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17-0104 Wednesday “The Daily Bugle”

17-0104 Wednesday “Daily Bugle”

Wednesday, 4 January 2017

TOP
The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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  1. Commerce/BIS Amends EAR, Adds Five Entities to the Entity List 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: Dane Francisco Delgado of Eden, TX, Denied Export Privileges for 10 Years 
  3. Commerce/BIS: Robert Luba of Waymart, PA, Denied Export Privileges for 10 Years 
  4. Commerce/BIS: Kamran Ashfaq Malik of Joint Base MDL, NJ, Denied Export Privileges for 5 Years 
  5. Commerce/Census: “Port of Unlading Code Added in the AES” 
  6. DHS/CBP: “ACE PRODUCTION PGA Deployment, 5 Jan” 
  7. State/DDTC: (No new postings.) 
  8. Australia Department of Foreign Affairs and Trade: “New Year Brings New Opportunities For Australian Exporters” 
  9. UK BIS: “What We’re Doing In 2017” 
  1. Eurasia Review: “Bulgaria Probes Arms Company Linked to Syria” 
  1. Global Trade News: “Weise Wednesday: How Does CBP Treat Errors Resulting from System Bugs vs. Flawed Processes?” 
  2. Hudson Institute: “The Awakening Giant: Risks and Opportunities for Japan’s New Defense Export Policy” 
  3. J.C. Poling, W.H. Segall & M. Baki Fadlallah: “OFAC Expands Iran-Related Authorizations for Medicine, Medical Devices and Agricultural Commodities” 
  4. K.C. Georgi, Regan K. Alberda & Julia L. Diaz: “Changes to Iran Sanctions Regulations Means Good News for US Medical Device Manufacturers” 
  5. J. Reeves & K. Heubert: “New Year, New Electronic Reporting Requirements” 
  6. R. Smith, Q. Michel & M. Garcia-Alonso: “What Will Happen To Arms Exports Under Brexit?” 
  7. Gary Stanley’s ECR Tip of the Day 
  1. ECTI Presents ITAR Hardware License Exemptions Explained -Webinar, 1 Feb 
  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 (4 Jan 2016), FACR/OFAC (23 Dec 2016), FTR (15 May 2015), HTSUS (1 Jan 2017), ITAR (3 Jan 2017) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. Commerce/BIS Amends EAR, Adds Five Entities to the Entity List

(Source: Federal Register) [Excerpts.]
 
81 FR 722-725: Addition of Certain Entities to the Entity List
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: The Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding five entities to the Entity List. These five entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. BIS is taking this action in conjunction with the designations made by the Office of Foreign Asset Controls, Department of the Treasury, under amended Executive Order 13694. This final rule lists these entities on the Entity List under the destination of Russia.
* DATES: This rule is effective January 4, 2017.
* FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Email: ERC@bis.doc.gov.
* SUPPLEMENTARY INFORMATION: …
   BIS, pursuant to Executive Order 13694, as amended, and in consultation with the Departments of State, Defense, Energy, and the Treasury, has designated the five entities specified in the next three paragraphs.
  – The Main Intelligence Directorate (a.k.a., the following two aliases: Glavnoe Razvedyvatel’noe Upravlenie; and GRU) is involved in external collection using human intelligence officers and a variety of technical tools, and is designated for tampering, altering, or causing a misappropriation of information with the purpose or effect of interfering with the 2016 U.S. election processes.
  – The Federal Security Service (FSB), (f.k.a., Esage Lab) a.k.a., Federalnaya Sluzhba Bezopasnosti, assisted the GRU in conducting the activities described above.
  – There were also three other entities involved: (1) The Special Technology Center, (a.k.a., STLC, Ltd.) assisted the GRU in conducting signals intelligence operations; (2) Zorsecurity Center (a.k.a., Esage Lab) provided the GRU with technical research and development; and (3) the Autonomous Noncommercial Organization Professional Association of Designers of Data Processing Systems (a.k.a., ANO PO KSI) provided specialized training to the GRU.
   With these additions, BIS imposes on these entities a license requirement for exports, reexports, or transfers (in-country) of all items subject to the EAR and a license review policy of presumption of denial. The license requirement applies to any transaction in which items are to be exported, reexported, or transferred (in-country) to any of the entities or in which such entities act as purchaser, intermediate consignee, ultimate consignee, or end-user. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to the persons being added to the Entity List in this rule. This license requirement implements an appropriate measure within the authority of the EAR to carry out the provisions of Executive Order 13694. …
 
   Dated: December 29, 2016.
Eric L. Hirschhorn, Under Secretary of Commerce for Industry and Security.

 

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OGSOTHER GOVERNMENT SOURCES

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


* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 5 January 2017.] 
* * * * * * * * * * * * * * * * * * * *

 
* Respondent: Dane Francisco Delgado, Eden, TX
* Charges: On 4 November 2014, in the U.S. District Court for the Southern District of Texas, Dane Francisco Delgado (“Delgado”), was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C. § 2778 (2012)) (“‘AECA”). Specifically, Delgado knowingly and willfully conspired with persons known and unknown to export, furnish, and cause to be exported from the United States to Mexico defense articles designated on the United States Munitions List without having first obtained from the Department of State a license or written authorization for such export. Delgado was sentenced to 60 months in prison, three years of supervised release, and a $100 assessment.
* Debarred: Delgado’s is denied export privileges under the Regulations for a period of 10 years from the date of Delgado’s conviction, until 4 November 2024.
* Date of Order: 29 December 2016.

