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17-0829 Tuesday “Daily Bugle”

17-0829 Tuesday “Daily Bugle”

Tuesday, 29 August 2017

TOP
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  1. Commerce/BIS: RPTAC to Meet on 12 Sep in Wash DC
  2. DHS/CBP Continues to Seek Comments on Bonded Warehouse Regulations
  3. DHS/CBP Continues to Seek Comments on CBP Form 400, Automated Clearinghouse
  4. DHS/CBP Continues to Seek Comments on CBP Form 7501, Entry Summary
  5. DHS/CBP Continues to Seek Comments on Declaration of Persons Who Performed Repairs or Alterations
  6. DoD Seeks Comments on DFARS Appendix F, Material Inspection and Receiving Report
  7. EPA Sets Filing Compliance Date for Hazardous Waste Exports on 31 Dec
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: Carrier Saudi Services Company Ltd. (Saudi Arabia) to Pay $12,000 to Settle Alleged Antiboycott Violations
  3. DHS/CBP Provides Guidance to Trade on Cargo Processing During Hurricane Harvey
  4. GAO: “Foreign Trade Zones: CBP Should Strengthen Its Ability to Assess and Respond to Compliance Risks Across the Program”
  5. State/DDTC Announces Leadership Changes
  1. Reuters: “Despite New U.S. Sanctions, Russian Oil Traders Say It’s Business as Usual”
  2. ST&R Trade Report: “Dates and Deadlines: China Investigation, CBP Forms, AGOA Review, Classification”
  1. J. Reeves & K. Heubert: “Myth Busters: Common Misperceptions About Export Controls” (Part 2 of 2)
  2. L.P. Carnegie & W.M. McGlone: “The Trump Administration’s New Venezuela Sanctions: Top 10 Takeaways”
  3. M. Baki Fadlallah, J.C. Poling & W.H. Segall: “OFAC Puts Companies on Notice: Due Diligence in Iran Can Trigger Sanctions Violations”
  1. NAITA Presents 2017 Export Control Update (ITAR/EAR/OFAC) on 18-19 Sep in Huntsville, AL 
  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 (15 Aug 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_a11.

Commerce/BIS: RPTAC to Meet on 12 Sep in Wash DC

 
82 FR 40995: Regulations and Procedures Technical Advisory Committee; Notice of Partially Closed Meeting
 
  The Regulations and Procedures Technical Advisory Committee (RPTAC) will meet September 12, 2017, 9:00 a.m., Room 1412, in the Herbert C. Hoover Building, 14th Street between Constitution and Pennsylvania Avenues NW., Washington, DC. The Committee advises the Office of the Assistant Secretary for Export Administration on implementation of the Export Administration Regulations (EAR) and provides for continuing review to update the EAR as needed. …
  The open session will be accessible via teleconference to 25 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at Yvette.Springer@bis.doc.gov no later than September 5, 2017.
  A limited number of seats will be available for the public session. Reservations are not accepted. To the extent that time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate the distribution of public presentation materials to the Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email. …
  For more information, call Yvette Springer at (202) 482-2813.
 
Yvette Springer, Committee Liaison Officer. 

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EXIM_a22.

DHS/CBP Continues to Seek Comments on Bonded Warehouse Regulations

 
82 FR 41040: Agency Information Collection Activities: Bonded Warehouse Regulations
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security.
* ACTION: 30-Day notice and request for comments; extension of an existing collection of information.
* SUMMARY: The Department of Homeland Security, U.S. Customs and Border Protection will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). The information collection is published in the Federal Register to obtain comments from the public and affected agencies.
* DATES: Comments are encouraged and will be accepted no later than September 28, 2017 to be assured of consideration. …
* SUPPLEMENTARY INFORMATION: … Overview of This Information Collection
  – Title: Bonded Warehouse Regulations.
  – OMB Number: 1651-0041. 
  – Abstract: Owners or lessees desiring to establish a bonded warehouse must make written application to the CBP port director of the port where the warehouse is located. The application must include the warehouse location, a description of the premises, and an indication of the class of bonded warehouse permit desired. Owners or lessees desiring to alter or to relocate a bonded warehouse may submit an application to the CBP port director of the port where the facility is located. The authority to establish and maintain a bonded warehouse is set forth in 19 U.S.C. 1555, and provided for by 19 CFR 19.2, 19 CFR 19.3, 19 CFR 19.6, 19 CFR 19.14, and 19 CFR 19.36. …
 
  Dated: August 24, 2017.
Seth Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection.

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EXIM_3
3
.

DHS/CBP Continues to Seek Comments on CBP Form 400, Automated Clearinghouse

 
82 FR 41042-41043: Agency Information Collection Activities: Automated Clearinghouse
 
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security.
* ACTION: 30-Day notice and request for comments; extension of an existing collection of information.
* SUMMARY: The Department of Homeland Security, U.S. Customs and Border Protection will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). The information collection is published in the Federal Register to obtain comments from the public and affected agencies.
* DATES: Comments are encouraged and will be accepted no later than September 28, 2017 to be assured of consideration. …
* SUPPLEMENTARY INFORMATION: … Overview of This Information Collection:
  – Title: Automated Clearinghouse.
  – OMB Number: 1651-0078.
  – Form Number: CBP Form 400. … 
  – Abstract: The Automated Clearinghouse (ACH) allows participants in the Automated Broker Interface (ABI) to transmit daily statements, deferred tax, and bill payments electronically through a financial institution directly to a CBP account. ACH debit allows the payer to exercise more control over the payment process. In order to participate in ACH debit, companies must complete CBP Form 400, ACH Application. Participants also use this form to notify CBP of changes to bank information or contact information. The ACH procedure is authorized by 19 U.S.C. 58a-58c and 19 U.S.C. 66, and provided for by 19 CFR 24.25. CBP Form 400 is accessible here. …
 
  Dated: August 24, 2017.
Seth Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection. 

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EXIM_4
4
.

