Every Monday we post the highlights out of last week’s FCC Export/Import Daily Update (“The Daily Bugle”). Send out every business day to approximately 6,500 readers of changes to defense and high-tech trade laws and regulations, The Daily Bugle is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III, Alexander P. Bosch, Vincent J.A. Goossen, and Alex Witt.
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 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 week’s highlights of The Daily Bugle included in this edition are:
- State Rescinds Statutory Debarment of Rocky Mountain Instrument Company under the ITAR; The Daily Bugle; Monday, 04 Feb 2019, Item #1;
- Dutch Government Posts Historic Overview of Denied Export Authorization Request for Military Goods; The Daily Bugle; Monday, 04 Feb 2019, Item #7;
- Treasury/OFAC Announces Temporary Extension of Ukraine-related General Licenses; The Daily Bugle; Wednesday, 06 Feb 2019, Item #6;
- UK DIT/ECJU Posts Guidance on Exporting Controlled Goods after EU Exit; The Daily Bugle; Wednesday, 06 Wednesday 2019, Item #7;
- DHS/CBP Releases Harmonized System Update 1903; The Daily Bugle; Thursday, 07 February 2019, Item #5;
- Treasury/OFACIssues Venezuela-Related General Licenses, Updates FAQs; The Daily Bugle; Friday, 08 March 2019, Item #9;
State Rescinds Statutory Debarment of Rocky Mountain Instrument Company under the ITAR
(Source:Federal Register, 4 Mar 2019.)
84 FR 7411-7412: Bureau of Political-Military Affairs; Rescission of Statutory Debarment of Rocky Mountain Instrument Company Under the International Traffic in Arms Regulations (“ITAR”)
* SUMMARY: Notice is hereby given that the Department of State has rescinded the statutory debarment of Rocky Mountain Instrument Company included in Federal Register notice of September 8, 2010.
* DATES: Rescission as of March 4, 2019.
* FOR FURTHER INFORMATION CONTACT: Jae Shin, Director, Office of Defense Trade Controls Compliance, Bureau of Political-Military Affairs, Department of State (202) 632-2107.
* SUPPLEMENTARY INFORMATION: …
In June 2010, Rocky Mountain Instrument Company (“RMI”) pleaded guilty to violating the AECA. On September 8, 2010, the Department notified the public of a statutory debarment imposed on RMI pursuant to ITAR Sec. 127.7(c) related to RMI’s criminal conviction via notice in the Federal Register (75 FR 54692). The notice provided that RMI was “prohibited from participating directly or indirectly in the export of defense articles, including technical data, or in the furnishing of defense services for which a license or other approval is required.” On May 9, 2016, the Department modified this statutory debarment to allow specific exceptions to the debarment of RMI without the submission of a transaction exception request as an element of the application, available to persons other than RMI but excluding persons acting for or on behalf of RMI in contravention of ITAR Sec. 127.1(d).
In accordance with ITAR Sec. 127.7(b) of the ITAR, reinstatement may only be approved after submission of a request by the debarred party. In response to such a request from RMI for reinstatement, the Department has conducted a thorough review of the circumstances surrounding the conviction, and has determined that RMI has taken appropriate steps to address the causes of the violations to warrant rescission of the notice of statutory debarment of RMI. Therefore, pursuant to ITAR Sec. 127.7(b) the Department determines it is no longer in the national security and foreign policy interests of the United States to maintain the policy as applied to RMI, and the Department hereby rescinds the notice of RMI’s statutory debarment.
