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16-0926 Monday “The Daily Bugle”

16-0926 Monday “Daily Bugle”

Monday, 26 September 2016

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The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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  1. DHS/CBP: User Fee Advisory Committee To Meet on 19 Oct in Miami 
  2. Justice/ATF Seeks Comments on Form ATF F 5300.38, Application for an Amended Federal Firearms License 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/Census: “Harmonized Tariff Schedule Updated in the Automated Export System to Accept Changes from Public Law 114-125” 
  3. Commerce/BIS: (No new postings.) 
  4. Justice: “Four Chinese Nationals and China-Based Company Charged with Using Front Companies to Evade U.S. Sanctions Targeting North Korea’s Nuclear Weapons and Ballistic Missile Programs” 
  5. State/DDTC: (No new postings.) 
  6. UK/BIS ECO Updates OIEL Undertaking Template 
  1. Expeditors News: “USDA Announces China Lifts Ban on U.S. Beef Imports” 
  2. The Globe and Mail: “Commons Committee to Scrutinize Arms Export Controls” 
  3. Reuters: “EU Leaders to Consider How to Improve Russia Ties without Dropping Sanctions” 
  4. ST&R Trade Report: “Dates and Deadlines: C-TPAT for Exports, Incoterms, Import/Export Filing, TSCA Certification” 
  5. ST&R Trade Report: “U.S. Gets WTO Win on EU Aircraft Subsidies” 
  1. T.B. McVey: “‘Reason To Know’ – A Chilling Term For Exporters” 
  1. Monday List of Ex/Im Job Openings: 119 Jobs Posted 
  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 (20 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_a11. DHS/CBP: User Fee Advisory Committee To Meet on 19 Oct in Miami

 
81 FR 66050-66051: The U.S. Customs and Border Protection User Fee Advisory Committee (UFAC)
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security (DHS).
* ACTION: Committee Management; Notice of Federal Advisory Committee Public Meeting.
* SUMMARY: The U.S. Customs and Border Protection User Fee Advisory Committee (UFAC) will meet on Wednesday, October 19, 2016, in Miami, FL. The meeting will be open to the public.
* DATES: The UFAC will meet on Wednesday, October 19, 2016, from 1:00 p.m. to 3:00 p.m. EDT. Please note that the meeting is scheduled for two hours and that the meeting may close early if the committee completes its business.
   Pre-Registration: Meeting participants may attend either in person or via webinar after pre-registering using a method indicated below:
  –For members of the public who plan to attend the meeting in person, please register either online here, by email to tradeevents@dhs.gov, or by fax to (202) 325-4290 by 5:00 p.m. EDT on October 17, 2016.
  –For members of the public who plan to participate via webinar, please register online here by 5:00 p.m. EDT on October 17, 2016.
   Please feel free to share this information with other interested members of your organization or association.
   Members of the public who are pre-registered and later require cancellation, please do so in advance of the meeting by accessing one (1) of the following links: Here to cancel an in-person registration, or here to cancel a webinar registration.
* ADDRESSES: The meeting will be held at the Pullman Miami Hotel, 5800 Blue Lagoon Drive, Paris Ballroom, Miami, FL 33126. There will be signage posted directing visitors to the location of the conference room. …
   There will be two (2) public comment periods held during the meeting on October 19, 2016. Speakers are requested to limit their comments to two (2) minutes or less to facilitate greater participation. Contact the individual listed below to register as a speaker. Please note that the public comment periods for speakers may end before the times indicated on the schedule that is posted on the CBP Web page.
* FOR FURTHER INFORMATION CONTACT: Ms. Wanda Tate, Office of Trade Relations, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW., Room 3.5A, Washington, DC 20229; telephone (202) 344-1440; facsimile (202) 325-4290.
* SUPPLEMENTARY INFORMATION: Pursuant to the Federal Advisory Committee Act (5 U.S.C. Appendix), the Department of Homeland Security (DHS) hereby announces the meeting of the U.S. Customs and Border Protection User Fee Advisory Committee (UFAC). The UFAC is tasked with providing advice to the Secretary of Homeland Security (DHS) through the Commissioner of U.S. Customs and Border Protection (CBP) on matters related to the performance of inspections coinciding with the assessment of an agriculture, customs, or immigration user fee. …
   Dated: September 21, 2016.
Maria Luisa Boyce, Senior Advisor for Private Sector Engagement, Office of Trade Relations, U.S. Customs and Border Protection.
* * * * * * * * * * * * * * * * * * * *

EXIM_a22. Justice/ATF Seeks Comments on Form ATF F 5300.38, Application for an Amended Federal Firearms License

(Source: Federal Register) [Excerpts.]
 
