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16-0901 Thursday “The Daily Bugle”

16-0901 Thursday “Daily Bugle”

Thursday, 1 September 2016

TOPThe 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 
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  1. Commerce/BIS Updates EAR Statements of Legal Authority 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. DoD/DSCA Posts SAMM and Policy Memoranda, Week 28 Aug – 3 Sep 
  4. State/DDTC Posts Revision 4.4a of the Agreement Guidelines 
  5. State/DDTC Posts Schedule for Uploading Licensing Submissions and Posting Licenses 
  6. State/DDTC IT System Outage, 9 Sep 
  7. EU Amends Restrictive Measures Concerning Central African Republic 
  1. Chattanoogan.com: “Alexander Opposes Administration’s ‘Crippling’ New $2,250 Fee On Tennessee Gunsmiths” 
  2. ST&R Trade Report: “Classification Ruling Changes on Dinnerware, Pipe Fittings, Bed Parts, Security Appliances”  
  1. D.M. Edelman: “Remember to Update Your Destination Control Statements – New Language Released for Both ITAR and EAR” 
  2. G.R. Tuttle III: “CBP Issues New Value Limits for Section 321 Entries” 
  3. J.E. Bartlett: “Amendments of Eleven ITAR Sections Effective Today
  4. J. Reeves & T. Ficaretta: “After Backlash, ATF Reinstates its Previous Position on Wetted Nitrocellulose” 
  5. L. Nemer: “Your Guide to AES Resources” 
  6. M. Lester: “US Citizen Jailed for Russia Export Violations” 
  7. Thomsen & Burke: “Changes to Export Controls in August 2016” 
  8. T. Murphy: “Exporting to China – Zika” 
  1. ICPA 2016 ICPA Export/Import Fall Conference, 9-11 Oct 
  1. Bartlett’s Unfamiliar Quotations 
  2. 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 Jul 2016), ITAR (17 Aug 2016) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. Commerce/BIS Updates EAR Statements of Legal Authority
(Source: Federal Register) [Excerpts.]
 
81 FR 60254-60257: Updated Statements of Legal Authority for the Export Administration Regulations
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: This rule updates the Code of Federal Regulations (CFR) legal authority paragraphs in the Export Administration Regulations (EAR) to cite the most recent Presidential notice extending an emergency declared pursuant to the International Emergency Economic Powers Act. This is a procedural rule that only updates authority paragraphs of the EAR. It does not alter any right, obligation or prohibition that applies to any person under the EAR.
* DATES: The rule is effective September 1, 2016.
* FOR FURTHER INFORMATION CONTACT: William Arvin, Regulatory Policy Division, Bureau of Industry and Security, Telephone: (202) 482-2440.
* SUPPLEMENTARY INFORMATION: …
   Dated: August 26, 2016.
Kevin J. Wolf, Assistant Secretary for Export Administration.

* * * * * * * * * * * * * * * * * * * * 

OGS
OTHER GOVERNMENT SOURCES

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

[No items of interest noted today.]

* * * * * * * * * * * * * * * * * * * *

OGS_a23. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)
* * * * * * * * * * * * * * * * * * * *

OGS_a34. DoD/DSCA Posts SAMM and Policy Memoranda, Week 28 Aug – 3 Sep

(Source: DoD/DSCA)
 
* DSCA Policy Memo 16-07 Case Management for Department of Defense, has been posted.
  – This policy updates the Security Assistance Management Manual by revising Section C2.2. – Department of Defense – Case Managers.
   – This policy update is a result of DSCA’s Strategic Plan, Vision 2020, initiative 8.2a. “Rewrite Case Manager Responsibilities” and clarifies case management responsibilities in order to improve the productivity of DoD Foreign Military Sales (FMS) Case Managers and efficiency of case management processes.
 

