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16-1220 Tuesday “The Daily Bugle”

16-1220 Tuesday “Daily Bugle”

Tuesday, 20 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/USTPO Seeks Comments on Secrecy and License To Export 
  2. DHS/CBP Amends Regulations, Regulatory Implementation of the Centers of Excellence and Expertise 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. DoD/DSCA Posts SAMM and Policy Memoranda, Week 18-24 Dec 
  4. DoD/DSS Posts Reminder on Submission of Electronic Fingerprints Before Investigation Request 
  5. Justice: “Chinese National Admits to Stealing Sensitive Military Program Documents From United Technologies” 
  6. State/DDTC Posts Notice on DTAS Information Systems Unavailable on 28 Dec 
  7. Treasury/OFAC Posts Russia/Ukraine-Related General License 11 
  8. EU Council Confirms Agreement with the European Parliament Concerning Control of Firearms 
  9. EU Amends Restrictive Measures Concerning Russia 
  1. Expeditors News: “CBP Releases Harmonized System Updates”
  2. The Globe and Mail: “Dion Chose Jobs over Human Rights When Approving Saudi Arms Deal, Court Hears”
  3. ST&R Trade Report: “Centers of Excellence and Expertise Made Permanent, Trade Functions Expanded”
  4. ST&R Trade Report: “Trade Preferences for Nepal Implemented, Central African Republic Added to AGOA”
  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 (19 Dec 2016), DOD/NISPOM (18 May 2016), EAR (16 Dec 2016), FACR/OFAC (4 Nov 2016), FTR (15 May 2015), HTSUS (16 Dec 2016), ITAR (5 Dec 2016) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. Commerce/USTPO Seeks Comments on Secrecy and License To Export
(Source: Federal Register) [Excerpts.]
 
81 FR 92791: Submission for OMB Review; Comment Request; Secrecy and License To Export
   The United States Patent and Trademark Office (USTPO) will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
  – Agency: United States Patent and Trademark Office, Commerce.
  – Title: Secrecy and License to Export.
  – OMB Control Number: 0651-0034.
  – Form Number(s): None.
  – Needs and Uses: This information is required by 35 U.S.C. 181-188 and administered by the USPTO through 37 CFR 5.1-5.22 and 1.17. This collection includes the information needed by the USPTO to review the various types of petitions regarding secrecy orders and to issue or revoke foreign filing licenses. Responses to this information collection is necessary to obtain a permit to disclose, modify or rescind a secrecy order; to obtain general or group permits; to obtain foreign filing licenses, including retroactive foreign filing licenses; or to change the scope of a license. …
   Written comments and recommendations for the proposed information collection should be sent on or before January 19, 2017 to Kimberly R. Keravouri, OMB Desk Officer, via email to Kimberly_R_Keravouri@omb.eop.gov, or by fax to 202-395-5167, marked to the attention of Kimberly R. Keravouri.
 
   Dated: December 13, 2016.
Marcie Lovett, Records Management Division Director, OCIO, United States Patent and Trademark Office.

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EXIM_a2

2. DHS/CBP Amends Regulations, Regulatory Implementation of the Centers of Excellence and Expertise
(Source: Federal Register) [Excerpts.]
 
