| | The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe here for free subscription. Contact us for advertising inquiries and rates.
EX/IM ITEMS FROM TODAY’S FEDERAL REGISTER
1. DHS/CBP Announces ACE as the Sole CBP-Authorized EDI System for Processing Electronic Drawback and Duty Deferral Entry and Entry Summary Filings
(Source: Federal Register) [Excerpts.]
81 FR 59644-59645: Notice Announcing the Automated Commercial Environment (ACE) as the Sole CBP-Authorized Electronic Data Interchange (EDI) System for Processing Electronic Drawback and Duty Deferral Entry and Entry Summary Filings
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: This document announces that the Automated Commercial Environment (ACE) will be the sole electronic data interchange (EDI) system authorized by the Commissioner of U.S. Customs and Border Protection (CBP) for processing electronic drawback and duty deferral entry and entry summary filings. This document also announces that the Automated Commercial System (ACS) will no longer be a CBP-authorized EDI system for purposes of processing the electronic filings specified in this notice. This notice also announces a name change for the ACE filing code for duty deferral and the creation of a new ACE filing code for all electronic drawback filings, replacing the six distinct drawback codes previously filed in ACS.
* DATES: Effective October 1, 2016: ACE will be the sole CBP-authorized EDI system for processing electronic entry and entry summary filings for certain entry types, and ACS will no longer be a CBP-authorized EDI system for purposes of processing the electronic filings specified in this notice.
* FOR FURTHER INFORMATION CONTACT: Questions related to this notice may be emailed to ASKACE@cbp.dhs.gov with the subject line identifier reading “ACS to ACE October 1, 2016 transition”.
* SUPPLEMENTARY INFORMATION: …
In this phase, CBP will decommission ACS for all drawback and duty deferral filings. Additionally, CBP is removing the reference to NAFTA from the name of the ACE filing code 08 for duty deferral and is announcing a new ACE filing code 47 for drawback, which will replace the following decommissioned ACS filing codes:
41–Direct Identification Manufacturing Drawback
42–Direct Identification Unused Merchandise Drawback
43–Rejected Merchandise Drawback
44–Substitution Manufacturer Drawback
45–Substitution Unused Merchandise Drawback
ACE as the Sole CBP-Authorized EDI System for the Processing of Certain Electronic Entry and Entry Summary Claims
This notice announces that, effective October 1, 2016, ACE will be the sole CBP-authorized EDI system for the electronic entry and entry summary filings listed below, for all filers. These electronic filings must be formatted for submission in ACE and will not be accepted in ACS.
ACS as the Sole CBP-Authorized EDI System for the Processing of Certain Electronic Entry and Entry Summary Filings
Electronic entry and entry summary filings for the following entry type must continue to be filed only in ACS. CBP will publish a subsequent Federal Register Notice in the future when this entry and entry summary filing will be transitioned in ACE.
Due to Low Shipment Volume, Filings for the Following Entry Types Will Not Be Automated in Either ACS or ACE
26–Warehouse–Foreign Trade Zone (FTZ) (Admission)
33–Aircraft and Vessel Supply (For Immediate Exportation)
65–Permit to Proceed
Dated: August 25, 2016.
R. Gil Kerlikowske, Commissioner, U.S. Customs and Border Protection.
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| | OTHER GOVERNMENT SOURCES
|2. Ex/Im Items Scheduled for Publication in Future Federal Register Editions |
(Source: Federal Register)
* Justice; Alcohol, Tobacco, Firearms, and Explosives Bureau; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application and Permit for Permanent Exportation of Firearms [Publication Date: 31 August 2016.]
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|3. Commerce/BIS: (No new postings.) |
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|4. State/DDTC: (No new postings.) |
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U.S. Customs and Border Protection is proposing to allow electronic filing of the Toxic Substances Control Act certification required when importing chemicals in bulk form or as part of mixtures and articles containing a chemical or mixture. This rule would also clarify and add certain definitions and eliminate the paper-based blanket certification process. Comments on this proposal must be received by Sept. 28.
When a TSCA chemical substance is imported in bulk form or as part of a mixture or a non-TSCA chemical is imported, an importer or its customs broker must submit a signed certification stating that either (1) all chemical substances in the shipment comply with all applicable rules or orders under TSCA and the importer is not offering a chemical substance for entry in violation of TSCA or any rule or order thereunder (a positive certification), or (2) all chemicals in the shipment are not subject to TSCA (a negative certification).
