;

17-0517 Wednesday “The Daily Bugle”

17-0517 Wednesday “Daily Bugle”

Wednesday, 17 May 2017

TOP
The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
here for free subscription.  Contact us
for advertising inquiries and rates.

  1. DHS/CBP Seeks Comments on Commercial Invoice 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. DHS/CBP Posts ACE Trade FAQs (Week of 27 April) 
  4. Justice: “Czech Republic and Slovak Republic Nationals Charged with Violating U.S. Export Laws” 
  5. State/DDTC Updates Approved Australian Intermediate Consignee List 
  6. EU Council Releases Declaration by the High Representative on the Alignment of Certain Third Countries with the EU’s Restrictive Measures Concerning Egypt  
  1. Automotive News Europe: “French Automakers Push into Iran as Rivals Fear Possible Trump Sanctions” 
  2. The Irish Times: “U.S. Drops Sanctions Against Irish-Based Pacnet Executives” 
  3. Reuters: “American University of Beirut Settles U.S. Lawsuit for $700,000” 
  4. ST&R Trade Report: “Trade Groups, Lawmakers Urge Caution on Renegotiating NAFTA” 
  1. Debevoise & Plimpton LLP Releases New Sanctions Alert Issue 
  2. Institute for Science and International Security Publishes Export Control Reform Report 
  3. S.L. Fredericksen, J.B. Guerrero & G. Husisian: “The Foreign Corrupt Practices Act and the New Trump Administration: Your Top Ten Questions Answered” (Part I of III) 
  4. Gary Stanley’s ECR Tip of the Day 
  5. R.C. Burns: “Send 3 Bitcoins to the Norks or You’ll Never See Your Files Again!” 
  1. Annual ICP European Conference in Dublin Ireland, 11-13 Jun  
  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 (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
. DHS/CBP Seeks Comments on Commercial Invoice

 
82 FR 22672: Agency Information Collection Activities: Commercial Invoice
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security.
* ACTION: 30-Day notice and request for comments; extension of an existing collection of information. …
* FOR FURTHER INFORMATION CONTACT: Requests for additional information should be directed to the CBP Paperwork Reduction Act Officer, U.S. Customs and Border Protection, Office of Trade, Regulations and Rulings, Economic Impact Analysis Branch, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, or via email CBP_PRA@cbp.dhs.gov. Please note that the contact information provided here is solely for questions regarding this notice. Individuals seeking information about other CBP programs should contact the CBP National Customer Service Center at 877-227-5511, (TTY) 1-800-877-8339, or CBP Web site.
* SUPPLEMENTARY INFORMATION: …
  – Title: Commercial Invoice.
  – OMB Number: 1651-0090.
  – Form Number: None.
  – Current Actions: This submission is being made to extend the expiration date with no change to the burden hours or to the information collected. …
  – Abstract: The collection of the commercial invoice is necessary for conducting adequate examination of merchandise and determination of the duties due on imported merchandise as required by 19 CFR 141.81, 141.82, 141.83, 141.84, 141.85, 141.86, 141.87, 141.88, 141.89, 141.90, 141.91, 141.92 and by 19 U.S.C. 1481 and 1484. A commercial invoice is presented to CBP by the importer for each shipment of merchandise at the time the entry summary is filed, subject to the conditions set forth in the CBP regulations. The information is used to ascertain the proper tariff classification and valuation of imported merchandise, as required by the Tariff Act of 1930. To facilitate trade, CBP did not develop a specific form for this information collection. Importers are allowed to use their existing invoices to comply with these regulations. …
 
  Dated: May 12, 2017.
Seth Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border
Protection.

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

OGSOTHER GOVERNMENT SOURCES

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

* President; ADMINISTRATIVE ORDERS; Iraq; Continuation of National Emergency (Notice of 16 May 2017) [Publication Date: 18 May 2017.]

* Alcohol, Tobacco, Firearms, and Explosives Bureau; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals:
  – Annual Firearms Manufacturing and Exportation Report [Publication Date: 18 May 2017.] 
* * * * * * * * * * * * * * * * * * * *

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

OGS_a34.

DHS/CBP Posts ACE Trade FAQs (Week of 27 April)

(Source:
CSMS #17-000278
, 16 May 2017)
 
(1) Question: The ACE Secure Data Portal provides users the ability to create blanket declarations from an importer account. Declarations are statements made by the importer or his/her agent that support a claim made with regard to imported merchandise. Blanket Declaration Records created in the ACE Portal can be viewed nationally by CBP. At this time, what blanket declaration types are supported in ACE?


Answer: At this time, the following blanket declaration types are supported in ACE: 

  – Affidavit of Manufacture
  – Importer Certifying Statement
  – Non-Reimbursement Blanket Statement (Antidumping/Countervailing Duty)
  – North American Free Trade Agreement (NAFTA) Certificate of Origin

For more information on creating blanket declarations records, please review the “Blanket Declaration Records” user guide posted on the “ACE Training and Reference Guides” page of CBP.gov/ACE

(2) Question: What is the current status of the eleven Partner Government Agencies (PGA) participating in the Automated Export System (AES)?

Answer: All eleven are available in the Production environment today. Please see below for more detailed information. The first four listed are required in AES, while 5-11 are available for volunteer data. AESTIR appendices can be located here

  (a) Census – The collection of the Electronic Export Information (EEI) in ACE through AES refactoring and AES Direct (legacy Census applications) with commodity data from exporters via EDI, AES Direct Bulk Uploading, AES Direct Web services and AES Direct portal. ACE Reports for Exporters from ACE. No change for trade. Active now.

  (b) BIS – The collection of BIS license data in the EEIs and BIS sends ACE all BIS license data. ACE currently has all BIS licenses and all BIS license data is submitted with EEI data. No change for trade. Active now.

  (c) DDTC – The collection of DDTC license data in the EEI and DDTC sends ACE all license data. Temporary Import and Export licenses are reported on all EEIs but historically Imports do not have this data and the import side has to a change to add a license value and to reply to the importer with the remaining value for that license. The programing is completed for S94 Foreign Military Sales (FMS) but we are waiting for data to be sent. No changes for the trade. Active now 

  (d) OFAC – The collection of OFAC license number in the EEI and OFAC sends license to DIS. No changes for the trade. Active now. The OFAC and FMS formats are documented in the AESTIR appendix F.