81 FR 92978-93027: Regulatory Implementation of the Centers of Excellence and Expertise
* AGENCY: U.S. Customs and Border Protection, DHS.
* ACTION: Interim final rule.
* SUMMARY: In 2012, U.S. Customs and Border Protection (CBP) developed a test to incrementally transition the operational trade functions that traditionally reside with port directors to the Centers of Excellence and Expertise (Centers). The purpose of the test was to broaden the ability of the Centers to make decisions by waiving certain identified regulations to the extent necessary to provide the Center directors, who manage the Centers, with the authority to make the decisions normally reserved for the port directors. At this time, CBP is prepared to end the test and establish the Centers as a permanent organizational component of the agency and to transition certain additional trade functions to the Centers. This rule amends the CBP regulations on an interim basis to implement this organizational change by: Defining the Centers and the Center directors; amending the definition for port directors to distinguish their functions from those of the Center directors; identifying the Center management offices; explaining the process by which importers will be assigned to Centers; providing the importer with an appeals process for its Center assignment; identifying the regulatory functions that will be transitioned from the port directors to the Center directors and those that will be jointly carried out by the port directors and the Center directors; and providing clarification in applicable regulations that payments and documents may continue to be submitted at the ports of entry or electronically.
* DATES: Effective date: This interim rule is effective January 19, 2017.
– Comment date: Written comments must be submitted on or before January 19, 2017. …
* FOR FURTHER INFORMATION CONTACT: Lori Whitehurst, CBP Office of Field Operations by telephone (202) 344-2536 or by email, lori.j.whitehurst@cbp.dhs.gov; or Susan S. Thomas, CBP Office of Field Operations by telephone (202) 344-2511 or by email, susan.s.thomas@cbp.dhs.gov.
* SUPPLEMENTARY INFORMATION: …
   During the Centers’ test period, CBP incrementally transitioned to the Center directors some of the trade functions that traditionally reside with the port directors, such as determinations, notifications, and processing concerning duty refund claims based on 19 U.S.C. 1520(d) and issuance of all Requests for Information (CBP Form 28). As explained in the Executive Order 13563 and Executive Order 12866 section below, the Centers met their trade enhancement goals and the test was a success. Moreover, section 110 of the Trade Facilitation and Trade Enforcement Act of 2015 (Pub. L. 114-125, 130 Stat. 122, February 24, 2016) required that the Centers of Excellence and Expertise be developed and implemented. Therefore, at this time, CBP is prepared to end the Centers’ test and establish the Centers as a permanent organizational component of the agency and to transition certain additional trade functions to the Centers, such as the processing of quota entry summaries (see 19 CFR part 132) and determining whether to provide importers with a reasonable opportunity to label products (see 19 CFR part 11). To accomplish this goal, CBP is realigning and shifting certain staff positions from the port director chain of command to the Center director chain of command. The staff that is handling the trade functions under the port director will continue to handle those same functions under the Center directors, but they will be reallocated by industry specialization and will report to one of the ten Centers. The staff who will report to the Centers includes: Import Specialists, Entry Specialists, and Liquidation Specialists. As explained in the Executive Order 13563 and Executive Order 12866 section below, this realignment is virtual, in that Center personnel will remain at their current location, primarily at ports of entry, to stay accessible to the trade community and to continue to assist with enforcement and compliance issues that arise. The staff who will continue to report to the port directors includes: CBP Officers, Agriculture Specialists, FPF Officers, and Seized Property Specialists.
   CBP notes that certain authorities and responsibilities that were provided to the Center directors by waiving certain regulatory sections in the test notices will not be transitioned to the Centers under the regulations. CBP has made the decision to maintain the current regulatory authorities for: The control, movement, examination and release of cargo; export; drawback; and Fines, Penalties & Forfeitures. The sections that will not be transitioned to the Centers under the regulations that were transitioned in the test notices are listed here along with parenthetical explanations: Sec. 10.66 (exportation of goods); Sec. 10.67 (exportation of goods); Sec. 12.3 (condition of release); Sec. 12.73(k) (detention of motor vehicle); Sec. 12.80 (condition of release); Sec. 134.3(b)(2) (location of examination); Sec. 141.58(c) (request to ship merchandise separately); Sec. 142.13 (condition of release); Sec. 144.34(a) (physical transport of goods from warehouse); Sec. 141.57 (incremental release of split shipments); Sec. 146.63 (Foreign Trade Zone release); Sec. 162.79b (involves Fines, Penalties & Forfeitures officers); Sec. 181.13 (involves Fines, Penalties & Forfeitures officers); and Sec. 191.61 (drawback).
   This document also amends certain regulations to jointly authorize the port directors and Center directors to implement certain functions, such as the authority to accept certain documentation (see, e.g., 19 CFR 10.41a(e)) and collect payments (see, e.g., 19 CFR 24.2). The reason for providing joint authority to the port directors and Center directors is to ensure that the trade mission and security mission are met regardless of the hour of operation for either of the personnel. CBP believes that providing broad decision-making authority to the Centers will better enable the Centers to facilitate trade, reduce transaction costs, increase compliance with applicable import laws, and achieve uniformity of treatment at the ports of entry for the identified industries. As such, this document amends the CBP regulations on an interim basis to more fully implement the Centers by: Defining the Centers and the Center directors; amending the definition for port directors to distinguish their functions from those of the Center directors; identifying the Center management offices; explaining the process by which importers will be assigned to Centers; providing the importer with an appeals process for its Center assignment; identifying the regulatory functions that will be transitioned from the port directors to the Center directors and those that will be jointly carried out by the port directors and the Center directors; and providing clarification in applicable regulations that payments and documents may continue to be submitted at the ports of entry or electronically. …
   In summary, this rule’s formal establishment of the Centers of Excellence and Expertise will introduce costs and benefits. CBP will sustain 1,260 added work hours each year from rerouting paper documentation and reviewing Center assignment appeals, while trade members will bear an annual cost of $1,803 attributable to Center assignment appeals. CBP and trade members will also experience benefits from this rule’s decreased import costs and time burdens, streamlined trade processing, broadened industry and trade compliance knowledge, enhanced trade enforcement posture, and improved communication, though the overall value of these benefits is unknown. Although not fully quantified, CBP believes this rule’s benefits to CBP and the trade community will be considerable, while its costs to these parties will be relatively negligible. For these reasons, CBP asserts that the benefits of this rule will outweigh its costs, thus providing an overall net benefit to the agency and members of the trade community.
 
