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17-0601 Thursday “Daily Bugle”

17-0601 Thursday “Daily Bugle”

Thursday, 1 June 2017

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe 
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  1. ITC Reviews Expanding NAFTA Duty-Free Treatment 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.) 
  3. State/DDTC: (No new postings.) 
  4. U.S. Court of Appeals Sets Aside Fine and Remands Conviction of Epsilon Electronics for Violations of Iran Sanctions 
  1. JOC.com: “Russian Customs Changes to Speed Cargo Clearance” 
  2. New York Times: “Gun Deal in Jeopardy for Turkish Guards Who Beat Protesters” 
  3. Reuters: “U.S. Sanctions More, including Russians, over North Korea Arms” 
  1. M. Volkov: “Ensuring Compliance with Controls” 
  2. Thomsen & Burke: “Changes to Export Controls in May 2017” 
  3. R.C. Burns: “Epsilon, the Unvanquished”  
  1. ECTI Presents “Ready, Aim, Fire: India Adopts the Wassenaar Arrangement Control Lists” Webinar, 28 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 (26 May 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. ITC Reviews Expanding NAFTA Duty-Free Treatment

(Source: Federal Register) [Excerpts.]
 
82 FR 25327-25328: North American Free Trade Agreement: Advice on the Probable Economic Effect of Providing Duty-Free Treatment for Currently Dutiable Imports Institution of Investigation and Scheduling of Hearing
* AGENCY: United States International Trade Commission (“ITC” or “Commission”.
* ACTION: Notice of investigation and scheduling of a public hearing.
* SUMMARY: Following receipt on May 18, 2017, of a request from the United States Trade Representative (USTR), the Commission instituted Investigation Nos. TA-131-042 and TPA-105-002, North American Free Trade Agreement: Advice on the Probable Economic Effect of Providing Duty-free Treatment for Currently Dutiable Imports.
* DATES:
  – June 7, 2017: Deadline for filing requests to appear at the public
hearing.
  – June 13, 2017: Deadline for filing prehearing briefs and
statements.
  – June 20, 2017: Public hearing.
  – June 26, 2017: Deadline for filing post-hearing briefs and
submissions.
  – June 26, 2017: Deadline for filing all other written statements.
  – August 16, 2017: Transmittal of Commission report to the USTR. …
* FOR FURTHER INFORMATION CONTACT: Project Leader Jessica Pugliese (202-205-3064 or jessica.pugliese@usitc.gov) or Deputy Project Leader Diana Friedman (202-205-3433 or diana.friedman@usitc.gov) for information specific to this investigation. For information on the legal aspects of this investigation, contact William Gearhart of the Commission’s Office of the General Counsel (202-205-3091 or william.gearhart@usitc.gov). The media should contact Margaret O’Laughlin, Office of External Relations (202-205-1819 or margaret.olaughlin@usitc.gov). Hearing-impaired individuals may obtain information on this matter by contacting the Commission’s TDD terminal at 202-205-1810. General information concerning the Commission may also be obtained by accessing its Web site. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000.
* SUPPLEMENTARY INFORMATION:
   Background: In his letter of May 18, 2017, the USTR requested that the Commission provide certain advice under section 131 of the Trade Act of 1974 (19 U.S.C. 2151) and an assessment under section 105 (a)(2)(B)(i)(III) of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 with respect to the effects of providing duty-free treatment for imports of products from Canada and Mexico.
   More specifically, the USTR, under authority delegated by the President and pursuant to section 131 of the Trade Act of 1974, requested that the Commission provide a report containing its advice as to the probable economic effect of providing duty-free treatment for imports of currently dutiable products from Canada and Mexico on (i) industries in the United States producing like or directly competitive products, and (ii) consumers. The USTR asked that the Commission’s analysis consider each article in chapters 1 through 97 of the Harmonized Tariff Schedule of the United States (HTS) for which tariffs will remain, taking into account implementation of U.S. commitments in the World Trade Organization. The USTR asked that the advice be based on the HTS in effect during 2017 and trade data for 2016.
In addition, the USTR requested that the Commission prepare an assessment, as described in section 105(a)(2)(B)(i)(III) of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, of the probable economic effects of eliminating tariffs on imports from Canada and Mexico of any agricultural products currently still subject to U.S. tariffs under the North American Free Trade Agreement and described in the list attached to the USTR’s request letter on (i) industries in the United States producing the products concerned, and (ii) the U.S. economy as a whole. The USTR’s request letter and list of agricultural products are posted on the Commission’s Web site. …
Public Hearing: A public hearing in connection with this investigation will be held at the U.S. International Trade Commission Building, 500 E Street SW., Washington, DC, beginning at 9:30 a.m. on June 20, 2017. Requests to appear at the public hearing should be filed with the Secretary no later than 5:15 p.m., June 7, 2017, in accordance with the requirements in the “Submissions” section below. All prehearing briefs and statements should be filed not later than 5:15 p.m., June 13, 2017, and all post-hearing briefs and statements should be filed not later than 5:15 p.m., June 26, 2017. For further information, call 202-205-2000. …
 