Currently, the TSCA certification must be filed with the director of the port of entry before release of the shipment. The certification may appear as a typed or stamped statement either (1) on the entry document or commercial invoice or on a preprinted attachment thereto, or (2) in the case of a release under a special permit for an immediate delivery under 19 CFR 142.21 or in the case of an entry under 19 CFR 142.3, on the commercial invoice or an attachment thereto. Further, importers are allowed to use paper blanket certifications, which are valid at one port of entry for one year.
The changes in this proposed rule include the following.
– providing an electronic option for filing positive or negative TSCA certifications and notices of exportation and abandonment
– requiring the submission of additional information relating to the certifying individual, including name, phone number and email address, for TSCA certifications submitted either in writing or electronically
– eliminating the blanket certification process, which has limited utility and is more burdensome than the current entry-specific certification process
– including language to make clear that the regulation applies to the importation of chemicals regardless of whether they are “chemical substances” subject to TSCA
– revising and adding definitions to clarify that certification obligations apply to both chemical substances and mixtures that are subject to TSCA (which require a positive certification) and those that are not (which require a negative certification)
In addition, CBP is seeking comments on whether to include an exemption from the negative certification requirement for chemicals that are clearly identified as a pesticide or other chemical not subject to TSCA.
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| | 6. A.E.P. Baj, E.J. Krauland & J.R. Hayes: “State and Commerce Publish Harmonized Destination Control Statements”
* Authors: Alexandra E.P. Baj, Esq., firstname.lastname@example.org, 202-429-6478; Edward J. Krauland, email@example.com, 202-429-8083; and Jack R. Hayes, Esq., firstname.lastname@example.org, 202-429-6491. All of Steptoe & Johnson LLP.
On August 17, 2016 the US Departments of State and Commerce published final rules regarding revisions to the destination control statements required under the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). Destination control statements are required in order to alert recipients of ITAR or EAR-controlled items of US export control requirements associated with the items. The agencies’ Federal Register notices (here and here) describe the harmonization of the two statements pursuant to Export Control Reform (ECR), along with new requirements for statement placement and accompanying information about export control classifications. The new rules will be reflected in the ITAR at 22 C.F.R. §123.9 and in the EAR at 15 C.F.R. §758.6 effective on November 15, 2016.
The harmonized destination control statement for the ITAR and the EAR is as follows:
These items are controlled by the US government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s) either in their original form or after being incorporated into other items, without first obtaining approval from the US government or as otherwise authorized by US law and regulations.
The ITAR and EAR require that the statement be included on the commercial invoice. The statement is no longer required on the bill of lading, air waybill, or other shipping documents.
Although the two statements are now harmonized, each agency has some additional requirements related to the statements. Most significant among the additional requirements, described in more detail below, is the need to provide certain export control classification information to the recipient of the items being exported.
In addition to the destination control statement, the following information must also be included on the commercial invoice for items exported pursuant to an ITAR license or other ITAR approval: (1) country of ultimate destination, (2) name of end-user, and (3) the license or other approval number or applicable license exception. Notably, there is no requirement to identify the USML category applicable to the items. However, US exporters who are exporting EAR-controlled items pursuant to an ITAR license or other approval must provide to the recipient the EAR Commodity Control List classification for each item included in the shipment. The EAR classification information requirement includes individual Export Control Classification Numbers (ECCNs) under the EAR, as well as EAR99 designations. These ITAR requirements are applicable to items when they are exported, reexported, or retransferred in tangible form (i.e., shipped).
The EAR also requires that exporters include export control classification information with the destination control statement. In particular, ECCNs for each 9×515 item and “600 series” item must be included when the items are exported in tangible form. While not required, the Commerce Department noted in the release of its rule that it is an export compliance best practice to provide ECCNs for all items subject to the EAR (not just 600 series and 9×515) to the recipient.
Like the ITAR, the EAR requires that the destination control statement (and other required information) be included on the commercial invoice. An EAR destination control statement is not required for exports of EAR99 items or items exported under the BAG or GFT license exceptions. All other tangible exports (including those exported “no license required” or NLR) will require the destination control statement.
