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16-0831 Wednesday “The Daily Bugle”

16-0831 Wednesday “Daily Bugle”

Wednesday, 31 August 2016

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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.

  1. Justice/ATF Seeks Comments on Form ATF F 9 (5320.9), Application and Permit for Permanent Exportation of Firearms 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/Census: “ACE AESDirect Scheduled Outage, 3-4 Sep” 
  3. Commerce/BIS: (No new postings.) 
  4. OMB/OIRA Reviews of Proposed Ex/Im Regulations 
  5. State/DDTC: (No new postings.) 
  1. ST&R Trade Report: “ATF to Cease ACE Pilot Test”  
  1. Amb. T. Kaidanow & Vice Adm. J. Rixey: “Advancing US Security Through Foreign Military Sales” 
  1. ECTI Presents United States Export Control (EAR/OFAC/ITAR) Seminar Series in Wash DC, 31 Oct – 3 Nov 
  1. “Is Your ITAR Up to Date? Get Ready for the 1 September Changes” 
  2. Bartlett’s Unfamiliar Quotations 
  3. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (26 Aug 2016), DOD/NISPOM (18 May 2016), EAR (23 Aug 2016), FACR/OFAC (18 May 2016), FTR (15 May 2015), HTSUS (1 July 2016), ITAR (17 Aug 2016) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11. Justice/ATF Seeks Comments on Form ATF F 9 (5320.9), Application and Permit for Permanent Exportation of Firearms

 
81 FR 60023: Agency Information Collection Activities; Proposed eCollection eComments Requested; Application and Permit for Permanent Exportation of Firearms (National Firearms Act) ATF F 9 (5320.9)
* AGENCY: Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
* ACTION: 60-day notice. …
* DATES: Comments are encouraged and will be accepted for 60 days until October 31, 2016.
* FOR FURTHER INFORMATION CONTACT: Kenneth Mason, Firearms and Explosives Services Specialist, National Firearms Act Branch, 244 Needy Road, Martinsburg, WV 25405, at email: nfaombcomments@atf.gov.
* SUPPLEMENTARY INFORMATION: …
  – The Title of the Form/Collection: Application and Permit for
Permanent Exportation of Firearms (National Firearms Act).
  – Form number (if applicable): ATF F 9 (5320.9).
  – Component: Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Justice.
  – Abstract: ATF Form 9 (5320.9) is typically used by a Federal firearms licensee who has paid the special (occupational) tax to deal, manufacture or import NFA firearms. The form must be filed (in quadruplicate) for approval to permanently export NFA firearms registered in the National Firearms Registration and Transfer Record. Once authorization has been granted, one copy is retained by ATF and the remaining copies returned to the exporter to establish that the exportation took place and claim relief from liability for the transfer tax. …
   Dated: August 25, 2016.
Jerri Murray, Department Clearance Officer for PRA, U.S. Department of Justice.

 

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OGSOTHER GOVERNMENT SOURCES

OGS_a12. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

 
* Commerce; Industry and Security Bureau; RULES; Statements of Legal Authority for the Export Administration Regulations [Publication Date: 1 September 2016.]

* State; NOTICES; Designations as Specially Designated Global Terrorists: Abdiqadir Mumin, aka Sheikh Abdikadir Mumin, aka Sheiky Abdulqadir Mumin, et al. [Publication Date: 1 September 2016.]  

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This message is intended for ACE AESDirect filers ONLY. If you are not an ACE AESDirect filer, you are not affected by this outage.
 
The outage is effective 10:00pm EST Saturday, September 3 – 4:00am EST Sunday, September 4.
 
ACE AESDirect filers may submit shipments under the AES Downtime Policy. State Department licensable shipments cannot be exported under the AES Downtime Policy and must be held until the connection is restored and an Internal Transaction Number (ITN) is received. Once connection is brought back on-line after the outage, all shipments that were exported under the AES Downtime Policy must be filed along with any new AES transactions.
 
If you use the AES Downtime Policy for export, please contact the port from which you will be exporting. In lieu of the AES Proof of Filing citation, please use the AES Downtime citation, which consists of the phrase AESDOWN, your individual company’s Filer ID, followed by the date.
 
For example: AESDOWN 123456789 09/03/2016
 
Please see the CBP web site for further information on the AES Downtime Policy.
 
For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.
 