   Dated: December 7, 2016.
Jeh Charles Johnson, Secretary.

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OGS
OTHER GOVERNMENT SOURCES

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

[No items of interest noted today.]

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OGS_a24. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)
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OGS_a35. DoD/DSCA Posts SAMM and Policy Memoranda, Week 18-24 Dec

(Source: DoD/DSCA)
 
  – This memo updates Table C9.T2. Case-Related Manpower Functions and Funding Source Manpower Matrix to further define activities that are funded via the Foreign Military Sales (FMS) administrative surcharge and those that are funded via a line on the Letter of Offer and Acceptance (LOA). This policy also defines “Non-Standard” items and how the activities to procure them should be funded.
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OGS_a46. DoD/DSS Posts Reminder on Submission of Electronic Fingerprints Before Investigation Request

(Source: DoD/DSS)
 
Reminder! Electronic fingerprints should be submitted at the same time or just before an investigation request is released to DSS in JPAS. You can confirm NBIB has processed the fingerprints by checking SII in JPAS which indicates a “SAC” closed. Fingerprint results are valid for 120 days, the same amount of time for which e-QIP signature pages are valid. Therefore, submitting electronic fingerprint at the same time or just before you complete your review for adequacy and completeness should prevent an investigation request from being rejected for missing fingerprints. A high-level process flow outlining this and other PCL activities associated with obtaining a security clearance for Industry is provided here for your ease of reference, and Step #2 outlines the submission activities.
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OGS_a57. Justice: “Chinese National Admits to Stealing Sensitive Military Program Documents From United Technologies”

(Source: Justice) [Excerpts.]
 
Dec. 19, 2016.  Yu Long, 38, a citizen of China and lawful permanent resident of the U.S., waived his right to be indicted and pleaded guilty today in New Haven federal court in Connecticut, to charges related to his theft of numerous sensitive military program documents from United Technologies and transporting them to China.
 
Long pleaded guilty to one count of conspiracy to engage in the theft of trade secrets knowing that the offense would benefit a foreign government, foreign instrumentality or foreign agent, an offense that carries a maximum term of imprisonment of 15 years. He also pleaded guilty to one count of unlawful export and attempted export of defense articles from the U.S. in violation of the Arms Export Control Act, an offense that carries a maximum term of imprisonment of 20 years. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. …

According to court documents and statements made in court, from approximately May 2008 to May 2014, Long worked as a Senior Engineer/Scientist at United Technologies Research Center (UTRC) in Connecticut. Long’s employment at UTRC included work on F119 and F135 engines. The F119 engine is employed by the U.S. Air Force F-22 Raptor fighter aircraft, and the F135 engine is employed by the U.S. Air Force F-35 Lightning II fighter aircraft.
 
