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16-0916 Friday “The Daily Bugle”

16-0916 Friday “Daily Bugle”

Friday, 16 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 here for free subscription. Contact us for advertising inquiries and rates.

  1. President Continues Exercise of Certain Authorities Under the Trading With the Enemy Act Regarding Cuba 
  2. President Restores Preferential Treatment for Burma Under GSP Program
  3. President Terminates National Emergency With Respect to the Situation in or in Relation to Côte d’Ivoire 
  4. DHS/CBP Seeks Comments on African Growth and Opportunity Act Certificate of Origin
  5. State/DDTC Seeks Comments on Form DS-7786, Request for Advisory Opinion
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS Opens Registration for 29th Annual Update Conference 
  3. State/DDTC: (No new postings.) 
  4. EU Amends Restrictive Measures Concerning Ukraine 
  1. Defense News: “US Weapons Export Official Wants Joint Procurement Beyond NATO”
  2. ST&R Trade Report: “Dates and Deadlines: Trademark Protection, Tariff Changes, Canada Trade, Classification”
  1. C. Greene, C.N. Stinebower & A.H. Schaefer: “U.S. Announces Intent to Lift Remaining Sanctions Against Burma”
  2. D. Albin-Riley, G. Ravitz & J.R. Ravitz: “Sellers Beware: California Adopts New Proposition 65 Warning Requirements”
  3. J.D. Harris: “Company Eliminated from Army Contract Competition Due to ITAR Compliance Program Description”
  4. P.E. Jeydel, J.C. London & E.J. Krauland: “DDTC’s Definitions of Export, Reexport, and Retransfer: Important Compliance Considerations”
  1. Friday List of Approaching Events 
  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 (7 Sep 2016), FACR/OFAC (18 May 2016), FTR (15 May 2015), HTSUS (30 Aug 2016), ITAR (8 Sep 2016)

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. President Continues Exercise of Certain Authorities Under the Trading With the Enemy Act Regarding Cuba
(Source: Federal Register)
 
81 FR 64045-64047: Continuation of the Exercise of Certain Authorities Under the Trading With the Enemy Act
 
Memorandum for the Secretary of State [and] the Secretary of the Treasury
 
Under section 101(b) of Public Law 95-223 (91 Stat. 1625; 50 U.S.C. 4305 note), and a previous determination on September 11, 2015 (80 FR 55503, September 16, 2015), the exercise of certain authorities under the Trading With the Enemy Act is scheduled to terminate on September 14, 2016.
 
I hereby determine that the continuation for 1 year of the exercise of those authorities with respect to Cuba is in the national interest of the United States.
 
Therefore, consistent with the authority vested in me by section 101(b) of Public Law 95-223, I continue for 1 year, until September 14, 2017, the exercise of those authorities with respect to Cuba, as implemented by the Cuban Assets Control Regulations, 31 C.F.R. Part 515.
 
(Presidential Sig.)
THE WHITE HOUSE,
Washington, September 13, 2016

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EXIM_a2

2. President Restores Preferential Treatment for Burma Under GSP Program

(Source: Federal Register)
 
81 FR 63671-63672: To Modify Duty-Free Treatment Under the Generalized System of Preferences
 
By the President of the United States of America
 
A Proclamation
 
  (1) Section 502 of the Trade Act of 1974, as amended (the “1974 Act”) (19 U.S.C. 2462), authorizes the President to designate countries as beneficiary developing countries, and to designate any beneficiary developing country as a least-developed beneficiary developing country, for purposes of the Generalized System of Preferences (GSP) program. Section 502(f)(1)(A) of the 1974 Act (19 U.S.C. 2462(f)(1)(A)) requires the President to notify the Congress before designating any country as a beneficiary developing country. Section 502(f)(1)(B) of the 1974 Act (19 U.S.C. 2462(f)(1)(B)) requires the President to notify the Congress at least 60 days before designating any country as a least-developed beneficiary developing country.
 
  (2) Pursuant to section 502(a)(1) of the 1974 Act, and taking into account the factors set forth in section 502(c) (19 U.S.C. 2462(c)), I have determined that the suspension pursuant to Proclamation 5955 of April 13, 1989, of preferential treatment for Burma as a beneficiary developing country under the GSP program should be ended, and I will so notify the Congress.
 
  (3) Pursuant to section 502(a)(2) of the 1974 Act, and having considered the factors set forth in sections 501 (19 U.S.C. 2461) and 502(c), I have also determined that Burma should be designated as a least-developed beneficiary developing country for purposes of the GSP program, and I will so notify the Congress.
 
  (4) Section 604 of the 1974 Act (19 U.S.C. 2483), as amended, authorizes the President to embody in the Harmonized Tariff Schedule (HTS) of the United States the substance of the relevant provisions of that Act, and of other Acts affecting import treatment, and actions thereunder, including removal, modification, continuance, or imposition of any rate of duty or other import restriction.
 
NOW, THEREFORE, I, Barack Obama, President of the United States of America, acting under the authority vested in me by the Constitution and the laws of the United States of America, including title V and section 604 of the 1974 Act (19 U.S.C. 2461-67, 2483), do proclaim that:
 
   (1) In order to reflect in the HTS the restoration of preferential treatment for Burma as a beneficiary developing country under the GSP program, general note 4(a) is modified by adding in alphabetical order “Burma” to the list entitled “Independent Countries” and to the list entitled “Member Countries of the Association of South East Asian Nations (ASEAN).”
   (2) In order to reflect in the HTS the designation of Burma as a least-developed beneficiary developing country under the GSP program, general note 4(b)(i) is modified by adding in alphabetical order “Burma.”
   (3) The modifications to the HTS made by paragraphs (1) and (2) of this proclamation shall be effective with respect to articles entered, or withdrawn from warehouse for consumption, on or after the date that is 60 days after the date of this proclamation.
   (4) Any provisions of previous proclamations and Executive Orders that are inconsistent with the actions taken in this proclamation are superseded to the extent of such inconsistency.
 
IN WITNESS WHEREOF, I have hereunto set my hand this fourteenth day of September, in the year of our Lord two thousand sixteen, and of the Independence of the United States of America the two hundred and forty-first.
              
