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17-0814 Monday “Daily Bugle”

17-0814 Monday “Daily Bugle”

Monday, 14 August 2017

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The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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  1. DHS/CBP Modifies, Extends, and Accepts Additional Applications for Participation in ACE Export Manifest for Air Cargo Test 
  2. DHS/CBP Modifies, Extends, and Accepts Additional Applications for Participation in ACE Export Manifest for Rail Cargo Test  
  3. DHS/CBP Modifies, Extends, and Accepts Additional Applications for Participation in ACE Export Manifest for Vessel Cargo Test 
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Announces Immediate Delivery Procedures Using ACE DIS
  4. GAO Ex/Im Reports and Testimonies of Interest
  5. State/DDTC Announces DTAS System Outage on 16 Aug
  6. EU Implements Regulation Concerning the Classification of Certain Goods in the Combined Nomenclature
  1. M. Volkov: “Every CCO Needs Authority + Autonomy + Resources”
  2. P. Jeydel, B. Egan & M. Rathbone: “A Detailed Look at the Countering America’s Adversaries Through Sanctions Act” (Part 2 of 2)
  1. Monday List of Ex/Im Job Openings 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (28 Jul 2017), DOD/NISPOM (18 May 2016), EAR (7 Jul 2017), FACR/OFAC (16 Jun 2017), FTR (19 Apr 2017), HTSUS (25 Jul 2017), ITAR (11 Jan 2017) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1
1. DHS/CBP Modifies, Extends, and Accepts Additional Applications for Participation in ACE Export Manifest for Air Cargo Test

(Source: Federal Register) [Excerpts.]
 
82 FR 37888-37890: Automated Commercial Environment (ACE) Export Manifest for Air Cargo Test: Expansion of Test To Include Additional Participants, Modification of Required Data Elements, and Extension of Test
 
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: This notice announces that CBP is modifying the U.S. Customs and Border Protection’s (CBP’s) Automated Commercial Environment (ACE) Export Manifest for Air Cargo Test, a National Customs Automation Program (NCAP) test concerning ACE export manifest capability, by making certain of the export manifest data elements optional. CBP is also extending the test and will be accepting additional applications for participation in this modified test from all parties meeting the eligibility requirements.
* DATES: The modifications of the ACE Export Manifest for Air Cargo Test set forth in this document are effective August 14, 2017. The modified test will run until August 10, 2018. Applications from additional participants may be submitted at any time. Current test participants do not need to reapply. Comments concerning this notice and all aspects of the test may be submitted at any time during the test period to the email address below.
* ADDRESSES: Applications to participate in the ACE Export Manifest for Air Cargo Test must be submitted via email to CBP Export Manifest at cbpexportmanifest@cbp.dhs.gov. In the subject line of the email, please use “ACE Export Manifest for Air Cargo Test Application”. Written comments concerning program, policy, and technical issues may also be submitted
via email to CBP Export Manifest at cbpexportmanifest@cbp.dhs.gov. In the subject line of the email, please use “Comment on ACE Export Manifest for Air Cargo Test”. …
* SUPPLEMENTARY INFORMATION: … Participation in the ACE Export Manifest for Air Cargo Test is limited to those parties able to electronically transmit manifest data in the identified acceptable format. Prospective ACE Export Manifest for Air Cargo Test participants must have the technical capability to electronically submit data to CBP and receive response message sets via Cargo-IMP, AIR CAMIR, IATA XML, or Unified XML, [FN/1] and must successfully complete certification testing with their client representative. Once parties have applied to participate, they must complete a test phase to determine if the data transmission is in the required readable format. Applicants will be notified once they have successfully completed testing and are permitted to participate fully in the test. In selecting participants, CBP will take into consideration the order in which the applications are received. …
  [C]BP has determined that, in order to better test the functionality and feasibility of submitting the specified export data 4 hours in advance, five of the 
mandatory or conditional data elements should be changed to optional. This will enable participants to submit the optional information when and if it is available. These data elements are listed below. (Data elements which are “mandatory” must be provided to CBP for every shipment. Data elements which are “conditional” must be provided to CBP only if the particular information pertains to the cargo. Data elements which are “optional” may be provided to CBP but are not required).
 
  – Number of pieces/unit of measure (Data Element #11)
  – Number of house air waybills (Data Element #13)
  – Split air waybill indicator (Data Element #18)
  – In-bond number (Data Element #21)
  – Mode of transportation (Data Element #22)
 
  The remaining data elements under the ACE Export Manifest for Air Cargo Test continue to be mandatory, conditional or optional as provided in the July 10, 2015 notice. The full list of data elements is set forth below. Unless otherwise noted, the data elements are mandatory.
 
