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16-1215 Thursday “The Daily Bugle”

16-1215 Thursday “Daily Bugle”

Thursday, 15 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 
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  1. Commerce/BIS Amends EAR, Addition of Seven Persons to the Entity List 
  2. State Modifies Iran, North Korea, and Syria Nonproliferation Act Measures Against a Russian Entity 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS Posts Change to Standard Language on BIS Licenses 
  3. Justice: “Iranian National Sentenced to Prison for Conspiring to Illegally Export Products From the U.S. To Iran” 
  4. State/DDTC Seeks Comments on Defense Export Control and Compliance System 
  5. Treasury/OFAC Posts Iran-related Frequently Asked Questions and General License J-1 
  1. ST&R Trade Report: “New Restrictions on Exports of EAR-Regulated Goods to Foreign Entities”
  1. Full Circle Compliance: This Year, Give the Gift of the BITAR and BAFTR! 
  2. Bartlett’s Unfamiliar Quotations 
  3. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (12 Dec 2016), DOD/NISPOM (18 May 2016), EAR (15 Dec 2016), FACR/OFAC (4 Nov 2016), FTR (15 May 2015), HTSUS (30 Aug 2016), ITAR (5 Dec 2016) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. Commerce/BIS Amends EAR, Addition of Seven Persons to the Entity List

(Source: Federal Register) [Excerpts.]
 
81 FR 90712-90715: Addition of Certain Persons to the Entity List
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: This final rule amends the Export Administration Regulations (EAR) by adding seven persons to the Entity List. The seven persons who are added to the Entity List have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These seven persons will be listed on the Entity List under the destination of Pakistan.
* DATES: This rule is effective December 15, 2016.
* FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Email: ERC@bis.doc.gov.
* SUPPLEMENTARY INFORMATION: …
   For the seven persons added to the Entity List, BIS imposes a license requirement for all items subject to the EAR and a license review policy of presumption of denial. The license requirements apply to any transaction in which items are to be exported, reexported, or transferred (in-country) to any of the persons or in which such persons act as purchaser, intermediate consignee, ultimate consignee, or end-user. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to the persons being added to the Entity List in this rule. The acronym “a.k.a.” (also known as) is used in entries on the Entity List to help exporters, reexporters and transferors better identify listed persons on the Entity List.
   This final rule adds the following seven persons to the Entity List: …
   Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export or reexport, on December 15, 2016, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR).
 
   Dated: December 8, 2016.
Kevin J. Wolf, Assistant Secretary for Export Administration.

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EXIM_a2

2. State Modifies Iran, North Korea, and Syria Nonproliferation Act Measures Against a Russian Entity

(Source: Federal Register)
 
81 FR 90903: Modification of Iran, North Korea, and Syria Nonproliferation Act Measures Against a Russian Entity
* SUMMARY: A decision has been made, pursuant to the Iran, North Korea, and Syria Nonproliferation Act, to modify nonproliferation measures pursuant to this Act on a Russian foreign person.
* DATES: Effective Date: December 15, 2016.
* FOR FURTHER INFORMATION CONTACT: Jeffrey G. McCoy, Office of Euro-Atlantic Security Affairs, Bureau of Arms Control, Verification and Compliance, Department of State, Telephone (202) 647-4940.
* SUPPLEMENTARY INFORMATION: On September 2, 2015, the United States Government published a notice announcing the imposition of measures including the following against Rosoboronexport (ROE) (Russia) and any successor, sub-unit, or subsidiary thereof: “No department or agency of the United States Government may procure or enter into any contract for the procurement of any goods, technology, or services from Rosoboronexport (ROE) (Russia) and any successor, sub-unit, or subsidiary thereof, except to the extent that the Secretary of State otherwise may determine. . . .” (See 80 FR 53222, Public Notice 9251; 80 FR 65844, Public Notice 9329; and 80 FR 73865, Public Notice 9358).
  On July 5, 2016, the United States Government published a notice announcing the imposition of measures including the following against Rosoboronexport (ROE) (Russia) and any successor, sub-unit, or subsidiary thereof: “No department or agency of the United States Government may procure or enter into any contract for the procurement of any goods, technology, or services from Rosoboronexport (ROE) (Russia) and any successor, sub-unit, or subsidiary thereof, except to the extent that the Secretary of State otherwise may determine. …” (See 81 FR 43696, Public Notice 9624).
  The United States Government has decided to modify the measures described above against ROE and any successor, sub-unit, or subsidiary thereof as follows: The measures described above shall not apply to United States Government procurement of goods, technology, and services for the purchase, maintenance or sustainment of the Digital Electro Optical Sensor OSDCAM4060, to improve the U.S. ability to monitor and verify Russia’s Open Skies Treaty compliance.
  Such subcontracts include the purchase of spare parts, supplies, and related services.
  This modification does not apply to any other measures imposed pursuant to the INKSNA and announced in Public Notice 9251 published on September 2, 2015 (80 FR 53222) or Public Notice 9624 published on July 5, 2016 (81 FR 43696).
 
