The Daily Bugle Weekly Highlights: Week 18 (3-7 May 2021)

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 9,500 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 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 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:

1. Commerce/BIS/OEE: FLIR Systems to Pay $307,992 for EAR Violations; Monday, 7 May 2021; Item #3
2. Justice: “Chinese National Pleads Guilty to Illegal Exports to Northwestern Polytechnical University”; Monday, 3 May 2021; Item #8
3. State/DDTC Imposes $13 Million Penalty Honeywell International, Inc., for ITAR Violations; Monday, 3 May 2021; Item #9
4. USTR to Hold Virtual Hearings in Section 301 Investigations of Digital Services Taxes; Monday, 3 May 2021; Item #10
5. White House: President Continues Restrictions on Central African Republic;Friday, 7 May 2021; Item #6

 

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Commerce/BIS/OEE: FLIR Systems to Pay $307,992 for EAR Violations

(Source: BIS Office of Export Enforcement)

 

* Case #: E2656

* Respondent: FLIR Systems, Inc., Wilsonville, Oregon

* Charges: 15 CFR 764.2(g), Misrepresentation and Concealment of Facts

– For among other incidents, supplying inaccurate or incomplete information when applying for a Commodity Jurisdiction through which FLIR sought a determination that the FLIR product was subject to EAR controls rather than ITAR controls, and concerning the end uses of the products.

* Fine or Civil Settlement: $307,992

* Debarred or Suspended from Export Transactions: Not if penalty is paid as agreed.

* Date of Order: 29 April 2021.

 

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Justice: “Chinese National Pleads Guilty to Illegal Exports to Northwestern Polytechnical University”

(Source: Justice)

 

A Chinese national pleaded guilty today in federal court in Boston in connection with illegally procuring and causing the illegal export of $100,000 worth of U.S. origin goods to Northwestern Polytechnical University (NWPU), a Chinese military university that is heavily involved in military research and works closely with the People’s Liberation Army on the advancement of its military capabilities.

According to court documents, Shuren Qin, 44, a Chinese national residing in Wellesley, Mass., gained admittance into the United States through the EB-5 Immigrant Investor Visa Program in 2014 and established LinkOcean Technologies, LTD., which he used to import goods and technology with underwater and marine applications into the PRC from the United States, Canada and Europe. Today, he pleaded guilty to one count of conspiracy to unlawfully export items from the United States to NWPU without first obtaining the required export licenses; one count of visa fraud; two counts of making false statements to law enforcement agents regarding his customers and the types of parts he caused to be exported from the United States to the People’s Republic of China (PRC); four counts of money laundering; and two counts of smuggling hydrophones from the U.S. to the PRC. …

NWPU has been involved in the development of unmanned aerial vehicles, autonomous underwater vehicles and missile proliferation projects. Since 2001, the U.S. Department of Commerce (DOC) has designated NWPU on its Entity List for national security reasons. Qin communicated with and received purchase orders from NWPU to obtain items used for anti-submarine warfare. Between approximately July 2015 and December 2016, Qin caused at least 60 hydrophones (devices used to detect and monitor sound underwater) to be exported from the United States to NWPU without obtaining the required export licenses from the DOC. Qin and his company, LinkOcean, did so by concealing from the U.S. manufacturer of the hydrophones that NWPU was the true end-user and by causing false end-user information to be filed with the U.S. government. In addition, on four occasions in connection with the export of hydrophones to NWPU, Qin engaged in money laundering by transferring or causing the transfer of more than $100,000 from Chinese bank accounts to bank accounts located in the United States with the intent to promote and facilitate his unlawful export scheme. …

The charge of conspiring to violate U.S. export laws provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $1 million. The charges of visa fraud and smuggling both provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. The charge of making false statements provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000.  The charge or money laundering provides for a sentence of up to 20 years in prison, five years of supervised release and a fine of $500,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

 

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State/DDTC Imposes $13 Million Penalty Honeywell International, Inc., for ITAR Violations

(Source: State/DDTC Penalties, 5 May 2021)

 

* Respondent: Honeywell International, Inc., 300 South Tryon Street, Charlotte, NC 28202
* Charges: 

