20-0421 Tuesday ” Daily Bugle”

20-0421 Tuesday “Daily Bugle”

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Tuesday, 21 April 2020

  1. USITC: “COVID-19 Related Goods: U.S. Imports and Tariffs; Institution of Investigation”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Processes FEMA Exemptions from the Temporary Final Rule (TFR) Published in the Federal Register on April 10, 2020
  4. State/DDTC (No new postings.)
  5. Treasury/OFAC Encourages Persons to Communicate OFAC Compliance Concerns Related to the Coronavirus Disease 2019 (COVID-19)
  6. Netherlands TCA: “PPE: Import Duty Relief (Update)”
  1. Export Compliance Daily: “Treasury Disputes Report That South Korea Obtained Special License to Export to Iran”
  2. ST&R Trade Report: “90-Day Duty Deferral Granted but Eligibility Limited”
  3. ST&R Trade Report: “U.S., Brazil to Seek Trade Agreement in 2020”
  4. WORLDecr: “EU Narrows PPE Export Controls to Face Masks Alone”
  1. Covington: “Importers Facing Economic Hardship May Defer Duty Payments for 90 Days”
  2. Husch Blackwell: “USTR and ITC to Consider Trade Impacts on COVID-19 Response”
  3. Miller: “In-Bond Movements, COVID-19, and FTZs”
  4. N. Turner: “Sanctions Top-5 for the Week Ending 17 April 2020”
  5. Steptoe: “Considerations for Conducting Remote Internal Investigations” (Part III of III)
  6. Wilmer Hale: “FEMA Announces Additional Exemptions for Export Restrictions on PPE”
  7. WTC: “Restrictive Measures on PPE at National Level: Belgium and the Netherlands”
  1. FCC Academy Presents Webinar: “An Introduction to EU/Dutch Dual-use and Military Export Controls”; 12 May
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USITC Extends Postponement of all In-Person Section 337 Hearings Until 10 Jun”

Federal Register, 21 Apr 2020) [Excerpts] 

85 FR 22177: Notice of Commission Determination To Extend Postponement

of all In-Person Section 337 Hearings Until June 10, 2020

* AGENCY: U.S. International Trade Commission.
* ACTION: Notice.
* SUMMARY: Notice is hereby given that the U.S. International Trade Commission has determined to extend postponement of all in-person hearings under section 337 of the Tariff Act of 1930, as amended, until June 10, 2020.
* SUPPLEMENTARY INFORMATION: In light of the ongoing Coronavirus (COVID-19) outbreak, the Commission has determined to extend postponement of all section 337 in-person hearings until June 10, 2020. Commission Administrative Law Judges (“ALJ”) are directed to notify all affected parties and to schedule new dates for the hearings as appropriate. ALJs may otherwise conduct their investigations in accordance with their established procedures.
   The authority for the Commission’s determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission’s Rules of Practice and Procedure (19 CFR part 210).

Back to top.

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Items Scheduled for Future Federal Register Editions  

Federal Register)
* DHS/CBP; RULES; Temporary Postponement of the Time to Deposit Certain Estimated Duties, Taxes, and Fees During the National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak; [Pub. Date: 22 Apr 2020]
* Justice/ATF; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: 
Special Agent Medical Preplacement; [Pub. Date: 22 Apr 2020]

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Commerce/BIS: (No new postings.)

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DHS/CBP, 20 Apr 2020)
On April 21, 2020, the Federal Emergency Management Agency (FEMA) published in the Federal Register a notice of exemptions from the allocation order issued through a Temporary Final Rule (TFR) published on April 10, 2020. The intent of the allocation order is to ensure that materials subject to the Presidential Memorandum (PM) regarding allocating certain scarce or threatened personal protective equipment (PPE) materials (covered materials) remain in the United States for use in responding to the spread of COVID-19, and to prevent domestic brokers, distributors, and other intermediaries from diverting such covered materials overseas.
N-95 Filtering Facepiece Respirators,
Other Filtering Facepiece Respirators (N99, N100, R95, R99, R100, or P95, P99, P100),
Elastomeric, air-purifying respirators and appropriate particulate filters/cartridges;
PPE surgical masks,

PPE gloves or surgical gloves
Pursuant to the allocation order, FEMA may review shipments of covered materials and, subject to certain exemptions, determine whether to (1) purchase some or all of the shipment through a Defense Protection Act priority-rated order, (2) return some or all of the shipment for domestic use, or (3) allow some or all of the export to proceed.                                            
Covered materials that are being exported and that fall into one or more of the exemptions described below may proceed immediately for export as scheduled.
  (1) Shipments to U.S. Commonwealths and Territories, Including Guam, American Samoa, Puerto Rico, U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands (Including Minor Outlying Islands).
  (2) Exports of covered materials by non-profit or non-governmental organizations that are solely for donation to foreign charities or governments for free distribution (not sale) at their destination(s).
  (3) Intracompany transfers of covered materials by U.S. companies from domestic facilities to company-owned or affiliated foreign facilities.
  (4) Shipments of covered materials that are exported solely for assembly in medical kits and diagnostic testing kits destined for U.S. sale and delivery.
  (5) Sealed, Sterile Medical Kits Where Only a Portion of the Kit is Made Up of One or More covered materials That Cannot be Easily Removed Without Damaging the Kits.
  (6) Declared diplomatic shipments from foreign embassies and consulates to their home countries. These may be shipped via intermediaries (logistics providers) but are shipped from and consigned to foreign governments.
  (7) Shipments to Overseas U.S. Military Addresses, Foreign Service Posts (e.g. Diplomatic Post Offices), and Embassies.
  (8) In-Transit Merchandise: Shipments in Transit through the United States with a Foreign Shipper and Consignee, Including Shipments Temporarily Entered into a Warehouse or Temporarily Admitted to a Foreign Trade Zone.
  (9) Shipments for Which the Final Destination is Canada or Mexico.
  (10) Shipments by or on behalf of the U.S. Federal Government, including its Military.

