;

17-0830 Wednesday “Daily Bugle”

17-0830 Wednesday “Daily Bugle”

Wednesday, 30 August 2017

TOP
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 
here for free subscription.  Contact us
for advertising inquiries and rates.

  1. DHS/USCG Announces CTAC Meetings on 3, 4, and 5 Oct in Wash DC
  2. State Amends ITAR, Modifies USML Cat. XI Temporarily
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: CH Robinson Freight Services, Ltd, to Pay $37,000 to Settle Alleged Antiboycott Violations
  3. DHS/CBP Posts Updated ACE Deployment Schedule
  4. GAO: “Export-Import Bank: Status of End-Use Monitoring of Dual-Use Exports as of August 2017”
  5. State/DDTC: (No new postings.)
  6. Australia DFAT Seeks Comments Concerning Statutory Review of UN Counter-Terrorism Listings
  1. Expeditors News: “CBP Announces Additional Port Closures in Texas”
  2. NewsChannel5: “Group Accused of Stealing Equipment from Fort Campbell, Selling It on EBay”
  1. D.M. Edelman & J. Scannapieco: “Foreign Investors Should Not Let Fear of CFIUS Limit Investment in US Manufacturers”
  2. J.E. Bartlett: DDTC Amended the ITAR Today – New Edition of the BITAR Available
  3. M. Volkov: “Ethics, Temptation and Money”
  4. R.I. Meltzer & D.M. Horn: “New Sanctions Prohibit US Firms from Wide Range of Dealings with Venezuelan Government and PdVSA”
  1. “8th Annual ‘Partnering for Compliance TM’ West Export/Import Control Program” on 10-13 Oct in Dallas TX. UPDATE: NIST/Computer Security Division Confirmed  
  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 (30 Aug 2017) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11.

DHS/USCG Announces CTAC Meetings on 3, 4, and 5 Oct in Wash DC

 
82 FR 41279-41280: Chemical Transportation Advisory Committee
 
* AGENCY: U.S. Coast Guard (USCG), Department of Homeland Security.
* ACTION: Notice of Federal Advisory Committee meeting.
* SUMMARY: The Chemical Transportation Advisory Committee (CTAC) and its subcommittees will meet in Washington, DC, to discuss committee matters relating to the safe and secure marine transportation of hazardous materials. These meetings will be open to the public.
* DATES: The Chemical Transportation Advisory Committee subcommittees will meet on Tuesday, October 3, 2017, from 9 a.m. to 5 p.m. and on Wednesday, October 4, 2017, from 9 a.m. to 5 p.m. The full committee will meet on Thursday, October 5, 2017, from 9 a.m. to 5 p.m. Please note that these meetings may close early if the committee has completed its business.
* ADDRESSES: The meeting will be held at the U.S. Coast Guard Headquarters, 2703 Martin Luther King Jr. Ave. SE., Washington, DC 20593-6509.
  Pre-registration Information: Pre-registration is required for access to Coast Guard Headquarters. Foreign nationals participating will be required to pre-register no later than noon on September 3, 2017, to be admitted to the meeting. U.S. citizens participating will be required to pre-register no later than noon on September 19, 2017, to be admitted to the meeting. To pre-register, contact Lieutenant Jake Lobb at jake.r.lobb@uscg.mil or (202) 372-1428. You will be asked to provide your name, telephone number, date of birth, and social security number. In addition, please provide the company or group in which you are affiliated, and whether parking is required. Foreign nationals will also need to provide your country of citizenship, passport country, country of residence, place of birth, passport number, and expiration date. All attendees will be required to provide a government-issued picture identification card in order to gain admittance to the building. …
* SUPPLEMENTARY INFORMATION: The Chemical Transportation Advisory Committee is established under the authority of Section 871 of the Homeland Security Act of 2002, Title 6, United States Code, section 451. This Committee is established in accordance with and operates under the provisions of the Federal Advisory Committee Act (Title 5, United States Code, Appendix).
  The Chemical Transportation Advisory Committee will advise, consult with, and make recommendations reflecting its independent judgment to the Commandant of the United States Coast Guard on matters concerning the safe and secure marine transportation of hazardous materials, including industry outreach approaches. The Chemical Transportation Advisory Committee will respond to specific assignments and may conduct studies, inquiries, workshops, and seminars as the Commandant may authorize or direct. …
 
  Dated: August 24, 2017.

