;

17-0523 Tuesday “Daily Bugle”

17-0523 Tuesday “Daily Bugle”

Tuesday, 23 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 
here
for free subscription.
Contact us
 for advertising inquiries and rates.

  1. Commerce/BIS Releases Procedures Concerning Public Hearing on National Security Investigation of Imports of Steel 
  2. Treasury/OFAC Updates List of Medical Supplies for Ukraine-Related Sanctions 
  3. USTR Seeks Comments and Announces Hearing on Negotiating Objectives Regarding Modernization of NAFTA 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. DHS/CBP Disables ACS ABI Entry Status ‘II’ and Cargo/Manifest ‘IN’ 
  4. DHS/CBP Duplicates Entries for the Hanjin Scarlet v29e Area Port of Seattle 
  5. DHS/CBP Releases Information Concerning Storm Damage at Port of Laredo Commercial Bridge 
  6. DoD/DSCA Publishes SAMM and Policy Memorandum, 21-27 May 
  7. Justice: Defense Contractor Employee Pleads Guilty to Selling Satellite Secrets to Undercover Agent Posing as Russian Spy 
  8. State/DDTC: (No new postings.) 
  9. EU Publishes Notice Concerning the Protocol (2015) Amending the Annex to the Agreement on Trade in Civil Aircraft 
  1. Daily Breeze: “Defense Worker from Culver City Admits Selling Satellite Secrets to FBI Agent Posing as Russian Spy” 
  2. Global Trade News: “Updates on Automated Commercial Environment” 
  3. The Guardian: “UN Experts Hacked While Investigating Violations of Sanctions on North Korea” 
  4. ST&R Trade Report: “Import Restrictions Imposed on Automated Teller Machines” 
  1. Arent Fox: “USTR Hearings Set for NAFTA Renegotiations” 
  2. D. Harmon: “Compliance Program Oversight-The Board’s Overlooked Role” 
  3. M. Volkov: “Take the FCPA Quiz and Test Your Knowledge of the FCPA” 
  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_a11.

Commerce/BIS Releases Procedures Concerning Public Hearing on National Security Investigation of Imports of Steel

 
82 FR 23529-23530: Notice on Procedures for Attending or Viewing Remotely the Public Hearing on Section 232 National Security Investigation of Imports of Steel
 
* AGENCY: Bureau of Industry and Security, Office of Technology Evaluation, U.S. Department of Commerce.
* ACTION: Notice on procedures for attending or viewing remotely the public hearing.
* SUMMARY: On April 26, 2017, the Bureau of Industry and Security (BIS), published the Notice Request for Public Comments and Public Hearing on Section 232 National Security Investigation of Imports of Steel. The April 26 notice specified that the Secretary of Commerce initiated an investigation to determine the effects on the national security of imports of steel. This investigation has been initiated under section 232 of the Trade Expansion Act of 1962, as amended. (See the April 26 notice for additional details on the investigation and the request for public comments.)
  The April 26 notice also announced that the Department of Commerce will hold a public hearing on the investigation on May 24, 2017 in Washington, DC. Today’s notice provides additional details on the procedures for attending the hearing and for viewing the hearing, via webcast.
* DATES: The hearing will be held on May 24, 2017 at the U.S. Department of Commerce auditorium, 1401 Constitution Avenue NW., Washington, DC 20230. The hearing will begin at 10:00 a.m. local time and conclude at 1:00 p.m. local time.
* FOR FURTHER INFORMATION CONTACT: Brad Botwin, Director, Industrial Studies, Office of Technology Evaluation, Bureau of Industry and Security, U.S. Department of Commerce (202) 482-4060, brad.botwin@bis.doc.gov. For more information about the section 232 program, including the regulations and the text of previous investigations, see here.
* SUPPLEMENTARY INFORMATION: … Today’s notice provides additional details on the procedures for attending the hearing and for viewing the hearing, via webcast.
 