  (1) Exporting Carrier (As reflected in the July 10, 2015 notice, CBP finds this term to be clearer than the term “Owner/Operator” used on CBP Form 7509.)
  (2) Marks of nationality and registration
  (3) Flight number
  (4) Port of lading
  (5) Port of unlading
  (6) Scheduled date of departure (As reflected in the July 10, 2015 notice, CBP finds this term to be clearer than the term “Date” used on CBP Form 7509.)
  (7) Consolidator (conditional)
  (8) De-consolidator (conditional)
  (9) Air waybill type (Master, House, Simple or Sub)
  (10) Air waybill number
  (11) Number of pieces and unit of measure (optional)
  (12) Weight (kg./lb.)
  (13) Number of house air waybills (optional)
  (14) Shipper name and address
  (15) Consignee name and address
  (16) Cargo description (As reflected in the July 10, 2015 notice, CBP finds this term to be clearer than the term “Nature of goods” used on CBP Form 7509.)
  (17) AES Internal Transaction Number (ITN) or AES Exemption Statement/Exception Classification (per shipment)
  (18) Split air waybill indicator (optional)
  (19) Hazmat indicator (Yes/No)
  (20) UN Number (conditional) (If the hazmat indicator is yes, the four-digit UN (United Nations) Number assigned to the hazardous material must be provided.)
  (21) In-bond number (optional)
  (22) Mode of transportation (Air, containerized or Air, non-containerized) (optional) …
 
  To continue further evaluation of the ACE Export Manifest for Air Cargo Test, CBP is extending the test for an additional year. The expanded and modified test will run until August 10, 2018.
 
  Dated: August 8, 2017.
Todd C. Owen, Executive Assistant Commissioner, Office of Field Operations.
 
——–
  [FN/1] Unified XML was not yet functional at the time of the original Automated Commercial Environment (ACE) Export Manifest for Air Cargo Test. It is now fully functional and available for use.

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EXIM_a2
2. DHS/CBP Modifies, Extends, and Accepts Additional Applications for Participation in ACE Export Manifest for Rail Cargo Test 

(Source: Federal Register) [Excerpts.]
 
82 FR 37893-37895: Automated Commercial Environment (ACE) Export Manifest for Rail Cargo Test: Expansion of Test To Include Additional Participants, Modification of Required Data Elements, and Extension of Test
 
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: This notice announces that CBP is modifying the U.S. Customs and Border Protection’s (CBP’s) Automated Commercial Environment (ACE) Export Manifest for Rail Cargo Test, a National Customs Automation Program (NCAP) test concerning ACE export manifest capability by changing the reporting requirements for certain data elements. CBP is also extending the test and will be accepting additional applications for participation in this modified test from all parties meeting the eligibility requirements.
* DATES: The modifications of the ACE Export Manifest for Rail Cargo Test set forth in this document are effective August 14, 2017. The modified test will run until October 9, 2018. Applications from additional participants may be submitted at any time. Current test participants do not need to reapply. Comments concerning this notice and all aspects of the test may be submitted at any time during the test period to the email address below.
* ADDRESSES: Applications to participate in the ACE Export Manifest for Rail Cargo Test must be submitted via email to CBP Export Manifest at cbprailexportmanifest@cbp.dhs.gov. In the subject line of the email, please use “ACE Export Manifest for Rail Cargo Test Application”. Written comments concerning program, policy, and technical issues may also be submitted via email to CBP Export Manifest at cbprailexportmanifest@cbp.dhs.gov. In the subject line of the email, please use “Comment on ACE Export Manifest for Rail Cargo Test”. …
* SUPPLEMENTARY INFORMATION:  … Participation in the ACE Export Manifest for Rail Cargo Test is limited to those parties able to electronically transmit manifest data in the identified acceptable format. Prospective ACE Export Manifest for Rail Cargo Test participants must have the technical capability to electronically submit data to CBP and receive response message sets via Cargo-ANSI X12 (also known as “Rail X12”) or Unified XML, [FN/1] and must successfully complete certification testing with their client representative. Once parties have applied to participate, they must complete a test phase to determine if the data transmission is in the required readable format. Applicants will be notified once they have successfully completed testing and are permitted to participate fully in the test. In selecting participants, CBP will take into consideration the order in which the applications are received. …
 CBP is modifying the ACE Export Manifest for Rail Cargo Test to change the following eight mandatory or conditional data elements to optional:
 
  – Mode of Transportation (Rail, containerized or Rail, non-containerized) (Data Element #1)
  – Place where the carrier took possession (Data Element #14)
  – Country of Ultimate Destination (Data Element #16)
  – Equipment Type Code (Data Element #17)
  – Number of House Bills of Lading (Data Element #22)
  – Split Shipment Indicator (Data Element #29)
  – Portion of Split Shipment (Data Element #30)
  – Mexican Pedimento Number (Data Element #32)
 
  CBP is modifying the ACE Export Manifest for Rail Cargo Test to change the following data element from mandatory to conditional:
 
  – Marks and Numbers (Data Element #10)
 
  The remaining data elements under the ACE Export Manifest for Rail Cargo Test continue to be mandatory, conditional, or optional as provided in the September 9, 2015 notice. The full list of data elements for all shipments, including empty rail cars, is set forth below. Unless otherwise noted, the data elements are mandatory.
 
  (1) Mode of Transportation (Rail, containerized or Rail, non-containerized) (optional)
  (2) Port of Departure from the United States
  (3) Date of Departure
  (4) Manifest Number
  (5) Train Number
  (6) Rail Car Order
  (7) Car Locator Message
  (8) Hazmat Indicator (Yes/No)
  (9) 6-character Hazmat Code (conditional) (If the hazmat indicator is yes, then UN (for United Nations Number) or NA (North American Number) and the corresponding 4-digit identification number assigned to the hazardous material must be provided.)
  (10) Marks and Numbers (conditional)
  (11) SCAC (Standard Carrier Alpha Code) for exporting carrier
  (12) Shipper name and address (For empty rail cars, the shipper may be the railroad from whom the rail carrier received the empty rail car to transport.)
  (13) Consignee name and address (For empty rail cars, the consignee may be the railroad to whom the rail carrier is transporting the empty rail car.)
  (14) Place where the rail carrier takes possession of the cargo shipment or empty rail car (optional)
  (15) Port of Unlading
  (16) Country of Ultimate Destination (optional)
  (17) Equipment Type Code (optional)
  (18) Container Number(s) (for containerized shipments) or Rail Car Number(s) (for all other shipments)
  (19) Empty Indicator (Yes/No)
 
