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16-1108 Tuesday “The Daily Bugle”

16-1108 Tuesday “Daily Bugle”

Tuesday, 8 November 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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 for advertising inquiries and rates.

[No items of interest noted today.]  

  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. State/DDTC Posts DECCS Release #1, Commodity Jurisdictions/DS-4076 
  1. ST&R Trade Report: “U.S. Tightens Sanctions Against North Korea”
  2. UPI: “After State Dept. Blocks the Sale, Rodrigo Duterte Cancels Order for 26,000 U.S. M-16s”
  1. R.K. Huffman, S.M. Heimberg & T.J. McCarthy: “DoD’s Proposed Rule Would Create Additional Risk and Burdens for Contractors Handling Export-Controlled Information”
  2. Shap Talk: “Beware of Customs Bearing Gifts: Informed Compliance Letters!”
  3. S. Moritz: “A Plan to Integrate the Compliance Program after an Acquisition”
  1. ECTI Presents Export Control Reform for USML Category XII: Fire Control, Laser, Imaging, and Guidance Webinar, 8 Dec
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (28 Oct 2016), DOD/NISPOM (18 May 2016), EAR (4 Nov 2016), FACR/OFAC (4 Nov 2016), FTR (15 May 2015), HTSUS (30 Aug 2016), ITAR (12 Oct 2016) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1


[No items of interest noted today.] 

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

OGS
OTHER GOVERNMENT SOURCES

OGS_a11. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

* Commerce; Industry and Security Bureau; RULES; Export Administration Regulations: Statements of Legal Authority [Publication Date: 9 November 2016.]

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

OGS_a22. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)
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OGS_a33. State/DDTC Posts DECCS Release #1, Commodity Jurisdictions/DS-4076

(Source: State/DDTC)
 
Beginning
November 21, 2016
a new online system for Commodity Jurisdiction (CJ) determination requests will be available and the External Form Submission (EFS) will no longer be available to use for CJ determination requests. The last day to submit a CJ determination request through EFS is Wednesday, November 16, 2016.
 
Background Information:
 
As part of the Directorate for Defense Trade Control’s (DDTC) IT Modernization effort, DDTC has been diligently reviewing all current processes and procedures. In April of 2016 the updated data collection was approved for use by the Office of Management and Budget (OMB). Once approval was received, DDTC developed an updated external application for CJ determination requests as well as working in tandem with Defense Technology Security Administration (DTSA) to update the internal USXPORTS application.
 
Therefore, on
November 21, 2016
the new CJ application will be available as the first release of the
D
efense
E
xport
C
ontrol and
C
ompliance
S
ystem (
DECCS
). The new DECCS CJ application will replace of the
Electronic Filing System
(EFS) to submit a CJ determination requests. However, ELISA will still be available for users to track the status of their requests.
 
Enhancements Coming Soon:
 
  – One Stop Shopping:
a single location to complete and submit the DS-4076.
  – Web Based:
no more Adobe PDF forms.
  – Digital Signature:
no more pen and ink signatures.

Important Dates:
  – November 16, 2016: Last day to submit a CJ request via the EFS application.
  –
November 17 to 20, 2016: DDTC prepares for deployment. No CJ requests will be accepted.
  –
November 21, 2016: DECCS CJ application is released.
 
Important Links:
 
  –
PM/DDTC:
monitor for up to date announcements
  –
DECCS CJ:
to access the new CJ application
  –
ELISA:
to track your CJ request
 
Questions?
 
Send questions to the PM/DDTC Special Projects Team: PM_DDTCProjectTeam@state.gov (note the underscore _ after PM_ in the email address)
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NWSNEWS

 
The Treasury Department’s Financial Crimes Enforcement Network (FinCen) has issued a final rule under section 311 of the USA Patriot Act to further restrict North Korea’s access to the U.S. financial system. Specifically, the final rule prohibits U.S. financial institutions from opening or maintaining correspondent accounts for North Korean banks and also requires U.S. financial institutions to apply additional due diligence measures in order to prevent North Korean financial institutions from gaining improper indirect access to U.S. correspondent accounts. The rule was proposed in June along with publication of a notice of finding that North Korea is a jurisdiction of “primary money laundering concern” engaged in illicit conduct, including using state­-controlled financial institutions and front companies to engage in proliferation of weapons of mass destruction and ballistic missiles and evade international sanctions.
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NWS_a2
5. UPI: “After State Dept. Blocks the Sale, Rodrigo Duterte Cancels Order for 26,000 U.S. M16s”

(Source: UPI)
 
Philippines President Rodrigo Duterte said he has canceled the purchase of 26,000 assault rifles from the United States after the sale was halted by the U.S. State Department.
 