(Presidential Sig.)

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EXIM_a3

3. President Terminates National Emergency With Respect to the Situation in or in Relation to Côte d’Ivoire

(Source: Federal Register)
 
81 FR 63673-63774: Termination of Emergency With Respect to the Situation in or in Relation to Côte d’Ivoire
 
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), section 5 of the United Nations Participation Act, as amended (22 U.S.C. 287c), and section 301 of title 3, United States Code,
 
I, BARACK OBAMA, President of the United States of America, find that the situation that gave rise to the declaration of a national emergency in Executive Order 13396 of February 7, 2006, with respect to the situation in or in relation to Côte d’Ivoire, including the massacre of large numbers of civilians, widespread human rights abuses, significant political violence and unrest, and attacks against international peacekeeping forces leading to fatalities, has been significantly altered by the progress achieved in the stabilization of Côte d’Ivoire, including the successful conduct of the October 2015 presidential election, progress on the management of arms and related materiel, and the combating of illicit trafficking of natural resources. Accordingly, and in view of the removal of multilateral sanctions by the United Nations Security Council in Resolution 2283, I hereby terminate the national emergency declared in Executive Order 13396, revoke that order, and further order:
 
Section 1. Pursuant to section 202(a) of the NEA (50 U.S.C. 1622(a)), termination of the national emergency declared in Executive Order 13396 shall not affect any action taken or proceeding pending not finally concluded or determined as of the date that this order is effective, any action or proceeding based on any act committed prior to such date, or any rights or duties that matured or penalties that were incurred prior to such date.
 
Sec. 2. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
 
Sec. 3. This order is effective at 8:00 a.m. eastern daylight time on September 14, 2016.
              
(Presidential Sig.)
THE WHITE HOUSE,
September 14, 2016.

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EXIM_a4

4. DHS/CBP Seeks Comments on African Growth and Opportunity Act Certificate of Origin
(Source: Federal Register) [Excerpts.]
 
81 FR 63781: Agency Information Collection Activities: African Growth and Opportunity Act Certificate of Origin
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: 30-Day notice and request for comments; Extension of an existing collection of information.
* SUMMARY: U.S. Customs and Border Protection (CBP) of the Department of Homeland Security will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act: African Growth and Opportunity Act Certificate of Origin (AGOA). CBP is proposing that this information collection be extended with a change to the burden hours. There is no change to the information collected. This document is published to obtain comments from the public and affected agencies.
* DATES: Written comments should be received on or before October 17, 2016 to be assured of consideration. …
* FOR FURTHER INFORMATION CONTACT: Requests for additional information should be directed to Paperwork Reduction Act Officer, U.S. Customs and Border Protection, Regulations and Rulings, Office of Trade, 90 K Street, NE., 10th Floor, Washington, DC 20229-1177, or via email (CBP_PRA@cbp.dhs.gov). Please note contact information provided here is solely for questions regarding this notice. Individuals seeking information about other CBP programs please contact the CBP National Customer Service Center at 877-227-5511, (TTY) 1-800-877-8339, or CBP Web site at https://www.cbp.gov/. For additional help: https://help.cbp.gov/app/home/search/1.
* SUPPLEMENTARY INFORMATION: …
  – Title: African Growth and Opportunity Act Certificate of Origin.
  – OMB Number: 1651-0082.
  – Form Number: None.
  – Abstract: The African Growth and Opportunity Act (AGOA) was adopted by the United States with the enactment of the Trade and Development Act of 2000 (PL.106-200). The objectives of AGOA are (1) to provide for extension of duty-free treatment under the Generalized System of Preferences (GSP) to import sensitive articles normally excluded from GSP duty treatment, and (2) to provide for the entry of specific textile and apparel articles free of duty and free of any quantitative limits from the countries of sub-Saharan Africa.
   For preferential treatment under AGOA, the exporter is required to prepare a certificate of origin and provide it to the importer. The certificate of origin includes information such as contact information for the importer, exporter and producer; the basis for which preferential treatment is claimed; and a description of the imported merchandise. The importers are required to have the certificate in their possession at the time of the claim, and to provide it to Customs and Border Protection (CBP) upon request. The collection of this information is provided for in 19 CFR 10.214, 10.215, and 10.216.
   Instructions for complying with this regulation are posted on CBP.gov Web site. …
 
     Dated: September 13, 2016.
Seth Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection.

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EXIM_a5

5. State/DDTC Seeks Comments on Form DS-7786, Request for Advisory Opinion

(Source: Federal Register) [Excerpts.]
 
81 FR 63840-63841: 60-Day Notice of Proposed Information Collection: Request for Advisory Opinion
* ACTION: Notice of request for public comment. …
* DATES: The Department will accept comments from the public until November 15, 2016. …
* FOR FURTHER INFORMATION CONTACT: Steve Derscheid, Directorate of Defense Trade Controls, Department of State, who may be reached at DerscheidSA@state.gov (please include subject line “ATTN: Advisory Opinion Form”).
* SUPPLEMENTARY INFORMATION:
  – Title of Information Collection: Request for Advisory
Opinion.
  – OMB Control Number: 1405-0174.
  – Originating Office: T/PM/DDTC.
  – Form Number: DS-7786. …
  – Abstract of proposed collection: The Directorate of Defense Trade Controls (DDTC), located in the Political-Military Affairs Bureau of the Department of State, has the principal mission of licensing the export and temporary import of defense articles or defense services as enumerated in the United States Munitions List (USML), and to ensure that the sale, transfer, or brokering of such items are in the interest of United States national security and foreign policy.
   Sections 126.9 and 129.9 of the International Traffic in Arms Regulations (ITAR, 22 CFR 120-130) may be used by entities and individuals involved in the brokering, manufacture, export, and temporary import of defense articles and defense services to request an advisory opinion as to whether DDTC would be likely to grant a license or other approval for the export of a particular defense article or defense service to a particular country; for general or regulatory guidance; or whether certain activity constitutes brokering under the meaning of the ITAR. Except for determinations made with reference to ITAR Sec. 129.9(b), advisory opinions are not binding on the Department of State and may not be used in future matters before the Department.
   DDTC has recently acquired an electronic case management system to update its business processes and how it receives and handles information from industry. This system, once deployed, will allow users to electronically submit requests for advisory opinions to DDTC; users will be able to retrieve responses using the same system. DDTC staff members have defined the data fields which are most relevant and necessary for requests for advisory opinions and developed the means to accept this information from the industry in a secure system. The revision of this information collection is meant to conform the current OMB-approved data collection to DDTC’s new case management system. DDTC is therefore requesting industry comments on the new advisory opinion form, which will be mirrored in the case management system once deployed. A copy of the draft form may be requested from DDTC using the contact information in the FOR FURTHER INFORMATION CONTACT section above, and a copy of the draft form will also be placed for viewing on the DDTC Web site. …
 