81 FR 66078-66079: Agency Information Collection Activities; Proposed eCollection eComments Requested; Application for an Amended Federal Firearms License (ATF F 5300.38)
* AGENCY: Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
* ACTION: 30-Day notice. …
* DATES: Comments are encouraged and will be accepted for an additional 30 days until October 26, 2016.
* FOR FURTHER INFORMATION CONTACT: Tracey Robertson, Chief, Federal Firearms Licensing Center, 244 Needy Road, Martinsburg, WV 25405 at email or telephone: Tracey.Robertson@atf.gov or (304) 616-4647. Written comments and/or suggestions can also be directed to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention Department of Justice Desk Officer, Washington, DC 20503 or sent to OIRA_submissions@omb.eop.gov.
* SUPPLEMENTARY INFORMATION: …
  – The Title of the Form/Collection: Application for an Amended
Federal Firearms License.
  – Form number: ATF F 5300.38.
  – Component: Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Justice.
  – Abstract: The Gun Control Act requires that each person applying for a Federal Firearms License (FFL) change of address must certify compliance with the provisions of the law for the new address. The ATF F 5300.38, Application for an Amended Federal Firearms License is the application method used by existing Federal Firearms licensees to change the business address of the license and certify compliance. Licensees are required to notify ATF of the intent to move any business premises no later than 30 days prior to the intended move. …
   Dated: September 20, 2016.
Jerri Murray, Department Clearance Officer for PRA, U.S. Department of Justice.
* * * * * * * * * * * * * * * * * * * *

OGSOTHER GOVERNMENT SOURCES

OGS_a13. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

 
* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 27 September 2016.]  
* * * * * * * * * * * * * * * * * * * *

 
Effective immediately, the Harmonized Tariff Schedule (HTS) tables have been updated in the AES to include the August 22, 2016 changes from Public Law 114-125, the Trade Facilitation and Trade Enforcement Act of 2015.

The Schedule B and HTS tables are available for download here.

The current list of HTS codes that are not valid for AES is available here.

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

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(Source:
Justice) [Excerpts.]
 
Four Chinese nationals and a trading company based in Dandong, China, were charged by criminal complaint unsealed today with conspiring to evade U.S. economic sanctions and violating the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR) through front companies by facilitating prohibited U.S. dollar transactions through the United States on behalf of a sanctioned entity in the Democratic People’s Republic of Korea (North Korea) and to launder the proceeds of that criminal conduct through U.S. financial institutions.
 
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Assistant Director E.W. Priestap of the FBI’s Counterintelligence Division made the announcement.
 
On Aug. 3, 2016, a U.S. Magistrate Judge Joseph A. Dickson of the District of New Jersey signed a criminal complaint charging Ma Xiaohong (Ma) and her company, Dandong Hongxiang Industrial Development Co. Ltd. (DHID), and three of DHID’s top executives, general manager Zhou Jianshu (Zhou), deputy general manager Hong Jinhua (Hong) and financial manager Luo Chuanxu (Luo), with conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and to defraud the United States; violating IEEPA; and conspiracy to launder monetary instruments.
 
Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also imposed sanctions on DHID, Ma, Zhou, Hong and Luo for their ties to the government of North Korea’s weapons of mass destruction proliferation efforts.
 
In addition, the department filed a civil forfeiture action for all funds contained in 25 Chinese bank accounts that allegedly belong to DHID and its front companies. The department has also requested tha the federal court in the District of New Jersey issue a restraining order for all of the funds named in the civil forfeiture action, based upon the allegation that the funds represent property involved in money laundering, which makes them forfeitable to the United States. There are no allegations of wrongdoing by the U.S. correspondent banks or foreign banks that maintain these accounts.
 
  “The charges and forfeiture action announced today allege that defendants in China established and used shell companies around the world, surreptitiously moved money through the United States and violated the sanctions imposed on North Korea in response to, among other things, its nuclear weapons program,” said Assistant Attorney General Caldwell. “The actions reflect our efforts to protect the integrity of the U.S. banking system and hold accountable those who seek to evade U.S. sanctions laws.” …
 
According to criminal and civil complaints, DHID is primarily owned by Ma and is located near the North Korean border. DHID allegedly openly worked with North Korea-based Korea Kwangson Banking Corporation (KKBC) prior to Aug. 11, 2009, when the OFAC designated KKBC as a Specially Designated National (SDN) for providing U.S. dollar financial services for two other North Korean entities, Tanchon Commercial Bank (Tanchon) and Korea Hyoksin Trading Corporation (Hyoksin). President Bush identified Tanchon as a weapons of mass destruction proliferator in June 2005, and OFAC designated Hyoksin as an SDN under the WMDPSR in July 2009. Tanchon and Hyoksin were so identified and designated because of their ties to Korea Mining Development Trading Company (KOMID), which OFAC has described as North Korea’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons. The United Nations (UN) placed KOMID, Tanchon and Hyoksin on the UN Sanctions List in 2006. In March 2016, KKBC was added to the UN Sanctions List.
 
In August 2009, Ma allegedly conspired with Zhou, Hong and Luo to create or acquire numerous front companies to conduct U.S. dollar transactions designed to evade U.S. sanctions. The complaints allege that from August 2009 to September 2015, DHID used these front companies, established in offshore jurisdictions such as the British Virgin Islands, the Seychelles and Hong Kong, and opened Chinese bank accounts to conduct U.S. dollar financial transactions through the U.S. banking system when completing sales to North Korea. These sales transactions were allegedly financed or guaranteed by KKBC. These front companies facilitated the financial transactions to hide KKBC’s presence from correspondent banks in the United States, according to the allegations in the complaints.
 
As a result of the defendants’ alleged scheme, KKBC was able to cause financial transactions in U.S. dollars to transit through the U.S. correspondent banks without being detected by the banks and, thus, were not blocked under the WMDPSR program.
 
