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17-0921 Thursday “Daily Bugle”

17-0921 Thursday “Daily Bugle”

Thursday, 21 September 2017

TOP
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[No items of interest noted today.]

  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS Announces Annual Export Control Update Conference on 3-5 Oct in Wash DC
  3. DHS/CBP Issues Memorandum Concerning the Processing of Charitable Contributions for Hurricane Irma
  4. State/DDTC Publishes DTAG Membership List
  5. EU P2P Posts Summaries of Activities
  1. The Australian: “Chinese Citizen Faces Espionage Charges”
  2. ExecutiveGov: “Reports: White House to Shift Nonmilitary Firearm Export Oversight to Commerce Department”
  3. Handelsblatt Global: “EU Raising the Drawbridge”
  4. Reuters: “Trump to Add North Korea Sanctions, Allies Call for Strict Enforcement”
  5. ST&R Trade Report: “Lighthizer Pledges New Approaches and Action on Trade Policy”
  6. The Washington Post: “Ethical Gun Dealer? Machine-gun Giant Heckler & Koch Will No Longer Sell in ‘Crisis Regions'”
  1. A.R. Moore & M. Wilson: “The Iran Nuclear Deal: What to Do If Sanctions Snap Back”
  2. B. Klein & S. Kwok: “China’s ‘One Belt, One Road’ Initiative Creates Opportunities and Regulatory Challenges”
  3. E. McClafferty: “Risks in the Common Practice of Sending Technical Data Outside the U.S. – New Jersey Company Penalized $400,000”
  4. R. MacLean, A. Doussin & M. Rees: “Export Controls and Sanctions Alert”
  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 (20 Sep 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_a1
[No items of interest noted today.]

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OGSOTHER GOVERNMENT SOURCES

OGS_a11. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register

[No items of interest noted today.]

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OGS_a22.

Commerce/BIS Announces Annual Export Control Update  Conference on 3-5 Oct in Wash DC


 
The Bureau of Industry and Security’s annual Update Export Control Policy Conference gives the exporting community the opportunity to learn first-hand from senior U.S. Government officials about current issues and trends in export control policies, regulations and practices. This major outreach activity draws business and government representatives from around the world to learn and exchange ideas about export control issues. It provides attendees with the opportunity to network with colleagues in the export control industry, interact with U.S. Government officials, and learn about programs and services offered by U.S. Government and industry exhibitors. It is one of the Department of Commerce’s most notable international trade events.
 
Exhibit opportunities are available. The exhibit hall will be open during the entire conference: on Tuesday, October 3 and Wednesday, October 4 from 7:30 a.m. – 5:00 p.m., and on Thursday, October 5 from 7:30 a.m. – 2:30 p.m.
 
Update will be held at the Washington Hilton Hotel in Washington, D.C. Confirmation receipts will be sent after the registration process has been completed.
 
For additional information on Update 2017, please contact BIS’s Outreach and Educational Services Division at updateconference@bis.doc.gov; or (202) 482-6031.

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OGS_a3
3.

DHS/CBP Issues Memorandum Concerning the Processing of Charitable Contributions for Hurricane Irma”

(Source:
CSMS# 17-000601, 21 Sep 2017.)
 
This memorandum is being issued to provide guidance on the processing of merchandise imported for relief efforts of Hurricane Irma, both for gifts accepted by FEMA via the international assistance system (IAS) concept of operation (CONOPS), and those being imported by U.S. charities (or other private entities) to assist with disaster relief. Under the IAS CONOPS, the importation has been sanctioned by the State Department as an approved shipment after FEMA exercises it gift acceptance authority, and the goods are eligible to be entered without the payment of duty or taxes pursuant to 19 U.S.C. 1322(b) or 19 U.S.C. 1318(b)(2). The requirement for advanced electronic filing of cargo information may be waived for these shipments. For IAS goods, upon arrival at a port, a paper cargo manifest must be provided by the arriving carrier and screened by the port for high-risk factors in accordance with CBP policy. Also, arriving foreign shipments processed under these guidelines must be logged and tracked locally by the port in accordance with existing policies to document the following:
 
  – Port of Entry
  – Importer
  – Consignee
  – Description of Goods
  – Quantity
  – Country of Origin of the Goods
  – Destination of the Goods
  – Certification that the Goods were Approved for Importation under the IAS
 
Shipments of emergency relief supplies, identified by CBP as having been accepted by the United States through the State Department, will be allowed to proceed without FDA review or PN data being submitted. FDA will attempt to obtain the information they require regarding such shipments in advance of arrival either through CBP or other means and will distribute this information to their field personnel as soon as possible.
 
CBP may not remit the duty on the entry of any goods imported for disaster relief by a private group or individual pursuant to 19 U.S.C. 1322(b), unless the recipient is a recognized tax-exempt charitable organization. These private groups or individuals must provide a letter from the charity, on the charity’s letterhead, with the charity’s Internal Revenue Service (IRS) number(s), and a statement that they are willing to accept the imported goods.
 
To determine if a charitable organization is in fact an established and eligible charity, CBP personnel may verify an organization’s tax-exempt status on the IRS list web site, under subheading, “Search for Charities.” The organizations that qualify as tax-exempt charities are listed in the Exempt Organizations Select Check electronic search tool. However, not all organizations eligible for tax-free deductions may be listed in the publication. If the charitable organization is not found, CBP personnel may verify an organization’s tax-exempt status and eligibility to receive tax-deductible charitable contributions by directly calling the IRS at 1-877-829-5500.
 
This method of verification is only for U.S. charitable organizations and may not contain information on international relief organizations. For example, the charity Oxfam has tax exempt status under 26 U.S.C. 501(c)(3) and appears on the IRS list, while Medecins Sans Frontieres (Doctors Without Borders) does not appear on the list, but nevertheless appears to have tax exempt status 26 U.S.C. 501(c)(3) status in the United States. In any case, the burden is on the importer to show that the recipient of the goods is an established charitable organization. This information is applicable to all charitable organizations, including religious organizations with 26 U.S.C. 501(c)(3) status.
 