  (e) DEA – The collection of DEA is allowed or required by HTS or Schedule B number. DEA sends AES all pre-cursor chemicals and control substances permits. DEA is looking at July 2017 to require their data in both imports and exports. The data can be submitted now by the trade. Response messages pertaining to DEA in AESTIR Appendix A are set as Active / Informational. Record formats located in Appendix Q.

  (f) FWS -The collection of FWS is allowed or required by HTS or Schedule B number. FWS send all export permits to ACE all data. FWS currently not being sent in as their pilot is on hold for both imports and exports. Response messages pertaining to FWS in AESTIR Appendix A are set as Inactive. Record formats located in Appendix Q.

  (g) EPA – The EPA manages Used Hazmat Waste. Currently EPA is sending of information for their used hazmat waste and AES is collecting EPA transactional data from them based on the HTS number. Currently ACE is processing approximately 1500 EEIs a month with EPA data. Not known when or if EPA will require this. Response messages pertaining to EPA are set as indicated in AESTIR Appendix A. Record formats located in Appendix Q.

  (h) ATF – ATF is sending export license data to ACE and we run business rules for ATF if ATF data is provided. Not based on HTS or Schedule B number. Provided by trade voluntarily as no plans to require. Response messages pertaining to ATF in AESTIR Appendix A are set as Active / Informational. Record formats located in Appendix Q.

  (i) AMS – AMS issues permits for apple and grape exports. ACE will receive the AMS export number on EEI transactional data based on HTS or Schedule B and the data will be sent to AMS. This is waiting on AMS FRN changes. Response messages pertaining to AMS in AESTIR Appendix A are set as Inactive. Record formats located in Appendix Q.

  (j) TTB – ACE receives TTB data from TTB and running TTB business rules on transactional data based on HTS or Schedule B. Transactional data is sent TTB. The pilot is pending FRN publications by TTB. Response messages pertaining to TTB in AESTIR Appendix A are set as Active / Informational. Record formats located in Appendix Q.

  (k) NMFS – ACE receives permit data NMFS on fish exports. The transactional data requires NMFS data based on the HTS and Schedule B and runs business runners against data. The FRN for these was published last summer for both imports and exports and had an enforcement date of 09/20/2016 but we have not been asked to enforce it yet. Response messages pertaining to NMFS are set as indicated in AESTIR Appendix A. Record formats located in Appendix Q.

For additional information regarding ACE, please dial in to the biweekly ACE Status Update Call on Thursdays at 2pm. Phone Number: (877) 336-1828 Pass Code: 6124214

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

OGS_a45

Justice: “Czech Republic and Slovak Republic Nationals Charged with Violating U.S. Export Laws”

(Source: Justice) [Excerpts.]
 
Deirdre M. Daly, United States Attorney for the District of Connecticut, Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office, and Matthew Etre, Special Agent of HSI Boston, today announced that a federal grand jury in New Haven has returned two indictments charging citizens of the Czech Republic and the Slovak Republic with offenses related to the illegal export of U.S. military equipment.
 
Earlier today, the grand jury returned a two-count indictment alleging that, between June 2011 and November 2011, JOSEF ZIRNSAK, 38, of the Czech Republic, shipped from the U.S. to Germany an infrared dual beam aiming laser and a rifle scope, both of which are designated as defense articles on the U.S. Munitions List.
 
On May 3, 2017, the grand jury returned a five-count indictment alleging that, between May 2012 and June 2012, MARTIN GULA, also known as “Mark Welder,” 38, of the Slovak Republic, purchased and attempted to arrange the export of night vision goggles and an aviator night vision system from the U.S. to the United Kingdom. The indictment also alleges that, during the same time period, GULA used a false U.S. passport as proof of residency and citizenship in the U.S.
 
  “The U.S. Attorney’s office in Connecticut is committed to working with our federal law enforcement partners to ensure that sensitive military items manufactured in the United States do not fall into the wrong hands,” said U.S. Attorney Deirdre Daly. “Willful violations of our nation’s export laws will be prosecuted to the full extent of the law.”
 
  “The protection of sensitive U.S. military technology is a top priority for the Defense Criminal Investigative Service,” said DCIS Special Agent in Charge Barzey. “The charges announced today demonstrate the continued commitment of DCIS and its law enforcement partners to prevent our nation’s adversaries from obtaining sensitive military technology that could pose a grave threat to America’s armed forces.”
 
  “These sophisticated technologies are highly sought after by America’s enemies,” said HSI Special Agent in Charge Etre. “They were developed to give the United States and its allies a distinct military advantage, which is why HSI will continue to aggressively target the individuals who illegally procure and sell these items.”
 
ZIRNSAK and GULA are each charged with two counts of violating the Arms Export Control Act, an offense that carries a maximum term of imprisonment of 20 years on each count GULA also is charged with two counts of export smuggling and one count of use of a false passport, offenses that carry a maximum term of imprisonment of 10 years on each count.
 
ZIRNSAK and GULA are currently being sought by law enforcement.
 
In January 2014, GULA was charged in the Central District of California with export related offenses. That indictment also is pending.
 
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. …  

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

OGS_a56
State/DDTC Updates Approved Australian Intermediate Consignee List

(Source:
State/DDTC
)
 
The Directorate of Defense Trade Controls (DDTC) has updated the Approved Australian Intermediate Consignee List. The list is available
here

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

OGS_a6
7. 
EU Council Releases Declaration by the High Representative on the Alignment of Certain Third Countries with the EU’s Restrictive Measures Concerning Egypt

 
On 21 March 2017, the Council adopted Council Decision (CFSP) 2017/496 [FN/1]. The Council Decision extends the existing restrictive measures until 22 March 2018. The measures in question are an assets freeze and a prohibition from making funds available regarding 15 individuals considered as responsible for the misappropriation of Egyptian State funds before 2011.
 
The Candidate Countries Montenegro*, Serbia* and Albania*, the country of the Stabilisation and Association Process and potential candidate Bosnia and Herzegovina, and the EFTA countries Iceland, Liechtenstein and Norway, members of the European Economic Area, as well as Ukraine and the Republic of Moldova align themselves with this Council Decision.
 