DHS/CBP Continues to Seek Comments on CBP Form 7501, Entry Summary

 
82 FR 41041-41042: Agency Information Collection Activities: Entry Summary
 
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security.
* ACTION: 30-Day notice and request for comments; extension of an existing collection of information.
* SUMMARY: The Department of Homeland Security, U.S. Customs and Border Protection will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). The information collection is published in the Federal Register to obtain comments from the public and affected agencies. Comments are encouraged and will be accepted (no later than September 28, 2017) to be assured of consideration.
* SUPPLEMENTARY INFORMATION: … Overview of This Information Collection
  – Title: Entry Summary.
  – OMB Number: 1651-0022.
  – Form Number: 7501, 7501A.
  – Current Actions: This submission is being made to extend the expiration date of this information collection with a decrease in burden hours due to increased automation. There is no change to the information collected on Form 7501 or 7501A. …
  – Abstract: CBP Form 7501, Entry Summary, is used to identify merchandise entering the commerce of the United States, and to document the amount of duty and/or tax paid. CBP Form 7501 is submitted by the importer, or the importer’s agent, for each import transaction. The data on this form is used by CBP as a record of the import transaction; to collect the proper duty, taxes, certifications and enforcement information; and to provide data to the U.S. Census Bureau for statistical purposes. CBP Form 7501 must be filed within 10 working days from the time of entry of merchandise into the United States.
  CBP Form 7501A, Document/Payment Transmittal, is used to reconcile a supplemental payment after an initial Automated Clearinghouse payment with the associated entry so the respondent’s account is properly credited.
  Collection of the data on these forms is authorized by 19 U.S.C. 1484 and provided for by 19 CFR 142.11 and CFR 141.61. CBP Form 7501 and accompanying instructions can be found here. …
 
  Dated: August 24, 2017.
Seth Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection.

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EXIM_5
5
.

DHS/CBP Continues to Seek Comments on Declaration of Persons Who Performed Repairs or Alterations

 
82 FR 41040-41041: Agency Information Collection Activities: Declaration of Person Who Performed Repairs
 
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security.
* ACTION: 30-Day notice and request for comments; extension of an existing collection of information.
* SUMMARY: The Department of Homeland Security, U.S. Customs and Border Protection will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). The information collection is published in the Federal Register to obtain comments from the public and affected agencies.
* DATES: Comments are encouraged and will be accepted no later than September 28, 2017 to be assured of consideration. …
* SUPPLEMENTARY INFORMATION: … Overview of This Information Collection
  – Title: Declaration of Person Who Performed Repairs.
  – OMB Number: 1651-0048.
  – Form Number: N/A.
 …
  – Abstract: The “Declaration of Persons Who Performed Repairs or Alterations” as required by 19 CFR 10.8, is used in connection with the entry of articles entered under subheadings 9802.00.40 and 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS). Articles entered under these HTSUS provisions are articles that were in the U.S. and were exported temporarily for repairs. Upon their return, duty is only assessed on the value of the repairs performed abroad and not on the full value of the article. The declaration under 19 CFR 10.8 includes information such as a description of the article and the repairs; the value of the article and the repairs; and a declaration by the owner, importer, consignee, or agent having knowledge of the pertinent facts. The information in this declaration is used by CBP to determine the value of the repairs and assess duty only on the value of those repairs. …
 
  Dated: August 24, 2017.
Seth Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection.

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EXIM_6
6
.

DoD Seeks Comments on DFARS Appendix F, Material Inspection and Receiving Report

 
82 FR 41006: Information Collection Requirement; Defense Federal Acquisition Regulation Supplement (DFARS); Inspection and Receiving Report
 
* AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).
* ACTION: Notice and request for comments regarding a proposed extension of an approved information collection requirement.
* DATES: DoD will consider all comments received by October 30, 2017.
* SUPPLEMENTARY INFORMATION: … 
  – Title, Associated Form, and OMB Number: Defense Federal Acquisition Regulation Supplement (DFARS), Appendix F, Material Inspection and Receiving Report; OMB Control Number 0704-0248.
  – Needs and Uses: The collection of this information is necessary to process shipping and receipt documentation for goods and services provided by contractors and permit payment under DoD contracts.
  – Type of Collection: Revision of a currently approved collection. …
  – Summary of Information Collection: This information collection includes the requirements of DFARS Appendix F, Material Inspection and Receiving Report. Appendix F contains procedures and instructions for submission of contractor payment requests and receiving reports using Wide Area WorkFlow (WAWF). 10 U.S.C. 2227(c) requires electronic submission and processing of claims for contract payments under DoD contracts. DoD has designated WAWF as the designated platform for contractors to submit payment requests and supporting documentation, including receiving reports. WAWF supports the preparation and distribution of electronic equivalents for the DD Form 250, Material Inspection and Receiving Report, and DD Form 250 series equivalents for repair of Government property and energy-related overland or waterborne shipments.
 
Amy G. Williams, Deputy, Defense Acquisition Regulations System. 

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EXIM_7
7
.

EPA Sets Filing Compliance Date for Hazardous Waste Exports on 31 Dec

 
82 FR 41015-41016: AES Filing Compliance Date for Hazardous Waste Exports
 
* AGENCY: Environmental Protection Agency (EPA).
* ACTION: Notice of announcement of compliance date.
* SUMMARY: This action announces that the Automated Export System (AES) filing compliance date for export shipments of hazardous waste and certain other materials is December 31, 2017. Under the “Hazardous Waste Export-Import Revisions” final rule published on November 28, 2016, that became effective on December 31, 2016, Environmental Protection Agency (EPA) provided flexibility to the regulated community by establishing a transition period prior to the required filing of EPA information into the AES for these export shipments. EPA had stated in the final rule that during the transition period, either paper processes or electronic processes at the port could be used until a future AES filing compliance date, which would be announced in a separate Federal Register action. EPA is making this announcement of the AES filing compliance date of December 31, 2017 in this action. On or after this AES filing compliance date, all exporters of manifested hazardous waste, universal waste, and spent lead-acid batteries for recycling or disposal, and all exporters of cathode ray tubes for recycling will be required to file EPA information in the AES or AESDirect for each export shipment. Paper processes will no longer be allowed on or after the compliance date.
* DATES: The AES filing compliance date is December 31, 2017. …
* SUPPLEMENTARY INFORMATION: … EPA has held three webinars for exporters on how to file the EPA information in AES on January 18, 2017, May 8, 2017, and June 5, 2017.
In the May and June webinars, EPA stated that the transition period would end no later than December 31, 2017. Materials and recordings of the May and June webinars are available here and here, respectively. EPA is also reaching out to individual exporters to ensure that all exporters with consent can successfully file the EPA information in AES for their export shipments.
 