In addition, the export of covered materials from shipments made by or on behalf of U.S. manufacturers with continuous export agreements with customers in other countries since at least January 1, 2020 are exempt, so long as at least 80 percent of such manufacturer’s domestic production of such covered materials, on a per item basis, was distributed in the United States in the preceding 12 months. FEMA and CBP are working to establish a process to identity the manufactures that qualify for this exemption.
In order to qualify for exemptions 2, 3, 4, 8, and 9, FEMA requires a letter of attestation, submitted via the document imaging system (DIS). For these exemptions, the exporter, shipper or their agents should present the letter via DIS, on company letterhead, signed by a responsible company official, including:
a description of which exemption(s) the exporter is claiming;
details regarding the shipment that are sufficient for the CBP and FEMA officials to determine whether the shipment falls under the claimed exemption(s), including the required information identified in the Federal Register notice published on April 21, 2020;
a statement that the provided information is true and accurate to the best of the exporter’s knowledge, and that the exporter is aware that false information is subject to prosecution under the DPA, as outlined in the allocation order.
Regarding exemption 9, the letter of attestation must state that the covered materials are for use in Canada/Mexico, and will not be transshipped through those countries and for exemption 8 it largely applies to goods temporarily entered into a bonded warehouse or Foreign Trade Zone with the intent to leave the US.
In order to avoid detention of shipments, letters should be uploaded in DIS at the same time as the Electronic Export Information (EEI) is transmitted in the Automated Export System (AES).
When submitting to DIS, filers have the following options to transmit:
  (1) Electronically through secure web services, file transfer protocol, or messaging queue.
  (2) By Email to docs@cbp.dhs.gov

Successful submissions will receive an automated ‘submission status email’ indicating Success or Failure. Technical guidelines for electronic or e-mail submission are available at www.cbp.gov/ace-dis
For questions about the process or specific shipment issues contact utilize the COVID-19 Exports Intake at https://imports.cbp.gov/s/. Select the Export Cargo Hold/Facilitation Assistance button.

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Treasury/OFAC Encourages Persons to Communicate OFAC Compliance Concerns Related to the Coronavirus Disease 2019 (COVID-19)


, 20 Apr 2020)

On March 13, 2020, President Trump declared a National Emergency in response to COVID-19. On April 16, 2020, OFAC published a fact sheet that summarizes existing exemptions and authorizations to provide humanitarian assistance in the context of the Iran, Venezuela, North Korea, Syria, Cuba, and Ukraine/Russia-related sanctions programs.
Separately, OFAC encourages persons, including financial institutions and other businesses, affected by the COVID-19 global pandemic to contact OFAC as soon as practicable if the person believes it may experience delays in its ability to meet deadlines associated with regulatory requirements administered by OFAC. This includes requirements related to filing blocking and reject reports within ten business days as required by 31 C.F.R. §§ 501.603 and 501.604, responses to administrative subpoenas issued pursuant to § 501.602, reports required by general or specific licenses, or any other required reports or submissions.
The appropriate OFAC contact information is below:
* Blocking / Reject Reports: 202-622-2490 / 800-540-6322 or ofac_feedback@treasury.gov
* Administrative Subpoenas: Please contact the case officer identified on the particular administrative subpoena.
* License Reports: 202-622-2480, ofac_feedback@treasury.gov or through the online licensing portal
* Requests for Reconsideration of a Listing as an SDN (Petitions): Please contact ofac.reconsideration@treasury.gov
In addition, OFAC encourages persons to submit self-disclosures to the following e-mail account rather than through physical mail: OFACdisclosures@treasury.gov. Please also refer to OFAC’s Data Delivery Standards for detailed electronic submission guidance.
OFAC understands that the COVID-19 pandemic can cause technical and resource challenges for organizations. As OFAC has articulated in both its Economic Sanctions Enforcement Guidelines (31 C.F.R. part 501 Appendix A) and its Framework for Compliance Commitments, the agency supports a risk-based approach to sanctions compliance. Accordingly, if a business facing technical and resource challenges caused by the COVID-19 pandemic chooses, as part of its risk-based approach to sanctions compliance, to account for such challenges by temporarily reallocating sanctions compliance resources consistent with that approach, OFAC will evaluate this as a factor in determining the appropriate administrative response to an apparent violation that occurs during this period. OFAC will address these issues on a case-by-case basis.

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OGS_a67. Netherlands TCA: “PPE: Import Duty Relief (Update)”

The corona virus is a huge challenge for citizens and businesses. We notice that many wish to contribute to combating the virus, such as donating personal protective equipment (PPE) to care institutions. It is really needed as there is a substantial shortage.
Under certain conditions, personal protection equipment may be imported with duty relief. 