Beginning in 2013, Long expressed his intent to individuals outside UTRC to return to China to work on research projects at certain state-run universities in China using knowledge and materials he had acquired while employed at the UTRC. To that end, Long interacted with several state-run institutions in China, including the Chinese Academy of Science (CAS) and the Shenyang Institute of Automation (SIA), a state-run university in China affiliated with CAS.
 
During 2013 and 2014, Long was recruited by SIA and other state-run universities, during which he leveraged information that he had obtained while working at UTRC to seek employment in China, culminating in his travel to China in the possession of voluminous documents and data containing highly sensitive intellectual property, trade secrets and export controlled technology, which he had unlawfully stolen from UTRC.
 
In December 2013, after Long agreed in principle to join SIA, an SIA-CAS Director and an SIA-CAS Recruiter asked Long to provide documents from his work at UTRC and examples of projects on which he had worked to substantiate the claims Long made in his application, and interview with SIA. Long agreed.
 
On Dec. 24, 2013, Long emailed several documents to the SIA-CAS Director, including a document that contained the cover page of an export controlled UTRC presentation on Distortion Modeling dated Sept. 30, 2011.
 
While negotiating with SIA, Long also continued to explore other opportunities at other state-run institutions in China. In one email, Long stated: “I have made my mind to return to China, so have prepared a research plan based on my industry experience and current projects.” In the research plan, Long stated: “In the past five years, I have been working with Pratt Whitney, also other UTC business units, like UTAS (including Hamilton Sundstrand and Goodrich), Sikorsky, CCS (including Carrier and Fire & Security), and Otis. These unique working experiences have provided me a great starting point to perform R&D and further spin off business in China. I believe my efforts will help China to mature its own aircraft engines.”
 
On May 30, 2014, Long left UTRC. In June 2014, Long traveled to China and began working for SIA. Beginning in July 2014, digital evidence and forensic analysis indicated that Long brought with him and accessed in China a UTRC external hard drive that had been issued to him and that he unlawfully retained.
 
In July 2014, Long was listed as the project leader on a lengthy research plan for CAS involving fourteen other individuals. The plan was replete with references to how the proposed research and development would benefit China. The plan stated: “The three major engine companies in the world, i.e. GE, Pratt & Whitney in the US and Rolls-Royce in the UK, are all using this technology. . . Our nation lacks the ability to process high performance components, such as airplane wings, tail hooks on carrier aircrafts, and blisks . . . Because of the technology embargo imposed by western developed countries, it is very difficult for us to obtain more advanced design and manufacturing technology . . . This research project will increase our independent ability, efficient and quality in key component manufacturing.”
 
On or about Aug. 12, 2014, the document on Distortion Modeling – the same document from which Long had sent the cover page to the SIA-CAS Director on Dec. 24, 2013 – was accessed on the external hard drive. Travel records and forensic analysis confirmed that both Long and the external hard drive were in China when this file was accessed.
 
On Aug. 19, 2014, Long returned to the U.S. from China through John F. Kennedy International Airport in New York. During a secondary inspection screening by U.S. Customs and Border Protection (CBP) officers, Long was found in the possession of a largely completed application for work with a state-controlled aviation and aerospace research center in China. The application highlighted certain parts of Long’s work related to the F119 and F135 engines while at UTRC.
 
On or about Aug. 20, 2014, Long emailed an individual at a university in China, attaching an updated “achievement and future plan.” In the plan, Long discussed his work related to the F119 and F135 U.S. military fighter jet engines and stated that he also had knowledge of unpublished UTRC projects in which the U.S. Air Force had shown interest.
 
On Nov. 5, 2014, Long boarded a flight from Ithaca, New York to Newark Liberty International Airport in Newark, New Jersey, with a final destination of China. During Long’s layover in Newark, CBP officers inspected Long’s checked baggage and discovered that it contained sensitive, proprietary and export controlled documents from another defense contractor, Rolls Royce.
 
