17-0608 Thursday “Daily Bugle”

17-0608 Thursday “Daily Bugle”

Thursday, 8 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. DHS/CBP Posts New Effective Date for ACE Transition, 8 Jul 
  2. DHS/CBP Posts 8 Jul 2017 as Effective Date for Modifications of the NCAP Tests re Reconciliation, Post-Summary Corrections, and Periodic Monthly Statements
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: Ali Reza Parsa of Philipsburg, PA, Denied Export Privileges for 10 Years 
  3. DHS/CBP Announces ACE PRODUCTION Cargo Release Deployment, 9 Jun  
  4. DHS/CBP Posts Notice Concerning 8 Jul ACE Capabilities Deployment 
  5. DoD/DSS Announces Closure from 19 June to 4 July of PCL and e-Quip Inquiries of the DSS Knowledge Center 
  6. State/DDTC: (No new postings.) 
  7. Treasury/OFAC: “American Honda Finance Corporation Settles 13 Alleged CACR Violations” 
  1. WorldECR News Alert, 8 Jun 
  1. M. Volkov: “The EU’s New General Data Privacy Regulation (GDPR) – Global Companies New Compliance Test” 
  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 


. DHS/CBP Posts New Effective Date for ACE Transition, 8 Jul

Federal Register) [Excerpts
see related item #6 below.
82 FR 26698-26699: Effective Date for the Automated Commercial Environment (ACE) Becoming the Sole CBP-Authorized Electronic Data Interchange (EDI) System for Processing Electronic Drawback and Duty Deferral Entry and Entry Summary Filings
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: On 30 August 2016, U.S. Customs and Border Protection (CBP) published a notice in the Federal Register announcing plans to make the Automated Commercial Environment (ACE) the sole electronic data interchange (EDI) system authorized by the Commissioner of CBP for processing electronic drawback and duty deferral entry and entry summary filings. The effective date for the changes announced in that notice had been delayed indefinitely. This notice announces that the effective date for the transition will be 8 July 2017.
* DATES: Effective 8 July 2017: ACE will be the sole CBP-authorized EDI system for processing electronic drawback and duty deferral entry and entry summary filings, and the Automated Commercial System (ACS) will no longer be a CBP-authorized EDI system for processing these filings.
* FOR FURTHER INFORMATION CONTACT: Questions related to this notice may be emailed to ASKACE@cbp.dhs.gov with the subject line identifier reading “ACS to ACE Drawback and Duty Deferral Entry and Entry Summary Filings transition”. …
   Dated: 2 June 2017.
Kevin K. McAleenan, Acting Commissioner, U.S. Customs and Border Protection.
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2. DHS/CBP Posts 8 Jul 2017 as Effective Date for Modifications of the NCAP Tests re Reconciliation, Post-Summary Corrections, and Periodic Monthly Statements

(Source: Federal Register) [Excerpts, see related item #6 below.]
82 FR 26699-26700: Effective Date for Modifications of the National Customs Automation Program Tests Regarding Reconciliation, Post-Summary Corrections, and Periodic Monthly Statements
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: This notice announces that the effective date for the modifications to the National Customs Automation Program (NCAP) tests regarding Reconciliation, Post-Summary Corrections, and Periodic Monthly Statements will be 8 July 2017. U.S. Customs and Border Protection (CBP) announced these modifications in notices previously published in the Federal Register. The effective dates for the modifications had been delayed.
* DATES: Effective 8 July 2017. The effective date for the modifications to the Reconciliation, Post-Summary Correction, and Periodic Monthly Statement NCAP tests will be 8 July 2017. …
* FOR FURTHER INFORMATION CONTACT: Reconciliation: Acenitha Kennedy, Entry Summary and Revenue Branch, Trade Policy and Programs, Office of Trade, at (202) 863-6064 or ACENITHA.KENNEDY@CBP.DHS.GOV. PSC and PMS: For policy-related questions, contact Randy Mitchell, Director, Commercial Operations, Trade Policy and Programs, Office of Trade, at Randy.Mitchell@cbp.dhs.gov. For technical questions related to ABI transmissions, contact your assigned client representative. Interested parties without an assigned client representative should contact the Client Representative Branch at (703) 650-3500. …
   Dated: 2 June 2017.
Brenda B. Smith, Executive Assistant Commissioner, Office of Trade.
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OGS_a13. Ex/Im Items Scheduled for Publication in Future Federal Register Editions