On 26 March 2020, we published our first news release on this topic. You will find important supplementary information below. You will note typical examples of personal protection equipment. We provide an explanation as to how to apply for an authorisation for duty relief.  

What is personal protection equipment?

Personal protection equipment includes at any rate:
  • FFP1, FFP2 and FFP3 masks
  • Medical protective coats
  • Safety splash goggles
  • Medical aprons
  • Surgical masks
  • Examination gloves
  • Diagnostic tests 

The conditions for import duty relief 

Prior to being able to make use of the duty relief, you must apply for an authorisation from Customs. You may only apply to Customs in the Member State where the (care) institution is based.  
To be eligible for the authorisation, you have to meet the conditions set out in the Council Regulation (EC) No. 1186/2009.

(1) The personal protective equipment must be imported by an organisation which falls within one of the following categories:
government institutions 
charity institutions or philanthropic organizations 
relief agencies, hospitals, care institutions or care providers entered into the BIG Register (the Register of the Professions in Individual Health Care)
Please Note: Charity Institutions and philanthropic organizations currently only include the Dutch Red Cross and the Salvation Army.

(2) The goods are made available at no charge to the victims of a disaster or the goods are used for the benefit of the victims. Alternatively, the goods are at any rate used for a relief agency for the duration of their assistance. Covid-19 is defined as a disaster.

To apply for an authorisation

Are you an organisation referred to in the list above?  Please apply for the authorisation to what is referred to as the commercial contact point in your area. During the course of the corona crisis, you can contact the commercial contact points by E-mail and you can find the E-mail addresses at 
douane-telefoonnummers voor bedrijven, under ‘Contact met de Douane tijdens de coronacrisis’. The commercial contact point will send you a ‘care institution statement’ as soon as possible.  Please complete the form and return it to the commercial contact point.
Are you a company or an intermediary acting on behalf of an (relief)organization? You can arrange for the licence in the same way. However, do not complete the ‘care institution statement’ yourself but make arrangements for the (relief) organization to complete that section – as they will be using the duty relief. 
Did you get permission from the commercial contact point to use the duty relief? Note the duty relief code C26 in your import declaration. The relief organization will receive the licence retrospectively from Customs.  

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Export Compliance Daily: “Treasury Disputes Report That South Korea Obtained Special License to Export to Iran”
(Source: Export Compliance Daily, 21 Apr 2020) [Excerpts]
The Treasury Department disputed a report that said South Korea obtained a “special license” to export humanitarian goods to Iran, saying the country may be using an existing general license but did not receive an additional exemption. The Office of Foreign Assets Control “has not issued a ‘special license’ to the Koreans,” a Treasury spokesperson said. OFAC’s Iran sanctions regime contains “broad exemptions” for humanitarian exports, which may make some South Korean exports “permissible,” the spokesperson said.

ST&R Trade Report: “90-Day Duty Deferral Granted but Eligibility Limited”

Sandler, Travis & Rosenberg Trade Report, 21 Apr 2020) [Excerpts]

Importers of record suffering a significant financial hardship due to the COVID-19 pandemic may postpone for 90 days their deposit of certain estimated duties, taxes, and fees. However, there are significant limitations on eligibility for this deferral and a midnight April 20 deadline for associated adjustments to periodic monthly statements for April.
In the meantime, businesses are still pushing for legislation that would suspend additional tariffs, for all entries, for a longer period.
Deferral timeframe
 – Estimated duties, taxes, and fees paid on a single pay basis or daily statement may be deferred up to 90 days from the payment due date. Estimated internal revenue taxes may be deferred up to three months from the payment due date. Estimated duties and fees paid via periodic monthly statement may be deferred up to three months, as defined by the 15th working day of the third month.
Eligibility –
The deferral applies to formal entries of goods entered or withdrawn from warehouse for consumption, including entries from foreign-trade zones, in March or April 2020.
To qualify, importers must have had their operations fully or partially suspended during March or April due to orders from a competent governmental authority related to COVID-19 and, as a result, have gross receipts for March 13-31 or April that are less than 60 percent of their gross receipts from the comparable period in 2019. Importers need not file additional documentation to be eligible for this relief but must maintain documentation establishing compliance as part of their books and records. CBP may conduct post-entry reviews or audits to ensure compliance.
– The deferral does not apply when the entry summary includes any goods subject to antidumping, countervailing, section 201 (e.g., clothes washers and solar products), section 232 (e.g., steel and aluminum), or section 301 (e.g., imports from China) duties. When a shipment contains goods that are eligible for the deferral as well as goods that are not, CBP anticipates that importers will file two separate entries.
The deferral also does not apply to the payment of other debts to CBP, including (1) bills for duties, taxes, fees, and interest determined to be due upon liquidation or reliquidation, (2) fees under 19 USC 58c (except merchandise processing fees and dutiable mail fees), or (3) any penalty or liquidated damages due to CBP.
In addition, CBP will not return deposits of estimated duties, taxes, and fees that have already been paid. 
Payment instructions
– Importers and filers who take advantage of this deferral are responsible for scheduling payments accordingly, and CBP will not adjust statement dates. Any adjustments to the April periodic monthly statement must be made prior to 11:59 p.m. EDT on April 20. CBP is deploying updates to the ACE SU statement transaction to provide importers and filers with more flexibility when removing entries from a PMS, including (1) no longer requiring entries removed from the statement to be submitted as single pay and allowing entries removed from one statement to be rescheduled for another, (2) allowing remote location filing entries to be removed from a PMS and scheduled for another statement, and (3) allowing importers and filers to schedule the month further out than two months to avoid further pushing the periodic daily statement date.
Interest and penalties
– CBP will not assess interest during the 90-day deferral period or impose any penalty, liquidated damages, or other enforcement actions on appropriately deferred entries.
CBP has issued a temporary final rule amending its regulations to reflect this deferral and is accepting comments on it through May 20

