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17-0208 Wednesday “The Daily Bugle”

17-0208 Wednesday “Daily Bugle”

Wednesday, 8 February 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 
here for free subscription.  Contact us
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  1. DHS/CBP Seeks Comments on CBP Forms 301 and 5297, Importation Bond Structure 
  2. DHS/CBP Seeks Comments on Declaration of the Ultimate Consignee that Articles were Exported for Temporary Scientific or Educational Purposes 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. DHS/CBP Posts Updated ACE PGA Documentation 
  4. DHS/CBP Posts ACE Drawback “Lesser of” NAFTA Claims 
  5. DHS/CBP Updates ACE CATAIR Documentation 
  6. GAO Posts Report on Supply Chain Security: Providing Guidance and Resolving Data Problems Could Improve Management of the C-TPAT Program 
  7. State/DDTC Posts Name Change for OEI Opto AG 
  8. Treasury/OFAC Publishes Four Cyber-related FAQs 
  9. EU Implements Regulations (EU) 2017/200 and (EU) 2017/209 Concerning the Classifications of Certain Goods in the Combined Nomenclature 
  1. Reuters: “U.S. Lawmakers Want to Review Any Trump Russia Sanctions Action” 
  1. M. Volkov: “The Win-Win Argument: Compliance as a Marketing Advantage” 
  2. S.D. Varma, B. Connor & M. Hunnicutt: “Trump Administration Sanctions Iran for Ballistic Missile Tests and Expands List of Medical Devices Requiring License for Export to Iran” 
  3. S. Kovarovics: “US Leaves JCPOA Intact But Is Still Ratcheting Up Sanctions Against Iran” 
  4. Gary Stanley’s ECR Tip of the Day 
  1. ECTI Presents In Uncertain Times, the Only Certainty is Enforcement Webinar – 28 Mar 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (27 Jan 2017), DOD/NISPOM (18 May 2016), EAR (1 Feb 2017), FACR/OFAC (17 Jan 2017), FTR (15 May 2015), HTSUS (1 Jan 2017), ITAR (11 Jan 2017) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1
. DHS/CBP Seeks Comments on CBP Forms 301 and 5297, Importation Bond Structure 

(Source:
Federal Register) [Excerpts.] 
 
82 FR 9751-9752: Agency Information Collection Activities: Importation Bond Structure
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: 60-Day Notice and request for comments; extension of an existing collection of information. … 
* DATES: Written comments should be received on or before April 10, 2017 to be assured of consideration.
* ADDRESSES: All submissions received must include the OMB Control Number 1651-0050 in the subject line and the agency name. To avoid duplicate submissions, please use only one of the following methods to submit comments:
  (1) Email. Submit comments to: (
CBP_PRA@cbp.dhs.gov). The email should include the OMB Control number in the subject line.
  (2) Mail. Submit written comments to CBP PRA Officer, U.S. Customs and Border Protection, Office of Trade, Regulations and Rulings, Economic Impact Analysis Branch, 10th Floor, 90 K St. NE., Washington, DC 20229-1177.
* FOR FURTHER INFORMATION CONTACT: Requests for additional PRA information should be directed to Paperwork Reduction Act Officer, U.S. Customs and Border Protection, Regulations and Rulings, Office of Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, or via email (
CBP_PRA@cbp.dhs.gov). Please note that the contact information provided here is solely for questions regarding this notice. Individuals seeking information about other CBP programs should contact the CBP National Customer Service Center at 877-227-5511, (TTY) 1-800-877-8339, or CBP Web site at
https://www.cbp.gov/. For additional help:
https://help.cbp.gov/app/home/search/1.
* SUPPLEMENTARY INFORMATION: …
 – Title: Importation Bond Structure.
 – OMB Number: 1651-0050.
 – Form Number: CBP Forms 301 and 5297.
 – Abstract: Bonds are used to ensure that duties, taxes, charges, penalties, and reimbursable expenses owed to the Government are paid; to facilitate the movement of cargo and conveyances through CBP processing; and to provide legal recourse for the Government for noncompliance with laws and regulations. Each person who is required by law or regulation to post a bond in order to secure a Customs transaction must submit the bond on CBP Form 301 which is available
here.
  Surety bonds are usually executed by an agent of the surety. The surety company grants authority to the agent via a Corporate Surety Power of Attorney, CBP Form 5297. This power is vested with CBP so that when a bond is filed, the validity of the authority of the agent executing the bond and the name of the surety can be verified to the surety’s grant. CBP Form 5297 is available
here. Bonds are required pursuant to 19 U.S.C. 1608, and 1623; 22 U.S.C. 463; 19 CFR part 113.
  – Current Actions: This submission is being made to extend the expiration date with no change to the burden hours or to CBP Forms 301 or 5297. …
 
  Dated: February 3, 2017.
Seth Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection.

