
– An appropriate HTS code with no FD Flag, OR
– An appropriate HTS code with an FD1 flag and doing a “disclaim” for FDA.
Importers need to be aware that marketing or labeling on the product can impact whether the article is FDA regulated on not. Only products marketed or labeled for general purpose or industrial use may disclaim FDA review.
Products Authorized for Emergency Use Pursuant
to an Emergency Use Authorization (EUA)
For products authorized for emergency use pursuant to an EUA, entry information should be submitted to the FDA. However, reduced FDA information is required for review. At the time of entry, importers should transmit an Intended Use Code of 940.000: Compassionate Use/Emergency Use Device and an appropriate FDA product code. Under this Intended Use Code, the Affirmations of Compliance for medical devices (such as the Registration, Listing and Premarket numbers) are optional in ACE.
Below are the products and appropriate product codes that are authorized by an EUA:
(i) Diagnostic tests: 83QKP, 83QKO, 83QJR
(ii)Masks/Respirators: 80NZJ
(iii)Ventilators: See ventilator EUA for product codes
On April 3, 2020, in response to this evolving public health emergency and continued concerns about filtering facepiece respirator (FFR) availability, the FDA concluded, based on the totality of scientific evidence available, that certain product classifications for imported disposable FFRs, which are manufactured in China and not NIOSH-approved and for which data exists that supports the FFRs’ authenticity, are appropriate to protect the public health or safety (as described under section II Scope of Authorization) under section 564 of the Federal Food, Drug, and Cosmetic Act (Act) (21 U.S.C. § 360bbb-3). Under this EUA, authorized FFRs listed in Appendix A are authorized for use in healthcare settings by healthcare personnel (HCP)2 when used in accordance with CDC recommendations.
The FDA is issuing the April 3rd EUA to authorize disposable FFRs manufactured in China that meet certain criteria, including additional validation and review by FDA to confirm the FFR’s authenticity.
A full list of EUAs currently in place for the COVID-19 emergency is available on the FDA’s website. The import community is advised to check this site regularly for current information on products authorized by an EUA. For additional information issued by the FDA, go to the FDA page on COVID-19 EUAs or contact the FDA at 1-888-INFO-FDA, choose option *, or email.
Products Regulated by the FDA as a Device, not Authorized by an EUA, but Where an Enforcement Discretion Policy has been Published in Guidance
For these products, entry information should be submitted to the FDA on entry. At the time of entry importers should transmit Intended Use Code 081.006: Enforcement discretion per final guidance and an appropriate FDA product code. Under this Intended Use Code, the Affirmations of Compliance for medical devices (such as the Registration, Listing and Premarket numbers) are optional in ACE.
Below is a list of guidance documents that have been issued for specific products related to COVID-19. The guidance documents include applicable product codes and policy for the specific products.
(a) Electronic Thermometers, Gowns, Other Apparel, and Gloves
(b) Sterilizers, Disinfectant Devices and Air Purifiers
(c) Face Masks and Respirators
(d) Non-Invasive Remote Monitoring Devices
(e) Ventilators and Accessories and Other Respiratory Devices
A full list of all guidance documents related to COVID-19 is also available on the FDA’s website. The import community is advised to check the FDA site for current information on these and other product areas.


* What: Classifying Aircraft Part Technology
* When: April 22, 2020; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Scott Gearity
* Register
here or contact Ashleigh Foor, 1-540-433-3977.

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


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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.  The latest amendments are listed below.
Latest Update 
: 19 CFR, Ch. 1, Pts. 0-199.
5 Apr 2019:84 FR 13499: Civil Monetary Penalty Adjustments for Inflation.


24 Feb 2020:
85 FR 10274
: Amendments to Country Groups for Russia and Yemen Under the Export Administration Regulations.


DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.   Last Amendment: 24 Apr 2018: 83 FR 17749: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates.


18 May 2016: Change 2: Implement an insider threat program; reporting requirements for Cleared Defense Contractors; alignment with Federal standards for classified information systems; incorporated and cancelled Supp. 1 to the NISPOM (Summary here.)  

23 Feb 2015: 80 FR 9359, comprehensive updating of regulations, updates the activities and technologies subject to specific authorization and DOE reporting requirements. 

15 Nov 2017, 82 FR 52823: miscellaneous corrections include correcting references, an address and a misspelling.


DOJ ATF ARMS IMPORT REGULATIONS: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War.

14 Mar 2019: 84 FR 9239: Bump-Stock-Type Devices.

DOS INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130.  26 Dec 2019: 84 FR 70887; 23 Jan 2020: 85 FR 3819: Encryption rule and USML Categories I, II, III, and related sections regarding guns & ammo. 
DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

13 Mar 2020:
85 FR 14572:
General Licenses Issued Pursuant to Venezuela-Related Executive Order 13835.


1 Jan 2019: 19 USC 1202 Annex.
  – HTS codes for AES are available here.
  – HTS codes that are not valid for AES are available here.

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