ST&R Trade Report: “U.S., Brazil to Seek Trade Agreement in 2020”

Sandler, Travis & Rosenberg Trade Report, 21 Apr 2020) [Excerpts]

The U.S. and Brazil will seek to conclude this year an agreement on trade rules and transparency, including trade facilitation and good regulatory practices, according to an announcement from the Office of the U.S. Trade Representative. The decision was reached during an April 16 discussion on implementing an ambitious bilateral economic and trade agenda, as agreed by presidents Jair Bolsonaro and Donald Trump in March.
According to USTR, the two countries will pursue this goal by accelerating their trade dialogue under the Brazil-U.S. Commission on Economic and Trade Relations, which “will remain the locus for further engagement … to advance in the short-term agenda as well as in the preparatory work toward a deeper partnership.” They also plan to engage in domestic consultations, including with lawmakers, to solicit input on how best to expand trade and develop the bilateral economic relationship.

WORLDecr: “EU Narrows PPE Export Controls to Face Masks Alone”

WORLDecr, 17 Apr 2020) [Excerpts]

The European Union, which in March placed restrictions on exports of personal protective equipment (‘PPE’) outside the bloc in response to COVID-19 pandemic, has introduced a draft regulation that narrows controls on face masks only. The new regulation will become effective on 25 April, when restrictions imposed in mid-March are set to expire. The European Commission said 14 April that the new regulation:
  • Will apply for a limited period of 30 days, starting on 26 April, and covers one single product category, protective masks. The Commission services find that this is the only remaining category where an export authorisation is necessary in order to secure an adequate supply to protect the health of Europeans.
  • Exempts authorisation requirements for exports to Western Balkans countries (Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo).
  • Explicitly requires Member States to authorise exports of emergency supplies in the context of humanitarian aid and to process the applications expeditiously.
  • Asks Member States to positively assess exports to state agencies in charge of distributing personal protective equipment or involved in combating the coronavirus outbreak, subject to availability.
  • Obliges Member States to consult the European Commission when assessing whether to issue an export authorisation.
  • Includes a review clause that will allow the Commission to adjust the product scope or the duration of the provisions in light of possible new developments.
The regulation also requires Member States to report to the Commission on authorisations granted and refused and commits the Commission to reporting publicly on these developments.


COM_a112. Covington: “Importers Facing Economic Hardship May Defer Duty Payments for 90 Days”

Covington, 20 Apr 2020)

In response to ongoing requests for tariff relief from importers facing economic hardship during the COVID-19 crisis as well as pressure from Congress, U.S. Customs and Border Protection (“CBP”) and the U.S. Department of the Treasury released a joint temporary final rule on April 19, 2020, that provides importers with an option to delay the payment of certain import duties, taxes, and fees for 90 days. Payments eligible for deferral are deposits of estimated duties on formal entries of merchandise entered or withdrawn from a warehouse for consumption, including entries for consumption from a Foreign Trade Zone, in March or April 2020. The postponement option is available to importers who can demonstrate “significant financial hardship.”
Importantly, the option to delay payment does not cover tariffs imposed under Section 232 of the Trade Expansion Act of 1962, Section 201 of the Trade Act of 1974, and Section 301 of the Trade Act of 1974 or antidumping and countervailing duties. The Trump Administration has used these trade laws to increase tariffs on imports from China, as well as on specific products such as steel, aluminum, solar cells and modules, and large residential washing machines. While there was earlier discussion of a payment deferral option for
tariffs, those suggestions faced considerable political pushback, which resulted in several apparent changes of course prior to the current announcement of a payment deferral option only for ordinary tariffs.
An importer will be considered to have a “significant financial hardship” if (1) the importer’s operations were fully or partially suspended during March or April 2020 as the result of orders from a “competent governmental authority limiting commerce, travel, or group meetings because of COVID-19” and (2) the importer’s gross receipts from March 13 to 31, 2020, or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2 019.
Importers are not required to file documentation of significant financial hardship when exercising the deferred payment option. The guidance makes clear, however, that it is the importer’s responsibility to maintain records and documentation that demonstrate its eligibility for the relief. Importers should follow this guidance, as CBP may later audit importers that use the deferral option.
To facilitate this option to delay payment, CBP encourages importers and filers to take advantage of Automated Clearinghouse for electronic payment to the greatest extent possible. The authorization of the 90 additional calendar days for payment without penalty applies whether an entry summary is paid as a single-pay check, ACH Daily and Monthly Statement, or Periodic Monthly Statement.
More information is available via Cargo Systems Messaging Service (“CSMS”) #42423171 (announcement of 90-day postponement) and CSMS #42421561 (payment instructions).

