16-1201 Thursday “The Daily Bugle”

16-1201 Thursday “Daily Bugle”

Thursday, 1 December 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 here for free subscription. Contact us for advertising inquiries and rates

  1. Commerce/BIS Amends EAR Concerning Temporary Exports to Mexico Under License Exception TMP 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. State/DDTC Posts Notice on DECCS Being Down Every Thursday, Starting 1 Dec 
  4. EU Proposes Action Plan to Boost Research and Innovation of European Defense Industry for Long Term Security 
  1. Reuters: “Extension of Iran Sanctions Act passes U.S. Congress”
  2. ST&R Trade Report: “CEE, ISF, De Minimis, AD/CV Evasion, Other Rules on Regulatory Agenda”
  1. Gateway Recruiting Salary Survey
  2. W. Root: “Time to Reform Export Control Reform”
  3. R.C. Burns: “Maybe There’s a Good Idea Lurking in Tom Fox’s Stealth Advertorial”
  1. “The Best Customs Broker Course 4-day Boot Camp,” 13-17 Feb in Brattleboro VT 
  1. Jasper Helder Moves to Akin Gump London 
  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 (1 Dec 2016), FACR/OFAC (4 Nov 2016), FTR (15 May 2015), HTSUS (30 Aug 2016), ITAR (21 Nov 2016)



1. Commerce/BIS Amends EAR Concerning Temporary Exports to Mexico Under License Exception TMP

(Source: Federal Register) [Excerpts.]
81 FR 86571-86573: Temporary Exports to Mexico Under License Exception TMP
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: This final rule aligns the time limit of License Exception Temporary Imports, Exports, Reexports, and Transfers (in-country) (TMP), which authorizes, among other things, certain temporary exports to Mexico, with the time limit of Mexico’s Decree for the Promotion of Manufacturing, Maquiladora and Export Services (IMMEX) program. Currently, TMP allows for the temporary export and reexport of various items subject to the Export Administration Regulations (EAR), as long as the items are returned no later than one year after export, reexport, or transfer if not consumed or destroyed during the period of authorized use. Other than a four-year period for certain personal protective equipment, the one-year limit extends to all items shipped under license exception TMP. However, the one-year period does not align with the time constraints of Mexico’s IMMEX program, which allows imports of items for manufacturing operations on a time limit that may exceed 18 months. This rule amends TMP to complement the timeline of the IMMEX program. Under this amendment, items temporarily exported or reexported under license exception TMP and imported under the provisions of the IMMEX program would be authorized to remain in Mexico for up to four years from the date of export or reexport.
* DATES: Effective: January 3, 2017.
* FOR FURTHER INFORMATION CONTACT: Regulatory Policy Division, Office of Exporter Services, Bureau of Industry and Security, by telephone (202) 482-2440 or email: RPD2@bis.doc.gov.
   Under IMMEX, the length of time that imports may remain in Mexico is commodity dependent, with some items allowed to remain in-country for 18 months or more. These time allotments are greater than the time limits for License Exception Temporary Imports, Exports, Reexports, and Transfers (in-country) (TMP) allowed under Sec. 740.9(a)(14) of the EAR. With few exceptions, items exported under TMP, if not consumed or destroyed during the authorized use abroad, must be returned to the United States one year after the date of export. The discrepancy between the time periods of IMMEX and TMP reduces the efficacy of both policies, thereby hindering the shipment of items subject to the EAR to and from Mexico.
   U.S. companies that produce items subject to the EAR and ship those items to Mexico under IMMEX have notified the Bureau of Industry and Security of this discrepancy and have requested that BIS amend the EAR to increase compatibility with IMMEX. Considering the strength of Mexico’s export control regime, as exemplified by its accession as a member to the Wassenaar Arrangement, the Australia Group, and the Nuclear Suppliers Group, BIS published the proposed rule 81 FR 57505 on August 23, 2016 (known hereafter as the August 23 rule) proposing to amend Sec. 740.9(a) to account for IMMEX’s time limit. For the purpose of simplicity, BIS did not propose to match the various time periods instituted by IMMEX. Instead, the rule proposed to revise Sec. 740.9(a)(8) to allow temporary exports and reexports to remain in Mexico for up to four years, which accommodates the maximum available time that temporarily imported items may remain in Mexico under IMMEX and is in parallel with the validity period of BIS’s licenses. Additionally, the August 23 rule proposed to revise introductory paragraph Sec. 740.9(a)(14) to include a reference to Sec. 740.9(a)(8) as an exception to the one-year time limit of TMP. BIS received only one comment regarding the rule, in which the user expressed support for the potential change in the regulations. Because BIS received only one comment, which was positive, regarding the August 23 rule, this final rule implements the proposed rule without change. …
Kevin J. Wolf, Assistant Secretary for Export Administration.