   Dated: August 22, 2016.
Lisa Aguirre, Managing Director, Directorate of Defense Trade Controls, Department of State.

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OGSOTHER GOVERNMENT SOURCES

OGS_a16. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

* Presidential Documents; ADMINISTRATIVE ORDERS; Terrorism; Continuation of National Emergency With Respect to Persons Who Commit, Threaten to Commit, or Support (Notice of September 15, 2016) [Publication Date: 19 September 2016.]

* State; NOTICES; Designations as Global Terrorists [Publication Date: 19 September 2016.]:
  – Fathi Ahmad Mohammad Hammad, a.k.a. Fathi Ahmad Hammad, a.k.a. Fathy Ahmed Hamad, a.k.a. Fathi Hamad
  – Omar Diaby, a.k.a. Omar al-Diaby, a.k.a. Omar Omsen, a.k.a. Omar Oumsen, a.k.a. Oumar Diaby

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The Bureau of Industry and Security (BIS) today opened registration for its 29th annual Update Conference on Export Controls and Policy which will take place in Washington, D.C. from October 31 to November 2. Over 1000 U.S. and foreign company representatives, diplomats, academics and U.S. government officials are expected to attend.
 
  “The BIS Update Conference presents an extraordinary opportunity for the export control community to learn about the latest U.S. policy developments under Export Control Reform and continue to enhance the strong partnership between BIS and America’s exporters,” said Under Secretary of Commerce Eric L. Hirschhorn.
 
Additional information on registration and the conference program is available here.
 
For additional information on Update 2016, please contact the BIS Outreach and Educational Services Division at: UpdateConference@bis.doc.gov or (202) 482

6031.
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OGS_a49. EU Amends Restrictive Measures Concerning Ukraine

 
Regulations:
  – Council Implementing Regulation (EU) 2016/1661 of 15 September 2016 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine
 
Decisions:
  – Council Decision (CFSP) 2016/1671 of 15 September 2016 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine

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NWSNEWS

 
The Pentagon’s top weapons export official believes the US should do more to encourage allies to buy American equipment as a group, under the aegis of a pilot program launched to help NATO quickly acquire weapons.
 
While noting he doesn’t have direct say in any decision to expand the use of what is known as “lead nation procurement,” Vice Adm. Joseph Rixey, director of the Defense Security Cooperation Agency, said he would like to see the formula for buying American weapons expanded.
 
  “I would like to expand it beyond – I don’t have a say obviously – but I could see it expanding beyond NATO once we prove it out with NATO,” Rixey said Sept. 7 at the annual Common Defense conference. “So this is something we are very much interested in.”
 
There have been two NATO programs under the aegis of lead nation procurement. The first was fairly small – coordination for a Baltic defense college with Latvia, Lithuania and Estonia. While acknowledging that’s not the big-ticket dollar item most people keep eyes out for, Rixey said it was an important test case for how multiple nations could go in on procurement together.
 
  “We’re learning what are the mechanics besides just the bilateral signing of the case and the relationships associated with the countries they are working with,” Rixey said.
 
The second case was larger – a clutch of precision-guided munitions for the NATO Support and Procurement Agency, which the agency would then distribute to Belgium, the Czech Republic, Denmark, Greece, the Netherlands, Norway, Portugal and Spain. If completed, that sale could be worth $231 million, according to an August notification to Congress.
 
  “I think we’re really going to cut our teeth on that one and we’re moving forward,” Rixey said of the weapons sale.
 
The question that Rixey and his counterparts at the US Department of State need to wrap their heads around is how big the program can go. A State Department official, speaking on background, told Defense News it was simply “too soon to tell” if the lead nation pilot program could work
 
  “At this point, what we’d like to see is NATO countries submitting more proposals. We can’t comment yet on how we might use lead procurement beyond NATO until we fully evaluate how the pilot program has performed,” the official said.
 
But Rixey seems to have some ideas of what a future setup could look like. He held up an example of how a group of countries could buy into items for a major platform, such as the P-8 maritime surveillance aircraft, as a group.
 
  “Imagine what you could do with lead nation procurement if you could get something like the P-8 – maybe not the P-8 itself, but certainly all the support, the Sonobuoys, the spares, everything associated with it that you could buy – in batch quantities and not have to worry about third party transfer restrictions,” Rixey offered.

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NWS_a211. ST&R Trade Report: “Dates and Deadlines: Trademark Protection, Tariff Changes, Canada Trade, Classification”
(Source: ST&R Trade Report)
 
Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week.
 
  – Sep 19: deadline for comments to FTZ Board on proposed production activity at Nevada automotive facility
  – Sep 19: deadline for comments on CBP proposed rule to harmonize vehicle documentation requirements, allow electronic filing
 
  – Sep 20: deadline for comments to USTR on
Russia’s implementation of WTO obligations
  – Sep 21: deadline for comments to USTR on China’s compliance with WTO commitments
  – Sep 23: deadline for comments to FMC on proposed changes to rules on service contracts and NVOCC service arrangements
  – Sep 23: deadline for comments on proposed revocation and modification of classification rulings
  – Sep 23: deadline for comments to ITC on public interest issues in IPR probe of activity trackers

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COMMCOMMENTARY

COMM_a112. C. Greene, C.N. Stinebower & A.H. Schaefer: “U.S. Announces Intent to Lift Remaining Sanctions Against Burma”
 
* Authors: Carlton Greene, Esq., cgreene@crowell.com, 202-624-2818; Cari N. Stinebower, Esq., cstinebower@crowell.com, 202-624-2757; and Alexander H. Schaefer, Esq., aschaefer@crowell.com, 202-624-2773. All of Crowell & Morning LLP.
 
