;

16-1230 Friday “The Daily Bugle”

16-1230 Friday “Daily Bugle”

Friday, 30 December 2016

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe here for free subscription. Contact us for advertising inquiries and rates. (The Daily Bugle will not publish on Monday, 2 January, a Federal holiday. We wish you a healthy and prosperous 2017.)

  1. Justice/DEA Updates Regulations for the Import and Export Requirements for Controlled Substances, Listed Chemicals, and Tableting and Encapsulating Machines 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS Renews Mahan Airways of Teheran, Iran, and other Temporary Denial Orders 
  3. DHS/CBP Posts Updated ACE CATAIR Documentation
  4. DHS/CBP Updates Appendix R Intended Use Codes 
  5. DoD/DSS Posts Introduction to DISS 
  6. State/DDTC Posts ITAR Amendment to Take Effect 31 Dec 2017 
  1. ST&R Trade Report: “Dates and Deadlines: ACE, Export Controls, Textiles, IMMEX, Import Restrictions”
  2. ST&R Trade Report: “Filing of Import Documents for CDC-Regulated Goods Transitioned to ACE”
  1. E.J. Krauland, M. Rathbone, and J.R. Hayes: “Export Control Reform – DDTC and BIS Publish Long-Awaited Final Rules for Category XII: Night Vision and Cameras”
  1. Friday List of Approaching Events
  1. Heather Sears Moves to Johnson Controls
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (20 Dec 2016), DOD/NISPOM (18 May 2016), EAR (27 Dec 2016), FACR/OFAC (23 Dec 2016), FTR (15 May 2015), HTSUS (16 Dec 2016), ITAR (5 Dec 2016)

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. Justice/DEA Updates Regulations for the Import and Export Requirements for Controlled Substances, Listed Chemicals, and Tableting and Encapsulating Machines

(Source: Federal Register) [Excerpts.]
 
81 FR 96992-97044: Revision of Import and Export Requirements for Controlled Substances, Listed Chemicals, and Tableting and Encapsulating Machines, Including Changes To Implement the International Trade Data System (ITDS); Revision of Reporting Requirements for Domestic Transactions in Listed Chemicals and Tableting and Encapsulating Machines; and Technical Amendments
* AGENCY: Drug Enforcement Administration, Department of Justice.
* ACTION: Final rule.
* SUMMARY: The Drug Enforcement Administration is updating its regulations for the import and export of tableting and encapsulating machines, controlled substances, and listed chemicals, and its regulations relating to reports required for domestic transactions in listed chemicals, gamma-hydroxybutyric acid, and tableting and encapsulating machines. In accordance with Executive Order 13563, the Drug Enforcement Administration has reviewed its import and export regulations and reporting requirements for domestic transactions in listed chemicals (and gamma-hydroxybutyric acid) and tableting and encapsulating machines, and evaluated them for clarity, consistency, continued accuracy, and effectiveness. The amendments clarify certain policies and reflect current procedures and technological advancements. The amendments also allow for the implementation, as applicable to tableting and encapsulating machines, controlled substances, and listed chemicals, of the President’s Executive Order 13659 on streamlining the export/import process and requiring the government-wide utilization of the International Trade Data System (ITDS). This rule additionally contains amendments that implement recent changes to the Controlled Substances Import and Export Act (CSIEA) for reexportation of controlled substances among members of the European Economic Area made by the Improving Regulatory Transparency for New Medical Therapies Act. The rule also includes additional substantive and technical and stylistic amendments.
* DATES: This rule is effective January 30, 2017. However, compliance with the revisions to DEA regulations made by this rule is not required until June 28, 2017.
* FOR FURTHER INFORMATION CONTACT: Michael J. Lewis, Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-6812.
* SUPPLEMENTARY INFORMATION: …
   The DEA is amending its regulations to authorize electronic submission of data, and make the procedure mandatory over paper in most circumstances. 21 U.S.C. 958(f). The use of electronic applications and filings is consistent not only with the requirements of Executive Order 13659, but also with the general principles outlined in the Government’s Open Data Policy which requires agencies to collect or create information in a way that supports downstream information processing and dissemination. The Open Data Policy states that information should be collected electronically by default. …
   The DEA is amending its regulations regarding expiration dates associated with imports and exports of controlled substances. The DEA is changing the current expiration period of import and export permits found in Sec. Sec. 1312.16 and 1312.25 from not more than six months to not more than 180 calendar days after the date of issuance. This change standardizes expiration procedures as not all months have the same number of days. …
   The DEA is also amending Sec. Sec. 1312.18 and 1312.27 to specify an expiration date for import and export declarations for controlled substances. …
     The DEA is amending part 1313 to provide that each regulated person who seeks to import or export a listed chemical that meets or exceeds a threshold quantity, must notify/provide a declaration to the DEA (by filing a DEA Form 486/486A through the DEA Diversion Control Division secure network application) of the intended import or export not later than 15 calendar days before the date of release by a customs officer at the port of entry. Regarding imports and exports for those entities with regular customer and regular importer status, the notification must be filed at least three business days before the date of release by a customs officer at the port of entry. All declarations must be signed and dated by the importer or exporter and must contain the address of the final destination for the shipment. …
     This final rule implements section 4, Re-exportation Among Members of the European Economic Area, of the Improving Regulatory Transparency for New Medical Therapies Act, Public Law 114-89 (hereinafter “the 2015 Act”), which was signed into law on November 25, 2015. Section 4 of the 2015 Act amended section 1003 of the Controlled Substances Import and Export Act (CSIEA) (21 U.S.C. 953) by making changes to paragraph (f) and adding paragraph (g), changes that allow for expanded reexportation of certain controlled substances among members of the European Economic Area (EEA). Prior to passage of the 2015 Act, the CSIEA (21 U.S.C. 953(f)) provided, with respect to controlled substances in schedule I or II and narcotic drugs in schedule III or IV, that such substances could be exported from the United States for subsequent reexport from the recipient country (the “first country”) to another country (the “second country”)–but with no further reexports from the second country. The 2015 Act removed this latter limitation, provided that every country involved is an EEA country, and provided that the conditions specified in the 2015 Act are met. …
   The DEA is mandating electronic reporting requirements in Sec. 1310.05 for all regulated transactions involving tableting machines and encapsulating machines, including domestic, import, and export transactions. To standardize and streamline the electronic filing of these reports, the DEA is implementing usage of a new form, DEA Form 452, Reports for Regulated Machines, which covers imports, exports, and domestic regulated transactions of tableting and encapsulating machines. The new form will be accessed, completed, and submitted by regulated persons entirely though the DEA Diversion Control Division secure network application. Upon receipt and review, the Administration will assign each completed report a transaction identification number. The DEA Form 452 will not be deemed filed until the Administration issues a transaction identification number. This change is designed to ensure that electronically submitted reports are indeed received by the DEA, are completed, and can be appropriately tracked and monitored; to streamline the report filing process; and to eliminate duplicate filings. …
   The DEA is incorporating mandatory electronic reporting requirements into part 1310 for monthly reports of mail-order transactions involving ephedrine, pseudoephedrine, phenylpropanolamine, and gamma-hydroxybutyric acid (including drug products containing these chemicals or controlled substance) required to be filed in accordance with Sec. 1310.03(c) pursuant to 21 U.S.C. 830(b)(3).  . . .
   Advance notification is still allowed to be submitted to the DEA via paper in accordance with the existing procedures under Sec. 1313.31 for persons seeking to import a listed chemical that meets or exceeds the threshold reporting requirements into the United States for transshipment.  . . . 
Although the transshippers themselves would not have direct access to the instructions on the DEA Web site due to the firewall protection, it is the DEA’s understanding that most transshippers have someone in the United States as a domestic presence facilitating the transaction who will be able to access the instructions. There is no change from the current operational system. …
 