F.J. Sturm, Acting Director of Commercial Regulations and Standards.

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

EXIM_a22.

State Amends ITAR, Modifies USML Cat. XI Temporarily

 
82 FR 41172-41173: Temporary Modification of Category XI of the United States Munitions List
 
* AGENCY: Department of State.
* ACTION: Final rule; notice of temporary modification.
* SUMMARY: The Department of State, pursuant to its regulations and in the interest of the security of the United States, temporarily modifies Category XI of the United States Munitions List (USML).
* DATES: Amendatory instructions 1 and 2 are effective August 30, 2017. Amendatory instruction No. 3 is effective August 30, 2018. …
* SUPPLEMENTARY INFORMATION: On July 1, 2014, the Department published a final rule revising Category XI of the USML, 79 FR 37536, effective December 30, 2014. That final rule, consistent with the two prior proposed rules for USML Category XI (78 FR 45018, July 25, 2013 and 77 FR 70958, November 28, 2012), revised paragraph (b) of Category XI to clarify the extent of control and maintain the existing scope of control on items described in paragraph (b) and the directly related software described in paragraph (d). The Department has determined that exporters may read the revised control language to exclude certain intelligence-analytics software that has been and remains controlled on the USML. Therefore, the Department determined that it is in the interest of the security of the United States to temporarily revise USML Category XI paragraph (b), pursuant to the provisions of 22 CFR 126.2, while a long-term solution is developed. The Department will publish any permanent revision to USML Category XI paragraph (b) addressing this issue as a proposed rule for public comment.
  This temporary revision clarifies that the scope of control in existence prior to December 30, 2014 for USML paragraph (b) and directly related software in paragraph (d) remains in effect. This clarification is achieved by reinserting the words “analyze and produce information from” and by adding software to the description of items controlled.
  The Department previously published a final rule on July 2, 2015 (80 FR 37974) that temporarily modified USML Category XI(b) until December 29, 2015. The Department published a final rule on December 16, 2015 (80 FR 78130) that continued the July 2, 2015 modification to August 30, 2017. This final rule extends the July 2, 2015 modification to August 30, 2018 to allow the U.S. government to review USML Category XI in full and publish proposed and final rules. ….
 
Rex W. Tillerson, Secretary of State, U.S. Department of State.

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

OGSOTHER GOVERNMENT SOURCES

OGS_a13. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: 
Federal Register

[No items of interest noted today.]

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

        
* Respondent: CH Robinson Freight Services
* Case No: 17-01
* Charges:
– Ten Violations of 15 C.F.R. §760.2(d) – Furnishing Information about Business Relationships with Boycotted Countries or Blacklisted Persons
– Seven 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 $37,000
* Voluntary Disclosed: Yes
* Debarred or Suspended from Export Transactions: Not if penalty is paid as agreed.
* Date of Order: 24 August 2017
 

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

  

(Source:
CSMS #17-000525, 30 August 2017.)
 
U.S. Customs and Border Protection (CBP) has posted an updated version of the Automated Commercial Environment (ACE) Deployment Schedule. The ACE Deployment Schedule provides details on when upcoming capabilities will be deployed in ACE, and includes a list of changes made since the last update.

To access the updated the ACE Development and Deployment Schedule, please visit the “ACE and Automated Systems” page at CBP.gov/ACE and scroll down to the “Publications” section or go here.

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

OGS_a46. GAO: “Export-Import Bank: Status of End-Use Monitoring of Dual-Use Exports as of August 2017”

 
What GAO Found
 
Ex-Im approved financing for three dual-use export transactions in fiscal year 2012: (1) a portion of a satellite for the French company Eutelsat, (2) fixed- and mobile-service satellites for the government of Mexico, and (3) construction equipment for the government of Cameroon. Ex-Im receives monitoring documents from end users of these exports; the documents provide information on the extent to which the exports are used for civilian or military purposes. In addition, for the Mexico and Cameroon transactions, the bank completes an annual determination of dual-use compliance. In this report, GAO reviewed the 2015 annual determinations together with the 2016 determinations, because GAO received information on those determinations over the course of this review. Ex-Im received the end-use monitoring documentation for 2016 as required by the credit agreements with Eutelsat and the governments of Mexico and Cameroon, and completed its 2015 and 2016 dual-use compliance determinations for Mexico and Cameroon. However, it did so sometimes before receiving required end-use documents, or after internal deadlines. Ex-Im did not finance any new exports under its dual-use authority in fiscal year 2016.
 
