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17-0215 Wednesday “The Daily Bugle”

17-0215 Wednesday “Daily Bugle”

Wednesday, 15 February 2017

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The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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  1. Commerce/BEA Requires Quarterly Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons 
  2. Commerce/BEA Requires Annual Survey of Foreign Direct Investment in the United States 
  3. Commerce/BEA Requires Quarterly Survey of Foreign Direct Investment in the U.S.–Transactions of U.S. Affiliate With Foreign Parent 
  4. Commerce/BEA Requires Quarterly Survey of Insurance Transactions by U.S. Insurance Companies With Foreign Persons 
  5. Commerce/BEA Requires Quarterly Survey of Transactions in Selected Services and Intellectual Property With Foreign Persons 
  6. Commerce/BEA Requires Annual Survey of U.S. Direct Investment Abroad 
  7. Commerce/BEA Requires Quarterly Survey of U.S. Direct Investment Abroad–Transactions of U.S. Reporter With Foreign Affiliate 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. Commerce/Census: “Tips on How To Resolve AES Fatal Errors” 
  4. DHS/CBP Posts Notice on ACE Importer/Consignee Create (“TI”) Message Requiring Importer Type for U.S. Entities 
  5. DoD/DSS Posts Notice Personnel Security Inquiries Being Closed on 24 Feb 
  6. State/DDTC: (No new postings.) 
  7. UK/DIT ECO Amends Export Control Order 2008 
  1. Expeditors News: “FDA Invalidates Certain Food Facility Registrations” 
  2. ST&R Trade Report: “U.S., Canada to “Tweak” NAFTA, Pursue Cargo Preclearance” 
  1. Global Trade News: “Weise Wednesday: How Will President Trump’s Initiatives Curtailing Government Regulations Impact CBP and the Trade Community?” 
  2. R.C. Burns: “SDN List Hit Holds Up Food Bank Funds in Britain” 
  1. ECTI Presents United States Export Control (EAR/OFAC/ITAR) Seminar Series in Las Vegas NV, 1-4 May 
  2. IT System: Modernization Webinar – Industry Meeting on DECCS Release #2, 23 Feb 
  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 (10 Feb 2017), FTR (15 May 2015), HTSUS (10 Feb 2017), ITAR (11 Jan 2017) 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. Commerce/BEA Requires Quarterly Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons
(Source: Federal Register) [Excerpts.]
 
82 FR 10739-10740: BE-185: Quarterly Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons
* AGENCY: Bureau of Economic Analysis, Commerce.
* ACTION: Notice of reporting requirements. …
* SUPPLEMENTARY INFORMATION: …


The BE-185 survey form and instructions are available on the BEA Web site. …


  – Who Must Report: (a) Reports are required from each U.S. person who had sales of covered financial services to foreign persons that exceeded $20 million during the previous fiscal year, or are expected to exceed that amount during the current fiscal year; or had purchases of covered financial services from foreign persons that exceeded $15 million during the previous fiscal year, or are expected to exceed that amount during the current fiscal year. Because the thresholds are applied separately to sales and purchases, the reporting requirements may apply only to sales, only to purchases, or to both.
    (b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
   What To Report: The survey collects information on transactions in the covered financial services between U.S. financial services providers and foreign persons.
  – How To Report: Reports can be filed using BEA’s electronic reporting system at www.bea.gov/efile. Copies of the survey forms and instructions, which contain complete information on reporting procedures and definitions, can be downloaded from the BEA Web site given above. Form BE-185 inquiries can be made by phone to BEA at (301) 278-9303 or by sending an email to be-185help@bea.gov.
  – When To Report: Reports are due to BEA 45 days after the end of each fiscal quarter, except for the final quarter of the reporter’s fiscal year when reports must be filed within 90 days. …
 
Brian C. Moyer, Director, Bureau of Economic Analysis.

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EXIM_a2

2. Commerce/BEA Requires Annual Survey of Foreign Direct Investment in the United States


(Source: Federal Register) [Excerpts.]
 