  By order of the Commission.
  Issued: May 26, 2017.
Lisa Barton, Secretary to the Commission.

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

OGS
OTHER GOVERNMENT SOURCES

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

(Source: Federal Register)

 

* Commerce; Industry and Security Bureau; NOTICES; Hearings: National Security Investigation of Imports of Aluminum [Publication Date: 2 June 2017.]

* State; NOTICES; Designations as Foreign Terrorist Organizations: Abu Nidal Organization, aka ANO, et al. [Publication Date: 2 June 2017.]
 
* State; NOTICES; Designations as Global Terrorists: Abu Nidal Organization, aka ANO, aka Black September, aka the Fatah Revolutionary Council, aka the Arab Revolutionary Council, aka the Arab Revolutionary Brigades, aka the Revolutionary Organization of Socialist Muslims [Publication Date: 2 June 2017.]

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

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

(Source: Commerce/BIS)

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OGS_a45
. U.S. Court of Appeals Sets Aside Fine and Remands Conviction of Epsilon Electronics for Violations of Iran Sanctions

(Source:
U.S. Court of Appeals) [Excerpts. 
See related item #11 below.]
 
* Case: Epsilon Electronics, Inc., v. U.S. Dep’t of Treasury, Office of Foreign Assets Control, et al.; Case No. 16-5118
* Court: U.S. Court of Appeals for D.C. Circuit
* Date: Argued 9 Nov 2016; Decided 26 May 2017
* Judges: Before: ROGERS and GRIFFITH, Circuit Judges, and SILBERMAN, Senior Circuit Judge. Opinion for the Court filed by Circuit Judge GRIFFITH. Opinion concurring in part and dissenting in part filed by Senior Circuit Judge SILBERMAN.
* Counsel:  Teresa N. Taylor argued the cause and filed the briefs for appellant. Eric S. Volkman was on the brief for amicus curiae JPM Legal Advisors Worldwide Limited in support of appellant. Lewis S. Yelin, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, and Douglas N. Letter and Sharon Swingle, Attorneys.
* Opinion [Excerpts; footnotes and most citations omitted.]:
GRIFFITH, Circuit Judge: In 1995, President Clinton imposed trade sanctions against Iran that are enforced by the Office of Foreign Assets Control within the Department of the Treasury. OFAC is authorized to impose civil penalties against any person who exports goods to a third party who it has reason to know intends to send them to Iran. The principal question raised by this appeal is whether OFAC must also show that the goods actually ended up in Iran. We agree with the agency that the government need not make that showing and affirm the district court on that ground. But we also conclude that OFAC did not adequately explain parts of its determination that the exporter here had reason to know that its shipments would be sent on to Iran. …
 
OFAC implemented the President’s executive order in September 1995 by promulgating the Iranian Transactions and Sanctions Regulations, see 60 Fed. Reg. 47,061 (Sept. 11, 1995), which are now codified, as amended, at 31 C.F.R. pt. 560. Among other prohibitions, the regulations forbid “the exportation, reexportation, sale, or supply, directly or indirectly … of any goods, technology, or services to Iran” by United States individuals and businesses, including exportation to a third country with “knowledge or reason to know” that the goods are “intended specifically” for reexportation to Iran. See 31 C.F.R. § 560.204. The agency has invoked that prohibition against appellant Epsilon Electronics, a California-based wholesaler of sound systems, video players, and other accessories for cars. The company’s wares can be found across the globe, from Latin America to Africa and the Middle East. Asra International Corporation, a distributor based in Dubai, has been one of Epsilon’s trading partners. Between 2008 and 2012, Epsilon sent thirty-nine shipments of consumer goods to Asra, valued at about $3.4 million.
 