Procedure for Attending the Hearing, or Viewing the Hearing Via Webcast
 
  Registration: Individuals and entities who wish to attend the public hearing are required to pre-register for the meeting on-line here (preferred) or by emailing Steel232@bis.doc.gov. Anyone wishing to attend this public hearing must register by 5:00 p.m. (EST), Tuesday, May 23, 2017.
  Webcast: The public hearing will be available live via webcast. Please click here.
  Visitor Access Requirement: For participants attending in person, please note that federal agencies can only accept a state-issued driver’s license or identification card for access to federal facilities if such license or identification card is issued by a state that is compliant with the REAL ID Act of 2005 (Pub. L. 109-13), or by a state that has an extension for REAL ID compliance. The main entrance of the Department of Commerce is on 14th Street NW. between Pennsylvania Avenue and Constitution Avenue, across from the Ronald Reagan Building. Upon entering the building, please go through security and check in at the guard’s desk. BIS staff will meet and escort visitors to the auditorium.
  Non U.S. Citizens Please Note: All foreign national visitors who do not have permanent resident status and who wish to register for the above meeting must fax a copy of their passport to (202) 482-5361. Please also bring a copy of your passport on the day of the hearing to serve as identification. Failure to provide this information prior to arrival will result, at a minimum, in significant delays in entering the facility. Authority to gather this information is derived from United States Department of Commerce Department Administrative Order (DAO) number 207-12. Please click here to register and for more details regarding this requirement.
 
  Dated: May 17, 2017.
Matthew S. Borman, Deputy Assistant Secretary for Export Administration.

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

EXIM_a2
2. Treasury/OFAC Updates List of Medical Supplies for Ukraine-Related Sanctions

(Source: Federal Register) [Excerpts.]
 
82 FR 23716-23721: Update to the List of Medical Supplies for Ukraine-Related Sanctions
 
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Notice, publication of updated list of items defined as medical supplies.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing the list of items defined as medical supplies (List of Medical Supplies) and generally licensed for exportation or reexportation to the Crimea region of Ukraine pursuant to General License 4 under Executive Order 13685 of December 19, 2014, which is part of OFAC’s Ukraine-related sanctions program. OFAC is publishing the List of Medical Supplies both as originally posted on December 19, 2014 and as updated on August 12, 2016 to include additional items.
* DATES:  Effective Date: August 12, 2016. …
* SUPPLEMENTARY INFORMATION: … The text of the List of Medical Supplies, General License 4 under the Ukraine-related sanctions program, and additional information concerning OFAC are available from OFAC’s Web site. … The [new] versions correct a typographical error in versions that were previously published on OFAC’s Web site. …
 
  Dated: May 18, 2017.
Andrea M. Gacki, Acting Director, Office of Foreign Assets Control.

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

EXIM_a3
3. USTR Representative Seeks Comments and Announces Hearing on Negotiating Objectives Regarding Modernization of NAFTA

(Source: Federal Register) [Excerpts.]
 
82 FR 23699-23700: Request for Comments on Negotiating Objectives Regarding Modernization of the North American Free Trade Agreement With Canada and Mexico
 
* AGENCY: Office of the United States Trade Representative (USTR).
* ACTION: Request for comments and notice of public hearing.
* SUMMARY: The United States intends to commence negotiations with Canada and Mexico regarding modernization of the North American Free Trade Agreement (NAFTA). The NAFTA was negotiated more than 25 years ago, and, while our economy and U.S. businesses have changed considerably over that period, NAFTA has not. The United States seeks to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities under NAFTA. Our specific objectives for this negotiation will comply with the specific objectives set forth by Congress in section 102 of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015. The Office of the United States Trade Representative (USTR) is seeking public comments on matters relevant to the modernization of NAFTA in order to inform development of U.S. negotiating positions.
* DATES: If you want to testify at the hearing, you must provide written notification and a summary of your testimony by Monday, June 12, 2017. Written comments also are due by Monday, June 12, 2017. A hearing will be held at 9 a.m. in the Main Hearing Room of the United States International Trade Commission, 500 E Street SW., Washington, DC 20436, on Tuesday, June 27, 2017.
* ADDRESSES: You should submit notifications of intent to testify and written comments through the Federal eRulemaking Portal: here. Follow the instructions for submitting comments in part 3 below. For alternatives to on-line submissions, please contact Yvonne Jamison, Trade Policy Staff Committee, at (202) 395-3475. …
 
  Edward Gresser, Chair of the Trade Policy Staff Committee, Office of the United States Trade Representative.

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

OGS
OTHER GOVERNMENT SOURCES

OGS_a14. Ex/Im Items Scheduled for Publication in Future Federal Register Editions

(Source: Federal Register)

 

* Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Dates: 24 May 2017.]

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

OGS_a25. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)

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

OGS_a36.

