17-0313 Monday “The Daily Bugle”

17-0313 Monday “Daily Bugle”

Monday, 13 March 2017

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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[No items of interest noted today.] 

  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. DHS/CBP Sends Out February 2017 ACE Monthly Trade Update 
  4. State/DDTC Reschedules Its 15 March In-House Seminar to 29 March  
  5. EU Prolongs Sanctions over Actions Against Ukraine’s Territorial Integrity Until 15 September 2017 
  6. EU Posts Combined Nomenclature – Dual Use Codification Correlation Table 
  7. EUP2P Consortium Posts Summary of Activities in Serbia, Côte d’Ivoire, UAE, Poland and Morocco 
  1. Financial Times: “U.S. Loses Focus on White-Collar Crime, Lawyers Say” 
  2. ST&R Trade Report: “General Declaration, Warehouse Submission Under Review by CBP” 
  3. ST&R Trade Report: “Man Faces Substantial Sentence for Illegally Exporting Controlled Technology to Ukraine”  
  1. C.T. Cherniak: “It Is Best To Sever Ties With Representatives Who Commit Export Controls Infractions” 
  2. M.S. Casey, B.C. Hanifin & E. Siegle: “Export Control Enforcement In The Wake Of The ZTE Resolution” 
  3. T.A. Soliman, M.R. Cohen & T.J. Delaney: “Chinese Telecom Giant ZTE Makes History with Guilty Plea and $1.19 Billion Settlement for Sending US Export-Controlled Goods to Iran and North Korea” 
  1. ECTI Presents Global Export Control Classification Master Session Webinar – 6 Apr 
  1. Monday List of Ex/Im Job Openings: 113 Jobs Posted 
  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 (24 Feb 2017), FACR/OFAC (10 Feb 2017), FTR (15 May 2015), HTSUS (7 Mar 2017), ITAR (11 Jan 2017) 



[No items of interest noted today.]

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OGS_a11. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

* U.S. Customs and Border Protection; NOTICES; Country of Origin Determinations: Certain Data Storage Products [Publication Date: 14 March 2017.] 

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DHS/CBP Sends Out February 2017 ACE Monthly Trade Update

CSMS# 17-000139, 10 March 2017.)
Trade Policy Updates
Below you will find the February 2017 ACE Monthly Trade Update. This month’s update includes information on: the next ACE Deployment, ACE Portal 101 Information, new and updated ACE PGA documentation, plus much more. Please distribute to all users within your ACE account.

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State/DDTC Reschedules Its 15 March In-House Seminar to 29 March

Due to the impending winter storm affecting the greater Washington D.C. area, the DDTC In-House Seminar previously scheduled for 15 March has been rescheduled for Wednesday, 29 March, 2017. All registered attendees will receive a separate notice via email. If additional information is required, please contact Garrett Gardner-Graves at

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EU Prolongs Sanctions over Actions Against Ukraine’s Territorial Integrity Until 15 Sep 2017

On 13 March 2017, the Council prolonged the restrictive measures over actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine for a further six months,
until 15 September 2017. The measures consist of asset freezes and a travel bans.
The assessment of the situation did not justify a change in the sanctions regime. The list was reviewed and the Council removed two deceased persons from the list of persons and entities subject to these restrictive measures, which now apply to 150 persons and 37 entities. Identifying information and statement of reasons for listing related to these persons and entities were updated as necessary.
The legal acts are available in the EU Official Journal of 14 March 2017. They were adopted by written procedure.
These restrictive measures were introduced in March 2014 and were last extended in September 2016. Several EU measures are in place in response to the crisis in Ukraine, also including:
  – Economic sanctions targeting specific sectors of the Russian economy, currently in place until 31 July 2017;
  – Restrictive measures in response to the illegal annexation of Crimea and Sevastopol, limited to the territory of Crimea and Sevastopol, currently in place until 23 June 2017.
Relevant Documents

  – List of persons and entities under EU restrictive measures over the territorial integrity of Ukraine (March 2017)

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EU Posts Combined Nomenclature – Dual Use Codification Correlation Table

The Combined Nomenclature – Dual Use (CN-DU) codification correlation table assists in connecting Combined Nomenclature codes with the corresponding Export Control Dual-Use codification numbers.
The CN-DU correlation table – March 2017 can be found

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EUP2P Consortium Posts Summary of Activities in Serbia, Côte d’Ivoire, UAE, Poland, and Morocco

The EU Partner-to-Partner (“EUP2P”) Consortium has posted the below five summaries of its activities in Serbia, Côte d’Ivoire, UAE, Poland, and Morocco (Dec 2016 to Feb 2017). 
In the framework of the EUP2P Project on Export Control of Dual-Use Goods the first national training session dedicated to Customs topics took place on 7-8 December in Belgrade, Serbia.
The focus of the seminar which addressed relevant departments in the Serbian Customs Administration and licence authority involved in strategic trade controls was on role of different customs department in export control, exchange of information, coordination, cooperation and  and mapping of the export control industry. The latest had also a practical dimension with an exercise to have a more practical approach which supported Serbian partners in grasping the issue and work further on it.
As a result, the participants got the chance to discuss issues such as implementation and enforcement of dual-use export control law and issues, questions and challenges that came up and have been raised since the last time colleagues from Customs supporting the EUP2P project on export control of dual-use items visited the Serbian Customs Administration.
EU Experts from Belgium, Netherlands and Slovenia supported this event by presenting national practices, case studies and exercise.
In the framework of the EUP2P Arms Trade Treaty (ATT) project, an ad hoc seminar for Côte d’Ivoire was organized 7-8 December in Abidjan.
Côte d’Ivoire ratified the ATT in February 2015 and had requested assistance for an awareness raising seminar addressed to custom and police officers, parliamentarians and government officials. The seminar was organized in close cooperation with the National Commission against the Proliferation of Small Arms and Light Weapons (ComNat-ALPC).
The first day started with a presentation of the partner country on the current status of ATT implementation followed by a discussion on the controlled activities of the ATT and licensing procedures. In the afternoon topics were inter-agency cooperation, risk management, prosecutions and sanctions. The second day was dedicated to the role of regional organizations and the synergies between the ATT and the UN Program of Action. The experts met an interested and curious audience and many obstacles to national ATT implementation could be identified and clarified. The participants expressed their gratitude for the assistance and the hope for a continuation of the support in the next phase of the EU P2P ATT project.
The event was supported by experts from Belgium, the Netherlands, South Africa and UK.
The EU P2P Project on Dual-Use Goods Trade Control co-organised with the Executive Office of the Committee for Goods and Material Subject to Import and Export Control -Ministry of Foreign Affairs of the United Arab Emirates- the third of three workshops on dual-use goods trade control on 10 and 11 January 2017 in Dubai.
This session was dedicated to the interdiction of shipments that may contribute to the proliferation of weapons of mass destruction, and to inter-agency cooperation. The latter one took the form of a practical exercise, based on the simulation of a scenario involving potential proliferators and the diversity of authorities and stakeholders at play in the application of the controls.
Participants from key authorities in charge of controlling risks associated to the international transactions on dual-use goods were represented and actively participated in lectures and exercises conducted by European experts. The UAE partners emphasized the importance of the collaboration with the European Union through such training and exercises for maintaining the national trade control system up-to-date with the international best practices and enhancing its effectiveness and efficiency further on.
The EUP2P Consortium was invited by the National Commission on Dual-Use Goods of Morocco to meet and exchange with the General Secretariat of the Government on the dual-use trade controls, in Rabat, on February 7, 2017.
The objective of the meeting was to present and discuss the main principles for controlling the international trade of dual-use items and technologies as set, notably, by the United Nations Security Council Resolution 1540 (2004) including the origins, characteristics and worldwide implementation of trade controls. The meeting took place at a time when the General Secretariat of the Government was conducting a first assessment of the draft law elaborated by the competent ministries participating in the National Commission. This is the first step toward the foundation of a national dual-use goods’ trade control system.
The European example and international best practices for implementing trade controls were extensively commented and fuelled the discussions on a future state-of-the-art Moroccan national system.
On 14-15 February, a study visit for Azerbaijan, Georgia and Moldova took place within the framework of the EU Council Decision 2015/2309 on the promotion of effective arms export control to Warsaw, Poland.
The representatives of the beneficiary countries will have the opportunity to visit the Cargo Terminal of the Airport in Warsaw and talk about customs profiling and inter-agency cooperation. Further focal points of the event will be discussion on end-use verification, goods identification and transit provision for conventional arms and military items.
In addition to customs and licensing officer from Poland, EU experts from Croatia, Estonia and Germany supported the event.