They will ensure that their national policies conform to this Council Decision.
 
The European Union takes note of this commitment and welcomes it.
 
——–
  [FN/1] Published on 22.03.2017 in the Official Journal of the European Union no. L76, p. 22.
  *Montenegro, Serbia and Albania continue to be part of the Stabilisation and Association Process.

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

NWSNEWS

NWS_a18. 
Automotive News Europe: “French Automakers Push into Iran as Rivals Fear Possible Trump Sanctions”

(Source: Automotive News Europe) [Excerpts.]
 
French carmakers PSA Group and Renault are turning their U.S. absence into an advantage in Iran by piling into a resurgent market still off-limits to foreign rivals fearful of sanctions under Donald Trump’s administration.
 
The French investment has been seized upon by Iranian President Hassan Rouhani, who is seeking re-election this week, as evidence that his pursuit of a nuclear detente and attempts to attract foreign money will pay off for the economy.
 
PSA – the maker of Peugeots and Citroens – and Renault have pushed hard into Iran since its 2015 deal with world powers that saw international sanctions lifted in return for curbs on Tehran’s nuclear activities. PSA has signed production deals worth 700 million euros ($768 million), while Renault has announced a new plant investment to increase its production capacity to 350,000 vehicles a year.
 
The French companies, unlike their German, American and Japanese competitors, do not have manufacturing or sales operations in the United States. This makes them less vulnerable to penalties for any violation of U.S. sanctions still in force which ban financial transactions with Iran.
 
The prospect of a hardened U.S. stance under President Trump – a consistent critic of the nuclear deal – has deepened the caution of carmakers with large American exposures. … 

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

NWS_a02
9.

The Irish Times: “U.S. Drops Sanctions Against Irish-Based Pacnet Executives”

(Source:
The Irish Times
) [Excerpts.]
 
U.S. authorities have dropped sanctions against a number of Irish-based executives working for payments company Pacnet, who were linked to an investigation of the Canadian-headquartered group last year.
 
Last autumn, the US department of the treasury sanctioned Pacnet for allegedly laundering money from schemes used to dupe people out of cash.
 
However, the department’s Office of Foreign Assets Control (OFAC) recently removed the names of a number of the Irish-based Pacnet employees and directors from its special designation list, which bars US residents from doing business with them and froze any assets they may have held in the US.
 
According to a series of statements that OFAC published in recent weeks, former Pacnet Holdings directors Estelle Snyman, Siobhán Hanrahan and Brian Weekes were all removed from the list, effectively clearing them of suspicion.
 
The office delisted London-based director Donna Maria MacBain at the same time and changed the designation of a series of Pacnet group companies in the Republic and the UK. …

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

NWS_a03
10.

Reuters: “American University of Beirut Settles U.S. Lawsuit for $700,000”

 
American University of Beirut, a recipient of U.S. government aid, has agreed to pay $700,000 to settle a civil lawsuit over accusations that it assisted three organizations linked to the militant group Hezbollah, federal prosecutors said.
 
As part of its deal with the U.S. Attorney’s Office in Manhattan, a party to the lawsuit, the university also agreed to revise its policies, prosecutors said in a statement on Thursday.
The agreement resolved a case originally filed under seal by an unnamed complainant.
 
American University of Beirut receives funding from the U.S. Agency for International Development (USAID).
Acting Manhattan U.S. Attorney Joon Kim said in the statement, “For years, the American University of Beirut accepted grant money from USAID, but failed to take reasonable steps to ensure against providing material support to entities on the Treasury Department’s prohibited list.”
 
The U.S. Attorney’s Office said the university in the Lebanese capital admitted to training representatives of al Nour Radio and al Manar TV, media groups that the U.S. Treasury Department lists as branches of the Iranian-backed Hezbollah.
 
Between 2007 and 2009 the university provided the training in workshops to representatives from al Nour and al Manar, who were allowed to participate among a larger group of journalists, a statement from the U.S. Attorney’s Office said.
 
For instance, one workshop was titled “Citizen/Online Journalism” and provided instruction on how to produce blogs, videos and podcasts, prosecutors said.
 
Federal prosecutors said the university used its website to connect students with Jihad al-Binaa, another organization that the U.S. Treasury Department has said is linked to Hezbollah.
 
American University of Beirut (AUB) said in a statement on Friday that its conduct had been neither “knowing, intentional or reckless.”
 
  “AUB is pleased to have reached the settlement and looks forward to continuing to provide a world-class education to students of all backgrounds,” the statement said.
 
The university, founded in 1866, centers its teaching on the American liberal arts tradition.
 
  “With today’s settlement, the university is being made to pay a financial penalty for its conduct, and importantly, it has admitted to its conduct and agreed to put proper precautions in place to ensure that it does not happen again,” Kim said in a statement.
 
The $700,000 penalty levied on the university will be paid to the U.S. government.

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

NWS_a4
11.

ST&R Trade Report: “Trade Groups, Lawmakers Urge Caution on Renegotiating NAFTA”

 
Trade associations and members of Congress were quick to call on U.S. Trade Representative Robert Lighthizer after he was sworn 15 May to take a cautious approach to renegotiating NAFTA. Lighthizer is reportedly meeting with congressional committees this week to discuss the Trump administration’s renegotiation priorities and is expected to soon send Congress a formal 90-day notification of the administration’s intent to launch talks with Canada and Mexico.
 
Four apparel, footwear, and retail trade associations wrote to Lighthizer to express their “very strong support” for the continuation of NAFTA, which Trump has threatened to withdraw from unless the U.S. secures better terms. The letter said NAFTA “directly supports hundreds of thousands” of jobs in these industries “and many millions more indirectly in important agricultural, service, logistics, manufacturing, and retail operations in all 50 states.” The agreement also gives U.S. companies and consumers access to more affordable products and inputs through its duty-free provisions.
 
The trade groups acknowledged that NAFTA should be “updated to reflect today’s business reality and better prepare for future trade patterns.” Issues that should be discussed, they said, include making customs enforcement smarter and more streamlined, facilitating regional value chains, providing for digital trade, and recognizing advancements in trusted trader programs. However, they added, any changes should “do no harm” to existing supply chains, provide for seamless integration with the existing agreement, and afford ample transition for companies to incorporate modifications to their practices and procedures.
 