The weapons were to be used by the Philippines National Police, which is on an aggressive and violent anti-drug campaign that has spiked police killings. The State Department last week halted the sale of the weapons after Maryland Sen. Ben Cardin, the top Democrat on the Foreign Relations Committee, said he would block the sale.
 
On Monday, Duterte said he ordered the Philippines National Police to cancel the purchase.
 
  “I would like to announce now, that the … 26,000 M-16s that were ordered already, I am ordering its cancellation,” Duterte said. “We will just have to look for another source that is cheaper and maybe as durable and as good.”

Previously, Duterte suggested he would purchase weapons from Russia if the United States blocked the sale.  
“We will not insist in buying expensive arms. We can always get them somewhere else,” Duterte added on Monday.
 
Officials in the Philippines said about 3,500 people have been killed and nearly 20,000 have been arrested since the start of Duterte’s “war on drugs,” but human rights organizations, such as Amnesty International, have said the toll is much higher — prompting Cardin’s call to block the sale.

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COMMCOMMENTARY

COMM_a16. R.K. Huffman, S.M. Heimberg & T.J. McCarthy: “DoD’s Proposed Rule Would Create Additional Risk and Burdens for Contractors Handling Export-Controlled Information”
 
* Authors: Robert K. Huffman, Esq., rhuffman@akingump.com,
202-887-4530; Scott M. Heimberg, Esq., sheimberg@akingump.com, 202-887-4085; and Thomas J. McCarthy, Esq., tmccarthy@akingump.com, 202-887-4047. All of Akin Gump Strauss Hauer & Feld LLP.
 
Overview
 
The Proposed Rule creates a procedure for DoD to release unclassified technical data subject to EAR and ITAR to “qualified contractors,” which are defined to mean qualified U.S. and Canadian contractors. The Proposed Rule raises critical operational and legal issues for U.S. and Canadian defense contractors seeking to obtain ITAR and EAR technical data from DoD: (1) the certification requirements related to qualification, (2) the use of overlapping and confusing terminology throughout the rule regarding the type of information subject to the rule, (3) the limitations on further dissemination and (4) the possibility of disqualification for export violations. The following provides a brief summary of the process, the contractor certification requirement, the type of information subject to the rule, the disclosure limitations and the issue of disqualification.
 
Process
 
The Proposed Rule states that the procedures for release of technical information applies to only information that meets the following three criteria: (1) the information must be on the U.S. Munitions List (USML) or Commerce Control List (CCL); (2) the information would require a license, exception, exemption or other authorization in accordance with U.S. export laws and regulations; and (3) the information is not under the control of the Nuclear Regulatory Commission pursuant to the Atomic Energy Act of 1954, as amended, and the Nuclear Non-Proliferation Act of 1978, as amended. If the information meets these criteria, DoD will authorize release of the criteria to the qualified contractor, except in three circumstances: (1) the qualification of the contractor has been temporarily revoked for one or more of several reasons described in more detail below, (2) the controlling DoD office judges the requested technical data and technology to be unrelated to the purpose for which the qualified contractor is certified, or (3) the technical data and technology is being requested for a purpose other than to permit the requester to bid or perform on a contract with the DoD or other U.S. government entity.
 
Contractor Certification Requirement
 
To become a qualified U.S. contractor, the individual or enterprise must certify and acknowledge a variety of terms, including that the person who will act as the recipient of the export-controlled technical data and technology on behalf of the U.S. contractor is a U.S. citizen or lawful permanent resident located in the United States. The certification must specify the contractor’s business activity, which will be used by the DoD controlling office as a basis for approving or disapproving specific requests for technical data and technology. An important condition that may prove troublesome is that the contractor must state that, to the best of its knowledge, no person employed by it, or acting on its behalf, with access to the data or technology has violated U.S. export control laws or a certification previously made to DoD under the provisions of this rule.
 
Interestingly, this provision could provide a disincentive for U.S. companies to make voluntary disclosures of ITAR and EAR violations to the departments of State and Commerce, respectively. Voluntary disclosures could be used as evidence by DoD to reject an application for qualification. Moreover, it could have a significant impact on internal investigation processes for export control issues: individuals required to make the certifications to DoD under this Proposed Rule may feel compelled to seek confirmation through their internal compliance functions about the validity of the statement that the company has not “violated U.S. export control laws.” Particularly without a time limitation on this certification, it represents an extremely high – perhaps impossible – bar for any major defense contractor.  
 