82 FR 10737-10738: BE-15: Annual Survey of Foreign Direct Investment in the United States
* AGENCY: Bureau of Economic Analysis, Commerce.
* ACTION: Notice of reporting requirements. …
* SUPPLEMENTARY INFORMATION: …
The BE-15 survey forms and instructions are available on the BEA Web site. …
  – Who Must Report: (a) Reports are required from each U.S. business enterprise in which a foreign person has a direct and/or indirect ownership interest of at least 10 percent of the voting stock in an incorporated business enterprise, or an equivalent interest in an unincorporated business enterprise, and that meets the additional conditions detailed in Form BE-15.
    (b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
  – What To Report: The survey collects information on the operations of U.S. affiliates of foreign companies.
  – How To Report: Reports can be filed using BEA’s electronic reporting system at www.bea.gov/efile. Copies of the survey forms and instructions, which contain complete information on reporting procedures and definitions, can be downloaded from the BEA Web site given above. Form BE-15 inquiries can be made by phone to (301) 278-9247 or by sending an email to be12/15@bea.gov.
  – When To Report: A completed report covering a reporting company’s fiscal year ending during the previous calendar year is due by May 31 (or by June 30 for reporting companies that use BEA’s eFile system). …
 
Brian C. Moyer, Director, Bureau of Economic Analysis.

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EXIM_a3

3. Commerce/BEA Requires Quarterly Survey of Foreign Direct Investment in the U.S.–Transactions of U.S. Affiliate With Foreign Parent
(Source: Federal Register) [Excerpts.]
 
82 FR 10739: BE-605: Quarterly Survey of Foreign Direct Investment in the United States–Transactions of U.S. Affiliate With Foreign Parent
* AGENCY: Bureau of Economic Analysis, Commerce.
* ACTION: Notice of reporting requirements. …
* SUPPLEMENTARY INFORMATION: …
The BE-605 survey forms and instructions are available on the BEA Web site. …
  – Who Must Report: (a) Reports are required from each U.S. business enterprise in which a foreign person has a direct and/or indirect ownership interest of at least 10 percent of the voting stock in an incorporated business enterprise, or an equivalent interest in an unincorporated business enterprise, and that meets the additional conditions detailed in Form BE-605.
    (b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
  – What To Report: The survey collects information on transactions between parent companies and their affiliates and on direct investment positions (stocks).
  – How To Report: Reports can be filed using BEA’s electronic reporting system at www.bea.gov/efile. Copies of the survey form and instructions, which contain complete information on reporting procedures and definitions, can be downloaded from the BEA Web site given above. Form BE-605 inquiries can be made by phone to (301) 278-9422 or by sending an email to be605@bea.gov.
  – When To Report: Reports are due to BEA 30 days after the close of each calendar or fiscal quarter; 45 days if the report is for the final quarter of the financial reporting year. …
 
Brian C. Moyer, Director, Bureau of Economic Analysis.

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EXIM_a4

4. Commerce/BEA Requires Quarterly Survey of Insurance Transactions by U.S. Insurance Companies With Foreign Persons


(Source: Federal Register) [Excerpts.]
 
82 FR 10738-10739: BE-45: Quarterly Survey of Insurance Transactions by U.S. Insurance Companies With Foreign Persons
* AGENCY: Bureau of Economic Analysis, Commerce.
* ACTION: Notice of reporting requirements. …
* SUPPLEMENTARY INFORMATION: …
The BE-45 survey form and instructions are available on BEA Web site. ….
  – Who Must Report: (a) Reports are required from U.S. persons whose covered transactions exceeded $8 million (positive or negative) during the prior calendar year, or are expected to exceed that amount during the current calendar year.
    (b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
  – What To Report: The survey collects information on cross-border insurance transactions between U.S. insurance companies and foreign persons.
  – How To Report: Reports can be filed using BEA’s electronic reporting system at www.bea.gov/efile. Copies of the survey forms and instructions, which contain complete information on reporting procedures and definitions, can be downloaded from the BEA Web site given above. Form BE-45 inquiries can be made by phone to BEA at (301) 278-9303 or by sending an email to be-45help@bea.gov.
  – When To Report: Reports are due to BEA 60 days after the end of each calendar quarter, or 90 days after the close of the calendar year. …
 
Brian C. Moyer, Director, Bureau of Economic Analysis.

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EXIM_a5

5. Commerce/BEA Requires Quarterly Survey of Transactions in Selected Services and Intellectual Property With Foreign Persons
(Source: Federal Register) [Excerpts.]
 