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Financial Times: “U.S. Loses Focus on White-Collar Crime, Lawyers Say”

Donald Trump often promises to crack down on violent criminals. But he has not had much to say about the crooks who batter bank accounts rather than people. The president’s zeal on street crime represents a shift in enforcement priorities compared with the Obama administration, which secured more than $20bn in corporate fines and penalties in its final weeks alone, from companies including Rolls-Royce, Volkswagen and Deutsche Bank. …

Under Mr Trump, the US Department of Justice may not overhaul its white-collar crime stance as thoroughly as its approach to areas such as voting rights, where the government recently switched sides in a high-profile case. But prosecutions of securities law and Foreign Corrupt Practices Act (FCPA) violations may be overshadowed by its focus on traditional crime, say some white-collar defence lawyers. … 

[Editor’s note: to read the entire article, click on the source link above.]
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ST&R Trade Report: “General Declaration, Warehouse Submission Under Review by CBP”

CBP is seeking comments by May 12 on the proposed extension of the following information collections.
CBP Form 7507, General Declaration (Outward/Inward) Agriculture, Customs, Immigration, and Public Health. An aircraft commander or agent must file this form at the time of arrival for all aircraft required to enter pursuant to 19 CFR 122.41, as well as at the time of clearance for all aircraft departing to a foreign area with commercial airport cargo pursuant to 19 CFR 122.72. CBP Form 7507 collects information about the flight routing, the numbers of passengers embarking and disembarking, the number of crew members, a declaration of health for the persons on board, and details about disinfecting and sanitizing treatments during the flight. The form also includes a declaration attesting to the accuracy, completeness, and truthfulness of all statements contained in the form and in any document attached to the form.
CBP Form 300, Bonded Warehouse Proprietor’s Submission. This form must be filed by each warehouse proprietor within 45 days of the end of their business year. The information collected helps CBP determine all bonded merchandise that was entered, released, and manipulated in the warehouse. CBP is proposing that this information collection be extended with a reduction to the burden hours.

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ST&R Trade Report: “Man Faces Substantial Sentence for Illegally Exporting Controlled Technology to Ukraine”

The Department of Justice announced March 7 that a lawful permanent resident of the U.S. and citizen of Ukraine has been arrested on federal charges of exporting controlled military technology from the U.S. to end-users in Ukraine without the required licenses. According to DOJ, the devices obtained by the defendant and his co-conspirators included some of the most highly powerful and technologically sophisticated night vision rifle scopes and thermal imaging equipment available.
DOJ indicates that in order to induce U.S.-based manufacturers and suppliers to sell them the export-controlled devices and to evade applicable controls the defendant and his co-conspirators falsely purported to be U.S. citizens and concealed the fact that they were exporters. They also recruited, trained, and paid other U.S.-based individuals to export the controlled devices to Ukraine via various freight forwarding companies. Among other things, the defendant and his co-conspirators instructed the U.S.-based individuals to falsely describe the nature and value of the equipment they were attempting to export. In addition, to conceal their identities as well as the true destination of the rifle scopes and thermal imaging equipment the defendant and his co-conspirators instructed that the items be shipped using false names and addresses.
The export of military-grade rifle scopes and thermal imaging equipment requires a license from either the Department of State or the Department of Commerce. Both of these agencies have placed restrictions on the export of items that they have determined could make a significant contribution to the military potential and weapons proliferation of other nations and that could be detrimental to the foreign policy and national security of the U.S.
If convicted, the defendant faces up to 20 years in prison and a $1 million fine.
[Editor’s note: the official Department of Justice press release is available
, and was included in the Wednesday, 8 March 2017, Daily Bugle.]