DoD should reconsider the phrasing of the requirement in Section 250.3 under subsection five of the definition of “Qualified U.S. Contractor” in order to avoid the unintended consequences of the broad language of “violated U.S. export control laws” in its certification requirement.
 
Relationship to ITAR and EAR and the Ambiguity of Varying Terminology Used in the Proposed Rule
 
The Proposed Rule states that it does not introduce any additional controls on the dissemination of technical data and technology by private enterprises or individuals beyond those specific by export control laws and regulations or in contracts or other agreements. This is helpful because the Proposed Rule uses a series of overlapping and conflicting terms and descriptions to describe what is subject to the rule, including “technology,” “technical data” and “technical information.” The rule could be much more streamlined by reducing its use of differing terms and descriptions, as well as eliminating some altogether.
 
Ultimately, the Proposed Rule clarifies that it applies to only certain types of unclassified technical data, as defined in the ITAR, and certain types of technology, as defined in the EAR, that are subject to those regulations. It does this through the “procedures” section of the rule (Section 250.6). Through subsection 250.6(b)(1) in particular, DoD confirms that certain terminology used in the Proposed Rule (e.g., the phrases “technical information” and “unclassified technical data and technology that discloses technology or information with military or space application”) is ultimately irrelevant with respect to the application of the Proposed Rule to contractor requests.
 
Unfortunately, subsection 250.6(b)(1) leaves a significant gap that must be addressed before the final rule or else it will result in ambiguity in the application of the Proposed Rule by DoD. Specifically, subsection 250.6(b)(1)(ii) states that only information requiring a license, exception, exemption, or other export authorization under export control laws and regulations will be subject to the Proposed Rule. The problem is that a determination as to whether a license, exception, exemption or other export authorization is required depends on information about the country of destination, end use and end user with respect to information subject to EAR, but there is no requirement in this subsection that links the analysis to any particular end user, end use, or country (e.g., countries identified in the contractor’s release request).
 
For example, certain space technology may require a license for certain countries and not for others. Similarly, there are highly restrictive licensing requirements for low-level technology for countries subject to antiterrorism controls and sanctions laws (e.g., North Korea, Iran). DoD must modify subsection 250.6(b)(1)(ii) to provide better guidance on how to apply the test in that provision, or it will result in inconsistent approaches by DoD entities.  
 
Disclosure Requirements
 
The Proposed Rule authorizes DoD to provide technical data and technology to “qualified U.S. contractors” for only “legitimate business purposes,” which are limited to support of U.S. government approved sales to foreign governments, purchases of surplus property, sales or production for domestic and foreign commercial marketplaces (with appropriate export authorization), engaging in scientific research in a professional capacity and acting as a subcontractor to a qualified contractor. In turn, a qualified U.S. contractor may further disseminate technical data and technology, without additional DoD approval, to only:
 
  – employees and persons working on its behalf who meet citizenship and residency requirements
  – foreign recipients with an export license
  – other qualified U.S. contractors within the scope of the legitimate business purpose
  – the Department of State or Department of Commerce to apply for export licenses, which must be accompanied by a statement that the technical data and technology is controlled by DoD or
  – Congress or any federal, state or local government agency as required by law.
 
In contrast, DoD may provide technical data and technology to only a “certified Canadian contractor” where a “legitimate business relationship” exists between the contractor and the government. The existence of a “legitimate business relationship” is solely within the discretion of DoD and requires that a need exist to acquire, share, exchange or disseminate DoD technical information to anyone other than a DoD employee for the support of a DoD mission. Such a relationship may be established by a memorandum of understanding, agreement, contract or grant. Importantly, the Proposed Rule provides no parallel provision allowing certified Canadian contractors to further disseminate export-controlled information without DoD approval. Thus, it appears that, in addition to any authorizations required under U.S. export controls, certified Canadian contractors must also seek DoD approval to share technical information subject to the Proposed Rule with any party, including other qualified contractors.
 
Mandatory Revocation
 
The likely most controversial aspect of this regulation is that, “[u]pon receipt of substantial and credible information” under the following circumstances, a DoD Component will temporarily revoke the U.S. or Canadian contractor’s qualification if the contractor or its employees:
 
  – violated U.S. export control law
  – violated its certification
  – made a certification in bad faith or
  – omitted or misstated a material fact.
 