 

* * * * * * * * * * * * * * * * * * * *

OGS_a45. State/DDTC Posts Revision 4.4a of the Agreement Guidelines

(Source: State/DDTC)
 
Revision 4.4a of the Agreement Guidelines has been posted and replaces Revision 4.4. Revision 4.4a corrects an inadvertent omission on page 152. Both Revision 4.4a and a preamble with a summary of changes can be found here. Revision 4.4a is effective today, September 1, 2016
* * * * * * * * * * * * * * * * * * * *

OGS_a56. State/DDTC Posts Schedule for Uploading Licensing Submissions and Posting Licenses

(Source: State/DDTC)
 
Effective September 6, 2016, The Department of State will only be uploading licensing submissions (i.e., DSP -5, -6, -61, -62, -73, -74, and Batch Scheams) and posting licenses (Approved, Approved with Provisos, RWA’ed, and Denied) at 06:30 AM and again at 5:30 PM.
* * * * * * * * * * * * * * * * * * * *

OGS_a67. State/DDTC IT System Outage, 9 Sep

(Source: State/DDTC)
 
All DDTC systems, including DTrade and EFS, will be unavailable to industry from 5:30PM (EST) Friday September 9 through 9:30PM (EST) Friday September 9 due to scheduled system maintenance.
* * * * * * * * * * * * * * * * * * * *

OGS_a78. EU Amends Restrictive Measures Concerning Central African Republic

 
Regulations:
  – Council Implementing Regulation (EU) 2016/1442 of 31 August 2016 implementing Article 17(1) and (3) of Regulation (EU) No 224/2014 concerning restrictive measures in view of the situation in the Central African Republic
 
Decisions:
  – Council Implementing Decision (CFSP) 2016/1446 of 31 August 2016 implementing Decision 2013/798/CFSP concerning restrictive measures against the Central African Republic
* * * * * * * * * * * * * * * * * * * *

NWSNEWS

 
U.S. Senator Lamar Alexander this week joined a group of 24 Republican senators in fighting the Obama administration’s new plan to force the nation’s gun hobbyists and gunsmiths to pay a $2,250 fee and register [with State Department’s DDTC] as manufacturers.
 
“No Tennessean should have to pay $2,250 to the U.S. government because he or she simply enjoys working on antique firearms for a hobby,” Senator Alexander said.
 
The senators sent a letter to Secretary of State John Kerry to urge against the administration’s new enforcement policy. “We believe the July 22 ‘guidance’ regarding which manufacturers and gunsmiths must register as exporters under the Arms Export Control Act and the International Traffic in Arms Regulations and pay a $2,250 annual fee is unnecessary and will have serious and negative consequences on the hundreds of thousands of small and medium-sized gunsmiths who operate in our states,” the Republican senators said in a letter sent to Secretary of State John Kerry.
 
“The vast majority of our constituents engaged in gunsmithing make little to no income from their activities and often do it as a hobby or side business. They most certainly do not export firearms. They also do not manufacture firearms in any widely understood sense of the term. Therefore, it makes no sense for them to be required to pay $2,250 and register under AECA and ITAR. For those who do this work on the side – perhaps developing a small cottage business to supplement their income – the last thing they need is an edict from the federal government imposing crippling fees and requirements, which are wholly unnecessary and nonsensical.”
 
They continued, “Finally, this would not be an issue if the Obama Administration finished its seven-year “Export Control Reform” initiative, which has bipartisan support in Congress. The very basis of that effort is the common sense notion that products intended only for military use should be subject to the highest standards of security and oversight, while regulation of products with general commercial applications should not unnecessarily hinder American business and innovation.”
 
  “As part of the initiative, the Administration has been transferring regulatory responsibility for the United States Munitions List from the State Department to the Commerce Department. So far, eighteen categories have been transferred; only three remain. We understand that draft regulations exist to finish the job in this export reform initiative.”
 
The senators asked that the administration “finish the job” and publish proposed rules in the Federal Register that would move the remaining three categories of the USML to the Commerce Department, which would make the problems raise in the July guidance “null and void.”
 
Senator Alexander cosigned the letter that was led by Senator Steve Daines (R-Mont). They were joined by Senators Chuck Grassley (R-Iowa), Tom Cotton (R-Ark.), Jim Inhofe (R-Okla.), Jerry Moran (R-Kan.), John Barrasso (R-Wyo.), Lisa Murkowski (R-Alaska), Ted Cruz (R-Texas), Dean Heller (R-Nev.), John Boozman (R-Ark. ), Thom Tillis (R-N.C.), Pat Roberts (R-Kan.), Bill Cassidy (R-La.), Jeff Sessions (R- ), Kelly Ayotte (R – ), Michael Enzi (R-Wyo.), John Cornyn (R-Texas), David Vitter (R-La.), James Lankford (R-Okla.), Richard Shelby (R-Ala.), M. Michael Rounds (R-S.D.), Ben Sasse (R-Neb.), and John McCain (R-Ariz.).
 