  – Telephone: (800) 549-0595, select option 1 for AES
  – Email: askaes@census.gov
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(Source:
OMB/OIRA
)     
 
* Revisions to Export Administration Regulations (EAR): Control of Spacecraft Systems and Related Items President Determines No Longer Warrant Control Under United States Munitions List (USML)
  – AGENCY: DOC-BIS
  – STAGE: Final Rule
  – RECEIVED DATE: 08/30/2016
  – RIN: 0694-AG59
  – Status: Pending Review
 
* Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Category XV
  – AGENCY: STATE
  – STAGE: Final Rule
  – RECEIVED DATE: 08/30/2016
  – RIN: 1400-AD33
  – Status: Pending Review

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OGS_a56. State/DDTC: (No new postings.)

(Source: State/DDTC)

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NWSNEWS

NWS_a17. ST&R Trade Report: “ATF to Cease ACE Pilot Test”
(Source: ST&R Trade Report)
 
As of Aug. 31 the Bureau of Alcohol, Tobacco, Firearms and Explosives will cease a pilot test of the transfer of data between the Automated Commercial Environment’s participating government agency message set and ATF’s web-based data analytics system even though the mandatory date for filing entries of ATF-regulated goods in ACE has yet to be determined. ATF advises that no changes have been made to the requirement for importers to submit their copy of form 6A (with sections I and III completed) to ATF within 15 days of release from U.S. Customs and Border Protection custody.
 
Under this test participating U.S. importers used the PGA message set to send required data through ACE for CBP release and receipt. CBP validated this information and electronically transmitted entry and release information to ATF for purposes of satisfying certification requirements. According to ATF, the pilot confirmed the efficiency and effectiveness of digitizing traditional, manual paperwork.
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COMMCOMMENTARY

COMM_a18. Amb. T. Kaidanow & Vice Adm. J. Rixey: “Advancing US Security Through Foreign Military Sales”

(Source: Defense News)
 
* Authors: Ambassador Tina Kaidanow, Assistant Secretary of State for Political-Military Affairs; and Vice Admiral Joseph Rixey, Director of the Defense Security Cooperation Agency.
 
The US Foreign Military Sales (FMS) system – a mechanism by which the US government transfers defense articles and services to partner nations – is a central element in our foreign policy toolkit. In addition to the superior quality of U.S. defense articles and services, what sets this system apart is our “Total Package Approach.” No other country offers partner nations the same comprehensive up-front planning and foresight. FMS involves anticipating not only the partner’s requirement for the weapons system itself, but also the associated initial and follow-on support and services necessary to deploy and sustain the system. This Total Package Approach, when paired with other key enablers such as assistance with doctrine and logistics, generates long-term capabilities for our partners that they may employ and sustain independently.
 
Recently, some have claimed that FMS is a broken system. We respectfully disagree. The FMS system, while burdened by the recent growth of US arms sales, is not broken. There is room for improvement, however, and the departments of State and Defense, along with other interagency stakeholders, are implementing a number of initiatives to make the system more responsive.
 
The FMS system is intentionally deliberative, reflecting the critical nature of these decisions. When Congress established the FMS program, it understood that arms sales needed to be carefully considered and controlled, consistent with US national security and foreign policy. As designed, the administration must consider issues involving technology transfer and the protection of sensitive information associated with each case, with Congress playing a vital oversight role. All major arms transfers require congressional notification and involve an extensive consultation process to address any potential concerns. This process, which may sometimes appear slow, is essential to ensuring that sales are consistent with US foreign and national security interests and policy.
 
Of the thousands of cases the Defense Security Cooperation Agency processes every year, few require more extensive review. There is no “one size fits all” approach to FMS, and each request is reviewed on a case-by-case basis. The appearance that a particular sale is being “held up” is not a reflection of a flawed system; rather, it is the result of the deliberate discussion of complex technology or foreign policy issues.
 
At the same time, the departments of State and Defense are engaging key stakeholders across the interagency, as well as foreign partners, industry officials and Congress, to improve the FMS process. These efforts include working with our foreign partners and industry to better (and earlier) define requirements and align priorities; ensuring closer coordination with the procurement community to improve acquisition timelines; identifying ways to update, enhance and restructure our workforce training on refinements to the FMS process; and working to ensure the workforce meets current FMS requirements but also manages future needs effectively.
 
In addition to refinements to the existing processes, our departments are establishing new approaches. These include the expansion of the Special Defense Acquisition Fund, which enables us to buy ahead of need and deliver items to partners faster than the standard acquisition process. Additionally, the Lead Nation Procurement Initiative, a pilot program for NATO countries designed to support sales, allows for subsequent retransfer of items to other NATO partners, offering greater flexibility and cost savings while maintaining accountability.
 