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

 
* Respondent: Robert Luba, Waymart, PA
* Charges: On 25 April 2016, in the U.S. District Court for the District of New Jersey, Robert Luba (“Luba”), was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C. § 2778 (2012)) (“AECA”). Specifically, Luba knowingly and willfully exported and caused to be exported from the United States to India a defense article, that is, the technical drawing for the NSSN Class Submarine, Torpedo Tube, Open Breech Door, Gagging Collar A, Drawing Number 7072856, which was designated as a defense article on the United States Munitions List, without having first obtained from the Department of State a license for such export or written authorization for such export. Luba was sentenced six months in prison, three years of supervised release, $173,736.67 in restitution, and a $200 assessment.
* Debarred: Luba is denied export privileges under the Regulations for a period of 10 years from the date of Luba’s conviction 25 April 2026.
* Date of Order: 29 December 2016.

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OGS_a45. Commerce/BIS: Kamran Ashfaq Malik of Joint Base MDL, NJ, Denied Export Privileges for 5 Years

(Source: Commerce/BIS)
 
* Respondent: Kamran Ashfaq Malik, Joint Base MDL, NJ
* Charges: On 29 June 2015, in the U.S. District Court for the District of Maryland, Kamran Ashfaq Malik (“Malik”), was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C. § 2778 (2012)) (“AECA”). Specifically, Malik knowingly and willfully exported and caused the exportation of firearm parts and accessories designated as defense articles in Category I of the United States Munitions List, to wit: a .223 caliber rifle lower receiver, a .334 caliber rifle lower receiver, two .223 caliber rifle bolt carriers, and two .223 10 round magazines, from the United States and destined for Pakistan without having first obtained the required licenses or authorizations from the Department of State. Malik was sentenced to 24months in prison, three years o f supervised release, and a $100 assessment.
* Debarred: Malik is denied export privileges under the Regulations for a period of 5 years from the date of Malik’s conviction, until 29 June 2020
* Date of Order: 29 December 2016.

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OGS_a56. Commerce/Census: “Port of Unlading Code Added in the AES”

(Source: census@subscriptions.census.gov, 4 Jan 2017.)
 
Please note the following Port of Unlading Code has been added in the AES effective immediately.

The following Port of Unlading Code has been ADDED to the AES:

Port of Unlading Code; Description; Country
33704; Angamos; Chile

For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.

  – Telephone: (800) 549-0595, select option 1 for AES
  – Email: askaes@census.gov
  – Online: www.census.gov/trade

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OGS_a67. DHS/CBP: “ACE PRODUCTION PGA Deployment, 5 Jan”
(Source: cbp@service.govdelivery.com, CSMS# 17-000003.)
 
Please be advised that there will be an ACE PRODUCTION deployment on Thursday morning, January 5, 2017, starting at 0500 ET.
 
The deployment is expected to take approximately 30 minutes, and will impact ACE Cargo Release and ACE Entry Summary processing.
 
To be deployed:
 
* PGAD-13740 Update Format for Quantity Elements in XML
* PGAD-13630 Implement FDA Business Rules IG v2.5 updates
  – Relax rules for data elements that will no longer be mandatory per the final rule
* PGAD-13839 Miscellaneous Bugs
* * * * * * * * * * * * * * * * * * * *

OGS_a78. State/DDTC: (No new postings.)
(Source: State/DDTC)
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OGS_a89. Australia Department of Foreign Affairs and Trade: “New Year Brings New Opportunities For Australian Exporters”

 
Further tariff cuts on more than 7000 Australian products have come into effect, creating more export opportunities for Australian businesses.
 
These wide-ranging tariff cuts – agreed as part of Australia’s Free Trade Agreements with China and Korea – came into effect on January 1 and are continuing to deliver a competitive advantage for Australian business.
 
Australian businesses looking to take advantage of Australia’s free trade agreements can find out more about the tariffs that apply to their exports at the FTA Portal (ftaportal.dfat.gov.au).
 
Media release: “New year brings new opportunities for Australian exporters”, delivered by the Honorable Steven Ciobo MP, is available at here.

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OGS_a910. UK BIS: “What We’re Doing In 2017”
 
Followers of this blog will know that the team working on the SPIRE replacement made excellent progress during 2016. And thankfully, most traders we’ve spoken to seem happy with what we’ve done so far.
 
But of course, the service is not yet freely available for you to make license applications with – we’re in private beta at the moment – so we’re hardly done yet. Here’s what to expect in the first few months of 2017.
 
SIEL Applications and the End-User Undertaking
 
A lot of our early focus was on making open licence applications simpler, and OGELs more appealing to exporters as a result. But not every export is covered by an OGEL, and not every exporter wants to use one.
 
The existing paper SIEL application is quite burdensome. Much of our current focus is on tracking down duplication and shortening the application process as we digitize it.
 
The end-user undertaking inevitably comes into it: where we can, we plan to carry over information you’ve entered from the SIEL application to the EUU, or vice versa, depending on the order you complete them in. If you want to continue using the old paper system you’ll be able to.
 
Testing of the various iterations is ongoing; we’re getting invaluable info from every exporter we talk to. If you want to get involved please email userresearchforlite@digital.beis.gov.uk.
 
Account Management Systems
 
We’re also working on the system you’ll use to manage your license applications and view the licenses you hold. We’ve been calling it a ‘dashboard’ for a while, but it may not turn out that way.
 
A lot of the work in this area is visual; we need to make sure everything looks right to eyes accustomed to online shopping baskets and such like, without suggesting there’s about to be a sale on sofas.
 
We’ll soon be reaching a stage where we have something to test, so we’ll be looking for people accustomed to the equivalent system in SPIRE. If you’ve used the SPIRE ‘Workbasket’, and you’re keen to see how we’re trying to improve things in this area, please get in touch at userresearchforlite@digital.beis.gov.uk.
 
