20-1028 Wednesday “Daily Bugle”

20-1028 Wednesday “Daily Bugle”

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Wednesday, 28 October 2020

  1. Commerce/BIS: “Emerging Technology Technical Advisory Committee; Notice of Open Meeting”
  2. DHS/CBP: “Mandatory Continuing Education for Licensed Customs Brokers”
  3. DHS/CBP: “Customs Broker Permit User Fee Payment for 2021”
  4. Treasury/OFAC: “Notice of OFAC Sanctions Actions”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  1. Bloomberg: “China to Sanction Boeing, Raytheon, Lockheed Over Taiwan Arms”
  2. Deutsche Welle: “The Made in Hong Kong Brand Under Pressure”
  1. Dechert: “New Export Controls – Emerging Technologies”
  2. ST&R Trade Report: “Customs Brokers Could See Continuing Education Mandate Under CBP Proposal”
  3. Travers Smith: “Exporting Dual-Use Items to EU Member States from the UK – the New Rules”
  1. ECTI Presents 15 Dec; The Export Control Year in Review Webinar (just $99/seat!)
  2. FCC Academy Presents: 1 and 3 Dec; “U.S. Export Controls: ITAR/EAR” and “FMS”
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Find the Latest Amendments Here. 
  3. Weekly Highlights of the Daily Bugle Top Stories 
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(Source: Federal Register, 28 Oct 2020) [Excerpts]
85 FR 68287: Notice
The Emerging Technology Technical Advisory Committee (ETTAC) will meet on November 9, 2020, at 1:00 p.m. to 3:00 p.m., Eastern Standard Time. The meeting will be available via teleconference. The Committee advises the Office of the Assistant Secretary for Export Administration on the identification of emerging and foundational technologies with potential dual-use applications as early as possible in their developmental stages both within the United States and abroad.
Open Session
1. Welcome and Introductions.
2. Introduction by the Bureau of Industry and Security Leadership.
3. Presentation on ETTAC Structure and Work Plan (Chair/Vice Chair).
4. Presentations on Emerging Technologies Trends.
5. Open Discussion (Comments, Q&A).
6. Conclusion/Adjournment.
   The open session will be accessible via teleconference to 20 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at Yvette.Springer@bis.doc.gov no later than November 2, 2020.
A limited number of slots will be available for the public session. Reservations are not accepted. To the extent that time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate the distribution of public presentation materials to the Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email.
  For more information, call Yvette Springer at (202) 482-2813.
Yvette Springer,
Committee Liaison Officer.

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(Source: Federal Register, 28 Oct 2020) [Excerpts]
85 FR 68260: Proposed Rule
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: Advance notice of proposed rulemaking.
* SUMMARY: U.S. Customs and Border Protection (CBP) is considering amending its regulations to mandate continuing education for licensed customs brokers. CBP is seeking comments on a potential framework of continuing education requirements for licensed customs brokers in order to assess the current situation among members of the customs broker industry and analyze the potential impact of such a framework on customs brokers.
* DATES: Comments must be received on or before December 28, 2020.
* ADDRESSES: You may submit comments, identified by Docket No. USCBP 2020-0042, by one of the following methods:
1. Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments via Docket No. USCBP-2020-0042.
2. Mail: Trade and Commercial Regulations Branch, Regulations and Rulings, Office of Trade, U.S. Customs and Border Protection, 90 K Street NE (10th Floor), Washington, DC 20229-1177.
3. Confidential Information: If you want to submit a comment with confidential information that you do not wish to be made available to the public, please submit the comment as a written/paper submission by mail to the address listed above (see “Mail”).   
  Instructions: . . . . 

  For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” heading of the SUPPLEMENTARY INFORMATION section of this document.

  . . . .

* FOR FURTHER INFORMATION CONTACT: Elena D. Ryan, Special Advisor, Programs and Policy Analysis, Regulations and Rulings, Office of Trade, U.S. Customs and Border Protection, at (202) 325-0001 or ContinuingEducation@cbp.dhs.gov, including questions regarding the submission of confidential information.