82 FR 10740-10741: BE-125: Quarterly Survey of Transactions in Selected Services and Intellectual Property With Foreign Persons
* AGENCY: Bureau of Economic Analysis, Commerce.
* ACTION: Notice of reporting requirements. …
* SUPPLEMENTARY INFORMATION: …
The BE-125 survey form and instructions are available on the BEA Web site. …
  – Who Must Report: (a) Reports are required from each U.S. person who had sales of covered services or intellectual property to foreign persons that exceeded $6 million during the prior fiscal year, or are expected to exceed that amount during the current fiscal year; or had purchases of covered services or intellectual property from foreign persons that exceeded $4 million during the prior fiscal year, or are expected to exceed that amount during the current fiscal year. Because the thresholds are applied separately to sales and purchases, the reporting requirements may apply only to sales, only to purchases, or to both.
    (b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
  – What To Report: The survey collects information on U.S. international trade in selected services and intellectual property.
  – How To Report: Reports can be filed using BEA’s electronic reporting system at www.bea.gov/efile. Copies of the survey forms and instructions, which contain complete information on reporting procedures and definitions, can be downloaded from the BEA Web site given above. Form BE-125 inquiries can be made by phone to BEA at (301) 278-9303 or by sending an email to be-125help@bea.gov.
  – When To Report: Reports are due to BEA 45 days after the end of each fiscal quarter, except for the final quarter of the reporter’s fiscal year when reports must be filed within 90 days. …
 

Brian C. Moyer, Director, Bureau of Economic Analysis.

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EXIM_a6

6. Commerce/BEA Requires Annual Survey of U.S. Direct Investment Abroad
(Source: Federal Register) [Excerpts.]
 
82 FR 10737: BE-11: Annual Survey of U.S. Direct Investment Abroad
* AGENCY: Bureau of Economic Analysis, Commerce.
* ACTION: Notice of reporting requirements. …
* SUPPLEMENTARY INFORMATION:
The BE-11 survey forms and instructions are available on the BEA Web site. …
  – Who Must Report: (a) Reports are required from each U.S. person that has a direct and/or indirect ownership interest of at least 10 percent of the voting stock in an incorporated foreign business enterprise, or an equivalent interest in an unincorporated foreign business enterprise, and that meets the additional conditions detailed in Form BE-11.
    (b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
  – What To Report: The survey collects information on the operations of U.S. parent companies and their foreign affiliates.
  – How To Report: Reports can be filed using BEA’s electronic reporting system at www.bea.gov/efile. Copies of the survey forms and instructions, which contain complete information on reporting procedures and definitions, can be downloaded from the BEA Web site given above. Form BE-11 inquiries can be made by phone to (301) 278-9418 or by sending an email to be10/11@bea.gov.
  – When To Report: A completed report covering a reporting company’s fiscal year ending during the previous calendar year is due by May 31. …
 
Brian C. Moyer, Director, Bureau of Economic Analysis.

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EXIM_a7

7. Commerce/BEA Requires Quarterly Survey of U.S. Direct Investment Abroad–Transactions of U.S. Reporter With Foreign Affiliate
(Source: Federal Register) [Excerpts.]
 
82 FR 10736: BE-577: Quarterly Survey of U.S. Direct Investment Abroad–Transactions of U.S. Reporter With Foreign Affiliate
* AGENCY: Bureau of Economic Analysis, Commerce.
* ACTION: Notice of reporting requirements. …
* SUPPLEMENTARY INFORMATION: …
The BE-577 survey forms and instructions are available on the BEA Web site. …
  – Who Must Report: (a) Reports are required from each U.S. person that has a direct and/or indirect ownership interest of at least 10 percent of the voting stock in an incorporated foreign business enterprise, or an equivalent interest in an unincorporated foreign business enterprise, and that meets the additional conditions detailed in Form BE-577.
    (b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
  – What To Report: The survey collects information on transactions between parent companies and their affiliates and on direct investment positions (stocks).
  – How To Report: Reports can be filed using BEA’s electronic reporting system at www.bea.gov/efile. Copies of the survey form and instructions, which contain complete information on reporting procedures and definitions, can be downloaded from the BEA Web site given above. Form BE-577 inquiries can be made by phone to (301) 278-9261 or by sending an email to be577@bea.gov.
  – When To Report: Reports are due to BEA 30 days after the close of each calendar or fiscal quarter; 45 days if the report is for the final quarter of the financial reporting year. …
 
Brian C. Moyer, Director, Bureau of Economic Analysis.