OGEL and OIEL Transformation
 
Open licenses are handy things, saving people having to apply repeatedly to send similar shipments overseas. Unfortunately, over the years the number of open licenses has increased beyond sensibly manageable levels, as new OGELs are added at the request of trade bodies or to cover specific activities and industries.
 
Alongside the SPIRE replacement project, we’re looking into how we can simplify open licensing (including OIELs). The new import/export licensing service is not dependent on this, but the two projects go hand in hand. If you have any views or suggestions in this area, let us know at userresearchforlite@digital.beis.gov.uk.
 
Internal Processing Systems
 
OK, so this isn’t the most exciting section of an otherwise exhilarating blog. During the more public-facing development we’ve been running a sideline in tidying up the systems case officers use to process license applications.
 
We’re not looking for external help with this – after all, you probably don’t know much about how these systems look now. But rest assured we’re making things easier at our end so we can try to make things easier at yours!
 
Imports
 
We’re well aware of our focus on exports so far. Imports are a key strand of future development – eventually the new service is intended to replace the Import Case Management System (ICMS) in the same way as SPIRE.
 
Some licenses and permissions are dealt with elsewhere, such as CITES permits and authorizations to import controlled drugs or nuclear material. To begin with, we’ve built a simple, interactive decision tree to direct importers to the right type of license where one is needed. You’ll be able to take a look at this when we reach the public beta phase.
 
Replacing ICMS and the other systems is some way down the line, but if you regularly deal with the government over imports and have input for us in this area, please email us at userresearchforlite@digital.beis.gov.uk.
 
Public Beta
 
We’re currently scheduling our public beta phase for May/June, though that’s subject to change. The public beta will be when we open the new service to general use, though with the caveat that it’s not a final version and we’re still iterating and looking for your input. There’ll be more blogs about this as 2017 moves along.
 
More Blogs!
 
New year resolution alert: we’ve not been keeping our readers up to date as well as we’d like, so we’re going to write more frequent blogs in 2017. What we cover depends on how we progress with the things above, but if you have anything you want to know more about or think there’s a blog we could write to fill a gap, let us know and we’ll see what we can do.
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NWSNEWS

NWS_a111
. Eurasia Review: “Bulgaria Probes Arms Company Linked to Syria”

 
Prosecutors are investigating whether a local arms company broke the embargo on exporting weapons to Syria, following Russian claims that Bulgaria-made arms were found in Aleppo.
 
Prosecutors in Gorna Oryahovitsa, northern Bulgaria, have launched a probe into a local arms company whose products have reportedly been found in former rebel-controlled areas of Aleppo in Syria.
 
The probe, announced on Thursday, follows an investigation published by the newspaper Trud in December, which revealed that some arms found by Russian troops in eastern Aleppo were made by Arcus, a company located in Lyaskovets, in northern Bulgaria.
 
The aim of the probe is to identify whether the company has a license to trade in arms, the prosecution explained.
 
Ivan Gromov, commander of de-mining group in Aleppo, told Russian TV on Wednesday that the group had found “huge amounts” of arms produced in Germany, Bulgaria and the US.

Among them were various types of shells, hand grenades, grenade launchers and other weapons – enough for “a whole battalion”, Gromov said.
 
Maria Zaharova, from the Russian foreign ministry, on Tuesday said “questions have been raised in Moscow” about the arms produced in Bulgaria and with an expired Russian license.
 
Bulgarian Foreign Minister Daniel Mitov dismissed the Russian claims on Thursday, saying that Bulgaria strictly followed international arms trading standards and had not exported any arms to Syria since the beginning of the conflict in 2011.
 
  “I will not accept accusations from a country which is responsible for civilian victims in Aleppo,” Mitov told private broadcaster BTV, referring to Russian military support for the Syrian government offensive in the city.
 
He added that Russia is not a party to the UN Arms Trade Treaty and the Convention on Certain Conventional Weapons and that “such a country cannot moralize against Bulgaria”.
 
A recent investigation by BIRN and the Organized Crime and Corruption Reporting Project, OCCRP, revealed that since 2012, Bosnia, Bulgaria, Croatia, the Czech Republic, Slovakia, Serbia and Romania had agreed exports of weapons and ammunition worth at least 1.2 billion euros to four countries supporting Syria’s armed opposition.
 
The bulk of the deals, totaling 829 million euros, were made with Saudi Arabia.
 
The exporting countries granted the licenses despite evidence that many weapons were being diverted to Syria, ending up with opposition as well as Islamist groups accused of atrocities.

EU members and countries seeking to join the EU are obliged to carry out eight different checks before agreeing arms export licenses.
 
The checks include assessing the risk that sold weapons could be diverted to or end up in the hands of terrorist groups.

Bulgaria’s economy minister in August admitted that some weapons from the country may have ended up in the hands of fighters in Syria and Iraq, but insisted that the state was not responsible for this.

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COMMCOMMENTARY

COMM_a1
12. Global Trade News: “Weise Wednesday: How Does CBP Treat Errors Resulting from System Bugs vs. Flawed Processes?”

(Source: Integration Point)
 
Welcome to Weise Wednesday! Every week we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. Please send questions to AskGeorge@IntegrationPoint.com.
 
Q:
How does CBP treat inaccuracies due to bugs in an importer’s software systems? Are they generally tolerant of these as long as they get fixed going forward? How does this compare to the tolerance of errors caused by flawed processes?
 
A:
This is an excellent question since so many companies have turned to software solutions to drive their compliance effectiveness. In general, CBP looks at the use of software tools as an indication that the company is taking compliance seriously and exercising “Reasonable Care.”
 