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

EXIM_a22.

DHS/CBP Seeks Comments on Declaration of the Ultimate Consignee that Articles were Exported for Temporary Scientific or Educational Purposes

(Source:
Federal Register) [Excerpts.] 
 
82 FR 9751: Agency Information Collection Activities: Temporary Scientific or Educational Purposes
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: 60-Day notice and request for comments; extension of an existing collection of information. … 
* DATES: Written comments should be received on or before April 10, 2017 to be assured of consideration.
* ADDRESSES: All submissions received must include the OMB Control Number 1651-0036 in the subject line and the agency name. To avoid duplicate submissions, please use only one of the following methods to submit comments:
  (1) Email. Submit comments to: (
CBP_PRA@cbp.dhs.gov). The email should include the OMB Control number in the subject line.
  (2) Mail. Submit written comments to CBP PRA Officer, U.S. Customs and Border Protection, Office of Trade, Regulations and Rulings, Economic Impact Analysis Branch, 10th Floor, 90 K St. NE., Washington, DC 20229-1177.
* FOR FURTHER INFORMATION CONTACT: Requests for additional PRA information should be directed to Paperwork Reduction Act Officer, U.S. Customs and Border Protection, Regulations and Rulings, Office of Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, or via email (
CBP_PRA@cbp.dhs.gov). Please note that the contact information provided here is solely for questions regarding this notice. Individuals seeking information about other CBP programs should contact the CBP National Customer Service Center at 877-227-5511, (TTY) 1-800-877-8339, or CBP Web site at
https://www.cbp.gov/. For additional help:
https://help.cbp.gov/app/home/search/1.
* SUPPLEMENTARY INFORMATION: …
 – Title: Declaration of the Ultimate Consignee that Articles were Exported for Temporary Scientific or Educational Purposes.
  – OMB Number: 1651-0036.
  – Form Number: None.
  – Abstract: The Declaration of the Ultimate Consignee that Articles were Exported for Temporary Scientific or Educational Purposes is used to document duty free entry under conditions when articles are temporarily exported solely for scientific or educational purposes. This declaration, which is completed by the ultimate consignee and submitted to CBP by the importer or the agent of the importer, is used to assist CBP personnel in determining whether the imported articles should be free of duty. It is provided for under 19 U.S.C. 1202, HTSUS Subheading 9801.00.40, and 19 CFR 10.67(a)(3) which requires a declaration to CBP stating that the articles were sent from the United States solely for temporary scientific or educational use and describing the specific use to which they were put while abroad.
  – Current Actions: CBP proposes to extend the expiration date of this information collection with no change to the burden hours or to the information being collected. …
 
  Dated: February 3, 2017.

Seth Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection.

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OGSOTHER GOVERNMENT SOURCES

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


[No items of interest noted today.]

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OGS_a35.

DHS/CBP Posts Updated ACE PGA Documentation

(Source:
CSMS# 17-000064, 8 Feb 2017.)
 
Updated versions of both the PGA Import Forms and PGA Export Forms documents have been posted on cbp.gov. These documents outline how information required by specific PGA paper forms can be electronically submitted through ACE via the PGA Message set or the Document Image System (DIS).
 
Additionally, the current status of open and closed PGA pilots is now reflected in an updated PGA Pilot Status chart. This chart also includes information on PGA regulations that have been updated to require electronic filling or continue to allow a paper filing option. For additional details please refer to individual PGA websites.
 
The documents referenced above may be found at
here

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OGS_a46.

DHS/CBP Posts ACE Drawback “Lesser of” NAFTA Claims


(Source:
CSMS# 17-000066, 8 Feb 2017.)
 
