16-1019 Wednesday “The Daily Bugle”

16-1019 Wednesday “Daily Bugle”

Wednesday, 19 October 2016

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. Commerce/BIS Seeks Comments on Procedure for Parties on the Entity List To Request Removal or Modification of Their Listing 
  2. State: Defense Trade Advisory Group to Meet on 15 Nov in Wash DC 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. Commerce/Census: “ACE AESDirect Scheduled Outage, 22-23 Oct” 
  4. State/DDTC: (No new postings.) 
  1. Defense News: “UK Regulatory Office May Investigate US Foreign Military Sales” 
  2. Expeditors News: “eManifest Requirement Becomes Mandatory for Freight Forwarders” 
  1. D.M. Edelman: “New Changes to Sanctions on Cuba Provide New Array of Business Opportunities in Cuba-What You Should Know” 
  2. K.C. Little, D.R. Johnson & D.J. Gerkin: “Presidential Policy Directive and Associated Regulatory Amendments Nudge U.S.-Cuba Normalization Further Forward” 
  3. J.T. Mackintosh & C.M. Collier: “U.S. Supports U.N. Lifting of Sanctions, Delists and Lifts Sanctions on Nine Iranian Banks-Impact on European-Iranian Commerce” 
  4. Gary Stanley’s ECR Tip of the Day 
  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 (17 Oct 2016), FACR/OFAC (17 Oct 2016), FTR (15 May 2015), HTSUS (30 Aug 2016), ITAR (12 Oct 2016) 


EXIM_a11. Commerce/BIS Seeks Comments on Procedure for Parties on the Entity List To Request Removal or Modification of Their Listing

81 FR 72038: Renewal of Agency Information Collection for: Procedure for Parties on the Entity List To Request Removal or Modification of Their Listing
* AGENCY: Bureau of Industry and Security, Department of Commerce.
* ACTION: Notice of request for comments. …
* DATES: Written comments must be submitted on or before December 19, 2016.
* ADDRESSES: Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at JJessup@doc.gov).
* FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the information collection instrument and instructions should be directed to Mark Crace, BIS ICB Liaison, (202) 482-8093, Mark.Crace@bis.doc.gov.
   This collection is needed to provide a procedure for persons or organizations listed on the Entity List to request removal or modification of the entry that affects them. The Entity List appears at 15 CFR part 744, Supp. No. 1. The Entity List is used to inform the public of certain parties whose presence in a transaction that is subject to the Export Administration Regulations (15 CFR parts 730-799) requires a license from the Bureau of Industry and Security (BIS). Such requests would be reviewed by the Departments of Commerce, State, and Defense, and Energy and Treasury as appropriate. The interagency decision, as communicated to the requesting entity by BIS, would be the final agency action on such a request. This is a voluntary collection.
  – OMB Control Number: 0694-0134.
  – Title: Procedure for Parties on the Entity List to Request Removal
or Modification of Their Listing.
  – Brief Description of Collection: This collection provides a procedure for persons or organizations listed on the Entity List to request removal or modification of the entry that affects them.
Sheleen Dumas, PRA Departmental Lead, Office of the Chief Information Officer.
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EXIM_a22. State: Defense Trade Advisory Group to Meet on 15 Nov in Wash DC

(Source: Federal Register) [Excerpts.]
81 FR 72142: Defense Trade Advisory Group; Notice of Open Meeting
SUMMARY: The Defense Trade Advisory Group (DTAG) will meet in open session from 1:00 p.m. until 5:00 p.m. on Tuesday, November 15, 2016 at 1777 F Street NW., Washington, DC 20006. Entry and registration will begin at 12:30 p.m. The membership of this advisory committee consists of private sector defense trade representatives, appointed by the Assistant Secretary of State for Political-Military Affairs, who advise the Department on policies, regulations, and technical issues affecting defense trade. The purpose of the meeting will be to discuss current defense trade issues and topics for further study.
* FOR FURTHER INFORMATION CONTACT: Ms. Glennis Gross-Peyton, PM/DDTC, SA-1, 12th Floor, Directorate of Defense Trade Controls, Bureau of Political-Military Affairs, U.S. Department of State, Washington, DC 20522-0112; telephone (202) 663-2862; FAX (202) 261-8199; or email DTAG@state.gov.