The Department notes that the Federal Register notice of debarment for RMI stated that “export privileges may be reinstated only at the request of the debarred person followed by the necessary interagency consultations, after a thorough review of the circumstances surrounding the conviction, and a finding that appropriate steps have been taken to mitigate any law enforcement concerns, as required by Section 38(g)(4) of the AECA. Unless export privileges are reinstated, however, the person remains debarred.” (75 FR 54693). The Department is no longer requiring that export privileges be reinstated pursuant to ITAR Sec. 127.11 and Sec. 38(g)(4) of the AECA prior to the rescission of statutory debarment. This change in policy recognizes that the circumstances warranting statutory debarment may be different than those warranting the revocation of export privileges. The Department may find, as it does in this instance, that the national security and foreign policy interests of the United States are not advanced by maintaining the Department-imposed ITAR Sec. 127.7(b) prohibition on persons convicted of violating or conspiring to violate the AECA from “participating directly or indirectly in any activities that are subject to [the ITAR]” and where the debarred person may not meet the requirements of ITAR Sec. 127.11(b) (implementing the restrictions of Sec. 38(g)(4) of the AECA).
This notice rescinds the statutory debarment of RMI but does not provide notice of reinstatement of export privileges for RMI pursuant to the statutory requirements of Sec. 38(g)(4) of the AECA and ITAR Sec. 127.11. As required by the statute, the Department may not issue a license directly to RMI except as may be determined on a case-by-case basis after interagency consultations, a thorough review of the circumstances surrounding the conviction, and a finding that appropriate steps have been taken to mitigate any law enforcement concerns. Any determination by the Department regarding the reinstatement of export privileges for RMI will be made in accordance with these statutory and regulatory requirements and will be the subject of a separate notice. All otherwise eligible persons may engage in exports of RMI manufactured defense articles, incorporate RMI manufactured items into defense articles for export, or otherwise engage in transactions subject to the ITAR without providing prior written notification of RMI’s involvement as otherwise required by ITAR Sec. 127.1(d) and the transaction exception requirements of the Federal Register notice of statutory debarment (75 FR 54693).
Dated: February 4, 2019.
Andrea L. Thompson, Under Secretary, Arms Control and International Security, Department of State.
Dutch Government Posts Historic Overview of Denied Export Authorization Request for Military Goods
(Source: Rijksoverheid, 4 Mar 2019.)
Every year the Dutch government publishes an updated overview of denied authorization requests for the export, transfer or brokering of military goods or dual-use goods with a military end-use. In this filea historic overview can be found of such denied requests since 2004.
The Dutch government also posted its monthly report on the export of military goods, which can be found here.
Treasury/OFAC Announces Temporary Extension of Ukraine-related General Licenses
(Source: Treasury/OFAC, 6 Mar 2019.)
Today OFAC extended the expiration date of two general licenses related to GAZ Group by issuing General License No. 13K– Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in Certain Blocked Persons, and General License No. 15E – Authorizing Certain Activities Necessary to Maintenance or Wind Down of Operations or Existing Contracts.
UK DIT/ECJU Posts Guidance on Exporting Controlled Goods after EU Exit
(Source: UK DIT/ECJU, 6 Mar 2019.)
Leaving the EU with a deal remains the UK government’s top priority. This has not changed. However, the government is continuing with no deal preparations to ensure the country is prepared for every eventuality.
Controlled goods are regulated through a system of export licensing and include:
– military items
– dual-use items (items with both civil and military uses)
– items that can be used for torture or capital punishment
The Export Control Joint Unit (ECJU)is responsible for the exporting control and licensing of these items.
Exporting military items
There will be no changes to controls on the export of military items from the UK other than minor legislative fixes.
You will need to continue to apply for licences as you do now.
Exporting firearms to the EU
You will no longer be able to take personal firearms to the EU using the European Firearms Pass because this will no longer be available in the UK.
The exemption that currently applies to the temporary export of firearms as personal effects to the rest of the world will now cover exports to the EU.
If you want to take firearms as personal effects to an EU country, you will need to make sure that the destination country would also permit the import and re-export of the firearm.
If you are a dealer or exporter of firearms, you will need to continue to apply for licences.
Exporting dual-use items
The overall framework of controls for dual-use exports will not change, but there will be changes to some licensing requirements.
From the UK to the EU and the Channel Islands
You will need a new export licence if you are exporting dual-use items from the UK to the EU or the Channel Islands, issued by the UK.