   Dated: November 28, 2016.
Chuck Rosenberg, Acting Administrator.

* * * * * * * * * * * * * * * * * * * *

OGSOTHER GOVERNMENT SOURCES

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

* President; EXECUTIVE ORDERS; Defense and National Policy: Cyber-Enabled Activities; Taking Additional Steps to Address the National Emergency (EO 13757) [Publication Date: 3 January 2017.]

* State; RULES; Amendment of International Traffic in Arms Regulations: International Trade Data System, Reporting [Publication Date: 3 January 2017.]

* State; NOTICES; Global Terrorist Designations: Lashkar-e-Tayyiba, et al. [Publication Date: 3 Januari=y 2017.]

* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 3 January 2017.]

* * * * * * * * * * * * * * * * * * * *

OGS_a23
. Commerce/BIS Renews Mahan Airways of Teheran, Iran, and Others Temporary Denial Order

 
* Respondent: Mahan Airways, Teheran, Iran, and others.
* Charges: The renewal of the Temporary Denial Order is necessary in the public interest to prevent an imminent violation of the EAR
* Debarred or Suspended from Export Transactions: For 180 days from the date of the order.
* Date of Order: 30 December 2016

* * * * * * * * * * * * * * * * * * * *

OGS_a34
. DHS/CBP Posts Updated ACE CATAIR Documentation

 
U.S. Customs and Border Protection (CBP) has updated two draft Automated Commercial Environment (ACE) CBP and Trade Automated Interface Requirements (CATAIR) chapters and one appendix posted on CBP.gov. Below are the updated documents:
 
  – ACE Appendix B – Valid Codes: Burma was added and Myanmar was removed from the country code list
  – Draft ACE CATAIR Drawback chapter: Please review the table of changes for updated information.
  – Draft Document Image System Implementation Guide: Please review the table of changes for updated information.
 
To download a copy of the updated draft ACE CATAIR chapters and appendix, please visit the “ACE Automated Broker Interface (ABI) CATAIR” page of CBP.gov/ACE and click on the “Chapters: Drafts for future capabilities” and “Appendices” tabs. You may also copy and paste the URLs above to your internet browser.

* * * * * * * * * * * * * * * * * * * *

OGS_a4
5. DHS/CBP Updates Appendix R Intended Use Codes

(Source: cbp@service.govdelivery.com, CSMS# 16-001059)
 
U.S. Customs and Border Protection (CBP) has posted the updated Version of Appendix R for Intended Use Codes, dated December 2016 to CBP.gov.
 