The full text of the letter, sent Tuesday, is below:
 
August 30, 2016
The Honorable John Kerry
Secretary
[Address]
 
Dear Mr. Secretary,
 
We believe the July 22 “guidance” regarding which manufacturers and gunsmiths must register as exporters under the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) and pay a $2,250 annual fee is unnecessary and will have serious and negative consequences on the hundreds of thousands of small and medium-sized gunsmiths who operate in our states.
 
The vast majority of our constituents engaged in gunsmithing make little to no income from their activities and often do it as a hobby or side business. They most certainly do not export firearms. They also do not manufacture firearms in any widely understood sense of the term. Therefore, it makes no sense for them to be required to pay $2,250 and register under AECA and ITAR. For those who do this work on the side – perhaps developing a small cottage business to supplement their income – the last thing they need is an edict from the federal government imposing crippling fees and requirements which are wholly unnecessary and nonsensical.
 
We believe the guidance effectively expands ITAR registration requirements and should be rescinded immediately.
 
Expands ITAR Registrant Requirements
 
We understand that the Directorate of Defense Trade Controls (DDTC) intended the 7-22-2016 guidance to simply clarify existing policy. In fact, in the opening of the guidance you state, “traditional gunsmithing activities do not constitute manufacturing for ITAR purposes, and therefore, do not require registration.”
 
Unfortunately, the four pages which follow that introductory sentence run completely counter to your stated intent. As conveyed by the guidance from the DDTC, virtually any activity that involves modifications to an existing firearm to improve its accuracy or operation, or to change its caliber or round capacity would be treated by DDTC as controlled “manufacturing” of the firearm. While DDTC insists this is merely the “ordinary, contemporary, common meaning of ‘manufacturing,'” it is anything but. Rather, DDTC’s position is similar to claiming an auto mechanic who fixes or performs custom work on cars is a car manufacturer.
 
Specifically, as outlined, the activity threshold that necessitates a type 07 FFL (Federal Firearms License-manufacturing) does not match up with the activities listed on page three of the guidance. That means that firearms dealers who engage in limited gunsmithing – activities that do not require a type 07 FFL – would still need to register with DDTC as manufacturers of a defense article listed on the United States Munitions List (USML).
 
Gunsmiths Are Not Exporting Arms
 
Not only does the guidance expand registration to gunsmiths who do not “manufacture” firearms, it also runs counter to the intent of AECA and ITAR, which are meant to control the production and exportation of military material, not the domestic repair or maintenance of a legal, common, and Constitutionally-protected product.
 
The Big Picture & Best Solution: Move USML Items to Department of Commerce
 
Finally, this would not be an issue if the Obama Administration finished its seven-year “Export Control Reform” initiative, which has bipartisan support in Congress. The very basis of that effort is the common sense notion that products intended only for military use should be subject to the highest standards of security and oversight, while regulation of products with general commercial applications should not unnecessarily hinder American business and innovation.
 
As part of the initiative, the Administration has been transferring regulatory responsibility for the USML from the State Department to the Commerce Department. So far, eighteen categories have been transferred; only three remain. We understand that draft regulations exist to finish the job in this export reform initiative.
 
We urge you to publish the proposed rules to move the remaining three categories of USML to Commerce, which would make the problems raised in the 7-22-2016 guidance null and void. On what date will the Administration finish the job and publish proposed rules in the Federal Register?
 
Our constituents need clarity and this guidance does not accomplish that end. The situation must be rectified and we ask for your immediate attention.

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NWS_a210. ST&R Trade Report: “Classification Ruling Changes on Dinnerware, Pipe Fittings, Bed Parts, Security Appliances”
(Source: ST&R Trade Report)
 
The following final revocations and modifications of U.S. Customs and Border Protection classification rulings are included in the Aug. 24, 2016, Customs Bulletin and Decisions. These revocations and modifications will be effective for goods entered or withdrawn from warehouse for consumption on or after Oct. 24.
 
