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17-0929 Friday “The Daily Bugle”

17-0929 Friday “Daily Bugle”

Friday, 29 September, 2017

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe here for free subscription. Contact us for advertising inquiries and rates.

  1. Commerce/Census Seeks Comments on Proposed FTR Amendment Concerning Collection and Confidentiality of Kimberley Process Certificates
  1. Ex/Im Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Announces ACE Production Outage on 30 Sep-1 Oct
  4. DHS/CBP Releases Update Concerning San Juan Area Ports
  5. DHS/CBP: GSP Due to Expire on 31 Dec 2017
  6. State/DDTC: (No new postings.)
  7. Treasury/OFAC Releases Amended Ukraine-/Russia-Related Directives 1 & 2 and Updated FAQs
  8. EU Amends Restrictive Measures Concerning Mali and the ISIL (Da’esh) and Al-Qaida Organizations, Releases Corrigenda of North Korea Sanctions
  1. Politico: “Trump to Unleash More Global Arms Sales”
  2. ST&R Trade Report: “Dates and Deadlines: Export Rules, Customs Enforcement, Product Testing, AD/CV Reviews”
  3. ST&R Trade Report: “NAFTA Talks See First Completed Chapter, Significant Progress in Other Areas”
  1. C. Barfield: “CFIUS Reform: First, Do No Harm” (Part 2 of 2)
  2. M. Foggerty: “U.S. Economic Sanctions: A 3/4-Year Review”
  3. Miller & Company P.C.: “CBP Changes the In-Bond Process Regulations”
  4. Shearman & Sterling LLP: “DOJ And SEC Bring Major FCPA Enforcement Actions Against Swedish Telecom Firm, Imposing One of Largest FCPA Penalties in History”
  5. T. McVey: “Recent ITAR Case Sends Important Message to Small and Midsized Government Contractors”
  1. ICPA Presents Annual Asia Conferences: 5-7 Nov in Singapore and 9-10 Nov in Shanghai
  2. Friday List of Approaching Events: 17 New Events Posted This Week
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (28 Sep 2017), DOD/NISPOM (18 May 2016), EAR (25 Sep 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_a11.

Commerce/Census Seeks Comments on Proposed FTR Amendment Concerning Collection and Confidentiality of Kimberley Process Certificates

 
82 FR 45528-45530: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates
 
* AGENCY: Bureau of the Census, Commerce.
* ACTION: Notice of proposed rulemaking.
* SUMMARY: The U.S. Census Bureau (Bureau of the Census) proposes to amend its regulations in order to clarify that the data collected from the Kimberley Process Certificates (KPCs) are collected in compliance with the Clean Diamond Trade Act and not under the Census Bureau’s laws and regulations. In addition, this rule clarifies the submission requirements and permissible uses of the KPCs.
* DATES: Written comments must be received on or before November 28, 2017.
* ADDRESSES: Please direct all written comments on this proposed rule to the Chief, International Trade Management Division, U.S. Census Bureau, Room 5K158, Washington, DC 20233-6010. You may also submit comments, identified by RIN number 0607-AA54 or by the e-Rulemaking Docket ID USBC-2017-0003, to the Federal e-Rulemaking Portal: here. All comments received are part of the public record. No comments will be posted here for public viewing until after the comment period has closed. …
* SUPPLEMENTARY INFORMATION: …
 
Background …

[T]he CDTA and Executive Order 13312 require that the importation into, and exportation from, the United States of any rough diamonds be controlled through the Kimberley Process 
Certification Scheme (KPCS). The KPCS calls on Participants (i.e., 
governments participating in the KPCS), including the United States, to ensure that any shipment of rough diamonds exported to, or imported from, a Participant be accompanied by a valid KPC, and maintain and publish statistics on the importation and exportation of rough diamonds. The CDTA further provides that the United States should produce statistics on imports and exports of rough diamonds and to make these statistics available for analysis by interested parties, including other governments participating in the KPCS.
  Consistent with the CDTA, Executive Order 13312, and the KPCS, the Office of Foreign Assets Control’s Rough Diamonds Control Regulations (Title 31 CFR, part 592) require that a shipment of rough diamonds imported into, or exported from, the United States be accompanied by an original KPC, and the Census Bureau’s FTR requires that KPCs for all import and export shipments be provided to the Census Bureau. The data collected from the KPCs are separate and distinct from the statistical data collected under Title 13 of the United States Code, and are not 
governed by the confidentiality provisions of that title. …
 