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

* President; PROCLAMATIONS; Trade: Harmonized Tariff Schedule of the U.S.; Modifications (Proc. 9549) [Publication Date: 2 December 2016.]

* U.S. Customs and Border Protection; Notices; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Vessel Entrance or Clearance Statement [Publication Date: 2 December 2016.]

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. State/DDTC Posts Notice on DECCS Being Down Every Thursday, Starting 1 Dec

The Defense Export Control and Compliance (DECCS) environment, including the Commodity Jurisdiction (CJ) application, will be unavailable to industry from 6:00PM (EST) to 8:00PM (EST) every Thursday starting December 1 for a regularly scheduled system maintenance window. Please ensure work in progress is saved prior to the scheduled downtime.

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The Commission today adopted a European Defence Action Plan with concrete measures to support a strong and innovative European defense industry and defense capability priorities agreed by Member States. By mobilizing available EU instruments it will ensure that the European defense industrial base is able to meet Europe’s future security needs.
For Europe to be able to deliver on these capability priorities, it must create the conditions for more defense cooperation to maximize the output and the efficiency of defense spending. This should go hand-in-hand with a strong, competitive and innovative defense industrial base, also to the benefit of the broader economy: investments in the defense sector have a significant economic multiplier effect in terms of creation of spin-offs and technology transfers to other sectors, as well as the creation of jobs.
The Commission proposed the following measures: Firstly, a European Defence Fund to fund collaborative research projects and, as a separate element, the joint development of defense capabilities, to be owned by Member States, in priority areas. Secondly, supporting SMEs through fostering investments and providing more cross-border opportunities in defense supply chains. Thirdly ensuring Europe has an open and competitive single market for defense.
The proposed measures will not only enhance Europe’s strategic autonomy and strengthen its ability to act with partners; they will also stimulate jobs, growth and innovation across the EU.

The defense industrial sector is not only of strategic importance for Europe’s security. With a total turnover of EUR 100 billion per year and 1.4 million highly skilled peopled directly or indirectly employed in Europe, it is also a major contributor to the European economy.
  – Press release

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. Reuters: “Extension of Iran Sanctions Act passes U.S. Congress”

The U.S. Senate passed a 10-year extension of sanctions against Iran on Thursday, sending the measure to the White House for President Barack Obama to sign into law and delaying any potentially tougher actions until next year.
The measure passed by 99-0. It passed the House of Representatives nearly unanimously in November, and congressional aides said they expected Obama would sign it.
The ISA will expire on Dec. 31 if not renewed. The White House had not pushed for an extension, but had not raised serious objections.
Members of Congress and administration officials said the renewal of the Iran Sanctions Act (ISA) would not violate the nuclear agreement with Iran reached last year.
  “While we do not think that an extension of ISA is necessary, we do not believe that a clean extension would be a violation of the JCPOA (Iran deal),” a senior administration official said.
Iranian Supreme Leader Ayatollah Khamenei said recently the extension would breach the agreement and threatened retaliation.
Democrats who backed the accord said they did not believe the ISA extension violated the pact because it continued a sanctions regime that was already in place. They said they had not heard such objections from U.S. partners.
  “I have not heard strident objections from our key allies in the JCPOA,” Democratic Senator Chris Coons told reporters.
The agreement was signed by the United States, Britain, Russia, France, China, Germany and Iran.
Congress’ action did not address the fate of the nuclear pact, which was opposed by every Republican in the Senate and House. Lawmakers said it would make it easier for sanctions to be quickly reimposed if Iran violated the deal.
Republican U.S. President-elect Donald Trump railed against the pact as he campaigned for the White House. Many other members of his party, which also controls Congress, have called for the new administration to tear up the agreement.
Senate Foreign Relations Committee Chairman Bob Corker said the renewal ensures Trump can reimpose sanctions Obama lifted under the deal, in which Iran curbed its nuclear program in exchange for sanctions relief.
  “Extending the Iran Sanctions Act … ensures President-elect Trump and his administration have the tools necessary to push back against the regime’s hostile actions,” Corker said in a statement.
Trump becomes president on Jan. 20. Corker has been mentioned as a possible Trump secretary of state.