In May 2014, OFAC tentatively concluded that all thirty-nine of Epsilon’s shipments to Asra violated 31 C.F.R. § 560.204 because each was made with knowledge, or reason to know, that Asra intended to reexport the goods to Iran. The agency sent Epsilon a Prepenalty Notice, declaring its intent to impose a civil monetary penalty of $4,073,000, subject to Epsilon’s response. OFAC arrived at that dollar amount by applying its penalty guidelines, which required the agency to determine whether any of the violations were voluntarily disclosed and whether any were “egregious.” See generally 31 C.F.R. pt. 501, App. A. OFAC found that none of Epsilon’s violations was voluntarily disclosed, and that the last five shipments, made after Epsilon received OFAC’s January 2012 cautionary letter, were egregious. Though the agency has authority to depart upward or downward from the guideline penalty, it decided not to do so after balancing the aggravating and mitigating factors. …
 
In July 2014, OFAC issued a final Penalty Notice, formally imposing a $4,073,000 civil penalty. The agency had not been persuaded by Epsilon’s response to the Prepenalty Notice, which again denied any knowledge or reason to know that Asra distributed Epsilon’s products in Iran. The Penalty Notice explained that “multiple facts tend to show that the goods exported to Asra were sent to Iran and that Epsilon knew or had reason to know that the goods were intended specifically for supply, transshipment, or reexportation, directly or indirectly, to Iran.” Although the Notice recited much of the evidence against Epsilon, it never mentioned the emails between Epsilon management and Hashemi.  The issuance of the Penalty Notice was final agency action. See 31 C.F.R. § 560.704. In December 2014, Epsilon sued OFAC in district court. Epsilon’s complaint sought declaratory and injunctive relief against enforcement of the civil penalty. On March 7, 2016, the district court granted summary judgment in favor of the government. See Epsilon Elecs., Inc. v. U.S. Dep’t of Treasury, 168 F. Supp. 3d 131, 147 (D.D.C. 2016).  Epsilon timely appealed. We have jurisdiction under 28 U.S.C. § 1291, and review de novo the district court’s entry of summary judgment in favor of the government.  …
 
Epsilon offers three challenges to the civil penalty that OFAC imposed. First, the company contends that none of its thirty-nine shipments to Asra were in violation of the Iranian Transactions and Sanctions Regulations. Second, Epsilon claims that the amount of the penalty assessed is not only arbitrary and capricious, but also an “excessive fine” forbidden by the Eighth Amendment. Third, the company argues that its due process rights were violated because it had insufficient notice of the evidence that OFAC intended to rely on. …
 
Our disposition means that we will not decide whether OFAC’s calculation of Epsilon’s penalty was arbitrary and capricious. Nor will we reach Epsilon’s Eighth Amendment challenge to the penalty amount. Analysis of those questions must await OFAC’s response to our decision today. …
 
The order of the district court granting the government defendants’ motion for summary judgment is affirmed in part and reversed in part. The order is affirmed as to OFAC’s determination that Epsilon’s thirty-four shipments to Asra International between August 2008 and March 2011 violated section 560.204 of the Iranian Transactions and Sanctions Regulations. The order is reversed as to OFAC’s determination that Epsilon’s five shipments to Asra International in 2012 violated the same regulation. The case is remanded to the district court, with instructions to remand the matter to OFAC for further consideration of the five alleged 2012 violations, and of the total monetary penalty imposed for all liability findings, in a manner consistent with this opinion. So ordered.
 
SILBERMAN, Senior Circuit Judge, concurring in part and dissenting in part …
 
I hardly know where to start. First, the majority never denies that the regulation is ambiguous-still less the adjudication-it simply sets forth its interpretation of the regulation which favors the government’s decision.  But the problem with the majority treating deference as irrelevant is it improperly appears to freeze the agency’s interpretation of an ambiguous regulation. Cf. Perez v. Mortgage Bankers Ass’n …  Even if one were to agree with the majority that its interpretation of the regulation were the better one, I have little doubt that another OFAC leadership could interpret the language differently. Suppose, for instance, an exporter in Omaha sent goods to Iran to be consolidated with a brother-in-law’s shipment in Chicago. The brother-in-law, blessed with legal advice, determined not to send the goods. Would the Omaha shipper be in violation of the regulation? According to the majority, yes, but I certainly could imagine OFAC reasonably coming to another answer.
 
