20-0506 Wednesday ” Daily Bugle “

20-0506 Wednesday “Daily Bugle”

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Wednesday, 6 May 2020

  1. State/DDTC: “ITAR – Temporary Reduction in Certain Registration Fees” 
  1. Items Scheduled for Future Federal Register Edition 
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  4. Treasury/OFAC: “Settlement Agreement between OFAC and BIOMIN America, Inc.” 
  5. Canada TID Updates Notice to Exporters – Requirements for Exporting Prohibited Firearms 
  6. EU Commission: “Interim Appeal Arrangement for WTO Disputes Becomes Effective” 
  7. Singapore Customs Amends Schedule to the Chemical Weapons Act 
  1. Reuters: “U.S. Expected to Deport Iranian Professor Acquitted of Sanctions Violations”
  2. ST&R Trade Report: “Push for Tariff Relief Could be Aided by New ITC Report” 
  1. EU Sanctions: “South Korean NGO Granted North Korea Sanctions Exemption”
  2. N. Turner: “Sanctions Top-5 for the Week Ending 1 May 2020”
  3. Sheppard Mullin: “The Emerging Landscape for Export Controls on Autonomous Vehicle Technology”
  4. Wilmer Hale: “COVID-19: Impacts on US Sanctions Regulation and Policy”
  1. FCC Academy Presents Webinar: “An Introduction to EU/Dutch Dual-use and Military Export Controls”; 12 May 
  2. FCC Academy Presents June Webinars: U.S. Export Controls: ITAR, EAR, and FMS 
  1. New Edition of Bartlett’s Annotated ITAR (“The BITAR”) Available 
  2. Bartlett’s Unfamiliar Quotations 
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EXIM_a11. State/DDTC: “ITAR–Temporary Reduction in Certain Registration Fees”

Federal Register, 6 May 2020) [Excerpts]
85 FR 26847: Rule.
* AGENCY: Department of State.
* ACTION: Temporary reduction in certain fees.
* SUMMARY: The Department of State is making a temporary change in the Tier I and Tier II and new registrant payment guidelines on the Directorate of Defense Trade Controls (DDTC) website at www.pmddtc.state.gov.  
   These guidelines outline the registration fees charged to persons who engage in the United States in the business of manufacturing, exporting, or temporarily importing defense articles, furnishing defense services, or who engage in brokering activities pursuant to the International Traffic in Arms Regulations (ITAR). … 
* DATES: The temporary reduction in fees was effective May 1, 2020, and shall expire on April 30, 2021, unless modified by a subsequent notification in the Federal Register.
* FOR FURTHER INFORMATION CONTACT: Neal Kringel, Office of Defense Trade Controls Management, U.S. Department of State, telephone (202) 663-1282, or email DDTCResponseTeam@state.gov. ATTN: Temporary Fee Reduction.

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USTR: NOTICES; 2020 Generalized System of Preferences Annual Review and the Deadline for Filing Petitions [Pub. Date: 7 May 2020] [PDF]

* DHS/CBP: NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Temporary Scientific or Educational Purposes [Pub. Date 7 May 2020] [PDF]

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(Source: Commerce/BIS)

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4. State/DDTC: (No new postings)

(Source: State/DDTC)  

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Treasury/OFAC, 6 May 2020)
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced that BIOMIN America, Inc. (“BIOMIN America”), an animal nutrition company based in Overland Park, Kansas, has paid $257,862 to settle its potential civil liability for apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR).  
   Specifically, between the approximate dates of July 2012 and September 2017, BIOMIN America and its owned or controlled foreign entities engaged in a total of 30 sales of agricultural commodities produced outside the United States to Alfarma S.A. in Cuba without authorization from OFAC, which resulted in 44 apparent violations of § 515.201 of the CACR.  
   BIOMIN America could potentially have availed itself of such authorization but failed to take the steps necessary to do so. Instead, BIOMIN America developed a transaction structure that it incorrectly determined would be consistent with U.S. sanctions requirements.  
   OFAC determined that BIOMIN America voluntarily disclosed the Apparent Violations, and that the Apparent Violations constitute a non-egregious case.
For more information, please visit the following web notice.