In all cases where the imported merchandise to be processed under 19 U.S.C. 1322(b), is known to have other government agency requirements, every effort should be made to advise the responsible agency in order to provide them the ability to conduct inspections and make their own admissibility determinations based on their mission needs and requirements.
 
Any merchandise that does not meet the above criteria for the IAS CONOPS or donations to charities can still be entered under established entry procedures.
 
For questions about State Department approval for the admissibility of foreign goods for disaster relief, please contact Ms. Carol Chan, USAID, Office of Foreign Disaster Assistance (OFDA) at c.chan@usaid.gov or (202) 712-0841 or ofdainquiries@ofda.gov.
 
Any questions or concerns regarding this guidance should be addressed to Mr. Randy Mitchell, Director, Commercial Operations Revenue Entry Division, at otentrysummary@cbp.dhs.gov

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OGS_a44.

State/DDTC Publishes DTAG Membership List 2016-2018

 
DDTC has published the Defense Trade Advisory Group (DTAG) Membership List 2016-2018. The list is available in PDF here.
 
The DTAG, established as a continuing committee under the authority of 22 U.S.C. 2656 and the Federal Advisory Committee Act, provides the Bureau of Political-Military Affairs with a formal channel for regular consultation and coordination with U.S. private sector defense exporters and defense trade specialists on issues involving U.S. laws, policies, and regulations for munitions exports. The DTAG advises the Bureau on its support for and regulation of defense trade to help ensure that impediments to legitimate exports are reduced while the foreign policy and national security interests of the U.S. continue to be protected and advanced in accordance with the Arms Export Control Act, as amended.
 
Members are appointed by the Assistant Secretary of State for Political-Military Affairs on the basis of individual substantive and technical expertise and qualifications, and are drawn from a representative cross-section of U.S. defense industry, association, academic, and foundation personnel, including appropriate technical and military experts. 


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OGS_a55.
EU P2P Posts Summaries of Activities

(Source: EU P2P)
 
EU Partner-to-Partner (EU P2P) has posted summaries of the following activities:
 

– Sep 19-21: Third Individual Assistance Event for Kosovo 

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NWSNEWS

NWS_a16
.
The Australian: “Chinese Citizen Faces Espionage Charges”

(Source: The Australian, 21 Sep 2017.) [Excerpts.]
 
Samuel Straface thought he was the last one out the door one ­recent evening at the medical technology start-up he leads in suburban Boston.
 
But as he passed a glass-walled conference room on the second floor, Dr Straface says he saw a man he didn’t recognise, sitting by himself in front of two open laptops and a tablet device. He continued walking but then, feeling uneasy, he turned back.
 
The man was later identified as Dong Liu, a dual citizen of China and Canada. And his after-hours computing at Medrobotics is at the centre of an economic-­espionage case brought by US prosecutors.
 
Mr Liu is in federal custody, charged with attempting to steal trade secrets and trying to gain ­unauthorised access to the company’s computer system, prosecutors said. If convicted of both charges, he could face a maximum sentence of 15 years’ jail. …
 
The case against Mr Liu is part of a boom in federal prosecutions alleging theft or attempted theft of trade secrets from US companies or firms with American operations. Many of the cases involve a China connection. …
 
At the request of US President Donald Trump, the US trade representative launched an investigation last month into Chinese efforts to secure US technology. The probe will examine whether the Chinese government is backing unauthorised intrusions into US corporate computer networks or cyber-enabled theft of trade ­secrets, the trade representative said. … 

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NWS_a2
7. ExecutiveGov: “Reports: White House to Shift Nonmilitary Firearm Export Oversight to Commerce Department”

(Source: ExecutiveGov, 21 Sep 2017.)
 
The White House plans to transfer oversight of exports of nonmilitary firearms from the State Department to the Commerce Department in an effort to generate jobs, address government red tape and increase small arms sales overseas, Reuters reported Wednesday.
 
Senior U.S. officials told Reuters the Trump administration could publicly announce a new firearm export policy this fall and implement it by the first half of 2018.
 
One official said the Trump administration could potentially submit the draft version of the rules to the Office of Management and Budget within days for evaluation.
 
  “The [National Security Council] is working through the interagency process with the State Department and the Department of Commerce to ensure that U.S. industries have every advantage in the global marketplace, while at the same time ensuring the responsible export of arms,” said an official with NSC.
 
The Hill reported Sens. Ben Cardin (D-Maryland), Patrick Leahy (D-Vermont) and Dianne Feinstein (D-California) wrote a letter to Secretary of State Rex Tillerson urging him to carefully assess the consequences before introducing changes to International Trafficking in Arms regulations for small arms, ammunition and light weapons.
 
  “Combat firearms and ammunition are uniquely lethal” and “should be subject to more – not less – rigorous export controls and oversight,” the senators added.

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NWS_a3
8. Handelsblatt Global: “EU Raising the Drawbridge”

(Source: Handelsblatt Global, 19 Sep 2017.) [Excerpts.]
 
German politicians welcome EU proposals to shield European firms from foreign takeovers, particularly by the Chinese. But business leaders are concerned.
 
A year after the €4 billion ($4.8 billion) takeover of robotics maker Kuka by Chinese appliances maker Midea, new regulations are on the table in Brussels and Berlin aimed at restricting such acquisitions.
 
The Kuka purchase – the largest-ever Chinese takeover in Germany – angered the German government, which feared a sellout of technology to China. The deal came on the heels of three other big Chinese takeovers in Germany last year, including the sale of chipmaker Aixtron and machine maker KraussMaffei. Germany was not able to halt these takeovers, although US authorities blocked Aixtron’s deal due to security concerns.
 
As China’s takeover spree continued this year, Germany lobbied in Brussels for stricter regulations. Together with France and Italy, German Economics Minister Brigitte Zypries convinced the EU to take action.
 