Program Requirements
 
Consistent with the CDTA and Executive Order 13312, the Census Bureau is revising the FTR in CFR Title 15, part 30, in sections 30.1, 30.4, 30.7, 30.50, 30.60, and 30.70, as follows:
  – Revise Sec.  30.1(c) to add the definition ”Kimberley Process Certificate” as a technical amendment.
  – Revise Sec.  30.1(c) to add the definition ”Voided Kimberley Process Certificate” to clarify the term.
  – Revise Sec.  30.4 to add paragraph (e) to clarify the filing procedures for voided KPCs and to address that the collection of KPCs are not pursuant to Title 13, of the United States Code.
  – Revise Sec.  30.7(c) to clarify that KPCs must be provided to the Census Bureau immediately after export of the shipment from the United States.
  – Revise Sec.  30.50(c) to clarify that KPCs must be provided to the Census Bureau immediately after entry of the shipment in the United States.
  – Revise Sec.  30.60 to add a note clarifying that KPCs are not considered Electronic Export Information and are not confidential under Title 13 of the United States Code.
  – Revise Sec.  30.70 to clarify how violations of the CDTA will be enforced. …
 
  Currently, a KPC must be submitted for all imports or exports of rough diamonds. This rulemaking requires that KPCs be provided to the Census Bureau immediately after either entry in or export from the United States. It replaces the previous requirement to provide the KPC to the Census Bureau in advance.
  This action requires that U.S. Principal Parties in Interest (USPPIs) or authorized agents in the United States file export information to the Automated Export System (AES) for all shipments where an Electronic Export Information (EEI) record is required under the FTR. The SBA’s table of size standards indicates that businesses that are the USPPI or authorized agent and file export information are considered small businesses if they employ less than 500 people. Based on Exhibit 7a of the 2015 Profile of U.S. Exporting Companies, the Census Bureau estimates that there are 295,000 USPPIs that are considered small business entities under the SBA definition. And more than 90 percent of these USPPIs use an authorized agent to file export information. An estimate of the number of authorized agents is not known and is unable to be determined. …
 
  Dated: September 22, 2017.
 
Ron S. Jarmin, Associate Director for Economic Programs, Performing the Non-Exclusive Functions and Duties of the Director, Bureau of the Census.

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OGSOTHER GOVERNMENT SOURCES

OGS_a12
. Ex/Im Items Scheduled for Publication in Future Federal Register Editions
 

(Source:
Federal Register)
 


Treasury/OFAC; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 2 Oct 2017.]

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4.

DHS/CBP Announces ACE Production Outage on 30 Sep-1 Oct

(Source:
CSMS# 17-000625, 29 Sep 2017.)
 
There will be an ACE PRODUCTION Outage Saturday evening, September 30, 2017 from 2200 ET to 0400 ET Sunday, October 1, 2017.
 
ACE Infrastructure maintenance activities and the following ACE Deployment will take place during this time:
 
ACE Import Manifest
 
* CAOM-3479 – Air Manifest [Redeployment]: Add FIRMS/Shed to 1F air status notification messages. Also includes the possibility of double slashes in a CSN (status notification) record, in 1F (local transfer authorized) as well as non-1F notifications, when no entry number is output.
* CAOM-11232: Tickets #7729645, 7607531 and 7529031 — 4E (Entry Deleted) postings with ‘Bill Not on File’ in the Notify Date, resulting in Released quantity over-postings on ocean bills.
* CAOM-3618: Tickets# 2437752, 8974434 — Line release Rail BOL zeroed out Entered/Released Quantities on Amend. A Line release BOL that was fully closed on consist received a subsequent Delete and Re-add of the BOL. This zeroed out the Entered and Released quantities and opened the BOL.
 