  If the empty indicator is no, then the following data elements must also be provided, unless otherwise noted:
 
  (20) Bill of Lading Numbers (Master and House)
  (21) Bill of Lading type (Master, House, Simple or Sub)
  (22) Number of house bills of lading (optional)
  (23) Notify Party name and address (conditional)
  (24) AES Internal Transaction Number or AES Exemption Statement (per shipment)
  (25) Cargo Description
  (26) Weight of Cargo (may be expressed in either pounds or kilograms)
  (27) Quantity of Cargo and Unit of Measure
  (28) Seal Number (only required if the container was sealed)
  (29) Split Shipment Indicator (Yes/No) (optional)
  (30) Portion of split shipment (e.g. 1 of 10, 4 of 10, 5 of 10–Final. etc.) (optional)
  (31) In-bond number (conditional)
  (32) Mexican Pedimento Number (only for shipments for export to Mexico) (optional) …
 
  To continue further evaluation of the ACE Export Manifest for Rail Cargo Test, CBP is extending the test for an additional year. The expanded and modified test will run until October 9, 2018. …
 
  Dated: August 8, 2017.
Todd C. Owen, Executive Assistant Commissioner, Office of Field Operations.
 
———
  [FN/1] Unified XML was not yet functional at the time of the original Automated Commercial Environment (ACE) Export Manifest for Rail Cargo Test. It is now fully functional and available for use. 

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

EXIM_a3
3. DHS/CBP Modifies, Extends, and Accepts Additional Applications for Participation in ACE Export Manifest for Vessel Cargo Test

(Source: Federal Register) [Excerpts.]
 
82 FR 37890-37892: Automated Commercial Environment (ACE) Export Manifest for Vessel Cargo Test: Expansion of Test To Include Additional Participants, Modification of Required Data Elements, and Extension of Test
 
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: This notice announces that CBP is modifying the U.S. Customs and Border Protection’s (CBP’s) Automated Commercial Environment (ACE) Export Manifest for Vessel Cargo Test, a National Customs Automation Program (NCAP) test concerning ACE export manifest capability, by making certain of the export manifest data elements optional. CBP is also extending the test and will be accepting additional applications for participation in this modified test from all parties meeting the eligibility requirements.
* DATES: The modifications of the ACE Export Manifest for Vessel Cargo Test set forth in this document are effective August 14, 2017. The modified test will run until September 21, 2018. Applications from additional participants may be submitted at any time. Current test participants do not need to reapply. Comments concerning this notice and all aspects of the test may be submitted at any time during the test period to the email address below.
* ADDRESSES: Applications to participate in the ACE Export Manifest for Vessel Cargo Test must be submitted via email to CBP Export Manifest at cbpvesselexportmanifest@cbp.dhs.gov. In the subject line of the email, please use “ACE Export Manifest for Vessel Cargo Test Application”. Written comments concerning program, policy, and technical issues may also be submitted via email to CBP Export Manifest at cbpvesselexportmanifest@cbp.dhs.gov. In the subject line of the email, please use “Comment on ACE Export Manifest for Vessel Cargo Test”. …
* SUPPLEMENTARY INFORMATION: … Participation in the ACE Export Manifest for Vessel Cargo Test is limited to those parties able to electronically transmit manifest data in the identified acceptable format. Prospective ACE Export Manifest for Vessel Cargo Test participants must have the technical capability to electronically submit data to CBP and receive response message sets via Ocean CAMIR, ANSI X12, or Unified XML, [FN/1] and must successfully complete certification testing with their client representative. Once parties have applied to participate, they must complete a test phase to determine if the data transmission is in the required readable format. Applicants will be notified once they have successfully completed testing and are permitted to participate fully in the test. In selecting participants, CBP will take into consideration the order in which the applications are received. …
    CBP is modifying the ACE Export Manifest for Vessel Cargo Test to
change the following four mandatory or conditional data elements to
optional:
 
  – Name of the Master (Data Element #4)
  – Number of House Bills of Lading (Data Element #9)
  – Split Shipment Indicator (Data Element #22)
  – Portion of Split Shipments (Data Element #23)
 
  The remaining data elements under the ACE Export Manifest for Vessel Cargo Test continue to be mandatory, conditional, or optional as provided in the August 20, 2015 notice. The full list of data elements is set forth below. Unless otherwise noted, the data elements are mandatory.
 