As seating is limited to 125 persons, those wishing to attend the meeting must notify the DTAG Alternate Designated Federal Officer (DFO) by COB Friday, November 4, 2016. Members of the public requesting reasonable accommodation must also notify the DTAG Alternate DFO by that date. If notified after this date, the Department will be unable to accommodate requests due to requirements at the meeting location. Each non-member observer or DTAG member that wishes to attend this plenary session should provide: His/her name and identifying data such as driver’s license number, U.S. Government ID, or U.S. Military ID, to the DTAG Alternate DFO, Lisa Aguirre, via email at DTAG@state.gov. One of the following forms of valid photo identification will be required for admission to the meeting: U.S. driver’s license, passport, U.S. Government ID or other valid photo ID.

* SUPPLEMENTARY INFORMATION: The following agenda topics will be discussed:
  (1) Review past DTAG reports on issues previously examined and identify those issues/reports that remain relevant, warrant further DTAG review/update, and should be considered by DDTC for implementation;
  (2) Identify and recommend to DDTC new issues for DTAG to review;
  (3) Organize all (past and new) issues into a list of priorities for DTAG action and DDTC consideration. …
   Dated: October 5, 2016.
Lisa V. Aguirre, Alternate Designated Federal Officer, Defense Trade Advisory Group, Department of State.
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OGS_a13. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

* Commerce; Industry and Security Bureau; NOTICES; Meetings [Publication Date: 20 October 2016.]:
  – Materials Technical Advisory Committee
  – Transportation and Related Equipment Technical Advisory Committee

* State; NOTICES; Designations as Foreign Terrorist Organizations [Publication Date: 20 October 2016.]:
  – Army of Islam, and Other Aliases
  – Communist Party of Phillipines/New People’s Army, et al.
  – Indian Mujahedeen, etc.
  – Tehrik-e Taliban Pakistan, etc.  

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This message is intended for ACE AESDirect filers ONLY. If you are not an ACE AESDirect filer, you are not affected by this outage.
The outage is effective 10:00pm EST Saturday, October 22 – 4:00am EST Sunday, October 23.
ACE AESDirect filers may submit shipments under the AES Downtime Policy. State Department licensable shipments cannot be exported under the AES Downtime Policy and must be held until the connection is restored and an Internal Transaction Number (ITN) is received. Once connection is brought back on-line after the outage, all shipments that were exported under the AES Downtime Policy must be filed along with any new AES transactions.
If you use the AES Downtime Policy for export, please contact the port from which you will be exporting. In lieu of the AES Proof of Filing citation, please use the AES Downtime citation, which consists of the phrase AESDOWN, your individual company’s Filer ID, followed by the date.  
For example: AESDOWN 123456789 10/22/2016

Please see the CBP web site for further information on the AES Downtime Policy.
For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.
  – Telephone: (800) 549-0595, select option 1 for AES.
  – Email:

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OGS_a46. State/DDTC: (No new postings.)

(Source: State/DDTC)

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NWS_a17. Defense News: “UK Regulatory Office May Investigate US Foreign Military Sales”