When ACE deploys for Drawback, it will be the sole Electronic Data Interchange (EDI) system for the Drawback program. Drawback manufacturing claims for export to Canada (CA) or Mexico (MX) under NAFTA must be filed based on the ‘lesser of’ either the duty paid in the United States or the duty paid in the NAFTA country. In cases where the final product exported to CA/MX was manufactured from more than one imported part, ACE Drawback is designed to allow for multiple line input in the 43 record (Import Revenue Claimed). In the claim amount field, the “lesser of” duty amount paid should be allocated across each line. An even allocation is not necessary, so long as the amount totals the lesser duty amount claimed. See ACE CATAIR Drawback for complete description and calculation of claim amount.
 
Please send questions or comments to
OTDRAWBACK@cbp.dhs.gov or
DRAWBACKCERTIFICATION@cbp.dhs.gov

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OGS_a57.

DHS/CBP Updates ACE CATAIR Documentation


(Source:
CSMS# 17-000069, 8 Feb 2017.)
 
U.S. Customs and Border Protection (CBP) has updated an Automated Commercial Environment (ACE) CBP and Trade Automated Interface Requirements (CATAIR) chapter and an appendix posted on CBP.gov. The updated ACE CATAIR documentation includes:
 
PGA Message Set
 
  – In PG01, added a disclaimer code ‘E’ for the US Fish and Wildlife Service
  – References to Appendix C in the PGA Message Set document, have been removed. (This occurred in Unit of Measure data elements in PG04, PG26, PG29, and PG31.)
  – Descriptions for the “Unit of Measure” data elements have been made generic.
  – Please refer to PGA IGs for specific UOM guidance.
 
ACE Appendix B
 
  – HTS (tariff) Units of Measure that were listed in ACE Appendix C are now included as part of ACE Appendix B. (Appendix C document still exists in case it is referenced by other parts of ACE.)
  – Shipping/Packaging Unit Codes and HTS (Tariff) Unit of Measure codes have been combined in Appendix B and are now called ‘Units of Measure Codes’ in Appendix B.
 
To download a copy of the updated ACE CATAIR documentation, please visit the “ACE Automated Broker Interface (ABI) CATAIR” page of
CBP.gov/ACE. You may also copy and paste the URLs above to your internet browser.

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OGS_a68.
 GAO Posts Report on Supply Chain Security: Providing Guidance and Resolving Data Problems Could Improve Management of the C-TPAT Program

 
What GAO Found
 
Staff from U.S. Customs and Border Protection’s (CBP) Customs-Trade Partnership Against Terrorism (C-TPAT) program have faced challenges in meeting C-TPAT security validation responsibilities because of problems with the functionality of the program’s data management system (Portal 2.0). In particular, since the system was updated in August 2015, C-TPAT staff have identified instances in which the Portal 2.0 system incorrectly altered C-TPAT members’ certification or security profile dates, requiring manual verification of member data and impairing the ability of C-TPAT security specialists to identify and complete required security validations in a timely and efficient manner. While the focus of CBP’s staff was initially on documenting and addressing Portal 2.0 problems as they arose, the staff have begun to identify root causes that led to the Portal 2.0 problems. For example, CBP staff cited unclear requirements for the system and its users’ needs, coupled with inadequate testing, as factors that likely contributed to problems. In response, CBP staff have outlined recommended actions, along with timeframes for completing the actions. The staff stated that they will continue to work on identifying and addressing potential root causes of the Portal problems through 2017. C-TPAT officials told us that despite the Portal 2.0 problems, they have assurance that required security validations are being tracked and completed as a result of record reviews taking place at field offices. However, these field office reviews were developed in the absence of standardized guidance from C-TPAT headquarters. While the current validation tracking processes used by field offices do account for security validations conducted over the year, standardizing the process used by field offices for tracking required security validations could strengthen C-TPAT management’s assurance that its field offices are identifying and completing the required security validations in a consistent and reliable manner.
 
CBP cannot determine the extent to which C-TPAT members are receiving benefits because of data problems. Specifically, since 2012, CBP has compiled data on certain events or actions it has taken regarding arriving shipments-such as examination and hold rates and processing times-for both C-TPAT and non-C-TPAT members through its Dashboard data reporting tool. However, on the basis of GAO’s preliminary analyses and subsequent data accuracy concerns cited by C-TPAT program officials, GAO determined that data contained in the Dashboard could not be relied on for accurately measuring C-TPAT member benefits. Also, CBP has likely relied on such questionable data since it developed the Dashboard in 2012, and, thus, cannot be assured that C-TPAT members have consistently received the benefits that CBP has publicized. C-TPAT officials stated that they are analyzing the Dashboard to finalize an action plan to correct the data concerns. It is too soon to tell, though, whether this process will fully address the accuracy and reliability issues. Despite these issues, C-TPAT officials are exploring new member benefits, and industry officials we met with generally spoke positively of the C-TPAT program.
 
