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16-1027 Thursday “The Daily Bugle”

16-1027 Thursday “Daily Bugle”

Thursday, 27 October 2016

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe 
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  1. Commerce/ITA Seeks Comments on Subsidy Programs Provided by Countries Exporting Softwood Lumber and Softwood Lumber Products to the US 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. Justice: “Iranian National Pleads Guilty to Conspiring to Illegally Export Products From the U.S. to Iran” 
  4. State/DDTC: (No new postings.) 
  1. ST&R Trade Report: “U.S. Pursues WTO Complaint Against Chinese Restrictions on Raw Materials Exports”
  1. E.J. Krauland, L.A. Low & T. Best: “DOJ Sanctions and Export Controls Guidance Focuses on Companies, Parallels FCPA Pilot Program” 
  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) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. Commerce/ITA Seeks Comments on Subsidy Programs Provided by Countries Exporting Softwood Lumber and Softwood Lumber Products to the US

(Source Federal Register) [Excerpts.]
 
81 FR 74765-74766: Subsidy Programs Provided by Countries Exporting Softwood Lumber and Softwood Lumber Products to the United States; Request for Comment
* AGENCY: Enforcement and Compliance, International Trade Administration, Department of Commerce.
* SUMMARY: The Department of Commerce (Department) seeks public comment on any subsidies, including stumpage subsidies, provided by certain countries exporting softwood lumber or softwood lumber products to the United States during the period January
1, 2016 through June 30, 2016.
* DATES: Comments must be submitted within 30 days after publication of this notice.
* ADDRESSES: See the Submission of Comments section below.
* FOR FURTHER INFORMATION CONTACT: James Terpstra, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-3965.
* SUPPLEMENTARY INFORMATION: …
   Given the large number of countries that export softwood lumber and softwood lumber products to the United States, we are soliciting public comment only on subsidies provided by countries whose exports accounted for at leastone percent of total U.S. imports of softwood lumber by quantity, as classified under Harmonized Tariff Schedule code 4407.1001 (which accounts for the vast majority of imports), during the period January 1, 2016 through June 30, 2016. Official U.S. import data published by the United States International Trade Commission Tariff and Trade DataWeb indicate that three countries, Canada, Chile and France, exported softwood lumber to the United States during that time period in amounts sufficient to account for at least one percent of U.S. imports of softwood lumber products. We intend to rely on similar previous six-month periods to identify the countries subject to future reports on softwood lumber subsidies. For example, we will rely on U.S. imports of softwood lumber and softwood lumber products during the period July 1, 2016 through December 31, 2016, to select the countries subject to the next report. …
 
   Dated: October 21, 2016.
Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations.

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OGS
OTHER GOVERNMENT SOURCES

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

* U.S. Customs and Border Protection; RULES; New Mailing Address for the National Commodity Specialist Division, Regulations and Rulings, Office of Trade; Correction [Publication Date: 28 October 2016.]

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

(Source: Commerce/BIS)
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OGS_a34. Justice: “Iranian National Pleads Guilty to Conspiring to Illegally Export Products From the U.S. to Iran”

(Source: Justice) [Excerpts.] 
 
Mansour Moghtaderi Zadeh, 56, an Iranian national, pleaded guilty today to taking part in a conspiracy involving the purchase and shipment of various products, including aviation parts and supplies, from the U.S. to Iran without a license. …
 
Zadeh, who had been living in Iran, pleaded guilty to one count of conspiracy to unlawfully export goods, technology and services to Iran without the required license and to defraud the U.S. The charge carries a statutory maximum of five years in prison and potential financial penalties. Under federal sentencing guidelines, Zadeh faces a likely range of 46 to 57 months in prison and a potential fine of $20,000 to $200,000. Senior Judge Paul L. Friedman scheduled sentencing for December 14. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
 
In plea documents filed today, Zadeh acknowledged that beginning in October 2005, Iranian companies requested that Zadeh through his company, Barsan Aero Chemicals, Ltd., procure products, including a fiber optic video transmitter and receiver, and aviation course indicators, which required a license from the Department of the Treasury’s Office of Foreign Assets Control (OFAC), to be exported to Iran. Members of the conspiracy arranged for the items to be sent from the U.S. to Iran, and Zadeh received a commission.
 