As written, this revocation is mandatory, but the Proposed Rule does include a caveat that, if the temporary revocation would compromise a U.S. government investigation, the revocation may be delayed. In addition to the revocation, the DoD Component “must notify the appropriate law enforcement agency.” In the context of export-controlled information, those agencies could include DOJ, the FBI, the State Department and Department of Commerce.
 
Upon a temporary revocation, the DoD Component is to notify the contractor and the Undersecretary of Defense for Acquisition, Technology and Logistics (USD (AT&L)), and the contractor will have an opportunity to respond in writing before being disqualified. If the basis for the temporary revocation cannot be removed within 20 working days, the DoD Component will recommend to the USD (AT&L) that the contractor be disqualified from receiving export-controlled information. The rule allows a U.S. contractor whose qualifications have been temporarily revoked to present information “showing that the basis for revocation was in error or has been remedied” and be reinstated.
 
The Proposed Rule could clearly benefit from clarification about the “substantial and credible information” standard. As noted above, to the extent that DoD uses voluntary disclosures as a basis for this determination, it would create a mandatory trigger based on a contractor’s decision to follow long-standing policy that has been encouraged and fostered by the departments of State and Commerce to come forward to report violations of the ITAR and EAR. This is not the calculation that DoD should be injecting into the export compliance process within the contracting community.
 
Conclusion
 
Companies that are involved in DoD procurement are encouraged to closely read the Proposed Rule and critically examine the practical effects it may pose on their business activities and export control compliance programs. The public-comment period ends on December 30, 2016. 
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COMM_a27. Shap Talk: “Beware of Customs Bearing Gifts: Informed Compliance Letters!”
(Source: Shapiro)
 
It’s the ole’ Trojan horse scenario. Just when you think Customs is being helpful sending out Informed Compliance Letters to your business with information to “assist” your company with ensuring compliance, they will state in the document that since this information has been provided to your company, violations that may occur in the future could result in penalties and/or seizure and forfeiture of imported merchandise. That doesn’t sound much like a gift to us. It sounds like an official warning that the importer who received this letter must immediately take action to ensure their house is in order.
 
In today’s Automated Commercial Environment (ACE) world, there is much more transparency; it is easier for Customs to identify areas of possible or probable non-compliance as they review all of the data in ACE. While it appears that Customs is targeting the top 1,000 importers at this time, other importers cannot be far behind. Being proactive and ensuring a compliant internal program is essential for importers maintaining compliance with all Customs regulations.
 
Here is some advice on achieving good internal controls:
 
  – Analyze your ACE Data. More specifically, review any Post Summary Corrections (PSC) that have been made and any CF28 (Requests for Information) and CF29 (Notices of Action) that have been received;
  – Ensure your recordkeeping meets Customs expectations;
  – Review your shipments vis-à-vis the high risk areas that Customs is currently concentrating on: Valuation, Free Trade Agreements, Antidumping and Countervailing duties, Textiles/Wearing apparel, country of origin, Duty free provisions, Classification, and Intellectual Property Rights;
  – Analyze the root cause of any errors that are uncovered and implement corrective action plans to prevent these errors from recurring;
  – Monitor/Audit import entries for timeliness and accuracy;
  – Implement compliance and control policies and procedures;
  – Develop a culture of informed compliance with continued education and communicate these policies within your organization.
 
In February of this year, the president signed the Trade Enforcement and Trade Facility Act, with the goal of protecting economic security through trade enforcement. We are now seeing the results of this initiative. If you implement good sound internal controls taking into account Customs laws and regulations, you won’t be afraid when Customs rolls that Trojan horse to your door.
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COMM_a38. S. Moritz: “A Plan to Integrate the Compliance Program after an Acquisition”
(Source: FCPA Blog)
 
One way the DOJ determines if a company has performed the required anti-corruption due diligence when acquiring an entity is looking at whether the new entity was promptly incorporated into the acquiring company’s internal controls, including its compliance program.
 
There are three main areas to focus on in order to successfully accomplish this integration, whether it be into your existing anti-corruption program or one that has been newly established.
 
These are:
 
  – Identifying the universe of foreign official touchpoints
  – Fully identifying the intermediaries among third parties, and
  – Examining hiring practices as they relate to foreign officials
 
Most senior executives struggle to understand the term “foreign officials.” The designation includes not only government officials but employees of state-owned companies and public international organizations like the World Bank or the United Nations.
 