If errors result from a bug in the system, CBP is likely to focus on the steps the importer and service provider took to get the system right and the remedial steps taken after the bug was discovered in determining whether the importer exercised reasonable care. So long as there has been no history of such mistakes being made without corrective action being taken, my guess is that CBP would be sympathetic and not impose penalties in this situation if the problem is corrected going forward.
 
In my view, CBP is likely to be much more tolerant of situations like these, if properly corrected going forward, than errors resulting from flawed processes. CBP expects importers to institute processes and procedures designed to get their transactions right. When flawed processes are found to be contributing to compliance errors, CBP is much more likely to determine that the importer has not exercised reasonable care and penalties could result.

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COMM_a2
13. Hudson Institute: “The Awakening Giant: Risks and Opportunities for Japan’s New Defense Export Policy”

(Source: Hudson Institute)

* Author: Dr. Arthur Herman, Senior Fellow Hudson Institute, info@hudson.org, 202-974-2400.

Executive Summary

In 2014 the Japanese government promulgated a new defense export policy, lifting bans that had been in place for nearly thirty years. As inaugurated by the Abe administration, Japan’s new defense export policy offers huge opportunities for US-Japan defense industrial cooperation. [FN/1]

These are opportunities Japan can exploit as it moves from having almost no presence in a rapidly expanding, increasingly globalized, and highly lucrative defense trade market into potentially being one of the market’s most important global players. This would be much like what it managed to do in the 1970s and 1980s when it became a dominant and innovative presence in the global automotive industry.

The United States can also take full advantage of these opportunities to increase its own defense exports and imports, including in some surprising areas. These include technologies and systems that until recently lay outside the conventional defense sector, but which now overlap with the Pentagon’s new third offset strategy for developing and fielding future military systems, in many cases by tailoring commercial high-tech technologies to fit defense needs (see Chapter 5). [FN/2]

At the same time, there are important risks that accompany this new defense export policy. These include:

  – political risks, particularly with Japanese public opinion at home, as well as public opinion abroad;
  – geopolitical risks, including Japan’s bilateral relations with Asian neighbors, particularly China;
  – technological risks, particularly in the area of technology transfers and intellectual property (IP);
  – economic risks for Japanese companies that venture into the new defense export arena without adequate preparation or adequate support from their government, which are vividly illustrated in Japan’s recent major effort to sell its Soryu-class submarines to Australia (see Chapter 4).

Any new national policy, especially in the defense arena, comes with an inevitable learning curve. The highly competitive arms market today makes that curve especially steep for Japan. But when-not if-Japan masters that curve and becomes both an important defense exporter and innovator, much as it did in the automotive industry in the 1970s and 1980s, it can and will emerge as a formidable partner of the United States, or possibly even a competitor, in equipping its allies with defense technologies to make the world safer and more secure.

[The remainder of the article is too long for the Daily Bugle, but this is the Table of Contents. If you wish to read the entire article, go here.]

  * Executive Summary
  * Chapter 1: Japan’s New Defense Export Policy
  * Chapter 2: The Role of Japanese Government Agencies and Trade Associations
  * Chapter 3: Japan and the International Defense Market
  * Chapter 4: Three Case Studies
     – Australia and the Soryu-class Submarine
     – India and the US-2 Seaplane
     – The United States and SM-3
  * Chapter 5: Japan and the Third Offset Strategy
  * Chapter 6: Risks of the New Export Policy
  * Chapter 7: Managing the Risks of a Defense Export Policy
  * Conclusion
 

————–

  [FN/1] Martin Fackler, “Japan Ends Decades-Long Ban on Export of Weapons,” New York Times, April 1, 2014, available at here.
  [FN/2] Bob Work, “The Third U.S. Offset Strategy and Its Implications for Partners and Allies,” US Department of Defense, January 28, 2015, accessed September 20, 2016, available at here.

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COMM_a3
14. J.C. Poling, W.H. Segall & M. Baki Fadlallah: “
OFAC Expands Iran-Related Authorizations for Medicine, Medical Devices and Agricultural Commodities”

 
* Authors: Jonathan C. Poling, Esq.,
jpoling@akingump.com
,
202-887-4029; Wynn H. Segall, Esq.,
wsegall@akingump.com
, 202-887-4573; and Mahmoud Baki Fadlallah, Esq.,
mfadlallah@akingump.com
, +971-4-317-3030 (Dubai). All of Akin Gump Strauss Hauer & Feld LLP.
 
On December 23, 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a Final Rule amending the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (ITSR) to expand the scope of permissible exports/re-exports of medicine, medical devices and agricultural commodities to Iran.
 
While helping improve Iran’s access to medical devices and patient safety, these changes lower the regulatory barriers for U.S. agricultural, medical and pharmaceutical companies to export products and services to Iran. Specifically, the Final Rule makes the following changes:
 
  – expands the scope of medical devices and agricultural commodities authorized for export or re-export to Iran
  – provides new authorization for training related to the safe and effective use of medicine, medical devices and agricultural commodities
  – expands the scope of authorization for replacement parts
authorizes the export/re-export of software and services related to the operation, maintenance and repair of medical devices
  – authorizes the importation into the United States of items that are broken or connected to product recalls or other safety concerns
  – clarifies the definition of the terms “goods of Iranian origin” and “Iranian-origin goods.”
 
Agricultural, medical and pharmaceutical companies doing business in Iran under general or specific licenses should reassess their 2017 licensing needs, since these new changes may operate to reduce the number of specific licenses required and/or expand business opportunities available in Iran.
 