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Canada TID, 1 May 2020)
  (1) The purpose of this Notice is to advise exporters of export controls implications flowing from the announcement by the Prime Minister that a number of firearms are now considered “prohibited firearms” as defined in subsection 84(1) of the Criminal Code. As per the Prime Minister’s announcement, all firearms that have been prohibited effective May 1st under the Regulations Amending the Regulations Prescribing Certain Firearms and Other Weapons, Components and Parts of Weapons, Accessories, Cartridge Magazines, Ammunition and Projectiles as Prohibited, Restricted or Non-Restricted:
  • are captured under section 4.1 of the EIPA and are eligible for export only to those destinations listed on the Automatic Firearms Country Control List (AFCCL), and;
  • require an individual export permit. This also applies to the export of parts related to these firearms.
General Information
  (2) Items controlled under the AFCCL are enumerated in section 4.1 of the Export and Import Permits Act (EIPA). These items include, but are not limited to, cartridge magazines that are prohibited devices, full-automatic firearms or firearms that have been prescribed to be prohibited firearms, and any components or parts of such firearms that are specially designed for them. 
  (3) The Minister of Foreign Affairs maintains the authority to exercise discretion on a case-by-case basis over permit applications, which are approved only when the Minister is satisfied that such exports would be consistent with his legal obligations as well as Canada’s foreign, defence and security policies.
  (4) Prohibited firearms and their specially designed components or parts, including the firearms newly prohibited, may only be exported to countries listed on the AFCCL. …
The export of prohibited firearms to non-Automatic Firearms Country Control List destinations is not permitted, regardless of whether the exporter possesses an export permit issued prior the reclassification of that firearm.
  (5) The Export and Brokering Controls Handbook explains the requirements of the export process, and also lists controls administered by other government departments. Concerning firearms, sections D.2. Automatic firearms country control list and J. Applications to export firearms, related goods, and ammunition of the Handbook are of particular interest.
  (6) Exporters must prepare and submit the appropriate export permit application(s) for controlled goods, including prohibited firearms, their components or parts, and any accessories, that are proposed for export. For a step-by-step description of how to apply for an Export Permit for Firearms, Related Goods and Ammunition, please consult this website.
  (7) Please note that we are currently facing permit processing delays. Exporters are advised to submit their applications four to five months in advance of the time they wish to export.
  (8) This Notice has been prepared for guidance and convenience of reference only. Global Affairs Canada does not provide legal advice on the foregoing. For all purposes of interpreting and applying the law, readers should consult the Export and Import Permits Act and its associated regulations. These publications are available online.

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The EU and other WTO members have formally notified the ‘Multi-party interim appeal arbitration arrangement’ (MPIA) to the World Trade Organization (WTO). This notification marks the start of the application of the MPIA to disputes arising between the participating WTO members.
The MPIA ensures that participant WTO members will continue to benefit from a functioning 2-step dispute settlement system in the WTO including the availability of an independent and impartial appeal stage. 
These are currently Australia; Brazil; Canada; China; Chile; Colombia; Costa Rica; the European Union; Guatemala; Hong Kong, China; Iceland; Mexico; New Zealand; Norway; Pakistan; Singapore; Switzerland; Ukraine and Uruguay. Additional WTO members may join the MPIA at any time. Inclusiveness is an important feature of the MPIA that is designed to offer stability to WTO dispute settlement, despite the Appellate Body’s paralysis. 
The MPIA will operate under the WTO framework, based on a provision in the WTO’s Dispute Settlement Understanding (DSU) for dispute arbitration (Article 25 DSU). It is based on the usual WTO rules applicable to appeals, but also contains some novel elements to enhance procedural efficiency. The interim appeal arrangement is not intended to supplant the WTO’s Appellate Body. This is a stopgap measure. As soon as the Appellate Body is again able to operate, appeals will be brought before the Appellate Body. 
The subscribing WTO members will now start putting in place a pool of 10 arbitrators that could be called on to hear future appeals. The aim is to have the composition of this pool finalised within three months from now. Arbitrators to serve on specific appeals will be drawn randomly from that pool.