The harmonization of the ITAR and EAR destination control statements will be helpful to exporters of mixed shipments of ITAR and EAR items as it removes confusion about which statement to apply and allows for the statement to be included only on the commercial invoice. This should simplify export clearance requirements for some exporters.
As commentators on the proposed rule have noted, however, exporters may experience some difficulty in implementing the new destination control statement from a logistics perspective. In particular, many exporters will need to focus on recoding logic for enterprise resource planning (ERP) systems to reflect the new statement. Perhaps most difficult to implement will be the need to include export control classification information with the destination control statement. The harmonized statement does not alleviate the need to determine the export jurisdiction and classification of exported items; indeed, it illustrates the need for increased attention to this area of export controls compliance. For example, for companies with a significant volume of exports, the new requirements may necessitate combining databases of export control jurisdiction and classification determinations with automatic generation of commercial invoices. Exporters have until November 15th to implement the changes, but should start planning now to avoid delays with shipments this fall.
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| | 7. A.G. Fernández & A.E. Mendoza: “Compliance Conundrum — Unauthorized Exports v. Discrimination: Find a Win in a Lose-Lose Scenario”
* Authors: Alfredo G. Fernández, Esq., email@example.com, 860-251-5353; and Ashley E. Mendoza, Esq., firstname.lastname@example.org, 860-251-5018. Both of Shipman & Goodwin LLP.
Imagine your company has employed a research scientist to support your technology programs. The scientist is a citizen of the People’s Republic of China and holds an H-1B visa, but is not authorized to view certain export-controlled technical data. Unclear of the restrictions in place, other company employees provide the foreign scientist with technical data related to a military program in the course of his job duties. This real life scenario recently resulted in a $100,000 settlement penalty with the U.S. State Department this summer.
It appears that a company policy to screen out foreign candidates for job openings of this sensitive nature would have prevented this violation and penalty, but a company also faces the challenge of avoiding discrimination in its hiring practices. Is this a lose-lose scenario? Not quite, but companies must pay close attention to recent guidance and regulatory revisions to understand their compliance obligations.
The Tricky Intersection of Legal Obligations
On March 31, 2016, the U.S. Department of Justice Office of Special Counsel for Immigration-Related Unfair Employment Practices (the “OSC”) released its most recent guidance to employers to aid them in navigating the murky waters where export regulations meet immigration antidiscrimination regulations.
These two regulated areas may contradict each other when it comes to the hiring practices of U.S. companies soliciting candidates for a position where the job duties impose compliance with export control laws. Unfortunately, the limited governmental guidance confounds some employers when it comes to complying with both sets of regulations in certain scenarios. The OSC’s recent guidance and upcoming definitional changes within the export control laws do provide some general direction for employers; however several ambiguous issues remain unresolved.
What We Know About the Export Regulations in this Context
Exports are commonly associated with the shipment of a tangible item to a foreign country, but the U.S. export regulations have a much broader application. An export also includes the transfer of controlled technical data or technology to foreign persons, even when the transfer takes place within the geographic territory of the United States. Such a transfer is “deemed” to be an export to the country of the foreign person and is referred to as a “deemed export.”
Although not the only federal agencies administering export control laws, the U.S. State and Commerce Departments manage the two broadest export control systems. The U.S. State Department’s Directorate of Defense Trade Controls administers the International Traffic in Arms Regulations (“ITAR”), found at 22 C.F.R. §§ 120-130, which control defense articles and services. The U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) administers the Export Administration Regulations (“EAR”), found at 15 C.F.R. §§ 730-774, which control commercial and dual-use items, as well as limited low-sensitivity military items. Generally speaking, all articles controlled under the ITAR and many articles controlled under the EAR require an export license before the export, including a deemed export, occurs.
Each set of regulations accounts for deemed exports but have slightly different definitions of key terms. In fact, new and revised definitions under both regulations become effective September 1, 2016. One primary intention of the definitional changes is to better harmonize the analogous definitions in both systems. Under both regulations, the deemed export rule applies only to foreign persons and, by definition, does not apply to U.S. citizens, persons lawfully admitted for permanent residence in the United States (e.g., green card holders) or to persons who are protected individuals under the Immigration and Nationality Act (“INA”)(e.g., certain refugees and asylees).