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C.T. Cherniak: “It Is Best To Sever Ties With Representatives Who Commit Export Controls Infractions”

* Author: Cyndee Todgham Cherniak, Esq., LexSage PC,
cyndee@lexsage.com, 416-307-4168.
On February 9, 2017, Stewart Bell wrote an article for the Financial Post entitled ”
Canadian company investigating branch in Iraq after logo spotted in photos of missile test“. It is never good to see your company name in the news – let alone being associated with a missile test in a country subject to United Nations sanctions. This story should cause Canadian companies, even companies which are not in the aerospace and defense industries, to revisit their internal controls or consider ways to improve their business practices.
Advanced Development Group Ltd. (“ADG”), a Canadian company, was surprised to see their
corporate logo and name on a piece of equipment associated with a missile test in Iraq.  ADG is a construction company and not in the defense industries.  So, ADG was not the manufacturer of the missile technology.   How could their name be so prominently displayed in a photograph on a missile?  More importantly, was their foreign agent/representative responsible?
To control the reputational damage and prevent future non-compliance, the company immediately took important steps:
  (1) ADG severed its relationship with its agent/representative in Iraq;
  (2) ADG commenced an investigation (on the ground in Iraq); and
  (3) ADG commenced an investigation of their internal controls in Canada.
The issues for the company to determine are:
  (1) Was their logo used without permission by the company’s Iraq agent/foreign representative and was he selling goods manufactured by some other company (passing the goods off as manufactured by the Canadian company)?
  (2) Were the Canadian company’s goods (parts of goods) in the photo?
  (3) If the goods were Canadian goods, were they exported without an export permit required under the Export and Import Permits Act or were they properly exported and re-transferred or diverted?
  (4) Were the goods exported from Canada subject to Canada’s economic sanctions under the United Nations Act and
United Nations Iraq Regulations (Canada imposes a prohibition on the export of arms and related material to any person in Iraq)?
The company also has many internal compliance issues to resolve.  When there is one rogue representative, there may be more. If their is a gap in the compliance program, it must be filled.
Canadian companies doing business in Iraq should be aware and learn from the experience of ADG. Canadian, U.S. and Western European firms have an advantage when bidding on contracts in Iraq because of their reputation for quality.
This situation provides an excellent lesson in export controls corrective action.  When an issue is uncovered, it is important to sever the company’s relationship with any rogueagent/ representative.  To maintain a relationship might be perceived as approval of the behaviour.  A message needs to be sent to all foreign representatives.  Further, all foreign agents and representatives should be provided with a compliance policy and asked to sign the policy acknowledging that the policy has been read.  Further, the company should offer training to foreign agents/ representatives so that they know what is expected of them and, more importantly, they know what is required under Canadian laws.  Agents/representatives in countries that are higher risk (e.g., they are subject to Canadian economic sanctions or regularly do business with countries subject to Canadian sanctions) should undergo a review to ensure there are no problems.
What is also important is looking at the internal controls in Canada.  In the ADG case, they should determine whether goods were shipped without an export permit.

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M.S. Casey, B.C. Hanifin & E. Siegle: “Export Control Enforcement In The Wake Of The ZTE Resolution”