A complaint is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. …

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

 
The Export Control Organisation has updated the Open individual export licence (“OIEL”) undertaking template. The template now includes a delivery address field and a definition of the term ‘consignee’.
 
A consignee undertaking which is required to be completed in accordance with Open Individual Export Licence conditions.
* * * * * * * * * * * * * * * * * * * *

NWSNEWS

NWS_a19. Expeditors News: “USDA Announces China Lifts Ban on U.S. Beef Imports”

(Source: Expeditors News)
 
On September 22, 2016 the United States Department of Agriculture (UDSA) announced that China has lifted its thirteen year ban on U.S. beef imports after completing a U.S. supply system review.
 
Further steps will be taken by both the U.S. and China to restore market access for U.S. beef and beef products. In a statement by Agriculture Secretary Tom Vilsack, he states, “We look forward to prompt engagement by the relevant authorities for further technical discussions on the specific conditions that will allow trade to resume.”
 
The full USDA article can be accessed here.

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NWS_a210. The Globe and Mail: “Commons Committee to Scrutinize Arms Export Controls”

(Source: The Globe and Mail)
 
A parliamentary committee is preparing to take a hard look at the export controls Canada places on foreign sales of military goods and whether sanctions and embargoes meant to stop arms shipments by Canadians have sufficient teeth.
 
The scrutiny by the Commons foreign affairs committee comes amid a growing debate over the military and security business that Canadians are doing with Mideast countries – including a $15-billion deal with Saudi Arabia – and increasing concern Ottawa is not doing enough to monitor and control this trade.
 
Controversies that have cropped up over the past year include: whether Canada exercises sufficient scrutiny when deciding whether to allow shipments to countries with terrible human-rights records; whether Ottawa is transparent with Canadians about the arms trade; and why one Canadian-controlled company has been selling armoured vehicles to Libya and Sudan despite arms embargoes against these countries.
 
The review, expected to begin later this fall, comes as the Liberal government takes steps to join the global Arms Trade Treaty and is readying legislation to ensure Canada’s export regime for military goods complies with the UN-backed accord. The foreign affairs committee, chaired by Kenora Liberal MP Robert Nault, will study the bill after it is introduced.
 
Mr. Nault’s committee has been asked to examine the Special Economic Measures Act, which regulates sanctions and embargoes – and hasn’t been reviewed since it was introduced in 1992, as well as the Freezing Assets of Corrupt Foreign Officials act, which targets individuals.
 
  “If the system doesn’t work and Canadian companies are allowed to skirt Canadian law as we know it [and] the commitments we have made, then obviously our committee will be looking at making recommendations to change that,” said the Liberal MP, a former minister during the Jean Chrétien years, said in an interview.
 
He said he also wants to look at how the rules differentiate between countries with good and bad human-rights records.
One recent arms-export controversy raises questions about how far the Canadian government’s reach extends.
 
The RCMP has been probing Canadian-owned Streit Group for more than three months over its sales of armoured vehicles to Libya despite a ban on military exports to that country – a review that now has been expanded to include shipments to Sudan. Streit’s owner Guerman Goutorov, a Canadian citizen, runs his business from the United Arab Emirates and exports from there, not Canada.
 
In April, The Globe and Mail reported how a UN panel had concluded Streit’s 2012 shipment of 131 armoured personnel carriers to Libya violated a Security Council embargo. Earlier this month, The Globe reported how Streit sold 30 vehicles to Sudan in 2012, despite a Canadian ban on military and paramilitary shipments.
 
Canada’s defence industry association said it wants to see violators held to account. “The [Canadian Association of Defence and Security Industries] takes the recent accusations of violations of UN sanctions seriously. Violating export-control laws and sanctions is unacceptable. The steps taken by the government are important in order to establish the facts and to hold to account any individual or company that breaks Canada’s export-control regulations,” association president Christyn Cianfarani said.
 
Cyndee Todgham Cherniak, a Toronto-based international trade lawyer, said Canada’s export-control legislation could use a significant overhaul. “I am curious whether implementation of the UN arms trade treaty is really going to lead to a complete rewrite of the Export and Import Permits Act.”
 
She said Ottawa could add clarity to the law. “In my view, a lot of the rules are very broadly and generically stated, where more precision would be very beneficial,” the lawyer said, adding it would be useful to have “something that is robust in terms of dos and dont’s.”
 
Ms. Todgham Cherniak said the world has changed a lot since export-control legislation was written and Ottawa should add in new measures to deal with “more current concepts and things it wants to control better.” These could include: circumvention of export laws; diversion of goods; as well as technological advances from drones to encryption, she said.

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NWS_a311. Reuters: “EU Leaders to Consider How to Improve Russia Ties without Dropping Sanctions”

(Source: Reuters)
 
European Union leaders will explore next month the possibility of improving strained ties with Russia in response to growing irritation among some member states over economic sanctions imposed on Moscow over its role in the Ukraine crisis.
 
But the sanctions appear likely to remain in place for now, especially those slapped over Crimea, the Black Sea peninsula seized by Russia in March 2014, despite the legal and political challenges of maintaining them.
 
