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17-0112 Thursday “The Daily Bugle”

17-0112 Thursday “Daily Bugle”

Thursday, 12 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 
here
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  1. Commerce/ITA Seeks Comments on Request for Duty-Free Entry of Scientific Instrument or Apparatus 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. DoD/DSCA Posts SAMM and Policy Memoranda, Week 8-14 Jan 
  4. State/DDTC: (No new postings.) 
  5. Treasury/OFAC Posts Guidance on the Provision of Certain Services Relating to the Requirements of U.S. Sanctions Laws 
  6. Treasury/OFAC: Aban Offshore Limited Settles Potential Civil Liability for an Apparent Violation of the Iranian Transactions and Sanctions Regulations 
  7. Treasury/OFAC: An Individual and the Alliance for Responsible Cuba Policy Foundation Settle Potential Civil Liability for Alleged Violations of the Cuban Assets Control Regulations 
  1. ST&R Trade Report: “Imports of Nanoscale Materials Subject to Reporting and Recordkeeping”
  1. J.E. Bartlett: “ITAR Changes Again on 15 January 2017” 
  2. M.S. Smith: “Satellite Export Controls Get Another Update — JWST is No Longer Under ITAR”
  3. Gary Stanley’s ECR Tip of the Day
  1. Correction: “Sensors and Instrumentation Technical Advisory Committee to Meet 1 Feb (Wed) in San Francisco” 
  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/ITA Seeks Comments on Request for Duty-Free Entry of Scientific Instrument or Apparatus

(Source:
Federal Register
) [Excerpts.]
 
82 FR 3725: Proposed Information Collection; Comment Request; Request for
Duty-Free Entry of Scientific Instrument or Apparatus
* AGENCY: Enforcement and Compliance (E&C), International Trade Administration, Commerce.
* ACTION: Notice.
* SUMMARY: The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
* DATES: Written comments must be submitted on or before March 13, 2017. …
* FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the information collection instrument and instructions should be directed to Charlie Michael, Enforcement and Compliance (E&C), phone number 202-482-0596, or via the internet at
charles.michael@trade.gov
.
* SUPPLEMENTARY INFORMATION:
  – Abstract: The Departments of Commerce and Homeland Security (DHS) are required to determine whether nonprofit institutions established for scientific or educational purposes are entitled to duty-free entry for scientific instruments the institutions import under the Florence Agreement. Form ITA-338P enables: (1) DHS to determine whether the statutory eligibility requirements for the institution and the instrument are fulfilled, and (2) Commerce to make a comparison and finding as to the scientific equivalency of comparable instruments being manufactured in the United States. Without the collection of the information, DHS and Commerce would not have the necessary information to carry out the responsibilities of determining eligibility for duty-free entry assigned by law. …
  – Form Number(s): ITA-338P.
 
Sheleen Dumas, PRA Departmental Lead, Office of the Chief Information Officer.

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

OGS
OTHER GOVERNMENT SOURCES

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

* Commerce; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Report of Requests for Restrictive Trade Practice or Boycott [Publication Date: 13 January 2017.]

* Commerce; Industry and Security Bureau; NOTICES; Increase of Controls: Infrared Detection Items [Publication Date: 13 January 2017.]

* Justice; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Notice of Firearms Manufactured or Imported [Publication Date: 13 January 2017.]

* State; PROPOSED RULES; U.S. Munitions List Category XII [Publication Date: 13 January 2017.]

* State; NOTICES; Designations as Global Terrorists: Jamaah Ansharut Daulah also known as Jemaah Anshorut Daulahalso known as Jamaah Ansharut Daulatalso known as JAD [Publication Date: 13 January 2017.]

* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 13 January 2017.]

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

OGS_a23. Commerce/BIS: (No new postings.)

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

OGS_a34. DoD/DSCA Posts SAMM and Policy Memoranda, Week 8-14 Jan

(Source:
DoD/DSCA)
 
 
* * * * * * * * * * * * * * * * * * * *

OGS_a45. State/DDTC: (No new postings.)

