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:
- State/DDTC: “ITAR Reorganization Rule 1: Website & DECCS Updates”; Thursday, 1 Sep 2022; Item #8
- Canada TID Adds North Macedonia and Qatar to Automatic Firearms Country Control List (AFCCL); Thursday, 1 Sep 2022; Item #10
- State/DDTCITAR Amendment to Consolidate and Restructure Purposes and Definitions Takes Effect Today, 6 Sep 2022; Tuesday, 6 Sep 2022; Item #6
- UK ECJU Publishes Contact for World-Wide DIT Offices; Tuesday, 6 Sep 2022; Item #8
- State Department Requests Comments Concerning Technology Security/Clearance Plans, Screening Records, and Non-Disclosure Agreements; Thursday, 8 Sep 2022; Item #3
- Commerce/BIS Amends EAR to Authorization Transfer of Certain “Items” to Entities on the Entity List; Friday, 9 Sep 2022; Item #1
- Commerce/BIS Seeks Comments on Proposed Technology Export Controls on Instruments for the Automated Chemical Synthesis of Peptides; Tuesday, 13 Sep 2022; Item #1
- Australia DEC Voluntary Disclosure Policy; Tuesday, 13 Sep 2022; Item #8
- Commerce/BIS Amends EAR re Sanctions Against Belarus, Burma, Cambodia, China, Russia, and Venezuela; Friday, 16 Sep 2022; Item #1
- State Lifts Defense Trade Restrictions on the Republic of Cyprus for Fiscal Year 2023; Monday, 19 Sep 2022; Item #5
- State Dept Notice Information Collection on ITAR § 9 Requests To Change End-User, End-Use and/or Destination of Hardware and Open General Licenses; Tuesday, 28 Sep 2022; Item #1
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State/DDTC: “ITAR Reorganization Rule 1: Website & DECCS Updates”
(Source: State/DDTC, 2 Sep 2022)
The DDTC website and Defense Export Control and Compliance System (DECCS) applications are undergoing maintenance to update ITAR citations to reflect regulatory changes taking effect on Sept. 6, 2022 as a result of the ITAR Reorganization Rule 1 (87 FR 16396, Mar. 23, 2022). Updates are being made on a rolling basis. As DDTC updates its webpages, some ITAR references on the website may be temporarily outdated. We expect these changes to be completed and updated no later than September 9th.
Effective September 6, all DECCS applications (Registration, Licensing, Advisory Opinions, and Commodity Jurisdictions) will reflect the revised ITAR citations.
For a complete listing of all ITAR Reorganization Rule I moves and revisions, see this table. For a redlined ITAR showing all moves and revisions, see this summary.
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Canada TID Adds North Macedonia and Qatar to Automatic Firearms Country Control List (AFCCL)
(Source: Canada TID, 31 Aug 2022)
2022-08-31:- North Macedonia has been added to the AFCCL.
2022-08-31:- Qatar has been added to the AFCCL.
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State/DDTC ITAR Amendment to Consolidate and Restructure Purposes and Definitions Takes Effect Today, 6 Sep 2022
(Source: 87 FR 16396, 23 Mar 2022)
* AGENCY: Department of State.
* ACTION: Interim final rule effective September 6, 2022.
* SUMMARY: The Department of State amend the International Traffic in Arms Regulations (ITAR) on March 23, 2022, to better organize the purposes and definitions of the regulations. This rule consolidates and co-locates authorities, general guidance, and definitions. This rule amends every Part of the ITAR and all categories of the U.S. Munitions List.
* DATES: This interim final rule is effective September 6, 2022.
- Federal Register Document: Public Notice 11657
- 87 FR 16396, Mar. 23, 2022
- 87 FR 16396 – ITAR Reorg I – Summary of Changes
- 87 FR 16396 – ITAR Reorg I – Table of Moves, Edits, Removals, and Additions
- 87 FR 16396 – ITAR Reorg I – ITAR Redline
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UK ECJU Publishes Contact for World-Wide DIT Offices
(Source: UK ECJU, 6 Sep 2022)
Guidance: Department for International Trade offices around the world. (Updated 6 Sep 2022) Go to THIS LINK to view file.
Example: USA:
Department for International Trade USA
Location: USA
Part of: Department for International Trade
DIT provides trade and investment services and practical support. We help UK companies succeed in the USA, and US companies set up and invest in the UK
We offer expertise and contacts through our extensive network of specialists in the UK, and staff in the British Embassy in Washington, and the British Consulates General in Atlanta, Boston, Chicago, Houston, Los Angeles, Miami, New York and San Francisco.
