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17-0110 Tuesday “The Daily Bugle”

17-0110 Tuesday “Daily Bugle”

Tuesday, 10 January 2017

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe 
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  1. Commerce/BIS Amends EAR, Adds Five Persons and Makes Revisions to Entries on the Entity List 
  2. Commerce/BIS Amends EAR, Makes Revisions to Control of Spacecraft Systems and Related Items the President Determines No Longer Warrant Control Under the USML 
  3. State Amends ITAR, Revises USML Cat. XV 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. State/DDTC: (No new postings.) 
  4. Treasury/OFAC Posts Important Technical Announcement for Users of OFAC’s Sanctions List Data Files 
  1. Reuters: “U.S. Senators Seek Russia Sanctions Over Hacking, Ukraine, Syria”
  2. ST&R Trade Report: “Feds’ Focus on Trade Enforcement Highlighted with Creation of New Advisory Council”
  1. F.A. DeBusk, M.L. Duffy & A.G. Kashdan: “End-of-Year Changes in Iran, Russia Sanctions, Cyber Sanctions”
  2. J. Barton & L. Alexander: “Start-Ups Face Export Control Traps”
  3. L. Lewis: “Ethics Programs Need Regular Improvements”
  4. T. Feddo, J. Burnett & J.M. Waite: “OFAC Eases Restrictions on Medical and Agricultural Exports to Iran”
  5. R.C. Burns: ” Our Long National Nightmare Is Over”
  1. ECTI Presents The Fundamentals of Product Classification Webinar – 16 Feb 
  2. University of Liverpool Talks International Trade Compliance in London, 24 Jan 
  1. J.E. Bartlett III: “Ch..ch..Changes: The ITAR is Amended Again!” 
  2. Bartlett’s Unfamiliar Quotations 
  3. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (20 Dec 2016), DOD/NISPOM (18 May 2016), EAR (10 Jan 2017), FACR/OFAC (23 Dec 2016), FTR (15 May 2015), HTSUS (1 Jan 2017), ITAR (10 Jan 2017) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. Commerce/BIS Amends EAR, Adds Five Persons and Makes Revisions to Entries on the Entity List

(Source: Federal Register) [Excerpts.]
 
82 FR 2883-2889: Addition of Certain Persons and Revisions to Entries on the Entity List; and Removal of a Person From the Entity List
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: This rule amends the Export Administration Regulations (EAR) by adding five persons to the Entity List. The five persons who are added to the Entity List have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These five persons will be listed on the Entity List under the destination of Turkey. This final rule also removes one entity from the Entity List under the destination of India as the result of a request for removal received by BIS and a review of information provided in the removal request in accordance with the procedure for requesting removal or modification of an Entity List entity. Finally, this rule is also revising five existing entries in the Entity List, under the destinations of Armenia, Greece, Pakistan, Russia and the United Kingdom (U.K.). Four of these entries are modified to reflect the removal from the Entity List of the entity located in India. The license requirement for the entry under the destination of Russia is being revised to conform with a general license issued by the Department of the Treasury’s Office of Foreign Assets Control on December 20, 2016.
* DATES: This rule is effective January 10, 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: …
 
Conforming Changes for an Approved Removal From the Entity List
 
This final rule revises four entries in the Entity List for the entity Veteran Avia LLC, a.k.a., Veteran Airline, under the destinations of Armenia, Greece, Pakistan and the United Kingdom. As described above, the ERC approved the removal of Veteran Avia LLC (India). Therefore, this final rule makes conforming changes to the remaining four entries for the entity to remove the cross-references to India. This final rule does not make any other changes to these four entries, except for revising the Federal Register citation column to reflect this conforming change being made to these four entities. The license requirement for the four entries remains all items subject to the EAR, and the license application review policy remains a presumption of denial. …
 
  Dated: December 28, 2016.
Alexander K. Lopes, Jr., Acting Assistant Secretary for Export Administration.

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EXIM_a2

2. Commerce/BIS Amends EAR, Makes Revisions to Control of Spacecraft Systems and Related Items the President Determines No Longer Warrant Control Under the USML
(Source: Federal Register) [Excerpts.]
 
82 FR 2875-2883: Revisions to the Export Administration Regulations (EAR): Control of Spacecraft Systems and Related Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML)
* AGENCY: Bureau of Industry and Security, Department of Commerce.
* ACTION: Final rule.
* SUMMARY: This final rule addresses issues raised in, and public comments on, the interim final rule that was published on May 13, 2014, as well as additional clarifications and corrections. The May 13 rule added controls to the Export Administration Regulations (EAR) for spacecraft and related items that the President has determined no longer warrant control under United States Munitions List (USML) Category XV–spacecraft and related items.
This is the third final rule BIS has published related to the May 13 rule and completes the regulatory action for the interim final rule. These changes were also informed by comments received in response to the May 13 rule that included a request for comments, as well as interagency discussions on how best to address the comments. The changes made in this final rule are grouped into four types of changes: Changes to address the movement of additional spacecraft and related items from the USML to the Commerce Control List (CCL), as a result of changes in aperture size for spacecraft that warrant ITAR control, in response to public comments and further U.S. Government review; changes to address the movement of the James Webb Space Telescope (JWST) from the USML to the CCL; other corrections and clarifications to the spacecraft interim final rule; and addition of .y items to Export Control Classification Number 9A515.
  This final rule is being published in conjunction with the publication of a Department of State, Directorate of Defense Trade Controls (DDTC) final rule, which makes changes, including corrections and clarifications, to the provisions adopted in the State Department’s own May 13, 2014 rule. The State May 13 rule revised USML Category XV (22 CFR 121.1) to control those articles the President has determined warrant control on the USML. Both May 13 rules and the subsequent related rules are part of the President’s Export Control Reform Initiative. This rule is also part of Commerce’s retrospective regulatory review plan under Executive Order (EO) 13563 (see the
* SUPPLEMENTARY INFORMATION section of this rule for information on the availability of the plan).
* DATES: This rule is effective on January 15, 2017.
* FOR FURTHER INFORMATION CONTACT: For questions about the ECCNs included in this rule, contact Dennis Krepp, Office of National Security and Technology Transfer Controls, Bureau of Industry and Security, U.S. Department of Commerce, Telephone: 202-482-1309, email: Dennis.Krepp@bis.doc.gov. For general questions about the regulatory changes pertaining to satellites, spacecraft, and related items, contact the Regulatory Policy Division, Office of Exporter Services, Bureau of Industry and Security, at 202-482-2440 or email: rpd2@bis.doc.gov.
* SUPPLEMENTARY INFORMATION: …
 