(Source: Federal Register)


* Commerce; Industry and Security Bureau; NOTICES; Reminder of Offsets Reporting Requirements for Calendar Year 2016 [Publication Date: 9 June 2017.]
* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 9 June 2017.]

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OGS_a24. Commerce/BIS: Ali Reza Parsa of Philipsburg, PA, Denied Export Privileges for 10 Years

(Source: Commerce/BIS)
* Respondent: Ali Reza Parsa, Philipsburg, PA
* Charges: On 20 May 2016, in the U.S. District Court for the Southern District of New York, Ali Reza Parsa (“Parsa”) was convicted of violating the International Emergency Economic Powers Act (50 U.S.C. § 1701, et seq. (2012)) (“IEEPA”). Specifically, Parsa was convicted of knowingly and willfully conspiring to export, reexport, sell and supply from the United States electronic components to customers located in Iran, without the required U.S. Government authorization. Parsa was sentenced to 36 months of imprisonment and ordered to pay a $100 assessment.
* Debarred: Parsa’s export privileges under the EAR are denied for 10 years from the date of Parsa’s conviction, until 20 May 2026. In addition, all licenses issued pursuant the EAR in which Parsa had an interest at the time of his conviction are revoked.
* Date of Order: 7 June 2017.

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. DHS/CBP Announces ACE PRODUCTION Cargo Release Deployment, 9 Jun

CSMS #17-000335, 8 June 2017.)
There will be an ACE PRODUCTION Cargo Release deployment tomorrow morning, Friday, 9 June 2017, at 8:00 am ET. No outage is necessary for this deployment.
To be deployed:
  – SE-8717 – Use Estimated Arrival Date transmitted on the SE message for entries with non-AMS bills as the arrival date so ONE USG messaging will occur on the SO status messaging to the filer.
  – SE-8718 – Ticket# 7585890: Fixed issue that caused “Qty Mismatch” warnings in R4 Truck Manifest system that sent some trucks to Secondary unnecessarily.
  – SE-8719 – Tickets# 7526249, 7717309: Resolve issue with excessive unnecessary 1C (Entry Released) postings for each in-bond arrival on a bill. There were also unnecessary 4E/1C’s (Entry Cancelled/Released) sent upon bill amendments; the 4E/1C postings should only be necessary upon a bill quantity change or entry port change.

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. DHS/CBP Posts Notice Concerning 8 July ACE Capabilities Deployment

CSMS #17-000334, 8 June 2017.)
ee related items #1 & #2 above.
On 8 July 2017, U.S. Customs and Border Protection (CBP) will deploy a series of new Automated Commercial Environment (ACE) capabilities to support Collections and Statements, Reconciliation, Drawback*, Duty Deferral and Liquidation (with the exception of the previously deployed electronic posting of the Notices of Liquidation on CBP.gov). 

For the latest information on the capabilities being deployed, please visit CBP.gov/ACE and the 8 June 2017 Federal Register Notices, 82 FR 26699, and 82 FR 26698.

CBP has posted updated documentation including Information Notices by capability and the June 2017 ACE Entry Summary Business Rules and Process Document in the “What’s New with ACE” section.

Software vendors and self-filers should reference the ACE CATAIR technical documentation to ensure systems are up to date with the latest ACE documentation. These resources are available through here.  

* Please note that the drawback capabilities being deployed on 8 July 2017 are part of the ACE core trade processing capabilities, and include the following:  

  – Consolidation to single entry type 47
  – For electronic claims, submission of entire drawback package electronically
  – System validations
  – Integration with post release processes
  – Improved system controls

SEPARATELY, CBP is planning future additional drawback capabilities for implementation pursuant to the Trade Facilitation and Trade Enforcement Act (TFTEA).