(1) Additional Medical Devices and Agricultural Commodities
 
OFAC expanded the general license at ITSR 560.530(a)(3), which previously authorized the export or re-export to Iran of medicine and certain medical devices specifically listed on OFAC’s “List of Medical Supplies.” Following the amendment, the general license authorizes all items meeting the ITSR definition of “medical devices,” except for those that are specifically excluded. The medical devices that are excluded from the general license can be found on OFAC’s new “List of Medical Devices Requiring Specific Authorization.”
 
OFAC has also updated the list of agricultural commodities excluded from the general license for the export/re-export of agricultural commodities at ITSR 560.530(a)(2). Shrimp and shrimp eggs, which had previously not been covered by the general license, will no longer require specific OFAC authorization.
 
(2) Training “Necessary and Ordinarily Incident to” the Safe and Effective Use of Medicine, Medical Devices and Agricultural Commodities
 
OFAC also added a provision to authorize training “necessary and ordinarily incident to” the safe and effective use or operation of medicine, medical devices and agricultural commodities exported or re-exported under an Ag/Med general license. OFAC considers the following nonexhaustive list of training activities to be “necessary and ordinarily incident to” the safe and effective use or operation of medicine and medical devices (see FAQ 484):
 
  – dissemination of product information on the intended use of the device
  – comparisons of other devices and options
  – manufacturer’s instructions for use, labeling, warning, contraindications, storage, and maintenance of the medicine or device to be necessary and ordinarily incident to the safe and effective use of medicines and medical devices
  – training of health care professionals to use medical devices safely in order to achieve the desired patient outcome
  – training on procedures for cleaning and inspecting devices regularly to ensure that they are functioning correctly
  – ongoing training and periodic testing to ensure that users stay competent
  – training on procedures for adverse events or device failure.
 
(3) Additional Replacement Parts for Certain Medical Devices
 
OFAC also expanded the general license at ITSR 560.530(a)(4), which previously authorized the export or re-export of replacement parts on a one-for-one basis of exchange. OFAC removed the one-for-one basis of exchange requirement and now authorizes the export or re-export of replacement parts for storage within Iran for future use, as long as:
 
  – the replacement parts are intended to replace a broken or nonoperational component of a medical device previously exported or re-exported to Iran pursuant to an OFAC authorization, or the export/re-export of the replacement part is ordinarily incident and necessary to the proper preventative maintenance of the medical device
  – the number of replacement parts that are exported or re-exported to and stored in Iran does not exceed the number of corresponding parts in use in relevant medical devices in Iran.
 
To be eligible for this general license, replacement parts must be designated EAR99 or, in the case of replacement parts that are not subject to the Export Administration Regulations (EAR), would be designated as EAR99 if located in the United States.
 
(4) Software and Services Necessary for the Operation, Maintenance and Repair of Medical Devices
 
OFAC added a new general license at ITSR 560.530(a)(5) to authorize the export/re-export to Iran of software and services necessary for the operation, maintenance, and repair of medical devices and replacement parts. Specifically, the authorizations allow for the export/re-export of the following software and services:
 
  – software for safety and service updates and the correction of system/operational errors in medical devices, replacements parts and associated software previously exported/re-exported pursuant to an OFAC authorization under the Ag/Med Program;
  – software to maintain/repair medical devices previously exported/re-exported pursuant to an OFAC authorization under the ITSR, as well as related transactions subject to certain conditions repair services for medical devices authorized for export or re-export to Iran by OFAC under the Ag/Med Program, including inspection, testing, calibration, and diagnostic services to ensure patient safety or effective operation of such medical devices.
 
To be eligible for this general license, software must be designated EAR99 or, in the case of software that is not subject to the EAR, would be designated as EAR99 if located in the United States.
 
(5) Importation of Items that Are Broken, Defective or Nonoperational
 
OFAC added a new general license at ITSR 560.530(a)(6) to authorize the importation into the United States of certain U.S.-origin agricultural commodities, medicine and medical devices that were previously exported to Iran under the Ag/Med Program and are:
 
  – broken, defective or nonoperational connected to product recalls, adverse events or other safety concerns.
 
(6) Definition of “Goods of Iranian Origin” and “Iranian-Origin Goods”
 
The revised rules also update the definition of the terms “goods of Iranian origin” and “Iranian-origin goods.” As long as goods are not grown, produced, manufactured, extracted or processed in Iran, “goods of Iranian origin” or “Iranian-origin goods” do not include the following categories:
 
  – goods exported or re-exported to Iran under an ITSR authorization that are subsequently re-exported from and are located outside of Iran or
  – goods transported on a vessel or aircraft that have not come into contact with Iran other than (1) passing though Iranian territorial waters or (2) stopping in Iran en route to another destination outside of Iran.

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COMM_a4
15. K.C. Georgi, Regan K. Alberda & Julia L. Diaz: “Changes to Iran Sanctions Regulations Means Good News for US Medical Device Manufacturers”

(Source: Arent Fox)
 
* Authors: Kay C. Georgi, Esq., kay.georgi@arentfox.com, 202-857-6293; Regan K. Alberda, Counsel, regan.alberda@arentfox.com, 202-715-8547; Julia L. Diaz, Associate, julia.diaz@arentfox.com, 202-350-3622.
All of Arent Fox LLP.
 
OFAC Expands General Licenses to Export Medical Devices, and Associated Services, to Iran; OFAC Also Redefines “Iranian-Origin” Goods Eliminating Its Unintended Capture of Goods Just Passing Through Iranian Ports and Airports

On December 23, 2016 in pre-holiday spirit, the Treasury Department’s Office of Foreign Asset Control sent US medical device manufacturers and their overseas subsidiaries and affiliates a present last week in the form of a revised General License for medical devices to Iran. OFAC also issued general licenses that provide much greater flexibility for training on the devices, as well as maintenance and repair. The full Federal Register notice is available here. OFAC also narrowed the list of excluded agricultural products, authorizing exports of shrimp and shrimp eggs to Iran under the general license.