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

OGS_a56. Treasury/OFAC Posts Guidance on the Provision of Certain Services Relating to the Requirements of U.S. Sanctions Laws

(Source: Treasury/OFAC)    
 
Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued guidance on the provision of certain services relating to the requirements of U.S. sanctions laws (the “Compliance Services Guidance”).  The Compliance Services Guidance does not reflect a change in OFAC’s policy with respect to the provision of these types of legal and compliance services.  The Compliance Services Guidance responds to numerous inquiries received by OFAC, many from foreign companies at outreach events, relating to whether U.S. persons, including U.S. attorneys and compliance personnel, may provide certain services described in that guidance.    
 
OFAC is also publishing a number of new Frequently Asked Questions pertaining to the Compliance Services Guidance.
* * * * * * * * * * * * * * * * * * * *

OGS_a67. Treasury/OFAC: Aban Offshore Limited Settles Potential Civil Liability for an Apparent Violation of the Iranian Transactions and Sanctions Regulations

(Source: Treasury/OFAC)
 
Aban Offshore Limited (“Aban”), of Chennai, India, has agreed to pay $17,500 to settle potential civil liability for an apparent 1 violation of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR). The apparent violation of § 560.204 of the ITSR occurred on the approximate date of June 27, 2008, when Aban’s Singapore subsidiary placed an order for oil rig supplies from a vendor in the United States with the intended purpose of re-exporting these supplies from the United Arab Emirates to a jack-up oil drilling rig located in the South Pars Gas Fields in Iranian territorial waters. The transactional value of the order was $10,127.
 
OFAC determined that Aban did not voluntarily disclose the apparent violation and that the apparent violation constitutes a non-egregious case. The statutory maximum civil monetary penalty amount for the apparent violation was $250,000, and the base penalty amount for the apparent violation was $25,000.
 
The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, app. A. OFAC considered the following to be aggravating factors:
 
  (1) Aban failed to exercise a minimal degree of caution when it re-exported U.S.-origin goods from the United States to a jack-up oil drilling rig while it was located in Iranian territorial waters;
  (2) Aban’s re-exportation of equipment to the jack-up oil drilling rig aided in the development of Iran’s energy resources;
  (3) Aban is a large sophisticated company with approximately 15 jack- up oil drilling rigs doing business throughout the world; and
  (4) Aban did not have an OFAC compliance program in place at the time of the transaction despite conducting business with the United States and/or with U.S. companies in relation to the petrochemical and offshore drilling sectors.
 
OFAC considered the following to be mitigating factors:
 
  (1) Aban has no prior sanctions history with OFAC and has not received a penalty notice or Finding of Violation in the five years preceding the date of this apparent violation;
  (2) Aban took remedial action by instituting an OFAC sanctions compliance program; and
  (3) Aban displayed substantial cooperation throughout the course of OFAC’s investigation, including by conducting an internal look-back investigation for potential ITSR violations, by providing OFAC with detailed and well-organized information, and by entering into multiple tolling agreements with OFAC and tolling the Statute of Limitations for a total of 1,134 days.
 
For more information regarding OFAC regulations, please go to: http://www.treasury.gov/ofac.
* * * * * * * * * * * * * * * * * * * *

OGS_a78. Treasury/OFAC: An Individual and the Alliance for Responsible Cuba Policy Foundation Settle Potential Civil Liability for Alleged Violations of the Cuban Assets Control Regulations

(Source: Treasury/OFAC
 
An individual acting in his personal capacity (the “Individual”), as well as the Alliance for Responsible Cuba Policy Foundation (the “Alliance”), on whose behalf the Individual also acted, have agreed to a settlement whereby the Alliance has agreed to pay $10,000 to settle potential civil liability for alleged violations of the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR). OFAC alleged that the Individual violated § 515.201 of the CACR by engaging in unauthorized travel-related transactions during business travel to Cuba from on or about August 23, 2010 to on or about August 27, 2010, and separately from on or about September 8, 2011 to on or about September 11, 2011; and that the Individual violated § 515.201 of the CACR by providing unauthorized travel services related to the two aforementioned trips to a total of 20 persons (collectively referred to hereafter as the “Alleged Violations”).
 