  (1) Mode of transportation (Vessel, containerized or Vessel, non-containerized)
  (2) Name of ship or vessel
  (3) Nationality of ship
  (4) Name of Master (optional)
  (5) Port of loading
  (6) Port of discharge
  (7) Bill of Lading number (Master and House)
  (8) Bill of Lading type (Master, House, Simple or Sub)
  (9) Number of House Bills of Lading (optional)
  (10) Marks and Numbers (conditional)
  (11) Container Numbers (conditional)
  (12) Seal Numbers (conditional)
  (13) Number and kind of packages
  (14) Description of goods
  (15) Gross Weight (lb. or kg.) or Measurements (per HTSUS)
  (16) Shipper name and address
  (17) Consignee name and address
  (18) Notify Party name and address (conditional)
  (19) Country of Ultimate Destination
  (20) In-bond number (conditional)
  (21) Internal Transaction Number (ITN) or AES Exemption Statement (per shipment)
  (22) Split Shipment Indicator (Yes/No) (optional)
  (23) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10–Final, etc.) (optional)
  (24) Hazmat Indicator (Yes/No)
  (25) UN Number (conditional) (If the hazmat indicator is yes, then UN (for United Nations Number) or NA (North American Number) and the corresponding 4-digit identification number assigned to the hazardous material must be provided.)
  (26) Chemical Abstract Service (CAS) Registry Number (conditional)
  (27) Vehicle Identification Number (VIN) or Product Identification Number (conditional) (For shipments of used vehicles, the VIN must be reported, or for used vehicles that do not have a VIN, the Product Identification Number must be reported.) …
 
  To continue further evaluation of the ACE Export Manifest for Vessel Cargo Test, CBP is extending the test for an additional year. The expanded and modified test will run until September 21, 2018. …
 
  Dated: August 8, 2017.
Todd C. Owen, Executive Assistant Commissioner, Office of Field Operations.
 
———
  [FN/1] Unified XML was not yet functional at the time of the original Automated Commercial Environment (ACE) Export Manifest for Vessel Cargo Test. It is now fully functional and available for use.


back to top
 

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OGSOTHER GOVERNMENT SOURCES

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

* Commerce/BIS: RULES; Wassenaar Arrangement 2016 Plenary Agreements Implementation [Publication Date: 15 Aug 2017.]
 
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OGS_a36.

DHS/CBP Announces Immediate Delivery Procedures Using ACE DIS

(Source:
CSMS# 17-000486, 14 Aug 2017.)
 
The CBP Document Imaging System (DIS) can be used as an interim procedure for Immediate Delivery (ID) procedures needed for specific shipments through ports of entry. ID procedures require a letter to be on file at the port of entry. Letters requesting ID procedures can be sent via ACE using DIS. Trade will use DIS to provide the ID procedure request to the port on an as needed basis or as requested by the port of entry. The ID procedure request will need to accompany the specific entry number with a DIS image.
 
Questions related to this matter should be directed to Mr. Randy Mitchell, Director, Commercial Operations and Entry Division at otentrysummary@cbp.dhs.gov

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

OGS_a47. 
GAO Ex/Im Reports and Testimonies of Interest

 
* Title: Foreign Military Sales: Expanding Use of Tools to Sufficiently Define Requirements Could Enable More Timely Acquisitions. 
* GAO Report Number: GAO-17-682.
* Fast Facts: Foreign governments acquire billions of dollars of military goods and services every year through the foreign military sales program administered by the Department of Defense. We found that several factors contributed to delays or higher prices in this program-such as federal budget uncertainty and equipment defects identified during testing. In addition, some initial procurement requests lacked enough detail and required DOD follow-up, leading to significant delays in defining contract requirements. We recommended that DOD use specific tools to help foreign customers define their requirements.
* Highlights Page
: available here
* Full Report
: available here

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OGS_a58.

State/DDTC Announces DTAS System Outage on 16 Aug

 
The DTAS information systems will be unavailable from 16 August 2017 at 4:00AM through 5:00AM for scheduled routine maintenance. The DTAS systems will be available 16 August 2017 after 5:00AM.

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COMMCOMMENTARY

COMM_a0110. 
M. Volkov: “Every CCO Needs Authority + Autonomy + Resources”

(Source: Volkov Law Group Blog. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
Chief compliance officers are the rising stars in the corporate governance world.  However, CCOs have to avoid complacency.  CCOs have a lot more to accomplish – it is almost as if the profession has put its collective foot in the door.   CCOs have to be honest with themselves – it is easy to say everything is going great when some changes have been implemented. Instead, CCOs have to apply a more holistic and honest assessment of their actual role in the company applying the basic measuring framework of: authority + autonomy + resources.
 
Authority
. A CCO has to exercise adequate authority in the company. A CCO has to be empowered to exercise independence and authority over a variety of activities outside of the management of the compliance function.  Some may term this – “line of sight” across the company functions (beyond the management and control of the compliance department).
 
In this area, a CCO has to be empowered by the board and the CEO to intervene in important areas – business decisions that implicate the company’s ethics and compliance issues, compliance with business code of ethics, agent/distributor and supplier codes of conduct, training, communication, and internal investigations. If a company considers a business decision or practice that implicates the company’s ethical principles, the CCO has to weigh in and ensure that ethical principles and compliance issues are factored into the business decision.
 
In other words, CCOs have to be integrated into the business fabric and be a member of any senior business management company. If a CCO is excluded from senior business management, the CCO’s role at the company is by definition, deficient.
 
Autonomy.
 A CCO has to exercise independence. A CCO should report to a company’s CEO or COO, but has to have independent authority to report directly, on a dotted line, to the relevant board committee and entire board of directors. The dotted line is an important requirement that establishes a natural relationship between the CCO and the board of directors – it is a resource and relationship that should empower the CCO in the corporate governance environment.
 