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OGSOTHER GOVERNMENT SOURCES

OGS_a18. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)


* U.S. Customs and Border Protection; NOTICES; Quarterly IRS Interest Rates Used in Calculating Interest On Overdue Accounts and Refunds on Customs Duties [Publication Date: 16 Feb 2017.]   

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When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. However, if the shipment is rejected, a Fatal Error notification is received.
 
To help you resolve AES Fatal Errors, here are some tips on how to correct the most frequent errors that were generated in AES for this month.
 
Fatal Error Response Code: 256
 
  – Narrative: USPPI Postal Code Not Valid for State
  – Reason: The Postal Code and State Code reported in the USPPI Address do not match.
  – Resolution: The reported USPPI State Code must match the state associated to the Postal Code. Verify the USPPI State Code and Postal Code combination, correct the shipment and resubmit.
 
Fatal Error Response Code: 649
 
  – Narrative: Quantity 1 Cannot Exceed Shipping Weight
  – Reason: Shipping Weight is reported in kilograms. When the Unit of Measure 1 requires kilograms, the first net quantity (Quantity 1) cannot exceed the Shipping Weight. Ensure the Shipping Weight includes the weight of the packaging materials.
  – Resolution: The first net quantity (Quantity 1) in kilograms cannot exceed the Shipping Weight in kilograms. Verify the Quantity 1 and Shipping Weight, correct the shipment and resubmit.
 
For a complete list of Fatal Error Response Codes, their reasons, and resolutions, see Appendix A – Commodity Filing Response Messages.
 
It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations. These errors must be corrected prior to export for shipments filed predeparture and as soon as possible for shipments filed postdeparture, but not later than five calendar days after departure.
 
For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.
 
  – Telephone: (800) 549-0595, select option 1 for AES.
  – Email: askaes@census.gov
  – Online: www.census.gov/trade
* * * * * * * * * * * * * * * * * * * *

(Source:
CSMS# 17-000081, 15 Feb 2017.)
 
The Importer Type is a conditional element in the TI application for Importer/Consignee Create/Update. It is required when the transmission includes a U.S. address. CBP is aware that ACE is currently accepting 5106 data submitted via the TI application for U.S. addressed entities without the Importer Type. Although the TI transmission is accepted, the data is not complete and this is causing downstream issues when the trade cannot use the IR (Importer of Record) number for entry or ISF (Importer Security Filing) processing. One error caused by this issue is an ACE Cargo Release (SE) rejection error “014 – Importer of Record Not on File”.
 
CBP has initiated a request to have the validation returned, but in the meantime filers and vendors should take extra caution to ensure they are correctly providing one of the four accepted Importer Types: “C” (CORPORATION), “P” (PARTNERSHIP), “I” (INDIVIDUAL), OR “S” (SOLE PROPRIETOR) when transmitting a TI with a U.S. address.
* * * * * * * * * * * * * * * * * * * *

 
Personnel Security (PCL) inquiries (option #2) to include e-QIP authentication resets of the DSS Knowledge Center will be closed on Friday, February 24, 2017, for internal training to deliver the highest quality customer service to Industry and Government callers. Normal Knowledge Center operations for PCL and e-QIP inquiries will resume on Monday, February 27, 2017. Reminder, the PCL portion of the DSS Knowledge Center typically closes on the last Friday each month.

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OGS_a613. State/DDTC: (No new postings.)
(Source: State/DDTC)
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OGS_a714. UK/DIT ECO Amends Export Control Order 2008
(Source: UK/DIT ECO)

The UK Dep’t for International Trade (DIT) and Export Control Organisation (ECO) has amended the Export Control Order 2008. Changes have also been made to schedules 2, 3 and 5 of the order.
 
The new order, The Export Control (Amendment) Order 2017 (S.I. 2017 No.85), comes into force on 22 February 2017.

The amending order makes a number of changes to schedule 2 to the main order, which lists the military goods, software and technology subject to export controls. These changes reflect amendments made to the EU Common Military List following agreement to alter this list in the export control regime known as the Wassenaar Arrangement. These changes need to be incorporated into UK control lists to reflect the UK commitment to the international non-proliferation regime.
 