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

(Source: Federal Register, 28 Oct 2020) [Excerpts]
85 FR 68355: Notice
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: This document provides notice to customs brokers that the annual user fee that is assessed for each permit held by a broker, whether it may be an individual, partnership, association, or corporation, is due by January 29, 2021. Pursuant to fee adjustments required by the Fixing America’s Surface Transportation Act (FAST ACT) and U.S. Customs and Border Protection (CBP) regulations, the annual user fee payable for calendar year 2021 will be $150.33.
* DATES: Payment of the 2021 Customs Broker Permit User Fee is due by January 29, 2021.
* FOR FURTHER INFORMATION CONTACT: Melba Hubbard, Broker Management Branch, Office of Trade, (202) 325-6986, or melba.hubbard@cbp.dhs.gov.

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

(Source: Federal Register, 28 Oct 2020) [Excerpts]
85 FR 68412: Notice
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Notice.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC’s Specially Designated Nationals and Blocked Persons List based on OFAC’s determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
* FOR FURTHER INFORMATION CONTACT: OFAC: Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490; Assistant Director for Licensing, tel.: 202-622-2480; or Assistant Director for Regulatory Affairs, tel.: 202-622-4855.

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


(Source: Federal Register)
* Commerce/BIS: NOTICES; Order Denying Export Privileges: Jimy Joseph [Pub. Date: 29 Oct 2020] (PDF)
* Commerce/BIS: NOTICES; Order Denying Export Privileges: Junior Joel Joseph [Pub. Date: 29 Oct 2020] (PDF)
* Commerce/BIS: RULES; Amendments to National Security License Review Policy under the Export Administration Regulations [Pub. Date: 29 Oct 2020] (PDF)
* Treasury/OFAC: NOTICES; Blocking or Unblocking of Persons and Properties [Pub. Date: 29 Oct 2020] (PDF)
* Treasury/OFAC: RULES; Yemen Sanctions Regulations [Pub. Date: 29 Oct 2020] (PDF)
* USTR: NOTICES; Modifications to the Harmonized Tariff Schedule Concerning the United States-Colombia Trade Promotion Agreement; Effective Date [Pub. Date: 29 Oct 2020] (PDF)

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OGS_a26. Commerce/BIS: (No new postings)

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  China will impose unspecified sanctions on Boeing Co.‘s defense unit, Lockheed Martin Corp. and Raytheon Technologies Corp. after the U.S. State Department approved $1.8 billion in arms sales to Taiwan last week.

  The sanctions will be imposed “in order to uphold national interests,” Chinese Foreign Ministry spokesman Zhao Lijian told reporters Monday in Beijing.
The action follows the State Department’s approval last week of $1.8 billion in sales of new weapons for Taiwan and submission of the package to Congress for a final review. The deals, and an earlier one involving Lockheed F-16 fighters, are taking place amid rising tension between the superpowers ahead of the U.S. election next week.
  The new package includes 135 SLAM extended-range land attack missiles from Boeing, Himars mobile artillery rocket systems from Lockheed, and Raytheon surveillance and reconnaissance sensors to be mounted on aircraft. …
   Boeing’s 50-year relationship with China in aviation has helped the country’s “safe, efficient and profitable aviation system to keep pace with the country’s rapid economic growth,” the company said by email. Boeing sells civilian aircraft such as the 787 Dreamliner and 737 Max to Chinese airlines.
  Raytheon, which makes Pratt & Whitney jet engines and other aeronautics equipment, also touted its connections to China’s civil aviation industry. “We remain committed to its success,” the company said by email.
  Raytheon and Lockheed noted as well that foreign military sales are government-to-government transactions, made in cooperation with U.S. authorities. Lockheed said its presence in China is limited.

(Source: Deutsche Welle, 27 Oct 2020) [Excerpts]
Exports from Hong Kong to the US will no longer be labeled ‘Made in Hong Kong’ as of November. The US has revoked its special trading rights as China takes ever greater control of the territory. Manufacturers are worried. …


(Source: Dechert, Oct 2020)