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7. ST&R Trade Report: “CEE, ISF, De Minimis, AD/CV Evasion, Other Rules on Regulatory Agenda”

The departments of Homeland Security and the Treasury have issued their semiannual regulatory agendas, which list the following regulations affecting international trade that could be issued within the next year as well as rulemaking proceedings that have been in process for some time and are not as likely to see further progress in the near term. The expected timeframes for issuance of these rules are indicated in parentheses.
Upcoming Regulations
  – a U.S. Customs and Border Protection interim final rule clarifying the circumstances under which a notice of arrival must be filed for imported pesticides and pesticidal devices, codifying existing required NOA data elements, requiring the submission of additional NOA data elements for unregistered pesticides that are currently optional, and permitting the NOA to be filed electronically in the Automated Commercial Environment (November (first time published)
  – separate proposed rules from the Alcohol and Tobacco Tax and Trade Bureau to update procedures for imports and exports of distilled spirits, wine, beer, and tobacco products and implement the International Trade Data System all-electronic environment (December (previously May) for imports and April 2017 (previously October) for exports)
  – a final rule setting forth due process procedures for CBP to follow before suspending or revoking assigned entry filer codes, immediate delivery privileges, or remote location filing privileges (December (previously June))
  – a CBP interim final rule shifting authority to make certain decisions regarding customs transactions from port directors to directors of the Centers of Excellence and Expertise (December (previously July))
  – a CBP final rule to expand the definition of “importer” under the importer security filing rule for certain types of shipments to ensure that the party that has the best access to the required information is the party responsible for filing the ISF (December; proposed rule issued in July)
  – a CBP proposed rule to implement the Air Cargo Advance Screening pilot as a regulatory program (December (previously September))
  – a CBP final rule to harmonize the documentation requirements applicable to different classes of vehicles and engines that are subject to the Clean Air Act’s emission standards and to permit the required EPA emission compliance forms to be filed with CBP electronically (December (first time published); proposed rule published in August)
  – a CBP final rule allowing Toxic Substances Control Act certifications to be filed electronically and eliminating the paper-based blanket certification process (December (first time published); proposed rule published in August)
  – a CBP final rule removing regulations addressing flights to and from Cuba (January 2017 (unchanged))
  – a CBP final rule on procedures for investigating evasion of antidumping and countervailing duty orders (March 2017 (first time published); interim final rule published in August)
  – a CBP final rule reflecting that the Automated Commercial System is being phased out as a CBP-authorized electronic data interchange system for the processing of electronic entry and entry summary filings (March 2017 (previously December 2016); interim final rule issued October 2015)
  – a CBP final rule raising from $200 to $800 the value of articles that may be imported by one person on one day free of duty and tax (April 2017 (first time published); interim final rule published in August)
  – a CBP final rule to update the customs broker examination procedures (proposed rule issued in September; no date yet set for final rule)
Regulations in Process
  – a CBP proposed rule to give effect to certain liberalized changes to the NAFTA preference rules of origin that have been agreed to by the U.S., Canada and Mexico
  – a final rule reflecting the U.S.-Singapore free trade agreement
  – a final rule to enhance CBP’s ability to regulate and track in-bond merchandise and ensure that it is properly entered or exported
Regulations Completed
  – a TTB final rule updating and reissuing regulations pertaining to minimum manufacturing, marking, and importer permit requirements for tobacco products and cigarette papers and tubes

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COMM_a18. Gateway Recruiting Salary Survey

(Source: Garrett Stephenson, Gateway Recruiting, Inc.)