  Dated: August 15, 2017.
Barry N. Breen, Acting Assistant Administrator, Office of Land and Emergency Management.

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OGSOTHER GOVERNMENT SOURCES

OGS_a18. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: 
Federal Register

* Coast Guard: NOTICES; Meetings: Chemical Transportation Advisory Committee [Publication Date: 30 Aug 2017.]
 
* State: RULES; United States Munitions List: Temporary Modification of Category XI [Publication Date: 30 Aug 2017.]

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OGS_a29.

Commerce/BIS: Carrier Saudi Services Company Ltd. (Saudi Arabia) to Pay $12,000 to Settle Alleged Antiboycott Violations

      
* Respondent: Carrier Saudi Services Company Ltd. (Saudi Arabia)
* Case No: 05-04
* Charges:
  – Two Violations of 15 C.F.R. 760.2(a), Refusal to do Business
  – Two Violations of 15 C.F.R. 760.5, Failing to Report the Receipt of a Request to Engage in a Restrictive Trade Practice or Foreign Boycott Against a Country Friendly to the United States
* Fine or Civil Settlement: Civil Settlement of $12,000
* Debarred or Suspended from Export Transactions: Not if penalty is paid as agreed
* Date of Order: 22 Aug 2017 

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OGS_a310.

DHS/CBP Provides Guidance to Trade on Cargo Processing During Hurricane Harvey

(Source:
CSMS# 17-000521, 29 Aug 2017.)
 
The following (updated) guidance is provided for entry and entry summary filing for cargo aboard ships that have been forced to divert due to Hurricane Harvey.
 
– Scenario 1
. At the of time the diversion, both the entry and summary have already been filed at the original port (e.g. Houston), nothing needs to be done with either the entry or summary.
– Scenario 2
. At the of time the diversion, a certified summary had already been filed at the original port (e.g. Houston), nothing needs to be done with the certified summary.
– Scenario 3
. At the of time the diversion, the entry had already been filed at the original port (e.g. Houston), but the summary had not been filed. In this case, it is recommended to file the summary using the same entry port as the entry was filed.
Scenario 4. At the of time the diversion, neither the entry or summary had been filed at the original port (e.g. Houston). In this scenario, both the entry and summary will be filed at the new (diverted) port.
 
We are advising that entry type 09, Reconciliation entries for the Houston port (5301) be held by trade until it reopens.
 
If Trade requires entry/entry summary cancellation/deletion please adhere to the entry deletion and cancellation policy and ACE Entry Summary business processing document.
 
CBP will only allow filers to delete entry data prior to cargo release processing. Once cargo release processing occurs and a provisional release notification is generated, the data is considered to be in CBP status and CBP will not delete the entry data. Deletion may only be performed on an entry (cargo selectivity information). An entry summary may not be deleted. All subsequent changes by trade must be processed via the entry or entry summary cancellation process.
 
It should be noted that there are many situations in which entry or entry summary cancellation is a legitimate and acceptable action, as long as the filer provides documentation to substantiate the request. The entry or entry summary cancellation process enables CBP to account for 21st century logistics and just-in-time inventory, as well as other government agency entry refusals.
 
The Office of Trade, Trade Policy and Programs intends to work with the impacted trade community during this time to mediate or resolve entry summary processing issues.
 
  – Related CSMS No. 17-000520, 17-000518

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OGS_a411. GAO: “Foreign Trade Zones: CBP Should Strengthen Its Ability to Assess and Respond to Compliance Risks Across the Program”

 
* GAO Report GAO-17-649: Published: Jul 27, 2017. Publicly Released: Aug 28, 2017.
 
What GAO Found
 
The Foreign Trade Zones (FTZ) program provides a range of financial benefits to companies operating FTZs by allowing them to reduce, eliminate, or defer duty payments on goods manufactured or stored in FTZs before they enter U.S. commerce or are exported. FTZs are secure areas located throughout the United States that are treated as outside U.S. customs territory for duty assessments and other customs entry procedures. Companies using FTZs may be warehouse distributors or manufacturers (see figure). A manufacturer, for example, that admits foreign components into the FTZ can pay the duty rate on either the foreign components or the final product, whichever is lower-resulting in reduced or eliminated duty payments. Distributors can also benefit by storing goods in FTZs indefinitely and thereby deferring duty payments until the goods enter U.S. commerce. In 2016, U.S. Customs and Border Protection (CBP) collected about $3 billion in duties from FTZs.
 
While FTZs were created to provide public benefits, little is known about FTZs’ economic impact. For example, few economic studies have focused on FTZs, and those that have do not quantify FTZs’ economic impacts. In addition, these studies do not address the question of what the economic activity, such as employment, would have been in the absence of companies having FTZ status.
 
CBP has not assessed compliance risks across the FTZ program, and its methods for collecting compliance and enforcement data impair its ability to assess and respond to program-wide risks. While CBP regularly conducts compliance reviews of individual FTZ operators to ensure compliance with U.S. customs laws and regulations, it does not centrally compile FTZ compliance and enforcement information to analyze and respond to compliance and internal control risks across the program. Federal internal control standards state that management should obtain relevant data and assess and respond to identified risks associated with achieving agency goals. Without a program-wide assessment of the frequency and significance of problems identified during compliance reviews, risk levels determined, and enforcement actions taken, CBP cannot verify its assertion that the FTZ program is at low risk of noncompliance. Incorrect determinations about program risk level may impact program effectiveness and revenue collection for the FTZ program, which accounted for approximately 11 percent of U.S. imports in 2015.
 
Why GAO Did This Study
 
The FTZ program was established in 1934 to expedite and encourage international trade and commerce. FTZs provide benefits to companies that import foreign goods for distribution or for manufacturing in order to encourage them to maintain and expand their operations in the United States. The total value of foreign and domestic goods admitted to FTZs in 2015 was about $660 billion. CBP is responsible for oversight and enforcement in FTZs, including revenue collection and assessing risk of noncompliance with U.S. laws and regulations.
 
