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17-0502 Tuesday “Daily Bugle”

17-0502 Tuesday “Daily Bugle”

Tuesday, 2 May 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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[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. State/DDTC: (No new postings.) 
  1. Expeditors News: “White House Issues EO on Office of Trade and Manufacturing Policy and Trade Agreement Violations” 
  2. The National Interest: “Defense Secretary Mattis Under Pressure to Look into China’s Backdoor Threat to National Security” 
  1. M. Volkov: “The Revolution in Compliance Training – It is Not Just About Your ABCs” 
  2. University of Liege Publishes Strategic Trade Review Spring 2017 Issue 
  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 (19 Apr 2017), HTSUS (26 Apr 2017), ITAR (11 Jan 2017) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

[No items of interest noted today.] 

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OGS
OTHER GOVERNMENT SOURCES

OGS_a11. Ex/Im Items Scheduled for Publication in Future Federal Register Editions

(Source: Federal Register)
* President; EXECUTIVE ORDERS;
  – America-First Offshore Energy Strategy; Implementation Efforts (EO 13795) [Publication Date: 3 May 2017.]
  – Committees; Establishment, Renewal, Termination, etc.: 
American Technology Council; Establishment (EO 13794) [Publication Date: 3 May 2017.]
* Defense Department; NOTICES; Meetings: Government-Industry Advisory Panel [Publication Date: 3 May 2017.] 

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OGS_a22. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS

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NWSNEWS

NWS_a14.

Expeditors News: “White House Issues EO on Office of Trade and Manufacturing Policy and Trade Agreement Violations”

 
On 29 April 2017 the White House’s Office of the Press Secretary issued notices that President Trump had signed two Executive Orders (EO) regarding trade.
 
The first EO requires the Secretary of Commerce and the United States Trade Representative (USTR) to conduct an investigation into all current Free Trade Agreements (FTA), trade preference programs, including trade relationships maintained through the World Trade Organization (WTO) that operates at a trade imbalance. Appropriate actions or addresses to any found violations must also be notated in the investigation.
 
The second EO establishes the Office of Trade and Manufacturing Policy (OTMP) which has been tasked to act as an advisor to the President on innovative trade strategies and policies, act as a liaison between Commerce and the White House, as well as focus on domestic policies.
 
The Executive Orders can be accessed here and here.

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NWS_a25.

The National Interest: “Defense Secretary Mattis Under Pressure to Look into China’s Backdoor Threat to National Security”

 
[H]ouse Armed Services Strategic Forces subcommittee chairman Mike Rogers and ranking member Jim Cooper, with chairwoman Elise Stefanik and ranking member Jim Langevin of the House Armed Services Emerging Threats and Capabilities subcommittee, sent Mattis an April 26 letter describing their concerns about the East Asian Observatory’s access to the United Kingdom Infrared Telescope on Wednesday. The Chinese Academy of Sciences funds the observatory in conjunction with Japan, South Korea and Taiwan. The foreign research group wants access to the telescope, which is leased by the University of Hawaii and operated under a Scientific Cooperation Agreement led by the University of Arizona. …
 
 “Apparently, absent other competitive offers, the University of Hawaii would be inclined to accept the offer from EAO,” the letter states. “Therefore, we request you provide us further information on your assessment on the national security implications regarding foreign operation of this telescope, and as applicable, your short and long term plan to protect the related national security interests.”
 
The National Interest reported last week that space experts are concerned that the East Asian Observatory funding offer would allow it to observe the unique details of U.S. space assets. Government documents show that the foreign research group would be able to see the electromagnetic waves emitted or received by an antenna, determine whether an antenna is active or not, find the position of artificial satellites, identify cooling and heating rates and spectral signatures, identify an object’s size, and gain access to other potential secrets. Additionally, concerning is the conflict of interest surrounding the telescope’s cameras and spectrometers, which are restricted by International Traffic in Arms Regulations. A group of independent scientists raised this issue back in 2013, but their warning didn’t gain traction with government officials until recently. …
 
China has a long history of looking for loopholes that would give them access to U.S. national security. 
Last month, Fuyi Sun, a fifty-three-year-old Chinese national,
pleaded guilty to violating the International Emergency Economic Powers Act
after he was caught trying to illegally export to China a type of high-grade carbon fiber used primarily in aerospace and military equipment, according to a Department of Justice press statement. And last year Chinese national Su Bin
pleaded guilty in 2016 to participating in a multiyear conspiracy
to hack into the computer networks of major U.S. defense contractors and steal data relating to the U.S. military’s C-17 transport aircraft and fighter jets. …
 
[Editor’s Note: excerpts of an earlier National Interest article concerning the EAO’s access to the United Kingdom Infrared Telescope were included in the Daily Bugle of Monday, 1 May 2017, item #9.]

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COMMCOMMENTARY

COMM_a16.

