Every month we post the highlights of FCC’s Export/Import Daily Update (“The Daily Bugle”). The Daily Bugle is sent out every business day to approximately 10,000 readers, who keep up to date with changes in defense and high-tech trade laws and regulations. It is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III and Elina Tsapouri.
We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of European Union, Australia, Canada, U.K., and other countries and international organizations. Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items. To subscribe, click here.
Last month’s highlights of The Daily Bugle included in this edition are:
- Commerce/BIS Adopts Congressional Notification Requirement for Certain Semiautomatic Firearms Exports Under the Export Administration Regulations (EAR); Wednesday, 1 Jun 2022; Item #1
- Commerce/BIS Revises Russia and Belarus Sanctions; Monday, 6 Jun 2022; Item #2
- Treasury/OFAC Publishes Russian Sanctions General Licenses; Monday, 6 Jun 2022; Item #3
- Treasury/OFAC Publishes new Russia-related Frequently Asked Questions; Thursday, 9 Jun 2022; Item #8
- UK Gov Publishes Guidance on Russia Sanctions; Monday, 13 Jun 2022; Item #6
- Commerce/BIS Requests Comments on License Exemptions and Exclusions; Wednesday, 15 Jun 2022; Item #2
- State Dept Renews the Charter of the Defense Trade Advisory Group for 2 Years; Thursday, 16 Jun 2022; Item #1
- DoD/DFARS Requests Comments on Cyber Incident Reporting and Cloud Computing; Monday, 20 Jun 2022; Item #1
- State/DDTC Extends Date to Comment on Requests for Approvals Requiring Congressional Notice; Tuesday, 28 Jun 2022; Item #1
- Commerce/Census: “Guidance on Filing the USPPI Address and State of Origin in the Automated Export System”; Thursday, 30 Jun 2022; Item #4
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Commerce/BIS Adopts Congressional Notification Requirement for Certain Semiautomatic Firearms Exports Under the Export Administration Regulations (EAR)
(Source: Today’s Federal Register, 87 FR 32983, 1 Jun 2022) [Excerpts]
* AGENCY: Bureau of Industry and Security, Department of Commerce.
* ACTION: Final rule.
* SUMMARY: In this final rule, the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to add a new section to the EAR to adopt a congressional notification requirement for certain license applications of semiautomatic firearms meeting certain value and destination requirements. This rule does not change the interagency license process for these firearms or how license applicants currently structure or generally apply for BIS licenses.
* DATES: This rule is effective July 18, 2022.
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Commerce/BIS Revises Russia and Belarus Sanctions
(Source: 87 FR 34131, 6 Jun 2022) [Excerpts]
* AGENCY: Commerce, Bureau of Industry and Security
* ACTION: Final rule
* SUMMARY: Between February and May 2022, the Bureau of Industry and Security (BIS) has published a series of amendments to the Export Administration Regulations (EAR) that have increasingly tightened export controls on the Russian Federation (Russia) and Belarus in response to Russia’s further invasion of Ukraine, as substantially enabled by Belarus. This rule revises, corrects, and clarifies certain provisions of the EAR that pertain to these controls and related provisions. First, this rule makes certain revisions to the EAR’s military end use and military end user controls as they apply to Russia and Belarus, as well as related modifications to the entries for entities on the Entity List that are Russian and Belarusian military end users. Second, it revises restrictions that apply to items destined for certain regions in Ukraine by clarifying the categories of license applications that BIS subjects to case-by-case review. Third, this rule clarifies and corrects provisions of the EAR that pertain to luxury goods destined for Russia and Belarus and items for use in Russia’s oil refinery sector. Fourth, it makes a technical correction to an EAR provision describing items and activities subject to the EAR by adding a cross-reference to the Foreign Direct Product Rules of the EAR, which were updated shortly before the Russia and Belarus export controls were imposed. Finally, with regard to export control enforcement, including enforcement of the Russia and Belarus controls, this rule revises the EAR to allow export enforcement case charging letters to be made available to the public prior to the final administrative disposition of such cases.
* DATES: This rule is effective June 2, 2022.
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Treasury/OFAC Publishes Russian Sanctions General Licenses
(Source: 87 FR 34169, 6 Jun 2022) [Excerpts]
* AGENCY: Treasury, Office of Foreign Assets Control
* ACTION: Publication of Web General Licenses
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing four general licenses (GLs) issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations: GL 25A, GL 33, GL 34, and GL 35, each of which was previously issued on OFAC’s website.
* DATES: GL 25A, GL 33, GL 34, and GL 35 were each issued on May 8, 2022. See SUPPLEMENTARY INFORMATION of this publication for additional relevant dates. …
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Treasury/OFAC Publishes new Russia-related Frequently Asked Questions
(Source: Treasury/OFAC, 9 Jun 2022)
Q #1. Russian Harmful Foreign Activities Sanctions 1068. For the purposes of the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), do accounting services include tax preparation and filing?
A. [See Source for answers.]
Q #2. 1066. Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” prohibit the provision of educational services, such as online university courses, on the subjects of accounting, management consulting, or trust and corporate formation to persons located in the Russian Federation?