Last week, European Commission chief Jean-Claude Juncker proposed a “framework for investment screening” to “protect our collective security if needed.” It aims better vetting of state-backed, non-EU buyers who seek to purchase European companies in hi-tech manufacturing, infrastructure and energy sectors. … 

[Editor’s Note: Due to copyright restrictions, we are not authorized to include the entire article. To read the remaining parts, click on the source link above.] 

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NWS_a4
9. Reuters: “Trump to Add North Korea Sanctions, Allies Call for Strict Enforcement”

(Source: Reuters, 21 Sep 2017.) [Excerpts.]
 
U.S. President Donald Trump said on Thursday the United States will add more sanctions against North Korea, while U.S. allies have called for enforcing existing international sanctions as the best way to get Pyongyang to give up its nuclear weapons program.
 
The sanctions are not expected to further target oil, a senior Trump administration official told Reuters.
 
Tensions have risen over North Korea’s nuclear and ballistic missile tests, despite intense pressure from world powers. The U.N. Security Council has unanimously imposed nine rounds of sanctions on North Korea since 2006, the latest earlier this month capping fuel supplies to the isolated state.
 
  “We will be putting more sanctions on North Korea,” Trump said in response to a question at a meeting with Afghan President Ashraf Ghani in New York on the sidelines of the annual gathering of world leaders at the United Nations. …
 
Earlier this month, Mnuchin warned China, North Korea’s main ally and trading partner, that if it did not follow through on new U.N. sanctions on Pyongyang, Washington would “put additional sanctions on them and prevent them from accessing the U.S. and international dollar system.”
 
Last month, the Trump administration blacklisted 16 Chinese, Russian and Singaporean companies and people for trading with banned North Korean entities, including in coal, oil and metals. However, it did not sanction Chinese banks that experts and former U.S. officials say enable North Korea’s international trade, often by laundering funds through the United States.
 
On Wednesday, U.S. Secretary of State Rex Tillerson told a news conference there “some indications” that sanctions were beginning to cause fuel shortages in North Korea.

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NWS_a5
10. ST&R Trade Report: “Lighthizer Pledges New Approaches and Action” on Trade Policy”

 
U.S. Trade Representative Robert Lighthizer told an audience at the Center for Strategic and International Studies on 18 September to “expect change, expect new approaches, and expect action” on trade policy from the Trump administration.
 
Enforcement
. Lighthizer indicated he intends to be proactive in working to overcome market distortions and achieve “free and fair competition.” The U.S. has “trade agreements that we don’t think have worked out in our interest,” he said, but “years of talking about these problems has not worked.” Instead, the U.S. “must use all instruments we have to make it expensive to engage in non-economic behavior and to convince our trading partners to treat our workers, farmers, and ranchers fairly.” The Trump administration has “a different philosophy,” he said, “and there will be change.”
 
Trade Agreements
. Lighthizer reiterated his and the president’s position that “trade deficits matter,” though he did not explain why. Instead he argued that the “rules of trade” are a major contributor to U.S. trade deficits, citing in particular the lower tariffs the U.S. imposes on automobiles than other developed countries, border tax adjustments by trading partners, and currency undervaluation. He also said changes in trade deficits will be considered in determining whether the United States’ existing free trade agreements are “working to our benefit” and suggested that the White House will seek to renegotiate those that have resulted in a “disequilibrium.”
 
On the topic of NAFTA, the one FTA that the administration has already started renegotiating, Lighthizer was uncertain as to whether the talks can be concluded before the end of this year. “We’re running very quickly somewhere,” he said, referencing the scheduling of each negotiating round three weeks apart as well as the fact that the two rounds held so far have not appeared to yield much forward progress.
 
With respect to possible new trade agreements, Lighthizer affirmed President Trump’s preference for a bilateral approach. “Not only can you negotiate better agreements,” he said, “but you can enforce them more easily,” because enforcement of multilateral or plurilateral agreements involves “disrupting too many things.” However, he gave no indication as to when any such negotiations might begin or which countries might be involved. He noted that “when and if” the U.S. might resume negotiations on the Transatlantic Trade and Investment Partnership with the European Union is “something that we’re looking at right now.”
 
China
. Lighthizer said the “principal challenge we face” is how to deal with China in a global trading system. China is an “unprecedented” threat to that system, he said, because of “the sheer scale of their coordinated efforts to develop their economy, to subsidize, to create national champions, to force technology transfer, and to distort markets in China and throughout the world.” Referring to USTR’s ongoing Section 301 investigation of intellectual property rights practices in China, he said “there’s an awful lot to indicate that there’s a problem” and warned that if existing means are insufficient to address that problem “we’ll try to devise other remedies.”
 
WTO
. Much of Lighthizer’s criticism was focused on the World Trade Organization. He argued that the WTO was “not designed to successfully manage mercantilism” on the scale being practiced by China and that as a result the U.S. “must find other ways to defend … our economic system.” He was also skeptical of the WTO’s ability to achieve “negotiated outcomes” at its ministerial meeting this December, saying “there are a number of areas where we would be willing to engage but there seems to be something blocking it in every case.” He expressed hope that the ministerial would result in agreement on the WTO’s future work but would not say if that work should include ongoing negotiations to liberalize trade in services and other sectors, noting that USTR’s study on which such initiatives the U.S. wants to pursue is expected “hopefully in another month or so.”
 
Lighthizer was particularly critical of the WTO’s dispute settlement process, which he called “deficient.” Over the years this process “has really diminished what we bargained for or imposed obligations that we do not believe we agreed to,” he said, echoing a complaint raised by policymakers from both sides of the ideological spectrum in recent years. He attributed these difficulties to the fact that the U.S. sees the WTO agreements as a contract giving participants specific rights whereas others “tend to think they’re … evolving kinds of governance.” Given that the dispute settlement process is “a fundamental part of the WTO,” he said, sorting out these differences is “what we have to do.”