A series of Reuters investigations recently showed how European companies including German retailer Metro and France’s Auchan were doing business in Crimea despite the punitive sanctions regime there.
 
EU leaders will review the state of relations with Russia at a summit on Oct. 20-21, with the hawks’ camp weakened by Britain’s decision to leave the bloc and by increased strains between Brussels and Poland’s nationalist-minded government.
 
Countries skeptical about extending sanctions include Italy, Greece, Cyprus, Slovakia and Hungary. They are keen to return to doing business with Russia, the EU’s main gas supplier, not least to help offset Europe’s sluggish economic growth.
 
  “It will be increasingly difficult to go on extending the sanctions. But this could be done if the key skeptics are convinced that there are other elements in the EU’s policy on Russia, not just sanctions,” said a senior EU official.
 
  “There will be those who want to lower the bar for Russia, give a signal that if only Moscow makes a little move, the EU would want to normalize the situation a bit. Then there will be those who want to raise the bar,” a second EU official said.
 
  “Eventually we’ll stay more or less where we are. The advantage of those who want easing is that you need unanimity to extend sanctions. But no one wants to be alone in blocking (an extension). It would be different if a few of them came out together.”
 
“MUTUAL INTERESTS”
 
The EU first imposed sanctions after Russia seized Crimea following a Western-backed uprising against a pro-Russian leader in Kiev. It then widened the sanctions over Moscow’s backing for rebels battling Kiev’s forces in eastern Ukraine in a conflict that has killed more than 9,500 people since April 2014.
 
The sanctions include travel bans and asset freezes on people and entities; curbs on energy, financial and defense dealings with Russia and limits on doing business in Crimea.
 
But in a sign of how difficult it is proving to implement the measures, a recent Reuters report showed that products for sale in the Crimean stores of Metro and Auchan were being shipped there from Russia via a ferry and port that are subject to the EU sanctions. Both retailers said they were not violating the sanctions because the stores are operated by their Russian subsidiaries, which are not subject to the EU sanctions.
 
Reuters also revealed in August that a Russian power-plant builder bought turbines from a joint venture of German engineering group Siemens and had them earmarked for Crimea.
 
The company since said it would sell them elsewhere and there was no suggestion that Siemens knew of or condoned the planned transfer of its turbines to Crimea.
 
Italy has urged a thorough EU debate on sanctions instead of allowing a technical extension every six months. The economic sanctions are next due to be extended in late January.
 
States less friendly towards Russia increasingly accept that some concessions may be needed to maintain unanimous backing for sanctions.
 
  “We do need to talk about our mutual interests with Russia but remain united on sanctions,” said one such diplomat.
 
Germany, the EU’s biggest economy, backs this approach. But with distrust between Brussels and Moscow running high, it will be tough to make progress even in areas where they have shared interests such as fighting terrorism or drug-trafficking.
 
Other ideas for improving ties include encouraging more international cooperation. But deep disagreements between Russia and the West over Syria highlight the difficulties here.
 
Further out, it seems all but impossible that the EU and Russia will be able to hammer out an accord over Crimea. Russia says it will never return the peninsula to Ukraine while the West refuses to accept its annexation.
 
Meanwhile, EU officials say they are aware of cases of European companies exploiting legal gray areas to continue doing business in Crimea but said this did not undermine the wider sanctions policy.
 
  “Throughout history we see surreptitious ways of busting sanctions,” said an EU official who deals with Russia. “But the key ones are the economic sanctions and the most important objective is keeping unity on that.”

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NWS_a412. ST&R Trade Report: “Dates and Deadlines: C-TPAT for Exports, Incoterms, Import/Export Filing, TSCA Certification”
(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 26: deadline for comments to FDA on information collection on processing and importing of fish and fishery products
  – Sep 26: deadline for comments to DOE on proposed energy conservation standards for portable air conditioners
  – Sep 26: deadline for comments to FTZ Board on production authority request for polysilicon facility
  – Sep 26: deadline for comments to ITA on proposed change in calculation of normal value in AD proceedings
  – Sep 28: deadline for comments to CBP on proposal to allow electronic filing of TSCA certifications
  – Sep 30: compliance date for DOT final rule implementing new registration system for motor carriers, forwarders and others
  – Sep 30: USTR meeting on Russia’s implementation of WTO obligations
  – Sep 30: deadline for comments to FTZ Board on expansion of subzone 124D, subzone for Mississippi footwear facility
  – Sep 30: deadline for requests for administrative reviews of AD/CV duty orders  
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NWS_a513. ST&R Trade Report: “U.S. Gets WTO Win on EU Aircraft Subsidies”
(Source: ST&R Trade Report)
 
A World Trade Organization panel has determined that the European Union did not remove aircraft subsidies previously found to be in violation of WTO rules and further violated those rules by granting additional subsidized financing. U.S. Trade Representative Mike Froman said the subsidies have resulted in lost U.S. exports worth tens of billions of dollars and called on the EU to end the subsidies “immediately.” However, EU officials said parts of the decision were “unsatisfactory,” suggesting an appeal may be forthcoming.
 