On Wednesday, September 14, 2016, President Obama announced two major improvements to U.S.-Burma relations during his first in-person meeting with Aung San Suu Kyi since she became Burma’s de facto leader in April. First, the U.S. will fully terminate its current sanctions on Burma (Myanmar) in the coming days. Second, it will add Burma to the list of beneficiary countries for preferential imports under the Generalized System of Preferences (GSP).
 
Sanctions Relaxations
 
President Obama’s announcement represents a major policy shift for the U.S., which has maintained a sanctions program on Burma since May 1997. Despite the president’s announcement, no changes have taken effect yet. Instead, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has explained in a newly-issued Frequently Asked Question (No. 480) that no changes will take effect until the president issues a new Executive Order (EO) that terminates the existing national emergency with respect to Burma and revokes all current Burma EOs.
 
OFAC stated that it will formally repeal the Burmese Sanctions Regulations (BSR) after the new EO is issued. While the precise scope of the relaxations will not be clear until the new EO is issued, this will likely involve the removal of all or most of the 111 persons (38 individuals and 73 entities) currently on OFAC’s List of Specially Designated Nationals (SDNs) pursuant to the BSR and designated with the tag “[BURMA].”
 
The removal of the SDN designations will remove one of the largest risks facing investors in Burma who, despite substantial sanctions relaxations since 2012, have struggled to verify that any counterparties or potential investments in Burma are not owned or controlled by, or associated with, current SDNs, given often opaque corporate ownership structures there. It will also remove barriers to increased financing, as financial institutions have currently only been able to transact with the four Burmese financial institutions on the SDN list pursuant to the limited scope of a general license.
 
However, even if OFAC does repeal the BSR and de-list all of the current [BURMA] designees, there are still a number of open questions, including:
 
  –
Prohibition on Import of Jade and Rubies
: The Administration has not yet clarified whether the relaxations will involve a waiver of the statutory import prohibitions on Burmese jade, rubies, and jewelry made therefrom pursuant to the Tom Lantos Block Burmese JADE Act of 2008. The JADE Act does contain presidential waiver authority for requests received from “a democratically elected government in Burma” provided the president makes several human rights and democratic governance related certifications to Congress.
  –
Reporting Obligations
: Currently, the BSR requires companies to file reports related to investments in excess of $5,000,000 (raised in May from a previous threshold of $500,000). There has not yet been a public indication of whether the reporting requirement will be fully repealed, amended in some way, or maintained.
  –
Section 311
: Burma is a jurisdiction of “primary money laundering concern” subject to special measures pursuant to Section 311 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act, which depend on the BSR for their operation. Because of how the respective provisions are drafted, it is not currently clear exactly how the repeal of the BSR would affect the operation of the special measures. The designation of Burma as a jurisdiction of primary money laundering concern would, however, remain until removed by the Financial Crimes Enforcement Network, a sister agency to OFAC. This might deter U.S. financial institutions wary of the effect on their anti-money laundering program obligations of doing business in a jurisdiction that remains designated by Treasury as a haven for money laundering.
  –
Retention of Certain SDNs
: The Administration has indicated that some restrictions will remain in place, including those related to drug trafficking. This is significant because some key [BURMA] SDNs were designated not just for human rights abuses or anti-democratic actions, but as a result of their involvement in drug trafficking – these include Steven Law, a Burmese tycoon and the owner of Asia World. At this point, it is unclear whether OFAC will remove these persons from the SDN list as well or, perhaps, designate them under a separate program (e.g., the narcotics trafficking or drug kingpin programs). If the latter, OFAC would need to simultaneously re-issue a new general license (to replace General License 20 issued pursuant to the BSR) to authorize trade through the Burmese ports controlled by Asia World; if it did not, trade through these ports could once again become prohibited.
 
These developments come on the heels of several substantial relaxations the U.S. issued in May 2016 that had issued or modified several general licenses to facilitate certain trade, financing, and in-country transactions.
 
As Burma transitions to a less closed economy, it will remain an anti-money laundering and corruption risk, and anyone exploring the Burmese market should continue to conduct enhanced due diligence to mitigate against money laundering or corruption concerns. This is especially true if Burma remains designated as a primary money laundering concern following any repeal of the BSR. Further, even where persons are removed from the SDN list, many financial institutions may continue to treat these parties as higher risk. Given the current tendency of financial institutions to de-risk customers engaging in business with higher risk jurisdictions or parties even where such business is legally permissible, companies should consider seeking careful instructions from their financial institution relationship managers about the diligence needed to establish and maintain business relationships in Burma before entering the market.
 
Generalized System of Preferences
 
Simultaneously with the termination of sanctions, the president also issued a Presidential Proclamation restoring preferential treatment for Burma as a beneficiary developing country under the GSP program. The GSP program provides for the duty-free importation of designated articles imported from designated beneficiary developing countries. Importantly, the president also designated Burma as a least-developed beneficiary developing country under GSP, enabling a substantially broader range of duty-free imports (tariff lines with the symbol “A+”) than for other beneficiary developing country (tariff lines with the symbol “A”).
 
The president’s announcement comes just after the Office of the U.S. Trade Representative formally initiated the 2016/2017 Annual Review, providing an opportunity for interested parties to seek changes to the list of tariff lines eligible for GSP treatment. Importers currently, or considering, sourcing from Burma should review the current GSP eligibility for any imported tariff lines and consider using the Annual Review process to seek any changes necessary to maximize the potential opportunity. Petitions are due October 4, 2016.
 