Exporters will need to review the new regulations carefully, first to see if their medical devices qualify for the new broader general license, but also to see if they can now support their products more fully in Iran. We discuss both of these major changes below.

(1) Revised General License for Medical Devices to Iran

OFAC has provided a general license for the exportation or reexportation of certain listed medical devices to Iran, 31 C.F.R. § 560.530(a)(3), since October 22, 2012. On December 23, 2016, OFAC expanded the general license to authorize medical device manufacturers to export from the US to Iran all EAR99 medical devices, or to export from other countries to Iran non-US medical devices that would be EAR99 if they were in the US, provided the medical devices in question do not appear on a special exclusion list, the List of Medical Devices Requiring Specific Authorization (effective December 23, 2016).

Companies need to review the new exclusion list carefully: if their medical devices appear on that list, the general license is not available and they need to continue to apply for specific licenses.

The new general license works as follows:

  – All EAR99 medical devices qualify for the general license unless they appear on the exclusion list.
  – Most of the items on the exclusion list are described in technical terms that hopefully will be clear to medical device manufacturers. For example, the list includes the following items: oxygen generators, pumps with flow rates of more than 1 liter/minute, fermenters, bioreactors and chemostats, and autoclaves larger than 20 liters.
  – However, the exclusion list also contains a mysterious note excluding two other sets of items based on their status under the Export Administration Regulations (the “EAR”), which we discuss in detail in the paragraphs below:

    (1) Items “within the scope of the Statement of Understanding – medical equipment at Supplement No. 3 to Part 774 of the Export Administration Regulations (EAR);” and
    (2) Items “excluded from an otherwise applicable Export Control Classification Number (ECCN) on the Commerce Control List of the EAR because it is medical equipment, or because it is designed or modified for medical equipment or medical purposes.” [FN/1]
 
The first set of EAR items excluded from the General License is medical equipment at Supplement No. 3 to Part 774 of the EAR. Supplement No. 3, medical equipment are “{c}ommodities that are ‘specially designed’ for medical end-use” that “incorporate commodities or software on the Commerce Control List (Supplement No. 1 to part 774 of the EAR) that do not have a reason for control of Nuclear Nonproliferation, Missile Technology, or Chemical & Biological Weapons are designated by the number EAR99 (i.e., are not elsewhere specified on the Commerce Control List).” More information on medical equipment at Supplement No. 3 to part 774 of the EAR is available here.

If the first set of EAR items excluded from the General License is read literally, all medical equipment in Supp. 3 is excluded from the General License. This reading would mean that all EAR99 medical devices containing any part, component, or software on the CCL, even if that part is controlled for Anti-Terrorism reasons, would not qualify for the general license. Since large numbers of electronic parts of medical devices (such as ordinary microprocessors) may be AT-controlled, this exclusion, if intentional, would exclude most of the medical devices that OFAC just included in the General License. It would also be extremely difficult to manage, requiring medical device manufacturers to obtain the ECCNs of every part and component, no matter how minor.

We suspect that OFAC may not have meant this far-reaching of an exclusion and may intend to exclude just EAR99 medical devices that incorporate parts and components controlled for NP, MT, or CB reasons. We are clarifying this question with OFAC and BIS and will update this alert when we have received an answer.

The second set of EAR items excluded from the General License is medical equipment that is classified as EAR99 only because it is “medical equipment, or because it is designed or modified for medical equipment or medical purposes.” In other words, if your product would be a controlled laser under ECCN 6A005, but is excluded from that ECCN because there is a note in the ECCN excluding medical equipment, you still need an OFAC specific license to export to Iran. Manufacturers will need to dust off their BIS classification determinations (CCATS) and see if they relied on the “medical equipment” notes to reach the EAR99 classification. If they did, they cannot use the general license. One wonders if this exclusion may end up excluding some medical devices that actually qualified for the general license prior to the revision?

(2) New General Licenses Provide Much Greater Flexibility for Medical Device Training and Maintenance/Repair

In addition to expanding the list of medical devices qualifying for the general license, OFAC’s recent changes provide greater flexibility for training on the devices, as well as maintenance and repair. These general licenses for training, services, replacement parts, software updates, and imports of broken items go a long way toward filling the significant holes in the prior general license: holes that forced many exporters to file for specific licenses, even when their products qualified for the general license.

New General License for Medicine and Medical Devices Training

There is a new general license for “training necessary and ordinarily incident to the safe and effective use of medicine and medical devices exported or reexported pursuant to {the general license} to the Government of Iran, to any individual or entity in Iran, or to persons in a third country purchasing such goods specifically for resale to any of the foregoing.” The conditions of this general license are as follows:
 
  – Payment terms and financing have to meet the standard requirements of 31 C.F.R. § 560.532;
  – Any technology released in the training must be EAR99; and
  – The training cannot be provided to any military, intelligence, or law enforcement entity, or any official or agent thereof.
 
Expanded General License for Medical Device Replacement Parts

OFAC expanded the general license for replacement parts for medical devices exported under general or specific license. The conditions of this general license are as follows:
 
  – The replacement parts must be EAR99 (or if non-US origin, EAR99 if they were located in the US);
  – The replacement parts must be exported to replace a broken or non-operational component of a medical device that was legally exported or the exportation or reexportation of such replacement parts is necessary and incident to the proper preventive maintenance of such medical device;
  – The number of replacement parts stored in Iran cannot exceed the number of corresponding operational parts currently in use in relevant medical devices in Iran;
  – The broken or non-operational replacement parts that are being replaced are promptly exported, reexported, or otherwise provided to a non-Iranian entity located outside of Iran selected by the replacement part supplier; and
  – No replacement parts for medical devices may be provided to any military, intelligence, or law enforcement purchasers or importers.
 
