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16-1123 Wednesday “The Daily Bugle”

16-1123 Wednesday “Daily Bugle”

Wednesday, 23 November 2016

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The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
here for free subscription.  Contact us
for advertising inquiries and rates. [Editor’s Note: The Daily Bugle will not be published tomorrow, November 24th, a U.S. Federal holiday.] 
 

  1. Commerce/BIS: Emerging Technology And Research Advisory Committee to meet on 15 Dec in Wash DC 
  2. Commerce/BIS: Regulations and Procedures Technical Advisory Committee to Meet on 13 Dec in Wash DC 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. Commerce/Census: “Did You Know? Fall Edition” 
  4. State/DDTC: (No new postings.) 
  5. EU Posts Comprehensive Change Note Summary 2016 
  1. Expeditors News: “WTO Announces Chile and Swaziland have Ratified TFA” 
  2. ST&R Trade Report: “ACE Test for CPSC to End 31 Dec”  
  1. T.B McVey: “Trade Compliance Issues in the New Administration, Part I: Export/Sanctions Laws” 
  2. 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 (28 Oct 2016), DOD/NISPOM (18 May 2016), EAR (21 Nov 2016), FACR/OFAC (4 Nov 2016), FTR (15 May 2015), HTSUS (30 Aug 2016), ITAR (21 Nov 2016) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11. Commerce/BIS: Emerging Technology And Research Advisory Committee to meet on 15 Dec in Wash DC

 
81 FR 84553: Emerging Technology And Research Advisory Committee; Notice of Open Meeting
   The Emerging Technology and Research Advisory Committee (ETRAC) will meet on December 15, 2016, 8:30 a.m., Room 3884, at the Herbert C. Hoover Building, 14th Street between Pennsylvania and Constitution Avenues NW., Washington, DC. The Committee advises the Office of the Assistant Secretary for Export Administration on emerging technology and research activities, including those related to deemed exports. …
   The open sessions will be accessible via teleconference to 25 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at Yvette.Springer@bis.doc.gov no later than, December 8, 2016. …
   For more information, call Yvette Springer at (202) 482-2813.
 
   Dated: November 16, 2016.
Yvette Springer, Committee Liaison Officer.
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EXIM_a22. Commerce/BIS: Regulations and Procedures Technical Advisory Committee to Meet on 13 Dec in Wash DC

(Source: Federal Register) [Excerpts.]
 
81 FR 84553-84554: Regulations and Procedures Technical Advisory Committee; Notice of Partially Closed Meeting
   The Regulations and Procedures Technical Advisory Committee (RPTAC) will meet December 13, 2016, 9:00 a.m., Room 3884, in the Herbert C. Hoover Building, 14th Street between Constitution and Pennsylvania Avenues NW., Washington, DC. The Committee advises the Office of the Assistant Secretary for Export Administration on implementation of the Export Administration Regulations (EAR) and provides for continuing review to update the EAR as needed. …
   The open session will be accessible via teleconference to 25 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at Yvette.Springer@bis.doc.gov no later than December 6, 2016.
   A limited number of seats will be available for the public session. Reservations are not accepted. To the extent that time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate the distribution of public presentation materials to the Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email. …
   For more information, call Yvette Springer at (202) 482-2813.
 
   Dated: November 16, 2016.
Yvette Springer, Committee Liaison Officer.
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OGSOTHER GOVERNMENT SOURCES

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


* Commerce; Industry and Security Bureau; RULES; Commerce Control List: Removal of Certain Nuclear Nonproliferation Column 2 Controls [Publication Date: 25 November 2016.]:

* State; NOTICES; Global Terrorist Designations [Publication Date: 25 November 2016.]:
  – Abdelilah Himich, aka Abu Suleyman al-Faransi, aka Abu Suleyman al-Firansi, et al.
  – Basil Hassan
  – Victor Quispe Palomino, aka Comrade Jose

* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 25 November 2016.] 

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The season is changing from the blazing hot days of summer to the cool afternoons of fall. The leaves are starting to turn vibrant oranges, reds and yellows and transform our landscape.
 
Harvested in October, pumpkins are traditionally associated with this time of year. Did you buy your pumpkin yet?
 
Did You Know?
 
  – There was about a 1,383 percent increase in exports of pumpkins, squash and gourds from the United States between 2012 and 2015.
  – In 2015, the United States exported approximately $49.0 million in pumpkins, squash and gourds to Canada.
 