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COMM_a213
. D. Albin-Riley, G. Ravitz & J.R. Ravitz: “Sellers Beware: California Adopts New Proposition 65 Warning Requirements”

(Source: Arent Fox LLP)
 
* Authors: Debra Albin-Riley, Esq., debra.riley@arentfox.com, 213-443-7545; Georgia Ravitz, Esq., georgia.ravitz@arentfox.com, 202-857-8939; and James R. Ravitz, Esq., james.ravitz@arentfox.com, 202-857-8903. All of Arent Fox LLP
 
On August 31, 2016, California took a long-awaited step in publishing new major changes to the Proposition 65 warning regulations; the first of such amendments in more than a decade. The wholesale changes completely alter the “safe harbor” warning rules, creating a new set of obstacles for companies offering products or operating facilities in California. Although the new regulations are intended to increase clarity and decrease litigation, they may actually have the opposite effect. 
 
Proposition 65, known as the Safe Drinking Water and Toxic Enforcement Act of 1986 requires that businesses with 10 or more employees provide a clear and reasonable warning to individuals before knowingly and intentionally exposing them to a chemical known to cause cancer or reproductive toxicity. The infamous Proposition 65 list now contains more than 900 such chemicals under strict regulation by governmental agencies and plaintiff consumer watchdog groups, commonly known as “bounty hunters.” The Office of Environmental Health Hazard Assessment (OEHHA) is the lead agency that implements Proposition 65, maintains the Proposition 65 list, and has authority to amend the regulations to further the purposes of the Act. In adopting the changes, OEHHA determined that the safe harbor warnings needed more detailed information for the public as well as to incorporate changes in technology and to communicate more effectively with non-English speakers.
 
The new rules become operative on August 30, 2018, providing businesses with a two-year transition and preparation period. Until then, companies must comply with the current regulations which provide that a warning is “clear” if it clearly communicates that the product contains a chemical known to the State of California to cause cancer, birth defects, or other reproductive harm. Under current regulations, the warning is deemed “reasonable” if the method employed to transmit the message is reasonably calculated to make the warning message available prior to the exposure. Companies may also comply with the current warning regulations if they are a party to an out-of-court settlement or court-approved consent judgment which establishes a warning method or content, and the companies comply with those requirements.
 
The new warning rules have been closely monitored by businesses, consumer advocacy groups, and regulators, among others. The final version of the warning regulations, which were published after OEHHA’s consideration of over 70 written comments, remains controversial. The new safe harbor rules have the following key changes which are more onerous than the current regulations, except as to retail sellers:   
  – Warning symbol:
The addition of a symbol consisting of a black exclamation point in a yellow equilateral triangle with a bold black outline for nonfood products while retaining the signal word “WARNING”:
 
  – “Can expose”:
Additional language in the warning statement that the product “can expose” an end user to chemicals known to the state to cause cancer. The current regulation only requires that the warning state that the product “contains” a chemical. A comparison of the existing warning and new warning for products that can expose consumers to chemicals known to cause cancer is set forth below:
 
Exemplar Existing Warning (Cancer)
New Warning (Cancer)
“WARNING: This product contains a chemical known to the State of California to cause cancer.”
“WARNING: This product can expose you to chemicals, including [name of one or more chemicals], which is [are] known to the State of California to cause cancer.  For more information go to www.P65Warnings.ca.gov.”
 
  – A similar warning is required for products that “can expose” a user to chemicals known to the state to cause reproductive toxicity. A comparison of the existing warning and new warning for products that can expose consumers to chemicals known to cause reproductive harm is set forth below:
 
Exemplar Existing Warning (Reproductive Toxicity)
New Warning (Reproductive Toxicity)
“WARNING: This product contains a chemical known to the State of California to cause birth defects or other reproductive harm.”
“WARNING: This product can expose you to chemicals, including [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information go to www.P65Warnings.ca.gov.”
 
  – Identification of chemicals:
The identification of one or more chemicals for each endpoint (cancer or reproductive harm) within the warning, except where the warning is affixed to the product itself;
  – Hyperlinks:
The addition of a URL to all warnings linking to a public website operated by OEHHA to provide information supplementing the warning for interested consumers and others, such as plaintiff’s lawyers and consumer advocacy groups;
  – Internet purchases:
For internet purchases, the warning must be provided on the product display page or on a clearly marked hyperlink using the word “WARNING;”
For food products, including dietary supplements, new requirements to enclose the warning in a box and set it apart from other label information;
  – Additional languages:
If a consumer product, sign, or label used to provide a warning includes consumer information in a language other than English, the warning must also be provided in that language in addition to English;
  – Retailers:
The new rules continue to minimize the burden of warning on retail sellers and limits the specific instances where retailers must provide such warnings (e.g., where the retailer sells a product under a brand or trademark owned or licensed by the retailer or an affiliated entity); and
  – Miscellaneous new rules:
Special rules for alcoholic beverages, canned and bottled foods and beverages that contain bisphenol A, parking facilities, and amusement parks.
 
The new warning rules place additional burdens on companies manufacturing and selling consumer products in California by requiring new, more specific content and formatting, and extending into specific products and industries not previously regulated. While the new regulations are intended to decrease litigation in this area, companies may find themselves the target of additional violation notices and lawsuits as plaintiff “watchdog” groups search for any slight noncompliance with the technical, detailed new warning requirements. By understanding the new requirements now, businesses can proactively prepare themselves for full compliance by the effective date.

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

COMM_a314
. J.D. Harris: “Company Eliminated from Army Contract Competition Due to ITAR Compliance Program Description”

 
* Author: James D. Harris, Esq., Holland & Knight LLP, james.harris@hklaw.com, 202-828-1855.
 
The U.S. Government Accountability Office (GAO) denied on Aug. 11, 2016, a government contract protest by Microwave Monolithics Inc. See GAO case number B-413088. The case is noteworthy because of the reason for denial. The GAO found that the company’s proposal was properly eliminated from the competition because the U.S. Army Materiel Command (Army) reasonably concluded that the proposal failed to show the required compliance with the International Traffic in Arms Regulations (ITAR), even though the company was registered with the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC).
 