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NWS_a6
11. The Washington Post: “Ethical Gun Dealer? Machine-gun Giant Heckler & Koch Will No Longer Sell in ‘Crisis Regions'”

(Source: The Washington Post, 21 Sep 2017.) [Excerpts.]
 
Heckler & Koch’s pistols and submachine guns are among the most legendary firearms in the world.
 
While the Colt .45 Single Action Army, nicknamed the “peacemaker,” epitomized the American Old West and Mikhail Kalashnikov’s AK-47 grew into a visual shorthand for the 20th century’s Cold War hangover, Heckler & Koch’s products — sleek and black, a favorite of SWAT teams and Special Operations units — are recognizable across the globe. …
 
The gun manufacturer plans to no longer sell weapons to corrupt and warring governments, a move first revealed in a yearly financial report in March.
 
According to Deutsche Welle International, the report stated “we are not seeking to take part in new tenders in non-green countries.” Under that criteria developed by the corporation, Heckler & Koch promises only to deal with NATO countries, NATO-equivalent nations – Australia, New Zealand, Japan, and Switzerland – and countries with passing marks on Transparency International’s corruption index and the Economist Intelligence Unit’s democracy test.
 
  “Heckler & Koch chose a new strategy in spring 2016,” a company spokesperson told Deutsche Welle International. “As a consequence we have withdrawn from the crisis regions of the world.” … 

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COMMCOMMENTARY

COMM_a0
12. A.R. Moore & M. Wilson: “The Iran Nuclear Deal: What To Do If Sanctions Snap Back”

(Source: Joiner Trade Law)
 
* Authors: Ashley R. Moore, Esq., +1 713-395-2214, amoore@joinertradelaw.com; and Mike Wilson, Esq., +1 713-395-2209, mwilson@joinertradelaw.com. Both of Joiner Law Firm.
 
Recent communications with clients and others in the industry have revealed a growing sense of unease regarding the future of the Joint Comprehensive Plan of Action or JCPOA (commonly known as the Iran nuclear deal), and more specifically with the status of the economic sanctions relief the U.S. afforded as part of the JCPOA.  While U.S. persons have long been broadly prohibited from doing business in or involving Iran, prior to January 2016 foreign subsidiaries of U.S. companies were also prohibited from engaging in such transactions.
 
Upon the implementation of the JCPOA, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License H, which authorized foreign subsidiaries to engage in a wide-range of previously prohibited Iran-related transactions, subject to certain conditions.  Indeed, many U.S.-based multinational companies have since taken advantage of General License H, investing considerable time and resources to permit foreign subsidiaries to engage in such transactions.
 
As we have seen over the past few months, however, both Congress and the Trump Administration have been active in implementing new and more restrictive sanctions on a number of countries, including Russia, Venezuela, North Korea and even Iran itself.  Given the deteriorating nature of the U.S.-Iran relationship, many observers are beginning to fear a rollback of the sanctions relief provided as part of the JCPOA, up to and including potential revisions to or repeal of General License H.
 
In order to protect previous investments while also remaining nimble enough to ensure prompt compliance with any future sanctions implementation, companies should consider taking the following few steps to help mitigate disruption to normal business operations if, in fact, the U.S. ever does decide to reinstitute secondary sanctions against Iran and revoke General License H.
 
(1) Don’t Panic
 
While the Trump Administration has made statements in the past indicating a desire to take a firm stance in response to Iran’s ballistic missile testing, and is currently conducting a review of U.S. policy toward Iran –  including whether the continued suspension of sanctions under the JCPOA is vital to U.S. national security interests – any rollback of sanctions would almost certainly provide a grace period during which necessary actions can be taken to wind down any foreign subsidiary business dealings in Iran.
 
OFAC has stated in its guidance (particularly, in FAQ M.4) that it will not “retroactively impose sanctions for legitimate” activities undertaken after implementation of the JCPOA, including activities undertaken pursuant to General License H.  For activities undertaken pursuant to General License H or currently authorized under the JCPOA, OFAC’s current guidance (in FAQ M.5) confirms that in the event of a sanctions snapback, the U.S. government would:
 
  – Provide U.S. persons [FN/1] and U.S.-owned or -controlled foreign entities with a 180-day period to wind down operations in or business involving Iran, and to receive payments (according to and pursuant to the terms of a written contract or written agreement entered into prior to snapback) for goods or services fully provided or delivered pursuant to OFAC’s authorization prior to snapback, if a sanctions snapback results in the revocation of General License H or another general or specific license issued by OFAC;
  – Provide non-U.S., non-Iranian persons with a 180-day period to wind down operations in or business involving Iran and undertaken pursuant to a written contract or written agreement entered into prior to snapback;
  – Allow non-U.S., non-Iranian persons to receive payment for goods or services (according to and pursuant to the terms of a written contract or written agreement entered into prior to snapback) if a non-U.S., non-Iranian person is owed payment at the time of the sanctions snapback for goods or services fully provided or delivered to an Iranian counterparty prior to snapback; and
  – Allow non-U.S., non-Iranian persons to receive repayment of a debt or obligation (according to and pursuant to the terms of a written contract or written agreement entered into prior to snapback) if a non-U.S., non-Iranian person is owed repayment for loans or credits extended to an Iranian counterparty prior to snapback. [FN/2]
 
While this guidance was issued under the Obama administration and is subject to change at any time, OFAC has traditionally provided for some sort of wind down period whenever instituting (or reinstituting) sanctions programs to allow companies to remain compliant while extricating themselves from previous contractual commitments. [FN/3]  Please note, however, that the typical wind down period has often been much shorter than the 180-day period contemplated by the guidance discussed above, so it remains possible that companies will need to be in a position to move quickly should snapback occur. 
 
Compliance and legal departments should thus carefully and continually monitor OFAC’s website and thoroughly review any changes to its guidance regarding a potential sanctions snapback.  Companies should also consider implementing policies that require foreign subsidiaries to update or revise any Iran-related contracts to include language permitting the subsidiary to withdraw from such contracts during any authorized wind down period in the event that secondary sanctions are reinstituted and General License H is revoked.
 