Why GAO Did This Study
 
The Export-Import Bank Reform and Reauthorization Act of 2015 extended Ex-Im’s authority to finance dual-use exports until the date when the authority of the Export-Import Bank expires under 12 U.S.C. § 635f. Under this section, Ex-Im is currently authorized through September 30, 2019. GAO is required to report annually on the end uses of dual-use exports supported by Ex-Im during the second preceding fiscal year.
 
What GAO Recommends
 
GAO is not making any recommendations in this report.
 
For more information, contact Kimberly Gianopoulos at (202) 512-8612 or gianopoulosk@gao.gov.

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

OGS_a57. State/DDTC: (No new postings.)

(Source: State/DDTC)

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

OGS_a68. Australia DFAT Seeks Comments Concerning Statutory Review of UN Counter-Terrorism Listings

(Source: Australia DFAT)
 
The Australian Department of Foreign Affairs and Trade (DFAT) invites members of the public to comment on a review of Australia’s listings of five persons pursuant to United Nations Security Council (UNSC) Resolution 1373 (2001).
 
UNSC Resolution 1373 requires all UN Member States to prevent and suppress terrorist acts. Australia implements these obligations in Part 4 of the Charter of the United Nations Act 1945 (CotUNA) and the Charter of the United Nations (Dealing with Assets) Regulations 2008.
 
These laws make it a criminal offence to use or deal with the assets of, or to make assets available to, persons and entities listed by the Minister for Foreign Affairs. Under the CotUNA, listings expire after three years, unless extended by the Minister for Foreign Affairs.
 
This round of public consultations is for five such listings that are due to expire on 17 November 2017. The public consultation period on these five listings will be open until 5pm on Tuesday 19 September 2017. More information about listings currently under review and how to make a submission is on the DFAT website.

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

NWSNEWS

(Source:
Expeditors News, 29 Aug 2017.)
 
On 29 August 2017 U.S. Customs and Border Protection (CBP) announced Cargo System Messaging Service (CSMS) #17-000522 announcing multiple port closures for August 30 – September 1, 2017 due to Hurricane Harvey.
 
The below Texas ports will be temporarily suspended until at least September 1, 2017:
 
  – Port Arthur – 2101
  – Houston Seaport – 5301
  – Houston Airport – 5309
  – Galveston – 5310
  – Freeport – 5311
 
According to the CSMS, “CBP is extending an additional day, without penalty, for any entry summaries and payment of duties that will be due on 30 August 2017 – 1 September 2017” for these ports.
* * * * * * * * * * * * * * * * * * * *

(Source:
NewsChannel5, 29 Aug 2017.)
 
A group of eight men were given felony charges for involvement in an alleged theft ring that rounded up stolen military equipment and sold it on the online marketplace, EBay.
 
According to an indictment from U.S. District Court, the men were charged with conspiracy and violations of an international arms trade act for theft of U.S. Army property between 2013 and 2016.
 
The documents singled out John Roberts and Cory Wilson, both civilians, as the operators of an online store on EBay that sold thousands of stolen pieces of equipment worth an estimated amount of upwards of a million dollars. Six others listed on the indictment are all soldiers at Fort Campbell who are accused of supplying the stolen property.
 
Items stolen included machine gun parts, a grenade launcher site, body armor, helmets, night vision goggles and medical equipment.
 
Roberts and Wilson were accused of moving the items off the post to a warehouse in Clarksville.
 
Items sold often went overseas, to countries such as China, Russia, Kazakhstan, Ukraine, Lithuania, Mexico and others.
 