According to a USTR press release, in June 2011 the WTO found that the EU and four of its member states (France, Germany, Spain, and the United Kingdom) had conferred more than $18 billion in subsidized financing to Airbus and that European “launch aid” subsidies had been instrumental in permitting Airbus to launch every model of its large civil aircraft. The EU claimed to have removed the WTO inconsistencies in December 2011, but according to USTR the WTO has ruled that the EU did not come into compliance with respect to the subsidies previously found and further breached WTO rules by granting more than $4 billion in new subsidized financing for a new Airbus model. The EU noted that the WTO rejected new U.S. claims that repayable support for two Airbus models constitutes prohibited subsidies, which it called “an important win.”
 
The U.S.-EU dispute over government subsidies to competitors Airbus and Boeing has been underway for more than a decade and could last several years more. It is generally expected that in the next few months the WTO will issue a similar compliance ruling against the U.S. While the two sides have each sought WTO authorization to impose billions of dollars’ worth of retaliatory sanctions over the other’s noncompliance, most observers believe the dueling cases are more likely to eventually be resolved with a settlement instead.
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COMMCOMMENTARY

COMM_a114. T.B. McVey: “‘Reason To Know’ – A Chilling Term For Exporters”
(Source: Williams Mullen)
 
* Author: Thomas B. McVey, Esq., Williams Mullen, tmcvey@williamsmullen.com, 202-293-8118.
 
It’s a simple question – if a U.S. exporter sells its product to a foreign customer, and the customer resells the product to a prohibited country such as Iran, can the U.S. exporter have liability for an export violation? The U.S. District Court for the District of Columbia handed down an important decision regarding obligations of U.S. exporters in such situations. This is a sobering decision that every exporter should read.  
 
The case involves U.S. exporter Epsilon Electronics and its subsidiaries. According to the decision, Epsilon had sold its retail electronics products to a customer in the United Arab Emirates. The UAE customer, in turn, resold the products to customers in Iran. OFAC learned about the sales, initiated an investigation, and eventually levied a civil penalty against Epsilon for $4,073,000.
 
In its defense in the case, Epsilon argued that OFAC failed to provide any evidence that Epsilon had knowledge that the goods would be resold to Iran. However, under OFAC’s Guidance On Transshipments to Iran [FN/1] (“Guidance”), a U.S. company can have liability if it had direct knowledge or if it had “reason to know” that the products were intended to be resold to Iran. Thus, even if the U.S. company did not have actual knowledge of a potentially illegal transaction, if facts are present that the goods would be shipped to Iran this is sufficient to constitute a violation. OFAC’s Guidance provides as follows:
 
It is important to note that prohibited sales to Iran through a non-U.S. person in a third country are not limited to those situations where the seller has explicit knowledge that the goods were specifically intended for Iran, but includes those situations where the seller had reason to know that the goods were specifically intended for Iran, including when the third party deals exclusively or predominantly with Iran or the Government of Iran.
 
“Reason to know” that the seller’s goods are intended for Iran can be established through a variety of circumstantial evidence, such as: course of dealing, general knowledge of the industry or customer preferences, working relationships between the parties, or other criteria far too numerous to enumerate . . . .
 
A violation involving indirect sales to Iran may be based upon the actual knowledge of the U.S. supplier at the time of its sale, or upon determination that the U.S. supplier had reason to know at the time of sale that the goods were specifically intended for Iran. OFAC would consider all the relevant facts and circumstances in order to determine the actual or imputed knowledge on the part of the U.S. supplier. [FN/2]
 
Epsilon challenged OFAC’s decision in a suit in the US District Court [FN/3] and the court reviewed the “reason to know” standard in cross-motions for summary judgment. In its decision, the court confirmed that OFAC did not find any direct evidence that Epsilon’s shipments to the UAE customer were eventually sold to Iran. However, the court found that OFAC had identified significant information that was available to the public that showed that the UAE company conducted a substantial amount of its business in Iran. As part of this, OFAC had located an English language website for the UAE company that showed that the UAE company distributed products in Iran, had an address in Iran and engaged in other activities in Iran. The court concluded that based upon this information being available to the public, even if Epsilon did not have explicit knowledge of such information, this was sufficient to find that Epsilon had “reason to know” that the goods would be resold in Iran and upheld OFAC’s determination. [FN/4]
 
This is an important decision for U.S. exporters. First, it provides a rare glimpse into judicial review of the U.S. export control laws. [FN/5] More importantly, the case reinforces the validity of the “reason to know” standard under OFAC’s Iran regulations [FN/6] (and arguably under other export laws as well) and provides insight into its application. Under this standard, U.S. exporters appear to have an affirmative obligation to review the facts surrounding export transactions. If facts are present that point to the risk of an illegal transaction, if something later goes wrong in the transaction the U.S. company could have liability, even if it did not participate in or support the illegal activity and even if it did not have actual knowledge of the suspicious facts. Simply stated: bad facts equal big risks.
 
Thus companies should conduct careful due diligence reviews in their export transactions. Such reviews should include some or all of the following as is appropriate for your company and transaction: (i) having clearly written due diligence procedures for compliance personnel; (ii) identifying specific red flags that are appropriate for your company’s industry and risk analysis; (iii) training employees to spot red flags and bring these to the attention of compliance staff; (iv) developing heightened compliance steps in high risk countries (such as due diligence questionnaires for customers to complete); (v) cross-referencing reviews with data collected elsewhere in your company (such as credit reports obtained by your finance department); (vi) use of export compliance certifications in transaction documentation; (vii) maintaining records of due diligence reviews; (viii) conducting restricted party screening; and (ix) strong visible support from senior management.
 