Microwave Monolithics Inc., a small business in Simi Valley, Calif., protested the elimination of its proposal from the competition under a request for proposals (RFP) issued by the Army for personal recovery devices. The RFP stated that a proposal had to meet the solicitation’s minimum requirements, which included the following pertaining to ITAR compliance:
 
The offeror, and subcontractors as appropriate, is ITAR compliant, or has a viable plan to become ITAR compliant prior to contract award. The contractor has appointed an employee to be responsible for ITAR compliance and has established the following: written policies and procedures for employees performing activities subject to ITAR and/or handling ITAR-controlled items or data; procedures for the receipt, handling, storing, implementation and testing of ITAR-controlled items, procedures for the restriction of access by foreign nationals to ITAR-controlled items or data; an auditing procedure for ITAR compliance; and procedures for actions to be taken if a violation is discovered (emphasis added).
 
The company argued that its proposal met the requirement, in part, because it was registered with the DDTC, which by default requires a designated security officer and maintenance of records showing compliance per ITAR Section 122. The Army maintained that it was looking for more detail than mere ITAR registration.
 
Conclusion
 
In addition to existing DDTC oversight, government customers increasingly are taking steps to mitigate export control risks of their contractors through the contracting process itself. Any company active in government contracts should review RFP language carefully with respect to ITAR compliance. The ability of a contractor to clearly describe a viable ITAR compliance program could affect the competitiveness of its proposal.

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

COMM_a415
. P.E. Jeydel, J.C. London & E.J. Krauland: “DDTC’s Definitions of Export, Reexport, and Retransfer: Important Compliance Considerations”

 
* Author: Peter E. Jeydel, Esq., pjeydel@steptoe.com, 202-429-6291; John C. London, Esq., jlondon@steptoe.com, 202-429-8093; and Edward J. Krauland, Esq., ekrauland@steptoe.com, 202-429-8083. All of Steptoe & Johnson LLP.
 
On September 8, 2016, the State Department’s Directorate of Defense Trade Controls (DDTC) published a final rule amending the International Traffic in Arms Regulations (ITAR) to finalize and clarify changes from a June 3, 2016 interim final rule related to the definitions of “export,” “reexport,” and “retransfer.” For additional information on the interim final rule, see our previous advisory.
 
A noteworthy comment from the final rule is in the preamble, where DDTC confirms “that theoretical or potential access to technical data is not a release,” and that a release occurs only “if a foreign person does actually access technical data.” That represents a significant change in a longstanding view of DDTC policy that theoretical access by a foreign person to ITAR-controlled technical data is to be treated as an export, reexport, or retransfer, and that the burden was on the data owner to show that no release actually occurred. This often came up in the context of databases, where a foreign national might have password access to the database, even though there was no evidence that the foreign national obtained and reviewed ITAR-controlled information in the database. DDTC appears now to accept that an actual release of technical data to a foreign national must occur in order to trigger an export, reexport, or retransfer.
 
This is an important change in policy that will have ramifications, in particular as DDTC continues to prepare a final rule on the treatment of controlled technical data in an encrypted, cloud-based environment. Given that many cloud service providers employ or contract with foreign persons, it is noteworthy that DDTC appears to have clarified how it would handle potential access to cloud-based data by foreign-person system administrators.
 
However, DDTC did not state when it will issue a final rule on the definitions of “activities that are not exports, reexports, or retransfers,” which includes regulations related to encrypted data in the cloud, or other areas that are still awaiting final regulatory action. Importantly, DDTC warned companies not to rely on definitions or guidance issued by the Commerce Department’s Bureau of Industry and Security (BIS), stating that “it would not be appropriate to rely on definitions outside of the ITAR or guidance provided by any entity other than [DDTC] for authoritative interpretive guidance regarding the provisions or scope of the ITAR.”
 
DDTC also reaffirmed its position that any release of technical data to a foreign person is a “controlled event” that requires authorization, even when technical data is inadvertently revealed to dual or third-country national (DN/TCN) employees. DDTC views the release of technical data or software to DN/TCN employees of authorized foreign parties as a deemed reexport. Acknowledging potential tension between a company’s due diligence obligations and employment discrimination laws, DDTC noted that it will “consider all circumstances surrounding any unauthorized release” and will assess responsibility “based on the relative culpability of all of the parties to the transaction.”
 
Finally, DDTC emphasized its broad interpretation of the term “retransfer,” stating that it includes temporary transfers of defense articles within the same country to a separate legal entity, subcontractor or intermediate consignee. This underscores that every entity must be authorized, no matter how minor its role, if it gains custody or control, even if not permanent, over a defense article abroad.

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

TrainingEX/IM TRAINING EVENTS & CONFERENCES

TE_a216
. Friday List of Approaching Events

(Sources: Event sponsors.) 
 
Published every Friday or last publication day of the week. Send events to
apbosch@fullcirclecompliance.eu
, composed in the below format:

* DATE: PLACE; “TITLE;” SPONSOR; WEBLINK; CONTACT (email and phone number)
 
Continuously Available Training:
* Executive Masters: “
International Trade Compliance
;” University of Liverpool;
exed@liverpool.ac.uk
;
+44 (0) 20 768 24614
* E-Seminars: “
US Export Controls” / “Defense Trade Controls
;” Export Compliance Training Institute;
danielle@learnexportcompliance.com 
* On-Line: “
Simplified Network Application Process Redesign (SNAP-R)
;” Commerce/BIS; 202-482-2227
* E-Seminars: “
Webinars On-Demand Library
;” Sandler, Travis & Rosenberg, P.A.
 