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8. Singapore Customs Amends Schedule to the Chemical Weapons Act

Singapore Customs, 6 May 2020) [Excerpts]
Amendment of Part I of the Schedule (Schedule 1 chemicals) to the Chemical Weapons (Prohibition) Act
We would like to inform you that the Chemical Weapons (Prohibition) Act (Amendment of Schedule) Order 2020 had been gazetted on 6 May 2020 and will enter into force on 7 Jun 2020.
Singapore is a State Party to the Chemical Weapons Convention (CWC). At the 24th Session of the Conference of the State Parties to the CWC, the decisions for the amendments of Schedule 1 chemicals were adopted. The amendments added new chemicals to the list of Schedule 1 chemicals, and they are to enter into force for all State Parties on 7 Jun 2020.
Specifically, the new chemicals are added to the list of Schedule 1A chemicals. These newly added chemicals, including the Chemical Abstracts Service (CAS) registry numbers assigned to the toxic chemicals described therein.
You may access the full list of CWC scheduled chemicals via our website at 
www.customs.gov.sg > Businesses > Chemical Weapons Convention (CWC) > 
Controlled Chemicals. [
Shortcut HERE]
Companies that wish to carry out controlled activities pertaining to scheduled chemicals or unscheduled discrete organic chemicals are required to obtain a CWC licence that is issued by the National Authority (CWC) [NA(CWC)] under the Chemic
al Weapons (Prohibition) Act (CWPA) before the start of these activities.  . . .

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NWS_a19. Reuters: “U.S. Expected to Deport Iranian Professor Acquitted of Sanctions Violations”

(Source: Reuters, 6 May 2020) [Excerpts]
The United States is expected to deport Iranian professor Sirous Asgari, who was acquitted of stealing trade secrets, once he receives medical clearance to leave, U.S. and Iranian officials said on Tuesday.
Asgari might be part of a rare prisoner swap between foes Iran and the United States. Iranian sources have told Reuters that Tehran is prepared to take part in a swap.
The 59-year-old Asgari, who tested positive for the novel coronavirus around 10 days ago, is under the medical care of U.S. immigration authorities and awaits a health clearance to travel, said Abolfazl Mehrabadi, an Iranian diplomat who is deputy director of Tehran’s interests section at the Pakistani Embassy in Washington. …

NWS_a210. ST&R Trade Report: “Push for Tariff Relief Could be Aided by New ITC Report” 

(Source: Sandler, Travis & Rosenberg Trade Report, 6 May 2020) [Excerpts]
Lawmakers and business groups are intensifying their calls for tariff relief in response to the COVID-19 pandemic, aided by a new International Trade Commission report. 
The ITC report identifies 112 HTSUS numbers covering imported products related to the pandemic response, including test kits; disinfectants and sterilizing products; medical imaging, diagnostic, oxygen therapy, pulse oximeter, and other equipment; medicines; personal protective equipment; and non-PPE medical consumable and hospital supplies. The total value of imports of these HTSUS numbers (some of which cover goods not related to the pandemic response) in 2019 was $105.3 billion.
According to the report, more than two-thirds of these HTSUS numbers (68 percent) are currently duty-free, while the rest are subject to duties of 2.5 to 16 percent (although each of these is duty-free from one or more countries). Half of the HTSUS numbers (51 percent) are not subject to the Section 301 additional tariffs on imports from China. Of the half (49 percent) that are, 35 percent are subject to a 25 percent tariff, 14 percent are subject to a 7.5 percent tariff, and 51 percent are subject to a whole or partial tariff exclusion (all of which are slated to expire later this year).
The report prompted House Ways and Means Committee Chairman Richard Neal, D-Mass., to call on the Trump administration to suspend all tariffs on the covered products for 90 days. The National Foreign Trade Council echoed that call, saying the report shows that “immediate suspension of tariffs on these items is justified and really important to fighting the pandemic.”
Others are urging the White House to go even further. Hundreds of companies and trade associations asked President Trump in an April 28 letter to (1) extend the duty deferral already granted to imports made during May and June and (2) expand the deferral to “all duties and fees.” The limited 90-day duty deferral only benefits some U.S. companies, the letter explained, while expanding the deferral “would immediately free up billions of dollars of working capital” for many others “to pay suppliers, employees, service providers and other critical stakeholders.”
Three textile and apparel product associations made the same request and argument in an April 30 letter to House and Senate leaders. However, they also recommended suspending duties and tariffs on personal protective equipment; allowing foreign-trade zones to temporarily remove items to off-site, non-activated, secure warehouses for 12-14 months of storage; reviewing current bond requirements so sureties can lower collateral requirements; and renewing the Caribbean Basin Trade Partnership Act and the Generalized System of Preferences, both of which are set to expire this year.