      Charges 1-17: Unauthorized Exports of Technical Data to the PRC. Respondent violated section 127.1(a)(1) of the ITAR seventeen (17) times when Respondent without authorization exported technical data for parts and components controlled under USML Categories VIII(i), XI(d), and XIX(g) that are used in platforms including in the F-35 Joint Strike Fighter, M1A1 Abrams Tank, Tactical Tomahawk Missile, B-1B Lancer Long-Range Strategic Bomber, and F[1]22 Fighter Aircraft platforms as well as the T55 and CTS800 turbo shaft engines to the PRC.
      Charges 18-26: Unauthorized Retransfers of Technical Data to the PRC. Respondent violated section 127.1(a)(1) of the ITAR nine (9) times when Respondent without authorization retransferred technical data for parts and components controlled under USML Categories VIII(i), XI(d), and XIX(g) that are used in platforms including in the F-35 Joint Strike Fighter and the Tactical Tomahawk Missile as well as the T55 and CTS800 turbo shaft engines in the PRC.
      Charges 27-30: Unauthorized Exports of Technical Data to Taiwan. Respondent violated section 127.1(a)(1) of the ITAR four (4) times when Respondent without authorization exported technical data for aircraft parts and components controlled under USML Categories VIII(i) and XIX(g) to Taiwan. 
      Charges 31-32: Unauthorized Exports of Technical Data to Canada. Respondent violated section 127.1(a)(1) of the ITAR two (2) times when Respondent without authorization exported technical data for aircraft parts and components, including for the CTS800 turbo shaft engine, controlled under USML Categories VIII(i) and XIX(g) to Canada.
      Charge 33: Unauthorized Export of Technical Data to Ireland. Respondent violated section 127.1(a)(1) of the ITAR one (1) time when Respondent without authorization exported technical data for aircraft parts and components controlled under USML Categories VIII(i) and XIX(g) to Ireland. 
      Charge 34: Unauthorized Export of Technical Data to Mexico. Respondent violated section 127.1(a)(1) of the ITAR one (1) time when Respondent without authorization exported technical data for aircraft parts and components controlled under USML Categories VIII(i) and XIX(g) to Mexico.
* Civil Settlement: $13 million ($5 million suspended if spent on corrective actions)
* Debarred or Suspended from Export Transactions: Not if penalty is paid and corrective actions are completed as agreed. (See below mitigating factors justifying non-debarment.)
* Result of Voluntary Disclosures: Yes
* Date of Order: 27 Apr 2021
* Available documents:
   * Proposed Charging Letter
   * Consent Agreement
   * Order

 

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USTR to Hold Virtual Hearings in Section 301 Investigations of Digital Services Taxes

(Source: USTR, 2 May 2021) [Excerpts]

 

Beginning at 9:30 AM ET on Monday, May 3, 2021 and continuing Thursday, May 6 through Monday, May 10, the interagency Section 301 Committee will hold hearings to receive public comments regarding proposed tariff actions in the Section 301 investigations of Digital Services Taxes (DSTs) adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom.  The schedule of hearings is as follows: 

• Monday, May 3, 9:30 AM EST – Multi-jurisdictional hearing; 
• Thursday, May 6,
  • 9:30 AM EST – United Kingdom;
  • 11:00 AM EST – Italy; 
  • 1:00 PM EST – Spain; 
  • 2:30 PM EST – Austria; 
• Friday, May 7, 9:30 AM EST – Turkey; and
• Monday, May 10, 9:30 AM EST – India. 

Witnesses will present direct testimony, which will be followed by questions from the Section 301 Committee.  

The hearings are open to the public and will be live streamed at: ustr.gov/live. 

The witness lists for the hearing on Monday, May 3 is available here. The live-stream links for the subsequent hearings will be posted on USTR’s website. Transcripts will be available after the hearings conclude.

WHO:  USTR Staff and the interagency Section 301 Committee.

WHAT: Virtual hearings regarding the proposed tariff actions in the Section 301 investigations of DSTs adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom.

WHEN: 9:30 AM EST, Monday, May 3; 9:30 AM, 11:00 AM, 1:00 PM, and 2:30 PM EST, Thursday, May 6; 9:30 AM, Friday, May 7; and 9:30 AM, Monday, May 10. 

FURTHER INFO: USTR will post witness lists and links to the public live-streams of these hearings on its website in advance of each of the hearings.

 

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White House: President Continues Restrictions on Central African Republic

(Source: The White House) [Excerpts]

 

6 MAY 2021. A Letter to the Speaker of the House of Representatives and the President of the Senate on the Continuation of the National Emergency with Respect to the Central African Republic

. . . .

The situation in and in relation to the Central African Republic, which has been marked by a breakdown of law and order, intersectarian tension, widespread violence and atrocities, and the pervasive, often forced recruitment and use of child soldiers, threatens the peace, security, or stability of the Central African Republic and the neighboring states, and continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. Therefore, I have determined that it is necessary to continue the national emergency declared in Executive Order 13667 with respect to the Central African Republic.

– Joseph R. Biden, Jr.