Please reference this Appendix for appropriate PGA Message Set transactions.

* * * * * * * * * * * * * * * * * * * *

OGS_a5
6. DoD/DSS Posts Introduction to DISS

(Source: DoD/DSS)
 
The Defense Information System for Security (DISS) is a family of systems that will serve as the system of record for comprehensive personnel security, suitability and credential management of all military, civilian, and DOD contractor personnel.
 
DISS also provides secure communications between adjudicators, security officers and component adjudicators in support of eligibility and access management. DISS is undergoing a phased deployment and is set to launch for Industry in the 3rd Quarter FY17.

The Personnel Security Management Office for Industry (PSMO-I) will be hosting a webinar on Tuesday, January 24, 2017, with special guest speakers from the Defense Manpower Data Center (DMDC) to provide a demonstration of DISS, including a proposed timeline, which ensures Industry readiness for deployment. Click here to register.

Lastly, the DISS website is now available on the DMDC PSA site. Much like the JPAS link is used today; the DISS website will provide authoritative information to the DISS user community to include: Account Management Policy, Account Request Procedures, Release Notes, Frequently Asked Questions and DISS news/announcements. Remember to visit and bookmark the site to stay up to date on the latest DISS developments.

* * * * * * * * * * * * * * * * * * * *

OGS_a6
7. State/DDTC Posts ITAR Amendment to Take Effect 31 Dec 2017

(Source: State/DDTC) [Reminder.]
 
The Directorate of Defense Trade Controls yesterday issued a Final Rule that will take effect tomorrow, 31 December, but will not be published in the Federal Register until January 3, 2017. The rule amends several ITAR sections regarding changes to the International Trade Data System.  It is viewable on the Federal Register’s public inspection webpage, here.
 
[Editor’s note: These changes will be included in the 31 Dec 2016 edition of the BITAR, to be issued tomorrow.  See BITAR subscription information at the bottom of this email.]

* * * * * * * * * * * * * * * * * * * *

NWSNEWS

NWS_a18. ST&R Trade Report: “Dates and Deadlines: ACE, Export Controls, Textiles, IMMEX, Import Restrictions”

 
Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week.
 
  – Dec 31: effective date of BIS and State Dept. final rules transferring chemical and biological agents to Commerce Control List
  – Dec 31: effective date of BIS and State Dept. final rules transferring guidance and fire control equipment to Commerce Control List
  – Dec 31: effective date of BIS and State Dept. final rules modifying export controls on military aircraft and gas turbine engines
  – Dec 31: termination of ACE test for CPSC
  – Jan 1: effective date of NOAA final rule banning imports of certain fish and fish products
  – Jan 3: effective date of BIS final rule to aid exports to Mexico for IMMEX operations
  – Jan 4: deadline for comments to State Dept. on ITAR clarifications on disclosures and debarments
  – Jan 4: deadline for comments to ITC on potential IPR import restrictions on pumping bras
  – Jan 5: deadline for comments to USDA on regulatory revisions to prepare for ACE
  – Jan 5: deadline for comments to ITC on potential limited exclusion order on automated teller machines
  – Jan 5: deadline for comments to ITC on potential import restrictions on medical devices
  – Jan 6: deadline for comments to ITC on recommended import restrictions on woven fabrics
  – Jan 6: deadline for comments to BIS on voluntary self-disclosure information collection
  – Jan 6: deadline for comments to ITC on public interest issues in IPR complaint against electronic devices

* * * * * * * * * * * * * * * * * * * *

NWS_a2
9. ST&R Trade Report: “Filing of Import Documents for CDC-Regulated Goods Transitioned to ACE”

 
The Centers for Disease Control and Prevention has announced an updated policy concerning the electronic transmission of CDC permits, forms, and documents through the Automated Commercial Environment using the Document Image System. The CDC states that this DIS capability will satisfy the agency’s data and electronic document requirements for any entry filed electronically in ACE and enable the trade community to have a U.S. Customs and Border Protection-managed single window for the electronic submission of data and documents required by CDC during the cargo importation and review process.
 
Currently the importation of CDC-regulated commodities into the U.S. customs territory typically requires the submission of one or more of the following documents.
 
  – Animal and Plant Health Inspection Service/CDC Form 2 – Request to Transfer Select Agents and Toxins
  – CDC Form 0.0728 – Permit to Import or Transfer Etiologic Agents or Vectors of Human Disease
  – Rabies Vaccination Certificate (for dogs; must be issued by a licensed veterinarian)
  – CDC Approval of Confinement Agreement Issuance Letter
  – CDC Permission Letter – Permit to Import African Rodents, Civets, or Turtles
  – CDC Nonhuman Primate Notification Message – confirmation to a registered importer of permission to import a nonhuman primate
  – certification statement of a material that is not known to contain or suspected of containing an infectious biological agent or has been rendered noninfectious
 
Under the new policy, which is effective as of Dec. 30, importers and brokers who file electronic entries for CDC-regulated items are required to:

  (1) obtain a copy of the permit/permission letter, form, or document for submission to the DIS (see notice for details);
  (2) transmit import filings to CBP via ACE;
  (3) transmit only information to CBP that has been requested by CBP or CDC; and
  (4) check the CDC’s importation website regularly for updated guidance for electronic filing.