In March 2007, Zadeh and co-conspirators attempted to export metal sheets and rods that are used in the aviation manufacturing industry from the U.S. to Iran, without the required license from OFAC. Zadeh had arranged for his new corporation, Lavantia Ltd., to purchase the items, and used an alias in his communications. In September 2007, the shipment was detained by the U.S. Department of Commerce pending certification of the end user.
 
In October 2007, the Department of Commerce issued a Temporary Denial Order (TDO) against Lavantia and Zadeh (under his alias). The TDO prohibited Lavantia and Zadeh from participating, directly or indirectly, in any way in any transaction involving any commodity exported from the U.S. Notwithstanding the TDO, Zadeh and other conspirators exported and attempted to export numerous materials from the U.S., including resin, sealant, paint, pneumatic grease, film adhesive and polyurethane coating and thinner. Their conduct after the TDO was issued involved more than $69,000 of exported goods. …

 

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OGS_a45. State/DDTC: (No new postings.)

(Source: State/DDTC)
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NWSNEWS

 
The Office of the U.S. Trade Representative is accepting through Dec. 15 comments on the issues raised in a World Trade Organization dispute against Chinese restrictions on exports of nine raw materials. The U.S., along with the European Union, recently advanced this case by requesting the establishment of a dispute settlement panel.
 
USTR states that China maintains export duties of 5 to 20 percent, quantitative restrictions such as export quotas, and additional requirements (such as prior export performance requirements) that impose restrictions on the trading rights of enterpriser seeking to export various forms of antimony, chromium, cobalt, copper, graphite, indium, lead, magnesia, talc, tantalum, and tin. These materials are used to produce high-value products in the aerospace, automotive, electronics, chemicals, and other sectors.
 
USTR has said that China’s export restraints raise the prices of raw materials for downstream manufacturers outside of China while lowering the prices paid by manufacturers in China, thus creating pressures on foreign producers to shift production operations, technologies, and jobs to China.
 
Further, China committed as part of the terms of its WTO accession to eliminate export duties for all products other than those listed in a specific annex (which do not include those at issue) and to not restrict the right to export goods (e.g., through quotas). In two previous disputes the WTO found that China’s imposition of export duties and export quotas on two different sets of raw materials was inconsistent with WTO rules and could not be justified as legitimate conservation or environmental protection measures.

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COMMCOMMENTARY

COMM_a17. E.J. Krauland, L.A. Low & T. Best: “DOJ Sanctions and Export Controls Guidance Focuses on Companies, Parallels FCPA Pilot Program”
 
* Authors: Edward J. Krauland, Esq., ekrauland@steptoe.com, 202-429-8083; Lucinda A. Low, Esq., llow@steptoe.com, 202-429-8051; and Tom Best, Esq., tbest@steptoe.com, 202 429 8079. All of Steptoe & Johnson LLP.
 
On October 2, the Department of Justice’s (DOJ) National Security Division (DOJ NSD) published a memorandum setting out the policy framework for negotiated resolutions with companies involved in economic sanctions and export control investigations with a criminal dimension.  Titled “Guidance Regarding Voluntary Self-Disclosures, Cooperation, and Remediation in Export Control and Sanctions Investigations Involving Business Organizations” (the Guidance), the policy statement is intended to establish incentives for companies [FN/1] investigating potential economic sanctions and export controls issues to voluntarily disclose them to DOJ NSD, and, where those companies meet the announced cooperation, remediation, and compliance standards, to provide significantly more favorable resolution terms than would otherwise have been available.
 