These statistics come from USA Trade Online, a dynamic data tool provided by the U.S. Census Bureau that gives users access to current and cumulative U.S. export and import data.
 
This powerful software allows users to create customized reports and colorful charts detailing international trade data at different levels. All data are updated each month with the release of the latest U.S. International Trade in Goods and Services Report.
 
This data supports manufacturers and businesses wishing to expand their business globally, as well as economists in interpreting economic news and performing academic research, and governments and federal agencies in analyzing domestic and international trade policies.
 
For more information on U.S. Trade Statistics, please go here.

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

(Source: State/DDTC)

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OGS_a57. EU Posts Comprehensive Change Note Summary 2016

 
This document summarizes proposed amendments to Annexes I, II and IV of Council Regulation(EC)No. 428/2009 (as amended by 
Commission Delegated Regulation (EU) No 2016/1969) to implement the changes in the control lists of the various international flora on non-proliferation.
 
The changes implemented are a result of the review of the Wassenaar Arrangement (WA) Dual Use Lists, Missile Technology Control Regime (MTCR) Technical Annexes and Australia Group Common Control Lists during the course of 2015.

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NWSNEWS

NWS_a18
. Expeditors News: “WTO Announces Chile and Swaziland have Ratified TFA”

 
On November 21, 2016 the World Trade Organization (WTO) announced that Chile and Swaziland have now ratified the new Trade Facilitation Agreement (TFA). Ninety-eight countries have now ratified the TFA, including Chile and Swaziland. “The TFA will enter into force once two-thirds of the WTO membership has formally accepted the agreement.”
 
The first section of the TFA covers the movement, clearance of freight, and improving the timing of the process. The second section allows Least Developed Countries (LDC’s) to review specific provisions and coordinate the release of those provisions on a workable timetable for that country. The last section determines that a permanent committee should be established at the WTO, with the main focus on trade facilitation.
 
The discussions for the TFA were concluded at the Bali Ministerial Conference in December 2013. To learn more on the TFA, please go here.

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NWS_a29. ST&R Trade Report: “ACE Test for CPSC to End 31 Dec”

 
The Consumer Product Safety Commission has announced the conclusion at the end of this year of a pilot test that is assessing the electronic filing to the Automated Commercial Environment via the partner government agency message set of certain information for regulated finished consumer products and three products included on the substantial product hazard list (hand-supported hair dryers, extension cords, and seasonal and decorative lighting products). The CPSC and CBP have determined that the so-called “eFiling Alpha Pilot” was successful in that participating firms were able to file CPSC’s PGA message set data as part of an ACE entry, the CPSC was able to receive the PGA message set data from CBP, and the CPSC was also able to accept the data into its system for risk analysis.
 
Pilot participants had a choice between two different methods to file targeting/enforcement data for products using the PGA message set. They could either file the targeting/enforcement data elements with each product at the time of entry (full PGA message set) or file only a reference to targeting/enforcement data stored in a product registry maintained by the CPSC (product registry and reference PGA message set). The CPSC notes that participants primarily chose to file data using the product registry and reference PGA message set, although the agency anticipates that several participants will file using the full PGA message set before the pilot concludes.
 
After the conclusion of the test, the CPSC will provide a forum to consider what CPSC staff and participants learned from the eFiling Alpha Pilot and how best to structure a more robust “beta” test of electronic filing. Based on the review of the pilot, CPSC staff will provide options regarding a “beta” testing phase for CPSC consideration.

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COMMCOMMENTARY

COMM_a110. T.B McVey: “Trade Compliance Issues in the New Administration, Part I: Export/Sanctions Laws”

(Source: Williams Mullen)

* Author: Thomas B. McVey, Esq., tmcvey@williamsmullen.com, (202) 293-8118, Williams Mullen LLP
 
A change in administration will likely bring changes in export/sanctions laws and compliance obligations. This will include both last minute amendments by the outgoing administration and initiatives by the new President. Regardless of your politics, these will most likely affect your company and you should use care to stay abreast of these developments. Here are a number of issues to watch during this transition.
 
A.   Outgoing Administration. It is unlikely that there will be any new policy initiatives involving export controls between now and January 20. However there may be a number of last minute final amendments to close out initiatives started earlier in the year. For example:
 
  – ECR and Harmonization of EAR/ITAR. BIS has issued final regulations for most of the important changes to the Export Administration Regulations (“EAR”) under export control reform (“ECR”). However, the Directorate of Defense Trade Controls (“DDTC”) still has a number of proposed amendments waiting to be finalized under the International Traffic In Arms Regulations (“ITAR”). These include revisions to the definition of “defense services” under ITAR §120.9, amendment of the “by and for” license exemption under ITAR §126.4 and amendments to the definition of “export” involving end-to-end encryption and cloud computing. These will be significant amendments to ITAR.
 