 
The CDC notes that the following processes will remain as paper-based submissions:

  (1) human remains for interment or cremation after entering the U.S.; and
  (2) Form 75.37, Notice to Owners and Importers of Dogs (Requirement for Dog Confinement).

* * * * * * * * * * * * * * * * * * * *

COMMCOMMENTARY

COMM_a1
10. E.J. Krauland, M. Rathbone, and J.R. Hayes: “Export Control Reform – DDTC and BIS Publish Long-Awaited Final Rules for Category XII: Night Vision and Cameras”

* Authors: Edward J. Krauland, Esq., ekrauland@steptoe.com, 202-429-8083; Meredith Rathbone, Esq., mrathbone@steptoe.com, 202-429-6437; and Jack R. Hayes, Esq., jhayes@steptoe.com, 202-429-6491. All of Steptoe & Johnson LLP.
 
On October 12, 2016, the State Department’s Directorate of Defense Trade Controls (DDTC) and the Commerce Department’s Bureau of Industry and Security (BIS) published companion final rules to amend Category XII of the United States Munitions List (USML) and move some less sensitive items to the Commerce Control List (CCL).  The final rules will become effective on December 31, 2016.  The changes are part of the President’s Export Control Reform (ECR) initiative on which we have previously advised.  Category XII (Fire Control, Range Finder, Laser, Optical and Guidance Control Equipment) is one of the last categories to be addressed.   The final rules come after two sets of proposed rules.  They incorporate many of the provisions in the proposed rules, but also make some important changes.  (See our advisory on the initial set of proposed rules here.)

The DDTC final rule largely follows the proposed rules by moving to a positive list approach that lays out in detail the types of items to be controlled.  This promulgation follows the overall goals of ECR and the approach taken in reforming other USML categories.  However, the final rule also creates a new concept of “specially designed for a military end user,” that applies solely to seven paragraphs of amended Category XII.  This change arguably introduces a new design intent standard that contrasts with the approach taken by DDTC for the definition of “specially designed” hardware throughout the other USML Categories subject to ECR.  Overall, DDTC’s revisions create a more detailed and narrow USML Category XII with many items moving to new or pre-existing Export Control Classification Numbers (ECCNs) on the CCL.  The new BIS rule, in addition to integrating items formerly controlled on the USML, institutes enhanced controls for dual-use infrared detection items, and includes revisions to harmonize and simplify regulations regarding certain quartz rate sensors.

DDTC CHANGES:

Positive List

With the exception of the new design intent standard (discussed below), the final rule promulgates a positive list with detailed specifications of the items controlled for most items under Category XII.  Although many items have been moved to the CCL, the Category XII list retains a significant portion of the items previously controlled.  DDTC acknowledges that “transfer to the CCL … was greater in other USML categories,” but contends that this is because Category XII simply has more items that warrant ITAR control.

Nonetheless, DDTC did actively engage with industry and amend some control paragraphs in the final rule to more clearly remove certain items from the USML.  For example, commenters expressed concern that paragraph (c)(6)(iii) (multispectral imaging systems that classify or identify military or intelligence targets or characteristics) could inadvertently control civil or commercial multispectral systems.  DDTC accepted this comment, at least in part, and the final rule amends (c)(6)(iii) to control only multispectral systems that provide “automated” classification or identification of military or intelligence targets or characteristics.  Similarly, DDTC’s final rule alters paragraph (c)(6)(vi) (signature reduction systems), based on industry comments, to control only systems that reduce optical chain signature for optical augmentation.   The change clarifies that certain non-military systems that reduce noise or reflections are not controlled.

New “Specially Designed for Military End User” Concept

The newly introduced “specially designed for a military end user” language alters the approach to “specially designed” in other USML categories subject to ECR, and instead controls relevant items based on the intended end user at the development stage.  This new control parameter will apply to paragraphs (b)(6), (c)(1)(iii), (c)(3), (c)(4)(ii), (c)(5), (c)(6)(viii)(b), and (c)(7)(ii).  

Under the final rule, a “military end user” means “the national armed services, national guard, national police, government intelligence, or reconnaissance organizations, or any person or entity whose actions or functions are intended to support military end uses.”  The “any person or entity” clause means the definition will capture a wide variety of actors and DDTC “acknowledges the definition of military end user is broad and intends it to be so.”  An item will be deemed “specially designed” for a military end user “if it was developed for use by a military end user or users.”  Under the new Note to Category XII, items designed for both military and commercial end users, as well as items designed with no specific end user in mind, are not considered specially designed for a military end user.  However, DDTC notes that “contemporaneous documents are required to support the design intent; otherwise use by a military end user establishes that the item is specially designed for a military end user.”