(1) Changes To Address the Movement of Additional Spacecraft and Related Items From the USML to the CCL, as a Result of Changes in Aperture Size for Spacecraft That Warrant ITAR Control, in Response to Public Comments and Further U.S. Government Review …
 
This final rule makes several changes to the EAR to address the movement of additional spacecraft and related items from the USML to the CCL, as a result of the Department ofState’s responding to comments on its interim final rule, which specifically asked for additional public comments on this issue. The Department of State in its May 13 interim final rule noted: …
 
(2) Changes To Address the Movement of the James Webb Space Telescope (JWST) From the USML to the CCL
 
ECCN 9A004. This final rule revises ECCN 9A004 to add a specific telescope, which was “subject to the ITAR” prior to the effective date of this final rule. A determination was made based on the public comments received by the Department of State and the space interagency working group (a group of U.S. Government agencies involved in the export control system and that deal with space related issues) that this specific telescope was within the scope of spacecraft and related items that did not warrant being subject to the ITAR. Therefore, consistent with the stated purpose of the May 13 rule, as well as section 38(f) of the Arms Export Control Act (AECA), the Department of State has moved this telescope, the James Webb Space Telescope (JWST), which is being developed, launched, and operated under the supervision of the U.S. National Aeronautics and Space Administration (NASA), to the CCL. The “parts,” “components,” “accessories,” and “attachments” that are “specially designed” for use in or with the JWST are also being moved from the ITAR and will be subject to the EAR, as of the effective date of the State and Commerce final rules. …
 
(3) Other Corrections and Clarifications to Interim Spacecraft Final Rule
 
ECCN 9A515. This final rule adds two sentences at the end of the introductory text in the “items” paragraph in the List of Items Controlled section of ECCN 9A515, consistent with the notes to USML Category XV. The introductory paragraph clarifies when “spacecraft” and other items described in ECCN 9A515 remain subject to the EAR even if exported, reexported, or transferred (in-country) with defense articles “subject to the ITAR” integrated into and included therein as integral parts of the item. This introductory paragraph includes some application examples and some qualifiers for when the ITAR jurisdiction would reapply to such defense articles. This final rule adds two new sentences to clarify two additional instances where the jurisdiction of the ITAR would be applicable in such scenarios. The first new sentence is being added to clarify that the removal of a defense article subject to the ITAR from the spacecraft is a retransfer under the ITAR–meaning the removal of a defense article would require an ITAR authorization. The ITAR authorization requirement would apply regardless of which CCL authorization the spacecraft is exported under the EAR. The second sentence clarifies that transfer of technical data regarding the defense article subject to the ITAR integrated into the spacecraft would require an ITAR authorization. …

(4) Addition of .y Items to ECCN 9A515
 
This final rule adds five .y paragraphs (ECCN 9A515.y.2, .y.3., .y.4, .y.5, and .y.6) as additional commodities specified under paragraph (y) in this ECCN. As noted in the introductory text of paragraph (y), the U.S. Government through the Sec. 748.3(e) process will identify the items that warrant being classified under 9×515.y, such as the commodities being specified under ECCN 9A515.y.2 to .y.6 in this final rule. Specifically, the following space grade or for spacecraft applications commodities: thermistors (ECCN 9A515.y.2); RF microwave bandpass ceramic filters (dielectric resonator bandpass filters) (9A515.y.3); space grade or for spacecraft applications hall effect sensors (9A515.y.4); subminiature (SMA and SMP) plugs and connectors, TNC plugs and cable and connector assemblies with SMA plugs and connectors (9A515.y.5); and flight cable assemblies (9A515.y.6) have been identified in interagency-cleared commodity classifications (CCATS) pursuant to Sec. 748.3(e) as warranting control in 9A515.y.2 to .y.6. The additions described above for ECCN 9A515.y.2 to y.6 are the second set of approved populations of .y controls being added to 9A515. As stated in the May 13 rule, as well as the July 13 rule (which added ECCN 9A515.y.1), BIS (along with State and Defense) will continue to populate the 9A515.y with additional entries as additional classification determinations are made in response to requests from the public under Sec. 748.3(e). …

   Dated: December 27, 2016.
Kevin J. Wolf, Assistant Secretary of Commerce for Export Administration.

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EXIM_a3

3. State Amends ITAR, Revises USML Cat. XV

(Source: Federal Register) [Excerpts.]
 