OFAC concluded that the Alleged Violations were frequently undertaken while the Individual held himself out as an officer of the Alliance.
 
OFAC determined that the Alleged Violations were not voluntarily self-disclosed to OFAC. The statutory maximum civil monetary penalty amount for the Alleged Violations was $1,430,000, and the base penalty amount for the Alleged Violations was $80,000.
 
The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, app. A. OFAC considered the following to be aggravating factors:
 
  (1) the Individual appears to have willfully engaged in the Alleged Violations involving Cuba with knowledge that such transactions likely constituted violations of the CACR, as evidenced by having been issued a cautionary letter from OFAC prior to the aforementioned trips for similar travel-related transactions to Cuba that appeared to have violated the CACR; and
  (2) the Individual appears to have knowingly facilitated unauthorized business travel to Cuba by other persons that appears to have violated the CACR.
 
OFAC considered the following to be mitigating factors:
 
  (1) the Alleged Violations appear to have resulted in minimal harm to the current objectives of the U.S. sanctions program regarding Cuba;
  (2) the investigation involved an individual, acting in his personal capacity, and the Alliance, which is a small nonprofit entity; and
  (3) based on the financial condition of the Individual and/or the Alliance, mitigation is warranted.
 
For more information regarding OFAC regulations, please go to: www.treasury.gov/ofac.
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NWSNEWS

NWS_a19
. ST&R Trade Report: “Imports of Nanoscale Materials Subject to Reporting and Recordkeeping”

 
The Environmental Protection Agency has issued a final rule allowing it for the first time to use its authority under section 8(a) of the Toxic Substances Control Act to collect health and safety information on chemicals currently in the marketplace when imported, manufactured, or processed as nanoscale materials. This rule will be effective as of May 12.
 
This rule applies to chemical substances that are solids at 25 ºC and standard atmospheric pressure; that are imported, manufactured, or processed in a form where any particles, including aggregates and agglomerates, are in the size range of 1-100 nanometers (nm) in at least one dimension; and that are imported, manufactured, or processed to exhibit one or more unique and novel properties.
 
Persons that do or intend to import, manufacture, or process these chemical substances must electronically report certain information, including the specific chemical identity, production volume, methods of manufacture and processing, use, exposure and release information, and existing data concerning environmental and health effects. This rule involves one-time reporting for existing discrete forms of certain nanoscale materials and a standing one-time reporting requirement for new discrete forms of certain nanoscale materials before they are imported, manufactured, or processed.
 
This rule does not apply to the following.
 
  – chemical substances imported, manufactured, or processed in forms that contain less than one percent by weight of any particles, including aggregates and agglomerates, in the size range of 1-100 nm
  – certain biological materials including DNA, RNA, proteins, enzymes, lipids, carbohydrates, peptides, liposomes, antibodies, viruses, and microorganisms
  – chemical substances that dissociate completely in water to form ions with a size of less than 1 nm (except chemical substances manufactured at the nanoscale that release ions but do not dissociate in water to form those ions)
  – chemical substances formed at the nanoscale as part of a film on a surface
  – persons that do or intend to import, manufacture, or process the subject chemical substances only in small quantities for research and development
  – any manufacturer or processor with sales of less than $11 million per year
 
The EPA notes that this rule is not intended to conclude that nanoscale materials will cause harm to human health or the environment; instead, the agency plans to use the information gathered to determine if any further action under TSCA, including additional information collection, is needed.

 

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COMMCOMMENTARY

COMM_a110. J.E. Bartlett: “ITAR Changes Again on 15 January”

(Source: Editor)

The International Traffic in Arms Regulations (ITAR), 22 CFR 120-130, was last amended on January 10, 2017, by 82 Fed. Reg. 2889, amending USML Category XV, but the amendments do not take effect until this Sunday, 15 January 2017. Subscribers to Bartlett’s Annotated ITAR (the “BITAR”) will receive a revised BITAR by 15 January which includes all amendments. To get your copy, subscribe at www.FullCircleCompliance.eu.