The main changes are to the definitions (see the entries for library, spacecraft and software), ML1 (note on deactivation) and text revisions to ML9, ML13, ML17 and ML21. There are also a number of minor typographical changes made throughout the control entries in the schedule. The national control (PL5017) within this schedule has been deleted (on equipment and test models).
 
The order itself has been amended in article 2(1) to remove the reference to the deleted national control PL5017 from the definition of European military items. Article 26 is amended to ensure that a UK license now authorizes the export or transfer of minimum technology required for the installation of goods and software listed In Schedules 2 and 3 of the order. Article 30 is deleted (registration and record keeping – information security items) together with the associated references to article 30 in articles 28, 31 and 38. The deletion of article 30 means schedule 5 (Information security Items) has also been deleted.
Schedule 3 has been amended to make some minor amendments to the controls on firearms.
 
A separate notice will be issued to give details of associated changes required to open general export licenses.
 
ACTION FOR EXPORTERS
 
Exporters should familiarize themselves with the changes to the scope of the controls following these amendments to the order and schedules.
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NWSNEWS

 
On February 14, 2017 U.S. Customs and Border Protection (CBP) released Cargo Systems Messaging Service (CSMS) #17-000078 announcing that the Food and Drug Administration (FDA) has, in accordance with the FDA Food Safety Modernization Act (FSMA), invalidated food facility registrations that were not renewed during the 2016 registration cycle.
 
According to the notice, “Registrations that have been invalidated cannot be renewed and a new registration will have to be created.” The status of an individual registration may be viewed by logging into a FURLS Food Facility Registration Module account.
 
The CSMS can be accessed here.
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The U.S. and Canada announced plans for further trade-related cooperation Feb. 13 while downplaying the prospect of significant changes to NAFTA, which President Trump has said he wants to renegotiate. …
 
Click here for more information on how to prepare your business for these changes.
 
In a joint press conference following a meeting with Canadian Prime Minister Justin Trudeau in Washington, Trump said the U.S. has “a very outstanding trade relationship with Canada” and will be “tweaking it,” ostensibly as part of a NAFTA renegotiation. He asserted that U.S.-Canada trade is “a much less severe situation than what’s taking place” between the U.S. and Mexico, which he said has been an “extremely unfair” situation that he plans to “make … a fair deal for both parties.”
 
Trudeau emphasized that NAFTA has been a “groundbreaking economic partnership” that currently features more than $2 billion in cross-border trade each day and that millions of jobs depend on this partnership. Trudeau said future discussions should reflect the complete and total integration of the two economies and the need to “allow this free flow of goods and services.”
 
Trump added that the U.S. and Canada will “be doing certain things that are going to benefit both of our countries” economically. For example, he and Trudeau pledged to continue a dialogue on regulatory issues and to pursue shared regulatory outcomes that are “business-friendly, reduce costs, and increase economic efficiency without compromising health, safety, and environmental standards.” They also committed to establishing pre-clearance operations for cargo in light of the success of pre-clearance for travelers and said they intend to accelerate the completion of pre-clearance for additional cities and further expand this program. They also plan to examine ways to further integrate border operations, including by analyzing the feasibility of co-locating border officials in common processing facilities.
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COMMCOMMENTARY

COMM_a117
. Global Trade News: “Weise Wednesday: How Will President Trump’s Initiatives Curtailing Government Regulations Impact CBP and the Trade Community?”

 
Welcome to Weise Wednesday! Every week we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. Please send questions to AskGeorge@IntegrationPoint.com.
 
Q: How will President Trump’s initiatives curtailing government regulations impact CBP and the trade community?
 
A: President Trump has made it clear that he intends to reduce the impact of government regulations on the business community. 
 
CURTAILING REGULATORY ACTIONS
 
On January 20, 2017, Chief of Staff Reince Priebus sent a memo to the heads of executive departments and agencies directing them to cease moving forward on any regulatory actions until it can be reviewed by “a department or agency head appointed or designated by the President after noon on January 20, 2017.” 
 
More recently, the President issued an executive order stating that “unless prohibited by law, whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.”  
 