DHS/CBP Disables ACS ABI Entry Status ‘II’ and Cargo/Manifest ‘IN’

(Source:
CSMS# 17-000294, 22 May 2017.)
 
Effective Wednesday, 31 May 2017, the ACS “Entry Status Query” and “Cargo/Manifest Query”, with ABI application IDs “II” and “IN”, respectively, will be disabled/retired. Trade users should instead already be using the ACE Cargo/Manifest/Entry Release Query (CQ).
 
If you have any concerns about no longer being able to use these two ACS ABI queries, please contact your assigned CBP Client Representative.

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

OGS_a47.

DHS/CBP Duplicates Entries for the Hanjin Scarlet v29e Area Port of Seattle

(Source:
CSMS# 17-000295, 23 May 2017.)
 
The Hanjin Scarlet v29e scheduled to discharge at port 3001 in the Area Port of Seattle on 3 September 2016 was diverted to Canada. Currently there are still entries filed against deleted bills of lading for that vessel where duties and fees have been paid. Most of the cargo was returned to the Seattle area via truck, rail and barge shipments and replacement entries were filed at various Seattle Area ports of entry.
 
Please research your files for that specific voyage of that vessel into Seattle to see if you have any outstanding duplicate entries and submit administration/cancellation requests to the Seattle Entry Branch attention Supervisory Entry Specialist Shelly Kosaka at Shelly.E.Kosaka@CBP.DHS.GOV

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

OGS_a58.

DHS/CBP Releases Information Concerning Storm Damage at Port of Laredo Commercial Bridge

(Source:
CSMS# 17-000296, 23 May 2017.)
 
Due to power outages, flooding and structural damage sustained from heavy rains and high winds on Sunday, 21 May, by joint agreement between U.S. Customs and Border Protection (CBP), Laredo Port of Entry and Servicio de Administración Tributaria (SAT), Aduana Mexico, cargo operations will be temporarily suspended at World Trade Bridge effective on Monday, 22 May 2017. Commercial traffic will be rerouted to the Colombia-Solidarity Bridge. Please stay tuned for updates regarding business resumption at World Trade Bridge. As provided for by bi-national business resumption plans, CBP and SAT will work collaboratively to prioritize FAST, perishable, and medical related shipments as truck lanes become operational at WTB.
 
Snow day being granted to filers for statements and payments due Monday, 22 May 2017.

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

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

OGS_a710.

Justice: Defense Contractor Employee Pleads Guilty to Selling Satellite Secrets to Undercover Agent Posing as Russian Spy

 
Gregory Allen Justice, 49, of Culver City, California, has pleaded guilty to federal charges of one count of attempting to commit economic espionage and one count of attempting to violate the Arms Export Control Act. The charges are related to Justice’s selling sensitive satellite information to a person he believed to be an agent of a Russian intelligence service. Justice was an engineer who worked for a cleared defense contractor. Specifically, he worked on military and commercial satellite programs. …
 
According to a plea agreement filed in this case, Justice stole proprietary trade secrets from his employer and provided them to a person he believed to be a Russian agent – but who in fact was an undercover FBI employee.
 
In addition to their proprietary nature, the documents contained technical data covered by the U.S. Munitions List and therefore were subject to controls restricting export from the U.S. under the International Traffic in Arms Regulations.
 
In exchange for providing these materials during a series of meeting between February and July of 2016, Justice sought and received thousands of dollars in cash payments. During one meeting, Justice and the undercover agent discussed developing a relationship like one depicted on the television show “The Americans,” and during their final meeting, Justice offered to take the undercover agent on a tour of his employer’s production facilities where Justice said all military spacecraft were built, according to the plea agreement.
 
Justice faces a maximum sentence of 35 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
 
Justice pleaded guilty before U.S. District Judge George Wu, who scheduled a sentencing hearing for September 18. Justice has been in custody since his arrest in July 2016. … 

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

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

OGS_a912.

EU Publishes Notice Concerning the Protocol (2015) Amending the Annex to the Agreement on Trade in Civil Aircraft

 
The Protocol (2015) amending the Annex to the Agreement on Trade in Civil Aircraft will enter into force on 26 May 2017.

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

NWSNEWS

NWS_a113.

Daily Breeze: “Defense Worker from Culver City Admits Selling Satellite Secrets to FBI Agent Posing as Russian Spy”

(Source:
Daily Breeze) [Excerpts.]
 