(Source: Defense News)
The organization responsible for policing single-source defense contracts in Britain is to look at whether US foreign military sales (FMS) and other government-to-government (G2G) deals should be scrutinized to ensure taxpayers’ money is being spent effectively, a top Ministry of Defence (MoD) official has told Parliament .
Britain introduced legislation in 2014 to set up a Single Source Regulations Office (SSRO) tasked with securing better value for money from defense contracts awarded without a competition. But the MoD ruled against including FMS and other G2G deals.
Now the SSRO is set to raise the issue again as part of a wider review now underway on the effectiveness of the current Defence Reform Act legislation.
  “The SSRO will make recommendations to the secretary of state for defense in June 2017 on changes to the legislation. They have indicated that they will review this exclusion [of G2G deals],” recently appointed Defence Procurement Minister Harriett Baldwin said in response to a question in Parliament.
A decision by the defense secretary, currently Michael Fallon, on any changes to the regulations is expected by December 2017, Baldwin said.
The MoD has a statutory obligation to review the regulations within three years of their introduction, but while the SSRO can make recommendations, it’s MoD ministers that have the final say whether the proposed changes are implemented.
Aside from adjudicating on allowable contract costs, the SSRO is also responsible for recommending the annual base profit level that industry can earn for single-source contracts.
Single-source contracts are big business in Britain. Last year alone the MoD spent £8.8 billion (US $10.8 billion) on noncompetitive contracts like the F-35 combat jet – more than half of the entire annual equipment and support budget.
While British and foreign companies can be referred to the SSRO by the MoD for scrutiny of their contracts for things like non-allowable costs, any deals done on a G2G basis, predominantly FMS arrangements with the US government, currently escape investigation.  
Concerns over the lack of transparency on British FMS deals have primarily revolved around the more than $5 billion worth of contracts announced at the Farnborough air show in July for the purchase of Boeing Apache attack helicopters and P-8 maritime patrol aircraft.
Other FMS deals could be in the pipeline. Earlier this year, Defense News reported the British were in discussion with the United States over the possible purchase of Oshkosh-built Joint Light Tactical Vehicles.
The SSRO declined to comment on their move to bring G2G deals into the regulations.
But in the summary of a document published in September, titled “Perspectives on non-competitive defense spending,” the organization argued that FMS generates transparency and justification issues that need scrutiny.

“Foreign military sales (for example, Poseidon P-8A and Apache helicopters) are decisions to award single source contracts which do not fall under the regulations and therefore do not benefit from the transparency brought by the regime. It is vital that there is transparency in all these cases and the reasons are fully justified,” according to the SSRO.

Failure to open up G2G contracts can be counterproductive, according to Jon Louth, the director of defense, industry and society at the Royal United Services Institute think tank in London.
  “The lack of transparency drives uncertainty and cynicism. Some of these deals are really good for the operator and can be good for the taxpayer as well. Having a light shine on these kind of contracts would not necessarily be a bad thing,” Louth said.
Elements of an FMS contract may not get a nod of approval were they subject to the rules and regulations applied to a straight commercial deal with a company, Louth reckons. But, he said, there is another reason these deals need an independent review.
  “Why are we having these deals unless we can point to them being specific and exceptional? Something like P-8 is a good example. It’s difficult to see why it trumps other potential solutions other than the operators really wanted it, there’s nothing wrong in that, but let’s at least put it to some kind of scrutiny if we are going to have uncontested solutions” the analyst said.
In theory, at least the SSRO is meant to be independent of government, but questions are still raised over its relationship with the MoD. Louth said the legislation review will help bring the issue into view.
  “There is a significant debate going on in and around Whitehall and Parliament as to the role of the organization. SSRO itself is very bullish and articulating the view that it wants to be an independent regulator and thinks there is an important role for it to play in that regard,” he said.
  “Other people have been pointing to a position within MoD which appears to drive it away from that independence. The fact that it has to take almost everything back to the defense secretary for approval makes for a really interesting agenda being played through the review at the moment. G2G and FMS is part of that debate,” he added.
In an article on the “Perspectives on non-competitive defense spending” document, Louth questioned whether an independent regulator and adjudicator should be “subject to Ministerial whimsy.”

  “Credibility is key as the SSRO develops and the debate on where it sits within government should continue,” he said.

Though not everyone agrees independence is an issue.
An article in the March edition of an in-house publication of ADS, the main aerospace and defense lobby group here, said industry reservations about the independence of the SSRO had “not materialized.”

Earlier, the SSRO criticized industry and the MoD for failing to meet the new regulations and said it had identified up to £61 million in non-allowable costs claimed by contractors working under single-source contracts. These included costs for charitable donations, Christmas parties and staff welfare.