Further investigation determined that the U.S. Air Force had convened a consortium of major defense contractors, including Pratt and Rolls Royce, to work together to see whether they could collectively lower the costs of certain metals used. As part of those efforts, members of the consortium shared technical data, subject to restrictions on further dissemination. Rolls Royce reviewed the documents found in Long’s possession at Newark Liberty Airport and confirmed that it provided the documents to members of the consortium, which included Pratt. Rolls Royce further confirmed that Long was never an employee of Rolls Royce. A review of UTRC computer records indicated that Long had printed the documents while employed at UTRC.
 
Long was arrested on a federal criminal complaint on Nov. 7, 2014. A review of Long’s digital media seized at the time of his arrest revealed voluminous files protected by the International Traffic in Arms Regulations and Export Administration Regulations, and voluminous files proprietary to various U.S. companies. In short, the investigation revealed that Long took his laptop and the UTRC external hard drive with him to China in 2014, at which time there was a substantial body of highly sensitive, proprietary and export controlled materials present on that digital media. UTRC has confirmed that the hard drive that Long unlawfully retained and accessed in China contained not only documents and data from projects on which Long worked while employed at the company but also from projects on which he did not work to which he would have had access.
 
A sentencing date has not been set. Long has been detained since his arrest. …
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OGS_a68. State/DDTC Posts Notice on DTAS Information Systems Unavailable on 28 Dec

(Source: State/DDTC)
 
The DTAS information systems will be unavailable on 28 Dec from 6:00-8:00PM due to scheduled routine maintenance.
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OGS_a79. Treasury/OFAC Posts Russia/Ukraine-Related General License 11

(Source: Treasury/OFAC)
 
Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) updated the Specially Designated Nationals List and the Sectoral Sanctions Identifications List to target sanctions evasion and other activities related to the conflict in Ukraine. Concurrent with today’s action, OFAC also published Russia/Ukraine-related General License 11, “Authorizing Certain Transactions With FAU Glavgosekspertiza Rossii.” This general license authorizes certain transactions that are ordinarily incident and necessary to requesting, contracting for, paying for, receiving, or utilizing a project design review or permit from FAU Glavgosekspertiza Rossii’s office(s) in the Russian Federation.
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OGS_a810. EU Council Confirms Agreement with the European Parliament Concerning Control of Firearms

 
On 20 December 2016, the Permanent Representatives Committee (Coreper) confirmed, on behalf of the Council, the agreement reached with the European Parliament on the proposal for a directive on control of the acquisition and possession of weapons, which reviews and completes existing directive 91/477/EEC.
 
Current European laws on firearms have been in place since 1991 and in the aftermath of the series of terrorist attacks in Europe, the need to address shortcomings in existing legislation has become ever more urgent ” said Robert Kaliňák, Minister for the Interior of Slovakia and President of the Council. “This agreement provides for tighter controls which will help prevent the acquisition of firearms by terrorist and criminal organisations
   — Robert Kaliňák, Minister for the Interior of Slovakia and President of the Council
 
The amendments which address risks for public safety and security focus on:
 
Enhanced traceability of firearms
 
The revision strengthens the rules on marking of firearms, by providing, among other things, for a new obligation to also mark all their essential components. This harmonization of the rules for the marking of firearms and establishing the mutual recognition of marks among Member States will improve the traceability of firearms used in criminal activities, including those which have been assembled from components acquired separately.
 
In turn, this information also has to be recorded in national data-filing systems. For this to happen, member states will now have to ensure that dealers and brokers register any transaction with firearms by electronic means and without any undue delay.

Measures on deactivation and reactivation or conversion of firearms
 
The rules for deactivation of firearms have been strengthened, especially by providing for the classification of deactivated firearms under the so-called category C, that is, firearms subject to declaration. Until now, deactivated firearms have not been subject to the requirements set by the directive.
 