The below table showcases a few of the new definitions, including the improved harmonization for key terms such as export and release.
Export means releasing or otherwise transferring technical data to a foreign person in the United States.
Export means releasing or otherwise transferring technology to a foreign person in the United States.
Any release in the United States of technical data to a foreign person is deemed to be an export to all countries in which the foreign person:
has held or holds citizenship; or
holds permanent residency
§120.17 — Export
Any release in the United States of technology to a foreign person is a deemed export to the foreign person’s most recent country of citizenship or permanent residency.
§734.13 — Export
Technical data is released through:
Visual or other inspection by foreign persons of a defense article that reveals technical data to a foreign person; or
Oral or written exchanges with the foreign person of technical data in the United States or abroad.
§120.50 — Release
Technology is released through:
Visual or other inspection by a foreign person of items that reveals technology subject to the EAR to a foreign person; or
Oral or written exchanges with a foreign person of technology in the United States or abroad.
§734.15 — Release
Releases, as defined above, may be made through oral, visual, or other means and may seem innocuous. For example, deemed exports may occur through:
– a live or recorded demonstration;
– a telephone call or voice message;
– a laboratory or plant visit;
– an exchange of paper or electronic communication;
– a web-based meeting with a shared screen;
– posting non-public data on the Internet or company intranet; or
– carrying a device with controlled technical information or software to a foreign destination.
Therefore, employers must be aware of the potential need to seek an export license before allowing a release of controlled technical data or technology to a foreign person. The ability to evaluate the qualification of a candidate based on nationality and similar demographics, however, is itself another compliance challenge given certain federal antidiscrimination protections.
What We Know About the Antidiscrimination Immigration Regulations.
The INA is the controlling federal statute governing immigration into the United States. The INA contains antidiscrimination provisions, which are codified at 8 U.S.C. § 1324b and which protect U.S. citizens, U.S. nationals, lawful permanent residents, and asylees and refugees from citizenship and immigration status discrimination, as well as all work-authorized individuals, from national origin discrimination, document abuse and retaliation. These provisions prohibit: (1) discrimination based on national origin, citizenship or immigration status with respect to hiring, firing, recruitment, or referral for a fee; (2) unfair documentary practices with respect to verifying employment eligibility based on national origin, citizenship or immigration status; and (3) intimidation of or retaliation against any individual for intending to or filing a charge or complaint, testifying, assisting, or participating in an investigation, proceeding or hearing under this antidiscrimination provision.
The codified antidiscrimination provisions set forth three specific exceptions where the antidiscrimination provisions do not apply, including (1) where a person or entity employs three or fewer employees; (2) where discrimination based on national origin is covered under section 703 of the Civil Rights Act of 1964 [FN/1]; and (3) where discrimination based on citizenship occurs because citizenship status is required in order to comply with law, regulation, or executive order, or required by government contract, or which the Attorney General determines to be essential for an employer to do business with a government agency or department. The codified antidiscrimination provisions also set forth an additional exception, allowing for a person or other entity to prefer to hire, recruit, or refer an individual who is a citizen or national of the United States over another individual who is an alien if the two individuals are equally qualified.
The penalties for noncompliance with these regulations can be severe. If, after the requisite proceedings have taken place, an Administrative Law Judge determines that a person or entity engaged in an unfair immigration-related employment practice, the judge will issue a cease and desist order. This order may, at the Judge’s discretion, require the violator to comply with strict documentation of their future hiring practices above what the regulations typically require; to hire individuals directly and adversely affected, with or without back pay; to pay a civil penalty ranging from $178 to $17,816 [FN/2] per discrimination victim depending on the nature of current and prior violations; to educate employees and personnel about their rights and compliance with the regulations; and to pay the prevailing party’s attorney’s fees, among other penalties.
So, What is a U.S. Employer To Do?
Notwithstanding commentary on the upcoming definitional changes in the ITAR and EAR, the leading guidance is a March 31, 2016 letter from OSC, written in response to this very question.
In its response, the OSC clarifies that the ITAR “does not limit the categories of work-authorized non-U.S. citizens an employer may hire.” The letter stresses that U.S. employers may apply for export licenses for non-U.S. person employees if their positions require access to information governed by ITAR. Companies must be prepared for the burden of drafting export license applications and waiting up to several months for approval before controlled technical data or technology may be released to the foreign person.