A defense contractor from Culver City with an affinity for Jason Bourne, James Bond and the television show “The Americans,” pleaded guilty Monday to selling sensitive satellite information to a person he believed was a Russian spy, prosecutors said.
 
Gregory Allen Justice, 49, could be sent to federal prison for up to 35 years.
 
Justice, an engineer, stole proprietary trade secrets from his employer and provided them to someone posing as a Russian intelligence agent. The “spy” was actually an undercover FBI employee, the U.S. Attorney’s Office said.
 
Published reports quoted Justice’s father as saying Justice worked for Boeing Satellite Systems in El Segundo.
 
According to a 72-page FBI affidavit, Justice told the undercover agent he needed money to pay his house-bound’s wife’s extensive medical bills and was in a position to download secret files from his computer.
 
Justice began his path toward espionage in 2013, when he paid more than $4,000 during the next two years for online courses that included “Spy Escape and Evasion,” “Delta Defense,” and “Legally Concealed,” authorities said. … 

[Editor’s Note: this article is related to item #10 of today’s Daily Bugle.]

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

NWS_a214.

Global Trade News: “Updates on Automated Commercial Environment”

 
U.S. Customs and Border Protection is working to complete the final deployment of core trade processing capabilities in the Automated Commercial Environment (ACE). As part of the delivery of core trade processing in ACE, CBP has established a series of mandatory use dates for transitioning to ACE.
 
ACE is now the primary system through which the trade community reports imports and exports and the government determines admissibility. Through ACE as the Single Window, manual processes are streamlined and automated, paper is being eliminated and the trade community is able to more easily and efficiently comply with U.S. laws and regulations. Working in close coordination with the Department of Homeland Security, the Border Interagency Executive Council, and the White House, CBP is on track to meet an executive order signed in 2014. An executive order in December 2016 gained further ground for ACE.
 
At a recent presentation for NAFTZ Spring Seminar, John Swanson, Director of Cargo Security and Controls with U.S. Customs and Border Protection’s Office of Field Operations, and Melissa Irmen, Integration Point Sr. VP-Products & Strategy, spoke about recent and upcoming updates relating to ACE, including the timing of e214 integration and success with Partner Government Agencies (PGAs).
 
E214 Timing for U.S Foreign-Trade Zones
 
Nearly a decade ago, filers and brokers who wanted to admit goods into a U.S. Foreign-Trade Zone (FTZ) were required to submit a paper CBP Form 214 to CBP as well as transmit an encrypted ASCII file to the US Census Bureau.
 
Now, the FTZ e214 application for electronic admission filings presents multiple benefits, including a reduction in the amount of document handling placed on CBP personnel and FTZ operators. Although e214 made electronic, filing is not going directly in the ACE system and importers and exporters will need to prepare for transitions that will not use ABI.
 
CBP has announced plans to integrate the e214 into ACE in two phases:
 
Phase 1
 
  – As part of core trade processing in ACE, CBP will transition the current e214 mainframe functionality into ACE.
  – Trade testing in the Certification environment is planned to begin in July 2017.
  – Deployment to the Production environment is targeted for late summer of 2017.

Phase 2
 
As part of post-core trade processing, CBP needs funding to develop enhancements in ACE for the e214, including:
 
  – Integration with PGAs for e214 data
  – Enhanced in-bond integration to remove redundant requirements
  – Interface with the Document Integration System
  – Enhancement of zone-to-zone movements to remove redundant requirements and improve efficiencies
 
PGAs and the Pilot Program
 
Since the ACE core deployment began, CBP has automated 250-plus paper forms, coordinated with 40-plus vendors to update software to support their customers, developed $5.3-plus million lines of code and trained 7,500 CBP field users. As part of developing ACE, more than 100 Federal Register notices to support policy have been published.
 
In addition, working with PGAs has gained traction as ACE eliminates the need to submit PGA paper forms and promotes overall trade compliance. A total of 269 PGA forms have been automated, 28 agencies have met data requirements, 14 agencies only collect import data in ACE, eight agencies collect import and export data and two only collect export data.
 
CBP is continuing to coordinate with PGAs through the ACE pilot program, an opportunity for the trade community to work closely with CBP as they transition filers to ACE.
 
File Directly from a Common Platform
 
Complying with CBP ACE filing requirements may take time and training. Companies need to understand regulation deadlines and have ready-made solutions that can support ACE filing. 
 