Husch Blackwell: “USTR and ITC to Consider Trade Impacts on COVID-19 Response”

Husch Blackwell, 20 Apr 2020)

* Principal Author: Beau Jackson, 1-816-983-8202, Husch Blackwell LLP
The ongoing COVID-19 pandemic has 
almost every aspect of law and public policy, and trade has certainly 

Given that the 
supply chains
for many critical medical supplies and forms of personal protective equipment (“PPE”) run through China, it was inevitable that this impact would affect the
Section 301 investigation
of China brought by the United States Trade Representative (“USTR”). Late last month, USTR
a new comment
regarding the need for relief from Section 301 tariffs for products necessary to address the COVID-19 situation.
Earlier this week, at the 
of congressional leaders, the U.S. International Trade Commission (“ITC”) 
a fact-finding investigation to identify products “related to the response to COVID-19.”  The Commission is expected to issue its report by April 30.  A product’s inclusion in the ITC report may improve the likelihood that it receives an exemption from Section 301 tariffs.
At first glance, the standards for inclusion in the ITC’s report might seem fairly straightforward, and many products-such as certain medications or PPE like surgical masks-will be uncontroversial.  But many products could present difficult line-drawing problems.  For example, the FDA has
the importance of improved data collection in the supply chains for essential products.  Are handheld barcode scanners-which are essential for collecting and relaying such data in real time, and which are presently subjected to “List 4B” Section 301 tariffs-therefore “related to the response to COVID-19?”
With the April 30 report deadline fast approaching, importers and sellers may want to work quickly to make their case for inclusion on the ITC’s list.  The first written submission was filed on the Commission’s EDIS system yesterday.

COM_a314. Miller: “In-Bond Movements, COVID-19, and FTZs

(Source: Miller & Company P.C., 20 Apr 2020)
* Principal Author: Marshall V. Miller, Esq., Miller & Company P.C.
The COVID-19 pandemic has impacted movements and bonded storage of imported and exported merchandise including Foreign-Trade Zone (FTZ) activity. Pursuant to 19 C.F.R. § 18.1(i), the in-transit timeframe for in-bond CBPF 7512 movements is thirty (30) days (sixty (60) days for barge movements and there is no time limit for pipelines). In-bond merchandise must be entered, exported, or admitted into an FTZ within fifteen (15) calendar days from the date of arrival of the entire in-bond shipment per 19 C.F.R. § 18.1(k). Otherwise, the in-bond merchandise will become subject to General Order (G.O.) requirements.

In-port bonded movements may remain in the custody of the party on the Customs-authorized permit to transfer (PTT) for fifteen (15) calendar days after receipt under such permit or 15 days after arrival at the port of destination, whichever is later. No later than twenty (20) calendar days after receipt under the PTT or arrival under bond at the port of destination, the party must notify Customs of any such merchandise for which entry or FTZ admission has not been made. Note that filing the PTT does not start the 15-day clock, rather that timeclock begins to run with vessel arrival. Arrival of the PTT at the FTZ does not stop or impact that clock.

With air, sea, rail, and truck capacity issues and overflowing warehouses, a number of FTZ clients have experienced difficulties managing in-bond movements and avoiding liquidated damages and G.O. consequences. Depending on the circumstances, there are a number of potential solutions. It may be possible to request extensions at local CBP ports of in-transit 30-day time limits or the 15-day arrival timeframe on an individual in-bond entry basis. With appropriate permissions, merchandise may be held in “constructive G.O.” without movement to a G.O. warehouse. A second in-bond transaction might be initiated where possible. 
It is also possible to work with your local CBP office to determine if the shipment is “eligible for GO” or “Ordered to GO and assigned a number” status, and you can potentially avoid G.O altogether. It may be possible for the local CBP office not to enforce the G.O. if goods currently sit in a bonded facility. It is important for all clients, including FTZ clients, to take proactive steps to monitor in-bond movements and to work with your local CBP office to avoid unnecessary additional expense, delays, or noncompliance with FTZ regulations.

COM_a415. N. Turner: “Sanctions Top-5 for the Week Ending 17 April 2020”

LinkedIn, 21 Apr 2020)

* Author:  
Nicholas Turner, Esq., 852-5998-7559, Steptoe & Johnson HK LLP
Here are five things that happened this week in the world of economic sanctions that I think you should know about.

(1) The US Office of Foreign Assets Control (OFAC) published a fact sheet summarizing US sanctions exemptions, licenses, and related guidance related to humanitarian trade. OFAC “encourages those interested in providing such assistance during the COVID-19 crisis to avail themselves of longstanding exemptions, exceptions, and authorizations,” the fact sheet states. 

(2) In related news, the Center for a New American Security (CNAS) hosted a really excellent virtual roundtable with OFAC Director Andrea Gacki, former OFAC Director John Smith, and Juan Zarate, Chairman and Co-founder of the Financial Integrity Network, to discuss US sanctions policy and COVID-19. (See below for my glowing review.)

(3) The Panel of Experts established pursuant to UN Security Council Resolution 1874 (2009) issued a final report concluding that North Korea continues to successfully evade international trade restrictions with the assistance of nationals of other UN member states. As reported by Reuters, the report contains photographs procured from an unnamed UN member state appearing to show ship-to-ship transfers taking place in Chinese territorial waters. (Read the Panel of Experts Report here.)