CCOs should not confuse the dotted line with a broader definition of autonomy – an empowered CCO carries a broad portfolio of responsibilities and influence. If a CCO confines him/herself to operation of pure compliance functions, the CCO is failing to assume basic responsibility for the company’s ethical and compliance culture – a broad responsibility that stretches across all internal operations.
 
Resources.
 Many CCOs are suffering from resource limitations. All too often I hear from CCOs who are hampered by resource restrictions. In many cases, CCOs are not able to carry out basic functions needed for a compliance program to operate. In the end, CCOs have to delay projects to address basic risks. CCOs who face this situation use creative solutions and seek to leverage their limited resources to address as many issues a possible.
 
To resolve this issue, CCOs have to honestly report on resource requirements to the CEO and/or the board. A CCO who “goes along to get along” is not serving his or her interests and ultimately is sacrificing compliance for fear of upsetting his/her executive managers. Further, a CCO who reports to the board without discussing this issue and the compliance program needs is ignoring his or her important obligations. A CCO has to assess resource needs honestly and without fear of reprisals, and communicate with appropriate officials so that they are aware of the compliance program requirements.
 
It is easy to be complacent in this era of compliance focus.  CCOs have to be mindful of where they stand in the company, their responsibilities and accountability for possible problems that may occur.  Compliance requires a continuous focus, objectivity, honest communications with senior management and the board, and a steady commitment to important objectives.  A CCO who keeps his/her focus on authority, autonomy and resources is well one his or her way to achieving an effective ethics and compliance program.

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COMM_a2
11P. Jeydel, B. Egan & M. Rathbone: “A Detailed Look at the Countering America’s Adversaries Through Sanctions Act” (Part 2 of 2)

 
* Authors: Peter Jeydel, Esq., pjeydel@steptoe.com; Brian Egan, Esq., began@steptoe.com; and Meredith Rathbone, Esq., mrathbone@steptoe.com. All of Steptoe & Johnson LLP, Washington DC and London, respectively.
 
[Editor’s Note: Due to space limitations, this commentary has been divided into two parts. The first part, containing sections on the sanctions on Russia, was published in the Daily Bugle of Friday, 11 August 2017.]
 
On August 2, 2017, President Trump signed into law the Countering America’s Adversaries Through Sanctions Act, targeting Russia, North Korea, and Iran.  This law is a forceful, bipartisan statement that the US Congress continues to view robust economic sanctions as a cornerstone of US foreign policy, in which Congress will play a leading role in restricting trade, sometimes in conflict with the president’s authority to conduct diplomacy.  The Russia section of the law significantly expands the scope of the US sanctions regime and requires careful review by both US and non-US companies.  The North Korea and Iran sections do not materially affect most US companies, which already face broad restrictions in those countries, but the North Korea section in particular includes additional secondary sanctions that create new risk areas for non-US companies.
 
SANCTIONS ON NORTH KOREA
 
The North Korean section of the law is substantially similar to H.R. 1644, the Korean Interdiction and Modernization of Sanctions Act, which the US House of Representatives passed in May.  It imposes additional measures to reinforce existing UN Security Council sanctions against North Korea (although it was enacted before the passage of UN Security Council Resolution 2371, passed on August 5), along with reporting requirements to help determine whether additional sanctions may be required in the future.  The law requires the president to promulgate implementing regulations no later than 180 days after its enactment.
 
The new North Korea sanctions will have little impact on US businesses, which are already largely prohibited from doing business in North Korea.  Therefore, the impact of these new sanctions will depend on how aggressively the Trump Administration implements them against individuals and entities in China, Russia, and other countries that still conduct material commercial transactions with North Korea.  In the current environment, there is every reason to believe the Trump Administration will implement these sanctions aggressively.  For example, on June 29, 2017, OFAC designated Chinese individuals and entities for facilitating transactions on behalf of North Korea.  On the same day, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) named a Chinese bank, Bank of Dandong, as a foreign bank of primary money laundering concern under Section 311 of the USA PATRIOT Act.
 
New Mandatory North Korea Sanctions
. The law builds on the North Korea Sanctions and Policy Enhancement Act of 2016 (NKSPEA), on which we previously advised, by imposing mandatory blocking sanctions on persons that “knowingly” do any of the following: 
 
  – Import from or export or reexport to North Korea any defense article or defense service;
  – Purchase or acquire from North Korea “significant” amounts of gold, titanium ore, vanadium ore, copper, silver, nickel, zinc, or rare earth minerals;
  – Sell or transfer to North Korea “significant” amounts of rocket, aviation, or jet fuel (except for use by a civilian passenger aircraft outside North Korea, exclusively for consumption during its flight to North Korea or its return flight);
  – Provide “significant” amounts of fuel or supplies, provide bunkering services, or facilitate a significant transaction to operate or maintain, a vessel or aircraft designated by the US or UN for North Korea-related activity or owned or controlled by such a designated person;
  – Insure or register, facilitate the registration of, or maintain insurance or a registration for, a vessel owned or controlled by the Government of North Korea (except as specifically approved by the UN Security Council);
  – Maintain a correspondent account with any North Korean financial institution (except as specifically approved by the UN Security Council)
 
The law also provides for mandatory blocking sanctions against foreign persons that “knowingly” employ North Korean laborers (with an exception if the employment does not result in the direct or indirect transfer of convertible currency, luxury goods, or other stores of value to the Government of North Korea; all wages and benefits are provided directly to the laborers; and the laborers are subject to working conditions consistent with international standards).  Further, it creates a rebuttable presumption that goods made with North Korean labor may not enter the United States.  These provisions appear primarily to target Russia, China, and several Arab and African states that employ the bulk of North Korean expatriate laborers.
 
