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| | - Presidents Posts Proclamation Concerning Modification of U.S. Harmonized Tariff Schedule
- DHS/CBP Seeks Comments on Form 1300, Vessel Entrance or Clearance Statement
| | | - Ex/Im Items Scheduled for Publication in Future Federal Register Editions
- Commerce/BIS: (No new postings.)
- State/DDTC: (No new postings.)
| | | - Reuters: “U.S. Warns China It Will Target Firms for Illicit N. Korea Business”
- ST&R Trade Report: “Dates and Deadlines: Classification, OFAC Symposium, Export Rules, Product Safety”
- ST&R Trade Report: “Export Controls, AD Proceedings Among Upcoming DOC Rules”
| | | - D.G. Yeargin & C.J. Owen: “Compliance with Export Controls Can Be Essential to Winning Government Contracts”
- R.C. Burns: “Prosecutors’ Flood of Crocodile Tears Drown the Wind”
| | | - Friday List of Approaching Events
| | | - Bartlett’s Unfamiliar Quotations
- 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)
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EX/IM ITEMS FROM TODAY’S FEDERAL REGISTER |
1. Presidents Posts Proclamation Concerning Modification of U.S. Harmonized Tariff Schedule (Source: Federal Register) [Excerpts.] 81 FR 87401-87407: To Modify the Harmonized Tariff Schedule of the United States and for Other Purposes By the President of the United States of America;
A Proclamation … NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States of America, including but not limited to sections 1102 and 1206 of the 1988 Act, section 111 of the URAA, section 201 of the USAFTA Act, section 201 of the USMFTA Act, section 201 of the CAFTA-DR Act, section 201 of the USOFTA Act, section 201 of the USPTPA Act, section 201 of the USKFTA, section 201 of the PTPA Act, section 112 of AGOA, section 604 of the Trade Act, 50 U.S.C. 1701 et seq., and 50 U.S.C. 1601 et seq., do proclaim that: (1) In order to modify the HTS to conform it to the Convention or any amendment thereto recommended for adoption, to promote the uniform application of the Convention, to establish additional subordinate tariff categories, and to make technical and conforming changes to existing provisions, the HTS is modified as set forth in Annex I of Publication 4653 of the United States International Trade Commission, titled, “Modifications to the Harmonized Tariff Schedule of the United States Under Section 1206 of the Omnibus Trade and Competitiveness Act of 1988,” which is incorporated by reference into this proclamation. (2) In order to provide for the continuation of previously proclaimed staged duty reductions in the Rates of Duty 1-Special subcolumn for originating goods of Morocco under the USMFTA that are classifiable in the provisions modified by Annex I of Publication 4653 and entered, or withdrawn from warehouse for consumption, on or after each of the dates specified in section (a) of Annex II of Publication 4653, the HTS is modified as follows: (a) The Rates of Duty 1-Special subcolumn is modified by inserting in such subcolumn for each subheading the rate of duty specified for such subheading in the table column titled 2017 before the symbol “MA” in parentheses; and (b) For each of the subsequent dated table columns, the rates of duty in such subcolumn for such subheadings set forth before the symbol “MA” in parentheses are deleted and the rates of duty for such dated table column are inserted in each enumerated subheading in lieu thereof. (3) In order to provide for the continuation of previously proclaimed staged duty reductions in the Rates of Duty 1-Special subcolumn for originating goods of Australia under the USAFTA that are classifiable in the provisions modified by Annex I of Publication 4653 and entered, or withdrawn from warehouse for consumption, on or after each of the dates specified in section (b) of Annex II of Publication 4653, the HTS is modified as follows: (a) The Rates of Duty 1-Special subcolumn for each of the subheadings enumerated in subsection B is modified by inserting in such subcolumn for each subheading the rate of duty specified for such subheading in the table column titled 2017 before the symbol “AU” in parentheses; and (b) For each of the subsequent dated table columns, the rates of duty in such subcolumn for such subheadings set forth before the symbol “AU” in parentheses are deleted and the rates of duty for such dated table column are inserted in each enumerated subheading in lieu thereof. (4) In order to provide for the continuation of previously proclaimed staged duty reductions in the Rates of Duty 1-Special subcolumn for originating goods under general note 29 to the HTS that are classifiable in the provisions modified by Annex I of Publication 4653 and entered, or withdrawn from warehouse for consumption, on or after each of the dates specified in subsections (c)(1) and (c)(2) of Annex II of Publication 4653, the HTS is modified as follows: (a) The rate of duty in the HTS set forth in the Rates of Duty 1-Special subcolumn for each of the HTS subheadings enumerated in subsection (c)(1) of Annex II is modified by inserting in such subcolumn for each subheading the rate of duty specified in the table column titled 2017 before the symbol “P” in parentheses; (b) The rates of duty for such subheadings