Set up a business and invest in the UK
Discover investment opportunities and learn how your business can expand to the UK on great.gov.uk.
Buy from the UK
Find exceptional and creative UK trade partners with DIT’s Find a Supplier service on great.gov.uk.
Export to the USA from the UK
UK companies can increase their sales, growth and stability by selling to the US.
On great.gov.uk, DIT provides:
– events for exporters and international buyers
– export finance and related guidance
Export licensing and special rules for the USA: Information on products or services which require licences for supply outside of the UK.
Contact us: Department for International Trade USA
British Consulate General New York
845 Third Avenue
New York NY 10022
ResearchUSA@mobile.trade.gov.uk
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State Department Requests Comments Concerning Technology Security/Clearance Plans, Screening Records, and Non-Disclosure Agreements
(Source: 87 FR 55071, 8 Sep 2022)
* Agency: State/DDTC
* Action: Request for public comment on 60-Day Notice Of Proposed Information Collection: Technology Security/Clearance Plans, Screening Records, And Non-Disclosure Agreements
* DATES: The Department will accept comments from the public up to
November 7, 2022.
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Commerce/BIS Amends EAR to Authorization Transfer of Certain “Items” to Entities on the Entity List
(Source: 87 FR 55241, 9 Sep 2022) [Excerpts]
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Interim final rule with request for comments.
* SUMMARY: In this interim final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to authorize the release of specified items subject to the EAR without a license when that release occurs in the context of a “standards-related activity,” as defined in this rule. BIS is revising the terms used in the EAR to describe the actions permissible under the authorization rather than defining the organizations to which it applies. The scope of the authorization is revised to include certain “technology” as well as “software” and applies to all entities listed on BIS’s Entity List. The uncertainty of not knowing whether other entities listed on the Entity List are participants in standards organizations and whether a BIS license is required to release low-level technology for legitimate standards activities has caused U.S. companies to limit their participation in standards-related activities in areas that are critical to U.S. national security. This authorization only overcomes licensing requirements imposed as a result of an entity’s inclusion on the Entity List; other EAR licensing requirements, including additional end-use or end-user based licensing requirements may continue to apply. This final rule does not change the assessment of whether “technology” or “software” is subject to the EAR. BIS is making these revisions to ensure that export controls and associated compliance concerns as they relate to the Entity List do not impede the leadership and participation of U.S. companies in national and international standards-related activities.
* DATES: This rule is effective September 9, 2022.
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Commerce/BIS Seeks Comments on Proposed Technology Export Controls on Instruments for the Automated Chemical Synthesis of Peptides
(Source: 87 FR 55930, 13 Sep 2022) [Excerpts]
* AGENCY: Commerce/ Industry and Security Bureau (BIS)
* ACTION: Rules: Imposition of Technology Export Controls on Instruments for the Automated Chemical Synthesis of Peptides
* SUMMARY: BIS maintains controls on the export, reexport and transfer (in-country) of dual-use items and less sensitive military items pursuant to the Export Administration Regulations (EAR), including the Commerce Control List (CCL). Certain instruments for the automated synthesis of peptides (automated peptide synthesizers) have been identified by BIS for evaluation according to the criteria in section 1758 of the Export Control Reform Act of 2018 (ECRA) pertaining to emerging and foundational technologies. BIS is seeking public comments on the potential uses of this technology, particularly with respect to its impact on U.S. national security ( e.g., whether such technology could provide the United States, or any of its adversaries, with a qualitative military or intelligence advantage). This advance notice of proposed rulemaking also requests public comments on how to ensure that the scope of any controls that may be imposed on this technology would be effective (in terms of protecting U.S. national security interests) and appropriate (with respect to minimizing their potential impact on legitimate commercial or scientific applications).
* DATES: Comments must be received by BIS no later than October 28, 2022.
* CONTACT: You may submit comments, identified by regulations.gov docket number BIS-2022-0023 or by RIN 0694-AI84, through any of the following:
- Federal eRulemaking Portal:http://www.regulations.gov. You can find this advance notice of proposed rulemaking by searching for itsregulations.gov docket number, which is BIS-2022-0023.
- Email: PublicComments@bis.doc.gov. Include RIN 0694-AI84 in the subject line of the message.