The order further provides that the total incremental costs of all new regulations, including repealed regulations, to be finalized this year in a department or agency “shall be no greater than zero.”  The stated objective is that any incremental costs associated with any new regulation shall “be offset by the elimination of existing costs associated with at least two existing regulations.” 
 
The Director of the Office of Management and Budget is directed to provide guidance to departments and agencies in carrying out this order and authorized to make exceptions to the order under prescribed circumstances, such as “regulations issued with respect to a military, national security, or foreign affairs function of the United States.”
 
WHAT THIS MEANS FOR CBP
 
Although many questions exist as to how this executive order will be interpreted – on its face, it applies to all federal agencies, which would include DHS and CBP.  As a result of the Priebus memo and this executive order, all regulations contemplated by CBP, including those that were in process and previously published in the Federal Register, have been halted awaiting clarification of how the executive order applies to CBP. 
 
The situation in CBP is further complicated by the fact that a Commissioner has not yet been “appointed by the President,” and it does not appear that Acting Commissioner McAleenan currently has the authority to sign off on new regulations.
 
CBP is also unique in that regulations impacting commercial trade have to be reviewed by the Secretary of the Treasury and the Secretary of Homeland Security.   As of today, the Senate has confirmed the Secretary of Homeland Security, but has not yet confirmed the Secretary of the Treasury or the Director of the Office of Management and Budget.  It is expected that those two positions will be confirmed very soon.
 
WHAT THIS MEANS FOR THE TRADE COMMUNITY
 
What this means to the trade community is that we will have to wait to see how all of this unfolds in the coming weeks and months.  Meanwhile, important regulatory initiatives affecting the movement of goods will remain in limbo on important issues like ACE and the Air Cargo Advance Screening (ACAS) program. 
 
It seems that CBP can make a credible argument that many, if not most, of the regulations they promulgate should be exempt from the executive order because of their impact on national security.  But until all of the key players are in place, it does not appear that CBP will have the opportunity to make their case.

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COMM_a2
18. R.C. Burns: “SDN List Hit Holds Up Food Bank Funds in Britain”

(Source:
Export Law Blog
. Reprinted by permission.)
 
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC,
Clif.Burns@bryancave.com
, 202-508-6067)
 
So, UK accountant Mamunal Islam was minding his own business trying to raise money for a Bedford food bank. He thought maybe he’d sell tickets to a film through Eventbrite and use the proceeds to help people in his hometown who needed food. He had never even heard of this obscure agency in the United States called the Office of Foreign Assets Control until San Francisco based Eventbrite told him that they were keeping his money and the hungry people in Bedford, well, they could eat cake. (Eventbrite didn’t really say the last part.)
 
It seems that Eventbrite thought that Mamunal Islam was a match on the SDN [Specially Designated Nationals] List, and although it never said that the food bank customers could eat cake, it did, according to an article on BBC News, say this:
 
Eventbrite said it was “truly sorry” but “a person with a very common name is more likely to make the list.” … Eventbrite said the Office of Foreign Assets Control (OFAC) had only recently added “M Islam” to its list. … A spokesman for the company said: “As a US company, Eventbrite must comply with US law. “In this instance, a payment to the organiser was temporarily held because of a potential OFAC name match. “Whether that is J Smith or M Islam does not make the slightest difference.”
 
To begin with, I don’t know what SDN List Eventbrite was using but it’s certainly not the one that OFAC publishes. Here’s every individual on the SDN List with Islam in his/her name:
 
ATABIEV, Islam
SDN
ATABIYEV, Islam
SDGT
ATABIYEV, Islam Seit-Umarovich
SDGT
ABU ISLAM, Karim
SDGT
ABU ISLAM
SDGT
AL-SURIR, Abu Islam
SDGT
AL-GADDAFI, Saif al-Islam
LIBYA2
AL-QADHAFI, Saif al-Islam
LIBYA2
EL-QADDAFI, Seif al-Islam
LIBYA2
ELKADDAFI, Saif al-Islam
LIBYA2
GADDAFI, Saif al-Islam
LIBYA2
GADHAFI, Saif al-Islam
LIBYA2
GHADAFFI, Saif al-Islam
LIBYA2
GHATHAFI, Saif al-Islam
LIBYA2
QADDAFI, Saif al-Islam
LIBYA2
QADHAFI, Saif al-Islam
LIBYA2
DEL ROSARIO SANTOS, Ahmad Islam
SDGT
 
I don’t see any “M Islam” there, do you?  I don’t see anything even close other than “Islam” – which should not be cause to say that “Mamunal Islam” is a hit.  If sharing one part of a name is enough, than Eventbrite would need to block every Sally, Carol, José, Mohammed, Ahmed, Tom, Robert, Paul and James, because all those names also show up on the list.
 