We are conducting our annual salary survey for Trade Compliance this year now.  Please circulate the link. Everyone who participates will get a free copy of the results.  Information is kept confidential.   No name is attached to the data. http://gatewayrecruiting.com/salary-survey.

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9. W. Root: “Time to Reform Export Control Reform”

(Source: Author) [Excerpts.]

* Author: Bill Root, waroot23@gmail.com

Seven years ago, President Obama and Secretary of Defense Gates initiated an ECR with “4 singles” at its core. If the Trump administration were to revive 4 singles and DoD were to be the single, the country would survive, especially because the responsible office in DoD would have to be staffed with experienced people . . . .

Whether or not the “4 singles” goal is revived, and until it is achieved, I urge all to oppose the “4 doubles” becoming the “4 triples” by giving a high priority to stopping the DoD proposal in the October 31 Federal Register to revise 32 CFR 250 (my public comments on that proposal are available on request to me at waroot23@gmail.com).

I also advocate adoption of the following sweeping proposals in both international and US export controls to simplify export controls whether or not “4 singles” is adopted. They are based in large part upon what happened in 1951, when the US persuaded COCOM to adopt Administrative Principle 4 (AP4), which stated that the components to control are those, which “would defeat the purpose of the embargo”:

  (1) Delete all controls based on actual or intended military end-use or military end-user.
  (2) Delete all controls on parts, accessories, and attachments and all catch-all controls on components.
  (3) Delete “specially designed” (and similar expressions) wherever they appear.
  (4) Control both munitions and dual use end-items using only technical characteristics.
  (5) Control components using the same technical characteristics as those applicable to end-items (already done for Wassenaar 5.A.2 and ECCN 5A002 encryption “systems, equipment, and components, as follows…”)
  (6) Use “required” to modify software controlled on the basis of its relationship to controlled commodities, as already anticipated in the EAR definition of “required.

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10. R.C. Burns: “Maybe There’s a Good Idea Lurking in Tom Fox’s Stealth Advertorial”
Export Law Blog
. Reprinted by permission.)
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC, 202-624-3949,
Over at the excellent FCPA Compliance & Ethics Blog, Tom Fox has a plug for email monitoring software disguised as a blog post.  He’s even doing a “webinar” with the software developers — completely free, of course — presumably to push the sales of this product.
Notwithstanding what might not be his completely objective take on this software product, Fox raises a good issue that might warrant consideration for incorporation into your export compliance program.  I assume everyone reading my blog and this post is acutely aware that a robust compliance plan is the best insurance against getting taken to the cleaners by the DoJ and the export agencies after it is discovered that an employee in your Hamburg office has been shipping your U.S. origin night vision to Iran.  But what does your compliance program do proactively to ferret out such problems?  Fox suggests that companies should consider periodic email sweeps for keywords
The concept is straightforward; at regular intervals you can sweep through your company email database for identified key words that can be flagged for further investigation, if required.
So, should you consider sweeping all emails for keywords such as “Iran” or “Syria”? What other keywords might help pinpoint export compliance problems? “Jail”? “Orange Jumpsuit”? “Export License,” as in “let’s avoid fussing with that stupid export license requirement”? Are there keywords that can identify times when employees say something like “Call me, since we shouldn’t put this in writing”?
While I think such an approach is a nice shiny bauble that can be dangled in front of prosecutors and enforcement agencies and therefore is worth considering, I also wonder whether such sweeps will actually be effective in detecting violations. First, in my experience, most of the problems come from sales employees outside the United States who don’t think U.S. laws should interfere with their commissions. Foreign privacy laws, particularly in the E.U., often pose barriers to rifling through foreign employees’ emails. Second, in my experience, employees, particularly those with mischief in their hearts, are much too savvy to talk openly in emails about their transshipment schemes. They almost always use code of some kind to conceal what they are up to. These employees and their code words are normally not clever enough to fool prosecutors, but those code words – like “the country we discussed” or “Middle Earth” – will easily evade keyword email sweeps.  
Any thoughts on this? Share your experiences (anonymously if you wish) in the comments section [of the source on-line blog].
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. “The Best Customs Broker Course 4-day Boot Camp,” 13-17 Feb in Brattleboro VT

