The Daily Bugle Weekly Highlights: Week 44 (26-30 Oct 2020)

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 8,500 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, Salvatore Di Misa, 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. EU Commission: “Boeing WTO Case – EU Gets Formal Green Light to Impose Duties on U.S. Imports”; Tuesday, 27 Oct 2020; Item #5
2. EU External Action: “Arms Exports Control — Launch of Online Database Increasing Transparency on EU Arms Exports”; Tuesday, 27 Oct 2020; Item #6
3. Commerce/BIS: “Amendments to EAR National Security License Review Policy re China, Russia, and Venezuela”; Thursday, 29 Oct 2020; Item #1
4. UK GOV Updates List of Export Licences and Certificates from 1 January 2021; Thursday, 29 Oct 2020; Item #11
5. Canada TID Publishes Order Amending the Automatic Firearms Country Control List; Friday, 30 Oct 2020; Item #11

 

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EU Commission: “Boeing WTO Case – EU Gets Formal Green Light to Impose Duties on U.S. Imports”

(Source: European Commission, 26 Oct 2020)

 

  Today, the Dispute Settlement Body of World Trade Organization (WTO) formally authorised the EU to take countermeasures against the United States. The EU can now increase its duties on U.S. exports worth up to $4 billion. Today’s decision follows the WTO panel announcement confirming EU retaliation rights in reaction to illegal subsidies granted to the U.S. aircraft maker, Boeing.

  Executive Vice-President for an Economy that Works for People and Commissioner for Trade, Valdis Dombrovskis, said: “Today’s formal approval by the Dispute Settlement Body of the WTO confirms the EU’s right to impose countermeasures for illegal subsidies to the American aircraft maker, Boeing. The European Commission is preparing the countermeasures, in close consultation with our Member States. As I have made clear all along, our preferred outcome is a negotiated settlement with the U.S. To that end, we continue to engage intensively with our American counterparts, and I am in regular contact with U.S. Trade Representative Robert E. Lighthizer. In the absence of a negotiated outcome, the EU will be ready to take action in line with the WTO ruling.”

  The European Commission is currently finalising the process, involving EU Member States, to be ready to use its retaliation rights in case there is no prospect of bringing the dispute to a mutually beneficial solution in a near future.

 

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EU External Action: “Arms Exports Control — Launch of Online Database Increasing Transparency on EU Arms Exports”

(Source: European Union External Action, 26 Oct 2020)

 

  Today the European External Action Service launched an online database on its website that will allow everyone to consult and analyse the data on Member States’ arms exports in a user-friendly manner.

  The database contains information on the value, destination and type of arms export licenses and actual exports from Member States, covering the years 2013-2019. The database will be updated on an annual basis.

All data in the annual reports and in the database is provided by Member States. Annual reports are shared publicly through publication in the Official Journal. On 23 October, the Council adopted the Twenty-Second Annual Report on arms exports covering the data for the year 2019.

  To improve transparency, the new database offers various graphic representations to all those interested in the value, military equipment and destination of European arms exports.

 

Background

  While decisions on issuing export licenses for military equipment are a clear national competence, the assessment criteria on which national authorities base their decisions are European. They are enshrined in the Common Position 2008/944 CFSP as the EU framework on arms export. The EEAS works together with Member States towards increased transparency and convergence in the implementation of that Common Position. It is essential to uphold European values when exporting arms: strict implementation by Member States of the Common Position on arms export is necessary.

  Military weapons have an indispensable role in the preservation of security, freedom and peace, provided they are used in accordance with International Law, including Human Rights Law and International Humanitarian Law. At the same time, weapons of war are by definition capable of inflicting death and destruction. This means that governments that control such weapons must ensure that they are traded and used in a responsible and accountable way, and prevent their diversion to terrorists, criminals and other unauthorised users. Accountability for arms export decisions can only take place when authorities are transparent. The EU does all it can to ensure that utmost transparency is being upheld and calls upon all other States to do the same.
You can find more information about the EU’s arms export control policy here.

 

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Commerce/BIS: “Amendments to EAR National Security License Review Policy re China, Russia, and Venezuela”

(Source: Federal Register) [Excerpts]

 

85 FR 68448: Rule

* AGENCY: Bureau of Industry and Security, Commerce.

* ACTION: Final rule.