* Authors: Michael S. Casey, Esq.,
Michael.Casey@ropesgray.com, +44 20 3201 193 (London); Brendan Hanifin,
Brendan.Hanifin@ropesgray.com, +1 312 845 1311 (Chicago); and Emerson Siegle,
Emerson.Siegle@ropesgray.com, +1 202 508 4744 (Washington, DC).  All of Ropes & Gray LLP.
On March 7, 2017, China-based telecommunications giant Zhongxing Telecommunications Equipment Corp. entered into settlement agreements with multiple U.S. regulators to resolve alleged violations of U.S. sanctions and export control laws, agreeing to pay a combined penalty of $892 million. The combined penalty, which is subject to court approval and would balloon to $1.19 billion if ZTE violates the terms of its settlement agreements, would represent the largest fine and forfeiture imposed to date in an export control case. This article provides an overview of the ZTE settlements and discusses what the combined resolution may portend for future sanctions and export control enforcement.
Factual Background
Collectively, the settlements allege that, from 2010 through mid-2016, ZTE implemented a company-wide strategy to evade U.S. economic sanctions and export control laws by building, operating and servicing telecommunications networks in Iran using U.S.-origin equipment and software. ZTE ordered, transferred and facilitated the delivery of U.S.-origin goods valued at nearly $40 million, including nearly 275,000 items that were controlled for export by the Export Administration Regulations (“EAR”) for national security, encryption, regional security or anti- terrorism reasons. The
U.S. Department of Commerce
Bureau of Industry and Security (“BIS”) alleged that ZTE also sent 283 shipments of controlled items to North Korea in contravention of the EAR. ZTE took various steps to conceal its unlawful conduct, including (1) designating Chinese intermediary companies as the shippers on internal paperwork; (2) commingling U.S.- origin items with non-U.S. origin items; (3) omitting U.S.-origin items from packing lists and other shipping documentation; and (4) using code names for – and deleting references to- Iran and Iranian customers in internal communications.
In March 2012, Reuters reported on ZTE’s dealings with Iran, including the company’s contract with the Telecommunication Company of Iran (“TCI”) and a 907-page ZTE packing list that included U.S.-origin items. In addition, ZTE came under investigation by the House Select Committee on Intelligence, the
U.S. Treasury Department‘s
Office of Foreign Assets Control (“OFAC”), and other agencies. Around that time, ZTE claimed that it had ceased performance of its contract with TCI and reported that it had wound down all re-exports of U.S.- origin goods to Iran. However, the U.S. government claimed that ZTE’s suspension of activities with Iran was only temporary. In November 2013, ZTE allegedly resumed its dealings with Iran and took deliberate steps to conceal its conduct, including (1) trans-shipping goods destined for Iran via an intermediary in China; and (2) instructing IT personnel to alter or remove references to Iran in the company’s internal databases.
Overview of Settlement Agreements
To resolve its potential liability, ZTE entered into coordinated settlement agreements with BIS, OFAC and the U.S. Department of Justice.
BIS: ZTE agreed to pay a civil penalty of $661 million, with $300 million suspended during a seven-year probationary period, for violating the EAR in connection with its dealings with Iran and North Korea. This civil penalty is the largest monetary fine that BIS has ever imposed on a party for export control violations.
OFAC: ZTE agreed to pay a civil penalty of $100,871,266 for committing 251 apparent violations of the Iranian Transactions and Sanctions Regulations. The penalty amount falls just below the statutory maximum of $106,180,280 and is the largest settlement that OFAC has entered into with a nonfinancial entity for sanctions violations.
DOJ: ZTE agreed to plead guilty to one count of conspiring to violate the International Emergency Economic Powers Act (“IEEPA”), one count of obstruction of justice, and one count of making a material false statement to federal investigators. ZTE agreed to pay a fine of $286,992,532, a criminal forfeiture in the amount of $143,496,266, and a special assessment of $1,200. In addition, ZTE is required to retain an independent corporate compliance monitor to review and report on the company’s export compliance program. If approved by the court, the criminal fine of over $286 million would represent the largest criminal fine levied in connection with an IEEPA prosecution.
Iran-Related Enforcement Remains a Top Priority
The ZTE settlements illustrate that the U.S. government remains committed to enforcing existing economic sanctions and export control laws targeting Iran. Despite relaxation of certain U.S. sanctions pursuant to the Joint Comprehensive Plan of Action (“JCPOA”), Iran continues to be perceived as a significant national security threat to the United States. Consistent with this sentiment, four out of the five civil penalties announced by OFAC in 2017 have involved alleged violations of the Iranian sanctions. In addition, recent reports suggest that the Trump administration specifically identified the ZTE case as an opportunity to secure a “quick win” in the weeks following President Trump’s inauguration and, possibly, to signal a new, tougher U.S. foreign policy. [FN/1] Notably, in a press release issued by BIS, Secretary of Commerce Wilbur Ross commented that, “Under President Trump’s leadership, we will be aggressively enforcing strong trade policies with the dual purpose of protecting American national security and protecting American workers.”
Looking forward, the Trump administration is expected to actively “police” Iran’s compliance with the JCPOA as President Trump promised on the campaign trail. In addition, the Trump administration may continue to ratchet up U.S. sanctions – i.e., designate additional individuals and entities within and outside of Iran – in an effort to deter Iran’s ballistic missile testing. Based on the administration’s statements to date, companies that violate U.S. sanctions and export controls targeting Iran can expect to be pursued aggressively, particularly if the underlying conduct potentially implicates U.S. national security interests (as in the ZTE case).
The Trump Administration May Be Signaling a New Posture Toward China
The ZTE settlement also has the potential to place greater strain on the United States’ relationship with China. On March 8, 2016, during the pendency of its investigation, BIS added ZTE and several affiliates to the Entity List. As a result, a specific license was required for exports, re-exports and in-country transfers to ZTE of items subject to the EAR, and license requests were subject to a presumption of denial. Less than three weeks later, in an unprecedented step, BIS reversed course and issued a temporary general license that essentially authorized all exports and other transfers of items subject to the EAR to ZTE. At the time, some observers speculated that the reversal in policy was an attempt by the Obama administration to placate Chinese leadership. [FN/2]
During his campaign, President Trump decried the impact of foreign interests on the U.S. economy and signaled changes to the United States’ policy toward China. For example, President Trump pledged to instruct the U.S. Trade Representative to pursue cases against China for unfair trade practices in U.S. courts and at the World Trade Organization. It is possible that the ZTE resolution marks the beginning of a new, more aggressive enforcement posture regarding dealings with China. Among other steps, the Trump administration may encourage increased scrutiny of transactions involving Chinese entities through the Committee on Foreign Investment in the United States and
Defense Security Service review processes.
Multi-Agency Enforcement Actions Produce Massive Penalties
As is increasingly common in sanctions and export control enforcement actions, ZTE’s conduct was investigated over a multiyear period by a slew of federal government agencies acting in close coordination. In its press release, the DOJ noted that the ZTE resolution “is an excellent example of cooperation among multiple U.S. agencies to uncover illegal technology transfers and make those responsible pay for their actions.” The DOJ’s release cited cooperation by four different federal agencies (DOJ, BIS,