New General License for Services and Software for Medical Devices and Replacement Parts
 
There is a new general license to export software necessary for the installation and operation of medical devices and replacement parts exported or reexported under general or specific licenses, and the conduct of related transactions. The conditions are as follows:
 
  – The software must be EAR99 (or if non-US origin, EAR99 if it were located in the US);
  – Payment terms and financing have to meet the standard requirements of 31 C.F.R. § 560.532;
  – EAR99 software updates are also authorized provided they are “intended for and limited to the provision of safety and service updates and the correction of system or operational errors in medical devices, replacement parts or software that was previously exported;”
  – Services “necessary to maintain and repair medical devices that previously were exported or reexported pursuant to this section including inspection, testing, calibration, or repair services to ensure patient safety or effective operation and the conduct of related transactions” are also authorized; and
  – No software or services for medical devices may be provided to any military, intelligence, or law enforcement purchasers or importers.
 
New General License for US Imports of US-origin Agricultural Products, Medicine, and Medical Devices

This new general license authorizes the import into the US of US-origin agricultural products, medicine, and medical devices, including parts, components, and accessories that were exported/reexported under OFAC authorizations and are broken, defective, or non-operational; or are connected to product recalls, adverse events, or other safety concerns, and the conduct of related transactions. Again, no imports are permitted from any Iranian military, intelligence, or law enforcement purchasers or importers.

(3) Amended Definition of “Iranian-Origin Goods”

Finally, OFAC did the public service of amending the definition, contained in 31 C.F.R. § 560.306, of “Iranian-origin goods” to exclude two fact patterns that were likely never meant to be captured in the first place. The definition of Iranian-origin goods has traditionally contained not only: 1) Goods grown, produced, manufactured, extracted, or processed in Iran, as one would expect, but also (2) “Goods which have entered into Iranian commerce.” The latter category had the habit of catching some innocent passers-by of Iranian commerce.
OFAC has rectified this by adding a note clarifying that goods which have entered into Iranian commerce do not include:
 
  – Those that were legally exported to Iran under an OFAC authorization, and now are located outside of Iran; and
  – Those that passed through Iranian territorial waters or stopped at an Iranian port or airport en route to a destination outside of Iran, or even were temporarily offloaded from the vessel/aircraft and placed on another vessel/aircraft to leave Iran. This issue had been bedeviling exporters for some time and it is a pleasant surprise to see it resolved in time for 2017!
 
————-
  [FN/1] For example, balancing machines as described in the note to ECCN 2B119.a; Motion simulators or rate tables as described in the notes to ECCNs 2B120 and 2B121; and accelerators as described in the notes to ECCNs 3A101.b and 3A201.c.

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16. J. Reeves & K. Heubert: “New Year, New Electronic Reporting Requirements”

(Source: R/D Alert)

* Authors: Johanna Reeves, Esq., 202-715-9941, jreeves@reevesdola.com; and Katherine Heubert, Esq., 202-715-9940, kheubert@reevesdola.com. Both of Reeves & Dola LLP.
 
On January 3, 2017, the Directorate of Defense Trade Controls (DDTC) published a Final Rule to revise the International Traffic in Arms Regulations (ITAR) to require industry to electronically submit import and export data with Customs and Border Protection (CBP) via the International Trade Data System (ITDS). The ITDS is “an electronic information exchange capability or ‘single window’ through which businesses will transmit data required by participating agencies for the importation or exportation of cargo” (Executive Order 13695, Sec. 3, Feb. 19, 2014). Access to the ITDS system is available through a CBP web portal at here.

Effective December 31, 2016, exporters are required to submit relevant data in ITDS for each import or export, which is a change from the way such information has been submitted to CBP. CBP will then electronically transmit the shipment details relevant to DDTC. As a result, there is no longer a need for exporters to notify DDTC separately for such shipments. Accordingly, the ITAR has been updated throughout to clarify electronic reporting requirements and to remove references to the Automated Export System (AES) and add in its place “U.S. Customs and Border Protection’s electronic system(s).” Such updates have been made to relevant sections of Parts 120, 123, and 126.

The implementation of the ITDS system should streamline this process and reduce reporting burdens sometimes experienced by industry. Companies should carefully review the new requirements, in conjunction with this Alert.

This Alert provides a brief summary of the changes made to the ITAR, but is not intended to be a substitute for reviewing the Federal Register Notice or the ITAR.                 

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17. R. Smith, Q. Michel & M. Garcia-Alonso: “What Will Happen To Arms Exports Under Brexit?”

(Source: The Conversation)
 
* Authors: Ron Smith, Professor of Applied Economics at Birckbeck, University of London,
r.smith@bbk.ac.uk
; Quentin Michel, Professor of European Studies at University of Liège,
qmichel@ulg.ac.be
; Maria Garcia-Alonso, Senior Lecturer in Economics at University of Kent, m.c.garcia-alonso@kent.ac.uk.
 
The decision by the UK to leave the EU will have many implications including consequences for the control of arms exports. Exports of weapons and dual-use equipment, which can have both military and civilian applications, raise major security concerns: you don’t want to arm your enemies and you don’t want your allies to arm your enemies either.
 
Most states have arms export control regulations and supplies are also restricted – to some extent – by international regimes like the Wassenaar Arrangement on export controls for conventional arms, as well as by UN embargoes and the Arms Trade Treaty that entered into force in December 2014.
 
