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 7,500 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 Alexander Witt.
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Last week’s highlights of The Daily Bugle included in this edition are:
- Treasury/OFAC Issues Directive Concerning Economic Sanctions on Russia; The Daily Bugle; Monday, 16 September 2019, Item #1;
- EU Adopts New Decision on the Control of Arms Exports; The Daily Bugle; Monday, 16 September 2019, Item #5;
- Treasury/OFAC Announces $4,000,000 Settlement with British Arab Commercial Bank plc for Violating Sudanese Sanctions Regulations; The Daily Bugle; Wednesday, 18 September 2019, Item #5;
- President Continues National Emergency with Respect to Persons Who Commit, Threaten to Commit, or Support Terrorism; The Daily Bugle; Friday, 19 September 2019, Item #1;
- USTR Adds Product Exclusions, Amends Exclusion Process, and Makes Technical Amendments Concerning Duties on Goods of China; The Daily Bugle; Friday, 19 September 2019, Item #2;
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1. Treasury/OFAC Issues Directive Concerning Economic Sanctions on Russia
(Source: Federal Register, 16 Sep 2019.) [Excerpts.]
84 FR 48704-48705: Issuance of Russia-Related Directive Pursuant to Executive Order 13883 of August 1, 2019
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Issuance of directive.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued a Russia-Related Directive under Executive Order 13883 of August 1, 2019.
* DATES: OFAC’s action described in this notice was effective on August 26, 2019.
* FOR FURTHER INFORMATION CONTACT: OFAC: Associate Director for Global Targeting, 202-622-2420; Assistant Director for Licensing, 202-622-2480; Assistant Director for Regulatory Affairs,202-622-4855; or Assistant Director for Sanctions Compliance & Evaluation, 202-622-2490.
* SUPPLEMENTARY INFORMATION: …
Russia-Related Directive Under Executive Order of August 1, 2019 (“CBW Act Directive”)
Pursuant to sections 1(a)(ii), 1(b), and 5 of Executive Order 13883 of August 1, 2019 “Administration of Proliferation Sanctions and Amendment of Executive Order 12851” (the “Order”) and 31 CFR 544.802, and following the Secretary of State’s selection of the sanction related to bank loans pursuant to delegated authority under section 307(b) of the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, as amended (22 U.S.C. 5605(b)), the Director of the Office of Foreign Assets Control has determined, in consultation with the Department of State, that the following activities by a U.S. bank, as defined below, including foreign branches, are prohibited, except to the extent provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control: (1) Participation in the primary market for non-ruble denominated bonds issued by the Russian sovereign, as defined below, after August 26, 2019; and (2) lending non-ruble denominated funds to the Russian sovereign, as defined below, after August 26, 2019.
For purposes of this Directive, the term “U.S. bank” means, consistent with the Order and 31 CFR 544.311, any entity organized under the laws of the United States or any jurisdiction within the United States (including its foreign branches), or any entity in the United States, that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, commodity futures, or options, or procuring purchasers and sellers thereof, as principal or agent. The term “U.S. bank” includes but is not limited to depository institutions, banks, savings banks, trust companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, and U.S. holding companies, U.S. affiliates, or U.S. subsidiaries of any of the foregoing. This term includes those branches, offices and agencies of foreign financial institutions that are located in the United States and otherwise meet the definition of “U.S. bank” used in this Directive, but not such institutions’ foreign branches, offices, or agencies.
Furthermore, for purposes of this Directive, the term “Russian sovereign” means any ministry, agency, or sovereign fund of the Russian Federation, including the Central Bank of Russia, the National Wealth Fund, and the Ministry of Finance of the Russian Federation. This term does not include state-owned enterprises of the Russian Federation.
Except to the extent otherwise provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control, the following are also prohibited: (1) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions contained in this Directive; and (2) any conspiracy formed to violate any of the prohibitions in this Directive. …
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2. EU Adopts New Decision on the Control of Arms Exports
(Source: Council of the EU, 16 Sep 2019.)
The Council today adopted a decision amending the Council Common Position of 8 December 2008 on the control of arms exports, as well as a revised user’s guide. It also adopted conclusions on the review of the Common Position.
The Council decision takes account of a number of developments at both European Union and international level that have resulted in new obligations and commitments for member states since the adoption of the Common Position of 2008. These developments include in particular the entry into force of the Arms Trade Treaty (ATT) on 24 December 2014, which regulates the international trade in conventional arms. All member states are States Parties to the ATT. The ATT aims to establish the highest possible common international standards for regulating or improving the regulation of the international trade in conventional arms and to prevent and eradicate the illicit trade in conventional arms and prevent their diversion.
In its conclusions, the Council recalls its commitment to strengthening the control of the export of military technology and equipment and to reinforce cooperation and promote convergence in the field of export of military technology and equipment within the framework of the Common Foreign and Security Policy. It does this through the setting, upholding and implementation of high common standards for the management of transfers of military technology and equipment by all member states.
The Council reaffirms that military equipment and technology should be traded in a responsible and accountable way. It renews its commitment to promote cooperation and convergence in member states’ policies to prevent the export of military technology and equipment which might be used for internal repression or international aggression, or contribute to regional instability.
– Read the full text of the Council conclusions
– Disarmament, non-proliferation and arms export control
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3. Treasury/OFAC Announces $4,000,000 Settlement with British Arab Commercial Bank plc for Violating Sudanese Sanctions Regulations
(Source: Treasury/OFAC, 18 Sep 2019.)