GAO was asked to review CBP’s oversight of FTZs and FTZs’ economic impact. This report examines (1) the benefits of the FTZ program to companies operating FTZs and revenues collected from FTZs, (2) what is known about FTZs’ economic impact, and (3) CBP’s ability to assess and respond to compliance risks across the FTZ program. GAO analyzed CBP documents and data, interviewed agency officials and FTZ operators, and visited five FTZs based on trade volume, industry sector, and FTZ activity.
 
What GAO Recommends
 
GAO makes three recommendations to CBP to strengthen its ability to assess and respond to compliance risks across the FTZ program, including actions to centrally compile FTZ compliance and enforcement data, and to conduct a risk analysis of the FTZ program. CBP concurred with these recommendations and identified steps it will take to address them.
 
For more information, contact Kimberly M. Gianopoulos at (202) 512-8612 or
gianopoulosk@gao.gov

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OGS_a512. State/DDTC Announces Leadership Changes

(Source: State/DDTC)  
 
Effective Monday, 28 August 2017, Sarah Heidema will become the Acting Director of the Office of Defense Trade Controls Policy. The current Director, Ed Peartree, has accepted a position outside of government. During this leadership transition, Rick Koelling will become the Acting Deputy Director of Policy in addition to being the Division Chief of Commodity Jurisdictions and Rob Hart will become the Acting Division Chief for Regulatory and Multilateral Affairs. 

The “About DDTC Key Personnel”
page
has been updated to reflect these changes. 
As a reminder, the following previously announced Acting positions are still effective:

  – Tony Dearth, Acting Managing Director, pending identification of a permanent replacement.
  – Terry Davis, Acting Director of the Office of Defense Trade Controls Licensing.
  – Arthur Shulman, Acting Director of the Office of Defense Trade Controls Compliance, pending identification of a permanent replacement.

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

NWSNEWS

NWS_a1
13.

Reuters: “Despite New U.S. Sanctions, Russian Oil Traders Say It’s Business as Usual”

(Source:
Reuters, 29 Aug 2017.) [Excerpts.]
 
Russian oil companies will quickly find ways to work around tighter restrictions imposed this month by the United States on the foreign finance they can use, multiple Russian oil industry sources told Reuters.
 
The new restrictions cut the period that U.S.-based entities can provide finance to Russian energy firms from 90 to 60 days and are part of a fresh package of U.S. sanctions that U.S. President Donald Trump approved on 2 Aug.
 
Initiated by Congress, the sanctions were in part designed to punish Moscow further for its 2014 annexation of Ukraine’s Crimea peninsula and to sanction it for what U.S. intelligence agencies say was its meddling in the U.S. presidential election, something Russia denies.
 
In particular, the measures were designed to hurt Russia’s energy sector, its biggest source of revenue.
 
But though the new steps are an inconvenience that could cause Russian oil companies to incur extra costs, the sources, who work for Russian oil firms and Russian and foreign oil trading houses, said that they were only incrementally worse than sanctions that have been in place since 2014.
 
Oil companies had learned to adapt then and would do so again now, they said.
 
None of the oil trade sources said they knew of any transactions having been disrupted as a result of the new measures.
 
  “Business as usual,” said one Russian oil trader, who spoke on condition of anonymity, when asked to describe how the industry was coping with the new curbs.
 

Still, of all the various measures targeting the energy sector, the restriction cutting the financing duration would have the biggest direct impact even if there were ways to mitigate it, the industry sources said. … 

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NWS_a2
14.

ST&R Trade Report: “Dates and Deadlines: China Investigation, CBP Forms, AGOA Review, Classification”

 
Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up this week.
 
28 Aug:
  – Deadline for comments on CBP information collections on detention, export, entry.
  – Deadline for comments on USDA information collections on imports of tomatoes from Korea.
 
30 Aug:
  – Deadline for comments to USTR on country eligibility for AGOA preferences.
 
1 Sep:
  – Deadline for comments to CBP on expansion of Savannah, Ga., port of entry.
  – Deadline for comments to CBP on proposed revocation or modification of classification rulings on folders with memo pads.

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

COMMCOMMENTARY


* Authors: Johanna Reeves, Esq.,
jreeves@reevesdola.com; and Katherine Heubert, Esq.,
khebuert@reevesdola.com. Both of Reeves & Dola LLP.
 
[Editor’s Note: This is the 2nd part to Reeves & Dola LLP’s Myth Busters article on export controls. Part 1 was published in the Daily Bugle of Monday, 28 August 2017.]
 
MYTH #6: INFORMATION AVAILABLE ON THE INTERNET IS IN THE PUBLIC DOMAIN AND THEREFORE NOT SUBJECT TO THE ITAR
 
As counterintuitive as this seems, this is absolutely false when it comes to “technical data” controlled under the International Traffic in Arms Regulations (ITAR). Simply posting controlled “technical data” to the Internet does not remove that information from the ITAR controls because the information is now in the public domain.
 
The ITAR defines controlled “technical data” to include information required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles, and include information in the form of blueprints, drawings, photographs, plans, instructions or documentation. However, there is certain information that is specifically NOT subject to ITAR controls: information concerning general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities, and information in the public domain. However, “public domain” is defined in the ITAR at 22 C.F.R. 120.11 and is limited to only those media forms specifically enumerated in the definition. The Internet is not included.
 
The U.S. Department of State, Directorate of Defense Trade Controls (DDTC) has long held that controlled technical data cannot be released in any form without prior authorization from the U.S. Government. In a June 3, 2015 Proposed Rule on certain ITAR definitions, including “Public Domain,” DDTC confirmed its interpretation of what constitutes release of controlled technical data in the context of the Internet and other media. In the proposed revision to the definition of “Public Domain,” DDTC acknowledged the current definition is “unnecessarily limiting in scope and insufficiently flexible with respect to the continually evolving array of media,” and proposed a revised definition that would identify characteristics that are common to the existing enumerated media forms. The proposed new definition, however, contained an important limitation: “Technical data or software, whether or not developed with government funding, is not in the public domain if it has been made available to the public without authorization from [DDTC, other identified government offices].”
 