  Frank Rose, Assistant Secretary, Bureau of Arms Control, Verification and Compliance, Department of State.

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OGS
OTHER GOVERNMENT SOURCES

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

* Commerce; Industry and Security Bureau; RULES; Implementation of the February 2015 Australia Group Intersessional Decisions and the June 2015 Australia Group Plenary Understandings [Publication Date: 16 December 2016.]

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OGS_a24. Commerce/BIS Posts Change to Standard Language on BIS Licenses

(Source: Commerce/BIS)
 
As of December 15, 2016, BIS is implementing a change to the standard language on validated licenses to align with the change in requirements specific to destination control statements that was published in a rule on August 17, 2016 (81 FR 54721 ) and went into effect on November 17, 2016.  BIS is also implementing one other minor change to the standard license text.  Before December 15, the language read as follows:

“The Export Administration Regulations require you to take the following actions when exporting under the authority of this license:

(A) Record the Export Commodity Control Number in the block provided in the Automated Export System (AES).
(B) Record your validated license number in the block provided in AES.
(C) Place a Destination Control Statement on all bills of lading, airway bills, and commercial invoices.”   

As of December 15, this language has been changed to read (new text in italics):   
“The Export Administration Regulations require you to take the following actions when exporting under the authority of this license.    
(A) Record the Export Control Classification Number in the block provided in the Automated Export System (AES).
(B) Record your validated license number in the block provided in AES.
(C) Place a Destination Control Statement on all commercial invoices for shipments of items on the Commerce Control List.”
 
This new language will appear on all current validated licenses that are available for review or printing in BIS’ SNAP-R system.
If you have any questions about these changes, please call BIS’ export counselors at either 202-482-4811 (Washington, DC), 949-660-0144 (Irvine, CA) or 408-998-8806 (San Jose, CA).
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OGS_a35. Justice: “Iranian National Sentenced to Prison for Conspiring to Illegally Export Products From the U.S. To Iran”

(Source: Justice)
 
Mansour Moghtaderi Zadeh, 56, an Iranian national, was sentenced today to 18 months in prison and one year of supervised release for taking part in a conspiracy involving the purchase and shipment of various products, including aviation parts and aviation supplies, from the U.S. to Iran without a license. Zadeh was also ordered to pay a forfeiture money judgment in the amount of $69,159.00. …
 
Zadeh, who had been living in Iran, pled guilty on October 27, to one count of conspiracy to unlawfully export goods, technology and services to Iran without the required license, and to defraud the U.S. In court documents filed at the time of the plea, Zadeh acknowledged that beginning in October 2005, Iranian companies requested that Zadeh through his company, Barsan, procure products including a fiber optic video transmitter and receiver, and aviation course indicators that would otherwise require a license from the Office of Foreign Assets Control (OFAC) to be exported to Iran. Members of the conspiracy arranged for the items to be sent from the U.S. to Iran, for which Zadeh received a commission.
 
In March 2007, Zadeh and co-conspirators attempted to export metal sheets and rods that are used in the aviation manufacturing industry from the U.S. to Iran without the required license from OFAC. Zadeh had arranged for his new corporation, Lavantia, to purchase the items. Zadeh also used an alias in his communications.
 
In September 2007, the shipment was detained by the U.S. Department of Commerce pending certification of the end user. In October 2007, the Department of Commerce issued a Temporary Denial Order (TDO) against Lavantia and Zadeh, under his alias. The TDO prohibited Lavantia and Zadeh from participating in any way in exporting commodities from the U.S. Notwithstanding the TDO, Zadeh and other conspirators exported and attempted to export numerous materials from the U.S., including resin, sealant, paint, pneumatic grease, film adhesive and polyurethane coating and thinner. The post-TDO conduct included more than $69,000 of exported goods. …
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OGS_a46. State/DDTC Seeks Comments on Defense Export Control and Compliance System

(Source: State/DDTC)
 
On November 21, 2016 DDTC deployed the Commodity Jurisdiction data collection in a web-based format in the Defense Export Control and Compliance System (DECCS) environment. DDTC would like to request your feedback and is providing a brief survey to capture all feedback regarding DECCS Release #1 activity. Please access the survey here.
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OGS_a57. Treasury/OFAC Posts Iran-related Frequently Asked Questions and General License J-1

(Source: Treasury/OFAC)
 