82 FR 2889-2892: International Traffic in Arms Regulations: Revision of U.S.
Munitions List Category XV
* AGENCY: Department of State.
* ACTION: Final rule.
* SUMMARY: As part of the President’s Export Control Reform (ECR) initiative, the Department published an interim final rule on May 13, 2014 that revised Category XV (Spacecraft and Related Articles) of the U.S. Munitions List (USML). After reviewing comments to the interim final rule, the Department of State is amending the International Traffic in Arms Regulations (ITAR) to further revise Category XV of the USML to describe more precisely the articles warranting control in that category.
* DATES: This final rule is effective on January 15, 2017.
* FOR FURTHER INFORMATION CONTACT: Mr. C. Edward Peartree, Director, Office of Defense Trade Controls Policy, Department of State, telephone: (202) 663-2792; email: DDTCResponseTeam@state.gov. ATTN: Regulatory Change, USML Category XV.
* SUPPLEMENTARY INFORMATION: …
 
Changes in This Rule
 
Paragraphs (a)(2), (a)(10), (a)(11), (a)(12), (e)(4), (e)(5), (e)(11)(iv), (e)(12), (e)(20), and Note 3 to paragraph (a) and Note 3 to paragraph (f) are amended to better reflect the intended scope of control with regard to autonomous tracking systems, logistics, propulsion systems, cryocoolers and vibration suppression systems. Paragraphs (a)(7)(i) and (e)(2) are amended to clarify the size of the respective aperture dimension of specific electro-optical remote sensing capabilities and space qualified optics. …
 
Additional Changes
 
The Department also makes a number of other revisions to Category XV to limit the controls to those items that provide a critical military or intelligence advantage to the United States and warrant controls on the USML, which are detailed below.
  This final rule amends paragraph (a)(2) to clarify that the control applies to spacecraft that perform real-time autonomous detection and tracking of moving objects, other than celestial bodies. The control does not include systems that can track fixed points to determine their own movement based on the relative position of the fixed points over time.
This final rule amends paragraphs (a)(10) and (11) to clarify the nature of the technology and defense articles controlled. Paragraph (a)(10) is revised to control spacecraft that autonomously perform collision avoidance. Paragraph (a)(11) is revised to control sub- orbital craft that incorporate a propulsion system described in either paragraph (e) or Category IV(d)(1)-(6), and are specially designed for atmospheric entry or re-entry. The Department also makes a corresponding change to paragraph (e)(20) to reflect the forms of propulsion controlled in paragraph (a)(11). The Department also removes the Note 3 paragraph (a) regarding attitude control. A new Note 3 to paragraph (a) is added to remove the James Webb Space Telescope from the jurisdiction of the USML and transfer its control to the EAR. A new sentence is also to Note 2 to paragraph (e)(17) removing the primary and secondary payloads of the James Webb Space Telescope from the jurisdiction of the USML and transferring their control to the EAR. Any parts and components of the James Webb Space Telescope that are controlled in other entries of paragraph (e) remain on the USML, except as described in Note 2 to paragraph (e).
This final rule amends paragraphs (e)(4) and (e)(5) to clarify the type of systems controlled. Specifically, the word “systems” is added to both provisions to make it clear that the provisions are designed to control “cold finger systems” in (e)(4) and “vibration suppression systems” and “active dampening systems” in (e)(5).
  This final rule amends paragraphs (e)(11)(iv) and (e)(12) to clarify the type of propulsions systems controlled. Paragraph (e)(11)(iv) is revised to control electric propulsion systems, such as plasma and ion based systems, that provide greater than 300 milli-Newtons of thrust and a specific impulse greater than 1,500 sec; or that operate at an input power of more than 15kW. Paragraph (e)(12) is revised to control bi-propellants or mono-propellant rocket engines with which provide greater than 150 lbf (i.e., 667.23 N) vacuum thrust. …
 
  Dated: December 22, 2016.
Tom Countryman, Acting Under Secretary, Arms Control and International Security, Department of State.
 
[Editor’s Note: The above amendments are contained in today’s edition of Bartlett’s Annotated ITAR (The “BITAR”). See subscription information in Item 19, below.]

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OGS
OTHER GOVERNMENT SOURCES

OGS_a14. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

* Commerce; Industry and Security Bureau; NOTICES; Meetings [Publication Date: 11 January 2017.]:
  – Information Systems Technical Advisory Committee
  – Sensors and Instrumentation Technical Advisory Committee

* Information Security Oversight Office; PROPOSED RULES; National Industrial Security Program [Publication Date: 11 January 2017.]

* State; RULES; Civil Monetary Penalties Inflationary Adjustment [Publication Date: 11 January 2017.]

* State; NOTICES; Designations as Global Terrorists: Ali Damush, aka Ali Daghmoush, aka Ali Dagmoush, aka Ali Daamoush, aka Ali Dagmush, aka Shiekh Ali Musa Da’amoush [Publication Date: 11 January 2017.]

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

OGS_a25. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)
* * * * * * * * * * * * * * * * * * * *

OGS_a36. State/DDTC: (No new postings.)

(Source: State/DDTC)
* * * * * * * * * * * * * * * * * * * *

OGS_a47. Treasury/OFAC Posts Important Technical Announcement for Users of OFAC’s Sanctions List Data Files

(Source: Treasury/OFAC)    
 
Per Office of Management and Budget (OMB) mandate, the Treasury Department will be implementing HTTP Strict Transport Security (HSTS) headers on the Treasury.gov website on Thursday, January 12 during an evening maintenance window. There is no anticipated downtime associated with this change; however, the change affects multiple domains and sub-domains, and will force users to the HTTPS site, as opposed to allowing browsers to redirect from HTTP to HTTPS. This has the potential to impact scripts that users may have developed to poll Treasury.gov for data.
In addition to this change, the Treasury Department will also be updating the HTTPS cert it uses for the Treasury.gov domain during the aforementioned maintenance window.   Users may have to reinstall the root certificate for the site if they experience connection problems. The root certificate (the G3 certificate) can found at here.

Please contact OFAC technical support at 1-800-540-6322 Option #8 or O_F_A_C@treasury.gov with any questions that you may have about this change.
* * * * * * * * * * * * * * * * * * * *

NWSNEWS

NWS_a18
. Reuters: “U.S. Senators Seek Russia Sanctions Over Hacking, Ukraine, Syria”

 
Senior U.S. Republican and Democratic senators will introduce legislation on Tuesday seeking to impose a wide range of sanctions on Russia over its cyber activities and actions in Syria and Ukraine.
 