Second, the majority’s lengthy interpretation of the regulation totally ignores another fundamental principle of administrative law going back to Chenery I. 318 U.S. 80 (1943). It is not up to a reviewing court to offer explanations for an agency decision not articulated by the agency. …
 
Finally, perhaps the strangest objections the majority raises to a remand to clarify the adjudication’s ambiguity are: (1) that appellant was not prejudiced because whether or not the adjudication was ambiguous, the complaint was not; and (2) in any event, appellant never argued that it was separately harmed by the ambiguity in the adjudication. Maj. Op. at 20. The first point assumes that the complaint is somehow transformed into final agency action. It is so contrary to administrative law- indeed all law-I hardly know what to say. The second point is equally bizarre. Of course, appellant wouldn’t “specifically” argue that the agency’s ambiguity required a remand. It wanted a decision holding the agency adjudication was inconsistent with the regulation. A remand is what a court does when it is not sure how the agency read the regulation and applied it to the facts. No case of ours ever held that a party challenging an agency’s interpretation of a regulation or a statute has to specifically ask for a remand if we conclude the agency’s decision is ambiguous.

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NWSNEWS

NWS_a16. JOC.com: “Russian Customs Changes to Speed Cargo Clearance”

(Source:
JOC.com) [Excerpts.]
 
The establishment of centers to process electronic customs declarations filed via Russia’s single window should speed up cargo clearance and reduce corruption.
 
Along with the new centers, the Russian Federal Customs Service (FCS) is harmonizing declaration procedures and putting more inspectors behind computers to examine paperwork rather than boxes themselves, reducing opportunities for corruption.
 
Several centers are already operational and the FCS hopes that 95 percent of customs declarations take place via electronic systems by 2019, compared with 18 percent at present. About 35.7 percent of export documentation and 1.6 percent of import documentation is processed electronically. …
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NWS_a27. New York Times: “Gun Deal in Jeopardy for Turkish Guards Who Beat Protesters”

 
The day before armed guards from the Turkish president’s security detail violently attacked a group of peaceful protesters here last month, the State Department notified Congress of its intention to license the sale of $1.2 million worth of semiautomatic handguns to the security force.
 
Two weeks later, with mounting outrage over the episode among American lawmakers and a continuing investigation by the State Department that could lead to criminal charges against some of the guards involved, the future of the sale now appears to be in question. …
 
Under the Arms Export Control Act, the State Department must approve of all weapons exports. The department is required to notify Republican and Democratic leaders of the House and Senate foreign affairs committees if the proposed sale exceeds certain monetary thresholds. In practice, the department does this in an effort to resolve lawmakers’ concerns before an intended sale becomes public.
 
In this case, the department gave the congressional leaders informal notification of the proposed sale on May 15, a letter obtained by The New York Times shows. …
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NWS_a038. Reuters: “U.S. Sanctions More, including Russians, over North Korea Arms”

(Source: Reuters) [Excerpts.] 
 
The United States on Thursday blacklisted nine companies and government institutions, including two Russian firms, and three people for their support of North Korea’s weapons programs.
 
The announcement from the U.S. Treasury came as diplomats said the United States and China were likely to propose on Thursday that the U.N. Security Council blacklist more North Korean individuals and entities over the country’s repeated ballistic missile launches.
 
Russia’s Interfax news agency quoted Russian Deputy Foreign Minister Sergei Ryabkov as saying Moscow was puzzled and alarmed by the U.S. decision to sanction a Russian citizen and firms over alleged connections to North Korea.
 
He said Russia is preparing retaliatory measures, and that the sanctions would not help efforts to restore relations between Moscow and Washington, RIA news agency reported.
 
The United States has struggled to slow North Korea’s nuclear and missile programs, which has become a security priority given Pyongyang’s vow to develop a nuclear-tipped missile capable of hitting the U.S. mainland.
 
Washington has worked to step up both unilateral and international sanctions in an effort to cut off funds and supplies to the reclusive state. …

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COMMCOMMENTARY

(Source:
Volkov Law Group Blog. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
Let’s start with some basics – a public company is required to implement a set of internal controls. A compliance program is a critical part of a company’s internal controls.
 
A company’s compliance program is only as effective as its board, executives, managers and employees adhere to the compliance policies and procedures. If a company’s constituents do not comply with the compliance program and policies, then the company’s compliance program controls are ineffective.
 
Ask yourself an important question – what is my company’s compliance rate with its internal compliance controls?
 
For example, if your company has implemented a revised due diligence program to review and approve new third-party intermediaries, it is unreasonable to expect that everyone in your company has complied with this new policy. Somewhere in the company, a third-party intermediary is likely to be hired without going through the due diligence process.
 
Take another example – what is your company’s compliance rate with gifts, meals, and entertainment authorizations and reimbursements? Again, no one should expect perfection in this area. We all have witnessed situations when corporate executives, managers and employees have failed to comply with the respective approval process.
 