This announcement by the DOJ NSD is significant in a number of respects, both in the sanctions and export controls space specifically, and with regard to companies’ efforts to manage the regulatory risks arising from international business activities.  While criminal risks in this area are not new, companies will now routinely need to assess the benefits and risks of voluntarily disclosing not only to the primary administrative agencies enforcing trade regulations (the US Department of the Treasury, Office of Foreign Assets Controls (OFAC); the US Department of State, Directorate of Defense Trade Controls (DDTC); and the US Department of Commerce, Bureau of Industry & Security (BIS)), but also to DOJ NSD, in the face of a clear policy statement from a criminal prosecuting authority that it expects companies to do so when such potential violations may be “willful” – a standard that could capture significant amounts of sanctions and export controls issues that may not have historically been disclosed to or investigated by DOJ.
 
The Guidance also likely signals the DOJ’s intent to be more active in sanctions and export controls investigations and enforcement than it has in the past, perhaps taking a page out of the DOJ’s US Foreign Corrupt Practices Act (FCPA) enforcement playbook.  Indeed, the Guidance draws on many of the concepts undergirding the DOJ’s FCPA “Pilot Program”  announced April 5, which set out the conditions the DOJ’s Fraud Section requires companies to meet in order to be eligible for cooperation credit (including full declinations of prosecution) in FCPA matters.  (See our past advisory on the Pilot Program).  But there are also significant differences, likely reflecting the national security dimension of export controls and many sanctions regimes and the government’s view that companies in this area are “gatekeepers” of technology. 
 
As with the FCPA Pilot Program, companies must voluntarily disclose, cooperate – including turning over all information regarding individuals, per the terms of the Yates memorandum (see Steptoe’s previous advisory) – and remediate to be eligible for the full “credit” (i.e., beneficial resolution terms) DOJ is offering in this area.  They must also disgorge and/or forfeit any ill-gotten gains from the conduct at issue.   In contrast to the Pilot Program, however, a non-prosecution agreement (NPA), not a declination, is the most lenient resolution form available. 
 
In light of the Guidance, and the inevitable additional scrutiny that DOJ’s increased interest in criminal enforcement will engender, companies will need to assess how they address sanctions and export controls issues when conducting internal investigations.  Notably, companies need to have the necessary information about the circumstances of an apparent violation to make an informed judgement as to the implications of their disclosures to applicable regulatory authorities, and whether they should be disclosing to the DOJ as well.
 
Below we summarize the Guidance, and compare it in more detail to the FCPA Pilot Program.

Guidance Summary
 
DOJ NSD’s Guidance applies where the conduct is “willful,” as set out in Bryan v. United States, 524 U.S. 184 (1998).  If a company identifies a willful violation of US economic sanctions and export control laws, then the Guidanceprovides a framework by which a company that: (1) voluntarily self-discloses the issues to DOJ NSD’s Counterintelligence and Export Controls Section (CES), (2) cooperates fully with CES, and (3) engages in timely and appropriate remediation, may be eligible for reduced criminal penalties and/or a non- or deferred-prosecution agreement (NPA and DPA, respectively) instead of a criminal plea.  The Guidance defines in detail DOJ NSD’s criteria for each of these requirements, and explicitly states that companies that do not meet the applicable standards will not be eligible for the full “credit” offered.  Notably, even where full credit is afforded, the Guidance does not offer companies the prospect of a declination of prosecution by DOJ.  Instead, an NPA (along with disgorgement of ill-gotten gains, and any criminal fine) is the most lenient resolution foreseen by the Guidance, and applicable regulatory authorities – OFAC, BIS, and/or DDTC – may still bring their own enforcement actions for civil violations of law.
 
Voluntary Self-Disclosure
 
Three requirements must be met for a self-disclosure to be considered voluntary:
 
  – First, pursuant to the U.S. Federal Sentencing Guidelines § 8C2.5, the disclosure must occur before “imminent threat of disclosure or government investigation.” [FN/2]
  – Second, the disclosure must be made within a “reasonably prompt time” after the entity learns of the violation, with the company bearing the burden of demonstrating timeliness.
  – Third, the company must disclose known relevant facts, including those pertaining to the specific individuals involved in the violations.
 