The legislation is sponsored by 10 senators – Republicans John McCain, Lindsey Graham, Marco Rubio, Ben Sasse and Rob Portman and Democrats Ben Cardin, Robert Menendez, Jeanne Shaheen, Amy Klobuchar and Richard Durbin.
 
The bipartisan support increases the measure’s chances of being passed by the Republican-led Congress. A House of Representatives aide said Russia sanctions legislation also was being prepared in that chamber.
 
It could set up a showdown with the administration of Republican President-elect Donald Trump, who takes office on Jan. 20 and has repeatedly praised Russian President Vladimir Putin.
 
The measure is being introduced a day before the U.S. Senate Foreign Relations Committee holds its confirmation hearing for Trump’s nominee to be secretary of state, former Exxon Mobil chief executive Rex Tillerson.
 
Many lawmakers from both parties have raised questions about the decades Tillerson spent working with Russia’s government as an executive at the oil company, and his ties to Putin. His hearing, set for Wednesday and Thursday, is expected to largely focus on those issues.
 
According to a preliminary summary seen by Reuters, the bill would impose visa bans and freeze the assets of people “who engage in significant activities undermining the cyber security of public or private infrastructure and democratic institutions” or aids such activities.
 
It would impose sanctions on those who engage with the Russian defense or intelligence sectors, which could affect international companies doing business with Russia. It also puts into law sanctions on Russia that President Barack Obama imposed via executive order late last month.
 
U.S. lawmakers have long called for a tougher response to Russian annexation of Ukraine’s Crimea region and intervention in the Syrian civil war on behalf of Syrian President Bashar al-Assad.
 
Their impatience has increased since U.S. intelligence agencies released a non-classified version of a report Friday saying Putin ordered a campaign to try to sway the 2016 U.S. election in favor of Trump.
 
The bill also sets new sanctions over Ukraine and Syria, including putting into law four executive orders from the Obama administration sanctioning Russia over its actions in Crimea and eastern Ukraine. Among other things, it would mandate sanctions on investments of $20 million or more in Russia’s ability to develop its petroleum and natural gas resources.

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NWS_a2
9. ST&R Trade Report: “Feds’ Focus on Trade Enforcement Highlighted with Creation of New Advisory Council”

 
The Department of Commerce has announced the establishment of the Advisory Council on Trade Enforcement and Compliance to advise the department on matters relating to the enforcement of U.S. trade remedy laws and foreign government compliance with trade agreements. Though created by the outgoing Obama administration, the ACTEC could find a role in the incoming Trump administration, which has pledged a renewed effort on trade enforcement and a larger role in trade policy for the secretary of Commerce.
 
According to the DOC, the ACTEC will provide advice on laws and government policies that deal with trade enforcement; identify and recomm-o programs, policies, and actions to help the DOC in its efforts to ensure that U.S. trading partners comply with their trade agreement commitments; and recommend ways that the DOC’s trade enforcement and compliance policies and programs can better support a strong trade and manufacturing agenda and enhance the commercial competitiveness of the U.S. In doing so the council is directed to survey and evaluate the trade enforcement and compliance concerns of its stakeholders, identify and examine specific trade problems that require attention, and recommend specific solutions to the problems and needs it identifies.
 
The ACTEC will consist of no more than 20 members (nominations for which will be solicited soon) representing U.S. entities involved in and significantly affected by imports and/or those that heavily export to, or operate in, countries with which the U.S. has trade agreements. All members must be U.S. nationals and will be selected based on their ability to carry out the council’s objectives in a manner that ensures the council is balanced in terms of points of view, demographics, industry sector, geography of both production infrastructure and product inputs, and company size. Members must also represent a broad range of products and services and be drawn from large, medium, and small enterprises, private sector organizations, and other entities such as non-governmental organizations, associations, and economic development organizations.
 
The DOC’s assistant secretary for enforcement and compliance will serve as the ACTEC’s executive director and will designate both the designated federal officer (who will serve as the council’s executive secretary) and a secondary DFO from among the employees of the International Trade Administration’s Enforcement and Compliance unit.

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COMMCOMMENTARY

COMM_a1
10. F.A. DeBusk, M.L. Duffy & A.G. Kashdan: “End-of-Year Changes in Iran, Russia Sanctions, Cyber Sanctions”

 
* Authors: F. Amanda DeBusk, Esq., amanda.debusk@hugheshubbard.com, 202-721-4790; Melissa L. Duffy, Esq. melissa.duffy@hugheshubbard.com, 202-721-4689; and Alan G. Kashdan, Esq., alan.kashdan@hugheshubbard.com, 202-721-4630. All of Hughes, Hubbard & Reed LLP.
 
In the final two weeks of 2016, the Obama Administration made changes to the U.S. Iran and Russia sanctions, including the imposition of cyber sanctions. Specifically, the Treasury Department’s Office of Foreign Assets Control (OFAC) published guidance concerning the potential “snapback” of Iranian sanctions relief promulgated under the Iran nuclear deal (the Joint Comprehensive Plan of Action or JCPOA), modified the definition of Iranian origin goods in the U.S. Iranian sanctions regulations, made additional designations under the Ukraine/Russia sanctions, and imposed targeted cyber sanctions against Russia for its attempts to interfere with the 2016 U.S. elections. In making these changes, the Administration tacitly acknowledged that the Trump Administration is likely to alter the Obama sanctions policies.
 
I. OFAC GUIDANCE ON REINSTITUTION OF IRAN SANCTIONS
 
As part of the U.S. commitments under the JCPOA, the United States suspended certain secondary nuclear sanctions measures that had targeted economic activity in Iran by non-U.S. companies and foreign subsidiaries of U.S. companies. In apparent response to President-elect Trump’s comments about re-negotiating the Iran deal, on December 15 OFAC issued new JCPOA guidance addressing the potential snapback of U.S. nuclear sanctions measures. The guidance states that OFAC will not prosecute companies engaged in lawful trade while the sanctions were suspended, and the agency would provide a 180-day wind-down period for persons to cease operations in Iran after any snapback, including allowing companies to be paid for goods and services provided to Iran before snapback.    
 