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COMM_a2
11. M.S. Smith: “Satellite Export Controls Get Another Update — JWST is No Longer Under ITAR”

 
* Author: Marcia S. Smith, Editor SpacePolicyOnline.com, marcia.s.smith@gmail.com.
 
The Departments of Commerce and State announced more changes to the regulations that govern satellite exports yesterday. The new rules affect a range of activities from commercial remote sensing satellites to human spacecraft to the James Webb Space Telescope and become effective on January 15, 2017.
 
After more than a decade of battling stringent export controls that many in the satellite industry claimed hampered U.S. efforts to compete on the global stage, a substantial victory was won in 2014 when many commercial satellite items were moved from the State Department’s U.S. Munitions List (USML) and its International Traffic in Arms Regulations (ITAR) to the Department of Commerce’s Commerce Control List (CCL) of dual-use technologies governed by the Export Administration Regulations (EAR).
 
Still, there were remaining matters to be settled, several of which were addressed in yesterday’s announcement.  A summary published by NOAA’s Office of Space Commerce includes the following:
 
  – increases the aperture thresholds for control of remote sensing satellites and components;
  – eliminates controls based on whether a spacecraft supports human habitation, but such spacecraft may be controlled by other criteria;
  – redefines several controls based on technical capabilities rather than end use of the spacecraft;
  – removes and replaces confusing criteria concerning integrated propulsion and attitude control;
  – adds thresholds for controls on electric propulsion systems; and
  – clarifies various ambiguities.
 
A quick glance at the new rules as published in the Federal Register (the Office of Space Commerce website has links) provides additional details:
 
  – The aperture limits for commercial electro-optical remote sensing satellites will be raised from 0.35m to 0.50m, which is still short of the 1.1m requested by some of the commenters; and
  – ITAR controls on electric propulsion systems are for those that provide greater than 300 milli-Newtons of thrust and a specific impulse greater than 1,500 sec, or operate at an input power of more than 15kW.
 
Another interesting decision is that NASA’s James Webb Space Telescope (JWST) is being moved to the CCL.  “A determination was made … that this specific telescope … did not warrant being subject to the ITAR.”   The change includes parts, components, accessories and attachments that are specially designed for use in or for JWST.   JWST is NASA’s next major space telescope.  In many ways it is a follow-on to the Hubble Space Telescope and is scheduled for launch on a European Ariane rocket in 2018.

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COMM_a3
12. 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
 
Pursuant to section 47(6) of the Arms Export Control Act (22 U.S.C. 2794(6) note) and ITAR § 120.8, major defense equipment means any item of significant military equipment (as defined in ITAR § 120.7) on the U.S. Munitions List having a nonrecurring research and development cost of more than $50,000,000 or a total production cost of more than $200,000,000.

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

ENEDITOR’S NOTES

EN_a313. Correction: “Sensors and Instrumentation Technical Advisory Committee to Meet 1 Feb (Wed) in San Francisco”

(Source: Editor)
 
Item # 2 in yesterday’s (11 Jan) Daily Bugle incorrectly stated that the Sensors and Instrumentation Technical Advisory Committee would meet on 1 Feb in Washington, DC. As stated in the expanded item, that SITAC meeting will be held in San Francisco. Thanks to Greg Hill for noticing this error. (If you see an error in the Daily Bugle, or have any tips to help improve the Bugle, please alert us by emailing dailybugle@fullcirclecompliance.eu.)

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

(Source: Editor)


*
Jack London (John Griffith Chaney, 12 Jan 1876 – 22 Nov 1916, was an American novelist, journalist, and social activist. His most famous works include
The Call of the Wild and
White Fang.)

  – “The proper function of man is to live, not to exist. I shall not waste my days in trying to prolong them. I shall use my time.”

 

*
Edmund Burke (12 Jan 1729 – 9 July 1797, was an Irish statesman born in Dublin, as well as an author, orator, political theorist, and philosopher.)

  – “It is not what a lawyer tells me I may do; but what humanity, reason, and justice tell me I ought to do.”

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

EN_a215
. 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.  

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

EPEDITORIAL POLICY

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

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

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

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

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