Full Cooperation
 
In assessing the level of cooperation provided, in addition to satisfying the factors set out in the Principles of Federal Prosecution of Business Organizations, prosecutors will consider “the scope, quantity, quality, and timing of cooperation,” and will evaluate the quality of a company’s cooperation on the facts and circumstances of each situation, against the following criteria: 
 
  – Consistent with the Yates memorandum, disclosure on a timely basis of all facts relevant to the wrongdoing at issue, including all facts related to involvement in the criminal activity by the corporation’s officers, employees, or agents
  – Proactive, as opposed to reactive, cooperation
  – Preservation, collection, and disclosure of relevant documents and information relating to their provenance
  – Provision of timely updates on a company’s internal investigation, including production of information and documents on a rolling basis
  – When requested, de-conflicting an internal investigation with a government investigation
  – Provision of all facts relevant to potential criminal conduct by all third-party companies (including their officers or employees) and third-party individuals
  – Making employees and officers (including those overseas) available to be interviewed by the DOJ upon request
  – Facilitating third-party production of documents and witnesses from foreign jurisdictions unless legally prohibited, and
  – Translating relevant documents where requested
 
The Guidance makes clear that, pursuant to the US Attorneys’ Manual 9-28.720, companies are not required to waive attorney-client privilege or work product protection in order to receive cooperation credit.  It also acknowledges that smaller companies may not have the resources to undertake all of the listed requirements, but places on the company the burden of demonstrating why it is unable to meet the requirement in question.
 
These requirements are not new, but are virtually identical to those set forth in the FCPA Pilot Program. 
 
Timely and Appropriate Remediation
 
The Guidance is clear that credit for remediation, and therefore the benefits available from DOJ NSD, will only be available to a company deemed to have cooperated, as defined above.  If so, a company “generally” will be required to meet three conditions to receive credit for timely and appropriate remediation:
 
  (1) implementation of an effective compliance program;
  (2) appropriate discipline of employees involved in the misconduct and their supervisors, including compensation impact; and
  (3) any additional steps recognizing the seriousness of the misconduct, demonstrating acceptance of responsibility, and reducing the risk of recidivism.
 
The Guidance sets out the following criteria for an effective compliance program:
 
  – Establishing a culture of compliance
  – Dedicating sufficient resources to compliance
  – Ensuring compliance personnel are appropriately qualified and experienced, and that they are appropriately compensated
  – Instituting an independent compliance function
  – Performing effective risk assessment and tailoring the compliance program to address the risks identified
  – Implementing a technology control plan and regular required training to ensure export-controlled technology is appropriately handled
  – Implementing a reporting structure that allows problems to reach senior company officials, and maximizes timely remediation 
The remediation requirements place specific emphasis on employee discipline, including possible termination of wrongdoers.
 
By and large these requirements are not new, but reflect more general thinking about effective compliance programs.  The last two elements-a technology control plan with regular training and reporting that maximizes timely remediation-are tailored to this area.
 
Aggravating Factors
 
The Guidance lists several aggravating factors that may result in less credit to companies that self-disclose, cooperate, and remediate (although more credit than to those companies who have not self-reported):
 
  – Exporting items controlled for nuclear nonproliferation or missile technology reasons to a proliferator country
  – Exporting items known to be used in weapons of mass destruction or to terrorist organizations
  – Exporting military items to hostile powers
  – Repeated violations of similar conduct
  – Knowing involvement of upper management
  – Significant profits from the criminal conduct when compared to lawfully exported products and services
 
Interestingly, the final aggravating factor appears to set the stage for disgorgement as a penalty (discussed below), even though the authority to impose disgorgement (or the standard for calculating disgorgement) does not appear in any of the export control or sanctions regulations. 
 
Benefits Available to Corporations
 
Where a company meets the requirements enumerated above, it may be eligible for the following benefits:
 
  – Reduced fines and forfeiture amounts
  – The possibility of an NPA
  – A reduced period of supervised compliance
  – No compliance monitor
 
The Guidance makes clear, however, that a company that does not voluntarily disclose, but still cooperates and remediates, will be eligible for some mitigation credit including a DPA.  However, such a company will “rarely” qualify for a NPA.  Where aggravating factors exist, more stringent penalties will be imposed, but such a company would still be in a better position than if it did not voluntarily disclose.
 