OFAC updated the Frequently Asked Questions Relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action, amending two FAQs regarding the re-imposition of sanctions in the event of a sanctions snapback under the JCPOA (M.4 and M.5) to provide additional clarity.  In addition, OFAC issued General License J-1, “Authorizing the Reexportation of Certain Civil Aircraft to Iran on Temporary Sojourn and Related Transactions,” which amends GL J to allow the temporary reexport of Eligible Aircraft that involve code sharing arrangements, subject to the conditions in GL J-1Effective December 15, 2016, GL J-1 replaces and supersedes in its entirety GL J. 
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NWSNEWS

NWS_a18
. ST&R Trade Report: “New Restrictions on Exports of EAR-Regulated Goods to Foreign Entities”

 
The Bureau of Industry and Security has issued a final rule that, effective Dec. 15, adds seven persons in Pakistan to the list of entities restricted from receiving U.S. exports of goods controlled under the Export Administration Regulations. BIS has determined that these entities have been involved in actions contrary to U.S. national security or foreign policy interests.
 
For these seven entities there will be a license requirement for all items subject to the EAR and a license review policy of presumption of denial. The license requirement applies to any transaction in which items are to be exported, reexported, or transferred (in-country) to any of these entities or in which they act as purchaser, intermediate consignee, ultimate consignee, or end-user. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to these entities.
 
Shipments of items removed from eligibility for a license exception or export or reexport without a license (NLR) as a result of this rule that were en route aboard a carrier to a port of export or reexport on Dec. 15 pursuant to actual orders for export or reexport to a foreign destination may proceed to that destination under the previous eligibility for a license exception or NLR.

 

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ENEDITOR’S NOTES

EN_a39. Full Circle Compliance:  This Year, Give the Gift of the BITAR and BAFTR!

(Source: Editor)
 
This is the gift-giving season, and what better gift for your employees or friends who specialize in trade compliance than a year’s subscription to constantly updated editions of Bartlett’s Annotated ITAR (International Traffic in Arms Regulations) (“BITAR”) and Bartlett’s Annotated FTR (Foreign Trade Regulations)(“BAFTR”)?  

The BITAR and BAFTR are Word documents, sent by email attachment, that contain the full text of the ITAR and FTR, updated every time the regulations are amended.  They also have huge indexes and hundreds of footnotes containing history and practical advice that are not available in the on-line government versions or in any other commercial publication.  
Subscribe at
www.FullCircleCompliance.eu
.  Discounts are available for multiple subscriptions, and site licenses are available for companies with more than 20 subscribers.  US Government employees (with “.gov” or “.mil” addresses) and higher education employees (with “.edu” addresses) are eligible for a 50% discount.  

Cheer up your employees this year, and at the same reduce your company’s risk of export violations with subscriptions to the BITAR and BAFTR.  For the serious compliance professional, there is no substitute!  

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(Source: Editor)

* J. Paul Getty (Jean Paul Getty (15 Dec 1892 – 6 Jun 1976, was an American industrialist who founded the Getty Oil Company. In 1957, Fortune magazine named him the richest living American, while the 1966 Guinness Book of Records named him as the world’s richest private citizen, worth an estimated $1.2 billion, or approximately $8.9 billion in 2016 dollars.)
  – “I hate to be a failure. I hate and regret the failure of my marriages. I would gladly give all my millions for just one lasting marital success.”
 
* Maxwell Anderson (James Maxwell Anderson, 15 Dec 1888 – 28 Feb 1959, was an American playwright, author, poet, journalist and lyricist.)
  – “There are some men who lift the age they inhabit, till all men walk on higher ground in that lifetime.” 

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EN_a211
. 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: 12 Dec 2016: 81 FR 890375-89381: Electronic Notice of Liquidation 

* 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: 15 Dec 2016: 81 FR 90712-90715: Addition of Certain Persons to the Entity List 

  
*
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.
  – Latest Amendment: 5 Dec 2016 (effective 5 Dec 2016): 81 FR 87427-87430: Corrections & Additions to ITAR Parts 120, 121, 122, 124, 126 and 127
  – The only available fully updated copy (latest edition 9 Dec 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 2016, plus a large Index, 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 subscribers to inform readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOJ/ATF, DoD/DSS, DoD/DTSA, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

* RIGHTS & RESTRICTIONS: This email contains no proprietary, classified, or export-controlled information. All items are obtained from public sources or are published with permission of private contributors, and may be freely circulated without further permission. Any further use of contributors’ material, however, must comply with applicable copyright laws.

* CAVEAT: The contents cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.

* SUBSCRIPTIONS: Subscriptions are free.  Subscribe by completing the request form on the Full Circle Compliance website.

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