Importantly, items controlled as specially designed for a military end user will not be eligible for the releases under § 120.41(b) because they are “systems” falling under §120.41(a)(1) rather than “parts, components, accessories, attachments, and software” falling under paragraph (b).  Therefore, the standard catch-and-release analysis that accompanies most specially designed controls is inapplicable.  However, according to DDTC, the “specially designed for a military end user” language will operate “similar” to the §§ 120.41(b)(4) and (b)(5) releases because it excludes items designed for a commercial or civil application or as a general purpose commodity – as long as contemporaneous documentation can be provided.

Many commenters noted, and DDTC has stated, that a design intent standard is more difficult to implement than the positive list approach.  However, DDTC stated that earlier attempts to use technical specifications incorporated too many items in the ITAR with widespread commercial and civil applications.  The design intent approach has the potential to disadvantage purchasers and subsequent users of an item who may not have access to design documentation, unless manufacturers provide clear jurisdiction and classification information to the marketplace.   Probably more significant, the new standard may inadvertently capture products designed for commercial use when the necessary documentation is lacking – this may be a particular problem for items that were designed before this rule was published or when records about development are not available.  In an effort to alleviate some of these concerns, DDTC noted that parties may request a commodity jurisdiction (CJ) determination in which DDTC will consider “any relevant information,” as opposed to self-determinations, where only contemporaneous development documentation may be used. 

Notably, this design intent standard may not remain.  DDTC acknowledges that a positive list approach is preferable and that it has not abandoned developing appropriate control parameters.   DDTC will issue a notice of inquiry later to seek public input on parameters that might be used instead of the design intent standard.  Companies exporting items or services related to the seven paragraphs falling under this specially designed standard should monitor the situation closely and take advantage of the opportunity to comment if appropriate.

BIS CHANGES:

Integrating Items Formerly Controlled on the USML

The BIS final rule includes new and amended 600 series ECCNs for items no longer controlled under Category XII of the USML after the revisions discussed above.  Specifically, the rule amends ECCN 7A611 and creates 7B611, 7D611, and 7E611.  The initial proposed rule created two different 600 series controls (6×615 and 7×611), but the final rule consolidates those into a single series (7×611) in order to create a more simplified structure.  The removal of items from the USML to the CCL could be beneficial for industry.  Some items will become eligible for de minimis treatment if they are incorporated into foreign-made products.  Certain items will also become eligible for license exceptions, particularly Strategic Trade Authorization (STA).

Enhanced Controls for Commodities Related to Infrared Detection Capabilities

Due to their sensitive nature, the final rule expands various controls for items related to infrared detection capabilities.  For example, additional restrictions have been placed on the use of license exceptions Additional Permissive Reexports (APR) and Strategic Trade Authorization (STA).  With regard to APR, the new rule increases the number of items ineligible for § 740.16(b) (reexports to and among specified countries) by adding ECCNs 6A002, 6A003, and 6A990 to the restrictions in paragraph (a)(2).  License exception STA has been amended by adding a number of new ECCNs, in whole or in part, to the restrictions in paragraph (b)(2)(x) and adding ECCN 0E987 to the restrictions of paragraph (b)(2)(ii).

In addition, certain technology in ECCNs 6E001 and 6E002 have been made ineligible for most license exceptions.  The rule also announces a new licensing policy for some RS Column 1 items by establishing a presumption of denial for license applications to Country Group D:5 for items controlled by 6E001 or 6E002, for the development of focal plane arrays or image intensifier tubes (IIT) described in 6A002 and technology controlled in 6E009.

On a positive note for industry, the de minimis rule (§ 734.4) was amended to make certain infrared commodities controlled by ECCN 0A919, which were previously ineligible for de minimis treatment, subject to the normal 25% de minimis threshold that is applicable to most items.  However, the scope of ECCN 0A919 has been broadened to control the reexport of a wider range of infrared detection items.

Due to the sensitive nature of certain cameras with night vision capability, the end-use controls of § 744.9 have been expanded by adding a number of new ECCNs in that section under National Security (NS), Missile Technology (MT), Nuclear Proliferation (NP), Crime Control (CC), Regional Stability (RS), United Nations (UN), Firearms Convention (FC), and/or Anti-Terrorism (AT) reasons for control.  The final rule makes other changes to infrared detection controls by creating ECCN 0E987 (technology for firearm optical sighting devices incorporating a focal plane array or IIT).  These changes make for a more complex and nuanced control regime. 

Removal of Controls for QRS-11 Sensors

The BIS final rule removes a variety of controls for QRS-11 sensors, most notably removing the ineligibility of such sensors for de minimis treatment in §734.4(a)(3).  It also removes the RS Column 1 control and reference to such sensors from ECCN 7A994, the restriction on license exceptions in § 740.2(a)(9), and references to such sensors in a number of other ECCNs.  The BIS rule notes that “the agencies do not believe that any of the sensors are described on the revised USML.”  While some controls remain in place for QRS-11 sensors, these changes should reduce many of them.  According to BIS, specific sensors may be captured by either a 600 series ECCN or other CCL ECCNs.

Abandonment of Previously Proposed Worldwide RS Control

The May 2015 proposed rule included a new worldwide RS control for dual-use items.  That provision was largely removed in the February 2016 proposed rule, which limited the new worldwide RS control to certain military technology in ECCN 7E611.a.  The final rule completely abandons the proposed worldwide RS control by removing it from ECCN 7E611.a as well.  