The OSC also addresses potential citizenship status and national origin discrimination. The OSC clarifies that if an employer were to take action and reject a protected individual’s application based on his/her answers to questions involving citizenship status or national origin, the employer may be engaging in illegal discrimination. The OSC leaves ambiguous, however, whether asking the proposed questions of all job applicants or new hires to determine whether the employer will need an export license violates the INA antidiscrimination provisions. The OSC adds that asking those questions would likely not violate the INA, but the OSC discourages inclusion of such questions on all applications to avoid confusion among applicants and human resources.
An acceptable alternate approach for employers when initially screening job applicants is to inquire about immigration sponsorship rather than immigration status, citizenship or national origin. In 1998, the OSC recommended the phrasing “Will you now or in the future require sponsorship for employment visa status?” [FN/3] Applicants who answer “yes” to this question will not qualify as U.S. persons under the ITAR or EAR. In this manner, employers may gather information that will alert them to the possibility that an export license may be required for applicants.
The OSC has also confirmed that it is acceptable for an employer to have a policy of not hiring individuals who are not “protected individuals” based solely on the person’s citizenship status. [FN/4] Therefore, if an applicant answers ‘yes’ to the sponsorship question posed above on a job application, he/she is not a “protected individual” under the INA in terms of citizenship and immigration status discrimination. An employer may lawfully reject that application based on a company policy not to provide immigration sponsorship.
If the employer is willing to provide immigration sponsorship, however, the hiring process is more complicated. Based on the currently available OSC guidance, if an applicant answers ‘yes’ to the sponsorship question posed above on a job application and the employer offers immigration sponsorship, an employer that rescinds a job offer or refuses to hire a work-authorized individual based on subsequently learned knowledge of that individual’s country of origin may be committing illegal national origin discrimination.
Finally, the OSC addresses potential unfair documentary practices in the employment eligibility verification process. The OSC clarifies that an employer that implements a document verification process to determine only a new employee’s immigration or citizenship status to comply with export control laws is unlikely to violate the INA antidiscrimination provisions if the document verification process is separate and distinct from the employment eligibility verification process. The OSC has previously stated that it is permissible to implement a verification procedure under the ITAR requiring the presentation of documents establishing citizenship or immigration status necessary to ensure compliance with the ITAR, for new employees that is separate and distinct from a Form I-9 employment eligibility verification procedure. [FN/5] The OSC warns employers that if these processes appear to be integrated due to proximity in time, candidates may assume discriminatory document verification processed led to an unfavorable hiring decision.
Employers are left to master a delicate dance: on one hand, avoiding an unauthorized export to a foreign employee, and on the other avoiding unlawful discrimination in the hiring process. Although the OSC letter provides some insight to ease the quandary, employers still face pitfalls with their export compliance and in their hiring processes without an appropriate export compliance management program and with inadequate recruiting and onboarding procedures. As the appropriate analyses of these issues are highly fact-specific, employers are encouraged to consult counsel before posting a job opening that requires access to export-controlled information.
Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employers with 15 or more employees from discriminating against employees on the basis of sex (including pregnancy, gender identity and sexual orientation), race, color, national origin, and religion.
The U.S. Department of Justice published the Civil Monetary Penalties Inflation Adjustment Rule on June 30, 2016 that raised the penalty amounts effective August 1, 2016.
This recommended phrasing was reaffirmed in the OSC’s September 6, 2013 technical assistance letter.
Confirmed in the OSC’s February 25, 2013 technical assistance letter.
Confirmed in the OSC’s October 6, 2010 technical assistance letter.
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| | 8. A. Novis: “Authorizing Your Boomerang” * Author: Ari Novis, Pratt & Whitney, email@example.com, 860-557-2353
Export Control Reform (ECR) includes a promise to regularly revisit the control lists to keep them “relevant.” February 9th saw DDTC make good by proposing updates to USML Categories VIII and XIX. The categories saw several changes, and while some entries were removed – including the DeWalt-friendly elimination of lithium-ion batteries – fourteen new ones were added. One thing not added was a re-transition plan for new or returning USML items.