set forth before the symbol “P” in parentheses are deleted and the rates of duty for such dated table column are inserted in each enumerated subheading in lieu thereof; (c) The Rates of Duty 1-Special subcolumn for each of the HTS subheadings enumerated in subsection (c)(2) of Annex II is modified by inserting in such subcolumn for each subheading the rate of duty specified in the table column titled 2017 before the symbol “P+” in parentheses; and (d) For each of the subsequent dated table columns in such subsection set forth before the symbol “P+” in parentheses, are deleted and the rates of duty for such dated table column are inserted in each enumerated subheading in lieu thereof. (5) In order to provide for the continuation of previously proclaimed staged duty reductions in the Rates of Duty 1-Special subcolumn for originating goods of Peru under the USPTPA that are classifiable in the provisions modified by Annex I of Publication 4653 and entered, or withdrawn from warehouse for consumption, on or after each of the dates specified in section (d) of Annex II of Publication 4653, the HTS is modified as follows: (a) The rate of duty in the HTS set forth in the Rates of Duty 1-Special subcolumn for each of the HTS subheadings enumerated in section (d) of Annex II is modified by inserting in such subcolumn for each subheading the rate of duty specified for such subheading in the table column titled 2017 before the symbol “PE” in parentheses; and (b) For each of the subsequent dated table columns, the rates of duty in such subcolumn for such subheadings set forth before the symbol “PE” in parentheses are deleted and the rates of duty for such dated table column are inserted in each enumerated subheading in lieu thereof. (6) In order to provide for the continuation of previously proclaimed staged duty reductions in the Rates of Duty 1-Special subcolumn for originating goods of Oman under the USOFTA that are classifiable in the provisions modified by Annex I of Publication 4653 and entered, or withdrawn from warehouse for consumption, on or after each of the dates specified in section (e) of Annex II of Publication 4653, the HTS is modified as follows: (a) The rate of duty in the HTS set forth in the Rates of Duty 1-Special subcolumn for each of the HTS subheadings enumerated in section (e) of Annex II is modified by inserting in such subcolumn for each subheading the rate of duty specified for such subheading in the table column titled 2017 before the symbol “OM” in parentheses; and (b) For each of the subsequent dated table columns, the rates of duty in such subcolumn for such subheadings set forth before the symbol “OM” in parentheses are deleted and the rates of duty for such dated table column are inserted in each enumerated subheading in lieu thereof. (7) In order to provide for the continuation of previously proclaimed staged duty reductions in the Rates of Duty 1-Special subcolumn for originating goods of Korea under the USKFTA that are classifiable in the provisions modified by Annex I of Publication 4653 and entered, or withdrawn from warehouse for consumption, on or after each of the dates specified in section (f) of Annex II of Publication 4653, the HTS is modified as follows: (a) The rate of duty in the HTS set forth in the Rates of Duty 1-Special subcolumn for each of the HTS subheadings enumerated in section (f) of Annex II shall be modified by inserting in such subcolumn for each subheading the rate of duty specified for such subheading in the table column titled 2017 before the symbol “KR” in parentheses; and (b) For each of the subsequent dated table columns, the rates of duty in such subcolumn for such subheadings set forth before the symbol “KR” in parentheses are deleted and the rates of duty for such dated table column are inserted in each enumerated subheading in lieu thereof. (8) In order to provide for the continuation of previously proclaimed staged duty reductions in the Rates of Duty 1-Special subcolumn for originating goods of Panama under the PTPA that are classifiable in the provisions modified by Annex I of Publication 4653 and entered, or withdrawn from warehouse for consumption, on or after each of the dates specified in section (g) of Annex II of Publication 4653, the HTS is modified as follows: (a) The Rates of Duty 1-Special subcolumn is modified by inserting in such subcolumn for each subheading the rate of duty specified for such subheading in the table column titled 2017 before the symbol “PA” in parentheses; and (b) For each of the subsequent dated table columns, the rates of duty in such subcolumn for such subheadings set forth before the symbol “PA” in parentheses are deleted and the rates of duty for such dated table column are inserted in each enumerated subheading in lieu thereof. (9) In order to make technical corrections necessary to provide the intended tariff treatment to goods covered by the Declaration in accordance with Presidential Proclamation 9466 of June 30, 2016, the HTS is modified as set forth in Annex III of Publication 4653. (10) In order to make technical corrections necessary to provide that the regional apparel article program and the third-country fabric program are effective through September 30, 2025, in accordance