* Principal Author: F. Amanda DeBusk, Esq., 1-202-261-3452, Dechert LLP 

Key Takeaways

  • The U.S. government has implemented new national security export controls on “emerging” technologies that went into effect on October 5, 2020.
  • Companies operating in the semiconductor, digital forensics, and aviation industries are likely to be directly impacted by these new controls.
  • Many of the new controls impose worldwide licensing requirements and can impact existing supply chains. Companies that can conduct timely assessments will be able to implement appropriate controls minimizing business disruptions.  
  The U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) on October 5, 2020, published a final rule implementing new export controls on six categories of emerging technology. In doing so, the U.S. government has implemented the latest annual update to the Wassenaar Arrangement – a multilateral export control regime in which 42 countries participate. The semiconductor, digital forensics, and aviation industries will feel the primary impact. These changes create new Export Control Classification Numbers (“ECCNs”) and modify existing ECCNs, applicable to silicon wafer production, computer numerically controlled (“CNC”) tools, computational lithography software, digital forensics tools, software that captures and analyzes communications and metadata, and suborbital aircraft. BIS also made corresponding changes to a license exception available for exports to closely allied countries. 
  Commodities captured by the new ECCNs are subject to stringent export control restrictions. Each of the new ECCNs is controlled for National Security reasons (under NS Column 1 or 2 of the Commerce Control List (“CCL”)) in addition to other reasons for control (e.g., Nuclear Non-Proliferation, Regional Stability and Anti-Terrorism). National Security controls can create significant challenges for global supply chains and export compliance programs, as they may impose a license requirement, or require the use of a license exception, for the export, reexport or transfer of subject commodities to all worldwide destinations except Canada. 


  Section 1758 of the Export Control Reform Act of 2018 (“ECRA”), enacted as part of the National Defense Authorization Act for Fiscal Year 2019, instructs BIS to identify and establish controls on emerging and foundational technologies. The ECRA does not define “emerging” or “foundational” technologies, leaving BIS and its interagency partners responsible to identify them and implement appropriate controls. The ECRA also directs BIS to seek multilateral adoption of any such new controls, with the intent that U.S. companies that compete globally will not be unilaterally disadvantaged by new controls on their technologies.
  This final rule is another step in BIS’ process to identify emerging technologies that began in 2018 with the issuance of an advanced notice of proposed rulemaking. BIS is following a similar path for the identification of foundational technologies, having issued an advanced notice of proposed rulemaking on August 27, 2020.
  In issuing these new controls, BIS did not provide commentary on its previous requests for industry comments or address any comments presented by industry. Instead, BIS framed the rules as being implemented in furtherance of and as consistent with the U.S. obligations under the Wassenaar Arrangement and the December 2019 Wassenaar Plenary Meeting. The ECRA includes a statutory requirement that a notice and comment period must be included in the emerging and foundational technology review processes. However, BIS generally does not use notice and comment for implementation of Wassenaar Arrangement rules and did not do so here. 

New Controls

  BIS has imposed new controls on six categories of goods that it determines are “recently developed or developing” and are “essential to the national security of the United States.”1 These new controls are:
  • ECCN 2B001, Machine Tools. BIS added Note 4 to ECCN 2B001. This addition states that machine tools with additive manufacture capabilities in addition to turning, milling or grinding capabilities (which were previously controlled) must be reviewed against the ECCN 2B001 definitions. 
  • ECCN 3D003, Computational Lithography Software. BIS revised the heading for 3D003 to include controls on emerging Electronic Design Automation (EAD) or computational lithography software developed for Extreme Ultraviolet (EUV) masks. 
  • ECCN 3E004, Silicon Wafer Technology. BIS created ECCN 3E004 which governs technology for the production of substrates for high-end integrated circuits. 
  • ECCN 5D001.e, Software Designed for Monitoring or Analysis. BIS created ECCN 5D001.e covering “specially designed” or modified for monitoring or analysis by law enforcement, subject to specified parameters. BIS also added ECCN 5E001.e technology for the “development”, “production” or “use” for items controlled by ECCN 5D001.e.
  • ECCN 5A004.b, Digital Forensics or Investigative Tools. BIS created ECCN 5A004.b to control items that circumvent authentication or authorization mechanics and extract raw data from a computer or communication device. BIS also made corresponding changes to ECCN 5D002, which controls encryption software.
  • ECCN 9A004, Sub-Orbital Craft. BIS amended ECCN 9A004 to include “sub-orbital craft.” Sub-orbital craft are those designed to operate above the stratosphere and land on Earth, without completing an orbit. While BIS differentiated sub-orbital craft from controlled “spacecraft,” it noted that the commodities warrant similar controls. Accordingly, BIS also amended ECCN 9A515.a to include sub-orbital craft and made corresponding changes to License Exception STA. 