Further, when companies look at foreign officials, the focus of scrutiny tends to be on customers, while failing to consider the various ways in which companies routinely interact with government agencies at the federal, state and local level and the ways those interactions can be problematic.
 
It is therefore critically important to perform an exhaustive “inventory” of all of the ways the organization can come into contact with foreign officials, not just among the company’s customer base, but through the various ways in which the company may interact with such persons in connection with meeting regulatory, legal, administrative and licensing obligations as well as any other way there may be contact, official or unofficial.
 
Mapping these relationships, examining them and then prioritizing them in terms of the potential risk is a critically important step to successfully integrating the acquired entity into the acquiring organization and its compliance program.
 
In the overwhelming majority of FCPA prosecutions, the bribe payers are business intermediaries acting on behalf of the defendant company. It is not common practice to delve deeply into business intermediaries during pre-acquisition due diligence, and yet most FCPA risk resides within those relationships.
 
Part of the process of identifying intermediaries is doing something similar to the mapping of foreign official touchpoints discussed above. Understanding the activities of each intermediary and determining whether and to what extent they may be interacting with foreign officials on the company’s behalf will make mitigating the potential corruption risk of the newly acquired entity a far less challenging exercise.
 
Government touchpoints extend to the hiring of employees, interns and consultants. The SEC has charged companies with FCPA violations in connection with hiring employees or interns who would not have otherwise been hired were it not for the fact that their family members were government officials in a position to award business to the defendant companies. Most companies do not include hiring practices in their anti-corruption program risk assessments, nor do they examine how a candidate was sourced and whether a prospective hire poses any added FCPA risk.
 
While simply hiring a family member of a foreign government official does not violate the FCPA, it is the hiring decision that could eventually come under intense scrutiny. The key is ensuring that the candidate has met or exceeded all of the criteria for the position and there is no indication of a quid pro quo. Since such a hire represents heightened risk, some organizations require additional controls, such as increased levels of approval prior to extending an offer to a family member or associate of a foreign official.
 
Finally, acquisitive companies should seek to examine the potential FCPA risk of a prospective acquisition within the constraints of the information available to them pre-close and then perform a timely, thorough risk assessment focusing on the three areas above: touchpoints with foreign officials and the acquired entity’s intermediaries — especially those who are interacting with foreign officials on the company’s behalf — and the alignment of recruiting and hiring activities with the company’s anti-corruption compliance program.
 
It is not uncommon for a company to get more than you bargain for when buying an entity — such as ongoing fraud and bribery schemes. Being able to demonstrate the lengths the company has gone to root them out will make all the difference in the government’s determination as to whether to hold it accountable for someone else’s sins.
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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a19. ECTI Presents Export Control Reform for USML Category XII: Fire Control, Laser, Imaging, and Guidance Webinar, 8 Dec 
(Source: Danielle McClellan, danielle@learnexportcompliance.com)

* What: Export Compliance in Australia: What U.S. Companies Need to Know about Export Controls in Australia
* When: December 8, 2016; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Scott Gearity
* Register: Here or Danielle McClellan, 540-433-3977, danielle@learnexportcompliance.com.
* * * * * * * * * * * * * * * * * * * *

ENEDITOR’S NOTES

(Source: Editor)

* Margaret Mitchell (Margaret Munnerlyn Mitchell, 8 Nov 1900 – 16 Aug 1949, was an American author and journalist. Her most successful work was the American Civil War-era novel, Gone with the Wind.)
  – “Until you have lost your reputation, you never realize what a burden it was or what freedom really is.” 

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EN_a2
11. 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: 28 Oct 2016: 81 FR 74918: New Mailing Address for the National Commodity Specialist Division, Regulations and Rulings, Office of Trade; Technical Correction 

* 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: 4 Nov 2016: 81 FR 76859-76861: Amendments to the Export Administration Regulations: Update of Arms Embargoes on Cote d’Ivoire, Liberia, Sri Lanka and Vietnam, and Recognition of India as Member of the Missile Technology Control Regime  

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 4 Nov 2016: 81 FR 76861-76863: Amendments to OFAC Regulations To Remove the Former Liberian Regime of Charles Taylor Sanctions Regulations and References to Fax-on-Demand Service  
 
*
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 next week on 15 November, and again on 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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