* SUMMARY: In this final rule, the Bureau of Industry and Security (BIS) amends the 15 CFR 742.4 of the Export Administration Regulations (EAR) to revise the license review policy for items controlled for national security reasons destined to the People’s Republic of China (PRC), Venezuela, or the Russian Federation (Russia). With this revision, BIS and reviewing agencies will determine whether the export, reexport, or transfer (in-country) of items controlled for National Security (NS) reasons will make a material contribution to the development, production, maintenance, repair, or operation of weapons systems of the PRC, Venezuela, or the Russian Federation, as well as setting forth several factors that will be considered in reviewing license applications.

* DATES: This rule is effective October 29, 2020.

* FOR FURTHER INFORMATION CONTACT:Sharron Cook, Regulatory Policy Division, Bureau of Industry and Security, Email: Sharron.cook@bis.doc.gov or Phone: 202-492-2440.

 

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UK GOV Updates List of Export Licences and Certificates from 1 January 2021

(Source: UK GOV, 28 Oct 2020)

 

The UK updates the list of licences, certificates and special rules for taking goods out of the UK from 1 January 2021.

 

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Canada TID Publishes Order Amending the Automatic Firearms Country Control List

(Source: Canada TID, 29 Oct 2020) [Excerpts]

 

Amendments

The Automatic Firearms Country Control List [FN/1] is amended by repealing the following:

• Czech Republic
• Republic of Colombia
• Republic of Korea

The List is amended by adding the following in alphabetical order:

• Austria
• Colombia
• Czechia
• Ireland
• Japan
• Korea, Republic of
• Switzerland

Coming into Force

This Order comes into force on the day on which it is registered.

 

Issues

  The Automatic Firearms Country Control List (AFCCL), which has existed since 1991, is a positive list of countries to which Canadians may export certain prohibited items as defined in the Criminal Code if they have obtained a permit to export these items. Further to the Export and Import Permits Act (the Act), prohibited firearms, weapons and devices (or components and parts thereof), that are also included on the Export Control List, may only be exported to countries listed on the AFCCL and only to the governments of those countries or to end-users authorized by those governments. Any permit application to export controlled items to AFCCL countries is assessed on a case-by-case basis against considerations laid out in legislation (including the Arms Trade Treaty [ATT] assessment criteria and the substantial risk test) and in policy. The ATT criteria include considerations as to whether the proposed export could be used to commit or facilitate a serious violation of international human rights or humanitarian law, an act of terrorism or transnational organized crime, or a serious act of gender-based violence or violence against women and children. If, after considering any available mitigating measures, the Minister of Foreign Affairs (the Minister) determines that there is a substantial risk that an export would result in any of these negative consequences, then the Minister cannot issue a permit for that export.

  The AFCCL currently comprises 40 countries. These include most NATO allies, as well as Australia, Botswana, Chile, Colombia, Finland, Israel, Kuwait, New Zealand, Peru, Saudi Arabia, South Korea, and Sweden. Ukraine was added most recently in 2017.

  Canada is the only country in the world to legally limit the export of automatic firearms by destination. Canadian defence manufacturers that export automatic firearms and prohibited weapons have often expressed frustration that the AFCCL places them at a competitive disadvantage as compared to their international competitors. The addition of appropriate destinations to the list helps to lessen this competitive disadvantage.

  On September 1, 2019, the Act was amended to remove the requirement that Canada must have concluded an “intergovernmental defence, research, development and production arrangement” with a country prior to its inclusion on the AFCCL. The Act now requires that the Minister consult the Minister of National Defence before recommending to the Governor in Council that amendments be made to the AFCCL. This amendment enables the addition to the AFCCL of traditionally neutral countries, such as Austria, Ireland, Japan, and Switzerland, that cannot enter into such defence arrangements.

  On May 1, 2020, a separate Government of Canada initiative resulted in the reclassification of various firearms as prohibited, thereby barring their export to non-AFCCL destinations. Adding countries that are significant manufacturers of firearms to the AFCCL, such as Switzerland and Austria, allows Canadians who own these newly prohibited firearms to return them to their manufacturer. This is already an option for Canadian owners of models of prohibited firearms that are manufactured in other AFCCL countries, such as the United States.

 

Objective

This Order

• lessens the competitive disadvantage that Canadian companies face compared to their international competitors;
• provides Canadians who own one of the 1 500 models and variants of firearms that were reclassified as prohibited on May 1, 2020, with additional options to dispose of them through export; and
• lists all countries using the official short form of their name so that countries appear in alphabetical order on the AFCCL.

Read the full order here.