According to the indictment, this violates the Arms Export Control Act which requires a person to apply for an export license before arms, ammunition or articles of war from the United States to other countries.
 
Roberts and Wilson both face charges of conspiracy, wire fraud and violation of the Arms Export Control Act. Those charges carry a max prison sentence of 45 years together and $1.5 million fine.
 
The other six defendants were charged with conspiracy and face up to five years in prison.
* * * * * * * * * * * * * * * * * * * *

COMMCOMMENTARY

COMM_a0111.

D.M. Edelman & J.
Scannapieco
: “Foreign Investors Should Not Let Fear of CFIUS Limit Investment in US Manufacturers”

(Source:
Industry Week) [Excerpts.]
 
* Authors: Doreen M. Edelman, Esq., 202-508-3460, dedelman@bakerdonelson.com
; and J. Scannapieco, Esq.,
jscannapieco@bakerdonelson.com
. Both of
Baker Donelson LLP, Wash DC and Nashville, TN, respectively.
 
As foreign direct investment in the U.S. has increased, many members in Congress have become concerned about foreign acquisitions of U.S. manufacturers that are perceived to be essential to U.S. national and economic security.
 
The United States is the largest recipient of foreign direct investment in the world. Over the last several years, foreign direct investment in the U.S. manufacturing sector has increased.  As this investment has increased, however, many members in Congress have become concerned about foreign acquisitions of U.S. manufacturers that are perceived to be essential to U.S. national and economic security. These lawmakers have called for an increase in the scrutiny of these cross-border investment projects by the Committee on Foreign Investment in the United States (CFIUS), an interagency committee that is authorized to review, investigate and block any transaction or investment that could result in the control of any U.S. businesses or assets by a foreign person that may raise national security concerns or involve critical infrastructure. Also, while the Trump administration has stated that it welcomes foreign investment into the U.S. manufacturing sector, its heightened interest in national security and strong interest in promoting its “America First” agenda have led to even louder calls for increased CFIUS review. …
 
[Editor’s Note: Due to copyright restrictions, we are not authorized to include the entire commentary. To read the remaining sections, please click on the source link below the item title.] 

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

COMM_a2
12
. J.E. Bartlett: DDTC Amended the ITAR Today – New Edition of the BITAR is Available

(Source: James E. Bartlett III, Law Office of James E. Bartlett III, PLLC, JEBartlett@JEBartlett.com, 202-802-0646)
 
The State Department amended the International Traffic in Arms Regulations (22 CFR 120-130) today.  The amendment is a final rule, effective today, but it is only a temporary modification of Category XI(b), which will last until next year on August 30, 2018, and on that day, an automatic amendment will take effect.  
 
Today’s amendment results in the following wording of ITAR Sec. 121.1, Cat. XI(b):  
 
*(b) 
Electronic systems, equipment or software, not elsewhere enumerated in this subchapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit, or analyze and produce information from, the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.

 

On August 18, 2018, ITAR Sec. 121.1, Cat. XI(b) will be amended to:  
 
*(b) Electronic systems or equipment, not elsewhere enumerated in this subchapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.


 
The Government Printing Office’s “e-CFR” consolidated version of the ITAR usually takes several days to update amendments, but an up-to-date version of the ITAR is available in “Bartlett’s Annotated ITAR” (BITAR), available by subscription at www.FullCircleCompliance.eu.  In addition to the full text of the ITAR, 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.

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

COMM_a3
13M. Volkov: “Ethics, Temptation and Money”

(Source: Volkov Law Group Blog. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
A corporate entity is like its own community – it has a culture, a set of values and principles that form the foundation for the company’s operations, and an overall purpose. The interesting factor that has to be identified, assessed and addressed is that a corporate entity has to be profitable, or in other words, it has to make money. We often hear that a compliance program is irrelevant if the company does not make money – that is another profound grasp of the obvious.
 
A corporate organization has to be profitable, but how is that defined and communicated within the company? If the company has an obsessive fixation on quarterly profits, short-term returns, and targets, you can expect that this focus will come at the expense of sustainability, long-term goals, and important support functions like compliance.
 