The changes aren’t just a redistribution of existing entries among a larger set – for example, gearboxes in VIII(h)(2) have been split into (h)(2) and (h)(27), with the remainder moving to the Commerce Control List (CCL). Some are bona fide retrograde motion from the EAR 600 series back to the USML, such as the addition of MT7 and T408 engines to XIX(d) – which will also catch their formerly 600-series parts in XIX(f)(2)-(f)(5) and casting cores in (f)(8). VIII(h)(7) and (h)(18) now include “specially designed parts and components therefore.” A small change, unless you make a part or component for one of those systems. Some tooling for stealth aircraft will move from the CCL to the USML; the February 9th Rule preamble reads: ‘”[t]his rule proposes to move specific types of production and test equipment for specific aircraft identified in [VIII](h)(1) to the control of the USML.”
It’s likely a number of proposed new entries won’t make the final rule; only time and a Federal Register notice will tell. Nevertheless, some items are likely to boomerang back to the USML. DDTC recognized that in the preamble to the proposed rule: “The articles that newly appear on or have returned to the USML in this rule are those that constitute or are specially designed for next-generation technology and thus satisfy ITAR §120.3.” The rationale for items to newly appear or return aside; what is missing is the mechanics of how to authorize exports, reexports, and transfers of those items. Executive Order 13222 gives DoS authority to over some DoC items, but DoC doesn’t have authority over DoS (i.e., USML) items. That existing BIS authorization does no good for a newly appearing or returning USML item.
Hypothetical scenario: Because the (first) Transition period is ending, a while back you retired a MLA for a BIS authorization. At the stroke of midnight on this new rule’s Effectivity Date, the 600 series MT7 turbine blade being produced abroad under that BIS license will be ITAR XIX(f)(2) and SME. The 9B619 casting core that supplier currently gets under STA will be USML XIX(f)(8). If you have production abroad for the JSF and your overseas supplier makes their own soon to be VIII(h)(30) or XIX(f)(16) ‘jig’, your MLA will need to cover the manufacture of that ‘defense article.’ Real scenario: Many tools needed by our Allies to maintain the JSF – DoD’s largest international acquisition program – include ‘jigs’ and ‘locating fixtures.’ Under what authorization will we export, reexport, and transfer them after the Effectivity Date? In the grand scheme of ECR, a fraction of items return to the USML under the proposed rule – that’s cold consolation if you’re responsible for one or more of them. If you export a boomerang item (or associated technical data), and followed the rules and got a BIS authorization, it’s not at all clear what will happen on the Effectivity Date of the new rule. Lacking a re-transition plan, there is the gap between the publication and effectivity dates to identify and re-reclassify the impacted items, apply for a new or amend an existing authorization, get DDTC approval, and get all the necessary signatures. It’s unlikely the gap will be the two (or three) years we got the first time around. DDTC will need to find a way to carry over existing BIS authorizations, and provide guidance on the treatment of items abroad legally exported under today’s rules. Tick Tock.
If you don’t deal in VIII and XIX item, just wait – all the other transitioned USML categories are due to be revisited in turn.
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| | 9. R.C. Burns: “Let No Such Man Be Trusted” (Source: Export Law Blog . Reprinted by permission.)
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC, 202-624-3949, Clif.Burns@bryancave.com )
Some Cubans in London wanted to send a piano to Conservatory Amadeo Roldan in Havana. They raised money for this gift by holding a classical music concert and sold tickets for the event through the U.S. company Eventbrite. Things immediately went downhill for that poor piano.
Not surprisingly, Eventbrite confiscated the money from the ticket sales and refused to send it to Cubanos en UK. Daniesky Acosta, the head of that group, tried to tell Eventbrite that, as the group and the concert were in London, the confiscation of the funds was “outside U.S. law.” Except of course Eventbrite isn’t.
So Acosta tried a different tack, citing the E.U. blocking regulation that prohibits people in the E.U. from complying with the U.S. embargo on Cuba. Unfortunately, Eventbrite is in San Francisco and not subject to the directive. Cubanos en UK has sought to enlist the U.K. government on its side, again without much success given the location of Eventbrite.
Cubanos en UK sought legal advice from the … attorney general of Iowa, Tom Miller, who has years of experience working on OFAC regulations with regards to the Cuba blockade. Miller told the organization that the transaction was legal, but Eventbrite continues to insist that it is in violation of OFAC regulations.