Please send questions on the upcoming ACE deployment to AskACE@cbp.dhs.gov.

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. DoD/DSS Announces Closure from 19 June to 4 July of PCL and e-Quip Inquiries of the DSS Knowledge Center

(Source: DoD/DSS)
Personnel Security (PCL) inquiries (option #2) to include e-QIP authentication resets of the DSS Knowledge Center will be closed from Monday, 19 June 2017, through Tuesday, 4 July 2017.
The extended closure enables the Personnel Security Management Office for Industry to focus on processing the inventory of investigation requests, with an anticipated substantial improvement to timelines for processing initial investigation requests and relative improvement to requests for periodic reinvestigation. Normal operations for PCL and e-QIP inquiries will resume on Wednesday, 5 July 2017. As a reminder, answers to common PCL inquiries are available here.

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. State/DDTC: (No new postings.)

(Source: State/DDTC)

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. Treasury/OFAC: “American Honda Finance Corporation Settles 13 Alleged CACR Violations”

(Source: Treasury/OFAC)    
American Honda Finance Corporation (AHFC), a motor vehicle finance company headquartered in California that specializes in various forms of financing in the United States for purchasers, lessees, and authorized independent dealers of Honda and Acura products, has agreed to remit $87,255 to settle its potential civil liability for 13 apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR) (the “Alleged Violations”).
Between February 2011 and March 2014, Honda Canada Finance, Inc. (HCFI) – a majority- owned subsidiary of AHFC located in Canada – approved and financed 13 lease agreements between an unaffiliated Honda dealership in Ottawa, Canada and the Embassy of Cuba in connection with the Cuban Embassy’s leasing of several Honda vehicles. The Cuban entity had the word “Cuba” in its name and provided documentation to HCFI demonstrating it was a Government of Cuba entity. Although AHFC and HCFI had policies and procedures in place to review transactions against OFAC’s List of Specially Designated Nationals and Blocked Persons for compliance with U.S. economic sanctions laws, they did not include the names of countries subject to OFAC-administered comprehensive sanctions in their screening system. AHFC and HCFI were not involved in the business of exporting vehicles internationally.
Overall, between 28 February 2011 and 3 March 2014, HCFI approved the financing of 13 lease agreements with the Cuban entity totaling $276,999. Three of the lease agreements, totaling $58,281, were initiated and/or approved by HCFI on or about 3 March 2014 – approximately two months after AHFC submitted its initial voluntary self-disclosure to OFAC regarding similar apparent violations. The total base penalty amount for the 13 Alleged Violations was $138,500.
OFAC has determined that AHFC voluntarily self-disclosed the Alleged Violations to OFAC, and that the Alleged Violations constitute a non-egregious case.
The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A. OFAC considered the following to be aggravating factors:
  – AHFC had reason to know of the conduct that led to the Alleged Violations, particularly the transactions that occurred after AHFC had filed its initial voluntary self-disclosure with OFAC;
  – HCFI personnel appear to have had actual knowledge of the Cuban Embassy’s involvement in the lease agreements in question;
  – the Alleged Violations resulted in harm to U.S. sanctions program objectives at the time they occurred; and
  – AHFC is a large and commercially sophisticated financial institution.
OFAC considered the following to be mitigating factors:
  – AHFC has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the Alleged Violations;
  – AHFC took remedial action in response to the Alleged Violations, including by implementing a new policy governing its OFAC policies and proprietary systems;
  – AHFC cooperated with OFAC’s investigation by voluntarily self-disclosing the Alleged Violations, providing detailed and well-organized information in a timely and efficient manner, and by signing and extending a statute of limitations tolling agreement; and
  – while the transactions described above constitute apparent violations of the CACR, OFAC issued a specific license to AHFC in June 2015 regarding the subject leases.
For more information regarding OFAC regulations, please visit: http://www.treasury.gov/ofac.