In a separate letter, 18 senators praised NAFTA for yielding “tremendous growth” in U.S. trade with Mexico and Canada, integrating cross-border supply chains that benefit U.S. employers, and more than tripling U.S. exports of goods and services. They agreed that the 23-year-old agreement “would benefit from strengthening and modernization” but cautioned that efforts to abandon it or impose unnecessary restrictions on trade in North America “will have devastating economic consequences.” 

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

COMMCOMMENTARY

COMM_a01
12. Debevoise & Plimpton LLP Releases New Sanctions Alert Issue

 
Debevoise & Plimpton LLP has released a new Sanctions Alert Issue (Issue 52 of May 2017). The issue includes summaries of new and continued U.S, EU, UK, and UN sanctions. The issue is available
here

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

COMM_a2
13.

Institute for Science and International Security Publishes Export Control Reform Report

 
The Institute for Science and International Security (ISIS) has published a 47-page report on the Export Control Reform Report, entitled “U.S. Export Control Reform: Impacts and Implications for Controlling the Spread of Proliferation-Sensitive Goods and Technologies, A Policy Document for the New President and Congress”. The report is written by
Andrea Sticker
(Senior Policy Analyst) and
David Albright
(Founder and President), and is available
here
. Excerpts of the executive summary are included below.
 
Executive Summary
 
The United States’ export control system serves a vital role in preventing the spread of proliferation-sensitive goods to the nuclear, missile, and military programs of our adversaries, such as Iran and North Korea. Both countries, among others, mount aggressive efforts to obtain controlled goods from the United States and other suppliers. Stopping these countries from succeeding requires a robust, effective export control system.
 
The U.S. control system is complex. Authorities and control lists are delegated to multiple federal agencies, and the system was created largely piecemeal to prevent the spread of sensitive goods during the Cold War. Governmental and non-governmental analyses, along with the relevant exporting sectors of industry, have noted for decades serious problems with the system, including the slow pace of obtaining an export license, overregulation of small parts, the failure of the government to standardize and interconnect information technology (IT) systems, and inefficiencies and redundancies in export law enforcement efforts. With these criticisms in mind, the Obama administration set out in 2009 to carry out a wholesale reform of the system and in 2010 launched the Export Control Reform Initiative (ECR Initiative). The ECR Initiative planned to create a single export licensing agency, merge commodity control lists into a single list, adopt a common IT system, and move most export enforcement efforts under the purview of a single agency. These so-called “four singles” were never achieved due to a shortage of time and a lack of Congressional support for carrying out a bureaucratic restructuring of this scale. Several important and impactful reforms did occur, however, bringing the reforms part of the way to completion.
 
The ECR Initiative at its core attempted to address the question of what the appropriate balance is between increasing U.S. exports and trade and maintaining strict control of sensitive goods in order to enhance national security objectives. Overall, we assess that the reforms tilted the balance more toward increasing exports and trade at the expense of controls and national security. As a result of the reforms, thousands of items usable in military systems and equipment are now more readily available to long time U.S. allies, as well as to some countries of governance or transshipment concern. Little effort was devoted to better securing the most proliferation-sensitive goods. In response to the inherent question asked by the reforms: should the United States loosen controls on items that are being made available from other countries – the answer reached appears to have been tilted to the affirmative. As a result, it is far from clear whether U.S. adversaries such as Iran and North Korea are now increasingly able to obtain sensitive parts and components to outfit their military and other sensitive programs.
 
The export control reforms were announced by the Obama administration to Congress and the business community as an effort to fix overregulation of the most innocuous items and allow allies to obtain needed items more easily, while more tightly regulating the most sensitive goods. These goals are not problematic if the items truly are innocuous and the changes addressed legitimate concerns of the government, allies, and exporters. However, the effort may have simply contributed to increasing the world’s supply of sensitive goods usable in military programs – and thereby increasing availability of such goods to adversaries. This result is likely to be at odds with overarching U.S. national security goals in the long term. Serious review is needed to answer important questions, such as: what damage, if any, has been done to national security objectives by the freer availability of goods usable in military equipment? Where are these goods today? Are they remaining with legitimate end users or are they being sent onward to proliferant states such as Iran, Syria, Pakistan, or North Korea? Are the goods being misused in countries favored by U.S. export control reforms? Is there a need to re-visit controls on some of the goods? What about the integrity of the process for determining the control status of goods in the reformed “catch and release” system? The Obama administration did not have to answer these questions through any substantive reporting or testimony during a review. It is now time for Congress to become involved to ensure that this review and reporting is performed by the executive branch. The risks of not performing such a review may be that only a major scandal associated with the spread of deregulated goods would necessitate a review ipso post facto, which is not a preferable way to conduct policy.
 
In addition, most agree that finishing the ECR Initiative as originally envisioned would be challenging but that stopping the process before the intended completion also has its own risks. A review should seek to determine whether not completing the reforms is on balance a net positive or negative. Have the reforms as completed to date improved the effectiveness of U.S. export controls regarding the transfer of proliferation-sensitive goods? Should the Trump administration push to finish the reforms, in whole or in part? It is important for the Trump administration and Congress to take stock of the ECR Initiative’s accomplishments, including determining the impacts of completing or not completing the process.
 
The Institute for Science and International Security became interested in the results of President Obama’s ECR Initiative in 2015, after hearing differing opinions about the impacts of the reforms. The reforms generated intense controversy among experts, officials, company officials, and practitioners who were involved in the initiative or had seen initial results regarding the control of proliferation-sensitive goods. The Institute decided to investigate the reforms and contact a wide range of officials and experts to better understand and assess the ECR Initiative. This resulting report is intended to serve as a guide for the Trump administration and the 115th session of Congress. It is not intended to be an exhaustive review of every change made under the ECR Initiative, but to focus on those reforms with implications for the control of proliferation-sensitive commodities and technologies. We understand that some readers may disagree strongly with some of the suggestions based on their own experiences in government or industry; however, we have attempted to achieve a balanced assessment of this complex issue and hope that at least some recommendations will appeal to each audience. We welcome feedback and comments on this paper.
 