Training by Date:


* Sep 19-22: Columbus OH; “

University Export Controls Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Sep 19-22: Houston TX; “
Customs Broker Exam Boot Camp
;” Export-Import Law Institute;
info@bestcustomsbrokercourse.com
; 800-256-2013

* Sep 20: Oxford UK; “Intermediate Seminar;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Sep 20: Orlando FL; “
AES Compliance Seminar
;” Dept. of Commerce/Census
& M-Palm;
shawn@m-palm.com 

* Sep 20-21: Shanghai; “
2nd Advanced Conference on China Antitrust
;” American Conference Institute
* Sep 20: Webinar; “NISP Administration & Policy Analysis (NAPA) Industry Insider Threat Workshop;” Dept. of Defense/Defense Security Service

* Sep 21: Buffalo NY; “
Essentials of U.S. Export Controls
;”
Dept. of Commerce/Bureau of Industry and Security

* Sep 21: Oxford UK; “Beginners Workshop;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Sep 21: Oxford UK; “Making Better Licence Applications;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Sep 21-24: San Antonio TX; “
Texas Customs Brokers Brokers & Forwarders Association Annual Conference
;” Texas Brokers and Forwarders Association
* Sep 21: Wash DC; “
In-House Industry Seminar
;” Dept. of State/DDTC;
DDTCeSeminars@state.gov 
* Sep 21: Webinar; “
Preparing for HS 2017 Tariff Changes
;”
Sandler, Travis & Rosenberg, P.A.;
Webinarorganizers@strtrade.com 

* Sep 22: Buffalo NY; ”
How to Develop an Export Management and Compliance Program
;”
Dept. of Commerce/Bureau of Industry and Security

* Sep 27-29: London UK; “Annual Anti-Bribery and International Trade Conference;” Email Kate Bullard to Request an Invitation to this Event; Baker McKenzie

* Sep 27: Webinar; “NISP Administration & Policy Analysis (NAPA) Industry Insider Threat Workshop;” Dept. of Defense/Defense Security Service

* Sep 28: DIY Encryption Classification 2016 Edition; ECTI; http://www.learnexportcompliance.com/Webinars/DIY-Encryption-Classification-2016-Edition.aspx; danielle@learnexportcompliance.com; 540-433-3977 

* Sep 28-29: Amsterdam NL: “Defence Expors 2016;” SMi

Informed Compliance Letter from U.S. Customs
;” Deleon Trade LLC, Tuttle Law, and the Braumiller Law Group

* Oct 3-6: Amsterdam NL: “United States Export Control (EAR/OFAC/ITAR) (for EU and other non-US Companies);” ECTI;jessica@learnexportcompliance.com; 540-433-3977

* Oct 4: North Reading MA; “Real-World Implementation of the New Export Control Definitions and DCS Rules” Massachusetts Export Center

* Oct 4: Webinar; “NISP Administration & Policy Analysis (NAPA) Industry Insider Threat Workshop;” Dept. of Defense/Defense Security Service

* Oct 5: Leeds UK; “Intermediate Seminar;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Oct 6: Leeds UK; “Beginners Workshop;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Oct 6: Leeds UK; “Control List Classification – Combined Dual Use and Military;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Oct 9-11: Grapevine TX: “DFW Fall Conference;” ICPA

* Oct 11: Webinar; “NISP Administration & Policy Analysis (NAPA) Industry Insider Threat Workshop;” Dept. of Defense/Defense Security Service

* Oct 12: Laredo TX; “
AES Compliance Seminar
;” Dept. of Commerce/Census;
shawn@m-palm.com

* Oct 12: Farmington Hills MI; “Harmonized Tariff Schedule – Classifications;”
Sandler, Travis & Rosenberg, P.A.; bwhite@sttas.com

* Oct 12-13: Miramar FL; “7th Maritime/Logistics Seminar;” ABS-Consulting; albert@abs-consulting.net; 954-218-5285.

* Oct 12-13: New Orleans; “
Critical Compliance: Jurisdiction/Classification, Auditing & Recordkeeping
;” Export Compliance Solutions (ECS);
spalmer@exportcompliancesolutions.com
; 866-238-4018

* Oct 13: Farmington Hills MI; “NAFTA Qualification, Compliance and Recordkeeping (Non-Automotive);”
Sandler, Travis & Rosenberg, P.A.; imeyer@sttas.com

* Oct 13-14: London; “
WorldECR Export Controls and Sanctions Forum 2016
;” WorldECR;
Mark.Cusick@WorldECR.com 

* Oct 13: Webinar; “Creative Uses of Standby Letters of Credit and Other Security Tools for Exporters” Massachusetts Export Center

* Oct 17-20: Huntsville AL; “
EAR/ITAR/OFAC Compliance
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Oct 18-19: New Orleans; “
ITAR/EAR Critical Compliance Jurisdiction/Classification Auditing/Recordkeeping
” Export Compliance Solutions;
spalmer@exportcompliancesolutions.com
; 866-238-4018

* Oct 18-19: San Francisco; “9th West Coast FCPA Enforcement & Compliance Conference;” American Conference Institute

* Oct 18-19: Washington, DC; “International Technology Transfers, Cloud Computing, and Deemed Exports;” American Conference Institute; americanconference.com/techtransfers OR 1-888-224-2480

* Oct 19: London; “Control List Classification – Dual Use;” UK/BIS Export Control Organisation; denise.carter@bis.gsi.gov.uk 

* Oct 19-20: Oslo Norway; “US Defense Contracting and DFARS Compliance;” C5

* Oct 20: London; “Making Better License Applications;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Oct 20: Lowell MA; “Essentials of Harmonized Tariff Classification and Free Trade Agreement Compliance” Massachusetts Export Center

* Oct 20: Webinar; “Conflicts Between EU and US Export Rules;” ECTI; danielle@learnexportcompliance.com; 540-433-3977

* Oct 24-25: Arlington VA; “2016 Fall Conference;” Society for International Affairs; admin@siaed.org 

* Oct 25: Troy MI; “Incoterms;” East Michigan District Export Council
* Oct 25: Webinar; “NISP Administration & Policy Analysis (NAPA) Industry Insider Threat Workshop;” Dept. of Defense/Defense Security Service

* Oct 31-Nov 2: Wash DC; “
Commerce/BIS Update 2016 Conference on Export Controls
;” U.S. Dept. of Commerce/Bureau of Industry and Security;
UpdateConference@bis.doc.gov
; 202-482-6031

* Oct 31-Nov 3: Wash DC; “US Export Controls Seminar;” ECTI; jessica@learnexportcompliance.com; 540-433-3977

* Nov 1: Webinar; “NISP Administration & Policy Analysis (NAPA) Industry Insider Threat Workshop;” Dept. of Defense/Defense Security Service