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NWS_a28. Expeditors News: “eManifest Requirement Becomes Mandatory for Freight Forwarders”

(Source: Expeditors News)
The Canada Border Services Agency (CBSA) recently published Customs Notice 16-17 to provide updated information on the eManifest implementation timeline.
The eManifest is an initiative by CBSA aimed to enhance cross-border commercial processes and represents the third phase of the Advance Commercial Information (ACI) program. Once fully implemented, the eManifest will require carriers, freight forwarders, and importers in all modes of transportation to electronically transmit cargo, conveyance, house bill, and importer data to the CBSA prior to arrival.
The following timeline will apply to all Freight Forwarders:
  – November 7, 2016 – January 10, 2017: a grace period will be offered to freight forwards during which penalties for non-compliance will not be issued by CBSA.
  – January 11, 2017 – July 11, 2017: if deemed non-compliant with eManifest requirements zero-rated penalties (non-monetary) could be issued under the CBSA’s Administrative Monetary Penalty System (AMPS).
  – July 12, 2017: monetary AMPS penalties may be issued for deemed non-compliant freight forwarders.
The regulatory amendments can be accessed online here.
The Customs Notice can be accessed here.

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COMM_a19. D.M. Edelman: “New Changes to Sanctions on Cuba Provide New Array of Business Opportunities in Cuba-What You Should Know”
* Author: Doreen M. Edelman, Esq., Baker Donelson LLP, 202-508-3460, dedelman@bakerdonelson.com
Sanctions against Cuba continue to lift. Effective this week, the Department of Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s Bureau of Industry and Security (BIS) have relaxed controls in several areas of trade and commerce with Cuba, including loosening restrictions on exporting to and importing from Cuba, carving out new allowances for U.S. persons entering into contingent contracts with Cubans, and opening new opportunities for American entrepreneurs in the civil aviation, construction, and health sectors. Among the changes is also a provision that will allow Americans to travel to Cuba to attend professional meetings and conferences related to tourism.
Some of the most important changes for U.S. business include:
  – An OFAC general license authorizing U.S. persons to negotiate and enter into certain contingent contracts for transactions currently prohibited by the Regulations. Performance of the contracts, which includes any exchange of money, remains prohibited without prior authorization from the U.S. government. Businesspersons may travel to Cuba to negotiate such contacts by using the general license authorizing travel for professional meetings.
  – While previous changes to the sanctions authorized travel to Cuba in order to attend professional meetings and conferences in Cuba, those changes excepted meetings and conferences related to tourism in Cuba. That exception has now been removed, allowing Americans not only to attend but also to organize tourism-related meetings and conferences in Cuba.
  – Americans may now service and repair items that were previously exported or reexported to Cuba. If replacement parts are required, a separate authorization is still required.
  – OFAC is adding a new general license to allow U.S. persons to provide Cuba and Cuban nationals, wherever located, services aimed to ensure safety in civil aviation and safe operation of commercial aircraft.
  – S. persons may now provide services related to developing, repairing, maintaining, or enhancing certain Cuban infrastructure projects that benefit the Cuban people, including public transportation, water and waste management, non-nuclear electricity generation, and electricity distribution projects. Authorized projects also include the construction of hospitals, public housing, and schools. Services rendered in performance of these projects must still comply with licensing policies of BIS.
  – Commercial joint medical research is now authorized under an amended OFAC general license.
  – BIS has extended a license exception to generally authorize aircraft carrying cargo to temporarily land and unload in Cuba, extending to aircraft allowances that previously applied to vessels on temporary sojourn to Cuba.
Less important to business but getting the most news attention, recent changes also remove monetary limits on the amount of Cuban cigars and alcohol that tourists may carry in their luggage to the United States provided that these items are for personal use.
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COMM_a210. K.C. Little, D.R. Johnson & D.J. Gerkin: “Presidential Policy Directive and Associated Regulatory Amendments Nudge U.S.-Cuba Normalization Further Forward”
* Authors: Kathleen C. Little, Esq., klittle@velaw.com, 202-639-6663; David R. Johnson, Esq., drjohnson@velaw.com, 202-639-6706; and Daniel J. Gerkin, Esq., dgerkin@velaw.com, 202-639-6654. All of Vinson & Elkins LLP.
In keeping with the major shift in U.S. policy toward Cuba announced in December 2014, on October 14, 2016, President Barack Obama approved a policy directive advancing the Administration’s ongoing efforts to normalize diplomatic and trade relations between the United States and Cuba. The Presidential Policy Directive and associated Statement by the President may be found here and here, respectively. The Obama Administration’s objectives include engaging in government-to-government interaction with Cuba; fostering people-to-people engagement and connectivity; expanding opportunities for U.S. businesses to engage in commerce with Cuba; supporting economic reform in Cuba; seeking greater respect for universal human rights, fundamental freedoms, and democratic values by the Cuban government; and encouraging Cuba’s integration into international and regional systems and organizations.
Nonetheless, the Presidential Policy Directive makes clear that the longstanding U.S. embargo on Cuba remains in effect absent Congressional action. Accordingly, while several aspects of the relationship between the U.S. and Cuba have been liberalized since 2014, the core embargo and the broader restrictions on trade with, travel to, and investment in Cuba are unchanged. Furthermore, the Presidential Policy Directive acknowledges that continued economic reform in Cuba is required to ensure that the efforts undertaken to date to ease the embargo, as well as any subsequent lifting of the embargo, will maximally benefit the Cuban people.