Security Analytics Appliances. CBP is reclassifying security analytics appliances that scan incoming data as other electrical apparatus under HTSUS 8543.70.9960 (2.6 percent duty) rather than as other apparatus for communication in a wireless network under HTSUS 8517.62.0050 (duty-free). Ruling HQ H271470 will revoke rulings NY N213277, NY N247242 and NY N247732 to reflect this change.
 
Ceramic Dinnerware. CBP is reclassifying ceramic dinnerware as tableware for hotel or restaurant use under HTSUS 6912.00.20 (ceramic; 28 percent duty) or HTSUS 6911.10.10 (porcelain or china; 25 percent duty) rather than as porcelain or ceramic tableware under headings 6911 or 6912. Ruling HQ H252124 will modify rulings HQ H169055 and HQ H226264 to reflect this change.
 
Pipe Fittings. CBP is reclassifying a specially designed portion of drain pipe that allows a dishwasher drain to be connected directly to a drain assembly as a plastic fitting under HTSUS 3917.40.00 (5.3 percent duty) rather than as a rigid plastic pipe under HTSUS 3917.22.0000 (3.1 percent duty). Ruling HQ H260228 will modify ruling NY N235599 to reflect this change.
 
Bed Components. CBP is reclassifying a headboard, footboard and side rails of a twin poster bed when shipped separately as wood parts of furniture under HTSUS 9403.90.70 (duty-free) rather than as wooden bedroom furniture under HTSUS 9403.50.9045 (duty-free). Ruling HQ H230217 will revoke ruling NY N220458 to reflect this change.
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COMMCOMMENTARY

COMM_a111. D.M. Edelman: “Remember to Update Your Destination Control Statements – New Language Released for Both ITAR and EAR”
 
* Author: Doreen M. Edelman, Esq., Baker Donelson LLP, 202-508-3460, dedelman@bakerdonelson.com
 
Dear all,
 
The State and Commerce Departments have revised the standardized language for the destination control statement (DCS) that exporters are required to put on their shipping documents. Further, now exporters are only required to put the language on the commercial invoice. Gone is the requirement that exporters and freight forwarders take steps to include the statements on bills of lading, air waybills, and other shipping documents. The hope is to ease the burden on exporters and make the standard the same under both the State Department’s International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR).
 
The revised DCS is as follows:
 
These items are controlled by the U.S. 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 U.S. government or as otherwise authorized by U.S. law and regulations.
 
Don’t forget to conform your contract language, manuals, and training as well.
 
Have a great day,
 
Doreen
* * * * * * * * * * * * * * * * * * * *

COMM_a212. G.R. Tuttle III: “CBP Issues New Value Limits for Section 321 Entries”

* Author: George R. Tuttle III, Esq., Law Offices of George R. Tuttle, george.tuttle.iii@tuttlelaw.com, 415-986-8780.
 
Effective August 26, 2016, CBP issued an interim final rule amending its regulations to implement section 901 of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) by raising from $200 to $800 the value of certain articles that may be imported by one person on one day free of duty and tax (see 81 FR  58831). This notice also makes clarifying and conforming amendments to the regulations and solicits comments on the changes.
 
Trade Facilitation and Trade Enforcement Act of 2015
 
On February 24, 2016 the TFTEA (Pub. L. 114- 125) was signed into law. Prior to enactment of the TFTEA, section 321(a)(2)(C) of the Tariff Act of 1930 (19 U.S.C. 1321(a)(2)(C)) authorized CBP to provide an administrative exemption to admit free from duty and tax shipments of merchandise (other than bona fide gifts and certain personal and household goods) imported by one person on one day having an aggregate fair retail value in the country of shipment not less than $200.
 