A CEO sets the tone on this issue – if success is defined in these short-term financial achievements, this attitude will permeate the organization. On the other hand, if the CEO takes a longer-term view of corporate development with due consideration of short-term goals, along with long-term growth and sustainable operation, a CEO can use corporate culture as a longer-term goal because of its important contribution to a company’s financial success.
 
Aside from the sustainable financial benefits of an ethical culture, research has shown that a company with an ethical culture will experience lower rates of employee misconduct.   Interestingly, and maybe this is obvious to everyone, but employee misconduct surrounding money (e.g. reimbursement, payment authorizations) is higher than employee misconduct that occurs surrounding non-monetary functions. So, for example, when an employee is dealing directly with a money function, the employee is more apt to engage in misconduct than an employee who may desire to steal or misuse a piece of property from a company.
 
While my point may seem very obvious, we can boil it down to a true human character trait – temptation. An employee who is tempted, notwithstanding the positive corporate culture, may steal money or cheat for financial gain. The clash of corporate culture and human behavior is a difficult one to resolve but from a compliance standpoint the company’s goal should be to make the individual employee feel that he or she is part of a greater whole than short-term individual gain. This is the challenge for installing an ethical culture – to embed a culture that embraces all individuals as a group, as a part of a greater whole.
 
However, if the employee is operating in a company culture dedicated to short-term quarterly objectives, you can easily imagine that the employee is likely to make decision to advance his/her own self-centered needs to the detriment of larger corporate interests. Companies have to offer a larger alternative to its employees – a vision of an organization committed to broad goals and values and to each and every employee.
 
In ethical companies, employees embrace the corporate vision in order to feel part of a greater whole. Employees look to the corporate culture as a means to embrace larger principles and purpose. Employees do not want to limit their purpose to meeting quarterly financial targets; they want to advance a common good and a broader purpose for the company.

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

COMM_a4
14R.I. Meltzer & D.M. Horn: “New Sanctions Prohibit US Firms from Wide Range of Dealings with Venezuelan Government and PdVSA”

(Source: Wilmer Hale)
 
On August 24, 2017, the Trump Administration significantly expanded sanctions against the Government of Venezuela, including state-owned oil company Petroleos de Venezuela, S.A. (PdVSA). These latest sanctions reflect elements of several other US sanctions programs, including restrictions on access to US capital markets and authorizations for US firms to “wind down” existing contractual obligations. While the sanctions include a prohibition on dealings in all Venezuelan sovereign bonds, they are accompanied by a general license authorizing transactions relating to certain previously issued bonds. US firms, especially US financial services firms, should carefully examine the interplay between the new prohibitions and the accompanying general licenses.
 
The new Executive Order signed by President Trump, “Imposing Additional Sanctions with Respect to the Situation in Venezuela,” contains five substantive prohibitions that apply to US persons and to activities within the United States.
 
Section 1(a) prohibits all transactions related to, provision of financing for, and other dealings in:
 
  (1) New debt of PdVSA with a maturity of greater than 90 days;
  (2) New debt with a maturity of greater than 30 days, or new equity, of the Government of Venezuela (other than that of PdVSA, addressed above);
  (3) Bonds issued prior to August 25, 2017, by the Government of Venezuela; and
  (4) Dividend payments or other distributions of profits to the Government of Venezuela from any entity that it directly or indirectly owns or controls.
 
And Section 1(b) prohibits the direct or indirect purchase of securities from the Government of Venezuela, other than those qualifying as new debt below the applicable authorized tenors for PdVSA and the Government of Venezuela identified above.
 
While these prohibitions are expansive, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued four general licenses which have an impact on applicable restrictions. These measures echo past OFAC authorizations, issued under other US sanctions programs, with which many in the financial services industry may already be familiar. Although the general licenses do not authorize activities that are otherwise prohibited by US sanctions, including past blocking sanctions against designated Venezuelan individuals and entities, they affect the scope, timing, and application of the Executive Order’s prohibitions and should be closely reviewed by US financial services firms.
 
General License No. 1
authorizes all transactions otherwise prohibited (other than the prohibition against dealings in dividend payments and other distributions of profit, which are outside the scope of this authorization) 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 must occur by September 24, 2017, and those relying on it must file a report with OFAC within 10 business days of the wind-down transactions. Past US sanctions programs, most notably those targeting Iran, have included comparable wind-down authorizations.
 