Consistent with the Presidential Policy Directive, on October 17, 2016, the Department of Commerce, Bureau of Industry and Security (BIS) and the Department of the Treasury, Office of Foreign Assets Control (OFAC) published amendments to the Export Administration Regulations and Cuban Assets Control Regulations, respectively, in support of normalization efforts and announced the amendments in a joint press release. Notable measures include the following:
  – Exports and reexports of certain items sold directly to eligible individuals in Cuba for personal use are now eligible for BIS License Exception Support for the Cuban People (License Exception SCP), facilitating direct sales by online retailers and others directly to end users in Cuba for their or their family’s personal use. Such items, however, must be classified as EAR99 or controlled on the Commerce Control List only for anti-terrorism reasons. As a practical matter, however, it remains unclear what the impact of this general authorization might be, as ordinary Cubans may not yet be able to afford many U.S. consumer goods.
  – Air cargo transiting Cuba on a temporary sojourn is now eligible for BIS License Exception Aircraft, Vessels and Spacecraft, in line with an existing general authorization for cargo transiting Cuba aboard vessels. To qualify for the exception, the cargo must depart with the aircraft or vessel at the end of the temporary sojourn to Cuba and cannot have been removed from the aircraft or vessel for use in Cuba or transferred to another aircraft or vessel while in Cuba.
  – BIS revised the list of Cuban government and Cuban Communist Party officials ineligible for three license exceptions, including License Exception SCP, limiting ineligible recipients to members of the Council of Ministers, flag officers of the Revolutionary Armed Forces, and members of the Politburo. This corresponds to OFAC’s revision of the definitions of “prohibited officials of the Government of Cuba” and “prohibited members of the Cuban Communist Party.”
  – OFAC’s general license authorizing transactions (such as insurance and transportation) that are ordinarily incident to BIS-authorized exports or reexports no longer refers to “100% U.S. origin items.” This change minimizes the need to obtain separate authorization from OFAC when BIS has approved an export or reexport. However, this general license does not authorize any transaction between a U.S.-owned or -controlled entity in a third country and Cuba for the exportation of commodities produced in a country other than the United States or Cuba, which means that such entities cannot export to Cuba items manufactured in a third country that are subject to the EAR by virtue of their incorporation of a greater than
de minimis
percentage of controlled U.S.-origin content.
  – OFAC clarified that only agricultural commodities, and not other agricultural items, such as pesticides or tractors, are subject to payment-related restrictions.
  – OFAC waived the requirement that non-U.S. vessels wait 180 days before calling at a U.S. port after having called at a Cuban port, so long as the cargo would, if subject to the EAR, be classified as EAR99 or be otherwise subject only to anti-terrorism controls.
  – OFAC removed monetary value limitations on imports from Cuba into the U.S. for personal use by authorized travelers as accompanied baggage, including on alcohol and tobacco products, and removed the exclusion for alcohol and tobacco products from the general authorization permitting foreign passengers to import Cuban-origin goods as accompanied baggage. OFAC considers “personal use” to include the giving of the imported item as a personal gift, but not the transfer of the item to another person for payment or other consideration.
  – OFAC issued new authorizations relating to: joint medical research projects with Cuban nationals; transactions incident to obtaining U.S. Food and Drug Administration approval of Cuban-origin pharmaceuticals; the importation of Cuban-origin pharmaceuticals into the United States; the provision of services to Cuba or Cuban nationals relating to certain Cuban infrastructure projects; the entry into certain contingent contracts; the provision of civil aviation safety-related services to Cuba or Cuban nationals; and the importation into the U.S. or a third country of items previously exported or reexported to Cuba pursuant to a BIS or OFAC authorization (however, the exportation or reexportation of serviced, repair, or replacement items must be separately authorized).
OFAC also updated its guidance on travel between the U.S. and Cuba, and both BIS and OFAC updated their comprehensive Frequently Asked Questions publications relating to Cuba (here and here, respectively).
Yesterday’s regulatory amendments build upon actions by BIS and OFAC over the past 21 months that, among other measures, facilitate certain travel to Cuba by U.S. citizens; encourage the ongoing development of Cuba’s telecommunications infrastructure; authorize certain exports in support of the Cuban people under a BIS general license; implement a general policy of approval for exports and reexports involving certain telecommunications items, agricultural items, and medicines and medical devices; permit certain persons and institutions subject to U.S. jurisdiction to establish a physical presence in Cuba; and increase access to U.S. financial institutions and the U.S. dollar by Cuban persons. Prior to these most recent changes, BIS and OFAC last amended their respective regulations in March 2016.
Yesterday’s measures give U.S. businesses new opportunities to gain access to the Cuban economy, although, as noted above, trade between the two nations is still severely restricted. Friday’s Presidential Policy Directive made clear that the U.S. will not pursue regime change in Cuba, and, by statute, the U.S. embargo on Cuba cannot be lifted until the President determines that a transition or democratic government-expressly not including Raúl Castro-is in power in Cuba. Even though authorized activities are gradually accumulating, individuals and entities subject to U.S. jurisdiction remain generally prohibited from doing business or investing in Cuba absent OFAC authorization. It remains the case that any business or individual seeking to engage in activities in Cuba will need to closely examine the evolving BIS and OFAC regulations before proceeding. Those engaging in activities in Cuba will also need to screen any potential customers and other counterparties to ensure that the transaction does not involve any “prohibited officials of the Government of Cuba” or “prohibited members of the Cuban Communist Party.”
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COMM_a311. J.T. Mackintosh & C.M. Collier: “U.S. Supports U.N. Lifting of Sanctions, Delists and Lifts Sanctions on Nine Iranian Banks-Impact on European-Iranian Commerce”
(Source: Holland & Hart LLP)