I’m not quite clear why the Attorney General of Iowa is an OFAC expert in the first place, but his alleged claim that the export of the piano to Cuba would be perfectly legal suggests that he might not in fact have profited much from his “years of experience” working on OFAC’s rules on the Cuba embargo. The closest exemption in the Cuba regulations would be the section which permits humanitarian donations to “projects involving formal or non-formal educational training.” This, without more, might cover the donation of piano to a music conservatory. The problem is the further qualification: the covered eductation training is limited to
Entrepreneurship and business, civil education, journalism, advocacy and organizing, adult literacy, or vocational skills; community-based grassroots projects; projects suitable to the development of small-scale private enterprise; projects that are related to agricultural and rural development that promote independent activity; microfinancing projects, except for loans, extensions of credit, or other financing prohibited by §515.208; and projects to meet basic human needs.
Although “civil education” is somewhat vague, it presumably means the sort of things taught in a civics class, and although you and I might agree that music is a basic human need, I think OFAC means more basic needs like food, water and shelter. So, for as much as I favor sending pianos to Cuba, it seems that a specific license would be needed.
[Title of this post is taken from here.]
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|EDITOR’S NOTES |
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
– Warren Buffett (Warren Edward Buffett, born August 30, 1930, is an American business magnate, investor and philanthropist. Buffett is the chairman, CEO, and largest shareholder of Berkshire Hathaway, and is consistently ranked among the world’s wealthiest people.)
“Baseball is the only field of endeavor where a man can succeed three times out of ten and be considered a good performer.”
– Ted Williams (Theodore Samuel “Ted” Williams, August 30, 1918 – July 5, 2002, was an American professional baseball player and manager. Williams is regarded as one of the greatest hitters in baseball history.)
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| | 11. Are Your Copies of Regulations Up to Date?
The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register. Changes to applicable regulations are listed below.
– Last Amendment: 15 Jan 2016: 81 FR 2657-2723: Machineguns, Destructive Devices and Certain Other Firearms; Background Checks for Responsible Persons of a Trust or Legal Entity With Respect To Making or Transferring a Firearm
– Last Amendment: 26 Aug 2016: 81 FR 58831-58834: Administrative Exemption on Value Increased for Certain Articles – Last Amendment: 23 Aug 2016: 81 FR 57451-57456: Addition of Certain Persons to the Entity List
– Last Amendment: 15 May 2015; 80 FR 27853-27854: Foreign Trade Regulations (FTR): Reinstatement of Exemptions Related to Temporary Exports, Carnets, and Shipments Under a Temporary Import Bond – HTS codes that are not valid for AES are available here
– The latest edition (9 May 2016) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and footnotes containing case annotations, practice tips, and Census/AES guidance. Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website. BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR, please contact us to receive your discount code.
– HTS codes for AES are available here . – HTS codes that are not valid for AES are available here
* INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR) : 22 C.F.R. Ch. I, Subch. M, Pts. 120-130 (Caution — The ITAR as posted on GPO’s eCFR website and linked on the DDTC often takes several weeks to update the latest amendments.)
– Latest Amendment: 17 Aug 2016: 81 FR 54732-54737
: Amendment to the International Traffic in Arms Regulations: Procedures for Obtaining State Department Authorization To Export Items Subject to the Export Administration Regulations; Revision to the Destination Control Statement; and Other Changes
– The only available fully updated copy (latest edition 17 Aug 2016) of the ITAR is contained in Bartlett’s Annotated ITAR (“BITAR”), by James E. Bartlett III. The BITAR contains all ITAR amendments to date, plus a large Index, and over 700 footnotes containing case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text. Subscribers receive updated copies of the BITAR in Word by email, usually revised within 24 hours after every ITAR amendment. The BITAR is THE essential tool of the ITAR professional. The BITAR is available by annual subscription from the Full Circle Compliance website. BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please contact us to receive your discount code.
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|* The Ex/Im Daily Update is a publication of FCC Advisory B.V., edited by James E. Bartlett III and Alexander Bosch, and emailed every business day to approximately 7,500 subscribers to inform readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOJ/ATF, DoD/DSS, DoD/DTSA, 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. |
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