II. IRANIAN TRANSACTIONS AND SANCTIONS REGULATIONS
 
On December 22, OFAC modified the Iranian Transactions and Sanctions Regulations (ITSR) to revise the definition of Iranian-origin goods and expand the scope of the existing general license for medical and agricultural products.
 
Iranian Origin Goods
 
The ITSR generally prohibit U.S. persons from dealing in Iranian-origin goods, defined to include items grown, produced, manufactured, extracted or produced in Iran, as well as goods that have entered into Iranian commerce. Provided that regulatory conditions are met, the amendments will now allow items exported to Iran to be serviced and repaired outside of Iran, and for vessels with U.S.-origin goods en route to third-country destinations to stop at Iranian ports.
 
Specifically, in its revised definition, OFAC clarified that the term “Iranian-origin goods” does not include the following items, provided they were not grown, produced, manufactured, extracted or processed in Iran:
 
  – Items exported or reexported to Iran under an OFAC general or specific license, once those goods have left Iran; or
  – Items not destined for Iran onboard vessels or aircraft (as well as the vessels or aircraft themselves) that pass thought Iranian controlled territory en route to a third country, provided that the goods do not otherwise come into contact with Iran.
 
This exclusion from Iranian-origin goods includes goods that are temporarily offloaded from a vessel in Iranian territorial waters or at a port in Iran and reloaded onto the same vessel or another vessel in the same location en route to a destination outside of Iran.
 
Medical Devices and Agriculture
 
OFAC expanded the scope of the ITSR’s medical and agricultural general licenses. For medical devices, OFAC revised its definition of medical devices to follow the definition of medical devices in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321). OFAC also made changes to cover repair of medical equipment, recalls and use of software in medical devices. For agriculture, OFAC expanded the definition of agricultural commodities to include shrimp.
 
III. UKRAINE/RUSSIA SANCTION EXPANSIONS
 
OFAC continued to enforce and expand its sanctions programs targeting Ukraine and Russia for Russia’s occupation and annexation of Crimea. On December 20, 2016, OFAC added seven individuals, eight entities and two vessels to the Specially Designated National (SDN) list and twenty-six entities to the Sectoral Sanctions Identifications list. In a parallel action, the Commerce Department’s Bureau of Industry and Security added twenty-three Russian and Crimean companies to the BIS Entity List.
 
IV. CYBER SANCTIONS
 
In response to the alleged Russian Government-backed attempt to manipulate the 2016 U.S. presidential election, including hacking into the Democratic National Committee emails, on December 28, 2016, President Obama for the first time used his authority to impose cyber sanctions against persons engaged in significant malicious cyber-enabled activities. The U.S. added five Russian intelligence agencies and six individuals associated with the agencies to the OFAC SDN list. The U.S. also expelled Russian diplomats and announced that additional covert measures would be imposed.
 
Russian President Putin said that for now he would not retaliate. However, a Vermont official blamed attempts to hack into the U.S. power grid on Russia, adding additional uncertainty to the situation.
 
V. CONCLUSION
 
The outgoing administration’s expansion of authorizations for trading with Iran and increased targeting of Russian entities could be potentially inconsistent with sanctions policy statements made by President-elect Trump. It remains to be seen how the new administration will use sanctions as a tool to impact U.S. diplomacy, and whether the new administration will continue or seek to reverse President Obama’s measures to ease restrictions with Iran and increase pressure on Russia.

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COMM_a2
11. J. Barton & L. Alexander: “Start-Ups Face Export Control Traps”

(Source: NDIA News)
 
* Authors: Joseph Barton, Associate, jbarton@sheppardmullin.com, 213-620-1780; Laura Alexander, lalexander@sheppardmullin.com, 213-455-7668. Both of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles.
 
A number of today’s hottest technologies are brought to market by small U.S. companies colloquially known as “start-ups.”    
 
Start-ups tend to rapidly develop scalable business models for their technologies to meet consumer demands that go viral overnight. What happens when the technologies have potential military uses that are not immediately recognized and are therefore subject to U.S. export controls and associated penalties?
 
President Donald Trump has said that his administration will make national security a top priority. This may signal a coming crackdown on illegal exports. There are some general considerations for start-ups to keep in mind when entering the defense market.
 
The U.S. maintains two primary sets of export controls to ensure that technologies with military uses do not land in the hands of enemies or in areas of the world where the technologies may be used to compromise regional stability. They are the Export Administration Regulations, EAR, and the International Traffic in Arms Regulations, ITAR. The EAR is administered by the Department of Commerce’s Bureau of Industry and Security and regulates exports of certain commercial items that may be useful for military purposes. They are referred to as “dual-use” items.
 
The ITAR is administered by the Department of State’s Directorate of Defense Trade Controls, DDTC, and regulates exports of certain items that are specially designed for military purposes. These items are referred to as “defense articles.”
 
Exports of dual-use items and defense articles to certain foreign countries or foreign nationals require licenses from one of the two offices. Importantly, an “export” extends beyond the physical export of a product outside the United States and includes oral or written exchanges of information related to that product. The latter form is commonly referred to as a “deemed export.”
 
The EAR and ITAR are broad and complex, and they apply to more than just bombs, guns, bullets and other traditional emblems of war. They also apply to technologies with certain computing, encryption, mass notification or real-world training capabilities, among other technologies. For example, in 1999 Commerce determined that it was illegal to ship a video game console to China without an export license because the console contained a powerful processor that could be modified for use in weapons systems.
 