The Guidance clearly sets out that where appropriate, and regardless of the form of resolution, disgorgement and forfeiture will be part of the final resolution framework.
 
Examples
 
To illustrate the new policy, the Guidance contains three hypothetical examples.  They suggest that in corporate groups, differing penalties may apply to different entities, much as we have seen in the FCPA area with some cases featuring NPAs, DPAs, and pleas.  They also suggest that there may be a range of monitoring/supervisory options the DOJ will consider, using the terms “monitor,” “auditor,” and “supervision” as alternates without explaining what the latter two may encompass.  Finally, they emphasize the need for discipline of not only those directly involved in the conduct, but also those who may have negligently failed to supervise.

Implications for Companies; Comparison to the FCPA Pilot Program
 
The Guidance has the potential to be significant for DOJ’s economic sanctions and export controls enforcement program, for a number of reasons:
 
* DOJ NSD More Involved in Enforcement?
  Where civil regulators (DDTC, BIS, and OFAC) have traditionally taken the lead in the vast majority of investigations and enforcement actions of US economic sanctions and export control laws, the Guidance suggests that more criminal investigation, and possibly enforcement, of these laws is on the horizon.  Companies evaluating what they previously might have handled as an entirely civil matter, working with the regulatory agencies, now must evaluate whether the issues involve conduct by persons who knew their conduct was not lawful and whether a voluntary disclosure to CES should be made, presumably in addition to a voluntary disclosure to the regulating agency.  When coupled with the prospect of those agencies referring the matter to CES on their own accord, we believe there is the possibility that the Guidance will have the effect of bringing DOJ NSD to the table as an investigator and enforcer where up to now it may have played a less active role, in an area where it may not have as much technical expertise as DDTC, BIS, or OFAC in administering applicable regulations.  The net result will almost certainly be more criminal investigations and possibly prosecutions, or combined civil/administrative and criminal investigations and prosecutions with the respective administrative agency or agencies.  How much the Guidance will incentivize self-reporting by companies given the high standards for cooperation and the more limited benefits of penalty resolutions remains to be seen.
 
* Further Institutionalizing the Yates Memo, and a Focus on Companies.  
The Guidance makes clear that it is intended to encourage companies to voluntarily disclose US sanctions and export control violations so that DOJ NSD may bring more prosecutions against companies themselves, and against individuals.  By incentivizing voluntary self-disclosures, and requiring those disclosures to meet the Yates memorandum requirements of including all relevant facts about the corporate employees involved in the alleged violations, DOJ is again requiring companies to “name names” and make judgments about which corporate employees are culpable.  We have expressed our views on a few occasions (see our past client alerts
here
and
here
) that corporations should not be pressured to take positions adverse to their own employees in order to get credit for cooperation.  The Guidance, especially coming on the heels of the FCPA Pilot Program and its effectively identical requirements, is yet another unfortunate step down the path of pressuring a company to turn against its employees.
 
* Sanctions and Export Controls Violations More Serious Than Foreign Corruption? 
Sophisticated consumers of cross-border regulatory and enforcement risks will immediately recognize the substantial similarities in form and substance between the Guidance and the FCPA Pilot Program: similar goals (pursuant to Yates, increased prosecution of individual wrongdoers); almost identical definitions of voluntary disclosure, cooperation, and remediation; and a strong focus on enhancement of companies’ compliance programs as a condition of receiving the benefits offered under the two policies, but falling short of a compliance affirmative defense.
 