* Authors: J. Triplett Mackintosh, Esq., tmackintosh@hollandhart.com, 202-654-6930; and Clarissa M. Collier, Esq., cmcollier@hollandhart.com, 303-295-8057. Both of Holland & Hart LLP.
On January 17, 2016, as part of the Iranian Joint Comprehensive Plan of Action (“JCPOA”), the Obama administration agreed to support the lifting of United Nations sanctions on two Iranian state banks-Bank Sepah and Sepah International. Bank Sepah is Iran’s oldest and third largest bank in terms of assets. Sepah International is Bank Sepah’s London-based affiliate and was pivotal to Iran’s pre-sanctions international trade.
The United States also removed the weapons proliferation-related sanctions from the following Iranian banks:
  – Bank Melli (a.k.a. Bank Melli Iran a.k.a. National Bank of Iran),
  – Export Development Bank of Iran (a.k.a. Bank Toseh Saderat Iran a.k.a. Bank Towseeh Saderat Iran aka Bank Towseh Saderat Iran a.k.a. EDBI),
  – Bank Refah (a.k.a. Bank Refah Kargaran a.k.a Workers’ Welfare Bank (of Iran)),
  – Europaisch-Iranische Handelsbank AG (f.k.a. Deutsch-Iranische Handelsbank AG a.k.a. Europaeisch-Iranische Handelsbank a.k.a. Europaesch-Iranische Handelsbank Aktiengesellschaft a.k.a. German-Iranian Trade Bank),
  – Bank of Industry and Mine (of Iran) (a.k.a. Bank Sanad Va Madan a.k.a. “BIM”),
  – Bank Tejarat, and
  – Bank Mellat
As a third step, the United States clarified through the Office of Foreign Asset Controls (OFAC) how non-U.S. financial institutions could support Iranian commerce denominated in U.S. dollars, in certain conditions.
U.S. support of the U.N.’s lifting of sanctions, delisting of these banks, and clarifying how transactions can be done in U.S. dollars address compliance concerns presented by an apparent conflict between the lawfulness of commerce with Iran (when conducted by non-U.S. companies) and continued banking restrictions on U.S. banks whose participation would be required to clear and/or settle U.S.-denominated transactions. European and other non-U.S. companies seeking to enter the Iranian market lawfully found that regulatory ambiguities and/or perceived risks of compliance violations resulted in many international banks refusing to support U.S. dollar-denominated transactions involving Iranian commerce – absent specific licensure from OFAC.
The clarification as to U.S. dollar transactions occurred on October 7, 2016, when OFAC clarified its responses to “Frequently Asked Questions” relating to the JCPOA. OFAC states that “[f]oreign financial institutions, including foreign-incorporated subsidiaries of U.S. financial institutions, may process transactions denominated in U.S. dollars or maintain U.S. dollar-denominated accounts that involve Iran or persons ordinarily resident in Iran … provided that such transactions or account activities do not involve, directly or indirectly, the United States financial system or any United States person, and do not involve any person on the [Specially Designated Nationals] List …”.
Compliance challenges remain, however. The delisted banks are not permitted access to the U.S. financial system and U.S. companies are still prohibited from doing business with Iranian banks and companies. The other aspects of the U.S.-Iranian embargo remain in force, producing compliance risks if global companies do not have clear lines of permitted and prohibited conduct between their U.S. and other operations. Finally, Iran remains a high corruption risk, as well as a material risk for diversion of controlled technologies.
This means that non-U.S. companies need to know the U.S.-controlled content (if any) of goods or technologies destined for Iran to determine if restriction requirements apply. Non-U.S. companies are also well advised to have strong controls regarding corruption and, if applicable, U.S. laws concerning anti-boycott.
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COMM_a412. Gary Stanley’s ECR Tip of the Day
(Source: Defense and Export-Import Update; available by subscription from
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059,
For the purposes of § 740.21 of the Export Administration Regulations (EAR) (15 CFR Parts 730-774), the private sector in Cuba encompasses economic activity generated by private individuals and groups as enterprises for profit and also that which is generated by non-profit organizations and charities. Companies and corporations that are government owned, operated, or controlled are not considered private sector.
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Notable birthdays:

* Leigh Hunt (James Henry Leigh Hunt; 19 Oct 1784 – 28 Aug 1859, was an English critic, essayist, poet, and writer.)
  – “If you are ever at a loss to support a flagging conversation, introduce the subject of eating.”
* Thomas Browne (Sir Thomas Browne, 19 Oct 1605 – 19 Oct 1682, was an English polymath and author of varied works which reveal his wide learning in diverse fields including science and medicine, religion, and the esoteric.)
  – “Rough diamonds may sometimes be mistaken for worthless pebbles.”

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. 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.
: 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 
: 19 CFR, Ch. 1, Pts. 0-199
  – Last Amendment: 26 Aug 2016: 81 FR 58831-58834: Administrative Exemption on Value Increased for Certain Articles 

  – 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.)

  – Last Amendment: 17 Oct 2016: 81 FR 71365-71367: Cuba: Revisions to License Exceptions  

: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 17 Oct 2016: 81 FR 71372-71378: Cuban Assets Control Regulations 
: 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
  – 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.
, 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
  – HTS codes that are not valid for AES are available
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: 12 Oct 2016: 81 FR 70340-70357: Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Category XII and associated sections.
  – The only available fully updated copy (latest edition 12 Oct 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, footnotes to amendments that will take effect on 15 November and 31 December, plus a large Index and over 750 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 available by annual subscription from the Full Circle Compliance website.  BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please contact us to receive your discount code.

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* The Ex/Im Daily Update is a publication of FCC Advisory B.V., edited by James E. Bartlett III and Alexander Bosch, and emailed every business day to approximately 7,500 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOJ/ATF, DoD/DSS, DoD/DTSA, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

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* 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.

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