Effective Dates

  BIS’ new controls apply to exports, reexports and transfers of the captured goods, technology and software as of October 5, 2020. However, commodities that were either not subject to control prior to October 5, 2020 (and therefore could be exported with no license required (“NLR”)) or were eligible for a pre-October 5, 2020 license exception can be exported NLR or under the terms of the then-in place license exception, provided that the export, reexport or transfer occurs before December 4, 2020. In order to utilize this savings clause, the shipment must have been on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export, as of October 5, 2020 and the shipment must be pursuant to an actual order. All shipments that do not meet the above requirements, or that do and are not completed by December 4, 2020, are subject to BIS’ new licensing requirements. 


  BIS new controls create significant new restrictions with immediate effect. Companies that operate in the semiconductor, machining, digital forensics, and aerospace industries must understand and address these new and robust controls to ensure continuity of production and supply chains.

* Contact: messages@strtrade.com, 1-305-894-1035
  Licensed customs brokers could be subject to a new continuing education requirement under a proposal being considered by U.S. Customs and Border Protection. Comments in response to this advance notice of proposed rulemaking are due no later than Dec. 28.
  CBP states that recent developments have demonstrated the need for those involved in importing and exporting to keep up-to-date on training and continuously build and maintain their knowledge of current requirements. For example, the Trade Facilitation and Trade Enforcement Act prompted new rules on duty drawback. Modern supply chains make determining the country of origin of imported goods more complex than in the past. Low-value shipments, which have exploded with the online shopping revolution, have created multiple levels of issues for international trade that touch security, health and safety, information collection, timely clearance, duty evasion, and facility capacity.
  Given the vigorous pace, complex nature, and expanding scope of international trade, CBP believes brokers must maintain a high level of functional and accessible knowledge to stay efficient and compliant over time. CBP believes a framework of continuing education requirements would (1) enhance the credibility and value of a broker’s license, (2) improve brokers’ skills, performance, and productivity, and (3) increase client service and compliance with customs laws.
  CBP has therefore laid out in this ANPR a number of possible provisions for such a framework, including the following.
– 40 hours of continuing education over three years
– credit for established corporate training, courses offered by broker associations, CBP online webinars, training relevant to customs business by other federal agencies, conferences and national customs brokers association meetings, and periodic port-level meetings with brokers
– 75 percent of continuing education would have to focus on customs business and CBP operational and process requirements, with 25 percent for other areas related to international trade that are not CBP-specific
– applicable to all licensed brokers
– reporting concurrently with submission of triennial report
– disciplinary measures for failure to comply such as warning letters and suspension and revocation of license
– suspension of continuing education requirement while a license is in voluntary suspension and requirement to complete a certain number of credits in the first year after a license is reactivated
  CBP is seeking comments on dozens of questions related to these and other aspects of the potential continuing education requirement, including its costs and benefits. However, CBP notes that it is also open to considering ideas other than continuing education to meet the objective of maintaining integrity and professionalism in the broker industry.

* Principal Author: Doug Bryden, 44-20-7295-3205, Travers Smith LLP 


  On 16 October 2020, the UK’s Export Control Joint Unit (“ECJU“) issued a  timely reminder to UK businesses that an Open General Export Licence (“OGEL“) will be required where a business is exporting dual-use items, as set out in Annex 1 of EU Regulation 428/2009 (the “Dual-use Regulations“), to any EU member state, and the Channel Islands, from 1 January 2021.  
  Prior to 1 January 2021, the export of these items from the UK to the EU has broadly been unfettered, save for a small number of the most high-risk items subject to individual controls at a state level.
  The UK Government has stated that “The overall framework of controls for dual-use exports will not change“; rather, exporters will need to take steps to register under the new regime and exporters who may not previously have needed a licence to export may now need one.

Which items does the new OGEL apply to?