These initiatives represent a robust effort across the interagency to enable the United States to remain the provider of choice for our foreign partners. As a result, our foreign partners understand and have confidence in the FMS system. They see the benefit of being able to “buy into” the US defense infrastructure and receive DoD-provided training support. Our partners have come to rely upon this system in the implementation of their national defense strategies, reflecting our shared international and defense interests.
 
The administration is committed to ensuring that FMS continues to advance and protect American national security interests, while helping our partners respond to the dynamic threats we collectively face today and in the future.

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MSEX/IM TRAINING EVENTS & CONFERENCES

* What: United States Export Control (EAR/OFAC/ITAR) Seminar Series in Washington, DC
* When: EAR/OFAC Seminar: Oct 31- Nov 1, 2016; ITAR Seminar: Nov 2-3, 2016
* Where: Washington, DC: Embassy Suites Old Town Alexandria
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker Panel: Scott Gearity, John Black, Christopher Tafe & Jonathan Poling
* Register: Here, or Jessica Lemon, 540-433-3977, jessica@learnexportcompliance.com.

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ENEDITOR’S NOTES

EN_a310. “Is Your ITAR Up to Date?  Get Ready for the 1 September Changes”

(Source: Jim Bartlett, JEBartlett@JEBartlett.com)
 
Bartlett’s Annotated ITAR
(“BITAR”) is updated every time the ITAR is amended, usually within 24 hours.  In addition, there are many editorial revisions throughout the year, which add new or revised footnotes (currently over 700), updated Glossary and Index entries, updated appendices, and Frequently Asked Questions.  Since January 1st, there have been ten updated versions of the BITAR.
 
2016 ITAR Amendments
 
  –
81 Fed. Reg. 35611-35617 (June 3, 2016); Interim final rule amending ITAR Parts 120, 123, 124, 125, and 126.
  –
81 Fed. Reg. 49531-49539 (July 28, 2016); Final rule amending ITAR Part 121, USML Categories XIV and XVIII (effective Dec. 31, 2016).
  –
81 Fed. Reg. 54732 (Aug. 17, 2016); Final rule (effective Nov. 15, 2016), amending Parts 120, 123, 124, and 126, including destination control statement in § 123.9.
 
2016 Editorial Revisions
 
  –
Feb. 14, 2016: Reformatted Appendix and Annex entries, added Annex F, Frequently Asked Questions, Annex G, Glossary, and added or revised numerous footnotes and Index entries.
  –
Feb. 19, 2016: Added excerpts of 81 FR 8438-8446 (Feb. 19, 2016) proposed amendment of USML Cat. XII to Appendix C, and footnotes to sections proposed for amendments.
  –
May 9, 2016: Revised footnotes, appendices, and Index entries regarding presumed denial countries, DDTC guidance, and other items.
  –
June 3, 2016: Added excerpts of 81 FR 35611-35617 (June 3, 2016) in Appendix C; revised footnotes to indicate amended sections effective September 1, 2016; revised Index entries.
  –
June 27, 2016: Added items to Appendix E, Consent Agreements; revised numerous footnotes, Glossary, and Index entries.
  –
July 28, 2016: Added 81 Fed. Reg. 49531-49539 (July 28, 2016) amendment of categories XIV and XVIII to Appendix C, and footnotes to amended sections; revised numerous footnotes, Glossary, and Index entries.
  –
Aug. 17, 2016: Added 81 Fed. Reg. 54732 amendments to Appendix and footnotes to affected sections to indicate effective date of November 15, 2016.  Also revised numerous footnotes, Glossary, and Index entries.
 
Tomorrow, 1 September, the following ITAR amendments will take effect.  All the amendments will of course be included in tomorrow’s 1 September BITAR:
 
Amended by 81 Fed. Reg. 35611 (June 3, 2016, effective Sept. 1, 2016):
  –
120.17, Export
  –
120.19, Reexport
  –
120.50, Release
  –
120.51, Retransfer
  –
123.28, Scope of a License
  –
124.1, Manufacturing License Agreements and Technical Assistance Agreements
  –
124.8, Clauses Required Both in Manufacturing License Agreements and Technical Assistance Agreements
  –
124.12, Required Information in Letters of Transmittal
  –
124.16, [Removed and Reserved]
  –
125.4(b)(9), Exemption for Technical Data for US person employee
  –
126.18, Exemption for DN/TCN
 