(4) The US Departments of State, Treasury, and Homeland Security, and the Federal Bureau of Investigation (FBI) issued a guidance document on cyber threats from North Korea. Among other things, the document highlights the US government’s ability to subpoena records from foreign financial institutions with US correspondent accounts on their customers’ activities outside the United States. (For more on that issue, see the Sanctions Top-5 for the week ending 28 June 2019.)

(5) The North Korea cyber-threat guidance also includes a reminder of the US State Department’s offer of USD 5 million for information about illicit DPRK activities in cyberspace, including past or ongoing operations” under the Rewards for Justice program. (This follows last week’s offer of a USD 10 million reward for information on a senior Hizballah official.)


Has anyone else’s LinkedIn feed been overtaken by COVID-19 postings? It’s a good thing if you ask me. For as much misinformation as there is on social media, the pandemic has also unleashed a universe of useful and well meaning content. We each have a veritable army of lawyers, consultants, researchers, and data scientists in our networks solving problems and sharing knowledge about the pandemic from their respective professions. What an incredible resource. On the sanctions front, 
OFAC’s humanitarian fact sheet 
amplifies the message coming from law firms over the past few weeks: US sanctions 
include numerous authorizations
for legitimate humanitarian trade. There are now many places where people who need that information can find it quickly. 
OFAC’s pro-humanitarian trade message was crystal clear during CNAS’ roundtable on Friday. In particular, OFAC Director Andrea Gacki gave one of the most reasonable, rational, and informative presentations on OFAC policy from a current official that I’ve seen in a while. John Smith and Juan Zarate shared their views on private sector concerns and how sanctions fit into information warfare about the pandemic. (
You can view a recording of the roundtable here.
) Thanks to 
Elizabeth Rosenberg
Peter Harrell
for hosting another great event. 

After the CNAS roundtable, head on over to the Association of Certified Anti-Money Laundering Specialists (ACAMS) 
to view their latest webinar
moderated by 
Justine Walker
, ACAMS Head of Global Sanctions and Risk, on financial crimes compliance and COVID-19. 

COM_a516. Steptoe: “Considerations for Conducting Remote Internal Investigations” (Part III of III)

, 16 Apr 2020)
* Principal Author:
Patrick F. Linehan
, Esq., 1-202-429-8154,
Steptoe & Johnson LLP
Additional Practical Considerations
Companies should keep the following additional practical considerations in mind when conducting interviews remotely:

As much as possible, the interview should be done in an environment that minimizes witness distractions. The witness should be encouraged to find a private space, and interviewers should be flexible enough to accommodate interviewees’ schedules in light of this practical challenge. Similarly, interviews can be stressful and tiring, and interviewees should be afforded the same breaks that typically accompany in-person meetings.

Videoconferences are typically preferable to teleconferences because they allow each participant to assess the conduct of other participants and minimize the likelihood both that third parties are present and that documents are being misused.
Additionally, the use of videoconference permits the interviewer to better assess witness credibility, which may be critical to the investigation. But, if videoconference is used, it is important to remind all parties that they are on video and that simply muting audio may not be an option.
Interviewers should set ground rules for speaking during the interview – such as allowing for a brief pause after one person speaks before the other jumps in – to minimize the interruptions caused by multiple individuals speaking at once. Speakers should also pause more frequently so that long responses are not missed due to calls being unknowingly disconnected.
In the case of video interviews, interviewers should maintain a professional appearance and background environment to preserve the seriousness and formality of the interview.

If separate counsel has been retained for the interviewee, interviewers should consider how practically the interviewee can seek advice from his or her counsel during the course of the interview. Additionally, if the interview is occurring in a jurisdiction (such as France) where relevant trade unions or staff counsel must attend the interview, interviewers should consider how to facilitate this process remotely.
If a translator is needed, interviewers should consider the logistics of having the translator participate by phone or videoconference from a different location than the witness.
Remote Document Collection
Although most forms of electronic documents can now be collected remotely, it may be more challenging to collect and review relevant hard-copy documents while travel restrictions and quarantines remain in place. Depending on the restrictions in a given location, and with due regard to employee health and safety, companies may consider a few options:
It may be possible to defer the hard-copy collection, particularly if the matter is less time- sensitive and waiting does not pose a risk of spoliation (e.g., because a building is shut down).
Alternatively, investigators could ask local legal or compliance personnel (or an appropriate legal or accounting consultant) to perform the hard-copy document collection with the aid of a defined document collection protocol and to transmit the documents to investigators via a secure file transfer site.
To the extent that a collection must be performed by the witness outside the presence of investigators or their representatives, investigators might consider overseeing the witness’s collection process via videoconference. If that is not an option, investigators could require the witness to confirm in writing the locations searched and to certify that they have provided all documents that are responsive to the collection list (although this would not be a preferred option for suspected wrongdoers given the risk of evidence destruction).
Companies also should document their collection process in detail and consider keeping investigating agencies apprised (perhaps even in advance) as to how they are adapting their hard-copy document collections to address the exigencies of a social distancing environment.
Finally, given the possibility that disinfections and cleanups may be underway at certain locations, companies facing such circumstances are well advised to re-issue any document preservation notices to make clear that under no circumstances should any cleanup efforts involve the disposal of documents otherwise covered by prior preservation notices.
As with any document collection effort, when undertaking a remote collection, companies must also consider any applicable data protection rules. In some jurisdictions, it is necessary to obtain the informed consent of the affected data subjects before processing data, although there may be applicable exceptions where an employee’s consent is not required.
Applicable data protection rules may also require specific levels of confidentiality, registration with local data protection agencies or data minimization (e.g., collecting the minimum number of documents necessary by, for example, applying keyword search terms).
In addition, independently of data protection requirements, companies should consider whether documents should be transferred to another jurisdiction when it is legal to do so. The availability of documents in a new jurisdiction might make them subject to production in that new jurisdiction in circumstances where they would otherwise not have been compellable from their original jurisdiction.
Finally, companies will want to consider the process for reporting remotely on the results of the investigation, both internally and, if relevant, to third parties such as law enforcement.
In circumstances where physical meetings cannot be convened to report on investigative findings, companies will want to consider whether results should be displayed via an electronic screen share or committed to writing and disseminated by email – as well as the privilege consequences of any processes followed, including the instructions given to recipients about taking notes, sending emails with their thoughts, etc.
Decisions may also be required (including, for example, suspending or dismissing employees, freezing employees’ compensation and/or reporting to law enforcement), which will be more challenging remotely and will need careful choreographing to ensure that any available privilege and confidentiality protections are not compromised.
It is clear that measures to control the new coronavirus will require lawyers to adapt quickly to ensure that investigations and other important client matters do not come to a standstill – particularly when operating in certain industries, such as the financial sector, which may require companies to undertake and report on investigations as expeditiously as possible.
As the effects of COVID-19 reverberate throughout corporate America and the world, in- house legal departments and their outside counsel will need to develop creative, and perhaps novel, techniques to conduct investigations remotely, while ensuring that these techniques do not pose unanticipated risks to the integrity of the investigation.