Explaining this limitation, DDTC provided important insight into its interpretation of public domain and the release of technical data: “The requirements of paragraph (b) are not new. Rather, they are a more explicit statement of the ITAR’s requirement that one must seek and receive a license or other authorization from the Department [of State] or other cognizant U.S. government authority to release ITAR controlled “technical data,” as defined in 22 C.F.R. § 120.10. A release of ”technical data” may occur by disseminating ”technical data” at a public conference or trade show, publishing ”technical data” in a book or journal article, or posting ”technical data” to the Internet. This proposed provision will enhance compliance with the ITAR by clarifying that ”technical data” may not be made available to the public without authorization. Persons who intend to discuss ”technical data” at a conference or trade show, or to publish it, must ensure that they obtain the appropriate authorization.” 80 FR 31525, 31528 (June 3, 2015).
 
A recent case that illustrates DDTC’s interpretation of public domain and unauthorized release of ITAR-controlled technical data is Defense Distributed v. U.S. Dep’t of State, 121 F.Supp.3d 680 (W.D. Tex. 2015), aff’d on appeal, 838 F.3d 451 (5th Cir. 2016). Defense Distributed made available for free on the Internet computer files used to create firearms and firearm parts, including so-called 80% AR-15-type lower receivers and a one-shot pistol known as the Liberator on a 3D-printer. Subsequent to the posting, DDTC sent a letter to Defense Distributed requesting the company remove the files from the Internet because the posting may be an unauthorized release of technical data in violation of the ITAR. The plaintiffs, Defense Distributed and Second Amendment Foundation, sued the Department of State, seeking to enjoin DDTC from enforcing the requirement for pre-publication approval. Defense Distributed and the Second Amendment Foundation argued that the pre-publication approval requirement is an unconstitutional prior restraint on protected First Amendment speech, and also argued violations of the Second and Fifth Amendments of the U.S. Constitution. The plaintiffs ultimately seek a declaration that no prepublication approval is needed for privately generated unclassified information, regardless of whether the information constitutes controlled “technical data.”
 
After plaintiffs filed their Complaint, they filed for a preliminary injunction against the State Department to have the district court suspend enforcement of the ITAR’s prepublication approval requirement pending final resolution of the case. The district court denied plaintiffs’ motion, finding the government’s interest in protecting national security outweighed the constitutional rights of Defense Distributed.
 
On appeal, the U.S. Court of Appeals for the Fifth Circuit affirmed the lower court’s decision, declining to reach the question of whether Defense Distributed demonstrated a substantial likelihood of success on the merits of its case. Finding the lower court did not abuse its discretion in denying Defense Distributed’s preliminary injunction, the court of appeals rejected the plaintiff’s argument that the lower court disregarded the paramount interest in protecting their constitutional rights. “The district court’s decision was based not on discounting Plaintiffs-Appelants’ interest but rather on finding that the public interest in national defense and national security is stronger here, and the harm to the government is greater than the harm to Plaintiffs-Appellants.” Defense Distributed, 838 F.3d at 459. This case continues, though Defense Distributed has been unsuccessful in its appeals thus far.
 
It should be noted that the proposed rule on “public domain” has not yet been finalized. Consequently, as of the date of this writing, the ITAR definition of “public domain” is still limited to the enumerated list in 22 C.F.R. 120.11.
 
Fundamental Rule
: posting ITAR-controlled “technical data” to the Internet does not remove the information from ITAR license requirements and restrictions without prior release approval from the proper government agency.  
 
MYTH #7: THE “NO LICENSE REQUIRED” (NLR) DESIGNATION
CAN BE USED IN AES FOR SHIPMENTS MADE UNDER ITAR LICENSE EXEMPTIONS
 
This myth concerns proper entries in the Automated Export System (AES). While invoking an ITAR exemption for a transaction does mean that no ITAR license is required for that particular export, the “NLR” entry is not the appropriate License Code/License Exemption Code to be used for such exports in AES. The NLR designation is only applicable to items controlled by the Department of Commerce under the Export Administration Regulations (EAR), and only when no license is required for the particular shipment. It is important to note that NLR is not to be used if an EAR exception is applicable. The appropriate License Code/License Exemption Code for type of export license, export permit, license exemption, license exception or other export authorization applicable to the shipment must be entered into AES. A full listing of all AES codes is available on the U.S. Customs and Border Protection website.
 
Fundamental Rule
: exercise caution when using the “NLR” (No License Required) designation for the license/license exemption code in AES.  NLR should not be used for ITAR-controlled goods, or for EAR-controlled items that are subject to an EAR license exception.
 
MYTH #8: MY FREIGHT FORWARDER TAKES CARE OF MY EXPORT FILINGS, SO I AM NOT RESPONSIBLE FOR ERRORS
 
The exporter of record is ultimately responsible for compliance with the requirements of the ITAR and EAR, which include entering the appropriate Electronic Export Information (EEI) into the AES. Among other items, the EEI includes identifying the applicable Export Control Classification Number (ECCN) for certain items on the Commerce Control List (CCL), as well as the appropriate License Type Code/License Exemption Code.
 
While it is perfectly acceptable to authorize an agent to prepare and file your EEI/AES entries, it is incumbent upon you, as the exporter of record, to ensure that you provide the freight forwarder the information necessary to properly complete the filings. A freight forwarder is rarely in the position to know this information without specific instructions from the exporter of record. Inaccurate entries in the AES are potential violations of the ITAR and the EAR. Both sets of regulations require that proper AES entries are made for every export, as applicable.
 
Further, you should request a copy of the entry made for every export transaction. Both the ITAR and EAR require the retention of records related to export activities, which includes AES entries.
 
Fundamental Rule
: the exporter of record is ultimately responsible for the accuracy of EEI entries, as well as proper reporting of export information to Customs and Border Protection with mandatory support documentation.
 