Section 901(c) of the TFTEA amended section 1321(a)(2)(C) by increasing the value of this administrative exemption from $200 to $800. Pursuant to section 901(d) of TFTEA, the effective date of this amendment was the 15th day after the date of enactment, i.e., effective as of March 10, 2016. Section 901 did not change the administrative exemption for bona fide gifts and personal or household articles accompanying travelers under 19 U.S.C. 1321(a)(2)(A) and 1321(a)(2)(B). Thus, while the change was effective March 10, 2016, CBP has just now released its changes to the regulations.
 
Amendments to Regulations to Reflect New Statutory Amount
 
CBP implements the administrative exemption provided for in 19 U.S.C. 1321 in its regulations at 19 CFR 10.151 and 10.153. The administrative exemption amount is also referenced in various other sections in the CBP regulations, including §§ 128.21(a)(4)(ii), 128.24(d) and (e), 143.21(l)(1), 143.23(j), 143.26, and 145.31. In all of the listed sections that currently provide that the 19 U.S.C. 1321(a)(2)(C) administrative exemption amount is $200, CBP is amending the regulations to reflect that the new amount is $800.
 
Comments to the interim final rule are due by September 26, 2016.
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COMM_a313. J.E. Bartlett: “Amendments of Eleven ITAR Sections Effective Today”

(Source: Jim Bartlett, JEBartlett@JEBartlett.com)

The following amendments to the International Traffic in Arms Regulations (ITAR), 22 C.F.R. 120-130, which were amended by final rule in 81 Fed. Reg. 35611-35617 (June 3, 2016), took effect today:
 
  – § 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), (Technical data exported by or to a U.S. person or a foreign person employee of a U.S. person.)
  – § 126.18, Exemptions Regarding Intra-company, Intra-organization, and Intra-governmental Transfers to Employees Who are Dual Nationals or Third-Country Nationals

These amendments scheduled to take effect in November and December 2016:

* 81 Fed. Reg. 49531-49539 (July 28, 2016, effective Dec. 31, 2016); Final rule amending ITAR Part 121, USML Cat. XIV, Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment, and Cat. XVIII, Directed Energy Weapons
* 81 Fed. Reg. 54732-54737 (Aug. 17, 2016, effective Nov. 15, 2016); Final rule amending the following sections:
 
  – § 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

Bartlett’s Annotated ITAR (The “BITAR”) has been updated to include the amendments that took effect today, and contains footnotes to the amended sections that will take effect on January 15th and December 31st. The BITAR is available by annual subscription from the Full Circle Compliance website, www.FullCircleCompliance.eu.

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COMM_a414. J. Reeves & T. Ficaretta: “After Backlash, ATF Reinstates its Previous Position on Wetted Nitrocellulose”
(Source: R/D Alert)

* Authors: Johanna Reeves, Esq., 202-715-9941, jreeves@reevesdola.com; and Teresa Ficaretta, Esq.,202-715-9183, tficaretta@reevesdola.com. Both of Reeves & Dola LLP.
 
In our previous Alert of August 22, 2016, we announced ATF had reclassified wetted Nitrocellulose containing greater than 12.6 percent nitrogen as a high explosive under the federal explosives laws. As we noted, this was a significant change in policy that ATF announced without any advance notice or input from members of the explosives or ammunition industries.

Yesterday, ATF posted an announcement titled “Nitrocellulose – Update.” The text of the update is as follows:
 
ATF’s June 2016 Explosives Industry Newsletter included a brief discussion of Nitrocellulose and attempted to clarify the circumstances under which wetted Nitrocellulose is considered a high explosive under 27 CFR, Part 555. As with all explosives, ATF’s focus is on the potential public safety risks associated with materials that can be misused or diverted to unlawful purposes. Subsequent contact from industry members who import, transport, store or employ wetted Nitrocellulose in the production of ammunition, however, has brought to our attention issues that were not fully addressed in the Newsletter and require further consultation and consideration with the industry. Accordingly, ATF has and will conduct further industry outreach concerning wetted Nitrocellulose. In the interim, previously authorized industry practices concerning wetted Nitrocellulose will not be affected.
 
Reeves & Dola has confirmed with ATF that the purpose of the update is to reinstate the regulatory environment that existed prior to issuance of the June 2016 Explosives Industry Newsletter. This “reset” will give ATF and members of the explosives industry the opportunity to have a meaningful dialogue on Nitrocellulose. Until ATF announces a different position, wetted Nitrocellulose containing greater than 12.6 nitrogen is not subject to the requirements of the federal explosives laws. ATF officials have expressed their commitment to working with members of the industry to arrive at an appropriate agency position.