COM_a111. EU Sanctions: “South Korean NGO Granted North Korea Sanctions Exemption”

EU Sanctions, 5 May 2020)
* Author: Michael O’Kane, 44-20-7822-7777, Peters & Peters
The UN Security Council 1718 Sanctions Committee (DPRK) has granted an exemption from UN sanctions to Greentree International, a South Korean NGO, for 6 months. The exemption allows the NGO to import items required to carry out a project entitled “the Agricultural Rehabilitation Project for physical-psychological development and recovery of people with disabilities”. Items to install a greenhouse, including seeds, cement, water tanks, doors and pipes have been approved. See 

COM_a212. N. Turner: “Sanctions Top-5 for the Week Ending 1 May 2020”

Medium, 5 May 2020)
* Author: 
Nicholas Turner, Esq., 852-5998-7559, Steptoe & Johnson HK 
Here are five things that happened this week in the world of economic sanctions that I think you should know about.
The US Office of Foreign Assets Control (OFAC) announced a finding of violation against American Express Travel Related Services Company (Amex) for violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations. According to the OFAC enforcement release, Amex issued a prepaid card to an individual on the List of Specially Designated Nationals and Blocked Persons (the SDN List) after a name-screening system failure and subsequent human error.
  (2) OFAC added an Iranian-Iraqi national and his Oman-based company to the SDN List pursuant to Executive Order 13224 for providing support to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). The US Department of Justice (DOJ) simultaneously announced criminal money laundering and sanctions charges against the individual and another Iranian national for making payments through the US financial system as part of a scheme to procure a petroleum tanker.
  (3) The US State Department is making the argument that the United States has the ability to force a “snap back” of United Nations sanctions against Iran under the Joint Comprehensive Plan of Action (JCPOA), despite having withdrawn from the JCPOA in May 2018. The argument turns on the meaning of the term “participant” as used in UN Security Council Resolution 2231 (2015). (Here is a transcript of a press briefing with Brian Hook, US Special Representative for Iran, discussing the issue.)
  (4) The Commerce Department’s Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to further restrict exports of “items subject to the EAR” to China, Russia, and Venezuela involving military end uses or end users. (For more details, read my team’s post on the Steptoe International Compliance Blog.)
  (5) Reuters reported that Amazon bought temperature cameras from a Chinese manufacturer that was added to the BIS Entity List in October 2019 for activities in the Xinjiang Uyghur Autonomous Region (XUAR). (A tempest in a teapot, if you ask me, since the Entity List applies to transfers of items to a listed entity, not from one.)
The Amex case brought me back to the days of working as a sanctions compliance officer for a bank. Going over name screening schematics with IT colleagues was one of the trickier parts of the job. According to OFAC’s enforcement notice, Amex’s centralized name screening system timed out after receiving multiple requests from an external issuing bank, allowing the SDN’s card application to be processed. (A back-up procedure involving a manual review also apparently failed.) It’s important that “automated sanctions compliance controls . . . cannot be overridden without appropriate review,” OFAC reminds us. A large part of sanctions compliance is about technology, as I’ve said before, and compliance officers should endeavor to understand how their screening systems work from end to end.

* Principal Author: Curtis M. Dombek, Esq., 32-2-290-7902, Sheppard Mullin
  Taking a break from reporting on COVID-19 legal developments, we turn for a moment to what is happening now on export control of autonomous vehicle technology.

   The autonomous vehicle R&D sector is booming, largely in the last three years. Companies are investing in sensor technology and machine learning, and creating pilot programs to test self-driving cars both for individuals and ride-sharing purposes.

The Current Landscape
  Export controls have been lagging behind the technology, however. Large numbers of cross-border collaboration programs have been underway, with little restriction under current export controls.

  In the case of technology, an export includes not only sending technical data abroad but also sharing it, visually or orally, with a foreign person in the United States (a “deemed export”).

  On the relevant Commerce Control List (CCL) published by the Commerce Department’s Bureau of Industry (BIS), there are several categories of Export Control Classification Numbers (ECCNs) pertinent to autonomous vehicle technology. Among these are:
  • Category 3, which covers electronics such as semiconductor devices and integrated circuits;
  • Category 5, which includes information security (encryption) items;
  • Category 6, which covers cameras and sensors; and
  • Category 7, which covers navigation and avionics, including GPS equipment.

  Much of the technology relevant to autonomous driving has been either absent from the enumerated ECCNs and therefore in the catch-all category of EAR99 subject to minimal export control, or in ECCNs controlled only for antiterrorism (AT) reasons. To date, therefore, relatively few exports of technology related to autonomous driving R&D have required export licenses.  This looks set to change, and the first steps in that direction have already been taken. Recent press reports suggest that additional steps will soon follow.