M. Volkov: “The Revolution in Compliance Training – It is Not Just About Your ABCs”

(Source:
Volkov Law Group Blog. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
A CCO never feels like he or she has caught up on compliance program requirements. As soon as one new best practice is identified, a CCO blinks for a moment and then there is a new best practice for them to consider.
 
In the training area, we have seen a rapid change over the last ten years. Years ago, compliance training was a check-the-box exercise where managers and employees were required to take stuffy training programs built around legal concepts to ensure that everyone complied with the law and knew what they were required to do.
 
In the last few years, we have seen companies’ build sophisticated training programs that leverage technology to maximize the availability and content of training for managers and employees. Companies have built global Learning Management Systems that provide training and professional development services.
 
The content offered in training programs has multiplied and become much more accessible, interactive and even captured in game-playing format. Foreign-speaking employees are not required to take training programs that they cannot understand because companies are offering training programs in multiple languages.
 
The most significant transformation, however, may be in recognition of the importance of compliance training to a company’s overall compliance communications program. Compliance training is not just training, but is a much broader communications function revolving around company’s culture, accountability, behavioral norms and leadership expectations.
 
Companies have taken moribund training opportunities and transformed them into a critical mechanism to communicate internally a company’s set of values and ethical principles. In doing so, they have elevated the technology and the content of training programs to make them more interesting and accessible to managers and employees.
 
While we can all acknowledge this important trend, the question arises as to where is the training function going in the future? What innovative training ideas will companies develop and what impact will they have?
 
Compliance training increases awareness – we all understand that. But training is also being extended into new topics and specifically in providing specific guidance on individual compliance functions.
 
As an example, I have long advocated that important functions, such as accounts payable, should receive specific compliance training so that they understand the important role that they play in identifying potential red flags relating to financial transactions, and how to elevate such concerns when they identify them. In the case of accounts payable staff, they operate as a first line of defense and can effectively provide important compliance program support.
 
As a result, more companies are engaging accounts payable staff, and other similar functions (e.g. vendor onboarding) and recognizing the important pay offs from training these critical employees.
 
Given this focused compliance training approach, I expect we will observe more emphasis on specialized training, meaning training that includes not only understanding a legal or code of conduct issue but specific guidance on how each employee can promote effective compliance in his or her day-to-day job.
 
Compliance training will rapidly move into specialization. This, in turn, will require increased delivery mechanisms, whether in person or web-based training, and could lead to even greater content improvements as training leaders are required to develop new and interesting content for more specialized audiences.

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COMM_a27. University of Liege Publishes

Strategic Trade Review Spring 2017 Issue

 
The University of Liege has published the Spring 2017 issue of Strategic Trade Review
on its
website
.

The Strategic Trade Review is a free refereed journal providing high-quality, peer-reviewed articles that tackle trade and security in the conventional arms and Weapons of Mass Destruction (WMD) illicit trade, nonproliferation and sanctions context.
 
The following articles are included in this issue:
 
  (1) A Resilience Framework for Understanding Illicit Nuclear Procurement Networks — Aaron Arnold
  (2) Chemical and Biological Contract Manufacturing Services: Potential Proliferation Concerns and Impacts on Strategic Trade Controls — Julie A. Carrera, Andrew J. Castiglioni, and Peter M. Heine
  (3) Dual-use Research and Trade Controls: Opportunities 
and Controversies
— Christos Charatsis
  (4) Export Control Compliance and American Academia — 
Brian Starks and Christopher Tucker
  (5) The Proliferation of Cyber-Surveillance Technologies: 
Challenges and Prospects for Strengthened Export Controls — 
Fabian Bohnenberger
  (6) Is There a Common Understanding of Dual-Use? The Case of Cryptography — Veronica Vella 

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ENEDITOR’S NOTES

(Source: Editor)

* Lesley Gore (Lesley Sue Goldstein; 2 May 1946 – 16 Feb 2015; was an American singer, songwriter, actress, and activist. At the age of 16, she recorded the 
pop hit ”
It’s My Party“, and followed it up with other hits including ”
Judy’s Turn to Cry“, ”
She’s a Fool“, and ”
You Don’t Own Me,” all before age 18.
  – “I still get a chill when I sing, ‘You Don’t Own Me.’ I find some new feeling in it every time.” 

* 
Robert Hall (2 May 1764 – 21 Feb 1831; English Clergyman.)
  – “In the power of fixing the attention lies the most precious of the intellectual habits.” 

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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: 19 Apr 2017: 82 FR 18383-18393: Foreign Trade Regulations: Clarification on Filing Requirements 
  – HTS codes that are not valid for AES are available
here.
  – The latest edition (19 Apr 2017) 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: 26 Apr 2017: Harmonized System Update 1703, containing 2,512 ABI records and 395 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.

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

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

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