COM_a617. Wilmer Hale: “FEMA Announces Additional Exemptions for Export Restrictions on PPE”

(Source: Wilmer Hale, 20 Apr 2020)
On April 21, 2020, the US Federal Emergency Management Agency (FEMA) is due to publish a 
notification of exemptions (Notification) to the restrictions it has recently imposed on the export of five types of personal protective equipment (PPE). 

As detailed in a prior 
WilmerHale client alert,
FEMA published a 
temporary final rule (TFR) on April 10 restricting the export of five types of PPE, including certain respirators, surgical masks and gloves. Under the TFR, which FEMA issued pursuant to the Defense Production Act (DPA), “[a]ll shipments of covered materials … shall be allocated for domestic use, and may not be exported from the United States without explicit approval by FEMA.” 
US Customs and Border Protection (CBP)-which is responsible for identifying covered shipments for review by FEMA-subsequently issued a 
Memorandum to its field operators providing guidance on CBP’s implementation of the TFR. As detailed in another WilmerHale client alert, the CBP Memorandum instructs CBP field operators to apply the TFR’s restrictions to shipments containing “commercial quantities,” defined as shipments that (i) are valued at $2,500 or more and (ii) contain more than 10,000 units of subject commodities. The Memorandum also includes a list of shipment types excluded from the TFR.
FEMA’s April 21 Notification establishes additional and partially overlapping exemptions pursuant to the DPA and FEMA’s regulations. The Notification exempts from the prohibitions on exportation the following types of shipments:

(1) Shipments to US territories and affiliated commonwealths, including Guam, Puerto Rico, the US Virgin Islands, American Samoa and the Commonwealth of the Northern Mariana Islands (including Minor Outlying Islands);
(2) Exports by nonprofit or nongovernmental organizations for donation (not sale) to foreign charities or governments for free distribution;
(3) Intracompany transfers by US companies to foreign-owned or affiliated facilities;
(4) Shipments exported solely for assembly into medical and diagnostic testing kits destined for US delivery and sale; 
(5) Shipments of sealed, sterile medical and diagnostic testing kits that include covered PPE, as well as other materials, and where the PPE cannot be easily removed without damaging the kit;
(6) Diplomatic shipments from foreign embassies and consulates to their home countries;
(7) Shipments destined for overseas US military addresses, US foreign service posts and US embassies; 
(8) In-transit shipments, including shipments temporarily entered into a warehouse or admitted into a Foreign Trade Zone;
(9) Shipments ultimately destined for Canada or Mexico; and
(10) Shipments by or on behalf of the US federal government, including the military. 
For exemptions number two, three, four, eight, and nine, FEMA will require that exporters file a letter of attestation with CBP certifying that the shipment comports with the terms of the applicable exemption. The letter should identify the exemption, substantiate that the shipment “falls within the claimed exemption,” and include a statement that the provided information is true and accurate “and that the exporter is aware that false information is subject to prosecution under the DPA.” 

FEMA instructs CBP to detain shipments of any manufacturer, broker, distributor, exporter or shipper that CBP believes “is intentionally modifying shipments in a way to take advantage of one or more of these exemptions,” is diverting materials from the US market or is otherwise trying to circumvent the export restrictions.

COM_a718. WTC: “Restrictive Measures on PPE at National Level: Belgium and the Netherlands”

(Source: World Trade Controls, 17 Apr 2020)
* Principal Author: Elise Theys, 32-2-743-4302, Loyens & Loeff
In order to combat the COVID-19 outbreak, the European Commission adopted Implementing Regulation 2020/402 of 14 March 2020, which imposed an authorization requirement on the export of Personal Protection Equipment (‘PPE’) out of the European Union. This Regulation, which was discussed in a
post of 18 March
, expires on 26 April 2020. The Commission is currently working on a follow-up regulation which would narrow down the export restrictions to protective masks and should apply for 30 days as from 26 April 2020. This new regulation is discussed in a
separate post.
Although the European Commission stressed the importance of EU solidarity and the preservation of the integrity of the single market during this crisis, several Member States have been concerned with own restrictions on exports and sales of medical supplies and PPE in order to protect their national healthcare sector and citizens. Belgium and the Netherlands have taken a different approach in this respect.