  An expansion of U.S. export controls on “emerging” and “foundational” technologies has been initiated pursuant to the Export Control and Reform Act of 2018 (“ECRA”). ECRA requires the executive branch to identify, and the BIS to control, emerging and foundational technologies that are essential to the national security of the United States and are not already subject to export controls.

  It has been widely acknowledged that technological collaboration with companies in China is one area that BIS will be targeting by means of its new controls on emerging and foundational technologies. The concern is that a country that comes to dominate the autonomous driving field will have such an important economic advantage that U.S. national security is at stake.

  BIS has already imposed new controls on some emerging technologies through the Wassenaar system of multilateral controls, and it has also issued an interim final rule to control certain geospatial imagery software with specified functionality. These geospatial imagery controls, which include some software pertinent to autonomous driving, require an export license to all destinations except Canada.

Next Steps
  We should expect BIS to continue adding other technologies pertinent to autonomous driving pursuant to the ECRA. If the initial steps taken are any guide, the new controls should remain tightly specified in terms of technical criteria.  There are, however, recent press reports indicating that other BIS export regulations affecting China will soon be amended. The press accounts indicate that these could include potentially the CIV and APR license exceptions as well as new rules limiting exports to entities in China that are under ultimate military control. CIV has been an important license exception for semiconductor programs involving China, and APR has been important for the China-related business of companies with affiliates and partners in countries that are close U.S. allies like the NATO countries, Australia, Japan, New Zealand and South Korea. The military end user rule presents unique challenges in the case of China because of the vast extent of state control over commercial companies in China.

  All of these coming regulatory changes are sure to present urgent compliance issues for U.S. and other companies engaged in autonomous driving development, especially those that are dealing directly or indirectly with collaborators, partners, affiliates, customers and even suppliers in China.

End Note: CFIUS
  This article would be incomplete without mentioning CFIUS – the Committee for Foreign Investment in the United States. CFIUS regulates foreign investment in the United States to protect national security, and the same legislation that enacted the ECRA enacted the Foreign Investment Risk Review Modernization Act (FIRRMA). FIRRMA made extensive revisions to CFIUS national security reviews, one of which was to target cross-border investments in U.S. companies with critical technologies, including those that BIS defines as emerging or foundational technologies in its new controls.  Under FIRRMA and the FIRRMA implementing regulations recently issued by CFIUS, many technology investments (including investments in foreign companies with U.S. subsidiaries) are now subject to mandatory pre-closing notification to CFIUS, which has the power to impose mitigation conditions or even block the investments.  As a result, when BIS adds areas of autonomous driving technology to its emerging or foundational technology controls, foreign investments in those same technologies will become subject to stricter CFIUS scrutiny.

Wilmer Hale, 4 May 2020)
* Principal Author: David S. Cohen, Esq., 1-202-663-6205, Wilmer Cutler Pickering Hale and Dorr LLP
  The COVID-19 pandemic has had profound economic and political effects over the past several months. Increasingly, those effects have led a number of US policymakers, US allies, and others to question certain US sanctions policies, and triggered debate over new sanctions with respect to the novel coronavirus and alleged coverups of information related to it. We urge companies to track these developments and consider how sanctions relief related to COVID-19-and potential new sanctions-might create new risks to, or even opportunities for, their business. 