Moreover, the revision includes a new category of salute and acoustic weapons. These are live firearms that have been converted to blank firing ones, for example, for use in theatres or television. These weapons were so far not included in the scope of the directive, and so they posed a serious risk for security: in the absence of more stringent national provisions, such firearms could be purchased freely. Given that their reconversion to live ones was often possible with limited efforts, this posed a risk. For example, such firearms have been used in the Paris terrorist attacks. The new wording of the directive ensures that these weapons remain registered under the same category as the firearm from which they have been converted.
 
Banning civilian use of the most dangerous semi-automatic firearms
 
Besides strengthening the rules for their acquisition, some dangerous semi-automatic firearms have now been added to category A and thus prohibited for civilian use. This is the case of short semi-automatic firearms with loading devices over 20 rounds and long semi-automatic firearms with loading devices over 10 rounds. Similarly, long firearms that can be easily concealed, for example by means of a folding or telescopic stock, will now also be prohibited.
 
Stricter rules for the acquisition and possession of the most dangerous firearms
 
The most dangerous firearms of category A can only be acquired and possessed on the basis of an exemption granted by the relevant member state. The rules for granting such exemptions have now been significantly strengthened. Possible grounds, such as national defence or protection of critical infrastructures, are now set out in a limitative list and the exemption may only be granted where this is not contrary to public security or public order.
 
When a firearm of category A is required for a sports-shooting discipline, it can only be acquired under strict rules relating among other things to proven practice recognised by an official shooting sport federation.
 
Concurrently provision of article 7 para 4a gives the possibility to confirm authorisations for semi-automatic firearms (new point 6, 7 or 8 of category A) legally acquired and registered before this directive will come in force.
 
Improving the exchange of relevant information between member states
 
A new provision has been added, according to which the Commission shall provide for a delegated act to set up a common system for Member States for systematic exchange of information by electronic means which strengthening the data collection system and examining the interoperability between information systems created at national level.. This information will concern the authorisations granted for the transfer of firearms to another member state and information with regard to refusals to grant authorisations to acquire and possess firearms.
 
The directive sets out minimum rules and does not prevent member states from adopting and applying stricter rules.
 
Next steps
 
Now that the agreement has been confirmed by the Permanent Representatives Committee, on behalf of the Council, the directive will be submitted to the European Parliament for a vote at first reading, and to the Council for adoption. The Council will inform the Parliament formally via the usual letter, with a view to reaching an agreement at first reading.
 
Background
 
Council directive 91/477/EEC on control of the acquisition and possession of weapons was originally designed as a measure to balance internal market objectives and security imperatives regarding “civil” firearms.
 
The amending proposal was submitted by the European Commission on 18 November 2015 against the backdrop of a series of terrorist acts that took place in Europe and which brought to light gaps in the implementation of the directive. The current review is a continuation of the 2008 revision and also aligns EU legislation with the provisions on the UN Protocol against the Illicit Manufacturing of and Trafficking in Firearms. 
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OGS_a911. EU Amends Restrictive Measures Concerning Russia

 
Directives:
  – Council Decision (CFSP) 2016/2315 of 19 December 2016 amending Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine
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NWSNEWS

 
On December 16, 2016, U.S. Customs and Border Protection (CBP) issued Cargo Systems Messaging Service (CSMS) #16-001030 announcing the release of Harmonized System Update (HSU) 1614, containing 27,913 ABI records and 4,820 harmonized tariff records.
 
The CSMS specifies that, “Modifications include the annual special program staged rate reductions. Changes required by Presidential Proclamation 9549 are also incorporated.”
 
The update also includes all required modifications for the verification of the 2016 Harmonized Tariff Schedule.
 
The CSMS can be accessed online here.
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NWS_a213. The Globe and Mail: “Dion Chose Jobs over Human Rights When Approving Saudi Arms Deal, Court Hears”
(Source: The Globe and Mail)
 
Lawyers behind a court bid to block a massive sale of weaponized fighting vehicles to Saudi Arabia argued in Federal Court on Monday that Foreign Affairs Minister Stéphane Dion ignored serious human-rights violations in favour of preserving jobs when he authorized the export of these machines in April.
 