As the old maxim goes: lie down with dogs, get up with fleas. Sometimes it is better to just walk away from a bad deal.
 
————
  [FN/1] This is available here.
  [FN/2] Guidance p. 2.
  [FN/3] Epsilon Electronics, Inc. v. United States Department of the Treasury, Office of Foreign Assets Control, et al., Civil Action No. 14-2220 (RBW), In the U.S. District Court For the District of Columbia.
  [FN/4] The court’s opinion is available here.
  [FN/5] There are many published decisions of U.S. agency enforcement actions for violations of the U.S. export laws, including the U.S. sanctions laws, Export Administration Regulations and International Traffic In Arms Regulations. However judicial review of such determinations is limited. This case provides a rare glimpse into how federal courts view enforcement of the U.S. sanctions laws under the Administrative Procedures Act.
  [FN/6] The Guidance was initially adopted by OFAC under the Iran Transaction Regulations.
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MSEX/IM MOVERS & SHAKERS

MS_a115
. Monday List of Ex/Im Job Openings: 119 Jobs Posted

(Source: Editor)  


 
Published every Monday or first business day of the week.  Send openings in the following format to
apbosch@fullcirclecompliance.eu
.
 
COMPANY; LOCATION; POSITION TITLE (WEBLINK); CONTACT INFO; REQ ID

*” New listing this week:

 

* 3M; Maplewood MN;
Trade Compliance Project Leader
; Requisition ID: 112850

* AAR Corp; Wood Dale IL;
Trade Compliance Manager
; Requisition ID: 5923

* Abbvie; Lake County IL;
Senior Analyst, Global Trade Compliance
; Requisition ID: 1605835

* Agilent; Singapore;
Global Trade Compliance Manager – South Asia Region
; Requisition ID: 2068249

* Amazon; Beijing, China; 
Trade Compliance Program Manager
; Requisition ID: 344454

* Amazon; London, UK;
Trade Compliance Program Manager (M/F)
; Requisition ID: 429019

* Amazon; Seattle WA;
Compliance Investigator
; Requisition ID: 432560
* Amazon; Seattle WA;
Compliance Investigator
; Requisition ID: 432561
* Amazon; Seattle WA;
Compliance Investigator
; Requisition ID: 432564
* Amazon; Seattle WA;
Sanctions Compliance Specialist
; Requisition ID: 431298

* Amazon; Seattle WA;
NA Compliance Analyst; Requisition ID: 256357

* Amazon; Seattle WA;
Prime Air Trade Compliance Program Manager; Requisition ID: 395658

* Aramco Services Company; Houston TX;
Trade Compliance Specialist
; Requisition ID: 295802

* Armstrong Flight Research Center; Edwards AFB CA; Export Control Specialist; Requisition ID: AF16D0026

* Baylor University; Waco TX;
Manager Export Compliance; Requisition ID: S030428

* Beckman Coulter; Nyon Switzerland;
Senior Trade Compliance Manager – L&D EMEAI
; Requisition ID: DIA009227


* Bourns Inc.; Riverside CA;
Director Worldwide Contracts
;
BournsHR.Riv@bourns.com


* Bunn-O-Matic Corporation; Springfield IL;
Global Logistics Analyst
;
employment.openings@bunn.com
; GO1678
* Bunn-O-Matic Corporation; Springfield IL;
Global Trade Compliance Analyst
;
employment.openings@bunn.com
; GO1687

* Cargill; Wayzata MN;
North America Customs Advisor

* CONMED Corporation; Utica NY;
Logistics & Trade Compliance Analyst
; Requisition ID: 3469

* Continental; Manila,
Philippines;
Head of Transportation and Foreign Trade Compliance
; Requisition ID: 42475BR

* Coriant; Naperville IL;
Sr Mgr of Global Trade Compliance
; Requisition ID: 11353

* DeLaval; Kansas City MO;
Trade Compliance Manager

* DoD/DSS; Parsippany NJ; Industrial Security Specialist; Requisition ID: DSS-16-1758834-B

* DoD/DSS; San Diego CA; Industrial Security Specialist; Requisition ID: DSS-16-1748385-MP

* DRS Technologies; Germantown MD;
Senior Trade Compliance Manager
;
Requisition ID: 54749
* DRS Technologies; Melbourne FL;
Senior Trade Compliance Specialist
; Requisition ID: 59327

*
DynCorp International LLC; Fort Worth TX;
BD Trade Compliance Manager
; Requisition ID: 1601114

* Esterline Technologies Corporation; Bellevue WA;
Senior Manager Trade Compliance – Segment Jurisdiction and Classification
; Requisition ID: 7187BR


* Esterline Technologies Corporation; Buena Park CA;
Trade Compliance Specialist 3
; Requisition ID: 6025BR

* Esterline Technologies Corporation; Buena Park CA;
Trade Compliance Team Lead
; Requisition ID: 7125BR

* Esterline Technologies Corporation; Brea CA;
Trade Compliance Manager; Requisition ID: 7333BR