US Humanitarian-Related Sanctions Relief

  On April 16, 2020, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Fact Sheet: Provision of Humanitarian Assistance and Trade to Combat COVID-19 (Factsheet), a comprehensive compilation of all regulatory guidance, exemptions, and exceptions that, to varying degrees, allow humanitarian-related trade with countries and territories subject to comprehensive US sanctions. According to OFAC, “the United States is committed to ensuring that humanitarian assistance continues to reach at-risk populations through legitimate and transparent channels as countries across the globe fight the Coronavirus Disease 2019 (COVID-19).”
The Factsheet appeared as the Trump Administration faced increasing criticism that it was not doing enough to facilitate humanitarian trade with countries impacted by the pandemic, Iran in particular. While the Factsheet contains some new details that are helpful to financial institutions, exporters, and others, it principally summarizes the scope and interplay of existing authorizations. But the Factsheet is now OFAC’s best-consolidated resource regarding permissible humanitarian assistance and trade under OFAC’s Iran, Venezuela, North Korea, Syria, Cuba, and Ukraine/Russia-related sanctions programs-particularly as they apply to COVID-19 related support.
Notably, the Factsheet describes how existing OFAC authorizations apply to exports of personal protective equipment (PPE) and other items needed in fighting COVID-19 to US-sanctioned governments. For example, it confirms that existing general licenses for the export of medicine and medical products to Iran cover medical gowns, medical eye shields and goggles, surgical gloves, face shields, certain respirators and masks such as N95, N99, and N100 masks, and certain ventilators, whereas, in contrast, certain other items helpful for COVID-19 treatment (such as oxygen generators, full face mask respirators including powered air purifying respirators, certain diagnostic medical imaging equipment, and certain decontamination equipment) are subject to a specific licensing requirement from OFAC. The agency states that it “is prioritizing and expediting review of these license requests.”
Persons seeking to avail themselves of OFAC’s humanitarian trade-related authorizations should read the Factsheet carefully, as there are various-and potentially impactful-differences in how the authorizations are applied under each sanctions program. For example, while the Iran, Cuba, Syria, and Venezuela sanctions programs contain general licenses for humanitarian-related activities conducted by nongovernmental organizations, the North Korea and Ukraine/Russia sanctions programs do not contain this exception, and even the extant general licenses vary in their conditions and parameters.
OFAC’s Factsheet arrived after months of pressure from international and domestic critics who have been urging the Trump Administration to ease US sanctions-especially sanctions against Iran-in response to the humanitarian challenges faced by sanctioned countries because of the COVID-19 pandemic. Eight United Nations member states targeted by US sanctions succeeded in persuading UN Secretary-General Antonio Guterres to urge “the waiving of sanctions imposed on countries to ensure access to food, essential health supplies, and COVID-19 medical support.” UN High Commissioner for Human Rights Michelle Bachelet, likewise, called for the easing or suspension of sanctions that create “obstacles to the import of vital medical supplies.” Bachelet specifically identified “over-compliance with sanctions by banks” as one such obstacle. Indeed, European and other non-US banks that are not legally prohibited from facilitating humanitarian trade with Iran often refrain from doing so because of the complexity of ensuring compliance with US primary and secondary sanctions; the risk of drawing unwanted attention from US sanctions enforcement agencies; and complicating commercial relationships with US counterparties. 
Domestically, 30 members of Congress wrote a letter to Secretary of State Mike Pompeo and Secretary of the Treasury Steven Mnuchin, asking that they “substantially suspend” US sanctions against Iran and “other countries facing outbreaks.” For his part, former Vice President and presumptive Democratic Party nominee for President, Joe Biden, issued a comparable statement in which he acknowledged that “there are already humanitarian exceptions in place for sanctions, but in practice, most governments and organizations are too concerned about running afoul to offer assistance.” Biden specifically suggested that the Trump Administration issue broad licenses, create “a dedicated channel for international banks” and others to provide support, issue comfort letters, and provide clearer public guidance. On April 6, two dozen US and European national security experts and former officials issued a statement urging eight comparable, specific measures to ease US sanctions against Iran, including expanding existing humanitarian exemptions, adding staff to expedite licensing of humanitarian trade, and supporting the newly operational Instrument in Support of Trade Exchanges (INSTEX) in Europe. 
Even prior to many of these criticisms and prior to the publication of the Factsheet, OFAC and the Treasury Department had made some effort to provide public guidance on the topic,2 while continuing to insist that existing humanitarian carveouts to their sanctions programs were adequate to ensure the delivery of humanitarian aid to sanctioned countries. On April 9, for example, the Department of the Treasury issued a statement affirming the US commitment “to ensuring the international flow of humanitarian aid continues through legitimate and transparent channels.” In the statement, Secretary Mnuchin affirmed that “Treasury sanctions do not target legitimate aid” and that the United States is “committed to working with financial institutions and non-profit organizations in their efforts to mitigate risks and allow humanitarian assistance and associated payments to flow to those who need it.” The statement suggested that the Treasury Department would “provide guidance and clarifications” on sanctions and anti-money laundering compliance in this context. In effect, the April 9 statement rejected calls for dramatic changes to US sanctions policy in response to COVID-19, previewed the publication of the Factsheet, and signaled some willingness by the Trump Administration to facilitate lawful trade with countries targeted by US sanctions. 
Additionally, on February 27, 2020, OFAC announced that the Swiss Humanitarian Trade Arrangement (SHTA) had become fully operational. The announcement was accompanied by the issuance of General License 8 authorizing humanitarian trade transactions involving the Central Bank of Iran (a Specially Designated Global Terrorist) and several related Frequently Asked Questions. The SHTA is supervised by the Swiss State Secretariat for Economic Affairs, is intended for use by US and non-US persons domiciled in Switzerland, and it is designed in particular to assist foreign financial institutions facilitate authorized agricultural and humanitarian exports to Iran. It remains to be seen whether and to what extent exporters and banks will look to the SHTA to facilitate such trade. 
  In light of these developments, we recommend that US, European, and other companies that wish to engage in or facilitate humanitarian-related trade to carefully assess the existing US primary and secondary sanctions, with particular attention to OFAC’s recent Factsheet, and-as appropriate-engage with the Treasury Department and other US government stakeholders to ensure that the transactions are consistent with US Government expectations. 