The differences between the programs, however, are important and bring into sharp relief the programs’ different purposes.  First, the Guidance’s goals with respect to companies are fundamentally different.  Where the FCPA Pilot Program was introduced in order to provide an avenue for companies to avoid prosecution altogether in exchange for information on individuals’ misconduct, the Guidance is squarely focused on enhancing DOJ NSD’s ability to investigate and prosecute companies as well as individuals for violations of law.  As noted above, this suggests DOJ NSD is likely to be active in many more cases than it would have been previously.  Second, the “credit” available under the Guidance suggests that DOJ NSD views corporate criminal violations of economic sanctions and export controls particularly seriously: whereas the FCPA Pilot Program offers a declination of prosecution in some circumstances, and/or up to a 50% reduction in the criminal fine range for self-disclosing companies which are subject to enforcement action, the Guidance is clear that a NPA is the most favorable resolution form on offer.  The “rogue employee” defense to corporate liability does not seem to be contemplated by the Guidance.  Third, the FCPA Pilot Program has no list of “aggravating factors,” further reflecting the differences between the two areas.  The national security dimension, and the fact that companies are explicitly characterized as “gatekeepers” of technology in the Guidance, reflects the heightened risk and responsibility profile the DOJ sees in this area.
 
By establishing an enforcement framework communicating the expectation that companies should voluntarily disclose to criminal enforcement authorities, and by institutionalizing the Yates memorandum-derived pressure on companies to implicate individuals in economic sanctions and export controls matters, the Guidance has significant implications for companies investigating sanctions and export controls issues.  It also has implications for their directors, officers, managers, and employees.  Although it remains to be seen whether the announcement of the new policy framework will lead to more DOJ investigations of sanctions and export controls matters, or more voluntary disclosures, it does signal DOJ’s heightened presence into yet another area traditionally viewed as more of a regulatory than a criminal domain, and further raises the criminal enforcement risks facing US and other companies doing business across borders.
 
————-
  [FN/1] The Guidance does not apply to financial institutions by virtue of their “unique reporting obligations under their applicable statutory and regulatory regimes.” Guidance, note 3, at page 2.
   [FN/2] The Guidance makes clear that if a whistleblower has reported an incident to the US government, but the company is unaware of this fact and discloses prior to being made aware of the DOJ’s investigation, such a disclosure would still be considered voluntary. This statement is notable in that, other agencies, such as OFAC, would not ordinarily treat this type of report as a voluntary self-disclosure (although it might in its discretion afford mitigation credit). This position likely reflects DOJ’s response to questions raised about this fact pattern after the release of the FCPA Pilot Program.

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ENEDITOR’S NOTES

(Source: Editor)

 

* Sylvia Plath (27 Oct 1932 – 11 Feb 1963, American poet, novelist, and short story writer.)
  – “There must be quite a few things that a hot bath won’t cure, but I don’t know many of them.”
 
* Niccolo Paganini (27 Oct 1782 – 27 May 1840, was an Italian violinist, violist, guitarist, and composer. He was the most celebrated violin virtuoso of his time.)
  – “I am not handsome, but when women hear me play, they come crawling to my feet.”
 
* James Cook (1728 – 1779, was a British explorer, navigator, cartographer, and captain in the Royal Navy.)
  – “Do just once what others say you can’t do, and you will never pay attention to their limitations again.”

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EN_a2
9. 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: 17 Oct 2016: 81 FR 71365-71367: Cuba: Revisions to License Exceptions 

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 17 Oct 2016: 81 FR 71372-71378: Cuban Assets Control Regulations  
 
*
FOREIGN TRADE REGULATIONS (FTR)
: 15 CFR Part 30
  – Last Amendment: 15 May 2015; 80 FR 27853-27854: Foreign Trade Regulations (FTR): Reinstatement of Exemptions Related to Temporary Exports, Carnets, and Shipments Under a Temporary Import Bond 
  – HTS codes that are not valid for AES are available
here.
  – The latest edition (9 May 2016) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and footnotes containing case annotations, practice tips, and Census/AES guidance.  Subscribers receive revised copies every time the FTR is amended.  The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR, please contact us to receive your discount code. 
 
*
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jul 2016: 19 USC 1202 Annex.  (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment: 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:
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 the essential tool of the ITAR professional. The BITAR is available by annual subscription from the Full Circle Compliance
website.  BAFTR subscribers receive a 25% discount on subscriptions to the BITAR — please
contact us to receive your discount code.  

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EPEDITORIAL POLICY

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

* 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.

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