To promote compliance with company policies and procedures, a company must dedicate time and resources to ensuring compliance by communication, training and enforcement. In fairness to a company’s directors, executives, managers and employees, a company has to communicate internally about the new policy, and explain the new policy and its requirements. Depending on the importance of the new policy, the company should enlist the support and communications contributions from the CEO and other senior executives. To reinforce this new policy and procedure, the company should conduct training on the new policy so that everyone understands its requirements and new procedures.
 
After there are sufficient efforts to communicate and train on the new policy requirements, the chief compliance officer should devote time to monitor compliance with the new policy. The CCO will have to conduct limited audits or enlist the support of internal audit to examine the compliance rate with the new policy. The CCO would have to examine financial records to determine if any new third parties have been signed up and paid and compare the list of new parties to the list of parties subjected to due diligence. Depending on the number of third parties, a CCO can start with a single country to determine compliance rates.
 
If the CCO identifies violations of the company’s procedures, the CCO has to initiate an internal investigation to confirm the violation and the circumstances surrounding the violation. Given the importance of compliance with these new policies, the CCO has to ensure the company balances the importance of strict punishment for such violations, while balancing the individual reasons for the violation.
 
An aggressive enforcement program with respect to compliance policies and procedures is an essential aspect of implementing effective compliance controls. If directors, executives, managers and employees perceive that compliance with controls is not a very serious offense, a company’s compliance rate will suffer. On the other hand, if a company strictly enforces its internal controls, and publicizes its enforcement program (without violating privacy restrictions and referring to enforcement matters in general terms), the company’s compliance rate should increase.
 
A CCO cannot ignore the importance of compliance with its policies and procedures as a basic requirement for an effective program.

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This memo summarizes the regulatory, legislative, and enforcement developments during May 2017 with respect to U.S. and multilateral export controls. Changes to the regulations published in the Federal Register are explained at greater length in the 
Regulatory Summary
, as is our custom.   

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

(Source:
Export Law Blog
. Reprinted by permission.)
 
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC,
Clif.Burns@bryancave.com
, 202-508-6067) [See related item #5 above.]
 
We have followed the saga of Epsilon Electronics extensively, beginning with the posts titled The Auto Sound and the OFAC Fury Part I and Part II followed by Epsilon, Epsilon and, then, As Epsilon Lay Dying, which discussed the federal district court’s decision reviewing OFAC’s $4.073 million fine imposed on Epsilon. Epsilon has persevered, and now the D.C. Circuit Court of Appeals has spoken in an opinion setting aside the fine and remanding the case back to OFAC for further proceedings.
 
I am going to break my thoughts on the D.C. Circuit’s opinion into several posts. This post will deal with an issue that Epsilon lost, namely its argument that it couldn’t be fined under section 560.204 of the Iranian Transactions and Sanctions Regulations (“ITSR”) without a showing that its products wound up in Iran. At issue were shipments Epsilon made to a distributor in Dubai that OFAC said only or mostly dealt with Iran. OFAC’s argument was that 560.204 was violated when Epsilon shipped the goods to Dubai when it knew, or should have known, that the goods would then be exported to Iran. According to OFAC, the shipment to Dubai was the violation of the ITSR whether or not the goods ultimately made it to Iran. (Significantly, OFAC did not charge Epsilon with attempt under section 560.203, where it would clearly not require a showing that the goods wound up in Iran.)
 
Section 560.204 prohibits exports to Iran “including the exportation … to … a third country undertaken with … reason to know that such goods … are intended specifically for … re-exportation, directly or indirectly, to Iran.” Using a somewhat bizarre analogy the Court reasoned that a shipment to Dubai with reason to know the goods were going to Iran was an “export to Iran” even if the goods never got to Iran.
 
Suppose you put a birthday card in the mail, addressed to your brother. While the card is still en route, your mother asks you, “Did you send a card to your brother?” In line with OFAC’s usage, you would respond, “I sent a card to him, but it hasn’t arrived yet,” because you put the card in transit, intending it to reach him. Following Epsilon’s usage, though, you would have to say, “I didn’t send a card to him,” because the card has not yet arrived.
 
This strange analogy fails because here the card is not put in the mail addressed to the brother. Instead, it was put in an envelope addressed to a third party with a note saying that if the third party saw the brother he should give this card to him. When Mom asked about the birthday card, only the most reprobate of siblings would respond that he sent the card to his brother. “No, Mom, but I did send it to Joe Schmo with a request that he give it to Bill if he sees him.”
 