CONCLUSION

The final rules issued by DDTC and BIS depart from the goals of ECR in some unique and important ways, and impose a complex regime of controls.  Manufacturers, exporters, and brokers operating in this space should pay close attention to the new rules and may face challenges understanding and complying with the amended regulations.  With the announcement of the final rules for Category XII, only a handful of USML categories have yet to be revised under ECR.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a211
. Friday List of Approaching Events

(Sources: Event sponsors.) 
 
Published every Friday or last publication day of the week. Send events to
apbosch@fullcirclecompliance.eu
, composed in the below format:

* DATE: PLACE; “TITLE;” SPONSOR; WEBLINK; CONTACT (email and phone number)
 
Continuously Available Training:
* Executive Masters: “
International Trade Compliance
;” University of Liverpool;
exed@liverpool.ac.uk
;
+44 (0) 20 768 24614
* E-Seminars: “
US Export Controls” / “Defense Trade Controls
;” Export Compliance Training Institute;
danielle@learnexportcompliance.com 
* On-Line: “
Simplified Network Application Process Redesign (SNAP-R)
;” Commerce/BIS; 202-482-2227
* E-Seminars: “
Webinars On-Demand Library
;” Sandler, Travis & Rosenberg, P.A.
 
Training by Date:

* Jan 4: Webinar; “Drawback Technical Webinar;” ACE Business Office

* Jan 9: Long Beach CA; “Customs Brokers License Examination Course;” Foreign Trade Association


* Jan 10: California MD; “Foreign Military Sales Essential to U.S. Defense;” The Patuxent Partnership

* Jan 11: London UK; “
Control List Classification – Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Jan 13: Shanghai; “
5th Advanced China Forum on Import Compliance;” American Conference Institute


* Jan 16-17: Frankfurt Germany; “
U.S. Export Controls and Sanctions – Update 2017
” (with BIS, DDTC and OFAC speakers); AWA Foreign Trade Academy;
Kristina.Brueffer@awa-seminare.de 

* Jan 17: Webinar; “
Foreign-Trade Zones and Bonded Warehouses
;”
Sandler, Travis & Rosenberg, P.A.;
webinarorganizers@strtrade.com


* Jan 18: Bristol UK; “
Intermediate Seminar
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Jan 19: Bristol UK; “
Beginners Workshop
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Jan 19: Bristol UK; “
Making Better License Applications
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Jan 19: Bristol UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Jan 23-26: San Diego CA; “
EAR/ITAR/OFAC Compliance Seminar Series
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977 

* Jan 23-25: Sterling VA; “
Basics of Government Contracting
;” Federal Publications Seminars

* Jan 24: Webinar; “
Customs Valuation 101
;”
Sandler, Travis & Rosenberg, P.A.;
webinarorganizers@strtrade.com

* Jan 25-26: Scottsdale AZ; “Complying with U.S. Export Controls;” Dept. of Commerce/Bureau of Industry and Security

* Jan 26-27: Orlando FL; “ITAR/EAR Bootcamp;” Export Compliance Solutions; spalmer@exportcompliancesolutions.com; 866-238-4018 / 410-757-1919

* Jan 31-Feb 1: Toronto; “
6th Forum on US Export & Re-Export for Canadian Operations;” American Conference Institute

* Jan 31: Webinar; “
CUI and CDI – The Federal Push to Protect Sensitive Technical Information
;” Federal Publications Seminars

* Feb 1: Wash DC; “
3rd National Forum on CFIUS & Team Telecom;” American Conference Institute

*
Feb 1: Webinar; “ITAR Hardware License Exemptions Explained;” ECTI; danielle@learnexportcompliance.com; 540-433-3977

* Feb 6: Manchester UK; “
Nuclear Course
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Feb 7: Webinar; “
Tariff Engineering to Legally Reduce or Eliminate Duty
;”
Sandler, Travis & Rosenberg, P.A.;
webinarorganizers@strtrade.com

* Feb 8-9: Wash DC; “7th Annual Advanced ITAR & EAR Compliance;” marcus evans

* Feb 8: Webinar; “
CBP Audit Surveys: What’s at Stake?
;”
Sandler, Travis & Rosenberg, P.A.;
webinarorganizers@strtrade.com

* Feb 10: Melbourne FL; “Accelerated Classification Workshop (USML, CCL, ECCN, HTS, Sched B);” Space Coast World Trade Council;
bcantillon@bellsouth.net
, 321-373-2047

* Feb 13-15: Las Vegas NV; “
Basics of Government Contracting
;” Federal Publications Seminars

* Feb 15: Webinar; “
Identifying Agents for Customs Purposes – Traps for the Unwary Importer
;”
Sandler, Travis & Rosenberg, P.A.;
webinarorganizers@strtrade.com

* Feb 20-23: Orlando; “
United States Export Control (EAR/OFAC/ITAR) Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Feb 21: San Diego CA; “AES Compliance Seminar;” Dept. of Commerce/Census

* Feb 22: Newcastle UK; “
Intermediate Seminar
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Feb 23: Long Beach CA; “AES Compliance Seminar;” Dept. of Commerce/Census