We will continue to keep you posted as ATF and industry members work through this challenging issue.
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COMM_a515. L. Nemer: “Your Guide to AES Resources”
(Source:
Shipping Solutions
)
 
 
* Author: Lisa Nemer, Shipping Solutions, lisan@shipsolutions.com.
 
I’ve written a lot about the Automated Export System (AES) lately. Since AES has been refactored into the Automated Commercial Environment (ACE), I’ve written so many blog posts about it that it’s hard to remember what I wrote about and when! So today I’m going to take a minute to organize the AES resources into one place where both you and I can come looking for information on AES.
 
New AES White Paper
 
First, I want to tell you about a brand new resource. It’s a white paper called Filing Your Export Shipments Through the Automated Export System (AES). It’s 37 pages and covers what AES is, how to get an account with ACE, and when and how to file. It also defines every data element required by AES. It’s a very useful resource for both the seasoned AES filer and the newbie.
 
Important AES Videos
 
Next, I want to remind you about two videos that are available. The first video, called Data Requirements for an AESDirect Filing, shows you what specific pieces of information are required for an AESDirect filing, and it shows you where to enter that data in Shipping Solutions.
 
The second video, called How to File through AESDirect via the ACE Portal, shows you step-by-step how to file with AESDirect using Shipping Solutions, from how to log in to how to resolve errors.
 
Helpful Resources for all AESDirect Users
 
Below is a summary of six other blog posts related to AES that you might want to keep at your finger tips as a quick reference. I know I do!
 
  (1)Reports – Even if your forwarder files your Electronic Export Information (EEI) for you, you can now run reports in ACE so you can make sure they are doing it and doing it right. The reports are also helpful if you file yourself. Find out how with this blog post:
Discover AESDirect Reports on ACE.
  (2)Statements – We all tend to click “I agree” on a new software program without ever reading what we’ve agreed to because if you want to use the program, you have to agree! But the AESDirect “I agree” screen actually has some good, basic information such as when you have to file and a link to the Foreign Trade Regulations. Since you can never see them again once you agree, I’ve reprinted them in the blog post,
Automated Export System (AES) Certification Statements.
  (3) Emails – The Census Bureau, which owns the AESDirect system, sends out a lot of emails. This blog post,
AESDirect Tips Direct from Census, summarizes some of their messages, such as what their downtime policy is and how you might get a rejected status even after an ITN has been issued.
  (4) Data Elements – The blog post,
A Closer Look at Electronic Export Information (EEI), defines some of the more confusing data elements that are required for an AESDirect filing.
  (5) License Codes – All exporters have to include either a license or excemption code on all AES filings. The blog post, 
Export License Number or Exemption Code Required for All AESDirect Filings, includes a chart of license types, their codes, a description, and their licensing agency.
  (6) Puerto Rico – While the blog post,
Is Your Shipment to Puerto Rico an Export?, is not just about AESDirect, it does include helpful information on the AES data requirements when shipping to Puerto Rico.
Who to Call for Help

 
If the white paper, videos and blog posts don’t answer your questions, here are some other helpful resources:
 

  – If you are a Shipping Solutions user, give us a call at (651) 905-1727 with any questions you have about filing with AESDirect using Shipping Solutions.
  – For questions about your ACE account, call the ACE Account Service Desk at (866) 530-4172, option 1.
  – General questions about EEI filings can be directed to the U.S. Census Bureau’s Data Collection Branch at (800) 549-0595, option 1.
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COMM_a616. M. Lester: “US Citizen Jailed for Russia Export Violations”
 
* Author: Maya Lester, Esq., Brick Court Chambers, maya.lester@brickcourt.co.uk, +44 20 7379 3550.
 