FBI and the
U.S. Department of Homeland Security). OFAC and the House Select Committee on Intelligence appear to have conducted their own investigations as well. These multi-agency enforcement actions tend to result in large settlements and present a host of logistical challenges to companies under investigation.
BIS Has Become Increasingly Aggressive in Bringing Enforcement Actions
The ZTE resolution is the latest in a string of high-profile enforcement actions in which BIS has played a more active role. Historically, BIS did not bring major enforcement actions or collect significant penalties from individuals or entities that violated export control laws. As recently as 2009, BIS investigations of export control violations netted only $455,409 in criminal fines, approximately $1.5 million in forfeitures, and just over $14.5 million in civil penalties. [FN/3]
Over the last several years, BIS has become increasingly aggressive in pursuing export control violators and imposing significant penalties. For example, following a lengthy BIS investigation,
Weatherford International agreed in 2013 to pay an administrative civil penalty of $50 million to resolve allegations that it had violated the EAR by exporting controlled U.S.- origin items to Cuba, Iran and Syria. At the time, Weatherford’s settlement was the largest penalty that BIS had ever levied. ZTE’s agreement to pay $661 million to BIS (with $300 million suspended) dwarfs the Weatherford settlement and sets a new high-water mark for EAR enforcement. The ZTE resolution also is unique in that a majority of the combined total penalty is earmarked for BIS, as opposed to another investigating agency.
Recent news reports suggest that BIS also is investigating potential export control violations involving other multinational companies. Notably, BIS’s settlement with ZTE was finalized five days after the agency’s participation in a high-profile raid of
Caterpillar Inc.‘s corporate offices in connection with an investigation into, inter alia, the company’s export filings involving shipments to its Swiss affiliate.
ZTE Will Incur Costs in Addition to its Settlement Payment
While the combined penalty that the U.S. government anticipates collecting from ZTE is massive, the impact (and indirect costs) of the settlement agreements’ nonmonetary requirements also are significant. Pursuant to its plea agreement with the DOJ, ZTE is required to retain an independent corporate compliance monitor for a term of up to three years. During the monitorship, ZTE will be responsible not only for its own costs (legal and otherwise), but also for the fees of the compliance monitor and his/her counsel. In addition, ZTE will be required to respond to information requests, host on-site observations and testing, and make employees available for interviews as reasonably requested by the monitor. The amount of ZTE’s combined penalty does not account for these quantifiable monitor-related expenses, much less business disruption costs.
BIS’s settlement with ZTE is arguably even more onerous. In addition to the monetary penalty levied by BIS, ZTE is subject to a seven-year probationary period, during which ZTE’s export privileges can be promptly revoked if the company fails to comply fully with all nonmonetary requirements imposed by BIS. Those nonmonetary requirements include (1) engagement of a third-party consultant to perform (and submit to BIS) six annual export control-focused audit reports; (2) agreement to comply with end use verifications, as jointly negotiated by the U.S. and Chinese governments; and (3) provision of extensive export control training to employees and affiliates (including submission of the training materials to BIS). [FN/4]
Regulators are Eager to Punish Perceived Bad Faith by Management
The magnitude of the penalty imposed against ZTE by the U.S. government appears to be attributable to, at least in part, the efforts undertaken by historic ZTE leadership to conceal the company’s violations of U.S. sanctions and export control laws. OFAC treated the involvement of ZTE’s senior leadership and management as an aggravating factor in calculating the applicable penalty. Among other actions, OFAC alleged that ZTE leaders: (1) instructed IT personnel to sanitize references to Iran from the company’s internal records; (2) required employees to sign nondisclosure agreements related to exports to Iran that included stiff monetary penalties for violating the agreements; (3) formed a committee for the specific purpose of identifying an intermediary to facilitate indirect exports to Iran; and (4) provided incomplete information to the company’s forensic consultant, knowing that such information would eventually be shared with the U.S. government.
Cooperation Counts, and Better Late than Never
Based on the settlement agreements, it appears that ZTE did not cooperate with regulators until the late stages of the investigation. In particular, the DOJ and OFAC alleged that ZTE misled
U.S. regulators regarding the company’s resumption of dealings with Iran from early 2014 until early 2016. The DOJ and OFAC also claimed that ZTE provided incomplete information to forensic auditors engaged by the company’s outside counsel, despite knowing that the auditors’ analysis would be reported to U.S. regulators. Finally, the DOJ alleged that a ZTE in-house attorney falsely reported to U.S. regulators during a July 2015 meeting that the company was abiding by U.S. laws. Collectively, these allegations served as the basis for criminal charges for obstruction of justice and making of a material false statement, and they undoubtedly contributed to the size of the penalty sought by the U.S. government.
Even against the backdrop of these allegations of obstruction and interference, ZTE persuaded OFAC to consider the company’s cooperation as a mitigating factor in calculating the applicable penalty. In assessing ZTE’s cooperation, OFAC cited (1) the company’s agreement to enter into three tolling agreements, which collectively extended the statute of limitations for 803 days; (2) ZTE’s willingness, after March 2016, to provide documentation and make witnesses available for interviews; and (3) remedial steps taken by the company in 2016 and 2017, including implementation of a sanctions and export control compliance program.
The ZTE resolution demonstrates that the U.S. government is committed to active enforcement of economic sanctions and export control laws, especially where there is a perceived impact on U.S. national security interests. The Trump administration, in particular, appears interested in exhibiting American strength through regulation of non-U.S. companies, as well as aggressive enforcement of suspected violations of U.S. laws. In the current enforcement environment, companies with international operations, whether based in the United States or elsewhere, should review their economic sanctions and export compliance controls regularly, address any identified gaps, and ensure that employees possess sufficient topical familiarity to identify and report potential violations of law or company policies as they arise.
  [FN/1] See, e.g., Megan Cassella, Ross’ to-do list at Commerce is revealed, Politico (Dec. 19, 2016, 10:00 AM), available
here. Although characterized as a “quick win,” ZTE’s conduct had been under investigation for several years by this point.
  [FN/2] As of this writing, ZTE remains on the Entity List, and the temporary general license authorizing exports and other transfers to the Company of items subject to the EAR is valid through March 29, 2017. Pursuant to the general license, U.S. exporters are permitted to export U.S.-origin products to ZTE. The BIS settlement agreement states that the Agency will recommend that ZTE be removed from the Entity List upon court approval of the Company’s guilty plea.
  [FN/3] BIS, Annual Report to the Congress for Fiscal Year 2009 8.
  [FN/4] The OFAC settlement requires ZTE to provide OFAC with “copies of all reports and other submissions in the same form as provided to the Departments of Justice and Commerce as prescribed in Respondent’s agreements with the Departments of Justice and Commerce arising from this matter and/or investigation.”