with Presidential Proclamation 9466 of June 30, 2016, the HTS is modified as set forth in Annex III of Publication 4653. (11) In order to implement Executive Order 13742 of October 7, 2016, as authorized by the International Emergency Economic Powers Act, National Emergencies Act, the BFDA, and the JADE Act, the HTS is modified by deleting additional U.S. Note 4 to Chapter 71 of the HTS. (12) (a) The modifications and technical rectifications to the HTS set forth in Annex I of Publication 4653 shall be effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after the later of (i) January 1, 2017, or (ii) the thirtieth day after the date of publication of this proclamation in the Federal Register. (b) The modifications to the HTS set forth in Annexes II and III of Publication 4653 shall be effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after the respective dates specified in each section of such Annex for the goods described therein. (13) Any provisions of previous proclamations and Executive Orders that are inconsistent with the actions taken in this proclamation are superseded to the extent of such inconsistency. IN WITNESS WHEREOF, I have hereunto set my hand this first day of December, in the year of our Lord two thousand sixteen, and of the Independence of the United States of America the two hundred and forty-first. (Presidential Sig.) [Editor’s note: The Official Harmonized Tariff Schedule will be amended when posted in https://usitc.gov/tata/hts/index.htm.] * * * * * * * * * * * * * * * * * * * *
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2. DHS/CBP Seeks Comments on Form 1300, Vessel Entrance or Clearance Statement (Source: Federal Register) [Excerpts.] 81 FR 87049: Agency Information Collection Activities: Vessel Entrance or Clearance Statement * AGENCY: U.S. Customs and Border Protection, Department of Homeland Security. * ACTION: 30-Day notice and request for comments; Extension of an existing collection of information. … * DATES: Written comments should be received on or before January 3, 2017 to be assured of consideration. * ADDRESSES: Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to oira_submission@omb.eop.gov or faxed to (202) 395-5806. * FOR FURTHER INFORMATION CONTACT: Requests for additional information should be directed to Paperwork Reduction Act Officer, U.S. Customs and Border Protection, Regulations and Rulings, Office of Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, or via email (CBP_PRA@cbp.dhs.gov). Please note contact information provided here is solely for questions regarding this notice. Individuals seeking information about other CBP programs please contact the CBP National Customer Service Center at 877-227-5511, (TTY) 1-800-877-8339, or CBP Website. For additional help please go here. * SUPPLEMENTARY INFORMATION: … – Title: Vessel Entrance or Clearance Statement. – OMB Number: 1651-0019. – Form Number: CBP Form 1300. – Abstract: CBP Form 1300, Vessel Entrance or Clearance Statement, is used to collect essential commercial vessel data at time of formal entrance and clearance in U.S. ports. The form allows the master to attest to the truthfulness of all CBP forms associated with the manifest package, and collects information about the vessel, cargo, purpose of entrance, certificate numbers, and expiration for various certificates. It also serves as a record of fees and tonnage tax payments in order to prevent overpayments. CBP Form 1300 was developed through agreement by the United Nations Intergovernmental Maritime Consultative Organization (IMCO) in conjunction with the United States and various other countries. This form is authorized by 19 U.S.C. 1431, 1433, and 1434, and provided for by 19 CFR 4.7-4.9, and accessible here. Dated: November 28, 2016. Seth Renkema,Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection. * * * * * * * * * * * * * * * * * * * *
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OTHER GOVERNMENT SOURCES |
3. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register) * Commerce; Industry and Security Bureau; RULES; Export Administration Regulations: Removal of Semiconductor Manufacturing International Corporation from the List of Validated End-Users in the People’s Republic of China [Publication Date: 5 December 2016.] * Commerce; Industry and Security Bureau; RULES; Export Administration Regulations: Removal of Special Iraq Reconstruction License [Publication Date: 5 December 2016.] * State; RULES; International Traffic in Arms Regulations; Corrections and Clarifications [Publication Date: 5 December 2016.] * * * * * * * * * * * * * * * * * * * *
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NEWS |