OFAC Engagement

  OFAC has recently signaled its willingness to maintain a degree of flexibility in response to challenges that companies and other persons may face in fulfilling certain OFAC-administered regulatory requirements.
On April 20, 2020, OFAC issued a notice encouraging persons affected by the COVID-19 pandemic to contact OFAC “as soon as practicable” if they believe that they may expect delays in meeting reporting or filing deadlines. This includes requirements related to filing blocked property and rejected transaction reports, responses to administrative subpoenas, reports required under general or specific licenses, or any other required submissions.
The notice also reiterates OFAC’s support for a risk-based approach to sanctions compliance.  Notably, OFAC states that “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.”

COVID-19 Sanctions and Other Restrictions

  Earlier this month, several Republican members of Congress introduced the Li Wenliang Global Public Health Accountability Act, which would authorize the President to impose sanctions against any foreign government official involved in efforts “to deliberately conceal or distort information about a public health emergency of international concern,” including COVID-19. On April 14, 2020, Senator Ted Cruz (R-TX) introduced the Ending Medical Censorship and Cover Ups in China Act of 2020, which would mandate that the President impose sanctions against persons who engaged in censorship and related activities in China targeting Chinese citizens who disseminate “accurate epidemiological information, including information related to emerging diseases or pathogens,” among others. A former Canadian justice minister is urging his government to impose comparable sanctions against Chinese officials under Canada’s Sergei Magnitsky Law.
On April 10, 2020, President Trump issued a Memorandum on Visa Sanctions to the Secretaries of State and Homeland Security. In it, he directed the Secretary of Homeland Security to notify the Secretary of State “if any foreign country denies or unreasonably delays the acceptance of aliens who are citizens, subjects, nationals, or residents of that country after being asked to accept those aliens, and if such denial or delay is impeding operations of the Department of Homeland Security necessary to respond to the ongoing pandemic caused by SARS-CoV-2.” The Secretary of State would then be required to impose visa sanctions under the Immigration and Nationality Act (INA). Specifically, under Sec. 243(d) of the INA, immigrant and nonimmigrant visas would be denied to aliens of that foreign country unless and until the foreign country acceded to the US request. 
These efforts signal that the political response to the COVID-19 pandemic is likely to resemble the political response to other global challenges, including-at least potentially-through the deployment of new sanctions programs.


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

* 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)
* Register: 

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EN_a218. Bartlett’s Unfamiliar Quotations

(Source: Editor)

* Sigmund Freud (Sigismund Schlomo Freud; 6 May 1856 – 23 Sep 1939; was an Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.)

– “
The tendency to aggression is an innate, independent, instinctual disposition in man… it constitutes the powerful obstacle to culture.”
– “The first human who hurled an insult instead of a stone was the founder of civilization.”

* Orson Welles (George Orson Welles; 6 May 1915 – 10 Oct 1985; was an American actor, director, writer and producer who is remembered for his innovative work in radio, theatre and film. He is considered one of the greatest filmmakers of all time. His first film was Citizen Kane, which is consistently ranked as the greatest film ever made, and which he co-wrote, produced, directed and starred in as Charles Foster Kane. In 2002 he was voted the greatest film director of all time in two British Film Institute polls among directors and critics.)

– “I started at the top and worked my way down.”
– “My doctor told me to stop having intimate dinners for four. Unless there are three other people.”

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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.


28 Apr 2020:
85 FR 23470
: Elimination of License Exception Civil End Users (CIV).


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.

6 May 2020: 85 FR 26847,  Temporarily reducing the registration fee schedule in ITAR 122.3 until April 30, 2021. 


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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