British Arab Commercial Bank plc (BACB), a commercial bank located in London, the United Kingdom (UK), with no offices, business or presence under U.S jurisdiction, processed 72 apparent violations of the Sudanese Sanctions Regulations (SSR) (previously found at 31 C.F.R. Part 538) totaling $190,700,000. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has determined that BACB did not make a voluntary self- disclosure of the apparent violations, and that these apparent violations constitute an egregious case. The total base penalty amount for the apparent violations was $381,400,000. In consultation with BACB’s domestic regulator, the United Kingdom’s Prudential Regulation Authority, OFAC determined that the Bank’s operating capacity was such that it would face disproportionate impact if required to pay the proposed penalty of $228,840,000. As a result, and in view of BACB’s operating capacity, the fact that it has represented that it ceased the conduct described below, its entering into a settlement agreement, and its maintenance of the compliance commitments articulated in the settlement agreement, BACB will remit $4,000,000 to settle these potential violations and its obligations to pay OFAC the remainder of the proposed penalty amount shall be suspended.
For more information, please visit the following web noticeand settlement agreement.
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4. President Continues National Emergency with Respect to Persons Who Commit, Threaten to Commit, or Support Terrorism
(Source: Federal Register, 20 Sep 2019.)
84 FR 49633: Continuation of the National Emergency with Respect to Persons Who Commit, Threaten to Commit, or Support Terrorism
Notice of September 19, 2019
Continuation of the National Emergency with Respect to Persons Who Commit, Threaten to Commit, or Support Terrorism
On September 23, 2001, by Executive Order 13224, the President declared a national emergency with respect to persons who commit, threaten to commit, or support terrorism, pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the grave acts of terrorism and threats of terrorism committed by foreign terrorists, including the terrorist attacks on September 11, 2001, in New York and Pennsylvania and against the Pentagon, and the continuing and immediate threat of further attacks against United States nationals or the United States.
The actions of persons who commit, threaten to commit, or support terrorism continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. For this reason, the national emergency declared in Executive Order 13224 of September 23, 2001, and the measures adopted on that date to deal with that emergency, must continue in effect beyond September 23, 2019. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency with respect to persons who commit, threaten to commit, or support terrorism declared in Executive Order 13224.
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5. USTR Adds Product Exclusions, Amends Exclusion Process, and Makes Technical Amendments Concerning Duties on Goods of China
(Source: Federal Register, 20 Sep 2019.) [Excerpts.]
84 FR 49591-49600: Notice of Product Exclusions, Amendment to the Exclusion Process, and Technical Amendments: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation
* AGENCY: Office of the United States Trade Representative.
* ACTION: Notice of product exclusions and technical amendments.
* SUMMARY: In September of 2018, the U.S. Trade Representative imposed additional duties on goods of China with an annual trade value of approximately $200 billion as part of the action in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The U.S. Trade Representative initiated a product exclusion process in June 2019, and interested persons have submitted requests for the exclusion of specific products. This notice amends the exclusion process by establishing August 7, 2020 as a uniform expiration date for all exclusions granted under the $200 billion action. This notice also announces the U.S. Trade Representative’s determination to grant certain exclusion requests, as specified in Annex A. As specified in Annex B, this notice also makes technical amendments to the $200 billion action and to the $300 billion action announced in August 2019.
* DATES: The product exclusions announced in this notice will apply as of the September 24, 2018, effective date of the $200 billion action, to August 7, 2020. The technical amendments in Annex B to the $200 billion and $300 billion actions are effective as of the respective effective date of those actions. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.
* FOR FURTHER INFORMATION CONTACT:…
SUPPLEMENTARY INFORMATION: …
- Amendment to the Exclusion Process
The June 24 notice announced that the exclusions granted for the $200 billion trade action would be effective starting from September 24, 2018, and extend for one year after the publication of the exclusion determination in the Federal Register. This policy, however, would have resulted in disparities in the effective periods between exclusions granted early in the exclusion process and those granted later. Accordingly, the Trade Representative is amending the exclusion process so as to adopt a uniform expiration date for exclusions granted for the $200 billion trade action, subject to special circumstances. In particular, all exclusions from the $200 billion action will be effective from September 24, 2018, to August 7, 2020.
- Determination To Grant Certain Exclusions
Based on the evaluation of the factors set out in the June 24 notice, which are summarized above, pursuant to sections 301(b), 301(c), and 307(a) of the Trade Act of 1974, as amended, and in
accordance with the advice of the interagency Section 301 Committee, the U.S. Trade Representative has determined to grant the product exclusions set out in Annex A. The U.S. Trade Representative’s determination also takes into account advice from advisory committees and any public comments on the pertinent exclusion requests.
As set out in Annex A, the exclusions are reflected in 38 specially prepared product descriptions, which cover 46 separate exclusion requests.
In accordance with the June 24 notice, the exclusions are available for any product that meets the description in Annex A, regardless of whether the importer filed an exclusion request. Further, the scope of each exclusion is governed by the scope of the product descriptions in Annex A, and not by the product descriptions set out in any particular request for exclusion.
Paragraph A, subparagraphs (3)-(5) are conforming amendments to the HTSUS reflecting the modification made by Annex A.
As stated in Section B above, the exclusions will apply from September 24, 2018, to August 7, 2020. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.
The U.S. Trade Representative will continue to issue determinations on pending requests on a periodic basis.
- Technical Amendments to $200 Billion and $300 Billion Actions
Annex B make technical amendments to the $200 billion and $300 billion trade actions. These amendments provide that the additional duties do not apply to entries under certain subheadings if the applied rate of duty for an entry is derived from another subheading, and if the entry for this reason already is subject to the additional duties. …