General License No. 2
authorizes transactions otherwise prohibited by the “new debt” and “new equity” provisions discussed above where the only Government of Venezuela entities involved are CITGO Holding, Inc., and any of its subsidiaries. When the US Department of State sanctioned PdVSA in 2011 for its support of the Iranian energy sector, it specifically affirmed that such sanctions did not apply to PdVSA subsidiaries. OFAC similarly recognized in this case the collateral harm that sanctions imposed against CITGO Holding, Inc. would cause in the United States.
 
General License No. 3
authorizes transactions otherwise prohibited by the restriction on sovereign bonds if the bonds are specified in the Annex to the general license. The list of such bonds is available here. General License No. 3 also authorizes transactions otherwise prohibited involving bonds that were issued prior to August 25, 2017, by US entities that are directly or indirectly owned by the Government of Venezuela.
 
General License No. 4
authorizes new debt transactions related to the exportation or reexportation of agricultural commodities, medicine, medical devices, and replacement parts and components, provided the export transaction is authorized under the Export Administration Regulations. The scope of products authorized under this general license is defined by reference to other US laws that will be familiar to US exporters of such goods. [FN/1]
 
OFAC’s FAQs that accompanied the Executive Order and General Licenses provide important guidance to US firms that must comply with these new sanctions. Most notably:
 
  – The 50 Percent Rule: The OFAC 50 Percent Rule applies to these new sanctions, meaning that the prohibitions targeting the Government of Venezuela include entities owned 50 percent or more, individually or in the aggregate, by the Government of Venezuela.
 
  – Treatment of “debt” and “equity”: The terms “debt” (including the rollover of existing debt) and “equity” have the same meanings as under the US sectoral sanctions against Russia. [FN/2] The new sanctions prohibit US persons from purchasing any securities, even those issued by a non-sanctioned party, from the Government of Venezuela, unless the securities are “new debt” that is below the applicable authorized tenor.
 
  – Banking services: US financial institutions may continue to maintain correspondent accounts, and process US dollar-clearing transactions, for the Government of Venezuela, provided the transactions are not specifically prohibited by the new Executive Order.
 
  – Third-party debt: US persons may engage in transactions in which the Government of Venezuela may be a counterparty in connection with debt issued by a non-sanctioned party (e.g., a loan provided by the Government of Venezuela, or where the Government of Venezuela is an underwriter on new debt of a non-sanctioned third party). US persons may also extend credit above the applicable authorized tenor to non-sanctioned parties for the purpose of purchasing goods or services from the Government of Venezuela (provided, however, the Government of Venezuela is not the indirect borrower).
 
  – Previously existing credit or loans: A US firm that has entered into a long-term credit facility or loan agreement prior to August 25, 2017, may process drawdowns and disbursements with repayment terms of 90 days or less (for PdVSA) or 30 days or less (for the rest of the Government of Venezuela), as well as those in which the repayment terms exceed the applicable authorized tenor if the terms of such drawdowns and disbursements are not modified on or after August 25, 2017. But where terms are negotiated on or after that date and the repayment terms exceed the applicable authorized tenor, then drawdowns and disbursements are prohibited. US persons may engage in transactions necessary to exit or replace participation in a long-term loan facility extended to the Government of Venezuela prior to August 25, 2017, provided the transaction does not otherwise violate the Executive Order.
 
  – Notably, the OFAC’s FAQs do not include an exclusion for dealings in derivatives, which exists in similar restrictions applicable to Russian sectoral sanctions.
 
OFAC’s FAQs also signaled to the Government of Venezuela what conditions the US Government would expect prior to issuing any licenses for a new bond or other issuance of debt. OFAC noted the Lima Declaration of August 8, 2017, and stated that “the United States would consider using licensing authority” for US persons to deal in the issuance of new debt if that new debt were issued by a democratically elected Venezuelan National Assembly. As in the case of US sanctions against Russia, where the United States has generally been clear that sanctions relief would be tied directly to Russia’s adherence to the Minsk II agreement, the US Government has linked sanctions relief for Venezuela to democratic reforms in that country.
 