* Nov 2: Chicago; “AES Compliance Seminar;” Dept. of Commerce/ Census & M-Palm; shawn@m-palm.com 

* Nov 3-4: Amsterdam International Trade & Compliance Conference;
Email Claudia Wehmeijer to Request an Invitation; Baker McKenzie

* Nov 6-7: Singapore; “
Singapore Conference
;” International Compliance Professionals Association;
wizard@icpainc.org 

* Nov 8: London; “Control List Classification – Military;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Nov 8: Webinar; “NISP Administration & Policy Analysis (NAPA) Industry Insider Threat Workshop;” Dept. of Defense/Defense Security Service

* Nov 9: London; “Making Better License Applications;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 


* Nov 9: Sturbridge MA; “Export School Fast Track Certificate Program” Massachusetts Export Center

* Nov 10-11: Shanghai; “
ICPA China Conference
;” International Compliance Professionals Association;
wizard@icpainc.org 

* Nov 14-16: London; “Expert Industry and Regulatory Advice for Solutions to Export Controls’ Global Compliance Risks;” Informa Maritime

* Nov 14-17: Phoenix AZ; “
EAR/ITAR/OFAC Compliance
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Nov 15-16: Santa Clara, CA, and webinar; “Year-End Review of Import/Export Developments;” Baker & McKenzie; Register Here; or call Lillian Han415-576-3061lillian.han@bakermckenzie.com 

* Nov 15: Westborough MA; “Essentials of Export Logistics & Regulatory Compliance” Massachusetts Export Center

* Nov 15: Webinar; “NISP Administration & Policy Analysis (NAPA) Industry Insider Threat Workshop;” Dept. of Defense/Defense Security Service

* Nov 16: Manchester UK; “Intermediate Seminar;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Nov 17: Manchester UK; “Beginners Workshop;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Nov 17: Manchester UK; “Making Better License Applications;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Nov 17: Manchester UK; “Control List Classification Combined Dual Use and Military;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Nov 24: London; “
Cyber Export Controls 2016
;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Nov 30: London; “Control List Classification – Dual Use;”

UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk

* Nov 29-Dec 2: Washington, D.C.; “
33rd International Conference on the Foreign Corrupt Practices Act
“; American Conference Institute
* Dec 1: London; “Making Better License Applications;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Dec 2: Wash DC; “
SIA Holiday Party
;” Society for International Affairs

* Dec 5-8: Miami FL; “
EAR/ITAR/OFAC Compliance Seminar Series
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Dec 7: Boston; “
AES Compliance Seminar
;”
Dept. of Commerce/Census
& M-Palm;
shawn@m-palm.com  

* Dec 7: London; “Intermediate Seminar;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Dec 8: London; “Beginners Workshop;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Dec 8: London; “Making Better License Applications;”
UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Dec 9: Boston MA; “Export Expo” Massachusetts Export Center

* Dec 14: Wash DC; “In-House Industry Seminar;” Dept. of State/DDTC; DDTCInHouseSeminars@state.gov

* Dec 16: Webinar; “Navigating the Intersection of HR and Trade Compliance” Massachusetts Export Center

* Jan 23-26: San Diego, CA; “
EAR/ITAR/OFAC Compliance Seminar Series
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Mar 13-15: Newport Beach CA; “2017 Winter Back to Basics Conference;” Society for International Affairs

* Mar 20-23: Singapore; “
United States Export Control (EAR/OFAC/ITAR) (for Asia-Pacific and other non-US Companies)
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Jun 12-15: San Francisco; “
United States Export Control (EAR/OFAC/ITAR) Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

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

ENEDITOR’S NOTES

EN_a117. Bartlett’s Unfamiliar Quotations

(Source: Editor)
 
Notable birthdays:
 
* Laurence J. Peter (Laurence Johnston Peter; 16 Sep 1919 – 12 Jan 1990, was a Canadian educator and “hierarchiologist” best known to the general public for the formulation of “the Peter principle.”)
  – “In a hierarchy every employee tends to rise to his level of incompetence… In time, every post tends to be occupied by an employee who is incompetent to carry out its duties… Work is accomplished by those employees who have not yet reached their level of incompetence.”
  – “Early to bed, early to rise, work like hell, and advertise.”
 
* J.C. Penney (James Cash Penney, Jr.; 16 Sep 1875 – 12 Feb 1971, was an American businessman and entrepreneur who founded the J. C. Penney stores in 1902.)
  – “Courteous treatment will make a customer a walking advertisement.”
 
Friday funnies:
 
An old man lived alone in New Jersey. He wanted to plant his annual vegetable garden, but it was difficult, as the ground was too hard. His only son, Vincent, who used to help him, was in prison. The old man wrote to his son: “Dear Vincent, I am sad, because it looks like I won’t be able to plant my vegetables this year. I’m just too weak to dig up a garden plot. In the old days, you would be here to dig the plot for me, but until you get out, I guess I won’t be able to plant a garden. Love, Papa.” A few days later he received a letter from his son: “Dear Pop, Don’t dig up that garden. That’s where the bodies are buried. Love, Vinnie.” At dawn the next morning, FBI agents and local police arrived with a search warrant and shovels, and dug up the entire area without finding any bodies. They apologized to the old man and left. A few days later, the old man received another letter from his son: “Dear Pop — You should be able to plant your garden now. That’s the best I could do under the circumstances. Love you, Vinnie.”
  — Eddie Hagler, Oklahoma City, OK

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

EN_a218. 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: 7 Sep 2016: 81 FR 61595-61612: Russian Sanctions: Addition of Certain Entities 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.  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: 30 Aug 2016; Harmonized System Update (HSU) 1612, containing 4,692 ABI records and 935 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
  – Latest Amendment: 8 Sep 2016; 81 FR 62004-62008: 22 CFR Parts 120, 125, 126, and 130; Public Notice: 9672; RIN: 1400-AD70; International Traffic in Arms: Revisions to Definition of Export and Related Definitions
  – The only available fully updated copy (latest edition 8 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. 

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

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 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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