ACE Portal
 
* CAOM-9829: ACE Portal to enforce the Length of General Order Number to 15 AN
 
ACE Accounts
 
* CAOM-12538: Enforce ‘importer type’ as a Required field for US importers on EDI Create/Update Importer (TI/TR) messages.

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OGS_a4
5.

DHS/CBP Releases Update Concerning San Juan Area Ports

(Source:
CSMS# 17-000624, 29 Sep 2017.)
 
After the impact of Hurricane Maria in the Caribbean, we are pleased to announce that commercial trade operations is resuming for the San Juan Area Ports 4909 (San Juan) and 4913 (Air Cargo) with limited communications.
 
However, the following ports will remain closed until further notice as they were severely impacted:
 
4901 AGUADILLA, PR
4904 FAJARDO, PR
4907 MAYAGUEZ, PR
4908 PONCE, PR
 
Due to the extensive damage on communications systems, lack of electricity and postal service in the island, the port is extending additional days without the assessment of liquidated damages for any entry summaries and payments due from September 29 through October 6, 2017.
 
In addition, the port now counts with only two Centralized Examination Stations as detailed below:
 
Island Storage Warehouse
Foreign Trade Zone 61 Building 2 Gate 1
Road 165 KM 2.4 Guaynabo, P.R. 00965
Firms Code L513
 
Jose G. Flores Warehouse
Located at Diana Street Lot 27, Amelia Industrial Park
Guaynabo, Puerto Rico 00968
Firms Code M404
 
Almacenes del Castillo CES will remain closed until further notice.
 
In order to expedite examinations we urge you to please designate the exam site in your ACE transmissions.
 
SAN JUAN AREA PORT Trade Operations POC – Mrs. Leida Colon at: (787) 729-6998.
 
  – Related CSMS No. 17-000623

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6.

DHS/CBP: GSP Due to Expire on 31 Dec 2017

(Source:
CSMS# 17-000622, 29 Sep 2017.)
 
Barring Congressional action, the Generalized System of Preferences (GSP), special program indicator (SPI) “A,” “A+” and “A*” will expire for goods entered or withdrawn from warehouse after midnight, December 31, 2017.
 
Special Procedures for GSP-Eligible Goods
 
In the event of a lapse and until further notice, importers are strongly encouraged to continue to flag GSP-eligible importations with the SPI “A,” even as they pay normal trade relations (column 1) duty rates on otherwise GSP-eligible importations. Importers may not file SPI “A” without duties.
 
Programming
 
CBP is working to have programming in place that, in the event that GSP is renewed with a retroactive refund clause, will allow CBP to automate the duty refund process.
 
Post-Importation GSP Claims Made via PSCs and Protest
 
CBP will continue to allow post-importation GSP claims made via post summary correction (PSC) and protest (19 USC 1514, 19 CFR 174) subsequent to the expiration of GSP, for importations made while GSP was still in effect. CBP will not allow post-importation GSP claims made via PSC or protest subsequent to the expiration of GSP, for importations made subsequent to expiration.
 
African Growth and Opportunity Act (AGOA)
 
The pending expiration of GSP has no effect on goods entered with African Growth and Opportunity Act (AGOA) preference. Effective January 1, 2017, the Harmonized Tariff Schedule of the United Sates (HTSUS) was modified so that all non-textile, AGOA-eligible tariff items indicate SPI “D” in the “Special” column. As such, since January 1, 2017, all non-textile AGOA claims have been made using the SPI “D”. AGOA preference remains in effect through September 30, 2025, irrespective of any lapse in GSP.
 
Merchandise Processing Fee (MPF)
 
Since the GSP does not provide an MPF exemption, its expiration has no impact on the collection of the MPF. Goods of least-developed beneficiary developing countries (LDBDCs) listed in HTSUS General Note 4(b)(i) maintain their MPF exemption per 19 CFR 24.23(c)(1)(iv).
 
Time of Entry
 
Per 19 CFR 141.68(a)(2) & (3), time of entry can be as early as the time that the entry documents are filed, provided that the merchandise is within the port limits and such has been requested. For additional information on the significance of time of entry and how to calculate it, please see page 11 of the Informed Compliance Publication “What Every Member of the Trade Community Should Know About: Entry” available here.
 