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Australia DEC Voluntary Disclosure Policy
(Source: Australia Defense Export Controls)
Defence Export Controls (DEC) regulates the export and supply of military and dual-use goods and technologies.
DEC recognises that for those who are new to Australia’s export control legislation, compliance can be challenging. Even individuals and companies committed to fulfilling their responsibilities may unintentionally commit breaches. Our first priority is to work with entities to identify the causes of a breach and to help them put measures in place to prevent future recurrences.
DEC’s response to non-compliance will depend on the specific context of a breach. Factors that may be considered include:
- whether the entity came forward with a timely, accurate and comprehensive disclosure
- causes of the breach, whether due to deliberate intent, negligence or lack of understanding
- risks to Australia’s national interest and international obligations arising from the breach
- whether the breach was an isolated event or a recurring issue
- any export and compliance history, including commitment to internal compliance procedures of an appropriate standard
- efforts made to redress the breach and level of cooperation with DEC.
Making a Voluntary Disclosure
DEC encourages exporters to voluntarily disclose when an error or breach has been made. When an exporter is willing to engage with export controls and is attempting to do the right thing, DEC’s response to non-compliance will generally reflect the level of cooperation displayed.
If you believe you have been non-compliant, we recommend you disclose this immediately. Voluntary disclosure demonstrates an intention to comply with export control obligations and is an important basis for DEC’s regulatory relationships.
Corrective Action
DEC’s assessment of the circumstances of a breach will inform the steps taken to address it. DEC may request records from entities related to their activities under the Defence Trade Control Act 2012 (DTC Act) to enable DEC to accurately assess the scope and implications of a breach.
DEC’s goal is to take fair and proportionate action that helps entities avoid breaches in the future. Depending on the circumstances, DEC may initially take one or both of the following corrective actions:
- provide guidance on how to prevent future breaches, including encouraging an entity to improve their compliance procedures;
- increase checks to ensure appropriate use of permits, licences or Australian Community Membership.
DEC’s preferred approach to managing non-compliance is one of prevention, by assisting entities to improve their compliance procedures. However, in some circumstances, DEC may initiate more formal corrective measures, including:
- formal warning letters;
- new and/or more restrictive conditions on permits (including broker registrations);
- prohibition notices to prevent the export, supply, publication or brokering of goods and technologies;
- suspension or cancellation of Australian Community Membership; and/or
- cancellation of permits and broker registrations.
Referrals to Enforcement Agencies
DEC may also refer severe or repeated cases of non-compliance to enforcement agencies together with recommendations for investigations, inspections and other possible punitive action. More information on what agencies DEC partners with and possible penalties for non-compliance can be found on our Breaches page.
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Commerce/BIS Amends EAR re Sanctions Against Belarus, Burma, Cambodia, China, Russia, and Venezuela
(Source: 87 FR 57068, 16 Sep 2022) [Excerpts]
* AGENCY: Commerce, Industry and Security Bureau
* ACTION: Final rule.
* SUMMARY: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine, the Department of Commerce is expanding the existing sanctions against Russia and Belarus by imposing new export controls, including expanding the scope of the Russian industry sector sanctions to add lower-level items potentially useful for Russia’s chemical and biological weapons production capabilities and items needed for advanced production and development capabilities to enable advanced manufacturing across a number of industries.
This rule also adds Belarus to the scope of industry sector sanctions that currently apply solely to Russia. With respect to end users, this rule expands the `military end user’ and `military-intelligence end user’ controls and applies the Russian/Belarusian-Military End User Foreign Direct Product (FDP) rule to ten existing entries for six existing entities that have continued to supply Russian entities on the Entity List or are under sanction since Russia’s further invasion of Ukraine.
Labeling these six entities as Russian `military end users’ and applying the Russia/Belarus-Military End User FDP rule to them will degrade Russia’s war efforts in Ukraine, as these entities produce items needed by the Russian and Belarussian military and industrial sectors.
Correspondingly, this rule clarifies requirements related to Burma, Cambodia, the People’s Republic of China, and Venezuela).
Finally, this rule refines existing controls on Russia and Belarus by adding additional dollar value exclusion thresholds for `luxury goods;’ and makes twelve corrections and clarifications to existing controls on Russia and Belarus. The Department of Commerce is taking these actions to clarify and enhance the effectiveness of U.S. controls and to better align its controls on both Russia and Belarus with those implemented by U.S. allies.