A . [See Source for answers.]
Russian Harmful Foreign Activities Sanctions
Q #3. 1065. Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” prohibit U.S. persons from serving as voting trustees on behalf of, or for shares of, persons located in the Russian Federation?
A. [See Source for answers.]
Q #4. Russian Harmful Foreign Activities Sanctions 1064. Are executive search and vetting services included in the prohibition on management consulting services imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services”?
A . [See Source for answers.]
Q #5. Russian Harmful Foreign Activities Sanctions 1063. Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), apply only with respect to the formation of new trusts and companies or do the prohibitions also apply with respect to existing trusts and companies?
A . [See Source for answers.]
Q #6. Russian Harmful Foreign Activities Sanctions 1062. Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” apply to services provided to a parent company located in the Russian Federation by a U.S. subsidiary?
A. [See Source for answers.]
Q #7. Russian Harmful Foreign Activities Sanctions 1061. Does the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), prohibit U.S. persons from working as employees of entities located in the Russian Federation?
A. [See Source for answers.]
Q #8. Russian Harmful Foreign Activities Sanctions 1060. Does the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), prohibit U.S. persons from serving as directors of companies located in the Russian Federation?
A . [See Source for answers.]
Q #9. Russian Harmful Foreign Activities Sanctions1059. Does the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), prohibit U.S. persons from providing services to persons located outside of the Russian Federation that are owned or controlled by persons located in the Russian Federation?
A. [See Source for answers.]
Q #10. Russian Harmful Foreign Activities Sanctions
A. [See Source for answers.]
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UK Gov Publishes Guidance on Russia Sanctions
(Source: UK Department for International Trade, 8 Jun 2022) [Excerpts]
The UK government has imposed a range of sanctions measures, including trade and financial sanctions, under The Russia (Sanctions) (EU Exit) Regulations 2019 (“the Russia Sanctions Regulations”). Detailed guidance on UK sanctions relating to Russia HERE. . . .
Trade sanctions
The following sections provide an outline of the key restrictions and exemptions, which should be read alongside other guidance on UK sanctions relating to Russia.
Sanctions applicability
UK trade sanctions apply to all persons within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world.
This means:
- all individuals and legal entities who are within, or undertake activities within, the UK’s territory must comply with UK financial sanctions that are in force
- all UK nationals and legal entities established under UK law, including their branches, must also comply with UK financial sanctions that are in force, irrespective of where their activities take place. Breaches of sanctions measures under the Russia Sanctions Regulations is a criminal offence. . . .
Sanctions relating to Belarus
The UK has designated various individuals and entities under the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019, which can be found on legislation.gov.uk.
Check the Republic of Belarus sanctions: guidance for detailed information in relation to the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019.
You can use the OFSI Consolidated List Search tool to search for individuals or entities to see if they are designated under the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019.
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Commerce/BIS Requests Comments on License Exemptions and Exclusions
(Source: Today’s Federal Register, 87 FR 36107, 15 Jun 2022) [Excerpts]
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Notice of information collection; request for comment.
* SUMMARY: The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public’s reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
* DATES: To ensure consideration, comments regarding this proposed information collection must be received on or before August 15, 2022.
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State Dept Renews the Charter of the Defense Trade Advisory Group for 2 Years
(Source: Today’s Federal Register, 87 FR 36357, 16 Jun 2022) [Excerpts]
* ACTION: Notice.
* SUMMARY: The Department of State announces the renewal of the Charter for the Defense Trade Advisory Group (DTAG) for another two years. DTAG advises the Department on its support for and regulation of defense trade to help ensure the foreign policy and national security of the United States continues to be protected and advanced, while helping to reduce unnecessary impediments to legitimate exports in order to support the defense requirements of U.S. friends and allies. It is the only Department of State advisory committee that addresses defense trade related topics. DTAG will remain in existence for two years after the filing date of the Charter unless terminated sooner. DTAG is authorized by Department of State regulations and the Federal Advisory Committee Act. For more information, contact Michael Miller, DTAG Designated Federal Officer, and Deputy Assistant Secretary, Directorate of Defense Trade Controls, Department of State, Washington, DC 20520, (202) 663-2861.
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DoD/DFARS Requests Comments on Cyber Incident Reporting and Cloud Computing
(Source: Today’s Federal Register, 87 FR 36831, 21 Jun 2022) [Excerpts]
* AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).
* ACTION: Notice and request for comments regarding a proposed extension of an approved information collection requirement.
* SUMMARY: In compliance with the Paperwork Reduction Act of 1995, DoD announces the proposed extension of a public information collection requirement and seeks public comment on the provisions thereof. DoD invites comments on: whether the proposed collection of information is necessary for the proper performance of the functions of DoD, including whether the information will have practical utility; the accuracy of the estimate of the burden of the proposed information collection; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the information collection on respondents, including the use of automated collection techniques or other forms of information technology. The Office of Management and Budget (OMB) has approved this information collection for use through September 30, 2022. DoD proposes that OMB extend its approval for use for three additional years beyond the current expiration date. . . .