In Part I of this report, we explain the main elements of the ECR Initiative, including its goals, justification, intended impacts, and status. We also provide an overview of the U.S. export control system, including its licensing and enforcement functions. We describe how the ECR Initiative has impacted government functions more broadly based on preliminary data.
 
Part II discusses the positive, negative, and neutral views of more than a dozen experts we interviewed about the effects of the reforms. These off-the-record meetings included discussions with the following: Obama administration officials and other government personnel (at the time of interviews) who were instrumentally involved in implementing the ECR Initiative, from the Department of Commerce, Department of State, and Department of Homeland Security; U.S. prosecutors; a former law enforcement official from Homeland Security Investigations; lawyers in private practices with former senior federal law enforcement and export control implementation experience; professional staff of members of Congress; a Congressional expert; and private sector representatives. This last group included: the former head of an industry association with senior experience in federal export control implementation; an executive partner at a trade compliance group; and a senior executive in trade compliance at a major international company headquartered in the United States. We also appreciate the informal feedback of several Senate and House Congressional staff members who added importantly to our final version of this paper during meetings in mid-2017. We appreciate the candidness of all of these participants and that they allowed us to better understand the reforms and their impacts through each of their particular lenses of expertise.
 
In Part III we offer policy solutions for mitigating the potential threats identified in Parts I and II that may have been opened by the reforms. These solutions are aimed at better securing efforts to prevent the spread of proliferation-sensitive goods under a reformed U.S. export control system. We also suggest ways for the Trump administration and Congress to further implement and strengthen the reforms. …

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

COMM_a3
14.

S.L. Fredericksen, J.B. Guerrero & G. Husisian: “The Foreign Corrupt Practices Act and the New Trump Administration: Your Top Ten Questions Answered” (Part I of III)

 
* Authors: Scott L. Fredericksen, Esq., sfredericksen@foley.com; Jaime B. Guerrero, Esq., jguerrero@foley.com; and Gregory Husisian, Esq., ghusisian@foley.com. All of Foley & Lardner LLP, Washington DC, Los Angeles, and Washington DC, respectively.  
 
(I) Introduction
 
Since mid-2000s investigation of Siemens, and the resulting $800 million penalty for violations of the Foreign Corrupt Practices Act (FCPA), the FCPA has been an enforcement priority of the U.S. Government. Although a dip in announced penalties in 2015 led some to wonder whether FCPA enforcement had peaked, questions regarding lagging enforcement attention were answered by a record level of enforcement actions and penalties in 2016.
 
Yet while enforcement activity has been strong under the Obama administration, criticisms of the FCPA by President Trump have led some to question whether FCPA enforcement will be a key priority of the new administration. To help companies determine the level of resources and attention that should be allocated to anticorruption compliance, this client alert presents the “top ten” questions that every company operating outside the United States should be thinking about, particularly companies dealing in high-risk environments such as China, India, Africa, Latin America, and other countries or regions that rank high on indices of perceived corruption.
 
This client alert is part of a series of “top ten” articles on the future of key international trade and regulatory issues expected to change under the Trump administration. Previously issued client alerts discuss international trade issues (the future of NAFTA, [FN/1] Customs and Border Protection, [FN/2] and international trade litigation (including antidumping and countervailing duty actions)), [FN/3] international investment (the future of the CFIUS review process [FN/4] and concerns of PE firms), and international regulation (cybersecurity, [FN/5] white collar enforcement, [FN/6] and here, the FCPA). Future client alerts will deal comprehensively with all international trade and regulatory areas where significant change could occur under the new administration.
 
(II) The Top Ten FCPA Questions Answered (or, Will Anti-bribery and Corruption Really Be as Easy as “ABC” under the New Administration?)
 
1. What has President Trump promised?
 
During the election, President Trump did not discuss the FCPA specifically (although he did introduce a promise at the end of the election that he would “drain the swamp,” if elected, a reference to supposed corruption in Washington politics). Prior to the campaign, Mr. Trump expressed skepticism regarding the FCPA in a 2012 interview with CNBC, where Mr. Trump stated that “this country is absolutely crazy” to vigorously prosecute alleged FCPA violations because it puts U.S. businesses at a “huge disadvantage.” Mr. Trump concluded that the FCPA is a “horrible law and it should be changed.” [FN/7]
 
It is not likely that the skepticism of businessman Trump will translate to President Trump pushing for a wholesale overhaul of the law or its revocation. With regard to Mr. Trump’s view that the FCPA imposes a disproportionate impact on U.S. companies, the reality is that seven of the ten largest penalties have been imposed on non-U.S. companies. Strong leadership by the United States on corruption has led to a more consistent level of anticorruption laws around the world. With the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions increasingly becoming the benchmark for anti-bribery standards (it has been signed by more than 40 countries), the result has been other countries enacting FCPA-style legislation or enhancing their measures to meet OECD standards. Both OECD and other countries (often at the urging of the United States) are implementing new anticorruption laws and stepping up their enforcement of their laws. For example, the second half of 2016, alone, saw France modernize its anti-corruption enforcement by adopting the Fight Against Corruption and Modernization of Economic Life law (known as Sapin II) in an effort to expand French jurisdiction over worldwide activity for companies that conduct business in France (among other enforcement strengthening). South Korea has also recently implemented a strengthened anticorruption law that prohibits its officials from accepting meals over 30,000 won (around $25) or gifts over 50,000 (around $45), while Brazil has announced a major series of investigations connected with Petrobas.
 
While it is true that the FCPA formerly put U.S. companies at a disadvantage, with other countries now putting in place their own restrictions on corrupt payments, the bribery-related advantages once enjoyed by companies from other countries have disappeared. This reality, as well as the political imperative that a President elected by promising to “drain the swamp,” will not want to be seen as weakening the principal anticorruption law maintained by the United States. With this in mind, it is unlikely that the FCPA or FCPA enforcement will be weakened under the Trump administration.
 
2. What are recent trends in FCPA enforcement? Will these trends continue?
 
In determining the likely enforcement priorities of the U.S. government, it is important to consider the nominees for the key positions that oversee FCPA enforcement: the Attorney General (criminal FCPA enforcement) and the head of the Securities & Exchange Commission (SEC) (oversight of the accounting provisions of the FCPA for publicly traded companies).
 