* Feb 23: Newcastle UK; “
Beginners Workshop
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Feb 23: Newcastle UK; “
Making Better License Applications
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Feb 23: Newcastle UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Mar 5-6: Dubai UAE; “Trade Compliance in the Middle East;” C5

* Mar 6-8: San Diego CA; “
Basics of Government Contracting
;” Federal Publications Seminars

* Mar 7-10: Orlando; “
‘Partnering for Compliance™’ East Export/Import Control Training and Education Program
;” Partnering for Compliance East;
Ailish@PartneringForCompliance.org
; 321-952-2978

* Mar 8: London UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Mar 9: London UK; “
Making Better License Applications
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Mar 12-15: Miami; “ICPA Miami Conference;”

International Compliance Professionals Association;
wizard@icpainc.org 

* Mar 13-15: Newport Beach CA; “2017 Winter Back to Basics Conference;” Society for International Affairs

* Mar 15: Birmingham UK; “
Intermediate Seminar
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Mar 15: Miami FL; “AES Compliance Seminar in Spanish;” Dept. of Commerce/Census

* Mar 16: Miami FL; “AES Compliance Seminar;” Dept. of Commerce/Census
* Mar 16: Birmingham UK; “
Beginners Workshop
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Mar 16: Birmingham UK; “
Making Better License Applications
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Mar 16: Birmingham UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* Mar 17: Chicago IL; “
Customs Education & Solutions Seminar
;” AAEI; Chris Enyart,
cenyart@aaei.org
, +1-202-857-8009

* Mar 20-22: Orlando FL; “
Basics of Government Contracting
;” Federal Publications Seminars

* 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

* Mar 21: Webinar; “
Importer Self-Assessment – What It Really Takes
;”
Sandler, Travis & Rosenberg, P.A.;
webinarorganizers@strtrade.com

* Mar 22: Detroit MI; “AES Compliance Seminar;” Dept. of Commerce/Census

* Mar 29: London UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
*  Mar 29-30: Phoenix/Scottsdale AZ; “Critical Compliance & TAA Workshop;” spalmer@exportcompliancesolutions.com; 866-238-4018 / 410-757-1919
* Apr 3-5: Sterling VA; “
Basics of Government Contracting
;” Federal Publications Seminars

* Apr 3-6: Wash DC; “
EAR/OFAC/ITAR Commercial and Military Export Controls/How US Controls Impact Non-US Companies, Affiliates and Transactions, PLUS Other Country Controls Comparison to US (EU & Canada) Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977


* Apr 18: Milwaukee WI; “AES Compliance Seminar;” Dept. of Commerce/Census
* Apr 26: London UK; “
Intermediate Seminar
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Apr 27: London UK; “
Beginners Workshop
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Apr 27: London UK; “
Making Better License Applications
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* May 1-4: Las Vegas; “
EAR Export Controls / ITAR Defense Trade Controls Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977


* May 1-2: Tucson AZ; “2017 Spring Conference;” Society for International Affairs

* May 7-9: Toronto; “ICPA Toronto Conference;”
International Compliance Professionals Association;
wizard@icpainc.org 

* May 8-10: San Diego CA; “
Basics of Government Contracting
;” Federal Publications Seminars

* May 10: London UK; “
Control List Classification – Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* May 11: London UK; “
Making Better License Applications
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* May 15-18: London UK; “
United States Export Control (EAR/OFAC/ITAR) Seminar in London (for EU and other non-US Companies)
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* May 17-19: Minneapolis MN; “
Basics of Government Contracting
;” Federal Publications Seminars

* May 17: Southampton UK; “
Intermediate Seminar
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* May 18: Southampton UK; “
Beginners Workshop
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 

* May 23: Tampa FL; “AES Compliance Seminar;” Dept. of Commerce/Census

* Jun 5-7: Boston MA; “
Basics of Government Contracting
;” Federal Publications Seminars

* Jun 5-8: Wash DC; “
United States Export Control (EAR/OFAC/ITAR) Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Jun 7: London UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Jul 10-12; Baltimore MD; “
2017 Summer Back to Basics Conference
;” Society for International Affairs

* Jun 11-13: Dublin IRL; “ICPA Dublin Conference;”

International Compliance Professionals Association;
wizard@icpainc.org 

* Jun 12-15: San Francisco; “
United States Export Control (EAR/OFAC/ITAR) Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Jun 13: Philadelphia PA; “AES Compliance Seminar;” Dept. of Commerce/Census
* Jun 14: Kegsworth, Derby UK; “
Intermediate Seminar
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Jun 15: Kegsworth, Derby UK; “
Beginners Workshop
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Jun 15: Kegsworth, Derby UK; “
Making Better License Applications
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* Jun 15: Kegsworth, Derby UK; “
Control List Classification – Combined Dual Use and Military
;” UK/BIS Export Control Organisation;
denise.carter@bis.gsi.gov.uk 
* July 11-12: Seattle WA; “ITAR/EAR Boot Camp;” spalmer@exportcompliancesolutions.com; 866-238-4018 / 410-757-1919
* Jul 17-19: Hilton Head Island SC; “
Basics of Government Contracting
;” Federal Publications Seminars
* Aug 14-16: McLean VA; “
Basics of Government Contracting
;” Federal Publications Seminars