(2) Ensure Your Company is in Compliance with Current Restrictions
 
Because the sanctions relief afforded under the JCPOA was primarily limited to secondary sanctions, U.S. companies and U.S. persons remain broadly prohibited from engaging in transactions involving Iran.  This includes prohibitions against any involvement by a U.S. person in the day-to-day operations of the foreign subsidiary with respect to its Iran-related activities.  For this reason, any U.S. persons who might be involved in preparing plans for a potential snapback should be careful to avoid any actions that might constitute a prohibited “facilitation” of Iran-related transactions, such as approving, financing, facilitating, or guaranteeing any such transactions.
 
Fortunately, OFAC has confirmed that the prohibition on facilitation does not apply to the provision of compliance services related to OFAC sanctions programs, including the Iran sanctions program.  Therefore, U.S. persons may continue to provide information, guidance, or counsel regarding U.S. sanctions requirements, as well as opinions on the legality of specific transactions regardless of whether it would be prohibited for a U.S. person to engage in those transactions.  So long as the U.S. person involvement is limited to determining how to comply with the Iran sanctions, no prohibited facilitation should occur.
 
(3) Have a Plan on What to Do in Case of a Sanctions Snapback
 
It is important for U.S. companies with foreign subsidiaries who do business in or involving Iran to be prepared for a potential future sanctions snapback.  These U.S. companies should:
 
  – Be prepared to issue written guidance to all foreign subsidiaries and employees on short notice if and when a snapback occurs, including a brief explanation of the sanctions to be implemented along with examples of any new limitations;
  – Develop a plan that will ensure the revocation of any company policies authorizing Iran-related transactions, and that will require immediate wind down of any such transactions within the authorized timeframe; and
  – In the event any authorized wind down period is not sufficient to ensure that the foreign subsidiary is able to withdraw from previous contractual commitments, have a plan in place that will ensure that specific license applications will be filed in order to continue any prohibited activities beyond OFAC’s authorized wind down period.
 
For specific questions regarding the information discussed in this article, please contact JLF attorneys, Ashley R. Moore or Mike Wilson. 
 
The information contained in this article is for informational purposes only and is not legal advice. You should seek the advice of legal counsel for specific guidance on how the JCPOA or the re-imposition of sanctions relieved pursuant to the JCPOA can affect your business.
 
———-
  [FN/1] The term “U.S. person” means any U.S. citizen, permanent resident alien, entity organized under the laws of the U.S. or any jurisdiction within the U.S. (including foreign branches), or any person in the U.S.
  [FN/2] In FAQ M.5, OFAC states that it is essentially allowing non-U.S., non-Iranian parties to be made whole for debts and obligations owed or due to them for goods or services fully provided or delivered, or loans or credit extended to an Iranian party prior to snapback.  OFAC reiterated, however, that any such payments must be consistent with U.S. sanctions, including that such payments cannot involve U.S. persons or the U.S. financial system unless such transactions are exempt from regulation or authorized by OFAC.
  [FN/3] For instance, when OFAC recently imposed additional sanctions on Venezuela, it simultaneously issued General License 1, which authorized certain activities necessary to wind down existing contracts for a period of 30 days.

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COMM_a01
13. B. Klein & S. Kwok: “China’s ‘One Belt, One Road’ Initiative Creates Opportunities and Regulatory Challenges”

 
* Authors: Bradley A. Klein, Esq., bradley.klein@skadden.com; and Steve Kwok, Esq., steve.kwok@skadden.com. Both of Skadden, Arps, Slate, Meagher & Flom LLP, Hong Kong.
 
In a time of shifting opinions on the benefits of globalization, China’s “One Belt, One Road” initiative (OBOR) offers an unexpected bright spot for multinational companies able and willing to participate in this infrastructure-building initiative. Unveiled by the Chinese government in 2013, OBOR seeks to connect — through roads, ports, railways, pipelines, airports, transnational grids and energy hubs — over 60 countries spanning Asia, Europe, the Middle East and Africa with US$900 billion worth of trade-boosting transportation infrastructure projects.
 
Some major U.S. companies, such as General Electric, Caterpillar and Honeywell, have publicly announced their participation. General Electric already has received orders of more than US$2 billion from the initiative, and it plans to bid for an additional US$7 billion in business in the next 18 months, according to a May 14, 2017, article in The New York Times. Similarly, embracing OBOR’s “unprecedented opportunities,” Caterpillar announced that it has teamed up with Chinese companies in the OBOR economies and is working closely with builders and developers in the region.
 
Hong Kong has enthusiastically embraced the opportunities OBOR offers. It created the Commission for Belt and Road to coordinate its efforts on the initiative, and in April 2017, its Securities and Futures Commission (SFC) announced a move to ease listing conditions for companies associated with OBOR projects.
 
But excitement should be tempered by the regulatory challenges ahead. In Hong Kong, where the financial markets have become increasingly integrated with those of mainland China, regulators have taken note of the compliance risks. The SFC has been aggressive in pursuing enforcement actions against companies for alleged market misconduct, and it is expected to continue that trend as OBOR ramps up and more companies, including those from mainland China, tap Hong Kong’s capital markets.
 
These compliance challenges stem from a confluence of factors. To start with, many of the countries along the OBOR trade route score at the low end of Transparency International’s Corruption Perceptions Index. Moreover, infrastructure projects often require multiple layers of government approvals – for land rights, licenses and inspections – that present numerous opportunities for corruption. The temptation to engage in under-the-table payments may be particularly strong given the large sums that are often at stake. Finally, the frequent use of third-party agents and consultants – from local suppliers to logistics companies to customs brokers – and the limited visibility into how money is being spent by these third parties aggravate the compliance risks. With corruption comes the need to launder unlawful proceeds, giving rise to another set of challenges to prevent and detect money laundering.
 