MYTH #9: I DON’T HAVE TO WORRY ABOUT EXPORT CONTROLS
BECAUSE MY ITEM IS EAR99
 
False! This may be the most dangerous misunderstanding of them all. EAR99 is the designation provided in the EAR for items are those items that are “subject to the EAR” but are not specifically listed on the CCL. As explained in Section 734.2 of the EAR (15 C.F.R. § 734.2), items “subject to the EAR” are those items and activities over which the U.S. Department of Commerce, Bureau of Industry and Security (BIS) exercises regulatory jurisdiction under the EAR. This means the EAR may still impose a license or other requirement on such items, even if they are not specifically identified on the CCL.
 
While it is true that most EAR99 items may be exported as “No License Required” to most countries in the world, there are still situations where a license is required. To illustrate, EAR Part 746 identifies broad based controls for items and activities “subject to the EAR” that are imposed to implement U.S. government policies. For example, a license is required for the export or reexport to Syria of all items subject to the EAR, except food and medicine classified as EAR99 (food and medicine are defined in Part 772 of the EAR).
 
There have been many enforcement cases involving improper exports of EAR99 items to prohibited end-users or end-uses, which have resulted in administrative penalties, criminal fines, and denial of export privileges. BIS summarizes recent enforcement actions, including those involving EAR99 items, in its frequently updated “Don’t Let This Happen to You!” publication available on the BIS website.
 
Fundamental Rule
: classification of an item as EAR99 does not automatically mean no license is required for a particular export, especially if the export involves a prohibited end-use or end-user. The exporter should conduct due diligence to ensure the proposed export does not require a license either because of a country, end-use or party involved in the transaction.
 
MYTH #10: ONCE MY LICENSE IS ISSUED, IT CANNOT BE REVOKED, SUSPENDED, OR AMENDED
 
It is often taken for granted that once the government issues authorization to export, the authorization is ironclad and immune from changes in policy. However, obtaining a license approval does not guarantee that once granted, that approval is irrevocable or unalterable. This is true for licenses issued under both the EAR and the ITAR.
 
The receipt of an export approval necessarily comes with it the chance that the government may revoke, suspend, or amend the approval for foreign policy or national security reasons. Section 38 of the Arms Export Control Act (AECA) grants the President the authority to control the import and export of defense articles “[i]n furtherance of world peace and the security and foreign policy of the United States.” 22 U.S.C. §2778. Courts have interpreted the U.S. government’s authority to act in furtherance of foreign affairs to be quite broad, and has held this authority to include the ability to prohibit particular export and import activities, even if previously licensed. In fact, 22 C.F.R § 123.22(c)(4) provides instructions for return of licenses revoked by DDTC. In the EAR, 15 C.F.R. § 750.8 provides guidance for revocation or suspension of licenses issued by the Department of Commerce. Be on the lookout for an upcoming Client Alert on this topic.
 
Fundamental Rule
: courts have consistently held that a party does not have protected property rights in foreign commerce. The U.S. government has the legal authority to revoke, suspend, or amend an export license without prior notice whenever the licensing agency deems such action to be advisable pursuant to the national security or foreign policy interests of the United States. 

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COMM_a2
16L.P. Carnegie & W.M. McGlone: “The Trump Administration’s New Venezuela Sanctions: Top 10 Takeaways”

 
* L.P. Carnegie, Esq., les.carnegie@lw.com; and W.M. McGlone, Esq., william.mcglone@lw.com. Both of Latham & Watkins LLP.
 
President Trump issues an Executive Order prohibiting certain transactions involving the Venezuelan government and state-owned or state-controlled entities.
 
Key Points

  – The Executive Order imposes new sanctions that prohibit US persons from dealing in certain new debt or new equity of the Venezuelan government – including state-owned Petroleos de Venezuela, S.A. (PdVSA).
  – The US Treasury Department’s Office of Foreign Assets Control (OFAC) issued four General Licenses authorizing, among other activities, efforts to wind-down contracts and agreements prohibited by the new sanctions, and most dealings with Citgo and Citgo affiliates.
 
On Friday, August 25, 2017, the Trump Administration released targeted financial sanctions against Venezuela with an Executive Order, titled “Imposing Additional Sanctions with Respect to the Situation in Venezuela.”).  These new sanctions, which are aimed at a broad range of debt and equity transactions involving the Venezuelan government and its owned or controlled entities, build upon the more targeted sanctions that OFAC announced in the past few weeks against Venezuela’s President and Vice President, as well as a number of other current and former Venezuelan government officials, all of whom were placed on OFAC’s List of Specially Designated Nationals (SDN List).
 
In a White House press release, the Press Secretary explained that “[t]hese measures are carefully calibrated to deny the Maduro dictatorship a critical source of financing to maintain its illegitimate rule, protect the United States financial system from complicity in Venezuela’s corruption and in the impoverishment of the Venezuelan people, and allow for humanitarian assistance.”
 
This Client Alert summarizes the top 10 takeaways from the Trump Administration’s new Venezuela-related sanctions.
 
(1) PdVSA “New” Debt is Prohibited
 
The Executive Order prohibits US persons from engaging in transactions related to, the provision of financing for, and other dealings in “new debt” of PdVSA with a maturity of greater than 90 days, including any such activities taking place in the United States.  The term “US person” includes (a) entities organized under US law and their foreign branches, (b) US nationals and US lawful permanent residents (wherever located) and (c) any person (regardless of nationality) present in the US. This prohibition in the Executive Order extends to all financing that supports such new debt, as well as the provision of services supporting such new debt. The prohibition also extends to the rollover of existing PdVSA debt if the rollover results in creating new debt with a maturity exceeding 90 days. “New debt” is defined as debt issued on or after August 25, when the new Executive Order took effect. In Frequently Asked Questions (FAQs), published simultaneously by OFAC, the agency confirmed that the term “debt” includes “bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper.” This definition mirrors the definition used by OFAC in the context of Russia-related sectoral sanctions.
 
(2) Dealings in “New” Debt and Equity of the Venezuelan Government, Government Bonds, and Dividends are Prohibited
 
The new Executive Order prohibits transactions related to, the provision of financing for, and other dealings in the following by a United States person or within the United States:
 
  – “New debt” of the Venezuelan government with a maturity of greater than 30 days, other than debt of PdVSA (where the maturity period is greater than 90 days), and “new equity” of the Government of Venezuela (including PdVSA). In its FAQs, OFAC defines “equity” to include “stocks, share issuances, depositary receipts, or any other evidence of title or ownership.”
  – Bonds issued by the Venezuelan government prior to August 25 (but see OFAC General License 3, discussed below).
 