* Sep 4-9: Galveston TX; “ICPA Conference at Sea;”

International Compliance Professionals Association;
wizard@icpainc.org

* Sep 5: Nashville TN; “AES Compliance Seminar;” Dept. of Commerce/Census

* Sep 12-13: Annapolis MD; “ITAR/EAR Boot Camp;” spalmer@exportcompliancesolutions.com; 866-238-4018 / 410-757-1919
* Sep 18-20: Las Vegas NV; “
Basics of Government Contracting
;” Federal Publications Seminars

* Oct 12: Boston MA; “AES Compliance Seminar;” Dept. of Commerce/Census

* Oct 23-24: Arlington VA; “
2017 Fall Advanced Conference
;” Society for International Affairs
* Nov 6-8: Chicago IL; “
Basics of Government Contracting
;” Federal Publications Seminars

* Nov 7: Norfolk, VA; “AES Compliance Seminar;” Dept. of Commerce/Census

* Dec 5: San Juan PR; “AES Compliance Seminar in Spanish;” Dept. of Commerce/Census
* Dec 7: Laredo, TX; “AES Compliance Seminar in Spanish;” Dept. of Commerce/Census

* Dec 11-13: Sterling VA; “
Basics of Government Contracting
;” Federal Publications Seminars

* * * * * * * * * * * * * * * * * * * *

MSEX/IM MOVERS & SHAKERS

MS_a112
. Heather Sears Moves to Johnson Controls

(Source:  Editor)
 
Heather Sears has moved to Johnson Controls, Inc. as Corporate Senior Counsel, Global Trade Compliance, in the Washington, D.C. office.  Heather’s new contact information is
hcsears@tyco.com
or (202)350-6915.

* * * * * * * * * * * * * * * * * * * *

ENEDITOR’S NOTES

EN_a113. Bartlett’s Unfamiliar Quotations

(Source: Editor)


* Rudyard Kipling (30 Dec 1865 – 18 Jan 1936, was an English journalist, short-story writer, poet, and novelist. Kipling’s works of fiction include The Jungle Book (1894), Kim (1901), and many short stories, including “The Man Who Would Be King” (1888). His poems include “Mandalay” (1890), and “Gunga Din” (1890).  In 1907, at the age of 42, he was awarded the Nobel Prize in Literature, making him the first English-language writer to receive the prize, and its youngest recipient to date.)
  – “All the people like us are We, and everyone else is They.”
 
* Ramana Maharshi (30 Dec 1879 – 14 April 1950, born Venkataraman Lyer, was an Indian sage and jivanmukta.  He lived for 17 years in a Virupaksha mountain cave.
  – “No one succeeds without effort. Those who succeed owe their success to perseverance.”
 
Friday funnies:
 
An older married woman is hauled into court for stealing a can of peaches. The judge asks, “Why did you do it?” She answers, “I was hungry.” The judge replies, “Sorry, but you committed a crime, so I have to sentence you. How many peaches were in the can?” The woman says, “Six.” The judge says, “Alright, I’m going to give you a day in jail for every peach you took.” Just before he bangs his gavel down, the woman’s husband says, “May I speak?” “Go ahead,” the judge replies. The old guy says, “She stole a can of peas too.”
  — John Rozeboom, Grand Rapids, MI 

* * * * * * * * * * * * * * * * * * * *

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

The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.  Changes to applicable regulations are listed below.
 
*
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:
20 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: 27 Dec 2016: 81 FR 94971-94974: Commerce Control List: Updates Based on the 2015 and 2016 Nuclear Suppliers Group (NSG) Plenary Meetings; Conforming Changes and Corrections to Certain Nuclear Nonproliferation (NP) Controls; 81 FR 94962-94963: Burma: Amendment of the Export Administration Regulations Consistent With an Executive Order That Terminated U.S. Government’s Sanctions; and 81 FR 94963-94971: Russian Sanctions: Addition of Certain Entities to the Entity List, and Clarification of License Review Policy 

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 23 Dec 2016: 81 FR 94254-94259: Iranian Transactions and Sanctions Regulations 
 
*
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 (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. 
 
*
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.  
  – 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.
 
*
INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR)
: 22 C.F.R. Ch. I, Subch. M, Pts. 120-130
  – Latest Amendment: 5 Dec 2016: 81 FR 87427-87430: Corrections & Additions to ITAR Parts 120, 121, 122, 124, 126 and 127. The ITAR was further amended on 29 Dec 2016 by Public Notice 9811, effective 31 Dec 2016, but the Federal Register notice of amendment will not be published until 3 Jan 2017.
  – The only available fully updated copy 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.  A new edition will be published tomorrow, 31 December.  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.  

* * * * * * * * * * * * * * * * * * * *

EPEDITORIAL POLICY

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., edited by James E. Bartlett III and Alexander Bosch, and emailed every business day to approximately 8,000 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOJ/ATF, DoD/DSS, DoD/DTSA, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

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

* CAVEAT: The contents 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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