In March and during the month of April, Belgium took several measures to prevent shortages of medical supplies, PPE and pharmaceutical drugs.
Firstly, in addition to the European export authorization requirement, the Belgian Federal Government imposed restrictions on the sales of medical devices and PPE by adopting the 
Ministerial Decree of 23 March 2020
. This Decree will remain in force until at least 22 June 2020.
The Decree aims to reserve a listed number of medical devices (including e.g. surgical masks, screening material and disinfectant wipes for medical use) and PPE for the Belgian healthcare sector.
In this context, only retail sale of the listed medical devices and PPE by licensed pharmacies is allowed and this insofar as the products have been prescribed by a healthcare professional. Registered distributors are permitted to exclusively (whole)sell the listed medical devices and PPE to other registered distributors, licensed pharmacies, hospitals and licensed healthcare professionals.
In relation to the wholesale of PPE, the Decree provides nonetheless for an exception: wholesalers can still sell the listed PPE to companies (not qualifying under one of the four groups listed above) insofar as that company (i) needs to provide such PPE to its employees in order to protect them from safety or health risks at work (but only in volumes which are reasonably foreseeable for use within the next month) or (ii) requires PPE for its production, processing, storage of its goods or, more in general, to perform its economic activity (e.g. food processing companies).
In accordance with the Decree, the Belgian Government can furthermore impose restrictions on the number of transactions, sales and sales volume of the medical devices and PPE, and could even require that stocks of medical devices and PPE are redistributed or claim the PPE and medical devices from the seller at cost price.
Next to the introduction of the Decree by the Belgian Federal Government, the FAMHP (Belgian Federal Agency for Medicines and Health Products) took a number of measures to address potential shortages of (clearly listed) pharmaceutical drugs and resources.
In order to prevent ‘over-ordering’ and misallocations of stock, mandatory quotas for Belgian wholesalers were adopted. Hospitals and pharmacies having a large stock of the listed pharmaceutical drugs or resources are furthermore required to report their ‘surplus stock’ to the FAMHP with the aim of potentially redistributing it.
Initially the FAMHP also introduced a prohibition on the export outside the EEA of the listed pharmaceutical drugs and resources. This measure was however converted later on into a notification duty for such export after it was deemed being too restrictive.
The Netherlands

In comparison to Belgium, the developments relating to the export of PPE are more limited in the Netherlands. The Dutch Government has appointed the Inspector General and Chief Inspectors of the Inspectorate for Health and Youth Care as the competent licensing authority with regard to Implementing Regulation 2020/402 by Ministerial Decree of 19 March 2020. The Inspector General and Chief Inspectors of the Inspectorate for Health and Youth Care are responsible for the decision-making process. The Central Import and Export Service (CDIU) – a Customs unit that is also responsible for export control licensing – deals with the administrative process of the licence application.
At the moment, contrary to Belgium, the Netherlands does not have specific legislation for the restriction of exports in place in addition to the Regulation. In the Dutch parliamentary debates, there is of course considerable attention for the potential threat of a shortage of PPE which is sometimes accompanied by calls for additional restrictive measures. Despite the pressing nature of the situation, however, the Dutch Government seems to be resisting the imposition of additional measures, because this could lead to a decrease of foreign supplies and an increase of prices of PPE.
The way ahead

It is clear that Belgium and the Netherlands have chosen a different approach to tackle the need for medical supplies, PPE and pharmaceutical drugs during the current COVID-19 crisis. The Belgian strategy appears to have led to sometimes hastily drafted legislation which at times may result in legal uncertainty for the economic actors involved. On the other hand, since the Belgian measures are only applicable during a limited period of time, they are periodically reviewed and, when the circumstances should require so, amended. The Dutch approach is rather straightforward but might entail risks for existing stock and supplies. It remains to be seen whether and how both countries will need to adjust their approach in the coming months


FCC Academy Presents Webinar: “An Introduction to EU/Dutch Dual-use and Military Export Controls
“; 12 May

(Source: FCC Academy)
*What: Introduction to EU / Dutch Dual-Use and Military Export Controls
*When: 12 May 2020
*Where:  Online
*Sponsor: FCC Academy 
*Presenter: Marco F.N. Crombach MSc (Director)

, or email

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


EN_a120. Bartlett’s Unfamiliar Quotations

(Source: Editor)


* Charlotte Brontë (21 Apr 1816 – 31 Mar 1855; was an English novelist and poet, the eldest of the three Brontë sisters, including Emily and Anne, whose novels became classics of English literature. Charlotte’s best-known novel was Jane Eyre.
  – “Prejudices, it is well known, are most difficult to eradicate from the heart whose soil has never been loosened or fertilized by education; they grow firm there, firm as weeds among stones.”
  – “I am always easy of belief when the creed pleases me.”

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

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

10 Apr 2020:
85 FR 20158:

North Korea Sanctions Regulations. 


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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