In addition, the law requires US financial institutions to ensure that correspondent accounts are not used to provide “significant” financial services indirectly to certain designated persons if the US financial institution “has or obtains knowledge” that a correspondent account is being used for such purposes. 
 
Furthermore, the law contains shipping restrictions, such as allowing the Secretary of Homeland Security to require enhanced screening of cargo on vessels or aircraft that have entered North Korean territory or waters in the preceding 365 days, and prohibiting vessels owned or operated by the Government of North Korea or North Korean persons from entering US waters or transferring cargo inside US jurisdiction.
 
New Non-Mandatory North Korea Sanctions
. The law also creates a number of new non-mandatory sanctions authorities (providing for asset blocking, prohibiting transactions in foreign exchange and use of financial institutions subject to US jurisdiction, correspondent account restrictions, visa bans, vessel/aircraft seizure, and government contracting restrictions), on persons determined to be “knowingly” doing any of the following:
 
  – Purchasing or acquiring from the Government of North Korea significant quantities of coal, iron, or iron ore, in excess of the limitations provided in applicable UN Security Council resolutions;
  – Purchasing or acquiring significant types or amounts of textiles from the Government of North Korea;
  – Facilitating a significant transfer of funds or property of the Government of North Korea that materially contributes to any violation of an applicable UN Security Council resolution;
  – Facilitating a significant transfer to or from the Government of North Korea of bulk cash, precious metals, gemstones, or other stores of value (other than those listed above);
  – Selling, transferring, or providing significant amounts of crude oil, condensates, refined petroleum, other types of petroleum or petroleum byproducts, liquefied natural gas, or other natural gas resources to the Government of North Korea (except for heavy fuel oil, gasoline, or diesel fuel for humanitarian use or as covered by an exception);
  – Engaging in, being responsible for, or facilitating the online commercial activities of the Government of North Korea, including online gambling;
  – Purchasing or acquiring fishing rights from the Government of North Korea;
  – Purchasing or acquiring significant types or amounts of food or agricultural products from the Government of North Korea;
  – Engaging in, being responsible for, or facilitating the exportation of workers from North Korea in a manner intended to generate significant revenue, directly or indirectly, for use by the Government of North Korea or by the Workers’ Party of Korea;
  – Conducting a significant transaction in North Korea’s transportation, mining, energy, or financial services industries;
  – Facilitating the operation of any branch, subsidiary, or office of a North Korean financial institution (except as specifically approved by the UN Security Council, and other than through a correspondent account as described above).
 
The law sets the stage for a possible future expansion of sanctions in new areas by requiring that the president report on, among other things, whether reasonable grounds exist to designate additional North Korean individuals and entities, including the Central Bank, the degree to which individuals and foreign governments provide specialized financial messaging services (e.g., SWIFT) to North Korean financial institutions, and the degree to which other governments and foreign ports have knowingly failed to implement existing UN Security Council resolutions against North Korea.  In addition, the president must evaluate whether North Korea meets the criteria for designation as a state sponsor of terrorism, a label that the US government removed from North Korea in 2008.
 
Additional congressional sanctions against North Korea may be in the works.  According to Senator Bob Corker (R-Tenn.), “the House has committed to approving additional enhancements to the North Korea sanctions provisions in the near future.”  That could include some elements of the Banking Restrictions Involving North Korea (BRINK) Act of 2017, which was modeled on the Iran secondary sanctions laws passed by Congress in 2010 and 2012 and would impose new types of secondary sanctions on financial institutions doing business with North Korea.
 
It is also important to note that the State Department issued a travel ban to North Korea for US passport holders on August 2, 2017, which is set to take effect on September 1, 2017.  Certain details of the ban are undergoing revision during a 21-day comment period.  In addition, the House has marked up the North Korea Travel Control Act, H.R. 2732, which would prohibit travel to, from, or within North Korea.
 
SANCTIONS ON IRAN
 
The Iran section of the law, called the Countering Iran’s Destabilizing Activities Act (CIDAA), does not significantly change existing US sanctions against Iran.  Among other provisions, it requires the president to impose sanctions pursuant to Executive Order 13224 (targeting terrorists and their supporters) against Iran’s Islamic Revolutionary Guard Corps (IRGC) and its officials, agents and affiliates.  This change will not have a significant practical effect for US persons, because the IRGC and its affiliates are already subject to similar sanctions based on a weapons of mass destruction proliferation authority, among others, and the IRGC’s Quds Force is already designated under Executive Order 13224 and other authorities.  Still, this sends the message that the US Congress views the entire IRGC, not just the Quds Force, as being responsible for Iran’s support for acts of international terrorism, which raises potential counter-terrorism finance risks for US and non-US persons.  This provision of CIDAA is much less aggressive than the Trump Administration’s earlier proposal to designate the IRGC as a Foreign Terrorist Organization, which has some support in Congress, and would have quite a significant legal and practical impact.
 
CIDAA also seeks to reinforce the UN Security Council arms embargo against Iran by imposing secondary sanctions for the supply, sale, or transfer of arms to Iran.
 