(Source: Ruth Rodriguez; ruthr@exportimportlaw.com)
* What: The Best Customs Broker Course 4-day Boot Camp, that require students to participate, collaborate, and to work through and improve upon the subjects in which they are weak. Taught by attorneys who have passed the customs broker exam
* Where: Brattleboro, Vermont
* When: February 13-17, 2017
* Sponsors: Thank you to our sponsors, Brattleboro Vermont Foreign Trade Zone LLC in cooperation with the Vermont Agricultural Business Education Center.
* Register: Here.
* Questions: Call Ruth Rodriguez at 469-767-0367 or e-mail her at ruthr@exportimportlaw.com

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MS_a112. Jasper Helder Moves to Akin Gump London
(Source: Editor)

Jasper Helder, Esq., has moved from Baker & McKenzie to Akin Gump Strauss Hauer & Feld LLP in their London office. Contact Jasper at jasper.helder@akingump.com or +44 7393 7664 64.
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EN_a113. Bartlett’s Unfamiliar Quotations

(Source: Editor)

* Woody Allen (Heywood “Woody” Allen, born Allan Stewart Konigsberg, 1 Dec 1935, is an American actor, comedian, filmmaker, playwright, and musician, who wrote, directed, or acted in nearly 60 films, and whose career spans more than sixty years.  Allen, age 81, currently plays jazz clarinet and tours with his New Orleans Jazz Band.)
  – “Eighty percent of success is just showing up.”
* Lee Trevino (Lee Buck Trevino, born 1 Dec 1939, is a retired American professional golfer regarded as one of the greatest players in professional golf history.)
  – “A hungry dog hunts best.” 

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EN_a214. Are Your Copies of Regulations Up to Date?
(Source: Editor)

The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.  Changes to applicable regulations are listed below.
: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War
  – Last Amendment:
15 Jan 2016: 81 FR 2657-2723: Machineguns, Destructive Devices and Certain Other Firearms; Background Checks for Responsible Persons of a Trust or Legal Entity With Respect To Making or Transferring a Firearm
: 19 CFR, Ch. 1, Pts. 0-199
  – Last Amendment:
28 Oct 2016: 81 FR 74918: New Mailing Address for the National Commodity Specialist Division, Regulations and Rulings, Office of Trade; Technical Correction

  – Last Amendment: 18 May 2016: Change 2: Implement an insider threat program; reporting requirements for Cleared Defense Contractors; alignment with Federal standards for classified information systems; incorporated and canceled Supp. 1 to the NISPOM  (Summary here.)

  – Last Amendment: 1 Dec 2016: 81 FR 86571-86573: Temporary Exports to Mexico Under License Exception TMP 

: 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 
: 15 CFR Part 30
  – Last Amendment: 15 May 2015; 80 FR 27853-27854: Foreign Trade Regulations (FTR): Reinstatement of Exemptions Related to Temporary Exports, Carnets, and Shipments Under a Temporary Import Bond 
  – HTS codes that are not valid for AES are available
  – The latest edition (15 Nov 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. 
, 1 Jul 2016: 19 USC 1202 Annex.  (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment: 30 Aug 2016; Harmonized System Update (HSU) 1612, containing 4,692 ABI records and 935 harmonized tariff records. 
  – HTS codes for AES are available
  – HTS codes that are not valid for AES are available
: 22 C.F.R. Ch. I, Subch. M, Pts. 120-130
  – 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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* 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.

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