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T.A. Soliman, M.R. Cohen & T.J. Delaney: “Chinese Telecom Giant ZTE Makes History with Guilty Plea and $1.19 Billion Settlement for Sending US Export-Controlled Goods to Iran and North Korea”

* Authors: Tamer A. Soliman, Esq.,
tsoliman@mayerbrown.com; Marc R. Cohen, Esq.,
mcohen@mayerbrown.com; and Thomas J. Delaney, Esq.,
tdelaney@mayerbrown.com.  All of Mayer Brown LLP. 
Following a five-year investigation and a scandal that threatened the loss of its supply chain, China’s Zhongxing Telecommunications Equipment Corporation, its subsidiaries and affiliates (collectively “ZTE”) have concluded settlement agreements with the US Departments of Justice, Commerce, and the Treasury. In total, ZTE agreed to combined civil and criminal penalties of $1.19 billion and pled guilty to shipping US-origin items illegally to Iran and North Korea, obstructing justice and making a material false statement. As part of the settlement, ZTE will remain under probation for an additional seven-year period and submit itself to active auditing and monitoring by the US government.
The settlement follows a key turning point in the case last year when the Commerce Department took a bold and aggressive action to blacklist ZTE, one of China’s largest companies and one of the largest telecommunications equipment firms in the world. Faced with a crippling loss of its supply chain, ZTE was forced to negotiate with US enforcement officials regarding allegations of an elaborate and far-reaching diversion scheme involving company management. The case is just the latest example of the US government’s intention to pursue and penalize both US and non-US companies that violate US export control and sanctions laws. While the case is noteworthy for both the nature of the conduct and the sheer size of the penalties involved, it also conveys important lessons for the board and management of any company that wishes to avoid a similar fate.
According to ZTE’s settlement agreements, over the course of more than six years, ZTE exported or reexported nearly $40 million worth of US-origin goods through China to Iran in knowing violation of US export control and sanctions laws against those countries. In addition, the company also made hundreds of shipments of controlled goods to North Korea in violation of export control laws. ZTE’s practices were specifically designed to evade these laws through the use of third-party “isolation companies,” were approved by the highest levels of company management and continued in secret even while the company was under investigation-a trifecta of damning actions that led to the record penalty imposed.
As ZTE bid on and secured contracts worth hundreds of millions of dollars to install cellular and landline network infrastructure in Iran, it developed an elaborate system to fulfill those contracts using US-origin items, including dual-use goods controlled by the US government for national security and anti-terrorism reasons. This evasive system included:
  – Importing US-origin goods into China with the purpose of reexporting them to Iran;
  – Using third-party “isolation companies,” including a company called Beijing 8 Star, to serve as parties to contracts and to be responsible for supplying the US-origin goods while ZTE itself effectively controlled these companies throughout the process; and
  – Removing logos and other markings from shipments containing the goods and comingling them with foreign-origin goods in an effort to conceal them and evade detection.
Following press coverage in 2012 of the company’s business dealings in Iran and alleged violation of US sanctions, ZTE temporarily stopped its business dealings with Iran. The coverage prompted a US government investigation into the company’s dealings in Iran. Although ZTE informed the US government that it was winding down operations, leaders at the highest levels of the company decided to resume the company’s business dealings with Iran, including its efforts to divert US goods to the country.
ZTE took several steps to conceal its new procurement campaign from investigators. The company sought and used a “new, more capable third-party” to serve as the isolation company in the scheme. ZTE also assembled a team of IT employees to engage in a project to “alter, process, sanitize, and/or remove references to Iran in the company’s internal databases” and then had the IT team delete their emails related to the project. In addition, ZTE apparently deleted and concealed records from, and otherwise provided “incomplete and/or otherwise altered information” to, outside counsel and forensic accountants retained in the investigation, knowing that such information would eventually be shared with the US government.
In 2016, the Commerce Department placed ZTE on the Entity List, thereby prohibiting all third parties from trading in goods, software and technology originating in the United States or containing more than de minimis US content. This prohibition immediately threatened to cut off ZTE from its suppliers, prompting the Chinese company to enter into settlement discussions with the US government.
The sheer size of the penalties against ZTE has attracted the attention of companies around the world and sends a message about the seriousness with which the US government will pursue both US and non-US companies that violate its export control and sanctions laws. But the case also holds broader lessens for the boards and management of any company that wishes to avoid ZTE’s fate.
Enforcement Focus on Diversion, Transshipment and Illicit Procurement
The conduct at the heart of the case highlights a high-priority focus for US enforcement officials-the use of procurement agents and transshipment routes to divert goods to prohibited countries and end users/end uses. As the case record demonstrates, ZTE’s scheme arose from its need to procure US export-controlled components in order to fulfill its contracts with Iran, as well as a belief that it could evade US law through schemes to conceal the actual intended destination and end user. Significant US government resources are focused on evaluating and monitoring customs and export declarations, parties to the transactions, end-user and end-use information and other risk factors. Indeed, the lengths to which ZTE went appear to reflect a recognition of this enforcement focus and an elaborate yet ultimately failed effort to evade scrutiny.
Extraterritorial Reach and Leverage
The case reflects the extensive reach of the US government over non-US parties that deal in goods and technology with a US nexus and the overlapping regulatory regimes governing that activity. Many non-US companies may wonder why ZTE, a non-US company, would concede US jurisdiction and settle these charges with the US government at all. When the Commerce Department designated the company on the Entity List in 2016, it effectively made it illegal for third parties, whether US or non-US, to provide critical US parts, components and related software and technology to ZTE. In addition, US banks were prohibited from clearing dollar transactions for ZTE. The threatened loss of its supply chain and dollar payments brought ZTE quickly to the negotiating table to deal with the US government and begin a process that ultimately led to this extraordinary settlement.
Aggravating Factors
The case also offers an important illustration of the aggravating factors that exacerbated ZTE’s penalties and treatment in the case with respect to both civil and criminal liability. With respect to the civil penalties, both the Commerce and Treasury Departments maintain enforcement guidelines under which the primary drivers of any penalty amount are the number and value of the violative transactions, whether the violations were voluntarily self-disclosed to the agencies and whether the case involves certain aggravating factors that make it “egregious.” In determining whether a particular case is “egregious,” both agencies give substantial weight to (1) the willfulness or recklessness of the conduct, (2) senior management’s awareness of the conduct at issue, (3) the harm to sanctions programs’ objectives and (4) the individual characteristics of the party that committed the violation. In this case, the facts as publicly reported clearly supported a determination that the civil violation was “egregious,” and indeed there were referrals to the Justice Department for parallel criminal prosecution.
Multi-Agency Investigations and Enforcement
ZTE was pursued aggressively over a five-year period, as multiple US agencies investigated. The case reflects the significant investigative resources that the US government brings to bear in these matters. Over the course of five years, the joint investigation involved investigative agents from the Departments of Justice, Homeland Security, Commerce, and the Treasury, as well as from the FBI. The multi-agency settlement drove higher penalties in this case. ZTE had to settle with not just one agency but three-$661 million (Commerce), $100 million (Treasury) and $430 million (Justice)-thus compounding the impact of its conduct.
Management and Board Governance Considerations
As with other notorious cases, perhaps the most significant lesson of this case relates to the critical impact that management and boards can have on the ultimate outcome of a case when violations are discovered or suspected. Much of the narrative in the settlement documents focuses not just on ZTE’s initial diversion scheme or management’s involvement in that scheme but on the company’s subsequent cover-up (including misleading its own outside counsel and advisors) when it became clear that the US government was investigating the matter.
Rather than taking steps immediately to bring ZTE’s conduct into compliance, management’s elaborate effort to conceal was ultimately futile and in the end involved an expensive and years-long campaign that drained significant resources and guaranteed harsher treatment. The initial decisions a company makes in response to the discovery of violations, including those involving its own management, regarding whether, how and in what manner to manage an investigation and disclose violations are critical. Companies that wish to avoid ZTE’s fate must be prepared to protect themselves by having in place appropriate and robust governance mechanisms, including appropriate board oversight and a plan to ensure independent investigation of potentially significant violations.

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


. ECTI Presents Global Export Control Classification Master Session Webinar on 6 April

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

* What: Global Export Control Classification Master Session
* When: 6 April 2017; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Jay Nash
* Register: Here or Danielle McClellan, 540-433-3977, danielle@learnexportcompliance.com.

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


MS_a115. Monday List of Ex/Im Job Openings: 113 Jobs Posted

(Source: Editor)  
Published every Monday or first business day of the week.  Send openings in the following format to
#” New listing this week:
* Amazon; Luxembourg, Luxembourg;
Trade Compliance Project Integration Manager (M/F)
; Requisition ID: 479077
* Amazon; Mexico City, Mexico;
Mexico Trade Compliance Program Manager
; Requisition ID: 481541
* Amazon; Mexico City, Mexico;
Mexico Trade Compliance Program Manager
; Requisition ID: 481542
* Amazon; Seattle WA;
Compliance Investigator
; Requisition ID: 432564
* Amazon; Seattle WA;
NA Compliance Analyst
; Requisition ID: 256357
* Amazon; Seattle WA;
Prime Air Trade Compliance Program Manager
; Requisition ID: 395658
* Amazon; Seattle WA;
Senior Compliance Audit Specialist
; Requisition ID: 473466

* Amazon; Seattle WA;
Sr. Trade Compliance PM, Fashion
; Requisition ID: 475927

* Amazon; Seattle WA;
U.S. Export Compliance PM
; Requisition ID: 475927

* Amazon; Tokyo, Japan;
Trade Compliance Specialist
; Requisition ID: 481891
* American Science & Engineering; Billerica MA;
Sr. Trade Compliance Analyst
Requisition ID: 10799
* Apple; Singapore;
APAC Trade Compliance Analyst / Manager
; Requisition ID: 52327703