Integration Point offers a comprehensive suite of global trade management products encompassing all industries, geographies, and trade programs.  A key part of Integration Point’s global trade management platform is the ability to file directly with any government agency around the world. For the United States that includes providing importers and exporters alike direct filing capabilities with ACE. By managing the entire import and export process end-to-end on a common, shared platform, companies are able to track the entire process, leading to stronger compliance and control.

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

NWS_a0315.

The Guardian: “UN Experts Hacked While Investigating Violations of Sanctions on North Korea”

(Source:
The Guardian) [Excerpts.]
 
United Nations experts investigating violations of sanctions on North Korea have suffered a “sustained” cyber-attack by unknown hackers with “very detailed insight” into their work, according to an email warning seen by Reuters.
 
The hackers eventually breached the computer of one of the experts on 8 May, the chair of the panel of experts wrote in an email to UN officials and the UN security council’s North Korea sanctions committee, known as the 1718 committee.
 
  “The zip file was sent with a highly personalized message which shows the hackers have very detailed insight into the panel’s current investigations structure and working methods,” read the email, which was sent on 8 May. … 

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

NWS_a416.

ST&R Trade Report: “Import Restrictions Imposed on Automated Teller Machines”

 
In investigation 337-TA-972 the International Trade Commission has determined that the importation, sale for importation, and sale within the U.S. after importation of automated teller machines, ATM modules, components thereof, and products containing the same are violating patent claims asserted by Diebold Incorporated and Diebold Self-Service Systems. As a result, the ITC has issued a limited exclusion order prohibiting the entry of infringing goods and cease and desist orders directed to the respondents, although these orders permit the respondents to import replacement parts for their customers who need to repair subject goods imported prior to the date of the orders. The ITC has also determined that a bond in the amount of 100 percent of the entered value is required for infringing goods to continue entering the U.S. during the 60-day presidential review period.

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

COMMCOMMENTARY

COMM_a117.

Arent Fox: “USTR Hearings Set for NAFTA Renegotiations”


(Source: Kay Georgi, Arent Fox,
kaygeorgi@arentfox.com)
 
The Office of the US Trade Representative announced it will hold a public hearing on 27 June to discuss next steps for NAFTA renegotiations. This will follow a public comment period that will end on June 12. In a Federal Register notice slated to be published on Tuesday, 23 May (today) USTR said it is “seeking public comments on matters relevant to the modernization of NAFTA in order to inform development of US negotiating positions.”
 
USTR’s Trade Policy Staff Committee identifies several areas for specific comments. The full list is provided below. Readers will take note that USTR staff will be looking at key industries on a NAFTA rule and product-by-product basis:
 
  – General and product-specific negotiating objectives for Canada and Mexico in the context of a NAFTA modernization.
  – Economic costs and benefits to US producers and consumers of removal of any remaining tariffs and removal or reduction of non-tariff barriers on articles traded with Canada and Mexico.
  – Treatment of specific goods (described by HTSUS numbers), including comments on:
  – Product-specific import or export interests or barriers;
  – Experience with particular measures that should be addressed in negotiations; and
  – Addressing any remaining tariffs on articles traded with Canada, including ways to address export priorities and import sensitivities related to Canada and Mexico in the context of the NAFTA.
  – Customs and trade facilitation issues that should be addressed in the negotiations.
  – Appropriate modifications to rules of origin or origin procedures for NAFTA qualifying goods.
  – Any unwarranted sanitary and phytosanitary measures and technical barriers to trade imposed by Canada and Mexico that should be addressed in the negotiations.
  – Relevant barriers to trade in services between the United States, Canada, and Mexico that should be addressed in the negotiations.
  – Relevant digital trade issues that should be addressed in the negotiations.
  – Relevant trade-related intellectual property rights issues that should be addressed in the negotiations.
  – Relevant investment issues that should be addressed in the negotiations.
  – Relevant competition-related matters that should be addressed in the negotiations.
  – Relevant government procurement issues that should be addressed in the negotiations.
  – Relevant environmental issues that should be addressed in the negotiations.
  – Relevant labor issues that should be addressed in the negotiations.
  – Issues of particular relevance to small and medium-sized businesses that should be addressed in the negotiations.
  – Relevant trade remedy issues that should be addressed in the negotiations.
  – Relevant state-owned enterprise issues that should be addressed in the negotiations.

[Editor’s Note: this article is related to the Federal Register notice published under item #1 of today’s Daily Bugle.]