  – Two Year Reviews. Similarly, it is expected that both agencies will continue the two year reviews of items on the U.S. Munitions List (“USML”) started under ECR. In particular, following the recent reviews of Categories VIII and XIX, the next categories up for review include Categories VI,[1] VII,[2] XIII,[3] XV,[4] and others. This process will continue along during the rest of this year and throughout 2017.
 
  – “Clean-Up” of Individual Country Laws. The Office of Foreign Assets Control (“OFAC”) has been amending miscellaneous sanctions programs in what appears to be a last minute clean-up of loose ends. This includes repeal of the Burma and Cote d’Ivoire sanctions and updates to the Belarus, Zimbabwe and other sanctions programs. DDTC has made similar “clean-up” amendments to the §126.1 countries, and BIS has made corresponding changes to the Vietnam, Liberia, Sri Lanka and Cote d’Ivoire embargoes. It is possible that there could be a few more “clean-up” changes within the next nine weeks.
 
 
B.   New Administration.   While it is too early to predict with certainty regarding changes in law, here are a number of hot areas to watch:
 
  – Russia/Ukraine.   If there is an improvement in U.S. relations with Russia, look for possible roll-back of the Russia sanctions under the OFAC Ukraine/Russia-Related sanctions program, BIS’s Russian Industry Section Sanctions and related Russia EAR restrictions and the ITAR policy of denial for Russia, as well as a possible repeal of the embargo involving Crimea.
 
  – Iran. Candidate Trump has repeatedly threatened to re-negotiate the Iran agreement under the Joint Comprehensive Plan of Action (“JCPOA”). If things deteriorate with Iran, look for a possible “snap-back” of some or all of the recent JCPOA sanctions relief. This will mostly affect the secondary sanction on foreign companies and banks, but could also affect U.S. firms involving civil aircraft and parts, under General License H and importers of specialized Iranian products.
 
  – USML Categories I, II and III. Export control practitioners are well aware of the difficult political issues surrounding the transfer of items in USML Categories I, II and III (firearms, ammunitions and accessories) to the Commerce Control List (“CCL”) under ECR. This is due to the thorny issues involving gun control, first amendment and similar concerns. Following the recent election, the political dynamic around this issue has changed radically in light of Trump’s strong vocal support for gun owners during the campaign. If the Trump administration is looking for a way to quickly and easily score points with campaign supporters, he can transfer jurisdiction of firearms from the USML to the CCL – this can happen within the first 100 days of the inauguration.
 
  – Cuba. The Trump administration could decide to roll back certain of the recent Obama amendments involving Cuba, repealing recent amendments by OFAC and BIS. Alternatively such amendments could come from a reinvigorated Republican Congress over the course of the next year.

  – N. Korea. N. Korea may be the first real foreign policy test for the new administration. If President Kim Jong-un provokes President Trump, look for expanded N. Korea sanctions – this will most likely affect secondary sanctions on foreign companies such as additional sanctions on Chines banks and other Chinese firms. If China feels threatened by extraterritorial U.S. sanctions, this could result in retaliatory measures by China.
 
  – Cyber-Related Sanctions Under 31 CFR Part 578. In light of recent increases in cyber-attacks by foreign governments on U.S. companies, political organizations and government agencies (including by N. Korea, China, Iran and Russia), the new administration could impose sanctions against any of these governments under the newly authorized Cyber-Related Sanctions at 31 CFR Part 578. In addition, the imposition of U.S. sanctions on China under Part 578 in response to China’s ongoing cyber-attacks on U.S. firms could provide President Trump with significant leverage in dealing with China on other issues such as imports of Chinese products.
 
  – Expanded Military Deployments. Candidate Trump repeatedly promised to beef up the U.S. military and be more assertive with foreign adversaries. It is possible that the U.S. could be embroiled in a major military initiative within the first year after the election, involving ISIL, Syria, Libya, N. Korea, Iran or any of a number of other hot spots. Military build-up and deployments involve significant U.S. contractor support, and this triggers the usual increase of export compliance requirements including ITAR registrations, TAA’s, export licenses, reexport/retransfer authorizations and related compliance activities. Following ECR, requirements will apply under the EAR as well. Companies should be ready if these requirements arise.
 