Why GAO Did This Study
 
The economic well-being of the United States depends on the movement of millions of cargo shipments throughout the global supply chain-the flow of goods from manufacturers to retailers or other end users. However, cargo shipments can present security concerns. CBP is responsible for administering cargo security and facilitating the flow of legitimate commerce. CBP has implemented several programs as part of a risk-based approach to supply chain security. One such program, C-TPAT, is a voluntary program in which CBP staff validate that members’ supply chain security practices meet minimum security criteria. In return, members are eligible to receive benefits, such as a reduced likelihood their shipments will be examined.
 
This report assesses the extent to which (1) CBP is meeting its security validation responsibilities, and (2) C-TPAT members are receiving benefits. GAO reviewed information on security validations, member benefits, and other program documents. GAO also interviewed officials at CBP headquarters and three C-TPAT field offices chosen for their geographical diversity; as well as select C-TPAT members and trade industry officials.
 
What GAO Recommends
 
GAO is recommending that CBP develop (1) standardized guidance for field offices regarding the tracking of information on security validations, and (2) a plan with milestones and completion dates to fix the Dashboard so the C-TPAT program can produce accurate data on C-TPAT member benefits. DHS concurred with GAO’s recommendations.
 
For more information, contact Jennifer Grover at (202) 512-7141 or
Groverj@gao.gov.

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OGS_a79
State/DDTC Posts Name Change for OEI Opto AG

(Source:
State/DDTC) [Excerpts.]
 
Effective immediately, OEI Opto AG will change as follows: Thales Alenia Space Switzerland Ltd. Due to the volume of authorizations requiring amendments to reflect this change, the Deputy Assistant Secretary for Defense Trade Controls is exercising the authority under 22 CFR 126.3 to waive the requirement for amendments to change currently approved license authorizations. The amendment waiver does not apply to approved or pending agreements. …

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OGS_a810.
 Treasury/OFAC Publishes Four Cyber-related FAQs

(Source:
Treasury/OFAC)     
 
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is providing
four FAQs related to the December 29, 2016, sanctions imposed on the Federal Security Service (FSB) and the February 2, 2017, issuance of
General License 1, “Authorizing Certain Transactions with the Federal Security Service,” pursuant to
Executive Order 13694 of April 1, 2015, “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities.”

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OGS_a911
EU Implements Regulations (EU) 2017/200 and (EU) 2017/209 Concerning the Classifications of Certain Goods in the Combined Nomenclature

 
Regulations:
  – Commission Implementing
Regulation (EU) 2017/200 of 1 February 2017 concerning the classification of certain goods in the Combined Nomenclature.
  – Commission Implementing
Regulation (EU) 2017/209 of 2 February 2017 concerning the classification of certain goods in the Combined Nomenclature.

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NWSNEWS

NWS_a212
.

Reuters: “U.S. Lawmakers Want to Review Any Trump Russia Sanctions Action”

 
Senior members of the U.S. Senate called on Wednesday for the right to review any move the White House might make to ease sanctions on Russia, amid mounting concern in Congress – and among U.S. allies – that President Donald Trump will be too conciliatory toward Moscow.
 
The lawmakers, led by Republican Senator Lindsey Graham and Democrat Ben Cardin, introduced “The Russia Sanctions Relief Act of 2017,” modeled on a bill introduced in 2015 that let Congress review the Iran nuclear agreement signed by then-President Barack Obama.
 
Trump’s open admiration for Russian President Vladimir Putin and promises to rebuild frayed U.S. ties with Moscow have raised questions over his commitment to maintaining sanctions against Russia for its involvement in fighting in Ukraine and annexation of Crimea from Ukraine.
 
The bill announced on Wednesday would require the Trump administration to submit to Congress a description of any proposed sanctions relief, as well as certification that Moscow has stopped supporting actions to undermine the government of Ukraine and ceased cyber attacks against the U.S. government and its people.
 