A $15-billion deal – the largest advanced manufacturing export contract in Canadian history – has landed before a federal court judge in Montreal who must decide whether the law demands she place human rights above politics and a huge industrial benefit.  . . .
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NWS_a3
14. ST&R Trade Report: “Centers of Excellence and Expertise Made Permanent, Trade Functions Expanded”

 
U.S. Customs and Border Protection has issued an interim final rule establishing the Centers of Excellence and Expertise as a permanent organizational component of the agency and transitioning certain additional trade functions to the Centers. The rule amends the CBP regulations on an interim basis effective Jan. 19 to implement this organizational change by:
 
  – defining the Center and Center directors;
  – amending the definition for port directors to distinguish their functions from those of the Center directors;
  – identifying the Center management offices;
  – explaining the process by which importers will be assigned to Centers;
  – providing the importer with an appeals process for its Center assignment;
  – identifying the regulatory functions that will be transitioned from the port directors to the Center directors and those that will be jointly carried out by the port directors and the Center directors; and
  – providing clarification in applicable regulations that payments and documents may continue to be submitted at the ports of entry or electronically.
 
Assignment of Importers. The rule indicates that importers will generally be assigned to an industry category administered by a specific Center based on the tariff classification in the HTSUS of the predominant number of goods imported. The list of HTSUS numbers that will be used by CBP for the importer’s placement in a Center is the same list of numbers that are referenced in the definition for Centers.
 
Factors that may cause CBP to place an importer in a Center not based on the tariff classification of the predominant number of goods imported include the importer’s associated business practices within an industry, the intended use of the predominant number of goods imported, or the high relative value of goods imported. Importers may appeal their Center assignment at any time by submitting a written appeal to CBP’s Office of Field Operations.
 
Brokers acting as the importer of record will have their entry summary processed by the Center relating to the predominant HTSUS number for the entry summary since brokers’ business models do not necessarily align within a particular industry sector.
 
Trade Functions Transitioned to CEEs. The rule amends certain regulations to transition to the Center directors a variety of post-release trade functions that are currently handled by the port directors, including decisions and processing related to entry summaries; decisions and processing related to all types of protests; suspension and extension of liquidations; decisions and processing concerning free trade agreements and duty preference programs; decisions concerning warehouse withdrawals wherein the goods are entered into the commerce of the U.S.; all functions and decisions concerning country of origin marking issues; functions concerning informal entries; and classification and appraisement of merchandise, including valuation.
 
Joint Authority. The rule amends certain regulations to identify the circumstances where the port directors and the Center directors will have joint authority. For example, Section 141.56(a) is being amended to note that CBP may accept, either at the port of entry or electronically, one entry summary for consumption or for warehouse for merchandise covered by multiple entries for immediate transportation, subject to the requirements of Section 142.17(a), provided the merchandise covered by each immediate transportation entry is released at the port of destination under a separate entry in accordance with Section 142.3.
 
The reference to “port directors” is being removed and replaced with “CBP” because the authority to accept the entry summary will continue to reside with the personnel working for the port directors and will also be extended to the personnel working for the Center directors.
 
Importers will continue to have the ability to submit the documentation at the port or electronically and this ability is merely being reflected in the regulation. In the example above, if the entry summary were submitted electronically to CBP it would be internally routed to the appropriate Center. As a second example, the port director and Center director personnel will have joint authority for all functions involving sampling and redelivery requests. CBP notes that while the redelivery notices may be sent out by either personnel working for the port director or the Center director, the resolution of marking issues will be the sole authority of the Center directors.
 
The regulations are also being amended to provide that port directors and Center directors will have joint authority to collect payments. CBP states that these amendments do not affect the public’s responsibility to continue to submit payments using the same methods of payment that are prescribed in the regulations today, but merely extend the authority to accept payments to Center directors as well. For example, Section 24.2 is being amended to include a reference to Center directors as persons authorized to receive customs collections.
 
Comments on the interim final rule may be submitted by Jan. 19.