  – Dividend payments or other distributions of profits to the Venezuelan government from any entity that the Venezuelan government owns or controls, either directly or indirectly. In part, this provision aims to ensure that PdVSA’s subsidiary in the United States, Citgo, does not repatriate its profits to the Venezuelan government.
 
The Executive Order defines the “Government of Venezuela” broadly to include any political subdivision, agency, or instrumentality of the Venezuelan government, including the Central Bank of Venezuela and PdVSA, and any person owned or controlled by, or acting for or on behalf of, the Venezuelan government.
 
(3) Purchasing Securities From the Venezuelan Government is Prohibited
 
The Executive Order prohibits transactions by US persons and activities in the United States relating to the purchase, directly or indirectly, of securities from the Venezuelan government, other than securities qualifying as new debt with a maturity of less than or equal to 90 days (for PdVSA) or 30 days (for the Government of Venezuela minus PdVSA). OFAC’s FAQs clarify that the new sanctions “prohibit U.S. persons from purchasing any securities – including equity securities issued by a non-sanctioned party – from the Government of Venezuela.”
 
(4) Citgo and Citgo Affiliates Benefit from an OFAC General License
 
Coinciding with the release of the new Executive Order, OFAC issued General License 2, which broadly authorizes US-person dealings and transactions with CITGO Holding, Inc. and CITGO Holding, Inc.’s subsidiaries, if no other sanctioned parties are involved. Citgo is a subsidiary of PdVSA. This general license effectively allows Citgo to maintain its normal operations, with the notable exception of its inability under the new sanctions to repatriate profits to the Venezuelan government, including to Citgo’s parent company.
 
(5) OFAC Issues Wind-Down General License

OFAC also issued General License 1, which is a “wind down” general license that narrowly permits US persons to participate in activities that are “ordinarily incident and necessary to wind down contracts or other agreements that were in effect prior to August 25, 2017.” Such wind-down activities must be completed before September 25, 2017. US persons taking advantage of this general license must provide a “detailed report” to OFAC within 10 business days after the wind-down transactions take place that includes such information as the name of the parties involved, the value of the transactions, and the date of the transactions. Failure to submit such a report can expose a US party to OFAC penalties.
 
(6) OFAC General License Permits Dealings in Certain Previously Issued Venezuela-Related Bonds and the Financing of Humanitarian Sales
 
Coinciding with the release of the new Executive Order, OFAC also issued General License 3, which authorizes US persons to engage in all transactions related to the provision of financing for, and other dealings in, bonds that:
 
  – Are specified in an Annex published by OFAC, or
  – Were issued (i) prior to August 25, 2017, and (ii) by US person entities owned or controlled, directly or indirectly, by the Venezuelan government (such as CITGO Holding, Inc.).
 
However, US persons are not permitted to purchase bonds listed in the OFAC Annex directly or indirectly from the Venezuelan government.
 
OFAC General License 4, permits financing activities and dealings in “new debt” related to the exportation or reexportation, from the United States or by a US person, of qualifying agricultural commodities, medicine, medical devices, or replacement parts and components for medical devices.
 
(7) The New Sanctions Do Not Require Blocking
 
OFAC’s FAQs underscore that the new, targeted sanctions against the Venezuelan government do not require US persons to treat the Venezuelan government as an SDN or to block its property. OFAC also notes that “the Government of Venezuela will not be added to the List of Specially Designated Nationals and Blocked Persons (SDN List),” and US persons should reject transactions or dealings that are prohibited by the new Executive Order. Such a rejection can trigger a notification to OFAC within 10 business days.
 
(8) Imports of Venezuelan Oil and Exports of US Crude Oil to Venezuela are Still Permitted
 
The current sanctions against Venezuela do not prohibit importing crude oil of Venezuelan origin into the US or processing such crude oil in the United States. The sanctions also do not preclude US persons from selling crude oil to Venezuela, provided no SDNs are involved.
 
(9) OFAC’s Application of the 50% Rule Merits Consideration
 
OFAC’s FAQs clarify that the prohibitions relating to financing and other activities involving the Venezuelan government also apply to entities that are owned 50% or more by the Venezuelan government. In other words, a 50-50 joint venture with the Venezuelan government, or an entity that meets the definition of “Government of Venezuela” (such as PdVSA), would be subject to the restrictions and limitations provided for in the Executive Order (unless the entity is CITGO Holding, Inc. or one of its subsidiaries, in which case General License 2 provides relief).
 
(10) US Persons Should Exercise Caution When Dealing with the Venezuelan Government, Given That Certain Government Officials Are on the SDN List.
 
In its FAQ No. 505, OFAC reminds the US-regulated community that “the designation of an official of the Government of Venezuela does not mean that the government itself is also blocked” and that the OFAC prohibitions apply “to transactions or dealings with the individuals and entities whose property and interests in property are blocked.” However, OFAC cautions that US persons should be alert to instances where dealings with the Venezuelan government may directly or indirectly involve dealing with an SDN, “for example by entering into contracts that are signed by the SDN, entering into negotiations with an SDN, or by processing transactions, directly or indirectly, on behalf of an SDN.”

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COMM_a3
17M. Baki Fadlallah, J.C. Poling & W.H. Segall: “OFAC Puts Companies on Notice: Due Diligence in Iran Can Trigger Sanctions Violations”

 
* Authors: Mahmoud Baki Fadlallah, Esq., mfadlallah@akingump.com, +971-4-317-3030 (Dubai); Jonathan C. Poling, Esq., jpoling@akingump.com, 202-887-4029; and Wynn H. Segall, Esq., wsegall@akingump.com, 202-887-4573; and. All of Akin Gump Strauss Hauer & Feld LLP.
 