It would give the Senate and House of Representatives 120 days to act, or decline to act, on any sanctions relief. During that period, Trump would be barred from action to ease sanctions.
 
After 120 days, sanctions relief would be granted only if the Senate and House of Representatives had not voted for a Joint Resolution of Disapproval.
 
The measure is also backed by Republican Senators Marco Rubio and John McCain and Democrats Sherrod Brown and Claire McCaskill.
 
It was not immediately clear whether Republican congressional leaders would back the measure or how it would fare in the House, but the bill has the support of some of the leading foreign policy voices in the Senate.

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COMMCOMMENTARY

COMM_a113
.

M. Volkov: “The Win-Win Argument: Compliance as a Marketing Advantage”

 
* Author: Michael Volkov, Esq., Volkov Law Group,
mvolkov@volkovlaw.com, 240-505-1992.
 
My good friend and colleague Dan Chapman, now the CCO at VimpelCom, is a compliance rock star. I have known Dan for years, beginning when he took over at Parker Drilling and implemented a world-class remediation program to pull Parker Drilling through a difficult FCPA problem.
 
Dan is now heading the effort to remediate and “fix” VimpelCom after the FCPA enforcement action announced last year. If there is anyone who can accomplish this task, Dan is the one.
 
In any event, at a conference at which Dan and I spoke together on a panel, Dan explained that a chief compliance officer has to look for “win-win” results where compliance and business interests share a success that advances both goals – compliance and business. Dan’s words of wisdom are particularly apt today.
 
Compliance has become a basic requirement in all business commerce. What do I mean?
 
In almost every significant business transaction – a bank loan, convertible debt, acquisition of equity or assets – company lawyers are demanding that each participant demonstrate and provide proof of their respective compliance programs. My translation of this requirement is simple – compliance has become an important currency in the business transaction marketplace.
 
For example, a joint venture consisting of five distinct partners is seeking a bank loan. Before the bank proceeds with the loan, the bank requests that each company provide documentation of its ethics and compliance program. The bank considers such an inquiry as an important issue to review because it influences the company’s ability to repay a loan. That makes sense.
 
This demand for ethics and compliance reaches into the global marketplace. Companies want to do business with other companies that are committed to ethics and compliance. Companies do not want to deal with shady companies that may be suffering from a range of unethical conduct or legal risks.
 
Recognizing this context, compliance officers have an incredible opportunity to “sell” or “promote” the virtues of compliance to the sales staff. Specifically, compliance officers can help educate sales staff on the value of a compliance program, the elements of an effective compliance program, documents they can use to promote compliance, and an overall message about their company – the company is committed to trust and integrity throughout all of its operations.
 
Turning compliance into a sales advantage is a “win-win” because it provides tangible and substantive advantage to the sales and compliance missions for both compliance officers and sales staff. For customers, the company’s message is powerful: you never have to worry about misconduct, bad headlines or publicity when conducting business. Moreover, the message of trust and integrity provides an important reassurance on overall business trust – a company committed to trust and integrity is less likely to engage in fraud, delay in invoice payments, or unscrupulous business dealings. In other words, the trust factor is an important competitive benefit. In a close competitive match, a government agency or a company may award significant credit to a company that has a robust and/or mature ethics and compliance program.

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COMM_a0314
.

S.D. Varma, B. Connor & M. Hunnicutt: “Trump Administration Sanctions Iran for Ballistic Missile Tests and Expands List of Medical Devices Requiring License for Export to Iran”

(Source:
Thompson Hine LLP)

 
* Authors: Samir D. Varma, Esq.,
Samir.Varma@ThompsonHine.com, 202-263-4136; Brent Connor, Esq.,
Brent.Connor@ThompsonHine.com, 202-263-4188; and Marcie Hunnicutt,
Marcie.Hunnicutt@ThompsonHine.com, 937-443-6915. All of Thompson Hine LLP.
 
Key Notes
 
  – In response to ballistic missile tests, the Trump administration places 25 Iranian persons/entities on the Specially Designated Nationals List.
  – OFAC expands list of medical devices requiring authorization for export to Iran after the Obama administration had relaxed sanctions in this area.
 