CIDAA’s supporters argue that these provisions do not violate the Iran nuclear deal (called the JCPOA), because, among other reasons, they are not related to Iran’s nuclear program.  However, the Government of Iran has taken the position that CIDAA does violate the deal and has already taken the issue to the JCPOA’s dispute commission.  It will be important to watch how the commission handles this complaint.  Perhaps even more significant for the fate of the JCPOA, President Trump has stated he expects the US government not to certify Iran’s compliance with the deal in the fall, and he “would have had them noncompliant 180 days ago.”  President Trump even said he will overrule his staff on this issue.  If the State Department declines to certify Iran’s compliance with the JCPOA this fall, this could set in motion events that may jeopardize the future of the deal.  It remains to be seen whether the Trump Administration would in fact take such a drastic step, or if they will settle on a compromise that does not actually threaten the continuing viability of the JCPOA. 
 
CONCLUSION
 
This far-reaching sanctions law is a major step by Congress to assert itself in the sanctions arena and constrain the Trump Administration’s discretion to ease sanctions on Russia.  Despite some lingering doubts about how this law will be implemented, the new sanctions on Russia are unprecedented, particularly those targeting non-US persons, and could have a significant effect on commerce with Russia.
 
President Trump issued a signing statement disputing the constitutionality of some of the provisions, including the congressional review requirement for any move to lift Russia sanctions (although the president said he would “honor” these provisions nonetheless).  The president also disputed the provisions on recognizing Crimea and other disputed areas occupied by Russia, and on visa bans that could conflict with the president’s power of diplomacy.  The presidential signing statement underscored that the law should not be used “to hinder our important work with European allies to resolve the conflict in Ukraine” or “to hinder our efforts to address any unintended consequences it may have for American businesses, our friends, or our allies.”  Those statements raise some doubt about how the administration will implement and enforce some of the core provisions, which we will continue to monitor.
 
As Congress considered this legislation, some European governments and the EU objected vociferously, arguing that some of the proposed Russia sanctions violated international norms by targeting European energy companies and projects to export Russian energy supplies to Europe.  While the European Commission’s president noted that the final version addressed many of the EU’s initial concerns, the EU threatened to respond “within days” if “the US sanctions specifically disadvantage EU companies trading with Russia in the energy sector.”

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MSEX/IM MOVERS & SHAKERS

MS_a212. Monday List of Ex/Im Job Openings

(Source: Editor)  
 
Published every Monday or first business day of the week. Please send openings in the following format to jobs@fullcirclecompliance.eu.
 
* COMPANY; LOCATION; POSITION TITLE (WEBLINK); CONTACT INFORMATION; REQUISITION ID
 
#” New listing this week:
 
* Acteon Group Ltd.; Norwich, Suffolk, or London, UK;
Head of Compliance; or email
Mike Pay
* Advanced Micro Devices (AMD); Austin TX; 
Import/Export Compliance Manager
; Requisition ID: 24061

* Amazon; Mexico City, Mexico; Mexico Trade Compliance Program Manager; Requisition ID: 520481 
* Amazon; Seattle WA;
NA Compliance Analyst; Requisition ID: 256357

* Ansell; Iselin NJ;
Senior Specialist NA Trade Compliance; Requisition ID: IRC6513

* Berry Plastics Corporation; Evansville IN;
International Trade Compliance Administrator
; Requisition ID: 4054

* Boeing; Saint Louis MO (and other locations);
Trade Control Specialist; Requisition ID: 1700011280

* Cobham Advanced Electronic Solutions; Exeter, NH, Plainview, NY, Eatontown, NJ, or Lansdale, PA;
Export Compliance Manager
; Charles Trokey
Charles.trokey@yoh.com


DRS Technologies; Dayton OH;
Senior Trade Compliance Manager 

* Eaton; Titchfield, United Kingdom;
Global Trade Manager (Trade Compliance); Requisition ID: 020681

*
 Esterline Technologies Corporation;
Bellevue, WA;
 
Manager, Trade Compliance Investigations and Disclosures


* Expeditors; Sunnyvale CA;
Customs Compliance Specialist
* Export Solutions Inc.; Melbourne FL; Trade Compliance Specialist;
info@exportsolutionsinc.com

* Fluke; Everett WA; 
Trade Compliance Manager
; Requisition ID: FLU005544


* General Atomics Aeronautical Systems, Inc.; San Diego CA; 


International Trade Compliance Analyst (ITC) / Export Import Specialist / Global Trade Administrator
; Requisition ID: 12252BR


General Dynamics Land Systems; Sterling Heights, MI; Compliance Officer

SHC-LC-17-19648

* George Washington University; Washington DC;


Research Compliance Officer, Export Control
; Requisition ID: PI97906765


Harsco; Columbia, SC; 
Import/Export Specialist

* Indiana Mills & Manufacturing, Inc.; Westfield, IN;
International Trade Compliance Manager 

*
Intel Corporation; Gdansk, Poland or Swindon/High Wycombe, England, UK;
EMEA Export Project Manager / Trade Specialist
; Job ID JR0033212; OR contact 
Joy Robins

* Johnson and Johnson; Skillman, NJ;
Export Trade Compliance Lead

* KPMG; Antwerp, Brussels;
Manager Global Trade & Customs – SAP GTS
; 122756BR

* Lutron; Coopersburg PA;
Trade Manager-Export
; Requisition ID: 2926
* Medtronic; Heerlen, The Netherlands;
Trade Compliance Analyst
; Requsition ID: 16000DYY

* Medtronic; Wash DC; Global Trade Lawyer;  
stacy.m.johnson@medtronic.com
; Requisition ID: 170002ON