With regard to the former, Attorney General Sessions has shown general support for the value of anti-bribery laws, having co-sponsored the Public Corruption Prosecution Improvements Act, which would have revised U.S. law to expand prohibitions against bribery, theft of public money, and other government-related public corruption. As analyzed in the Foley Client Alert regarding white collar enforcement, Mr. Sessions is generally viewed as a law-and-order prosecutor who is unlikely to let violations of white collar laws in general, and the FCPA specifically, slide. [FN/8]
 
With regard to the SEC, Mr. Trump has nominated Jay Clayton, a partner at Sullivan & Cromwell LLP, to chair the Commission. While Mr. Clayton chaired a committee of the New York City Bar Association that put out a 2011 white paper that concluded that rigorous FCPA enforcement was pushing foreign companies to avoid registering as U.S. issuers and stating that the U.S. government should “dial back the scope of FCPA enforcement with respect to companies,” the personal views of Mr. Clayton regarding FCPA enforcement are not known.
 
The SEC in general, however, has in recent years become a strong co-player with the Department of Justice (DOJ) in enforcing the accounting provisions of the FCPA. Institutional forces related to this increased SEC enforcement will push Mr. Clayton towards continuing the strong enforcement of the FCPA. Enforcement of the FCPA has been strong every year since 2008. Although FCPA settlements in 2015 were down (falling to $133 million), this appears to have been a statistical lull based upon the timing of settlements, what with 2014 featuring the announcement of $1.5 billion in penalties and 2016 announcements soaring to $2.48 billion. The new administration will not want to be seen as significantly falling off this pace.
 
At both the DOJ and the SEC, there is an institutional inertia that transcends changes at the political level. Both agencies have bulked up through the hiring of attorneys and the dedication of investigation resources – specifically for anticorruption/FCPA investigations. These new and existing attorneys work with special squads of FBI agents devoted to FCPA investigations and work closely with enforcement counterparts in other countries. The hiring of the first DOJ compliance expert, Ms. Hui Chen, also shows a commitment to FCPA enforcement and the evaluation of compliance measures in enforcement actions. By all reports, there is a strong pipeline of cases under current investigation, including the massive investigation of Wal-Mart’s potential use of bribes as a business-development tool. Further, with the SEC becoming more aggressive in its penalty assessment, and mining its successful whistleblower program for reports of violations, the table is set for continuing strong FCPA enforcement activity.
 
Based on all of these reasons, the chances favor continuing strong enforcement of the FCPA at both the DOJ and the SEC.
 
3. Is Congress likely to change the operation or scope of the FCPA?
 
There have been calls for Congress to change the operation or scope of the FCPA in recent years. For the most part, these proposals have not been attempts to directly ease the reach of the Act, such as by curtailing the controversial (yet effective) assertion of U.S. jurisdiction over tangential contacts with the United States or the U.S. financial system. The proposals, however, could indirectly cause some weakening of the FCPA (in some cases, by design).
 
The most commonly advocated changes involve two areas: (1) greater clarity regarding the scope and coverage of the law; and (2) institutionalizing credit to be given to companies that maintain well-functioning compliance programs. These efforts are encapsulated by the FCPA reform agenda advocated by the U.S. Chamber of Commerce. The key elements of that reform proposal are as follows:
 
  – Allowing for an affirmative defense that would allow the company to rebut the imposition of criminal liability upon a showing that the company maintained a compliance program reasonably designed to prevent FCPA violations.
  – Greater clarity regarding the definition of a “foreign official,” to make clear that a government official is one who acts in a governmental capacity, not one who acts in a commercial capacity for a company that happens to be owned by a foreign government.
  – Greater clarity regarding the definition of what an “instrumentality” is, to allow companies to determine whether they are in fact dealing with a government official in their dealings.
  – Greater clarity regarding parent-subsidiary and successor liability.
  – Greater clarity regarding the state of mind (mens rea standard) needed to support a finding of a violation.
 
Although prospects for significant FCPA weakening are low, some elements of this agenda could find a receptive ground before a pro-business Republican Congress and Republican president. The most likely change would be the introduction of an affirmative defense for effective anticorruption compliance measures. Such a provision would mirror the UK Bribery Act and other anticorruption laws that contain a similar provision to encourage effective compliance.
 
Less certain is whether Congress will enact “clarifying” changes, given that these clarifications generally would curtail the reach of the Act, such as stating that the law does not apply to employees of state-owned entities. There is a bipartisan interest in not appearing to be soft on corruption, especially with regard to bribes by not-particularly-popular U.S. and foreign multinational corporations. The U.S. Government also has an institutional interest in keeping the key terms of the law vague, as the DOJ has used the ambiguity to push an aggressive view of the breadth of the law. Thus, while judicial review of enforcement actions might provide additional clarity regarding these provisions, it is not likely that Congress will take steps to significantly curtail the reach of the law.
 
At the same time, it is possible that any efforts to open up the FCPA to amendment could actually lead to a tightening of the FCPA standards in two areas: coverage of commercial bribery and the elimination of the facilitating payments exception. Many non-U.S. laws, such as the UK Bribery Act, cover both types of bribes, making the FCPA’s approach somewhat dated.
 
Regardless of whether these changes occur, companies should be thinking more broadly about corruption compliance best practices, even if they are not explicitly required to comply with the FCPA. Even if the FCPA allows for commercial bribery and for facilitating payments, such actions often violate local law and make for bad compliance decisions. And the U.S. government has other tools, such as the Travel Act and various wire fraud statutes, to reach commercial bribery. As a result, companies should consider broadening their approach from compliance with the FCPA minimums to maintaining broader anticorruption policies, so as to cover all forms of corruption of any size, whether it involves government officials, private persons, facilitating payments, or even the receipt of bribes (kickbacks).
 
4. The regulatory agencies have a lot of regulations and initiatives in the anticorruption arena. Are these likely to change?
 