6 . Reuters: “U.S. Warns China It Will Target Firms for Illicit N. Korea Business” The United States has warned China it will blacklist Chinese companies and banks that do illicit business with North Korea if Beijing fails to enforce U.N. sanctions against Pyongyang, according to senior State Department officials. The tougher U.S. approach reflects growing impatience with China and a view that it has not strictly enforced existing sanctions to help curb Pyongyang’s nuclear program, which a U.S. policy of both sanctions and diplomacy has failed to dent. U.S. Deputy Secretary of State Antony Blinken gave the message to Chinese officials in meetings in Beijing in October after North Korea conducted its fifth and largest nuclear test, the officials said. U.S. National Security Adviser Susan Rice and Secretary of State John Kerry stressed the importance of choking off financial flows to Pyongyang during a meeting with Chinese State Councilor Yang Jiechi in New York on Nov. 1. In response to the U.S. warning, Chinese officials said they believe pressure alone on North Korea will not work, and that they oppose any U.S. action that would hurt Chinese companies, officials said. U.S. sanctions on Chinese businesses and banks would likely exacerbate tense relations between the two major powers, who disagree over China’s claims in the South China Sea and the U.S. deployment of an anti-missile battery to South Korea. With President Barack Obama’s administration in its final weeks, officials said any major steps would likely be left to Donald Trump’s administration, which takes over in January. Though a frequent critic of China, it is unclear whether Trump will pursue the sanctions. The U.N. Security Council, which includes China, unanimously voted to impose new, tougher sanctions on North Korea on Wednesday, to cut its annual export revenue by a quarter in response to the September nuclear test. North Korea has rejected the resolution. “We do expect that China will implement the resolution, but if we detect that Chinese companies in violation of the resolution are conducting business, aiding and abetting North Korea proscribed entities, we will tell the Chinese what we know, with the expectation that the Chinese will act on it,” Danny Russel, the U.S. Assistant Secretary of State for East Asian and Pacific Affairs, told Reuters. “If the Chinese decline or fail to act, then we’ve made absolutely clear, not only that we reserve the right to take action on a national basis under our authorities but that we will have no choice but to do so,” he said. One option being considered is to impose sanctions on Chinese steel companies that make use of cheap North Korean coal, the officials said. The measures could also target North Koreans who work through Chinese banks. SUPPORT FOR UNILATERAL SANCTIONS The U.S. Treasury Department on Friday blacklisted individuals and companies it said were helping the North Korean government or its nuclear and weapons programs, but no Chinese firms were on the list. South Korea and Japan also said they would impose new unilateral sanctions on North Korea. Support within Obama’s administration for unilateral sanctions against North Korea has increased gradually over the past six to eight months as concerns increased over Pyongyang’s growing nuclear capabilities, one official told Reuters on condition of anonymity. “If we are serious about leaning on the North, we have to go after the economy generally,” the official said. “As it turns out, the Chinese tolerance for North Korea misbehavior is higher than ours and that gap is not sustainable.” Trump, whose real estate business has had dealings with the Bank of China, has urged Beijing to do more to rein in its neighbor and lambasted China mostly for its trade practices on the campaign trail. He told Reuters in May he was willing to talk to North Korean leader Kim Jong Un to try to stop Pyongyang’s nuclear program. Neither sanctions, imposed by Washington since 1950, nor the so-called six-party talks with Pyongyang to suspend its nuclear program in return for diplomatic rewards and energy assistance, have stopped North Korea from testing nuclear devices. While Beijing has voted to impose sanctions on North Korea and condemned the nuclear tests, Chinese officials worry that tighter sanctions could lead to the collapse of the government and send tens of millions of refugees across its borders. Pyongyang’s collapse would also remove a buffer between China and South Korea, home to 28,500 U.S. troops. In fact, China this year has increased its imports of North Korean coal, one of the North’s only sources of hard currency and its largest single export item. Beijing is by far Pyongyang’s most important trading partner, and has been its economic lifeline, though there have been signs in recent weeks that it is doing more to squeeze commerce with the isolated country. Sanctions imposed by the United States banish companies and individuals from the international banking system, making it difficult for them to find financing or partners on foreign deals. The United States used so-called secondary sanctions on foreign firms that deal with banned entities to pressure Iran, and the measures were credited by sanctions experts as key to inducing Tehran to compromise on its nuclear program. Such sanctions could serve as a guidepost for unilateral actions against Pyongyang. China opposes unilateral sanctions on North Korea, and is especially sensitive to U.S. measures against China-based firms. The Chinese foreign ministry spokesman said on Thursday that the new U.N. sanctions are not intended to harm “normal” trade with North Korea, and that China has always enforced U.N. resolutions responsibly. * * * * * * * * * * * * * * * * * * * *