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NWS_a415. ST&R Trade Report: “Trade Preferences for Nepal Implemented, Central African Republic Added to AGOA”
 
President Obama has issued a proclamation providing duty-free treatment from Dec. 30, 2016, through Dec. 31, 2025, to the following products from Nepal:
 
  – luggage articles and attaché cases classified under HTSUS 4202.11.00, 4202.12.21, 4202.12.29, 4202.12.40, 4202.12.60, 4202.12.81, and 4202.12.89;
  – handbags classified under HTSUS 4202.21.60, 4202.21.90, 4202.22.15, 4202.22.40, 4202.22.45, 4202.22.60, 4202.22.70, 4202.22.81, 4202.22.89, 4202.29.50, and 4202.29.90;
  – pocket goods classified under HTSUS 4202.31.60, 4202.32.40, 4202.32.80, 4202.32.91, 4202.32.93, and 4202.32.99;
  – travel, sports, and similar bags, backpacks, and other containers classified under HTSUS 4202.91.10, 4202.91.90, 4202.92.08, 4202.92.15, 4202.92.20, 4202.92.31, 4202.92.39, 4202.92.45, 4202.92.60, 4202.92.91, 4202.92.93, 4202.92.94, 4202.92.97, and 4202.99.90;
  – carpets and rugs classified under HTSUS 5701.10.90, 5702.31.20, 5702.49.20, 5702.50.40, 5702.50.59, 5702.91.30, 5702.91.40, 5702.92.90, 5702.99.15, 5703.10.20, 5703.10.80, 5703.90.00, and 5705.00.20;
  – shawls, scarves, headbands, and travel blankets classified under HTSUS 6117.10.60, 6117.80.85, 6214.10.10, 6214.10.20, 6214.20.00, 6214.40.00, 6214.90.00, 6217.10.85, and 6301.90.00;
  – gloves classified under HTSUS 4203.29.50 and 6216.00.80; and
  – hats classified under HTSUS 6504.00.90, 6505.00.08, 6505.00.15, 6505.00.20, 6505.00.25, 6505.00.30, 6505.00.40, 6505.00.50, 6505.00.60, 6505.00.80, 6505.00.90, 6506.99.30, and 6506.99.60.
 
To qualify for duty-free treatment, the product must be the growth, product or manufacture of Nepal; at least 35 percent of the value of the product must be added in Nepal and/or the U.S.; and the product must be imported directly from Nepal into the U.S.
 
The proclamation also (1) designates the Central African Republic as a beneficiary sub-Saharan African country under the AGOA; (2) extends through Dec. 31, 2017, a 2004 agreement with Israel that provides duty-free access to specified quantities of certain agricultural products of that country; and (3) modifies the U.S.-Oman FTA, U.S.-Panama TPA and CAFTA-DR origin rules to ensure that the tariff and certain other treatment accorded under each of those agreements to originating goods will continue to be provided under certain tariff categories that were previously modified.
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ENEDITOR’S NOTES

EN_a316. 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)

* Sandra Cisneros (
born 20 Dec 1954, is an American writer. She is best known for her first novel, 
The House on Mango Street
.)
  – “I was a terrible student. Still, I managed to get into college, but my daydreaming threatened to sabotage me. I used behavior modification to break the cycle. I started by setting an arbitrary time limit on studying: for every 15 minutes of study, I’d allow myself an hour of daydreaming. I set the alarm.” 

* Branch Rickey (Wesley Branch Rickey, 20 Dec 1881 – 9 Dec 1965, was an innovative Major League Baseball executive, perhaps best known for breaking Major League Baseball’s color barrier by signing African American player Jackie Robinson, and for drafting the first Hispanic superstar, Roberto Clemente.)
  – “Problems are the price you pay for progress.” 

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EN_a218
. 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: 19 Dec 2016: 81 FR 92978-93027: Regulatory Implementation of the Centers of Excellence and Expertise 

* 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: 16 Dec 2016: 81 FR 90983-90987: Implementation of the February 2016 Australia Group (AG) Intersessional Decisions and the June 2016 AG Plenary Understandings 

  
*
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: 16 Dec 2016; Harmonized System Update (HSU) 1614, containing 27,913 ABI records and 4,820 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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