Violations can result in civil and criminal liability. Companies are subject to fines of $1 million or five times the value of the export for each violation. Individuals are subject to fines of $250,000 and 10 years imprisonment for each violation. It is therefore important for start-ups to consider the EAR and ITAR in all of their dealings.
 
For example, consumer demand for a start-up’s product may grow exponentially overnight and the company needs to grow its workforce quickly to meet the increased demand. In these situations, the business commonly turns to interns and contractors that work remotely to avoid the legal headaches that come with hiring additional employees and added overhead costs.
 
Think of the hit television show “Silicon Valley” where the start-up – Pied Piper – has a data compression algorithm that promises to revolutionize the internet. Data compression algorithms reduce the size of video, image, audio and other data files and thereby speed up transmission times for email, social media, file sharing platforms, and other electronic mediums. From one day to the next, Pied Piper finds itself to be the darling of the technology world. Pied Piper enlists four contractors from across the world to help meet insatiable demand. These contractors work remotely and attend team meetings via video conference.
 
There is nothing else in the world quite like Pied Piper’s data compression algorithm and it will almost certainly have as many, if not more, military uses down the road as it does commercial uses. So is Pied Piper’s algorithm covered by the EAR or ITAR? Did Pied Piper consider whether sharing information with its foreign contractors constitutes a deemed export? Won’t the investment houses or potential government customers ask Pied Piper about potential export control liabilities as part of their due diligence?
 
What will Pied Piper say in response? Will the investment houses and potential government customers report any potential noncompliance to the authorities? Will Pied Piper’s beloved 20-something CEO go to prison?
 
Silicon Valley is a fictional show. Real-world start-ups, however, should take note. Export controls are real and violations carry serious consequences. They would be wise to assess their international touch points and identify and address potential export control risks before someone else asks the question.
 
As the old axiom states, “An ounce of prevention is worth a pound of cure.”

 

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COMM_a3
12. L. Lewis: “Ethics Programs Need Regular Improvements”
(Source: NDIA News)
 
* Author: Leona Lewis, JD and founder of ComplyEthic Consulting LLC, leonalewis@complyethic.com, 612-695-8890.
 
Many know what an effective compliance program looks like, but how does it operate?
 
An effective program is one that is planned, executed and enforced toward the goal of detecting wrongdoing and preventing noncompliance, according to the Federal Sentencing Guidelines of the Department of Justice. Although the guidelines provide information on what elements an effective compliance program should contain, they do not explain how the program must operate in a real company.
 
Beyond complying with the law, one important goal of having a compliance program is to respond to regulatory investigations. Compliance programs will need to be explained to a regulator at some point. To show an effective compliance program to regulators, a contractor must explain how the compliance program works by answering the following questions: How does the company decide how to achieve compliance? How does the company implement measures to achieve compliance? How does the company know whether compliance procedures work? How does the company react to problems?
 
The answers to these questions can change, but they need to be answered in detail. How the compliance program works needs to be well-known by those with a role in its operation.
 
One approach is to use the structure of continuous improvement, borrowed from the world of manufacturing, to operate an effective compliance program, also known as “Plan, Do, Check, Act” or PDCA. Those familiar with quality management from manufacturing already understand continuous improvement. A library of books has been published on the topic. As an example, below is a simple description of a manufacturing continuous improvement cycle.
 
First, a manufacturer creates a plan to produce a product. Second, the manufacturer executes the plan. Third, during product production, the company checks for defects in the resulting product. Fourth, the company manages the defects by creating corrective action plans for reducing or eliminating defects. The cycle repeats with execution of the corrective action plans, measuring the results, creating new corrective action plans, and so on. With each successive cycle, changes are made to improve results, reducing the risk of defects.
 
In addition to quality management in manufacturing, the process of “Plan, Do, Check, Act” is also helpful for a contractor building an effective compliance program. Using it is helpful because its implementation also gives the business the ability to answer fundamental questions.
 
Plan. How does the company decide how to achieve compliance? Before a contractor can have an effective compliance program, it must first address how decisions about compliance will be made. In other words, it needs to determine how the compliance program will be governed. This is a step that is easy to overlook. However, without a sustainable method of making decisions, none of the other steps of PDCA can be accomplished. For example, in the case of a manufacturer of children’s toys, how will the company decide what policies and procedures are necessary to manage its compliance risks? These decisions require input and expertise from many participants from many levels and functions.
 
Do. How does the contractor implement measures to achieve compliance? Of course, implementation of the plan is the next step. Although directing the company to “do” sounds simple, reality is much more complex. The company needs to identify a responsible leader to ensure proper implementation. Determining who will hold this responsibility can be a tricky problem if the obvious candidate does not want the job. Companies are not normally structured around compliance obligations. Often responsibilities need to be shared across functions.
 
Check. How does the business know whether compliance procedures work? Contractors must be able to demonstrate why regulators should have confidence in the compliance program. Monitoring must be designed to detect problems. Companies cannot “go through the motions” and expect to build credibility with regulators.
 
It helps the monitoring function when policies and procedures are designed to be checked or raise red flags when problems arise. Further, procedures need to be designed with an eye to being auditable. The actions that the operation takes to comply need to leave behind a record that can be checked, either in an audit or as part of the process itself. For example, if a toy manufacturer required its toys to meet certain technical criteria, a procedure documenting the testing of the toys could be checked by an audit. If a procedure existed to stop shipment in the absence of the testing documentation, the procedure itself would include an automatic “check” on whether testing was done.
 
Act. How does the business react to compliance problems? Contractors must act reasonably and respond appropriately to information about compliance failures. Depending on the circumstances, what is “reasonable” can mean anything from re-training staff to automating manual processes to disciplining employees. Disclosure requirements must also be considered.
 
Repeat the cycle on a rhythm – weekly, monthly, quarterly – that makes sense for the contractor’s business and the risk at issue. Using the PDCA structure in compliance is helpful to the compliance practitioner. It provides a common language for the cross-functional work of operating the compliance program. It helps that continuous improvement is a method with which many are likely familiar. It also breaks down the broad goal of “compliance” into actionable steps.
 