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8. ST&R Trade Report: “Export Controls, AD Proceedings Among Upcoming DOC Rules” New rules on export controls, antidumping proceedings, and arms embargoes are among the items listed on the Department of Commerce’s most recent semiannual regulatory agenda. This online resource lists 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 the rules are indicated in parentheses. Upcoming Regulations – a proposed rule to clarify that for all entries subject to antidumping duties the importer must file its reimbursement certification in either proper electronic form or paper form in accordance with U.S. Customs and Border Protection requirements (November; previously May) – a final rule specifying that where the exporting country does not constitute a viable market the International Trade Administration will normally calculate normal value based on constructed value (November (first time published); proposed rule published in August) – a final rule aligning regulatory prohibitions on North Korea with Executive Order 13722 and United Nations Security Council Resolution 2270 and updating Export Administration Regulations anti-terrorism reasons for control on items exported to or transferred within North Korea (November; first time published) – a final rule removing nuclear nonproliferation column 2 license requirements from certain pressure tubes, pipes, fittings, pipe valves, pumps, numerically controlled machine tools, oscilloscopes, and transient recorders on the Commerce Control List (November; first time published) – a final rule imposing export controls on read-out integrated circuits, seismic intrusion detection systems, radar for helicopter autonomous landing systems, and technology required for the development or production of specified nanotechnology (November; previously August) – a final rule that (a) clarifies the parties’ responsibilities under the EAR in a routed export transaction, including when the U.S. principal party in interest maintains its responsibility for license requirement determination and licensing, and (b) details when and how a U.S. PPI may delegate to the foreign PPI its responsibilities to determine license requirements and apply for a license (November; previously September) – a final rule making four clarifications to license exception GOV and adding five notes to license exception STA (November; previously September) – a final rule reflecting new export reporting requirements related to the implementation of the International Trade Data System, including the addition of two new data elements (the original internal transaction number and the used electronics indicator) to the Automated Export System (December (previously September), proposed rule published in March) – a proposed rule on revising the record retention and creation requirements of the EAR (April 2017; previously June 2016) – an advance notice of proposed rulemaking to clarify that the license requirements for certain activities of U.S. persons apply to exports, reexports, and transfers (in-country) of any item, including items not subject to the EAR, by U.S. persons (June 2017; first time published) – a final rule updating arms embargo provisions in the EAR based on UN Security Council resolutions and U.S. sanctions (June 2017; first time published) – a proposed rule to amend certain 600 series ECCNs to clarify the controls on items related to military vehicles, vessels of war, submersible vessels, oceanographic equipment, and auxiliary and miscellaneous military equipment (June 2017) – a final rule adding targets for production of tritium and related development and production technology to ECCNs 0A521 and 0E521 (June 2017; interim final rule published in August) – a proposed rule expanding the scope of the maritime nuclear propulsion prohibition in the EAR to apply to both commodities and software as well as technology (June 2017; previously August 2016) – a proposed rule to improve the export clearance requirements under the EAR, including better harmonizing them with similar requirements under the International Traffic in Arms Regulations (June 2017; previously September 2016) – a proposed rule updating and clarifying certain license exception AVS provisions and clarifying the requirements that apply to shipments to international waters (June 2017; previously September 2016) Regulations in Process – a proposed rule to adopt an export licensing amendment process and make other licensing process efficiencies – a proposed rule on positively identifying specially designed components on the CCL so as to decrease the use of that term – a final rule establishing time limits for the submission of requests for sampling in administrative reviews of AD duty orders Completed Rulemakings The following rulemakings have been removed from the DOC’s regulatory agenda because they have been completed: – a final rule harmonizing certain definitions in the EAR with similar definitions in the ITAR to facilitate compliance with export controls, update the controls, and reduce unnecessary regulatory burdens on U.S. exporters – a final rule setting forth the factors the Bureau of Industry and Security considers when setting penalties in settlements of administrative enforcement cases and when deciding whether to