Then on 15 November, the following ITAR amendments take effect:
 
Amended by 81 Fed. Reg. 54732 (Aug. 17, 2016, effective Nov. 15, 2016):
  –
120.5, Relation to Regulations of Other Agencies; Export of Items Subject to the EAR
  –
123.4, Temporary Import License Exemptions
  –
123.9, Country of Ultimate Destination and Approval of Reexports or Retransfers
  –
123.13, Domestic Aircraft Shipments via a Foreign Country
  –
124.7, Information Required in all Manufacturing License Agreements and Technical Assistance Agreements
  –
124.8, Clauses Required Both in Manufacturing License Agreements and Technical Assistance Agreements
  –
124.9, Additional Clauses Required Only in Manufacturing License Agreements
  –
124.12, Required Information in Letters of Transmittal
  –
124.14, Exports to Warehouses or Distribution Points Outside the United States
  –
125.2, Exports of Unclassified Technical Data
  –
125.7, Procedures for the Export of Classified Technical Data and Other Classified Defense Articles
  –
126.9, Advisory Opinions and Related Authorizations
 
Then again at year’s end the following ITAR amendments take effect:
Amended by 81 Fed. Reg. 49531 (July 28, 2016, effective Dec. 31, 2016):
  –
121.1, Cat. XIV, Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment
  –
121.1, Cat. XVIII, Directed Energy Weapons
 
The BITAR is the essential tool of the ITAR professional.  The BITAR is available only by annual subscription from the Full Circle Compliance website, www.FullCircleCompliance.eu.  If you have any questions, call me at 202-802-0646 or email me JEBartlett@JEBartlett.com.

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“Never help a child with a task at which he feels he can succeed.”
  – Maria Montessori (Maria Tecla Artemisia Montessori, Aug 31, 1870 – May 6, 1952, was an Italian physician and educator best known for the philosophy of education that bears her name, and her writing on scientific pedagogy.)

“Surely it is one of the simplest laws of taste in dress, that it shall not attract undue attention from the wearer to the worn.”
  – Elizabeth Stuart Phelps (Elizabeth Stuart Phelps Ward, 1844-1911, was an American author and intellectual who challenged women’s traditional roles in marriage and family, and advocated clothing reform for women.)

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EN_a212
. Are Your Copies of Regulations Up to Date?
(Source: Editor)

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.
 
*
ATF ARMS IMPORT REGULATIONS
: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War
  – 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 
 
*
CUSTOMS REGULATIONS
: 19 CFR, Ch. 1, Pts. 0-199
  – Last Amendment: 26 Aug 2016: 81 FR 58831-58834: Administrative Exemption on Value Increased for Certain Articles 

* DOD NATIONAL INDUSTRIAL SECURITY PROGRAM OPERATING MANUAL (NISPOM): DoD 5220.22-M
  – Last Amendment: 18 May 2016: Change 2: Implement an insider threat program; reporting requirements for Cleared Defense Contractors; alignment with Federal standards for classified information systems; incorporated and canceled Supp. 1 to the NISPOM  (Summary here.)

* EXPORT ADMINISTRATION REGULATIONS (EAR): 15 CFR Subtit. B, Ch. VII, Pts. 730-774 
  – Last Amendment: 23 Aug 2016: 81 FR 57451-57456: Addition of Certain Persons to the Entity List  

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 18 May 2016: 81 FR 31169-31171: Burmese Sanctions Regulations   
 
*
FOREIGN TRADE REGULATIONS (FTR)
: 15 CFR Part 30
  – 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 Mar 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.
 
*
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jul 2016: 19 USC 1202 Annex.  (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment: 5 Aug 2016; Harmonized System Update (HSU) 1610, containing 12,995 ABI records and 2,287 harmonized tariff records.
  – 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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EPEDITORIAL POLICY

* 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 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.

* INTERNET ACCESS AND BACK ISSUES: The National Defense Industrial Association (“NDIA”) posts the Daily Update on line, and maintains back issues since August, 2009 here.

* RIGHTS & RESTRICTIONS: This email contains no proprietary, classified, or export-controlled information. All items are obtained from public sources or are published with permission of private contributors, and may be freely circulated without further permission. Any further use of contributors’ material, however, must comply with applicable copyright laws.

* CAVEAT: The contents of this newsletter cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.

* SUBSCRIPTIONS: Subscriptions are free.  Subscribe by completing the request form on the Full Circle Compliance website.

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