U.S. AND HONG KONG: COMMON ENFORCEMENT THEMES
 
The SFC’s recent public statements and actions have aligned with U.S. regulators’ enforcement priorities. These parallels are expected to multiply as law enforcement authorities in the U.S. and Hong Kong continue to fine-tune their evidence-sharing mechanisms and improve their coordination.
 
Individual Accountability
 
For American practitioners, any compliance discussion must involve the Yates memorandum. Issued in September 2015 by then-Deputy Attorney General Sally Yates, the Yates memo reaffirmed the U.S. Department of Justice’s (DOJ) commitment to holding individuals accountable for their misconduct through penalties such as substantial prison sentences and fines to achieve both deterrence and punishment. In DOJ’s views, “[o]ne of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.” Accordingly, the memo directs prosecutors to “focus on individual wrongdoing from the very beginning of any investigation of corporate misconduct.”
 
Recent statements by the SFC in Hong Kong echo these views. Ashley Alder, SFC’s CEO, said in a December 2016 press release that “[s]enior managers bear primary responsibility for the effective and efficient management of their firms, and they should be well aware of the obligations currently imposed on them as well as their potential liability if they fail to discharge their responsibilities.” Around the same time, the SFC issued a circular directed at licensed corporations that spelled out the SFC’s views as to the types of positions within a company that count as “senior management,” reminded these managers of their oversight responsibilities and outlined the severe consequences that would result from their failure to fulfill them.
 
Enforcement actions since then have backed up these muscular pronouncements. The SFC started the year with legal proceedings against the Hong Kong-listed Chinese solar energy company Hanergy Thin Film Power Group and its directors for alleged market manipulation. In a case currently under trial, the SFC sought disqualification orders for up to 15 years against the chairman and four independent nonexecutive directors for entering into transactions with “connected parties” against the interests of the company. A few weeks later, the SFC announced that it was investigating China Forestry and its two bank sponsors for making misrepresentations in its initial public offering disclosure documents. The investigation has resulted in the suspension of trading for China Forestry, which went into liquidation soon thereafter.
 
In another case initiated by the SFC involving an environmental engineering firm Greencool Technology Holdings Ltd., the SFC alleged, and the Market Misconduct Tribunal found in June 2017, that the company’s chairman and senior executives “perpetrated a massive, systemic fraud” by overstating the company’s earnings and the value of its net assets. The Market Misconduct Tribunal entered the largest disgorgement order ever imposed – approximately US$62 million – and issued disqualification orders, ranging from three to five years, against various individuals.
 
Cooperation Credit
 
Another area of convergence is the incentives offered to companies to self-report violations, potentially in exchange for leniency. In April 2016, the DOJ announced a one-year pilot program – since extended indefinitely – under which a cooperating company can receive up to 50 percent off the low end of the applicable U.S. Sentencing Guidelines fine range. Equally important from the company’s perspective, it may potentially be able to avoid the appointment of a corporate monitor. There have been a total of seven declinations since the start of the program, each of which was purportedly the result of these companies’ “prompt voluntary self-disclosure,” “thorough investigation undertaken,” “fulsome cooperation,” “agreement to continue to cooperate in any ongoing investigations of individuals” and “full remediation.”
 
With only minor modifications, the above-quoted language on cooperation could just as well have appeared in public announcements issued by Hong Kong regulators. Since the issuance of a Guidance Note in 2006 encouraging companies to cooperate, the Hong Kong SFC has regularly touted companies’ cooperation as the primary reason for the reduced penalties they were ordered to pay, variously citing these companies’ “cooperation,” “self-reporting,” and “agree[ment] to engage an independent reviewer to conduct a review.”
 
Anti-Money Laundering and Internal Controls
 
Both U.S. and Hong Kong authorities have ramped up their anti-money laundering (AML) efforts, bringing enforcement actions not just against money launderers but also against individuals, banks and financial institutions whose internal control failures allegedly enabled money launderers to circumvent the law. In the United States, a major German bank was fined US$41 million in May 2017 for Bank Secrecy Act violations, allegedly because its U.S. operations failed to maintain adequate protections against money laundering. At the state level, the New York State Department of Financial Services issued new rules, effective January 1, 2017, that impose stringent obligations on regulated institutions to maintain effective programs to monitor and filter transactions for potential Bank Secrecy Act and AML violations, and to prevent transactions with sanctioned entities.
 
Since the enactment of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance in April 2012, Hong Kong has taken a number of high-profile actions against banks. In the first reported enforcement action under this law in July 2015 initiated by the Hong Kong Monetary Authority (HKMA), it reprimanded and fined the State Bank of India close to US$1 million for its alleged failure to conduct proper due diligence on customers and verify whether they were “politically exposed persons.” Similar actions against other banks have followed, including earlier this year, when a U.K. bank’s Hong Kong branch was fined US$900,000 and given a public reprimand for alleged AML violations – specifically, failure to establish and maintain effective procedures to screen politically exposed persons.
 
INCREASED COOPERATION DEMANDS STRONG COMPLIANCE
 
Given the rise in international law enforcement cooperation, the convergence in enforcement priorities and approaches should not be surprising. Reaffirming the importance of international cooperation and their commitment to it has become de rigueur in recent public statements by both U.S. and Hong Kong regulators.
 
And it is more than just talk. To cite just one example, earlier this year, the U.S. Securities and Exchange Commission (SEC) and the Hong Kong SFC entered into a memorandum of understanding on evidence and information sharing that covers a spectrum of regulated entities, including investment advisers, broker-dealers, securities exchanges, market infrastructure providers and credit rating agencies. In certain circumstances, it even allows the commission in one jurisdiction (for example, the SEC) to conduct on-site examinations of registered entities in the other jurisdiction (for example, an SEC-registered entity’s Hong Kong office) – something that would have been unthinkable just a few years ago.
 