* Esterline Technologies Corporation; Everett WA;
Trade Compliance Specialist III
; Requisition ID: 7805BR

* Esterline Technologies Corporation; Paso Robles CA;
Trade Compliance Manager
; Requisition ID: 6148BR

* Esterline Technologies Corporation; Valencia CA;
Trade Compliance Manager
; Requisition ID: 6648BR

* Expeditors; Bangkok, Thailand; Regional Trade Compliance Manager – Indochina & Philippines
* Export Solutions Inc.; Melbourne FL; 

Trade Compliance Specialist II

info@exportsolutionsinc.com

* Henderson Group Unlimited Inc.; Wash DC;
Commodities Jurisdiction Analyst
;
alannasmith@hendersongroupinc.net


* Henkel; Amsterdam, the Netherlands;
Global Trade Compliance Manager (m/f)
; Requisition ID:
160004JX

* Honeywell; Jakarta, Indonesia;
Import / Export Specialist
; Requisition ID: 00326267

* Huntington Ingalls Industries – Newport News Shipbuilding; Newport News, VA;
Import Export Administrator 2; Requisition ID: 14418BR

* IBM; Dallas TX;
Global Trade Compliance Senior Analyst
; Requisition ID: 55904BR

* IBM; Tulsa OK;
Global Trade Compliance Manager
; Requisition ID: 61779BR

* ICAT Logistics; Elkridge MD;
Domestic Operations Agent 

* ICAT Logistics; Elkridge MD;
International Operations Agent 


* L-3 Communications; Greenville TX;
International Trade Compliance Admin 2
; Requisition ID: 083430

* L-3 Communications, Platform Integration Division; Waco TX;
Export/Import Compliance Administrator A3
; Requisition ID: 083171

* Lam Research Corporation; Fremont CA:
Foreign Trade Analyst 6
; Requisition ID: 12079BR

* Lumber Liquidators; Toano VA;
Compliance Auditor
; Requisition ID: 913

* Lumber Liquidators; Toano VA;
Supply Chain Compliance Specialist
; Requisition ID: 1578

* Lutron; Coopersburg PA; Trade Compliance Coordinator; Requisition ID: 2834

* Lutron; Coopersburg PA;
Trade Manager
; Requisition ID: 2926

* MACOM; Lowell MA;
Trade Compliance Analyst
;
David.Cassin@MACOM.com
; Requisition ID: 1522

* MACOM; Lowell MA;
Trade Compliance Analyst 1
; Requisition ID: 1529

* Mars; Chicago IL;
Trade Compliance Analyst
; Requisition ID: 60654

* Mars; Chicago IL;
Trade Compliance Specialist
; Requisition ID: 69456

* Meggitt (Erlanger), LLC; Erlanger KY;
Trade Compliance Manager
; Requisition ID: 22005

* Meggitt Advanced Composites Limited; Shepshed, UK;
Trade Compliance Officer
; Requisition ID: 22122

* Meggitt PLC, Los Angeles;
Trade Compliance Administrator II
; Requisition ID: 22591

* Mentor Graphics; Fremont CA;
Senior Global Trade Compliance Manager
; Requisition ID: 5129

* Microsoft; Redmond WA;
Trade Director, Regulatory Compliance & Standards
;
rybeli@microsoft.com
; Requisition ID: 973167

* Michael Baker International; Reston VA;
Export Compliance Officer
;
IRC52307

* Monsanto; St Louis MO;
North America Global Trade Specialist
; Requisition ID: 01CGT

* Moog; East Aurora NY;
Export Compliance Manager;
anihill@moog.com; Requisition ID: 161913

* Northrop Grumman T
echnology Services Sector, Advanced Defense Services (ADS) Division
; International Posting (Saudi Arabia);
Manager International Trade Compliance 1
(Saudi Arabia)
; Requisition ID: 16003577

* Northrop Grumman Corporation; Falls Church VA;
Corporate Counsel – Export/Import
; Requisition ID: 16011617
* Northrop Grumman Corporation; Sierra Vista AZ and Herndon VA;

International Trade Compliance Analyst 4
; Requisition ID: 16008077 

* Northrop Grumman Corporation; Falls Church VA;
International Trade Compliance Analyst 3/4
; Requisition ID: 16016665

* Northrop Grumman Corporation; International Posting (Europe);
Global Trade Management Europe 1
; Requisition ID: 16016526
* Northrop Grumman Corporation; Herndon VA;
Manager International Trade Compliance 2
; Requisition ID:
16003572
* Northrop Grumman Corporation; Linthicum MD;
International Trade Compliance Analyst 3
; Requisition ID: 16013233
* Northrop Grumman Corporation; San Diego CA;
Manager International Trade Compliance 2
; Requisition ID: 16017984


* PerkinElmer; Waltham MA;
Manager Trade & Customs

* Qorvo; Richardson TX;
Import/Export Analyst
; Requisition ID:
0004791
* Raytheon; Arlington VA;
Export Licensing SME/Empowered Official
; Requisition ID: 85810BR

* Raytheon; Arlington VA/Wash DC;
Export Licensing Manager
; Requisition ID: 83780BR


* Raytheon; El Segundo CA;
Manager I Export-Import Control
; Requisition ID: 85354BR