# ARCONIC; Pittsburgh PA;
Trade Compliance Manager; Requisition ID: 19518BR

# Barnes Group Inc.,; Bristol CT and Windsor CT;
Counsel & Director of Trade Compliance, Government Contracts Program; Requisition ID: 2200-271

* Bayer; Leverkusen, Germany;
Head of Customs & International Trade Classification (m/f)
; Requisition ID: 0000180456

* Chromalloy; Orangeburg NY;
International Trade Compliance Manager
; Requisition ID: 00935

* Crane Aerospace and Electronics; Chandler AZ;
Sr. Export Compliance Analyst
; Requisition ID: 4725

* Cummins Inc.; Daventry, United Kingdom;
Lead Export Controls Analyst

* DB Schenker; Atlanta GA, and Long Beach CA;
Area Customs Director
; Requisition ID: 17P009

* DRS Technologies; Germantown MD;
Senior Trade Compliance Manager
; Requisition ID: 54749

* Esterline Technologies Corporation; Bellevue WA;
Audit Manager – Compliance
; Requisition ID: 8215BR

* Esterline Technologies Corporation; Bellevue WA;
Sr. Trade Compliance Manager – Sensors & Systems (Engineering)
; Requisition ID: 8791BR
* Esterline Technologies Corporation; Brea CA;
Sr. Trade Compliance Manager;

Requisition ID: 7333BR

* Esterline Technologies Corporation; Coeur d’Alene ID;
Compliance Engineer
; Requisition ID:

* Expeditors; Sunnyvale CA;
Customs Compliance Specialist
* Export Solutions Inc.; Melbourne FL; Trade Compliance Specialist;

* Facebook; Dublin, Ireland;
Sanctions Specialist

* FD Associates, Tysons Corner VA;
Senior Export Compliance Associate

* FlightSafety International; Oklahoma; Trade Compliance Advisor; Requisition ID 16480

* FLIR; Arlington VA;
Manager of Defense Trade Licensing
; Requisition ID: 8121

FLIR; Billerica MA; 
Sr. Defense Trade Licensing & Compliance Analyst
; Requisition ID: 8008
* General Dynamics; South Wales, UK;
Senior Trade Compliance Officer
; Requisition ID: 6079
* Givaudan; Bogor, Indonesia;
Compliance Manager
; Requisition ID: 68063

# The Hershey Company; Hershey PA;
Global Customs and Trade Analyst
# Infinera Corporation; Sunnyvale CA;
Director, Global Logistics and Trade Compliance
; Requisition ID: 2016840

# Ingersoll Rand; Nuevo León, Mexico;
Trade Compliance Coordinator; Requisition ID: 1610625

# Ingersoll Rand; Nuevo León, Mexico;
Trade Compliance Supervisor; Requisition ID: 1610627

Ingersoll Rand; San Diego, CA;
Latin America Trade Compliance Manager (Trilingual: English, Spanish, and Portuguese)
; Requisition ID: 1610632

# Intel; Penang, Malaysia;
Global Export Compliance Program Manager
; Requisition ID:

* Intel; Santa Clara CA;
Global Export Compliance Specialist
; Requisition ID: JR0814909

* Intel; Santa Clara CA;
Export Compliance Specialist
; Requisition ID: JR0005160

# Johnson Controls; Monroe NC;
Shipping Logistics Coordinator; Requisition ID: 1710087

* Johnson Controls; Wash DC;
Manager Customs & Census; Requisition ID: 144495

# Lam Research Corporation; Fremont CA;
Foreign Trade Intern 1

# Lam Research Corporation; Shanghai, China;
Foreign Trade Analyst 

# Lam Research Corporation; Tualatin OR;
Corporate Counsel, Compliance 

* LORD Fly-by-Wire; Saint-Vallier, France; Trade Compliance and Customs Manager  

* Lutron; Coopersburg PA;
Trade Manager-Export
; Requisition ID: 2926
* Lutron; Coopersburg PA;
Trade Compliance Coordinator
; Requisition ID: 2834
* Medtronic; Heerlen, The Netherlands;
Trade Compliance Analyst
; 16000DYY

* Medtronic; Wash DC;
Global Trade Lawyer
; Requisition ID: 170002ON

# Meggitt PLC; Maidenhead, UK;
Trade Compliance Officer 

# Meggit-USA, Inc.; Simi Valley CA;
Trade Compliance Administrator
; Requisition ID: 25172

* Michael Page; Oestgeest, The Netherlands
Sr. Manager – Global Trade Management

# Netflix; Los Gatos CA;
Global Logistics Manager

# Northrop Grumman Corporation; Fall Church VA;
Corporate Counsel – Export/ Import; Requisition ID: 16030614

# Northrop Grumman Corporation; Fall Church VA;
International Trade Compliance Analyst 3/4; Requisition ID: 16016665

* Northrop Grumman Corporation; Herndon VA;
International Trade Compliance Analyst 3
; Requisition ID: 17000826

# Northrop Grumman Corporation; Herndon VA;
International Trade Compliance Analyst 3/4; Requisition ID: 17001180

* Northrop Grumman Corporation; Linthicum MD;
International Trade Compliance Analyst 3
; Requisition ID: 17001930

# Northrop Grumman Corporation; McLean VA;
Mgr Intl Trade Compliance 2; Requisition ID: 17003898

* Northrop Grumman Sperry Marine; New Malden, UK;
Trade Compliance Coordinator

* Pall Corporation; Portsmouth, UK;
Trade Compliance Specialist
; Requisition ID: SHA000201

# Parexel; Billerica MA;
Vice President, Chief Compliance Officer; Requisition ID: pare-00024091

# Parexel; Billerica MA;
Senior Compliance Manager; Requisition ID: Post-00024185

* Parexel; Kiev, Ukraine;
Global Trade Compliance Specialist
; Requisition ID: pare-10056329

# Plexus Corporation; Neenah Wi;
Manager – Export Compliance
; Requisition ID: 14645BR
# Plexus Corporation; Neenah Wi;
Manager – Import Compliance
; Requisition ID: 14593BR

* Roanoke Insurance Group; Schaumburg IL;
Carnet Service Representative
; Requisition ID: 1019

# Raytheon; Arlington VA;
Export Licensing Manager I
; Requisition ID: 94113BR

# Raytheon Australia; Canberra, Australia;
Export/Import Operations Advisor; Requisition ID: 86438BR

# Raytheon; Fullerton CA;
Manager of Export-Import Control, Empowered Official (RCCS); Requisition ID: 93625BR

# Raytheon; Rosslyn VA;
Customs Counsel; Requisition ID: 93887BR

# Raytheon; Woburn MA;
Supply Chain Compliance Manager; Requisition ID: 93734BR

# Raytheon; Woburn MA;
Supply Chain Subcontract Manager; Requisition ID: 93615BR

# Raytheon Integrated Defense Systems; Andover MA;
Export Licensing & Compliance Advisor, Global Trade; Requisition ID: 93670BR