In short, using these four fundamental questions within a PDCA approach is a practical way to think of how an effective program operates. It is a good guide for contractors to use to design the operation of compliance programs. It leads to answering fundamental questions that the company will need to explain to demonstrate its compliance program’s effectiveness.
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COMM_a4
13. T. Feddo, J. Burnett & J.M. Waite: “OFAC Eases Restrictions on Medical and Agricultural Exports to Iran”

(Source: Alston & Bird LLP)
 
* Authors: Thomas Feddo, Esq., thomas.feddo@alston.com, 202-239-3521; James Burnett, Esq., james.burnett@alston.com, 202-239-3364; and Jason M. Waite, Esq., jason.waite@alston.com, 202-239-3455.  All of Alston & Bird LLP.
 
On December 23, 2016, the Treasury Department’s Office of Foreign Assets Control (OFAC) issued a final rule amending the Iranian Transactions and Sanctions Regulations (ITSR) to expand the scope of permissible exports and reexports of medicine, medical devices and agricultural commodities to Iran and clarify the terms “Iranian origin” and “Iranian-origin goods.” The Final Rule significantly expands the scope of the general license for medical devices to Iran, authorizing manufacturers to export all medical devices satisfying the definition in the Federal Food, Drug, and Cosmetic Act (FFDCA) that are also designated EAR99 or would be if located in the United States with the exception of certain devices appearing on a special exclusion list.
 
EXPANDED GENERAL LICENSE FOR MEDICAL DEVICES
 
Since October 2012, OFAC has provided a general license for the exportation or reexportation of certain listed medical devices to Iran. The Final Rule expands the general license to authorize medical device manufacturers to export all medical devices that fall within the definition of “device” in Section 201 of the

FFDCA and are designated as EAR99, or in the case of an item not subject to the Export Administration Regulations (EAR), would be designated EAR99 if located in the United States, provided that the item is not on the List of Medical Devices Requiring Specific Authorization. The conduct of related transactions is also authorized to the extent payment terms and financing are consistent with Section 560.532; however, military, intelligence and law enforcement end-users remain prohibited.
 
Companies should review the special exclusion list to determine if their medical devices appear on that list since such items are not authorized by the general license and specific authorization from OFAC is required. Importantly, in addition to the listed items, the List of Medical Devices Requiring Specific Authorization contains a note excluding from the general license any item: (1) “within the scope of the Statement of Understanding – medical equipment at Supplement No. 3 to Part 774 of the [EAR]”; or (2) “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,” and therefore does “not qualify for exportation to Iran under section 560.530(a)(3)(i) of the [ITSR].”
 
EASED RESTRICTIONS ON MEDICAL DEVICE TRAINING AND MAINTENANCE AND REPAIR
 
In addition to expanding the list of medical devices authorized for export or reexport to Iran, OFAC added a new license authorizing training “necessary and ordinarily incident to the safe and effective use or operation of medicine and medical devices exported or reexported” under the medical device general license as well as a license for maintenance and repair activities. The general licenses for training and maintenance and repair do not authorize the provision of any services or goods to military, intelligence or law enforcement entities and persons.
 
New general license for medical device training
 
OFAC issued Frequently Asked Question (FAQ) 484, which provides a nonexhaustive list of training activities that OFAC considers “necessary and ordinarily incident to” the safe and effective use or operation of medicine and medical devices under the new general license:

  – 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.
 
Expanded general license for replacement parts for medical devices
 
The Final Rule also expands the general license at ITSR § 560.530(a)(4) for replacement parts by eliminating the one-for-one exchange requirement. The general license now authorizes the export or reexport of replacement parts for storage for later use, as well as related transactions, provided that the replacement parts are intended to replace a broken or nonoperational component or “ordinarily incident and necessary” to proper preventive maintenance of a medical device previously exported or reexported to Iran pursuant to an OFAC authorization and the number of replacement parts that are exported or reexported to and stored in Iran does not exceed the number of corresponding parts in use in the relevant medical devices in Iran. In addition, the replacement parts must be designated EAR99, or in the case of replacement parts not subject to the EAR, would be designated EAR99 if located in the United States.
 
New general license for software and services related to the operation, maintenance and repair of medical devices
 
OFAC also added a new general license at ITSR § 560.530(a)(5) to authorize the exportation or reexportation to Iran of software and services necessary to the operation, maintenance and repair of medical devices and replacement parts that were previously exported or reexported to Iran. As with the other general licenses related to medical devices, the software must be designated EAR99, or in the case of software that is not subject to the EAR, would be designated EAR99 if it were located in the United States. The export and reexport of software updates for those devices is also authorized. In addition, the license authorizes the provision of repair services for medical devices authorized for export or reexport to Iran to ensure patient safety and effective operation of those devices.
 
EASED RESTRICTIONS ON AGRICULTURAL COMMODITIES
 
The Final Rule also eases restrictions on certain agricultural commodities and generally authorizes training for agricultural commodities exported pursuant to the general license. Pursuant to the Final Rule, the general license in Section 560.530(a)(2) now authorizes the exportation or reexportation to Iran of shrimp and shrimp eggs. In addition, OFAC added a new provision in Section 560.530(a)(2)(iv) to generally authorize the provision of training necessary and ordinarily incident to the safe and effective use of agricultural commodities exported or reexported to the general license for agricultural commodities.
 
NEW GENERAL LICENSE FOR U.S. IMPORTS OF U.S.-ORIGIN AGRICULTURAL PRODUCTS, MEDICINE AND MEDICAL DEVICES
 
OFAC also added a new general license to authorize the import into the United States of U.S.-origin agricultural products, medicine and medicinal devices, including parts, components and accessories that were exported or reexported under OFAC authorization, and are broken, defective or nonoperational, or
are connected to product recalls, adverse events or other safety concerns, and related transactions. No imports are permitted from any Iranian military, intelligence or law enforcement purchasers or importers.
 