The DOJ and the SEC have undertaken several initiatives in recent years, including the issuance of a joint DOJ/SEC set of guidelines, the implementation of an SEC whistleblower program, SEC regulatory efforts, and the FCPA Pilot Program. In the main, these initiatives were intended to increase enforcement attention and to encourage enhanced FCPA compliance. The main recent regulatory initiatives in the anticorruption space, and prospects for change for each, are as follows:
 
  SEC Whistleblower Program
. Although there is pressure to amend the Dodd-Frank program that established this whistleblower regime (as discussed in the Foley Private Equity “Top Ten Questions” alert), the success of the SEC whistleblower program presents institutional pressure to keep it going, regardless of what happens to Dodd-Frank. Since the SEC established a whistleblower program in July of 2010, the SEC program has paid out well in excess of $100 million to whistleblowers, based on the collection of penalties approaching one billion dollars, with much of this activity being in the FCPA realm. The number of tips received annually has grown from 334 in 2011 to 4,218 in 2016. [FN/9]
 
The SEC would hate to give up such a successful source of enforcement leads. The SEC placed a vote of confidence in the whistleblower program in several enforcement actions, against such companies as BlueLinx Holdings, Inc. and Health Net, Inc., which imposed severance agreement requirements stating that outgoing employees must waive their rights to any monetary award from the SEC’s whistleblower program. Underscoring the importance of the program, the SEC imposed significant penalties for the implementation of these provisions even though there was no finding that the provisions had prevented anyone from reporting a potential violation to the SEC.
 
As Jane Norberg, Chief of the SEC’s Office of the Whistleblower, summarized the SEC’s view that the whistleblower program has had a “transformative effect” on SEC enforcement activity. [FN/10] The whistleblower program accordingly is likely to survive any changes to the Dodd-Frank Act that initially authorized it. Further, even if the Dodd-Frank authorization were to disappear, the SEC nonetheless might use its inherent regulatory powers to continue a variation of it. It is unlikely Congress would take steps to bar this, given the blowback that such a softening of a well-known anticorruption initiative would create.
 
  FCPA Pilot Program
. The FCPA Pilot Program was announced as part of a three-part approach to FCPA enforcement in a memorandum from Andrew Weissmann, the Chief of the DOJ’s Fraud Unit. The three initiatives were that: (1) the DOJ would be “intensifying its investigative and prosecutorial efforts by substantially increasing its FCPA law enforcement resources,” including a fifty percent increase in the number of FCPA-specialist prosecutors; (2) there would be a “strengthening” of DOJ “coordination with foreign counterparts in the effort to hold corrupt individuals and companies accountable”; and (3) there would be an FCPA “pilot program,” which would be a one-year program designed “to promote greater accountability for individuals and companies that engage in corporate crime by motivating companies to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their internal control and compliance programs.” Consistent with the dictates of the Yates Memorandum, the FCPA Pilot Program is intended in part to hold individuals responsible for FCPA violations. The FCPA Pilot Program also included circumstances where the DOJ could use its discretion to decline prosecution. These declinations can be used only if certain conditions are satisfied, including complete cooperation and disgorgement of profits gained as a result of the bribes paid.
 
There are several more months during which the FCPA Pilot Program will run. It appears, however, that the Pilot Program has been successful and that it will be renewed or perhaps made permanent.
 
  Yates Memorandum
. The Yates Memorandum, among other things, is designed to increase the focus on individual actors in DOJ enforcement actions. With Attorney General Sessions a law-and-order former prosecutor, who, in the past, has expressed support for prosecuting individuals where they are involved in corporate crime, it is unlikely that the DOJ will seek to weaken the provisions of the Yates Memorandum. The Yates Memorandum is discussed more extensively in Foley’s White Collar Enforcement client alert. [FN/11]
 
  Extractive Regulations. In contrast to the initiatives listed above, which are expected to continue in force, the draft extractive regulation rule will not become permanent law. A draft reporting rule issued by the SEC required that oil, natural gas, and mining companies reveal details about payments made to secure the right to extract resources. The extractive reporting rule (Rule 13q-1) required that, for fiscal years ending on or after September 30, 2018, companies in the impacted industries make detailed reports regarding payments made to foreign and domestic governments for the commercial development of oil, natural gas, or minerals.
 
This rule met fierce political opposition, illustrating the difference between weakening an existing law like the FCPA and creating a new anticorruption requirement that targets a specific group of well-connected companies. Following a Joint Congressional resolution disapproving of the rule pursuant to the Congressional Review Act (which permits Congress, by simple majority, to disprove rules shortly following their adoption), President Trump endorsed the invalidation of the rule. Under the terms of the Congressional Review Act, the SEC is precluded from re-adopting the rule, even though the Dodd-Frank Act required the issuance of a resource extraction disclosure rule.
[Editor’s note: This client alert is part of a series of “top ten” articles on the future of key international trade and regulatory issues expected to change under the Trump administration. Due to space limitations, this alert is divided into three parts. Part II and Part III will be posted in the Daily Bugle of Thursday, 18 May, and of Friday, 19 May, respectively.]

——–

  [FN/1] See Gregory Husisian and Robert Huey, “NAFTA and the Trump Administration: Your Top Ten Questions Answered,” available
here.

  [FN/2] See Gregory Husisian and Robert Huey, “U.S. Customs and the Trump Administration: Your Top Ten Questions Answered,” available here.
  [FN/3 See Gregory Husisian and Robert Huey, “International Trade Litigation and the Trump Administration: Your Top Ten Questions Answered,” available here.
  [FN/4] See Gregory Husisian, “CFIUS and the New Trump Administration: Your Top Ten Questions Answered,” available here.
  [FN/5] See Gregory Husisian, Chanley Howell, and Jacob Heller, “Cybersecurity and the new Trump Administration: Your Top Ten Questions Answered,” available here.
  [FN/6] See Scott Fredericksen and Gregory Husisian, “White Collar Enforcement and the New Trump Administration: Your Top Ten Questions Answered,” available here.
  [FN/7] See FCPA Professor, “The FCPA is a Horrible Law and It Should be Changed,” available here.
  [FN/8] See Scott Fredericksen and Gregory Husisian, “White Collar Enforcement and the New Trump Administration: Your Top Ten Questions Answered,” available here.
  [FN/9] See 2016 Annual Report to Congress on the Dodd-Frank Whistleblower Program.
  [FN/10] See 2016 Annual Report to Congress on the Dodd-Frank Whistleblower Program.
  [FN/11] See Scott Fredericksen and Gregory Husisian, “White Collar Enforcement and the New Trump Administration: Your Top Ten Questions Answered,” available here.