ECJU has published the Open General Export Licence (OGEL) for exports of dual-use items to EU countries. This licence also covers exports to the Channel Islands.
This new export licence will remove the need for you to apply for individual licences and can be used immediately after 29 March 2019, following registration on SPIRE, the online export licensing system.
From the UK to a non-EU country
If you already have a licence to export dual-use items to a non-EU country issued by the UK, it will remain valid for export from the UK. This includes registrations for Open General Export Licences and General Export Authorisations, which will still operate as UK licences.
An export licence issued by one of the 27 EU countries will no longer be valid for export from the UK.
From the EU to a non-EU country
You will need a new licence, issued by an EU member state, for exporting dual-use items from EU member states to a non-EU country.
An export licence issued in the UK will no longer be valid to export dual-use items from an EU member state
From the EU to the UK
You will need a new licence, issued by an EU member state, for exporting dual-use items from EU member states to the UK.
The European Council has proposed to add the UK as a permitted destination to Union General Export Authorisation (GEA) EU001, to minimise any additional licensing burden for those exporting dual-use items from the EU to the UK.
Exporting civil nuclear material
If you export civil nuclear material you can find out what other conditions will apply besides export controls. They include:
Exporting goods that could be used for torture or capital punishment
Strict controls apply to the export of goods that could be used for torture or capital punishment. The overall framework of the strict controls on these goods will not change, except that exports to EU countries will be treated in the same way as exports to non-EU destinations are treated now.
This means that you will:
– be prohibited from exporting items in Annex II of Council Regulation 2016/2134to EU member states
– be prohibited from providing brokering, training or advertising services relating to items in Annex II of Regulation 2016/2134 to any person or entity in an EU member state
– need a licence to export items in Annexes III and IIIA of Regulation 2016/2134 to EU member states
What you can do next
– check if you need an export licence for exports to EU countries on OGEL and goods checker tools, using as a guide the licensing provisions in current legislation for a ‘third country’ (a non-EU country) to understand what controls would apply for exports to EU countries
– refer to guidance links on OGEL and goods checker toolsto apply for a licence
– remember, it’s your responsibility to comply with the export control regulations, and breaching export controls is a criminal offence
– Sign up for updates on export controls and licensing.
For further information you could:
– find out more about export controls and licensing
– read more information on importing and exporting if the UK leaves the EU with no deal
You can contact the Department for International Tradeif you still have a question about exporting controlled goods after EU Exit.
DHS/CBP Releases Harmonized System Update 1903
(Source: CSMS# 19-000108, 7 Mar 2019.)
Harmonized System Update (HSU) 1903 was created on March 6, 2019 and contains 67 ABI records and 13 harmonized tariff records.
Changes made include those mandated by a final rule, published by the Agricultural Marketing Service, terminating the raspberry assessment. These changes were effective beginning February 21, 2019, and the Federal Register Notice can be retrieved using the following link.
Modifications required by the verification of the 2019 Harmonized Tariff Schedule (HTS) are included as well.
The modified records are currently available to all ABI participants and can be retrieved electronically via the procedures indicated in the CATAIR. For further information about this process, please contact your client representative. For all other questions regarding this message, please contact Jennifer Keeling via email at Jennifer.L.Keeling@cbp.dhs.gov.
Treasury/OFACIssues Venezuela-Related General Licenses, Updates FAQs 661 and 662
(Source: Treasury/OFAC, 8 Mar 2019.)
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing General License 3D, “Authorizing Transactions Related to, Provisions of Financing for, and Other Dealings in Certain Bonds,” and General License 9C, “Authorizing Transactions Related to Dealings in Certain Securities.” OFAC is extending the expiration date of provisions relating to the wind down of certain financial contracts or other agreements involving, or linked to, the bonds listed on the Annex to General License 3D or to certain Petroleos de Venezuela, S.A. securities. Additionally, OFAC is issuing correspondingly updated FAQs 661 and 662.