Extension of Liquidation
 
Requests for the suspension of liquidation under 19 CFR 159.12 pending the pending the reinstatement of GSP will be denied.
 
Questions concerning this guidance should be directed to the Trade Agreements Branch at FTA@dhs.gov

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8.

Treasury/OFAC Releases Amended Ukraine-/Russia-Related Directives 1 & 2 and Updated FAQs

 
Today, in accordance with the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA) (see Title II of the Countering America’s Adversaries Through Sanctions Act) the Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing amended Ukraine-/Russia-Related Directive 1 and Directive 2.  

Certain CRIEEA-related prohibitions in amended Directives 1 and 2 have a delayed effective date of November 28, 2017. 

OFAC is also publishing updated FAQs relating to the amended Directives.

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OGS_a8
9.

EU Amends Restrictive Measures Concerning Mali and the ISIL (Da’esh) and Al-Qaida Organisations, Releases Corrigenda of North Korea Sanctions

 
Regulations

* Council Regulation (EU) 2017/1770 of 28 September 2017 concerning restrictive measures in view of the situation in Mali
* Commission Implementing Regulation (EU) 2017/1773 of 28 September 2017 amending for the 278th time Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with the ISIL (Da’esh) and Al-Qaida organisations
 
Decisions

* Council Decision (CFSP) 2017/1775 of 28 September 2017 concerning restrictive measures in view of the situation in Mali
* Council Decision (CFSP) 2017/1776 of 28 September 2017 amending Decision (CFSP) 2015/1333 concerning restrictive measures in view of the situation in Libya
 
Corrigenda

* Corrigendum to Council Implementing Regulation (EU) 2017/1568 of 15 September 2017 implementing Regulation (EU) 2017/1509 concerning restrictive measures against the Democratic People’s Republic of Korea (OJ L 238, 16.9.2017)
* Corrigendum to Council Implementing Decision (CFSP) 2017/1573 of 15 September 2017 implementing Decision (CFSP) 2016/849 concerning restrictive measures against the Democratic People’s Republic of Korea (OJ L 238, 16.9.2017)

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NWSNEWS

NWS_1
10.

Politico: “Trump to Unleash More Global Arms Sales”

(Source:
Politico, 29 Sep 2017.) [Excerpts.]
 
The easing of restrictions on international weapons deals could create US jobs, but critics fear it will inflame war zones.
 
President Donald Trump is preparing to ease some restrictions on U.S. weapons sales overseas, sparking concerns about further flooding the international market with high-tech weapons and inflaming feuds in hot spots like the Middle East.
 
The changes, which could include enlisting the State Department and Pentagon to more actively advocate on behalf of American arms manufacturers, are set to be included in an executive order or presidential memorandum that Trump will issue this fall, according to three administration officials involved in the deliberations. …
 

Among the areas under review, the officials said, are revamping the Conventional Arms Transfer Policy, which lays out the criteria for selling military-grade weapons to foreign nations. The administration is also seeking to make “more user friendly” the International Traffic in Arms Regulations, which have not been updated since 1984, the State Department official said. … 

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11.

ST&R Trade Report: “Dates and Deadlines: Export Rules, Customs Enforcement, Product Testing, AD/CV Reviews”

 
Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week.
 
2 Oct:
  – effective date of CPSC final rule eliminating third-party testing for seven plastics
  – deadline for comments on CBP information collections on imports, exports, ACAS, ISF, containers, duty-free goods
  – deadline for comments to USTR on notorious IPR infringement markets
 
3 Oct:
  – deadline for comments on potential IPR enforcement cases on metal, storage tapes, reusable diapers
 
6 Oct;
  – deadline for comments to USDA on electronic export system for meat and poultry

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12.

ST&R Trade Report: “NAFTA Talks See First Completed Chapter, ‘Significant Progress’ in Other Areas”

 
Work on one chapter of an updated NAFTA was largely completed and “significant progress” was made on others at the third round of talks held Sept. 23-27 in Ottawa. However, U.S. Trade Representative Robert Lighthizer said there is still “an enormous amount of work to be done, including on some very difficult and contentious issues.” The next round of talks is scheduled for Oct. 11-15 in Washington, D.C.
 