  The UK Government first granted a new dual-use OGEL on 2 April 2019, under the Dual-Use Regulations and the Export Control Order 2008.  This new OGEL relates to the export of systems, equipment and components, test inspection and production equipment, materials, software and technology, and covers all areas of production.
  The following categories of items/sectors of interest are all within scope of the new OGEL:
  • nuclear materials and processing equipment;
  • materials processing – machine tools; 
  • electronics; 
  • computers – specific parameters;
  • telecommunications;
  • information security including cyber and crypto;
  • sensors and lasers including imaging equipment and radars;
  • navigation and avionics;
  • marine; and
  • aerospace and propulsion. 
Please see Annex 1 of the Dual-Use Regulations for further details. 

What steps must be taken in order to export?

  To export under the new OGEL, an exporter must first sign up to the Department for International Trade’s SPIRE system (which is the only way to apply for an export license in the UK). Once signed up, an exporter can then in turn register for the new OGEL. This process must be carried out either before export or within the first 30 days of making first use of the OGEL.
  This requires an exporter to provide details relating to record-keeping, and to nominate an address where records may be inspected by the ECJU.
  All physical exports under the OGEL must include a note either stating that the items are being exported under the OGEL or stating the exporter’s SPIRE reference number. A border force officer may request to verify this note.

Practical next steps

In light of these changes, companies that might be affected should:
  • Review how exports from the UK into the EU (and vice versa) could be affected by the new licensing requirements;
  • Check whether exports of controlled items are currently made from the UK under a licence granted by EU-27 authorities; and
  • Consider establishing an exporting entity in the UK for exports from the UK, and in the EU for exports from the EU. This is something that many businesses are currently considering, although ultimately this may be dependent on the outcome of the current EU-UK negotiations, in addition to other important factors such as a your customer base.


  Whilst it is not anticipated this change of rules will have a significant impact on seasoned exporters, it does mean that many new businesses will require an OGEL. Of potential concern, some businesses that were previously not subject to these controls in the first place may end up being caught unaware (such as those exporting software, which can at times slip below the radar from an export control perspective).
  This is particularly important as the export of controlled items without a licence is a criminal offence, which may lead to imprisonment of up to ten years, an unlimited fine and the items exported incorrectly being seized.


* What: The Export Control Year in Review 
* When: 15 Dec; 1:00 p.m. (EST)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Scott Gearity
* Register: here or contact Ashleigh Foor, 1-540-433-3977, ashleigh@learnexportcompliance.com.
* * * * * * * * * * * * * * * * * * * *

U.S. Export Controls: ITAR & EAR from a non-U.S. Perspective (Tuesday, 1 Dec 2020)Presenters: Jim Bartlett and Marco Crombach
Register or find more information here

The ABC of Foreign Military Sales (FMS) (Thursday, 3 Dec 2020) Presenters: Mike Farrell and Jim Bartlett
Register or find more information here
* Register for both and take advantage of our discounted price!
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EN_a115. Bartlett’s Unfamiliar Quotations

(Source: Editor)

* Erasmus (Desiderius Erasmus Roterodamus; 28 Oct 1469 – 12 Jul 1536; was a Dutch philosopher and Christian scholar who is widely considered to have been one of the greatest scholars of the northern Renaissance.  He wrote On Free Will, In Praise of Folly, Handbook of a Christian Knight, On Civility in Children, Julius Exclusus, and many other works.)
  – “Fortune favors the audacious.” 
* Ivan Turgenev (Ivan Sergeyevich Turgenev; 28 Oct 1818 – 3 Sep 1883; was a Russian novelist, short story writer, poet, playwright, translator and popularizer of Russian literature in the West. His first major publication, a short story collection entitled A Sportsman’s Sketches, was a milestone of Russian realism, and his novel Fathers and Sons is regarded as one of the major works of 19th-century fiction.)
  – “Most people can’t understand how others can blow their noses differently than they do.”
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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 


5 Apr 2019: 84 FR 13499:

Civil Monetary Penalty Adjustments for Inflation. 

9 Oct 2020: 
85 FR 64014:  Revisions to the Unverified List (UVL)

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

: DoD 5220.22-M. Implemented by Dep’t of Defense. 

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.)  
DOE ASSISTANCE TO FOREIGN ATOMIC ENERGY ACTIVITIES: 10 CFR Part 810.    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.


28 Sep 2020: 85 FR 60874: Temporary Amendment for Republic of Cyprus. The latest edition of the BITAR is 28 Sep 2020. 

DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
Amendment of Cuban Assets Control 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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