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

 
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059,
gstanley@glstrade.com
 
Electronic and print services for the distribution of information may be relatively expensive in the marketplace because of the value vendors add in retrieving and organizing information in a useful way. If such information is also available in a library — itself accessible to the public — or has been published in any way, that information is “publicly available” for those reasons, and the information itself continues not to be subject to the EAR even though you access the information through an electronic or print service for which you or your employer pay a substantial fee.

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

COMM_a05
16.

R.C. Burns: “Send 3 Bitcoins to the Norks or You’ll Never See Your Files Again!”

(Source:
Export Law Blog
. Reprinted by permission.)
 
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC,
Clif.Burns@bryancave.com
, 202-508-6067)
 
Security researchers have
indicated
 that they have found Kim Jong Un’s pawprints all over the code used for the WannaCry ransomware, stolen from the CIA vaults by Vladimi Putin’s BFFs at WikiLeaks. This, of course, raises the question as to whether companies that got locked out of their files by the ransomware violated the U.S. sanctions on North Korea if they paid the Bitcoin ransom to free their files.
 
The first part of that question that needs to be answered is whether U.S. sanctions are violated just by sending money to someone in North Korea. You can’t answer that question by looking at OFAC’s Nork sanctions regulations, because they are woefully out of date. The provisions in the regulations prohibit dealings with blocked parties in North Korea. But
Executive Order 13722
, issued on March 18, 2016, prohibits the unlicensed export of services by a United States person or from the United States to North Korea. In OFAC’s view, sending money to North Korea is an export of financial services to that country.
 
So obviously a Bitcoin ransom payment, if it winds up in Kim Jong Un’s hands, is a problem for U.S. persons. It looks like most of the ransom payments made so far came from outside the United States. What about them? All my readers should know that OFAC takes the position that if payments are made to sanctioned countries in U.S. Dollars, that is an export of financial services from the clearing bank in the United States to the sanctioned country. But Bitcoin payments don’t involve any banks. That’s the whole point. So no problem, right?
 
Not so fast. Think about how Bitcoin and the blockchain works. Any time a payment is made it will be reflected on the blockchain of all Bitcoin transactions and will be propagated to all computers running Bitcoin software – including a massive number of computers in the United States.
 
All that being said, there are a few practical roadblocks between a Bitcoin ransom payment to the Norks and an OFAC investigation. First, the
Chiquita case
aside, there has been a general hesitance to go after people who pay these ransoms. To begin with, it looks bad. What government agency wants to go after a shipping company that pays off Somali pirates to protect their crew and property even if one or more of the pirates turns out to be an SDN? (The most OFAC has done here has been to
say
that payments should not be made to SDN pirates but never explained how to figure out whether the pirate is an SDN. Do you ask him to fax you his passport before the helicopter drops the ransom money on the deck?)
 
Second, there are difficulties in proving the identity of persons to whom Bitcoin payments are made. Presumably the Norks would not have been stupid enough to establish the Bitcoin wallet or wallets using traceable IP addresses and were using clean addresses for each ransom transaction. So the de-anonmyzing of the people receiving the Bitcoin payments would rely on vulnerabilities in TOR and methods to link multiple transactions by analyzing the blockchain itself. The various techniques do not always work but they can in certain circumstances. However, how likely is it that OFAC will engage in these analyses to track down the ultimate recipient of the ransom payments?
 
Bonus round: In case you haven’t been reading the Twitter feed of the Nork news service, you will have missed
this
.

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

TEEX/IM TRAINING EVENTS & CONFERENCES

 
* What: The conference has been segmented into two tracks following both import and export.
View the
Agenda
.
* When: 11-13 June 2017
* Where: Radisson Blu St. Helens, Stillorgan Road, Blackrock, Booterstown, Dublin, Ireland
* Sponsor: International Compliance Professional Association (ICPA)
* Register
Here
.
* * * * * * * * * * * * * * * * * * * *

ENEDITOR’S NOTES

* Stewart Alsop (Stewart Johonnot Oliver Alsop, May 17, 1914 – May 26, 1974. was an American newspaper columnist and political analyst.)
  – “A dying man needs to die, as a sleepy man needs to sleep, and there comes a time when it is wrong, as well as useless, to resist.”
 
* Anna Jameson (Anna Brownell Jameson, 17 May 1794 – 17 Mar 1860, was a British writer. A volume of essays published in 1846 contains one of Jameson’s best pieces of work, The House of Titian.)
  – “What we earnestly aspire to be, that in some sense we are.”

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

EN_a319
. Are Your Copies of Regulations Up to Date?
(Source: Editor)

The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.  Changes to applicable regulations are listed below.
 
*
ATF ARMS IMPORT REGULATIONS
: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War
  – Last Amendment: 15 Jan 2016: 81 FR 2657-2723: Machineguns, Destructive Devices and Certain Other Firearms; Background Checks for Responsible Persons of a Trust or Legal Entity With Respect To Making or Transferring a Firearm. 
 
*
CUSTOMS REGULATIONS
: 19 CFR, Ch. 1, Pts. 0-199
  – Last Amendment: 27 Jan 2017: 82 FR 8589-8590: Delay of Effective Date for Importations of Certain Vehicles and Engines Subject to Federal Antipollution Emission Standards; and 82 FR 8590: Delay of Effective Date for Toxic Substance Control Act Chemical Substance Import Certification Process Revisions.

* DOD NATIONAL INDUSTRIAL SECURITY PROGRAM OPERATING MANUAL (NISPOM): DoD 5220.22-M
  – Last Amendment: 18 May 2016: Change 2: Implement an insider threat program; reporting requirements for Cleared Defense Contractors; alignment with Federal standards for classified information systems; incorporated and canceled Supp. 1 to the NISPOM  (Summary here.)

* EXPORT ADMINISTRATION REGULATIONS (EAR): 15 CFR Subtit. B, Ch. VII, Pts. 730-774 
  – Last Amendment: 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: 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 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.

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

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

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

EPEDITORIAL POLICY

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

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

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

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

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

Scroll to Top