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17-0418 Tuesday “Daily Bugle”

17-0418 Tuesday “Daily Bugle”

Tuesday, 18 April 2017

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe 
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  1. Commerce/BIS Amends EAR, Revises One Existing Entry in the Entity List 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. DHS/CBP Deploys ACE Extract Reference File Query (FQ) Software Updates 
  4. State/DDTC Posts Name and Address Changes for Two Organizations 
  1. ST&R Trade Report: “Exports of Information Technology Goods to Russia Eased Under BIS Rule”  
  1. T. Murphy: “Buy American, Hire American” 
  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 (18 Apr 2017), FACR/OFAC (10 Feb 2017), FTR (15 May 2015), HTSUS (7 Mar 2017), ITAR (11 Jan 2017) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11.

Commerce/BIS Amends EAR, Revises One Existing Entry in the Entity List

 
82 FR 18217-18220: Revision to an Entry on the Entity List
 
* AGENCY: Bureau of Industry and Security, Commerce
* ACTION: Final rule.
* SUMMARY: This rule amends the Export Administration Regulations (EAR) by revising one existing entry in the Entity List, under the destination of Russia. The license requirement for the entry is being revised to conform with a general license issued by the Department of the Treasury’s Office of Foreign Assets Control on February 2, 2017.
* DATES:
This rule is effective April 18, 2017.
* FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Email:
ERC@bis.doc.gov.
* SUPPLEMENTARY INFORMATION: …

  On February 2, 2017, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 1, Authorizing Certain Transactions with the Federal Security Service, an entity in the Russian Federation. This general license authorizes transactions and activities, otherwise prohibited pursuant to Executive Order 13694 (E.O.) of April 1, 2015, as amended by E.O. 13757 of December 28, 2016, that are necessary and ordinarily incident to: Requesting, receiving, utilizing, paying for, or dealing in licenses, permits, certifications, or notifications issued or registered by the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) for the importation, distribution or use of information technology products in the Russian Federation, provided that (i) the exportation, reexportation, or provision of any goods or technology that are subject to the EAR, 15 CFR parts 730 through 774, are licensed or otherwise authorized by the Department of Commerce and (ii) the payment of any fees to the Federal Security Service for such licenses, permits, certifications, or notifications does not exceed $5,000 in any calendar year. The OFAC general license also authorizes transactions and activities ordinary and necessarily incident to complying with law enforcement or administrative actions or investigations involving the Federal Security Service and transactions and activities ordinary and necessarily incident to complying with rules and regulations administrated by the Federal Security Service. The general license does not authorize exportation, reexportation, or provision of any goods, technology, or services to the Crimea region of Ukraine or any transactions that otherwise violate E.O. 13757 of April 1, 2015. Any questions regarding to the scope of this general license should be directed to OFAC.
  In light of OFAC’s General License No. 1, BIS makes a conforming change by modifying the listing for the Federal Security Service on the Entity List under the destination of Russia (the term used in the EAR for the Russian Federation). This final rule modifies the license requirement column for this entity to specify that the Entity List’s license requirements do not apply to items subject to the EAR that are related to transactions authorized by OFAC pursuant to new General License No. 1 (i.e., transactions that are necessary and ordinarily incident to requesting, receiving, utilizing, paying for, or dealing in licenses, permits, certifications, or notifications issued or registered by the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) for the importation, distribution, or use of information technology products in the Russian Federation, so long as the transactions do not involve exportation, reexportation, or provision of any goods, technology, or services to the Crimea region of Ukraine and do not otherwise violate E.O. 13757). Except for the limited purposes described above, this conforming change does not authorize the exportation, reexportation, or provision of goods or technology to or on behalf of the Federal Security Service. …
  
  Dated: April 13, 2017.
Matthew S. Borman, Deputy Assistant Secretary for Export Administration.

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OGS
OTHER GOVERNMENT SOURCES

OGS_a12. Ex/Im Items Scheduled for Publication in Future Federal Register Editions

(Source: Federal Register)

* Commerce; Census Bureau; RULES; Foreign Trade Regulations: Clarification on Filing Requirements [Publication Date: 19 April 2017.]


* State; NOTICES; Designations as Global Terrorists [Publication Date: 19 April 2017.]
  – Farah Mohamed Shirdon, aka Farah Shirdon, aka Abu Usamah, aka Abu Usamah Somali, aka Abu Usama al Somali, aka Abu Usamah as-Somali
  – Tarek Sakr
* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 19 April 2017.]

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

(Source: Commerce/BIS

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OGS_a3
4. DHS/CBP Deploys ACE Extract Reference File Query (FQ) Software Updates

(Source: CSMS# 17-000221, 18 April 2017.)
 