New Sanctions in Response to Iran’s Ballistic Missile Program and Continued Support of Terrorism
 
On February 3, 2017, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a
Specially Designated Nationals (SDN) List Update, adding 13 individuals and 12 entities to the SDN List. In a press release, OFAC announced that the additional individuals and entities were sanctioned due to their involvement in “procuring technology and/or materials to support Iran’s ballistic missile program, as well as for acting for or on behalf of, or providing support to, Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).”
 
OFAC stated that the sanctions were “fully consistent with the United States’ commitments under the Joint Comprehensive Plan of Action (JCPOA),” and that the sanctions were an effort to counter Iran’s hostile activity that was outside the scope of the JCPOA. The sanctions block all property and interests in property of those added to the SDN List. Further, no U.S. person may engage in any transactions with those listed.
 
In taking this action, OFAC designated several networks and supporters of Iran’s ballistic missile procurement, including a critical Iranian procurement agent (Abdollah Asgharzadeh) and eight individuals and entities in his Iran- and China-based network, an Iranian procurement company and its Gulf-based network, and five individuals and entities that are part of an Iran-based procurement network connected to Mabrooka Trading. OFAC also designated a key IRGC-QF-run support network working with Hizballah, including IRGC-QF official Hasan Deghan Ebrahimi, his associates, Muhammad Abd-al-Amir Farhat and Yahya al-Hajj, and several affiliated companies in Lebanon. Finally, OFAC designated Ali Sharifi, an individual providing procurement and other services on behalf of the IRGC-QF.
 
The sanctions come after two recent ballistic missile tests by Iran, in addition to a recent attack on a Saudi naval vessel by Tehran-backed militants in Yemen. This action comes just days after National Security Advisor Michael Flynn put Iran “on notice” after its latest missile test. Prior to the implementation of the new OFAC sanctions, President Trump had posted several tweets regarding Iran’s behavior: “Iran is playing with fire – they don’t appreciate how ‘kind’ President Obama was to them. Not me!” and “Iran has been formally PUT ON NOTICE for firing a ballistic missile. Should have been thankful for the terrible deal the U.S. made with them!”
 
Upon announcing the sanctions on these 25 Iranian persons and entities, Flynn issued a
brief statement asserting that, “The international community has been too tolerant of Iran’s bad behavior. … The Trump Administration will no longer tolerate Iran’s provocations that threaten our interests.” The White House indicated that these sanctions were actually already “in the pipeline” before President Trump took office, and indicated that further actions may be taken. When asked whether his administration’s new posture could mean military action, President Trump answered, “Nothing’s off the table.”
 
While this placement of individuals and entities on the SDN List is not in itself a shift in policy from the Obama administration towards Iran, it does appear to indicate that President Trump will be strictly enforcing what his administration sees as the scope of authorized activities by Iran under the terms of the JCPOA. Iran immediately countered that it has the right to conduct ballistic missile tests for defensive purposes and that none of the missiles are designed to be capable of carrying nuclear warheads. However, the United States and other western countries state that in an agreement separate from the JCPOA, Tehran agreed to an eight-year extension of a ban on its ballistic missile program.
 
The immediate aftermath of the placement of these Iranian parties on the SDN List was that Iran held military exercises involving its missile and radar systems.
 
OFAC Updates the List of Medical Devices Requiring Authorization for Export to Iran
 
On February 2, 2017, OFAC updated the existing list of medical devices requiring specific licensing authorization for export to Iran. Pursuant to the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR), OFAC updated and clarified the scope of medical devices that are not authorized for exportation or reexportation pursuant to the general license at 31 C.F.R. § 560.530(a)(3)(i).
 
This update comes just over a month after the Obama administration issued a final rule in December 2016 amending ITSR to expand the scope of permissible exports or reexports of medicine and medical devices to Iran to cover a broader range of medical devices, in particular products used for nuclear medicine purposes. The general license for medical devices under § 560.530 authorizes export or reexport to Iran of medical devices that are generally subject to the Export Administration Regulations (EAR) and designated as “EAR99.” While OFAC offered no comment on the February 2 update, the expanded list appears to cover medical devices that might possibly have some use in a nuclear weapons research program. Iran called the decision by the Trump administration “inhumane,” stating that the equipment has diagnostic and treatment applications.
 