The dissenting opinion by Judge Silberman notes that the majority opinion’s notion that a shipment to Dubai with reason to know it was going to Iran was an “export to Iran” is a notion that is inconsistent with OFAC’s decisions below. Judge Silberman points to a statement made by OFAC in the penalty proceeding that “multiple facts tend to show that the goods exported to Asra were sent to Iran,” which, “fudged the answer to the crucial question” whether a violation occurred without regard to whether goods ever wound up in Iran.
 
In my view there is another reason that section 560.204 can’t be read in the fashion suggested by the majority opinion. The statutory basis for the regulation is the International Emergency Economic Powers Act which, in section 1702, provides the power to the President to bar exports to a foreign country after declaring an emergency with respect to that country.  A declaration of national emergency has, in fact, been issued with respect to Iran. But, section 1701(b) of IEEPA provides:
 
The authorities granted to the President by section 1702 of this title may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for any other purpose.
 
Here Epsilon shipped product to Dubai. Its alleged “reason to know” that the goods might go to Iran was that the distributor had business in Iran. Even if the distributor was contractually obligated to sell the goods only in Dubai and that’s the only place they were sold, OFAC’s reasoning would be that this “reason to know” was enough for there to be a violation. That, I think, does not deal with an emergency declared with respect to Iran. This would not even qualify as an attempted export to Iran, which I think is the farthest limit that IEEPA permits sanctioning an activity without an actual export to Iran.

 

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a112. ECTI Presents “Ready, Aim, Fire: India Adopts the Wassenaar Arrangement Control Lists” Webinar, 28 Jun

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

* What: Ready, Aim, Fire: India Adopts the Wassenaar Arrangement Control Lists
* When: June 28, 2017; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Ryan Cathie
* Register: Here or Danielle McClellan, 540-433-3977, danielle@learnexportcompliance.com.

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ENEDITOR’S NOTES

(Source: Editor)
 
* John Marshall Harlan (1 Jun 1833 – 14 Oct 1911, was an American lawyer and politician from Kentucky who served as an associate justice on the U.S. Supreme Court.)
  – “Our constitution is color-blind, and neither knows nor tolerates classes among citizens.”
 
* Carl von Clausewitz (Carl Philipp Gottfried von Clausewitz, 1 Jun 1780 – 16 Nov 1831, was a Prussian general and military theorist who stressed the “moral” (meaning, in modern terms, psychological) and political aspects of war. His most notable work, Vom Kriege (On War), which was unfinished at his death, is considered a classic of military strategy, and is often required reading for military officer training, along with Sun
Tzu’s 
The Art of War
.)
  – “It is even better to act quickly and err than to hesitate until the time of action is past.”

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EN_a214
. 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:
26 May 2017: 82 FR 24242-24248: Addition of Certain Persons and Revisions to Entries on the Entity List

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 10 Feb 2017: 82 FR 10434-10440: Inflation Adjustment of Civil Monetary Penalties.  
 
*
FOREIGN TRADE REGULATIONS (FTR)
: 15 CFR Part 30
  – Last Amendment: 19 Apr 2017: 82 FR 18383-18393: Foreign Trade Regulations: Clarification on Filing Requirements 
  – HTS codes that are not valid for AES are available
here.
  – The latest edition (19 Apr 2017) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and footnotes containing case annotations, practice tips, and Census/AES guidance.  Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR.
 
*
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jan 2017: 19 USC 1202 Annex. (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)

  – Last Amendment: 26 Apr 2017: Harmonized System Update 1703, containing 2,512 ABI records and 395 harmonized tariff records.

  – HTS codes for AES are available
here
.
  – HTS codes that are not valid for AES are available
here.
 
INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130.
  – Latest Amendment: 11 Jan 2017: 82 FR 3168-3170: 2017 Civil Monetary Penalties Inflationary Adjustment
  – The only available fully updated copy (latest edition 8 Mar 2017) of the ITAR with all amendments is contained in Bartlett’s Annotated ITAR (“BITAR”), by James E. Bartlett III.  The BITAR contains all ITAR amendments to date, plus a large Index, over 750 footnotes containing case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text.  Subscribers receive updated copies of the BITAR in Word by email, usually revised within 24 hours after every ITAR amendment.  The BITAR is available by annual subscription from the Full Circle Compliance
website
.  BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please
contact us
to receive your discount code.  

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EN_a31
5. Weekly Highlights of the Daily Bugle Top Stories
(Source: Editor)

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

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EPEDITORIAL POLICY

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

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

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

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