In this Administration, as in the past, the new action against the Government of Venezuela illustrates a key trend for the imposition of US sanctions: these measures remain a central tool of US foreign policymaking in responding to evolving geopolitical events. US firms-especially those in the financial services sector-should review how the new sanctions against the Government of Venezuela impact their current financial positions, prospective business plans, and ongoing compliance. At this point, it is possible that the Trump Administration will take further action in sanctioning the Government of Venezuela. Accordingly, US firms should continue monitoring relevant geopolitical developments involving Venezuela and ensuring that their internal compliance programs take into account applicable sanctions risks and requirements.
 
——–
  [FN/1] Agricultural commodities include those defined in section 102 of the Agricultural Trade Act of 1978, as well as food for humans; seeds for food crops; fertilizers or organic fertilizers; or reproductive materials for the production of food animals. Medicine is an item that falls within the definition of “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act. And medicine device is any “device” under section 201 of the Federal Food, Drug, and Cosmetic Act.
  [FN/2] Debt includes bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper. Equity includes stocks, share issuances, depository receipts, or any other evidence of title or ownership.

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

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a1
15
. “8th Annual ‘Partnering for Compliance TM’ West Export/Import Control Program” on 10-13 Oct in Dallas TX. UPDATE: NIST/Computer Security Division Confirmed

 
* What: The 8th Annual “Partnering for ComplianceTM” West will focus intensely on a broad spectrum of export/import regulatory and compliance matters of current relevance to companies and individuals involved in global trading. Senior-level government officials and trade experts will provide first-class training.
* Where: Dallas/Dallas-Fort Worth Marriott South Airport Hotel (completely renovated)
* When:
  – Tue-Thurs, 10-12 Oct: “8th Annual ‘Partnering for ComplianceTM’ West Export Control Program
  – Fri, 13 Oct: 1-Day Program “Customs/Import Boot Camp”
* Speakers confirmed: DoS/DDTL: Terry Davis & Audra Collins; DoS/DDTC: Sr. Specialist TBD; DoC/BIS: Lani Tito & OEE James Fuller; DoD/DTSA: Susan Daoussi; NIST: Kelley L. Dempsey; Census Bureau: Dale Kelly; DHS/CBP: Raul H. Orona; ICE: Dean Fittz; OFAC: Jamie Rose (Invited): Braumiller Law Group PLLC: Adrienne Braumiller & Bruce Leeds (Imports); and U.S. Commercial Service: David Royce.
* Opening Address: The Honorable Brian Nilsson, Deputy Assistant Secretary, Defense Trade Controls, Department of State
* Cost: Customs/Import 1-day program: $200. Export 3-day program: $600. Both programs: $800.
* Remarks: As time permits, all Government and trade speakers will informally hold short “one-to-one” meetings with participants on a “first-come, first-served” basis.
* Certificates of Completion granting: 4.5 IIEI CEUs and 20 CES NCBFAA Credits for 3-day Exports program, and 6.5 CCS NCBFAA Credits for 1-day Customs/Import Boot Camp will be awarded for each program.
* More information: Here.

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

ENEDITOR’S NOTES

 

* Huey Long (Huey Pierce Long Jr.; 30 Aug 1893 – 10 Sep 1935; self-nicknamed “The Kingfish”, was an American politician who served as the 40th governor of Louisiana from 1928 to 1932 and as a Democrat member of the United States Senate from 1932 until his death by assassination in 1935. Long was shot by the son-in-law of judge Benjamin Henry Pavy, a political opponent who Long was attempting to remove from office.)
 – “One of these days the people of Louisiana are going to get good government – and they aren’t going to like it.”
 
* Theophile Gautier (Pierre Jules Théophile Gautier; 30 Aug 1811 – 23 Oct 1872; was a French poet, dramatist, novelist, journalist, and art and literary critic.)
  – “To love is to admire with the heart; to admire is to love with the mind.” 

 

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

EN_a317
. 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: 30 Aug 2017: 82 FR 41172-41173: Temporary Modification of USML Category XI(b)
  – The only available fully updated copy (latest edition: 30 Aug 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_a0318. 
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.

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

Scroll to Top