* Raytheon; Fullerton CA;
Global Trade Compliance Manager
; Requisition ID: 85521BR

* Raytheon; Indianapolis IN;
Director Export-Import Control
; Requisition ID: 86373BR
* Raytheon; Indianapolis IN;
Principal SC Compliance Specialist
; Requisition ID: 84932BR

* Raytheon; Rosslyn VA;
Director of Licensing; Requisition ID: 83836BR


* Raytheon; Waltham MA;
Sr Principal SC Compliance Specialist
; Requisition ID: 86169BR
* Sekisui; San Diego CA;
International Trade Compliance Associate
; Requisition ID: 1196

*
Sierra Nevada Corporation; Denver CO;
Trade Compliance Licensing Manager
; Requisition ID:
R0001568


* Tecomet; Lansing MI;
Export Control Coordinator – EAR/ITAR
; Requisition ID: 1539

* TE Connectivity; Middletown PA;
Senior Director Global Trade Services
; Requisition ID: 2016-73314

* Teva Pharmaceuticals USA, Inc.; North Wales PA;
Export Compliance Specialist; Requisition ID: 16-17768

* Textron Systems; Hunt Valley MD;
Principal Export Compliance Analyst
; Requisition ID: 242851

* Textron Systems; Wilmington MA;
Principal Export Compliance Analyst
; Requisition ID: 242857


* ThermoFisher Scientific; Fremont CA;
Senior Global Trade Compliance Analyst
; Requisition ID: 38513BR

* Troy Corporation; Florham Park NJ;
Global Trade and Compliance Manager
; Requisition ID: 306


* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
Self-Assessment Senior Specialist
; Requisition ID: 13727BR 
* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
Sr. Manager, ITC Contracts & Central Functions
; Requisition ID: 31767BR

* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
Manager, ITC-Authorizations
; Requisition ID: 22846BR  
* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
Specialist, ITC IT Systems
; Requisition ID: 33792BR

* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
Program Manager, Customs
; Requisition ID: 31331BR
* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
International Trade Compliance Auditor
; Requisition ID: 34285BR

* United Technologies Corporation, UTC Aerospace Systems; Danbury CT;
ITC Site Lead
; Requisition ID: 30565BR

* United Technologies Corporation, UTC Aerospace Systems; Danbury CT; 
Sr Analyst, International Trade Compliance
; Requisition ID: 28174BR


* United Technologies Corporation, UTC Aerospace Systems; Phoenix AZ; Sr Analyst, International Trade Compliance; Requisition ID: 30058BR 
* United Technologies Corporation, UTC Aerospace Systems; Pueblo CO; 
Sr Analyst, Intl Trade Compliance
; Requisition ID: 27643BR


* United Technologies Corporation, UTC Aerospace Systems; Westford MA;
Segment Lead, International Trade Compliance
;
Requisition ID: 30451BR

* Vista Outdoor; Overland Park KS;
Import Specialist, International Trade Operations
; Requisition ID: R0000433

* VWR International, LLC; Radnor PA;
Senior Specialist – Import Compliance
; Requisition ID: 11513


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

ENEDITOR’S NOTES

 
Notable birthdays:

* F. Scott Fitzgerald (Francis Scott Key Fitzgerald, 24 Sep 1896 – 21 Dec 1940, was an American novelist and short story writer, widely regarded as one of the greatest American writers of the 20th century. He finished four novels: This Side of Paradise, The Beautiful and Damned, The Great Gatsby (his best known), and Tender Is the Night.)

  – “Vitality shows in not only the ability to persist but the ability to start over.”
 
* T.S. Eliot (Thomas Stearns Eliot, 26 Sep 1888 – 4 Jan 1965, was an American-born naturalized British essayist, publisher, playwright, literary and social critic, and one of the twentieth century’s major poets. Eliot attracted widespread attention for his poem, The Love Song of J. Alfred Prufrock, which is seen as a masterpiece of the Modernist movement. It was followed by some of the best-known poems in the English language, including The Waste Land, The Hollow Men, Ash Wednesday, and Four Quartets.
  – “Only those who will risk going too far can possibly find out how far one can go.”
 
Monday is pun day:

A termite walks into the bar and says, “Is the bar tender here?”
  — Harry Stangel, Palo Alto, CA

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

EN_a217
. 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: 20 Sep 2016: 81 FR 64693-64698: Revisions to the Entity List; and 81 FR 64655-64692: Wassenaar Arrangement 2015 Plenary Agreements Implementation, Removal of Foreign National Review Requirements, and Information Security Updates 

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 18 May 2016: 81 FR 31169-31171: Burmese Sanctions Regulations   
 
*
FOREIGN TRADE REGULATIONS (FTR)
: 15 CFR Part 30
  – Last Amendment: 15 May 2015; 80 FR 27853-27854: Foreign Trade Regulations (FTR): Reinstatement of Exemptions Related to Temporary Exports, Carnets, and Shipments Under a Temporary Import Bond 
  – HTS codes that are not valid for AES are available
here.
  – The latest edition (9 Mar 2016) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and footnotes containing case annotations, practice tips, and Census/AES guidance.  Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR.
 
*
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jul 2016: 19 USC 1202 Annex.  (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment: 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 (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: 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 of this newsletter cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.

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

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

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