ACE Extract Reference File Query (FQ) software updates have been deployed to the ACE PRODUCTION environment as follows:
 
  – When returning F106 results for an Air Carrier, return the 2-character Census Abbreviation/IATA airline designator in the SCAC field, instead of the 3-character ICAO/SCAC.
  – Address data will not be returned in the F106 Carrier Query/Extract for Air Carriers.
  – When an “Air” MOT account has no Census Abbreviation/IATA code, the corresponding SCAC field will be blanked out (four spaces).
  – Air Carrier List output in F106 ordered alphabetically by Carrier Name.
  – F106 Air Carrier Extract to include Active air carriers only.
  – Alphabetical ordering of Country list corrected in F202
  – AGOA_CBPTA_BEGN_DT and AGOA_CBPTA_END_DT corrected in F202

 

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

 
  – L-3 Technologies Inc. Changes Name for Several Entities
  – Mercury Systems Changes Address
* * * * * * * * * * * * * * * * * * * *

NWSNEWS

NWS_a16. ST&R Trade Report: “Exports of Information Technology Goods to Russia Eased Under BIS Rule”

 
The Bureau of Industry and Security has issued a final rule revising the Entity List entry for Russia’s Federal Security Service in a move designed to ease U.S. exports of information technology products to Russia.
 
Effective April 18, this rule modifies the license requirement column for the FSB to specify that the Entity List’s license requirements do not apply to items subject to the Export Administration Regulations that are related to transactions authorized by the Office of Foreign Assets Control pursuant to new General License No. 1; i.e., transactions that are necessary and ordinarily incident to requesting, receiving, utilizing, paying for, or dealing in licenses, permits, certifications, or notifications issued or registered by the FSB for the importation, distribution, or use of information technology products in Russia (with certain restrictions).
 
Click here for more information on this change. 
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COMMCOMMENTARY

COMM_a17. T. Murphy: “Buy American, Hire American”

(Source: Author)
 

 
President Trump is expected to sign an Executive Order today in furtherance of his “Buy American, Hire American” agenda.  The agenda, which includes pushing Congress for a $1 trillion infrastructure spending bill to help fix roads, bridges, tunnels, airports, etc. (which has not materialized, thus far), seeks to ensure that government procurement dollars are spent in accordance with existing ‘Buy America’ legislation (i.e., legislation that requires, or gives preference to, U.S.-qualified products in U.S. government-funded procurements).  It also seeks to ensure that this legislation is properly enforced.
 
As any company who participates directly or indirectly in the government procurement market knows, this can be a confusing area.  There is no one “Buy America” standard across the federal government.  Often, just figuring out which standard (e.g., the Buy American Act of 1933, the Trade Agreements Act of 1979, the Surface Transportation Assistance Act of 1982, etc.) applies can be quite an ordeal, particularly if you are further down the chain – you supply a customer who supplies the government.  The good news is that, for those companies that have invested in figuring this out (or at least figuring out the piece that impacts them), there is quite an opportunity here.  As today’s Executive Order demonstrates there is going to be a renewed focus on acquiring qualifying articles, which means people can expect more scrutiny of their certifications.  That is also the potential bad news – this is an area where procurement officers have historically had a great deal of discretion and audits are relatively rare.  Given the Trump Administration’s interest in this issue, we expect that to change (i.e., a lot more scrutiny of the certifications).
 
If you are selling directly or indirectly to the government, then we recommend that you review your processes for ensuring that your “Buy America” certifications are accurate and auditable (i.e., make sure you are retaining the right supporting documentation).  Companies that are confident in their programs are expected to have a distinct advantage in this space for the foreseeable future.
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ENEDITOR’S NOTES

(Source: Editor)

* Clarence Darrow (Clarence Seward Darrow, 18 Apr 1857 – 13 Mar 1938, was an U.S. lawyer, leading member of the American Civil Liberties Union, and prominent advocate for Georgist economic reform. He is best known for defending John T. Scopes in the Scopes “Monkey” Trial (1925), in which he opposed William Jennings Bryan.)
  – “The law does not pretend to punish everything that is dishonest. That would seriously interfere with business.”
 
* George Henry Lewes (18 Apr 1817 – 30 Nov 1878, was an English philosopher and critic of literature and theatre.  He became part of the mid-Victorian ferment of ideas, which encouraged discussion of Darwinism, positivism, and religious skepticism.)
  – “The only cure for grief is action.”

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EN_a29
. 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 [New effective date: 21 March 2017.]; and 82 FR 8590: Delay of Effective Date for Toxic Substance Control Act Chemical Substance Import Certification Process Revisions [New effective date: 21 March 2017.]

* 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:
18 Apr 2017: 82 FR 18217-18220: Revision to an Entry on the Entity List

  
*
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: 7 Mar 2017: Harmonized System Update 1702, containing 1,754 ABI records and 360 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 8 Mar 2017) of the ITAR with all amendments is contained in Bartlett’s Annotated ITAR (“BITAR”), by James E. Bartlett III.  The BITAR contains all ITAR amendments to date, plus a large Index, over 750 footnotes containing case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text.  Subscribers receive updated copies of the BITAR in Word by email, usually revised within 24 hours after every ITAR amendment.  The BITAR is available by annual subscription from the Full Circle Compliance
website
.  BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please
contact us
to receive your discount code.  

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EN_a310
. Weekly Highlights of the Daily Bugle Top Stories
(Source: Editor)

Review last week’s top Ex/Im stories in “Weekly Highlights of the Daily Bugle Top Stories” published 
here
. 

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EPEDITORIAL POLICY

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

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

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

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