Overview of New Controls: . . .
* DATES: This rule is effective September 15, 2022
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State Lifts Defense Trade Restrictions on the Republic of Cyprus for Fiscal Year 2023
(Source: State Department Press Statement, 16 Sep 2022)
Secretary of State Antony J. Blinken determined and certified to Congress that the Republic of Cyprus has met the necessary conditions under relevant legislation to allow the approval of exports, re-exports, and transfers of defense articles to the Republic of Cyprus for fiscal year 2023. Compliance with the conditions is assessed on an annual basis. As a result of this determination and certification, the Secretary lifted the defense trade restrictions for the Republic of Cyprus for fiscal year 2023. The International Traffic in Arms Regulations will be amended to reflect the new policy, effective October 1, 2022.
The Eastern Mediterranean Security and Energy Partnership Act of 2019 and the National Defense Authorization Act for FY 2020 require that the policy of denial for exports, re-exports, or transfers of defense articles on the United States Munitions List to the Republic of Cyprus remain in place unless the President determines and certifies to the appropriate congressional committees not less than annually that the Government of the Republic of Cyprus is continuing to cooperate with the United States government in efforts to implement reforms on anti-money laundering regulations and financial regulatory oversight, and that the Government of the Republic of Cyprus has made and is continuing to take the steps necessary to deny Russian military vessels access to ports for refueling and servicing. In accordance with both Acts, the Department reviews compliance with the Acts annually.
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State Dept Notice Information Collection on ITAR § 123.9 Requests To Change End-User, End-Use and/or Destination of Hardware and Open General Licenses
(Source: 87 FR 58895, 28 Sep 2022) [Excerpts]
* AGENCY: Department of State.
* ACTION: 60-Day Notice of Proposed Information Collection: Request To Change End-User, End-Use and/or Destination of Hardware and Open General Licenses
* SUMMARY: information collection is used for two main purposes: (1) the collection and submission of information required for DDTC approval of a reexport or retransfer; and (2) the collection and retention of certain information for authorizations and other approvals, including for reexports and retransfers under an Open General License (OGL) program.
Under § 123.9(a) of the International Traffic in Arms Regulations (ITAR), unless an exemption applies, DDTC’s written approval must be obtained before reselling, transferring, reexporting, retransferring, transshipping, or disposing of a defense article to any end-user, end-use, or destination other than as stated on the export license or in the Electronic Export Information filing in cases where an exemption was claimed. Such approval is normally granted through case-by-case review of requests to authorize specific transfers.
In addition, ITAR § 126.9(b) allows DDTC to provide export authorization for DDTC’s own initiatives, including pilot programs and other specifically anticipated circumstances for which DDTC considers special authorizations appropriate.
DDTC has launched a pilot program pursuant to its authorities in ITAR § 126.9(b) to assess the concept of an OGL mechanism by which it may authorize certain transfers of defense articles to predetermined parties. OGLs eliminate the need for the Department to individually review and approve certain lower-risk transactions involving certain recipients. DDTC believes the OGL pilot program will provide unprecedented flexibility for the U.S. defense industry and U.S. allies to operate consistent with the ITAR and will enhance their ability to maintain, repair, and store defense articles.
Under ITAR § 123.1(c), DDTC may require pertinent documentation regarding the proposed transaction and proper completion of the application form, including information about the quantity and value of the defense article proposed for export and information on the proposed end-user, end-use, and ultimate destination.
Under ITAR § 123.9(c), foreign persons who seek approval from DDTC to reexport or retransfer defense articles are required to submit a description, quantity, and value of the defense article; a description and identification of the new end-user, end-use, and destination.
Under ITAR § 123.26 any foreign person engaging in any reexport or retransfer of a defense article pursuant to an exemption must maintain records of each such transfer including the following information: A description of the defense article, including technical data, or defense service; the name and address of the end-user and other available contact information ( e.g., telephone number and email address); the name of the natural person responsible for the transaction; the stated end-use of the defense article or defense service; the date of the transaction; and the method of transmission.
DDTC seeks to ensure that foreign persons who rely on any current or future OGLs to conduct reexports and retransfers abroad retain the same records as would be required if their transactions were authorized by either a specific license or an exemption. Accordingly, DDTC has restated the record-keeping requirements articulated in ITAR § 123.26 in the OGLs themselves.
* DATES: The Department will accept comments from the public up to November 28, 2022.