European states are major suppliers of military equipment and close competitors in the export markets. But they have different economic and security interests, so a sale that seems problematic to one country may not seem so to another – see, for example, the disagreements about the supply of arms to various players in the Syrian civil war or the supply to Saudi Arabia of equipment used in the Yemen. However, the EU’s rules do not allow other states to block UK sales to Saudi Arabia.
 
So what are those rules? To avoid exactly this sort of problem, in 2008 the EU defined common rules governing control of exports of military technology and equipment which replaced an earlier code of conduct on arms exports. This EU Common Position is presently the sole example of a group of states that have agreed to coordinate conventional (usually interpreted as not nuclear, biological or chemical which are covered by different rules) arms exports with a supranational constraining mechanism.
 
While producer countries have individual incentives to control the quantity, quality and use of the arms they export, these incentives are affected by the interactions with other exporter countries who have their own security and industrial objectives. In such situations, coordination among exporters is required to ensure a better outcome for everyone involved.
 
However, uncertainty regarding the implementation of controls and fear of noncompliance are a barrier to the implementation of multilateral controls. In particular there needs to be a mechanism to stop “prisoner dilemma” situations in which countries think: “If we don’t export, others will.” To deal with the uncertainty, the EU has a list of items subject to control and a no-undercutting mechanism to stop the fear of noncompliance by others.
 
Finding common ground
 
The EU Common Position says that member states are determined to set high common standards for the management of – and restraint in – conventional arms transfers, and to strengthen the exchange of relevant information with a view to achieving greater transparency.
 
The criteria that govern export control include the respect for the international commitments of EU member states (including any UN sanctions). They also take into account the situation in the buyer country, which includes its respect of human rights, its internal security situation, its respect for international law and its technical and economic capacity. The common position is also concerned for the preservation of regional peace, security and stability and the existence of a risk that the equipment will be diverted into the wrong hands within the buyer country or re-exported under undesirable conditions.
 
To make sure all states interpret these criteria in the same way – and to avoid the risk of unfair competitions between member states’ defense industries, several mechanisms have been adopted. These include strengthening the exchange of information by requiring the notification to all EU member states of the denial of a license, together with the no undercutting rule. This rule has been respected and member states have almost never undercut a license denial without the consent of the state which has issued it.
 
There are many difficult areas where exchange of information is valuable. These include dual-use equipment – where countries may differ over whether it is going to be used for civilian or military purposes – and brokering – where a firm facilitating the transaction may be outside the control of national authorities. There has been discussion in many countries about the extent to which arms brokers should be registered.
 
Britain’s role
 
Britain plays a central role in this process, currently drafting the list of items subject to control. But when it leaves the EU it will lose access to this mechanism. This increased the risk that its defense industry will not face the same trade rules as its EU competitors. While the UK will no longer be constrained by EU rules, the converse is also true and – given the breadth of UK security interests – this may not be to its advantage.
 
Other EU states will be able to supply weapons for which the UK has denied a license and may not include on the control list items that the UK regards as sensitive. So given the value that countries attach to the sharing of arms export information, it may be in the interests of the UK and the other EU countries to maintain joint participation in these arrangements even in the post-Brexit era.
   

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18. Gary Stanley’s ECR Tip of the Day

(Source: Defense and Export-Import Update; available by subscription from
gstanley@glstrade.com
)
 
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059,
gstanley@glstrade.com
 
EAR Part 772 defines the term “export control document” as a license; application for license; any and all documents submitted in accordance with the requirements of the EAR in support of, or in relation to, a license application; application for International Import Certificate; Delivery Verification Certificate or similar evidence of delivery; Electronic Export Information (EEI) on the Automated Export System (AES) presented in connection with shipments to any country; a Dock Receipt or bill of lading issued by any carrier in connection with any export subject to the EAR and any and all documents prepared and submitted by exporters and agents pursuant to the export clearance requirements of Part 758 of the EAR; a U.S. exporter’s report of request received for information, certification, or other action indicating a restrictive trade practice or boycott imposed by a foreign country against a country friendly to the United States, submitted to the U.S. Department of Commerce in accordance with the provisions of Part 760 of the EAR; Customs Form 7512, Transportation Entry and Manifest of Goods, Subject to Customs Inspection and Permit, when used for Transportation and Exportation (T.& E.) or Immediate Exportation (I.E.); and any other document issued by a U.S. Government agency as evidence of the existence of a license for the purpose of loading onto an exporting carrier or otherwise facilitating or effecting an export from the United States or any reexport of any item requiring a license.
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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a1
19. ECTI Presents ITAR Hardware License Exemptions Explained -Webinar, 1 Feb

(Source: Danielle McClellan, danielle@learnexportcompliance.com)

* What: ITAR Hardware License Exemptions Explained
* When: February 1, 2017; 1:00 p.m. (EST)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Scott Gearity
* Register: Here or Danielle McClellan, 540-433-3977, danielle@learnexportcompliance.com.

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ENEDITOR’S NOTES

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EN_a321
. 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: 4 Jan 2017: 81 FR 722-725: Addition of Certain Entities to the Entity List 

  
*
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 (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 Jan 2017: 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: 1 Jan 2017: 2017 Basic HTS 
  – 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: 3 Jan 2017 (effective 31 Dec 2016): 82 FR 15-19: International Traffic in Arms Regulations: International Trade Data System, Reporting
  – The only available fully updated copy (latest edition 3 Jan 2017) of the ITAR with all amendments is contained in Bartlett’s Annotated ITAR (“BITAR”), by James E. Bartlett III.  (The GPO’s “eCFR” website copy of the ITAR has not yet been updated.) The BITAR contains all ITAR amendments to date, 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 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 of this newsletter cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.

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