Companies would be well-advised to bolster their compliance programs to prepare for a reality where a regulatory inquiry from one jurisdiction may be followed by related inquiries from regulators in another jurisdiction, and to establish protocols to ensure well-coordinated responses to these multijurisdictional inquiries.

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COMM_a2
14.
E. McClafferty: “Risks in the Common Practice of Sending Technical Data Outside the U.S. – New Jersey Company Penalized $400,000”

 
* Author: Eric R. McClafferty, Esq.,
emcclafferty@kelleydrye.com
, Kelley Drye & Warren LLP.
 
Does your company source components or parts outside the U.S.?  When doing so, you need to be careful about sending unlicensed export controlled technical data like drawings, blueprints and manufacturing instructions as part of an RFQ or production process. Many companies send such information to overseas parts vendors and to non-U.S. person employees at domestic vendors without a systematic check to see if the information requires an export license. And an increasing number of companies already have – or are establishing – offshore engineering centers of their own, or they have a relationship with an offshore third party engineering center, without focusing on the need to implement a rigorous process to ensure that data exchanged with those centers is licensed for export when needed.  Similar challenges arise when engineers and procurement personnel at U.S.-based business units collaborate with a sister facility abroad, or they use web-based collaborative platforms (e.g. Sharepoint) for product development without thinking through export control concerns.
 
Yes, technical data export issues are more difficult to address in the same systematic way that product export issues are handled. Decision making about what data is shared and how it is shared (email, express mail, uploading to a vendor’s website, data sharing sites, cloud-based platforms, etc.) is often up to individual engineering and procurement personnel.  Because human beings are involved, export control training on technical data issues is key, as is implementing a fail-safe process to classify and control data. Many companies are still guessing about data classification, getting it half right, or otherwise don’t have a good handle on what kind of information they are exporting. But data classification and data handling can be tamed in a way that works within your company’s existing business systems. You don’t need an expensive technical solution.
 
A case in point: A New Jersey-based manufacturer of military spare parts recently settled a voluntary self-disclosure case with the State Department for $400,000. That case involved
11 alleged violations of the International Traffic in Arms Regulations (ITAR) related to exports of technical data
.  Allegedly, a senior employee and people under his supervision would ‘cut and paste’ information from export-controlled drawings and use the relabeled drawing to obtain quotes from overseas vendors, often without export licenses. This practice apparently occurred at a company that had obtained over 500 DDTC licenses in the last 8 years, demonstrating that even companies with significant experience with ITAR and EAR licensing can have issues with technical data exports.
 
In fact, too many companies are turning a blind eye to weak technical data export control systems and it could catch up with them in a variety of ways, such as a whistleblowing disgruntled employee, a competitor’s complaints, a customer’s questions about where parts and components are sourced, Buy America and Berry Amendment compliance audits and reviews, and internal financial and compliance audit processes. This is a tricky issue, but it can be addressed in a way that lets you sleep at night!

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COMM_03
15. 
R. MacLean, A. Doussin &
 M. Rees: “Export Controls and Sanctions Alert”

 
* Authors: Robert MacLean, Esq., robert.maclean@squirepb.com; Aline Doussin, Esq., aline.doussin@squirepb.com; and Martin Rees, Esq., martin.rees@squirepb.com. All of Squire Patton Boggs, Brussels, London/Brussels, and London, respectively.
 
EU goes ahead with a European framework for screening incoming foreign direct investments…moving steps closer to the well-known Committee on Foreign Investment in the US (CFIUS) filings.
 
Introduction
 
On September 13, 2017, the European Commission published the draft of the EU regulation establishing a common European framework for the review of incoming foreign direct investment (FDI), akin to the process in the US administered by Committee on Foreign Investment in the US (CFIUS). The objective of this new proposal is to improve cooperation between the Commission and EU member states that conduct foreign investments screening nationally and to strengthen the role of the EU Commission in these processes.
 
The draft regulation establishes a standalone definition of a “foreign direct investment.” According to it, an investment is any means aiming at maintaining “lasting and direct link” between the foreign investor and the entity or the entrepreneur that will use the capital received from the foreign investor to carry out its business. This covers all investments enabling active participation in management or control of a company or business. The draft regulation will apply to all EU member states’ mechanisms that screen non-EU foreign investments.
 
The proposed regulation is similar to the CFIUS process in that both systems would be able to review foreign investments that confer control over a domestic business (referred to as “covered transaction” in the CFIUS regulations).
 
The Upcoming Procedure for Incoming Investment Screening
 
The draft regulation does not replace all national screening procedures, but regulates how the Commission and other EU member states can intervene in the course of the national proceeding. First, each member state will inform the Commission and other EU member states about investments undergoing review within five days from the beginning of the process. Then, within 25 days, each other member state that considers the investment as a risk for its security or public order will have a possibility to address comments to the member state that conducts the review.
 
The Commission will issue a non-binding opinion if it considers the investment as affecting public order or security of one or more member states. The Commission and member states will be able to request additional information from the member state that conducts the review. This may have an enormous impact on national screening procedures and lead to their significant extension.
 
Investments Affecting EU’s Programs or Projects
 
When the foreign investment affects EU’s projects or programs on the grounds of security or public order, the Commission will issue the non-binding opinion as in the regular procedure aforedescribed. In the case of this type of investment, the member state opinion’s addressee will have to explain to the Commission why it has decided not to follow the Commission’s opinion.
 
Criteria of Screening
 
The draft regulation provides a non-exhaustive list of factors that the Commission and member states may consider while screening foreign investments. They are, for example, investment’s effects on:
 
  – Critical infrastructure (such as energy, transport, communication, data storage, space or financial infrastructure or sensitive facilities)
  – Critical technologies (such as artificial intelligence, robotics, semiconductors, dual use technologies, cybersecurity or nuclear technologies)
  – The security of critical inputs
  – The access or control over sensitive information
 
Comparision With US CFIUS Process
 
The proposed regulation will add an EU level framework to review foreign investments in member states, much in the same way CFIUS has authority to review acquisitions by foreign persons that result in control over a US business. In reviewing foreign investments, the draft regulation considers factors to assess the security implications of proposed transactions similar to the factors enumerated under the statute creating CFIUS (Section 721(f) of the Defense Production Act of 1950, as amended). That is, both consider whether the transaction will result in foreign control over critical technologies, critical infrastructure, critical inputs (particularly in the defense industry) and sensitive information.
 