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

COMM_a0218.

D. Harmon: “Compliance Program Oversight-The Board’s Overlooked Role”

 
* Author: R. Douglas Harmon, Esq., dougharmon@parkerpoe.com, Parker Poe Adams & Bernstein LLP (Charlotte, NC).
 
It’s long been axiomatic that an effective compliance program cannot exist without a strong ethics and compliance culture, which in turn requires the proper “tone from the top.” Yet, when most companies think “top,” they think C-suite. After all, tone starts with the CEO, right? And the C-suite is where you find many CCOs, or the executive to whom the CCO directly reports.
Also, that’s where decisions are made about staffing the compliance function, allocating funds to implement the program and the host of other operational matters that determine whether the program is robust, minimalistic or non-existent. Often overlooked, however, is the crucial role of the board of directors.
 
Most directors have a general understanding that their fiduciary duties include compliance oversight. After all, it’s been more than 20 years since the Delaware Court of Chancery held in its famous Caremark decision that directors could, in certain circumstances, be determined to have breached their fiduciary duty and, therefore, be liable for company losses due to compliance program failures. Later, the Delaware Supreme Court in Stone v. Ritter held that a director’s failure to implement and oversee aspects of a compliance program could constitute an unindemnifiable breach of the duty of loyalty.
 
But how well do boards really understand their compliance program obligations? And to what extent do many boards devote time and effort to ensuring that their performance would pass muster under the microscope of hindsight when (not if) a compliance breach occurs? Is it enough for them to know that someone in the company has been given the title of CCO? Is it enough to allocate 30 minutes each year to listening to a compliance report from the CCO? How about 15 minutes per quarter? If asked, could each director describe how the company’s compliance program is structured and how it operates? Could they provide convincing assurances to a third party that it operates effectively?
 
The U.S. Sentencing Guidelines were promulgated by the U.S. Sentencing Commission in 1991 so that sanctions imposed on entities and individuals “will provide just punishment, adequate deterrence, and incentives for organizations to maintain internal mechanisms for preventing, detecting, and reporting criminal conduct.” While there are many important reasons to establish and maintain an effective compliance program beyond simply seeking to minimize criminal penalties, the Sentencing Guidelines are a key consideration in that effort. It is interesting, therefore, to note that Chapter 8 of the Sentencing Guidelines Manual states in plain English that:
 
The organization’s governing authority shall be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.
 
Admittedly, words like “knowledgeable,” “reasonable” and “oversight” provide some interpretive wiggle room. Nevertheless, the scope of this language is not the kind of thing you want to be arguing about with a government investigator (or a plaintiff’s attorney, in other contexts) following a compliance breach, particularly with the current emphasis on risk management and compliance. Much better would be to have a robust compliance program in which the board clearly has been, and remains, actively involved so that questions of duty of care and loyalty are never seriously at issue.
 
With compliance working its way toward the top of things that keep general counsels and other executives awake at night, one wonders to what extent directors should likewise be pondering whether they are truly fulfilling their fiduciary duty to oversee the activities necessary for ensuring proper compliance. Put another way, would your directors be highly confident that they can pass the standard articulated, for example, by the Sentencing Guidelines? Would you be reluctant to ask them?

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

COMM_a0319. M. Volkov: “Take the FCPA Quiz and Test Your Knowledge of the FCPA”

(Source: Volkov Law Group Blog. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com.
 
Workplace Answers, a sponsor of Corruption, Crime & Compliance, is offering an online FCPA Quiz.  It is fun to take and test your knowledge of the FCPA.
The link to the test is
here
.
 
While at the site, please take time to register with Workplace Answers, order a white paper, and consider your training program needs.
 
Thank you again and have fun taking the quiz.

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

ENEDITOR’S NOTES

(Source: Editor)

 


Alfred P. Sloan, Jr.
(23 May 1875 – 17 Feb 1966, was an American
business executive in the automotive industry. He was a long-time
President,
 chairman and CEO of General Motors Corporation. Sloan’s memoir, 
My Years with General Motors
, exemplified Sloan’s vision of the professional manager and the carefully engineered corporate structure in which he worked. It is considered one of the seminal texts in the field of modern management education.)

  – “If you do it right 51 percent of the time you will end up a hero.”

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

EN_a221
. 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.  

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

EN_a322
. 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
. 

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

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.

Scroll to Top