Key Points
 
  – This enforcement action highlights the heightened sanctions compliance and enforcement risk that companies face when engaging third-party consultants to perform due diligence on counterparties. U.S. persons must make clear to consultants providing services that due diligence must exclude work performed in Iran or by Iranian nationals ordinarily resident in Iran.
  – Although the activities in question occurred prior to OFAC’s issuance of GL-H, OFAC made clear that such activities would not have been authorized under GL-H, raising questions regarding whether companies relying on GL-H must ensure that the benefit of a transaction is not received by their U.S. parent company.
  – OFAC further uses this enforcement action to clarify limitations on the scope of permissible sanctions compliance guidance by legal and compliance professionals in accordance with OFAC’s Guidance on the Provision of Certain Services Relating to the Requirements of U.S. Sanctions Laws, suggesting that providers of due diligence services should qualify any recommendations to conduct diligence on Iranian counterparties to ensure that such diligence does not involve U.S. prohibited importation of Iranian-origin services.
 
On August 10, 2017, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that IPSA International Services, Inc. (IPSA) agreed to pay a $259,200 civil settlement in connection with 72 apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). IPSA is a U.S. company that provides global investigative due diligence services for countries that run “citizenship by investment” programs. OFAC alleges that IPSA violated the ITSR when it benefited from imports of Iranian-origin services (Contract 1) and by facilitating payments made by its foreign subsidiaries related to Iranian-origin services (Contract 2).
 
Overview of Enforcement Action
 
According to the OFAC enforcement action, IPSA was involved in two contracts managed and performed by IPSA’s foreign subsidiaries to conduct due diligence on Iranian nationals in Iran.
 
Both of the contracts at issue featured “Iranian-origin services” because IPSA’s foreign subsidiaries hired third parties to “validate” information that “could only be obtained or verified within Iran.” [FN/1]  This, in turn, meant that both contracts involved “Iranian-origin services” as defined under the ITSR, which is defined to include all services performed within Iran, or outside Iran by an entity organized under the laws of Iran or an Iranian citizen, national or permanent resident ordinarily resident in Iran. [FN/2]
 
IPSA’s apparent violations arose under two separate theories of civil liability under Contract 1 and Contract 2. Under Contract 1, OFAC determined that IPSA directly benefitted from due diligence conducted in Iran, resulting in an impermissible “importation into the United States of . . . services of Iranian origin.” [FN/3]  Notably, OFAC does not state whether, or to what extent, IPSA received information concerning the due diligence activities in Iran, which suggests that the mere benefit of those activities to IPSA was sufficient to qualify as an impermissible importation of Iranian services. Under Contract 2, OFAC determined that IPSA “reviewed, approved, and initiated” its foreign subsidiaries’ payments to providers of Iranian-origin services. This, according to OFAC, violated the prohibition against U.S. person facilitation under the ITSR. [FN/4]
 
Heightened Risk Associated with Due Diligence Activities in Iran
 
This enforcement action highlights the heightened sanctions compliance and enforcement risks that companies face when conducting due diligence activities that involve Iran. In accordance with this enforcement action, companies should note that OFAC considers due diligence activities that occur within Iran as “Iranian-origin services” and may take enforcement action against U.S. persons that deal in such services or benefit from those services in the United States.
 
OFAC Comments on the Limits of General License H
 
OFAC used the enforcement action as an opportunity to comment on the limits of General License H. The activities in this case occurred in October 2012, well before OFAC issued GL-H. Nevertheless, OFAC used this enforcement action to clarify that “the conduct underlying the apparent violations “is not eligible for OFAC authorization under existing licensing policy” [FN/5] and noted that U.S. persons are allowed to engage in only limited activity under GL-H, while stressing that “the general prohibition of facilitation remains in place.” [FN/6]
 
Finally, the enforcement action is also notable because OFAC clarified the limits of permissible sanctions compliance advice provided by legal and compliance professionals. OFAC cited its January 2017 Guidance on the Provision of Certain Services Relating to the Requirements of U.S. Sanctions Laws, which states that legal and compliance professionals may “conduct research to make a determination as to the legality of transactions under U.S. sanctions laws, provided there is no [unauthorized] importation of services.” [FN/7]
 
In practice, legal and compliance professionals may recommend that clients conduct thorough due diligence on counterparties to ensure effective compliance with OFAC sanctions. Through this enforcement action, OFAC suggests that these recommendations should be qualified to ensure that the diligence conducted does not involve any prohibited importation of Iranian-origin services, such as through on-the-ground research in Iran.
 
———

  [FN/1] OFAC Enforcement Information (Aug. 10, 2017), available
here.

  [FN/2] 31 C.F.R. § 560.306(c).
  [FN/3] 31 C.F.R. § 560.201.
  [FN/4] 31 C.F.R. § 560.208.
  [FN/5] OFAC Enforcement Information (Aug. 10, 2017), available here.
  [FN/6] Id.
  [FN/7] OFAC Enforcement Information (Aug. 10, 2017), available here.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a118. NAITA Presents 2017 Export Control Update (ITAR/EAR/OFAC) on 18-19 Sept in Huntsville, AL

(Source: Amanda Berkey; apberkey@madisoncountyal.gov)  
 
* What: NAITA 2017 Export Control Update (ITAR/EAR/OFAC).
* When: 18-19 September 2017.
* Where: The Westin Huntsville; 6800 Governors West, Huntsville, AL 35806.
* Sponsor: North Alabama International Trade Association (NAITA) and Maynard Cooper & Gale PC.
* Speakers Include: Kevin Wolf, Candace Goforth, Michael Laychak, and Jim Bartlett.
* Credits: Approved by the Mandatory Continuing Legal Education Commission of the Alabama State Bar for 12.5 CLEs.
* Register: Click here for details & registration link or contact Amanda Berkey/NAITA at 256-532-3505, apberkey@madisoncountyal.gov or naita@naita.org.

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ENEDITOR’S NOTES

 

* John Locke (29 Aug 1632 – 28 Oct 1704; was an English philosopher and physician, widely regarded as one of the most influential of Enlightenment thinkers and commonly known as the “Father of Liberalism”.)
  – “All mankind… being all equal and independent, no one ought to harm another in his life, health, liberty or possessions.”
  – “Government has no other end, but the preservation of property.”

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EN_a320
. 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: 15 Aug 2017: 
82 FR 38764-38819: Wassenaar Arrangement 2016 Plenary Agreements Implementation 

  
*
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.

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EN_a0321. 
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., 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.

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