Although the objective of the EU proposal and the factors considered in the review process have much in common with the US system, the draft regulation differs from the CFIUS process in that it does not provide a mechanism for parties to voluntarily submit a transaction for review at the EU level (please note, in most instances, parties have the option under member state laws). Under the CFIUS process, it is possible to voluntarily file and subject the transaction to CFIUS review, with a clearance from CFIUS conferring a safe harbor protection on the parties from future action under the Defense Production Act. Thus, the draft lacks a European Union Merger Regulation type of mechanism that would remove transactions with an EU dimension from the member states and place the review authority with the European Commission. In this regard, the draft appears to impose greater scrutiny and oversight on foreign investments, but leaves the option for investors to proactively manage this additional regulatory burden to the member states’ laws.
 
What Happens Next?
 
The Commission has opened the public consultation that allows each interested entity or individual to submit feedback and comments on this proposal directly to the Commission until November 8. The Commission will then respond collectively to all submissions, and may revise the proposal or present it unchanged to the European Parliament and EU member states.
 
FDI Screening Mechanisms in EU Member States*
 
As mentioned, the proposal will not replace the FDI screenings that exist in the EU. Currently, there are two main approaches toward overseeing direct foreign investments.
 
  – Method 1: EU member states maintain screening processes that may be limited only to the defense industry (e.g., Denmark or Romania) or cover a wider range of sectors (e.g., France, Italy, Spain or the Netherlands). Fifteen member states of the EU have implemented such measures.
 
  – Method 2: Member states limit presence of foreign investors in certain sectors (e.g., Denmark maintains all gas and electricity infrastructure as public property; Greece, Latvia or Poland have introduced some limitations on foreign ownership of real property). Sixteen EU countries follow this approach.
 
In practice, many EU member states combine both regulatory approaches to supervision of foreign direct investments. See the following examples.
 
Germany
 
There are two screening mechanisms in Germany: one that has general scope of application and the other that uses sector-specific screening mechanism.
 
The general screening mechanism applies through all sectors when the foreign investor obtains at least 25% of voting rights in the management of the German company. The standard for the screening is security and public order according to the interpretation given to those factors by the Court of Justice of the European Union. For instance, concerns might arise when the investment may affect the security of supply in sectors such as telecommunication or electricity. Under the general scheme, the foreign investor does not have to apply for the license or any type of authorization. On the other hand, the German authorities have the right to initiate the investigation within three months as of obtaining the knowledge about the signing of the binding investment agreement. To ensure greater certainty, foreign investors may also apply for pre-approval of the investment.
 
The sector-specific mechanism covers defense and other related industries. In this case, all investments that may lead to acquisition of at least 25% of voting rights in the German company are subject to reporting prior to making the investment. German authorities then have three months to initiate the formal investigation. As an outcome of the investigation, the German government might not authorize the investment.
 
France
 
As a general rule, there are no statutory limits on foreign ownership or control of companies in France. However, acquisitions in certain sectors deemed crucial to France’s national interests relating to public order, public security or national defense are subject to authorization, screening and approval by the Economy and Finance Minister. Other sectors requiring approval include cryptologic activities; dual-use goods; energy infrastructure; transportation networks; public water supplies; electronic communication networks; public health protection; or installations vital to national security.
 
Poland
 
FDIs in Poland do not generally undergo any general screening process, but some instances require foreign investors to apply for the governmental permission. This includes if the investment entails ownership of real estate in Poland. In addition, there are some restrictions for foreign ownership of companies in certain sectors, e.g., in audiovisual services, aviation or defense.
 
——
  * For general information about screening mechanisms in EU Member states, see Parliament Research Service Briefing, Foreign Direct Investment Screening, May 2017, available here.

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ENEDITOR’S NOTES


Stephen King
(Stephen Edwin King, born 21 Sep 1947, is an American author of horror, supernatural fiction, suspense, science fiction, and fantasy. His books have sold more than 350 million copies,many of which have been adapted into feature films, miniseries, television series, and comic books. King has published 54 novels, including seven under the pen name Richard Bachman, and six non-fiction books.)
  – “Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work.”

* Chuck Jones (Charles Martin “Chuck” Jones; 21 Sep 1912 – 22 Feb 2002; was an American animator, filmmaker, cartoonist, author, artist, and screenwriter for Warner Brothers studios, best known for Bugs Bunny, Daffy Duck, Wile E. Coyote and the Road Runner, Pepé Le Pew, Porky Pig, Michigan J. Frog, the Three Bears, and a slew of other Warner characters.)
  – “Anxiety is the handmaiden of creativity.”
 
* H.G. Wells (Herbert George “H. G.” Wells; 21 Sep 1866 – 13 Aug 1946; was an English writer. He was prolific in many genres, including the novel, history, politics, social commentary, and textbooks and rules for war games. Wells is now best remembered for his science fiction novels and is called a “father of science fiction”, along with Jules Verne and Hugo Gernsback. His most notable science fiction works include The Time Machine (1895), The Island of Doctor Moreau (1896), The Invisible Man (1897), and The War of the Worlds (1898). He was nominated for the Nobel Prize in Literature four times.)
  – “If you fell down yesterday, stand up today.”
  – “The path of least resistance is the path of the loser.”

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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: 20 Sep 2017: 82 FR 43842-43844: Foreign Trade Regulations (FTR): Clarification on Filing Requirements; Correction  
  – HTS codes that are not valid for AES are available
here.
  – The latest edition (20 Sep 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 Category XI of the United States Munitions List
  – The only available fully updated copy (latest edition: 12 Sep 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_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

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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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