Alexander Brazhnikov Jr, a US citizen, has been sentenced to 70 months imprisonment in the US for his alleged role in an international procurement network that obtained and smuggled more than $65 million of electronics from the US to Russia in violation of export controls.  He is said to have routinely concealed the true identity of the end-user and true value of the goods in order to avoid having to fill out export control forms, and used shell addresses in Russia, including vacant storefronts and apartments, to obscure their destination.  Payments for the goods were made to the defendant from a Russian account through shell corporations in several countries, including the British Virgin Islands, Panama, and the UK.
 
The Department of Justice’s press release is here.
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COMM_a717. Thomsen & Burke: “Changes to Export Controls in August 2016”

(Source: Thomsen & Burke LLP, alerts@t-b.com)

A summary of the regulatory, legislative, and enforcement developments with respect to U.S. and multilateral export controls during the month of August 2016 is available here, including:

* Export Control Reform (ECR) Update
  – Proposed Wassenaar and Encryption Changes
  – Harmonization of the Destination Control Statements
* Additional Regulatory Changes
  – ZTE General License Extension
  – Controls on the Production of Tritium and Related Technology
  – BIS Seeks Comments on Temporary Exports to Mexico Under License Exception TMP
* Enforcement
  – California Woman Sentenced for Conspiring to Illegally Export Items to China
  – Four Former Executives Sentenced for Illegally Exporting Weapons Parts
  – Upcoming Events
* International Technology Transfers, Cloud Computing & Deemed Exports
* BIS Update

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COMM_a818. T. Murphy: “Exporting to China – Zika”

(Source: Author)
 
* Author: Ted Murphy, Esq., Baker & McKenzie LLP, ted.murphy@bakermckenzie.com, 202-452-7069.
 
We are writing to let you know that China has added the continental United States to the List of Zika Affected Countries as of August 17, 2016 (link to the AQSIQ notice can be found here; in Mandarin).  This means that shipments from the continental United States to China are now required to be “deinsected” (e.g., fumigated or another process to kill live mosquitos, larva, eggs, etc.) prior to release.  The deinsection can take place at any point during the shipment process (e.g., before loading, upon arrival, etc.) and sufficient proof must be maintained and provided upon importation.  A USDA Foreign Agricultural Service Update on this issue can be found here.
 
Anyone who exports to China from the United States (or one of the 40 other countries on the List) should be aware of these requirements.  We are seeing a fair amount of confusion in China around this issue (e.g., over what constitutes acceptable proof of deinsection, etc.) that is leading to additional expense and unnecessary cargo delays. 

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a119. ICPA 2016 ICPA Export/Import Fall Conference, 9-11 Oct

(Source: Ann Lister, anngelfire@yahoo.com)
 
* What: ICPA 2016 ICPA Fall Conference
* When: 9-11 October 2016
* Where: Embassy Suites Grapevine, Grapevine, TX (DFW Airport)
* Sponsor: International Compliance Professionals Association (ICPA)
* Speakers: Approximately 30 speakers; all are industry professionals and/or export/import specialty lawyers.
* Comments: Will feature three tracks of daily presentations that run simultaneously: Import, Export, and “Boot Camp” for beginners.
* Register: On-line at www.icpainc.org or email wizard@icpainc.org.

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ENEDITOR’S NOTES

(Source: Editor)


“I always wondered why somebody doesn’t do something about that. Then I realized I was somebody.”

  – Lily Tomlin (born Mary Jean Tomlin; 1 Sep 1939, is an American actress, comedian, writer, singer, and producer. Tomlin began her career as a stand-up comedian, performing as a cast member on the variety show Rowan & Martin’s Laugh-In from 1970 until 1973.)

“We never respect those who amuse us, however we may smile at their comic powers.”

  – Marguerite Gardiner Blessington (Marguerite Gardiner, Countess of Blessington,1 Sep 1789 – 4 Jun 1849, was an Irish novelist, journalist, and literary hostess.)

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EN_a221. 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 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. 
 
*
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: 12 Aug 2016; Harmonized System Update 1611, containing 2,707 ABI records and 743 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 
  – Latest effective change: 1 Sep 2016: 81 Fed. Reg. 35611-35617 (June 3, 2016, effective 1 Sep 2016): Sections from parts 120, 123, 124, 125, and 126.
  – The only available fully updated copy (latest edition 1 Sep 2016) of the ITAR with all amendments 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 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.

* 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 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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