* Meggitt PLC; Simi Valley, CA;
Trade Compliance Officer
* Meggitt PLC; Akron, OH;
Import Specialist;

*
 
NetApp; Singapore; Trade Compliance Mananger – APAC; Requisition ID 43338BR

# Nissan/Kelly Services; Franklin, TN;
CONTRACT Position – Contract Customs Compliance Analyst;
frankie.bryson@nissan-usa.com; Requisition ID: 55224BR

* North Dakota State University; Fargo ND;
Director for Research Integrity Compliance; Requisition ID: 1700372

* Northrop Grumman Corporation; Herndon VA;
International Trade Compliance Analyst 3/4; Requisition ID: 17001180

* Northrop Grumman Sperry Marine; New Malden, UK;
Trade Compliance Coordinator
;
careers.uk@sperry.ngc.com
* Northrop Grumman; Herndon, VA;
International Trade Compliance 5; Requisition ID: 17018159

* Premier Farnell Organisation; Leeds, UK;
Trade Compliance Specialist – Europe
; Requisition ID: 4301
* Raytheon; (El Segundo CA, McKinney TX, Dallas TX, Marlborough MA, or Washington D.C.);
Senior Manager of Global Trade Management
; Requisition ID: 98724BR

* Raytheon; Rosslyn, VA; 
Export Trade Compliance Specialist; Requisition ID: 97978BR

* Saab Defense and Security USA LLC; Syracuse NY;
Senior Import/Export Analyst
; Requisition ID: USA_00413

* Science and Engineering Services, LLC; Huntsville AL;
Export Compliance Specialist
bob.davis@ses-i.com; Requisition ID: 157
* Sierra Nevada Corporation; Arlington, VA; 
International Trade Compliance Analyst II; Req ID: R0003259

* SIRE: Noord-Brabant province, the Netherlands;
Trade Compliance Expert; Requisition ID: 33934

* Tesla Motors; Fremont CA; 
Global Supply Manager – International Logistics
; Requisition ID: 49362

* ThermoFisher Scientific; Breda, the Netherlands;
Import/Export Specialist – EMEA CMD Commercial Offices
; Requisition ID: 44930BR

* UBC; Monheim, Germany;
Manager Customs and Trade Compliance 
* Ultra Electronics; Greater London, United Kingdom;
International Trade and Export Compliance Specialist

* United Technologies Corporation, UTC Aerospace Systems; Chula Vista CA;

ITC Operational Excellence Manager
; Requisition ID: 49904BR

* United Technologies Corporation, UTC Aerospace Systems; Troy OH;
Sr. Manager, Intl Trade Compliance
; Requisition ID: 44065BR 

* University of North Carolina; Chapel Hill, NC;
Export Control Officer 

* VAG; Mannheim, Germany;
Trade Compliance Manager (m/w)
; Contact: Mr. Florian Uhl, +49 621 749 – 1870

Vertiv (formerly Emerson Network Power); Columbus, OH,  
International Trade Management (ITM) Senior Specialist
; Requisition ID: 1700001087

* Vigilant; Unknown location in the U.S.;
BioTech/Pharmaceutical Global Trade Analyst

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ENEDITOR’S NOTES

 
* Alfred Hitchcock (Sir Alfred Joseph Hitchcock KBE; 13 Aug 1899 – 29 Apr 1980; was an English and American film director and producer, referred to as the “Master of Suspense”. He pioneered many elements of the suspense and psychological thriller genres. He had a successful career in British cinema with both silent films and early talkies and became renowned as England’s best director. Hitchcock moved to Hollywood in 1939, and became a U.S. citizen in 1955. Hitchcock directed more than fifty feature films in a career spanning six decades. His films, Rear Window (1954), Vertigo (1958), North by Northwest (1959), Psycho (1960), and 
The Birds
 (1963)
 are regularly ranked among the greatest films of all time.)
  – “There is no terror in the bang, only in the anticipation of it.”
  – “I am a typed director. If I made Cinderella, the audience would immediately be looking for a body in the coach.”
 
Monday is pun day.
 
Q. Why are psychics easy to buy clothes for?
A.  They’re all Mediums! 
  – Peggy Udden, Norwood, MA

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EN_a314
. 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: 28 Jul 2017: 82 FR 35064-35065: Technical Corrections to U.S. Customs and Border Protection Regulations
 
* 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 cancelled Supp. 1 to the NISPOM  (Summary here.)


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

  – Last Amendment: 7 July 2017: 
82 FR 31442-31449: Revisions to the Export Administration Regulations Based on the 
2016 Missile Technology Control Regime Plenary Agreements. 

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 16 Jun 2017: 82 FR 27613-27614: Removal of Burmese Sanctions Regulations 
 
*
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 (18 July 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, Census/AES guidance, and to many errors contained in the official text. 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: 25 Jul 2017: Harmonized System Update 1706, containing 834 ABI records and 157 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.
  – Last Amendment: 11 Jan 2017: 82 FR 3168-3170: 2017 Civil Monetary Penalties Inflationary Adjustment
  – The only available fully updated copy (latest edition: 10 Jun 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 800 footnotes containing amendment histories, 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_a0315. 
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., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, John Bartlett. The Ex/Im Daily Update is emailed every business day to approximately 8,000 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOJ/ATF, DoD/DSS, DoD/DTSA, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

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

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

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

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