pursue administrative charges or settle allegations of EAR violations – a final rule harmonizing the statement required for the export of items subject to the EAR with the destination control statement in the ITAR – a final rule to integrate the National Marine Fisheries Service’s fisheries trade monitoring programs within ITDS and to require electronic information collection through the automated Internet portal maintained by U.S. Customs and Border Protection; this rule consolidates several existing trade permits and includes additional seafood commodities under the consolidated permit requirement – a final rule modifying the Commerce Control List entries for military aircraft and related items and military gas turbine engines and related items to add clarifying text to the descriptions of the types of military aircraft controlled on the CCL – a final rule updating the manner in which reports on restrictive trade practices or boycotts may be submitted to the Office of Anti-boycott Compliance – a final rule banning imports of fish and fish products from fisheries with bycatch of marine mammals in excess of U.S. standards and requiring reasonable proof from exporting nations of the effects on marine mammals of bycatch incidental to fisheries that harvest the fish and fish products to be imported – a final rule aligning the time limit in license exception TMP with the time limit in Mexico’s IMMEX program. * * * * * * * * * * * * * * * * * * * *
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COMMENTARY |
9. D.G. Yeargin & C.J. Owen: “Compliance with Export Controls Can Be Essential to Winning Government Contracts” * D. Grayson Yeargin, Esq., gyeargin@jonesday.com, 202-879-3634; Cherie J. Owen, Esq., cowen@jonesday.com, 202.879.3996. Both of Jones Day. An August 2016 bid protest decision highlights the importance of government contractors having, and being able to demonstrate, an effective export controls compliance program. As described in the U.S. Government Accountability Office’s (“GAO”) decision in Microwave Monolithics, Inc., B-413088 (Aug. 11, 2016), the Army eliminated Microwave Monolithics’ (“MM”) proposal from competition due to MM’s failure to meet the solicitation’s requirements pertaining to compliance with the International Traffic in Arms Regulations (“ITAR”). The solicitation at issue required that offerors and their subcontractors demonstrate ITAR compliance, or have a viable plan to become ITAR compliant prior to contract award. Specifically, the solicitation required that the contractor show that it had appointed an employee to be responsible for ITAR compliance and had established written policies and procedures for employees performing activities subject to ITAR. Offerors’ proposals also had to show that the contractor had established procedures for the receipt, handling, storing, implementation, and testing of ITAR-controlled items and data, procedures for the restriction of access by foreign nationals to ITAR-controlled items or data, an auditing procedure for ITAR compliance, and procedures for actions to be taken if violations were discovered. In challenging its elimination from the competition, MM argued that its proposal stated that it was ITAR compliant. In addition, MM noted that it was registered with the Directorate of Defense Trade Controls (“DDTC”), and that this registration demonstrated the required compliance. Specifically, MM argued that DDTC registration “by default requires a designated security officer and maintenance of records showing compliance per ITAR Section 122.” In response, the Army argued that MM’s proposal was insufficient because the Army was not looking merely for ITAR registration with DDTC. Rather, the Army argued, the solicitation made clear that the agency was looking for more detail regarding a contractor’s ITAR compliance. GAO sided with the agency, finding that MM’s “brief statements in its proposal with regard to how it would implement ITAR requirements were both conclusory and limited.” Because MM’s proposal did not provide the level of information regarding ITAR compliance required by the solicitation, GAO concluded that the Army acted reasonably in rating the proposal unacceptable and eliminating it from the competition. This decision is a significant affirmation of the importance of being able to demonstrate how a contractor will comply with regulatory requirements in performing government contracts. Companies should ensure not only that they are ITAR compliant, but also, as this GAO decision demonstrates, that their proposals provide enough detail to demonstrate full compliance with a solicitation’s requirements regarding ITAR compliance. Read a copy of GAO’s decision. * * * * * * * * * * * * * * * * * * * *