Beyond this, Eventbrite had already burned the barn after the horses had escaped, so to speak. If Mamunal Islam was really on the list – and he is not – then it would have been illegal to sell any tickets on his behalf.  By the time there were actual funds to block, the rules had already been broken. So it’s not clear why Eventbrite didn’t tell Mr. Islam that there was an issue when he signed up or registered a new event rather than after he’d already sold a bunch of tickets for the food bank event.
 
Ultimately Eventbrite reversed its action after Mr. Islam provided “information confirming his country of birth” thereby proving, I suppose, that he is not the second son of Muammar Gaddafi.  So there was, ultimately, a happy ending, more or less, for Mr. Islam, Eventbrite, and the food bank in Bedford.
 
I understand that OFAC is in the business of scaring people to death and that Eventbrite’s reaction was not entirely irrational.  I’m also guessing that Eventbrite was the victim of one of the numerous paranoid screening services that market their value by claiming to screen against a semi-dubious list of sixty-two billion names of dodgy people. Last, and perhaps least, I’m sure “Islam” is scarier to an Internet company in San Francisco than, say, “Sally” or “Carol.”  Still, it seems that common sense should have prevailed here sooner than it did.
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TEEX/IM TRAINING EVENTS & CONFERENCES

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19. ECTI Presents United States Export Control (EAR/OFAC/ITAR) Seminar Series in Las Vegas NV, 1-4 May
(Source: Jill Kincaid; jill@learnexportcompliance.com)

* What: United States Export Control (EAR/OFAC/ITAR) Seminar Series in Las Vegas, NV
* When: EAR/OFAC Seminar: May 1-2, 2017; ITAR Seminar: May 3-4, 2017
* Where: Las Vegas, NV: Treasure Island Hotel & Casino
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker Panel: Scott Gearity, John Black & Steve Wagner
* Register: Here, or Jessica Lemon, 540-433-3977, jessica@learnexportcompliance.com.
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20. IT System: Modernization Webinar – Industry Meeting on DECCS Release #2, 23 Feb

* What: This webinar provides an overview of DECCS release #2, as well as a question and answer session
* When: Thursday, 23 February 2017 from 11:30am – 12:30pm (Eastern)
* Where: Your computer
* Sponsor: Dept. of State/DDTC
* Register: Not necessary, to join the webinar, go to https://irmedip.adobeconnect.com/chatwsme/. If you are unable to join the webinar session but would like to join via the conference line:
 
  – Domestic Participants Toll Free Number: 877-336-1829; Access Code: 730 7668
  – Overseas Participants International Number: 636 651 0002; Access Code: 730 7668

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ENEDITOR’S NOTES

(Source: Editor) 

 
* Jeremy Bentham (15 Feb 1748 – 6 Jun 1832, was an English philosopher, lawyer, and social reformer. He is regarded as the founder of modern utilitarianism.)
  – “The power of the lawyer is in the uncertainty of the law.”
 
* John Witherspoon (John Knox Witherspoon, 5 Feb 1723 – 15 Nov 1794, was a Scottish-American Presbyterian minister and a Founding Father of the United States.)
  – “Never rise to speak till you have something to say; and when you have said it, cease.”
 
* Galileo Galilei (15 Feb 1564 – 8 Jan 1642, was an Italian polymath: astronomer, physicist, engineer, philosopher, and mathematician, he played a major role in the scientific revolution of the seventeenth century. He has been called the “father of observational astronomy”, the “father of modern physics”, the “father of scientific method”, and the “father of science”.
  – “In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual.” 

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. 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:
10 Feb 2017: 82 FR 10434-10440: Inflation Adjustment of Civil Monetary Penalties. 
 
*
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: 10 Feb 2017: Harmonized System Update 1701, containing 1,295 ABI records and 293 harmonized tariff records.  
  – 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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