CLARIFICATIONS TO DEFINITIONS OF “IRANIAN ORIGIN” AND “IRANIAN-ORIGIN GOODS”
 
Finally, the Final Rule attempts to clarify the terms “Iranian Origin” and “Iranian-Origin Goods” contained in Section 560.306, particularly for the status of goods on vessels and aircraft. Pursuant to these revised definitions, “Iranian origin” and “Iranian-origin goods” do not include the following categories:
  – Goods exported or reexported to Iran pursuant to the ITSR that are subsequently reexported from and are located outside Iran.
  – Goods transported on a vessel or aircraft that have not come into contact with Iran other than passing though Iranian territorial waters or stopping in Iran en route to another country outside of Iran.

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COMM_a5
14. R.C. Burns: “Our Long National Nightmare Is Over”

(Source:
Export Law Blog
. Reprinted by permission.)
 
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC,
Clif.Burns@bryancave.com
, 202-508-6067)
 
Regular readers of this blog are probably quite aware of my long-running crusade,
dating back almost a decade
, to free Daniel Garcia or, more accurately, to free people named Daniel Garcia from the stigma of sharing a name with someone on OFAC’s Specially Designated Nationals and Blocked Persons List. Other posts on Daniel Garcia are
here
and
here
.
 
The impetus behind this crusade was that people named Daniel Garcia are routinely denied financial services because someone else named Daniel Garcia is on the SDN List. Worse, officials at OFAC admitted to me, anonymously of course, that no one at OFAC even knew who Daniel Garcia was or why he was on the list.
 
Well, Daniel Garcias of the world, rejoice! Last Friday, OFAC
announced
that it was removing the mysterious Daniel Garcia from the list, sans, of course, any explanation for the removal. Because no one at the agency was sure why he was designated, it couldn’t have found that Daniel Garcia had stopped doing whatever it was that got him on the list in the first place. OFAC couldn’t even say that Daniel Garcia was dead or alive or whether, like Schrödinger’s cat, he was both dead and alive at the same time.
 
No matter. All that counts here is the result. I hope that maybe I played a small part in this removal and in helping the next guy named Daniel Garcia who tries to get a car loan drive off the lot in a shiny new BMW.
 
Now we can focus our attention on
Sally Jones
.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a115. ECTI Presents The Fundamentals of Product Classification Webinar – 16 Feb

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

* What: The Fundamentals of Product Classification
* When: February 16, 2017; 1:00 p.m. (EST)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Felice Laird
* Register: Here or Danielle McClellan, 540-433-3977, danielle@learnexportcompliance.com.

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TE_a216. University of Liverpool to Talk Post-Brexit International Trade Compliance in London, 24 Jan

(Source: University of Liverpool,
exed@liverpool.ac.uk
)
 
Join the University of Liverpool’s Executive Education team on Tuesday 24 January 2017 to hear David Hayes talk about Post-Brexit import and export regulations.
 
Taking place from 6 pm to 7 pm at the University’s London campus at 33 Finsbury Square, this informal event will offer attendees an opportunity to hear from David Hayes, an expert in trade compliance as he talks about a topic which will have implications for years to come.
 
David Hayes has many years’ experience in export controls and sanctions, both from an industry and regulator’s perspective.  After leaving the UK Export Control Organisation in the late 90’s David worked in industry as Head of Compliance for Fortune 500 and FTSE 100 companies, with significant involvement in US export compliance under both ITAR and EAR as well as OFAC sanctions. 
 
After David’s talk there will be time for questions, with refreshments and networking to follow.
 
To attend, notify 
exed@liverpool.ac.uk
before 16 January.

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ENEDITOR’S NOTES

EN_a317. J.E. Bartlett III:  “Ch..ch..Changes:  The ITAR is Amended Again!”

(Source: Editor)
 
Today’s Federal Register amended USML Category XV, Spacecraft & Related Articles.  Although the amendment is final, it does not take effect until next week, on January 15th.  To get an up-to-date copy of the ITAR with footnotes to the amended sections, which will be updated again on 15 January with the amended sections, subscribe to Bartlett’s Annotated ITAR (the “BITAR”), which contains the full ITAR plus over 750 footnotes to section histories, case law, practice tips, and appendixes containing past amendments, DDTC Consent Agreements, a huge index, and other helpful features.  Subscribe at www.FullCircleCompliance.eu or call/email Jim Bartlett, 202-802-0646, JEBartlett@JEBartlett.com

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(Source: Editor)


*
Lord Acton (John Emerich Edward Dalberg-Acton, 10 Jan 1834 – 19 Jun 1902, was an English Catholic historian, politician, and writer. He is perhaps best known for the remark, “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”)

  – “To be able to look back upon one’s past life with satisfaction is to live twice.”
  – “Socialism means slavery.”

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EN_a219
. 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: 10 Jan 2017: 82 FR 2883-2889: Addition of Certain Persons and Revisions to Entries on the Entity List; and Removal of a Person From the Entity List; and 82 FR 2875-2883: Revisions to the Export Administration Regulations (EAR): Control of Spacecraft Systems and Related Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML) 

  
*
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: 10 Jan 2017: 82 FR 2889-2892: International Traffic in Arms Regulations: Revision of U.S. Munitions List Category XV

  – The only available fully updated copy (latest edition 10 Jan 2017) 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, plus a large Index, over 750 footnotes containing case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text.  Subscribers receive updated copies of the BITAR in Word by email, usually revised within 24 hours after every ITAR amendment.  The BITAR is available by annual subscription from the Full Circle Compliance website.  BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please contact us to receive your discount code.  

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EPEDITORIAL POLICY

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

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

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

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