# Raytheon Integrated Defense Systems; Woburn MA;
Training Manager, IDS Global Trade Compliance; Requisition ID: 93597BR

# Raytheon Intelligence, Information and Services; Annapolis Junction MD or Dulles VA;
Sr Exp License&Compliance Adv; Requisition ID: 91338BR

# Raytheon Intelligence, Information and Services; Dulles VA;
Export License & Compliance Administrator; Requisition ID: 93473BR

# Raytheon Intelligence, Information and Services; Orlando FL;
Sr Exp License&Compliance Adv; Requisition ID: 92852BR

* Raytheon Space & Airborne Systems; McKinney TX;
Sr Exp License & Compliance Adv;
; 310-334-7499; Requisition ID:

* Rolls-Royce; Indianapolis IN;
Export Control Specialist
; Requisition ID: JR6016567

# Sierra Nevada Corporation; Centennial CO;
International Trade & Compliance Analyst III; Requisition ID: R0002516

* Space Systems Loral; Palo Alto CA; 
Senior Export Compliance Specialist
; Requisition ID: 6930

* Synopsys; Mountain View CA;
Senior Manager, Export Compliance
650-584-1676; Requisition ID: 13208BR
# Talbots; Hingham MA;
Sr Mgr Global Trade & Customs Compliance
; Requisition ID: 1077
# Talbots; Lakeville MA;
Dir., Global Logistics & Customs Com
; Requisition ID: 1085

* Tesla Motors; Fremont CA;
Global Supply Manager – Logistics
; Requisition ID: 38153

* Textron Systems; Wilmington MA;
Principal Export Compliance Analyst
; Requisition ID: 242857

* ThermoFisher Scientific; Hennigsdorf, Germany;
Global Trade Compliance Specialist (m/f)
; 43954BR

* ThermoFisher Scientific; Matamoros, Mexico;
Import/Export Supervisor
; Requisition ID: 39750BR

* ThermoFisher Scientific; Shanghai, China;
Trade Compliance Specialist – CMC
; Requisition ID: 42143BR

* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
International Trade Compliance Business Process Analyst
; Requisition ID:

* United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
Manager, International Trade Compliance;
Requisition ID:

# United Technologies Corporation, UTC Aerospace Systems; Charlotte NC;
Specialist, ITC IT Systems
; Requisition ID:

* United Technologies Corporation, UTC Aerospace Systems; Chula Vista CA;

International Trade Compliance Intern
; Requisition ID:

* United Technologies Corporation, UTC Aerospace Systems; Fairfield CA;
International Trade Compliance Analyst
; Requisition ID:

# United Technologies Corporation, UTC Aerospace Systems; Vergennes, VT;
ITC Generalist
; Requisition ID:

* United Technologies Corporation, UTC Aerospace Systems; Westford MA;

# United Technologies Corporation, UTC Aerospace Systems; Windsor Locks CT;
# United Technologies Corporation, UTC Aerospace Systems; Windsor Locks CT;
Specialist, International Trade Compliance
; Requisition ID: 44501BR

* United Technologies Corporation, UTC Aerospace Systems; Windsor Locks CT;

* United Technologies Corporation, UTC Aerospace Systems; Windsor Locks CT;

* Vigilant; Unknown location in the U.S.;
BioTech/Pharmaceutical Global Trade Analyst
* Vista Outdoor; Various locations in the U.S.;
Sr. Specialist Imports & Customs Operations, ITO
; Requisition ID: R0001996
* Vista Outdoor; Various locations in the U.S.;
Sr. Specialist Imports & Customs Programs, ITO
; Requisition ID: R0001997 

* Wurth Industry of North America; Indianapolis IN; Trade Compliance Officer;
International Trade Compliance Officer
; Requisition ID: 389-720
Wurth Snider Bolt and Screw; Louisville KY; 
Trade Compliance Specialist
; Sylvia Smith,
; Requisition ID: 1124

* XPO Logistics; Greenwich CT;
Global Trade Compliance Analyst

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


(Source: Editor) 

Earl Nightingale (12 Mar 1921 – 29 Mar 1989, was an American radio personality, writer, speaker, and author, dealing mostly on the subjects of human character development, motivation, excellence and meaningful existence; Nightingale was the author of
The Strangest Secret, which economist Terry Savage has called “one of the great motivational books of all time.”)

  – “Don’t let the fear of the time it will take to accomplish something stand in the way of your doing it. The time will pass anyway; we might just as well put that passing time to the best possible use.”

  – The biggest mistake that you can make is to believe that you are working for somebody else. Job security is gone. The driving force of a career must come from the individual. Remember: Jobs are owned by the company, you own your career!”


Aeschylus (525/524 BC – 456/455 BC (date uncertain), was an ancient Greek philosopher and playwright, often described as the father of tragedy in stage performance. Academics’ knowledge of the genre begins with his work.  Valerius Maximus wrote that he was killed in an open field by a tortoise dropped on his head by an eagle which had mistaken his head for a rock suitable for shattering the shell of the reptile. Pliny, in his
Naturalis Historiæ, adds that Aeschylus had been staying outdoors to avoid a prophecy that he would be killed by a falling object.)

  – “It is a profitable thing, if one is wise, to seem foolish.”


Monday is Pun Day.

Q. How is a pig’s tail like getting up at four in the morning?

A. It’s twirly!

  – Robby Bellah, Dunnavant, AL

Q. What happened to the frog when it parked illegally?

A. It was toad.

  – Michael S. Meleshenko, Windsor. CT 

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

. 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.
: 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. 
: 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.

  – 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.)

  – Last Amendment: 24 Feb 2017: 82 FR 11505-11506: Temporary General License: Extension of Validity 

: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment:
10 Feb 2017: 82 FR 10434-10440: Inflation Adjustment of Civil Monetary Penalties. 
: 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
  – 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.
, 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: 7 Mar 2017: Harmonized System Update 1702, containing 1,754 ABI records and 360 harmonized tariff records. 
  – HTS codes for AES are available
  – HTS codes that are not valid for AES are available
  – Latest Amendment: 11 Jan 2017: 82 FR 3168-3170: 2017 Civil Monetary Penalties Inflationary Adjustment
  – The only available fully updated copy (latest edition 8 Mar 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.

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


* 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.

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

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