These DFARS provisions and clauses facilitate mandatory cyber incident reporting requirements in accordance with statutory regulations. When reports are submitted, DoD will analyze the reported information for cyber threats and vulnerabilities in order to develop response measures as well as improve U.S. Government understanding of advanced cyber threat activity. In addition, the security requirements in NIST SP 800-171 are specifically tailored for use in protecting sensitive information residing in contractor information systems and generally reduce the burden placed on contractors by eliminating Federal-centric processes and requirements. The information provided will inform the Department in assessing the overall risk to DoD covered defense information on unclassified contractor systems and networks.
* DATES: DoD will consider all comments received by August 22, 2022.
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State/DDTC Extends Date to Comment on Requests for Approvals Requiring Congressional Notice
(Source: 87 FR 38448; 28 Jun 2022) [Excerpts]
* AGENCY: State, Directorate of Defense Trade Controls (DDTC)
* ACTION: Notice of request for public comment on Statement of Political Contributions, Fees, and Commissions Relating to Sales of Defense Articles and Defense Services. The purpose of this Notice is to allow 30 additional days for public comment.
* SUMMARY: Persons requesting a license or other approval for the export, reexport, or retransfer of USML-regulated defense articles or defense services valued in an amount of $500,000 or more that are being sold commercially to or for the use of the armed forces of a foreign country or international organization or persons who enter into a contract with the Department of Defense for the sale of defense articles or defense services valued in an amount of $500,000 or more under section 22 of the AECA.
* DATES: Submit comments until July 28, 2022. . . .
* FOR FURTHER INFORMATION CONTACT: Andrea Battista, BattistaAL@state.gov or 202-663-3136.
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Commerce/Census: “Guidance on Filing the USPPI Address and State of Origin in the Automated Export System”
(Source: Global Reach Blog, 30 Jun 2022)
This broadcast is intended for U.S. Principal Parties in Interest (USPPI) when their USPPI Address State and State of Origin do not match on the Electronic Export Information (EEI) in the Automated Export System (AES). Please review the information below and your internal business practices to ensure EEI filings are compliant with the definitions provided in the Foreign Trade Regulations (FTR). If the U.S. states do not match, begin filing in compliance with the FTR going forward.
The following guidance is consistent with Title 15, Part 30, FTR when reporting the USPPI Address and State of Origin in the EEI in the AES. On March 17, 2020, the Census Bureau released a Global Reach Blog titled USPPI Address: Getting it Right in the Automated Export System. This notice is a reminder to the trade community to report the correct USPPI Address as defined in section 30.6(a)(1)(ii) and the State of Origin in section 30.6(a)(4) of the FTR.
The Census Bureau has researched the reporting of these two data elements in the AES and discovered that over 12 percent of the EEI contained differences even though the definitions are merely identical. As a result, the Census Bureau’s Trade Regulations Branch (TRB) contacted USPPIs whose USPPI Address State and State of Origin did not match to educate and train on the AES filing requirements. The overall goal of this research is to determine if the removal of the State of Origin data element would have any risk to the Census Bureau’s statistical processing.
Below is a common example of how to properly report the USPPI Address and State of Origin data elements:
A U.S. company, Pack, Inc. (Pack), headquartered in Texas sold goods to a foreign buyer in the United Kingdom. The goods originated in several states and were consolidated by a freight forwarder in California to be prepared for export. Pack could not determine the state where the highest value of goods originated. Therefore, to be compliant with the FTR, the USPPI Address and State of Origin shall be California, where the goods were consolidated. This is the case, even if Pack does not own/lease the consolidation facility. Pack would be incorrect if they reported their headquarters in Texas as the USPPI Address and State of Origin because that is not the location where the goods actually began their journey to the port of export.
For reference, the definitions from section 30.6 of the FTR are provided below:
(a)(1)(ii) Address of the USPPI. In all EEI filings, the USPPI shall report the address or location (no post office box number) from which the goods actually begin the journey to the port of export even if the USPPI does not own/lease the facility. For example, the EEI covering goods laden aboard a truck at a warehouse in Georgia for transport to Florida for loading onto a vessel for export to a foreign country shall show the address of the warehouse in Georgia. For shipments with multiple origins, report the address from which the commodity with the greatest value begins its export journey. If such information is not known, report the address in the state where the commodities are consolidated for export.
(a)(4) U.S. state of origin. The U.S. state of origin is the 2-character postal code for the state in which the goods begin their journey to the port of export. For example, a shipment covering goods laden aboard a truck at a warehouse in Georgia for transport to Florida for loading onto a vessel for export to a foreign country shall show Georgia as the state of origin. The U.S. state of origin may be different from the U.S. state where the goods were produced, mined, or grown. For shipments of multi-state origin, reported as a single shipment, report the U.S. state of the commodity with the greatest value. If such information is not known, report the state in which the commodities are consolidated for export.
If additional clarification is needed on this topic or any other regulatory matters, please contact the Census Bureau’s TRB at (800) 549-0595, Option 3, or email us at emd.askregs@census.gov.