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NWS_a110. WorldECR News Alert, 8 Jun

  (1) P&I Clubs Issue Qatar Advice as Neighbours Sever Ties
  (2) “Wrong Time for Further Sanctions on Iran”: Feinstein
  (3) ECJ Gives Judgment in Safa Nicu Case
  (4) UN Ratchets up North Korea Sanctions
  (5) US BIS Extends Deadline on Alumin[i]um Consultation
[Editor’s Note: To subscribe to WorldECR, the journal of export controls and sanctions, please visit http://worldecr.com/.]
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Volkov Law Group Blog. Reprinted by permission.)
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
Global companies face a daunting array of risks – anti-corruption, trade compliance, antitrust, and money laundering are just a few. The European Union, however, has escalated the data privacy issue right into the corporate boardroom. Global companies will have to devote significant time and resources to building appropriate data privacy compliance programs.
The EU’s new General Data Privacy Regulation (or GDPR), which is effective 18 May 2018, sets out a new and rigorous set of data privacy requirements.   The GDPR was enacted to address serious concerns about the need to harmonize data privacy regulation among member states.
The GDPR applies to data processors and data controllers who operate outside the EU but who offer goods and services or monitor the behavior of EU data subjects. Global companies that maintain a website to solicit sales from potential EU customers will fall under the GDPR requirements. Prior to the GDPR, website-based companies were not subject to EU data privacy laws and regulations.
If a large global company operates in any (or a number of) EU member states, a company will have to comply with significant requirements for protecting, processing and transmitting data.   A designated Data Privacy Officer with appropriate staff will have to be appointed in those companies where: (i) processing is carried out by a public authority; (ii) processor or controller core activities involve processing of significant amount of data; or (iii) core activities consist of processing on a large scale of special categories of data. The DPO must have a direct line of reporting to senior management.
The GDPR imposes a number of compliance program requirements on those companies that operate in the EU. A global company will have to conduct a risk assessment and implement processes and procedures designed to protect personal data through encryption or other mechanisms to remove/mask sensitive information.
Data processors will have significant compliance obligations that require the preservation of records of processing activities and an obligation to notify a data controller of a breach.
A key component of the GDPR is implementing privacy by design – meaning that privacy should be addressed when new technologies or products are created. Designers and developers of new technologies will have to assess privacy issues at initial steps rather than when completing a project.
Every company has to assess its GDPR risks by analyzing: (i) the type of data it collects; (ii) the use of such data; (iii) where the data is collected and where is it transmitted (if anywhere); (iv) when is it collected and used; and (v) how and why the data is collected and used.  Once you understand these issues, you will be able to classify your data, keep accurate records of your data and notify the relevant authority.
The GDPR contains explicit consent requirements to ensure that such consents are freely given, specific, informed and unambiguous. Regulatory oversight of this area will be strict given the requirements for voluntary and specific consents. For example, regulators may question situations where a contract is made contingent on consents for data privacy processing and transmission out of the EU but where such consents are not needed for the execution of the specific services set out in the contract.
The potential fines for violations are significant. For improper international transfers or violation of basic processing requirements, the higher of 4 percent of worldwide turnover or EUR20 million; for less significant infringements, the higher of 2 percent worldwide turnover or EUR10 million.
The GDPR has the potential to solve a major problem for many global companies – compliance with multiple individual member states’ data privacy regimes. Under the GDPR, there is a potential for companies operating in multiple states to secure regulation by a leading member state where the company’s base operations in the EU may exist or where there is significant operations.

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. 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.
: 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 
: 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.]

  – 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.)

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

: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 10 Feb 2017: 82 FR 10434-10440: Inflation Adjustment of Civil Monetary Penalties.  
: 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
  – 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.
, 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
  – HTS codes that are not valid for AES are available
  – 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
.  BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please
contact us
to receive your discount code.  

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4. 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 

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* 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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