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10. R.C. Burns: “Prosecutors’ Flood of Crocodile Tears Drown the Wind” (Source: Export Law Blog . Reprinted by permission.) * Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC, 202-624-3949, Clif.Burns@bryancave.com ) This blog recently reported on the Iran sanctions case against Reza Zarrab in which Judge Berman misread and misquoted the International Emergency Economic Powers Act to hold that the United States has criminal jurisdiction over anyone on the planet who touches a dollar bill or, more accurately, knows that someone else anywhere on the planet might touch a dollar bill. Recently, the prosecution requested a Curcio hearing seeking to disqualify Zarrab’s lawyers at Kirkland & Ellis because they also represent banks that were involved, albeit without knowledge, in the wire transfers to Iran at issue. A Curcio hearing is one where the prosecution, overcome with a flood of crocodile tears and concern for the defendant, seeks to assure that the defendant receives effective representation of counsel from a lawyer free of any conflict. The irony is that prosecution’s goal is to deprive the defendant of counsel of choice and throw him or her into the arms of brand new counsel all, of course, in the name of protecting the defendant. A further irony here is that Zarrab is represented by top-notch lawyers at Kirkland and that everyone – all the banks and Zarrab – consented to Kirkland’s representation of Zarrab. But the real kicker here is the breathtakingly terrible argument that the prosecutors use in their request for a Curcio hearing – namely that the banks are “victims” of Zarrab’s offense: K&E’s simultaneous representation of Zarrab and at least two victims in this matter, Deutsche Bank and Bank of America, presents a conflict. The Government has charged Zarrab with defrauding these and other financial institutions by duping them into processing financial transactions that they would not otherwise have engaged in, and in doing so, exposing them to the possibility of substantial harm. This argument falls apart after only a moment’s scrutiny. The banks at issue either knew that the transactions they processed were destined for Iran or they did not. If they knew, they were co-conspirators and not victims. If they did not know, they did not do anything wrong by processing the transactions and were not victims. And the fact that they are not being fined or prosecuted in this case makes clear that they did not know, that they weren’t exposed to the possibility of harm, that they did not suffer any actual harm, and that they weren’t victims in any sense in which normal people use that word. An additional problem with this “victim” argument is that, as with any statute or rule protecting the foreign policy interests of the United States, the actual victims of violations of such statutes are the citizens of the United States. In that case, the only lawyer who could possibly represent Zarrab is a lawyer whose only client is Zarrab and who has not ever represented any U.S. citizens. For as much as the prosecution might welcome having Zarrab represented by a sole practitioner from a small village in Turkmenistan, I doubt that there are few others who think that might be an acceptable outcome. * * * * * * * * * * * * * * * * * * * *
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EX/IM TRAINING EVENTS & CONFERENCES |
11 . Friday List of Approaching Events * Mar 20-23: Singapore; “United States Export Control (EAR/OFAC/ITAR) (for Asia-Pacific and other non-US Companies);” ECTI; jessica@learnexportcompliance.com; 540-433-3977 * * * * * * * * * * * * * * * * * * * *
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| EDITOR’S NOTES |
12. Bartlett’s Unfamiliar Quotations (Source: Editor)
* Alexander Haig (Alexander Meigs Haig Jr., 2 Dec, 1924 – 20 Feb 2010, was a United States Army general who served as the United States Secretary of State under President Ronald Reagan and White House Chief of Staff under Presidents Richard Nixon and Gerald Ford.)
– “We didn’t lose Vietnam. We quit Vietnam.”
* Joseph Conrad (born Józef Teodor Konrad Korzeniowski; 3 Dec 1857 – 3 Aug 1924) was a Polish-British writer regarded as one of the greatest novelists to write in the English language. Conrad wrote numerous works of short fiction and novels, including Typhoon, The Nigger of the ‘Narcissus’, Heart of Darkness, Lord Jim, Nostromo, The Secret Agent, and Under Western Eyes.
– “He who wants to persuade should put his trust not in the right argument, but in the right word. The power of sound has always been greater than the power of sense.”
Friday funnies. Some jokes for scientists: * If it’s zero degrees outside, and it’s supposed to be twice as cold tomorrow, what will the temperature be?
* If you are not part of the solution, you are part of the precipitate. * * * * * * * * * * * * * * * * * * * *
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13. 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. – 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 – 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: 1 Dec 2016: 81 FR 86571-86573: Temporary Exports to Mexico Under License Exception TMP – 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 – 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 (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. – Last change per Presidential Proclamation: 81 FR 87401-87407 (Dec. 2, 2016): Proclamation 9549 of 1 Dec 2016.
– HTS codes for AES are available here . – HTS codes that are not valid for AES are available here. – 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. * 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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