  – Enforcement Climate. Will enforcement of the U.S. export laws increase or decrease under the Trump administration? Will the Yates policy of holding individuals personally liable for corporate violations continue or be rescinded? Candidate Trump espoused two separate, and possibly contradictory, themes during the campaign: first to get tough on crime and “drain the swamp” of criminal wrongdoing, and second to roll back regulation on businesses. The new administration could advance the traditional Republican view of limiting enforcement of regulatory violations, at least for corporate wrongdoing. Alternatively, it could take a strong law and order position for strict enforcement of U.S. laws, including export laws. (This could also extend to related areas including the Foreign Corrupt Practices Act, False Claims Act, Customs/import laws, etc.) At this point it is too early to tell. Much will depend on who is appointed as the new Attorney General and which Justice Department policies the new AG keeps or repeals (including the Yates policy). A lot can happen on this issue within the next few weeks, so pay particular attention to this one.
 
Whatever your politics, change will be coming, and possibly quickly. This will mean amendments to the law and changes in compliance procedures.   Compliance professionals and corporate counsel should be vigilant in the coming months.

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COMM_a211. Gary Stanley’s ECR Tip of the Day

(Source: Defense and Export-Import Update; available by subscription from
gstanley@glstrade.com
)
 
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059,
gstanley@glstrade.com
 
EAR Part 772 defines the term “export control document” as a license; application for license; any and all documents submitted in accordance with the requirements of the EAR in support of, or in relation to, a license application; application for International Import Certificate; Delivery Verification Certificate or similar evidence of delivery; Electronic Export Information (EEI) on the Automated Export System (AES) presented in connection with shipments to any country; a Dock Receipt or bill of lading issued by any carrier in connection with any export subject to the EAR and any and all documents prepared and submitted by exporters and agents pursuant to the export clearance requirements of Part 758 of the EAR; a U.S. exporter’s report of request received for information, certification, or other action indicating a restrictive trade practice or boycott imposed by a foreign country against a country friendly to the United States, submitted to the U.S. Department of Commerce in accordance with the provisions of Part 760 of the EAR; Customs Form 7512, Transportation Entry and Manifest of Goods, Subject to Customs Inspection and Permit, when used for Transportation and Exportation (T.& E.) or Immediate Exportation (I.E.); and any other document issued by a U.S. Government agency as evidence of the existence of a license for the purpose of loading onto an exporting carrier or otherwise facilitating or effecting an export from the United States or any reexport of any item requiring a license.

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ENEDITOR’S NOTES

(Source: Editor) 

 
*
William F. Buckley, Jr. (William Francis Buckley, 24 Nov 1925 – 27 Feb 2008, was an American conservative author and commentator. He founded National Review magazine in 1955, which had a major impact in stimulating the conservative movement; hosted 1,429 episodes of the television show Firing Line (1966-1999), where he became known for his transatlantic accent and wide vocabulary.)

  – “Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views.”

 

*
Laurence Sterne (24 Nov 1713 – 18 Mar 1768, was an Irish novelist and an Anglican clergyman. He wrote the novels The Life and Opinions of Tristram Shandy, Gentleman, and A Sentimental Journey Through France and Italy.)

  – “People who are always taking care of their health are like misers, who are hoarding a treasure which they have never spirit enough to enjoy.” 

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EN_a313
. 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: 21 Nov 2016 (effective 31 Dec 2016): 81 FR 83114-83126: Clarifications and Revisions to Military Aircraft, Gas Turbine Engines and Related Items License Requirements 

  
*
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 Mar 2016) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and footnotes containing case annotations, practice tips, and Census/AES guidance.  Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR.
 
*
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jul 2016: 19 USC 1202 Annex.  (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment: 30 Aug 2016; Harmonized System Update (HSU) 1612, containing 4,692 ABI records and 935 harmonized tariff records.  
  – HTS codes for AES are available
here
.
  – HTS codes that are not valid for AES are available
here.
 
INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130 (Caution — The ITAR as posted on GPO’s eCFR website and linked on the DDTC often takes several weeks to update the latest amendments.)
  – Latest Amendment: 21 Nov 2016 (effective 31 Dec 2016): 81 FR 83126-83135: Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Categories VIII and XIX
  – The only available fully updated copy (latest edition 21 Nov 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 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 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 8,000 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 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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