As a result of this update to the
List of Medical Devices Requiring Specific Authorization, exporters will need to obtain a specific OFAC license prior to exportation of certain medical supplies and equipment (such as oxygen generators, pumps with certain flow rates, and certain diagnostic medical imaging equipment). Further, the list expands the types of laboratory equipment which will require an OFAC authorization before exporting to Iran.

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COMM_a00315
.

S. Kovarovics: “US Leaves JCPOA Intact But Is Still Ratcheting Up Sanctions Against Iran”

 
When the United States lifted its nuclear-related sanctions as part of its Implementation of the Joint Comprehensive Plan of Action (JCPOA) in January 2016, it left in place several other sanctions mechanisms that could be implemented against Iran. On February 3, following Iran’s tests of certain ballistic missiles, the United States
designated twenty-five (25) additional individuals and entities as Specially Designated Nationals (SDNs) pursuant to certain of these remaining sanctions authorities.
 
Specifically, these designations were made pursuant to
Executive Order 13382, which targets proliferators of weapons of mass destruction, and
Executive Order 13224, which targets parties that commit or support terrorism.  According to the
press release announcing the designations, several of the parties are identified as part of certain procurement networks for Iran’s ballistic missile program.  Others who were designated were linked to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).
 
The addition of these individuals and entities to the SDN list under these Executive Orders means that non-US persons can now be subject to secondary sanctions if they engage in significant transactions with any of these newly designated parties.  So screening against the US SDN list continues to be of importance for non-US parties to minimize the risk of dealing with a designated party and potentially becoming a target of secondary sanctions.
 
For now, the United States has taken the position that these additional designations are consistent with its obligations under the JCPOA.  And that does appear to be the case.  At the same time, bills have been introduced in both the U.S. Senate and House of Representatives to impose additional sanctions against Iran.  It is unclear at this time whether these will eventually be passed or not.  What is clear is that one year into implementation of the JCPOA, the state of U.S. sanctions against Iran may not be static.

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COMM_a0416
. Gary Stanley’s ECR Tip of the Day

 
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059,
gstanley@glstrade.com
 

ITAR § 126.1(e)(2) requires that any person who knows or has reason to know of a proposed, final, or actual sale, export, transfer, reexport, or retransfer of articles, services, or data as described in paragraph ITAR § 126.1(e)(1)
must immediately inform the Directorate of Defense Trade Controls. Such notification or voluntary disclosure is mandatory, not optional.

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TEEX/IM TRAINING EVENTS & CONFERENCES

* What: In Uncertain Times, the Only Certainty is Enforcement
* When: March 28, 2017; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speakers: Melissa Proctor and Melissa Ho
* Register:
Here or Danielle McClellan, 540-433-3977,
danielle@learnexportcompliance.com.

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ENEDITOR’S NOTES

(Source: Editor) 

 
*
Sinclair Lewis (Harry Sinclair Lewis, 7 Feb 1885 – 10 Jan 1951, was an American author and playwright. In 1930, he became the first writer from the United States to receive the Nobel Prize in Literature. His novels included
Main Street, Babbit, Arrowsmith, and
Elmer Gantry.)
 – “Winter is not a season, it’s an occupation.”
 
*
Alfred Adler (Alfred W. Adler, 7 Feb 1870 – 28 May 1937, was an Austrian medical doctor, psychotherapist, and founder of the school of individual psychology.)
  – “A simple rule in dealing with those who are hard to get along with is to remember that this person is striving to assert his superiority; and you must deal with him from that point of view.”
  – “The only normal people are the ones you don’t know very well.”

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EN_a319
. 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: 27 Jan 2017: 82 FR 8589-8590: Delay of Effective Date for Importations of Certain Vehicles and Engines Subject to Federal Antipollution Emission Standards; and 82 FR 8590: Delay of Effective Date for Toxic Substance Control Act Chemical Substance Import Certification Process Revisions.

* 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: Last Amendment: 1 Feb 2017: 82 FR 8893-8894: Commerce Control List: Removal of Certain Nuclear Nonproliferation (NP) Column 2 Controls. 

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 17 Jan 2017: 
82 FR 7641-7642: Updated Statements of Legal Authority for the Export Administration 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: 11 Jan 2017: 82 FR 3168-3170: 2017 Civil Monetary Penalties Inflationary Adjustment
  – The only available fully updated copy (latest edition 24 Jan 2017) of the ITAR is 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 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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