According to a trilateral statement, discussions have been substantively completed on small and medium-sized enterprises, “effectively concluding negotiations on that chapter pending specific outcomes in related discussions.” This chapter aims to enhance SMEs’ ability to participate in and benefit from the opportunities created by NAFTA, including through cooperative activities, information sharing, and the establishment of a trilateral SME dialogue involving the private sector, non-government organizations, and other stakeholders. Negotiators are also working on modernizing other aspects of NAFTA that would benefit SMEs, including customs and trade facilitation, digital trade, and good regulatory practices.
 
The statement adds that “meaningful advancements” were made in the areas of telecommunications, competition policy, digital trade, good regulatory practices, and customs and trade facilitation. Initial offers were exchanged on market access for government procurement and discussions were “advanced substantively” in the competition chapter, which is expected to be completed prior to the next round. Negotiators are now working from consolidated texts in most areas.
 
However, there remains concern that the three partners will not be able to conclude negotiations by the end of the year. Following the third round, senior Mexican and Canadian officials pointed out that the U.S. had not yet submitted detailed proposals on some issues that are expected to be particularly contentious, including lowering the U.S. trade deficit, revamping the dispute settlement process, and tightening rules of origin, particularly with respect to automobiles and auto parts. According to a Reuters article, however, Lighthizer defended the U.S. approach, stating that “any suggestion that we’re not operating beyond a normal pace is just flat wrong.”

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COMMCOMMENTARY

COMM_a213
.

C. Barfield: “CFIUS Reform: First, Do No Harm” (Part 2 of 2)

 
* Author: Claude Barfield, Resident Scholar, American Enterprise Institute,
cbarfield@aei.org
).
 
[Editor’s Note: Part 1 was published in yesterday’s Daily Bugle.]
 
On reforming the Committee on Foreign Investment in the United States (CFIUS), Congress is about to move from general principles to actual legislative action. While predicting outcomes of the legislative process is always dicey, it looks as if a bill being introduced by Sen. John Cornyn (R-TX) will become the key vehicle for action in coming weeks. If that is the case, Congress can avoid some of the most problematic reform suggestions also circulating in Washington.
 
The most prominent alternative has been put forward by Senate Minority Leader Charles Schumer (D-NY). Sen. Schumer
has proposed
adding an “economic benefits” test to the criteria for CFIUS screening, including evaluation for US “economic security,” impact on jobs and wages, and overall effect on US economy. Briefly, there are two problems with this expansion of the CFIUS process: First, neither the CFIUS technical staff nor the top-level officials guiding the interagency process has the capability to make these kinds of complex judgements on economic effects. Further, as we have seen
in the past
– viz., Chinese oil giant CNOOC’s attempt to buy the small US company, Unocal – mixing economic/industrial policy criteria with defense infrastructure imperatives will inevitably politicize the process, as competing private interests cynically invoke national security to cover purely private gaming.
 
The Cornyn bill: Pluses and questions
 
Sen. Cornyn has clearly taken a deep dive into the complex and potentially conflicting goals in “modernizing” CFIUS. In a
June session
before an audience at the Council on Foreign Relations, the senator juxtaposed two competing goals behind his proposed legislation. First, he affirmed that he strongly supports foreign direct investment (FDI) in the United States: “I want to be clear here and say what it is not, which is an attack on foreign direct investment in the United States . . . I am a strong supporter of foreign investment . . . including even investment from nations that aren’t necessarily our friends or allies.” At the same time, Sen. Cornyn
candidly asserted
that China represented a new and greater challenge to the current CFIUS process: China had, he stated,
 
weaponized investment . . . and used it to exploit our open US economic system . . . not only are they stealing and copying our technology to modernize their arsenal and erode our military superiority, they’re strategically investing in key sectors of the US economy . . . The [CFIUS] system needs to be modernized.
 
Sen. Cornyn has not actually introduced his bill, but there are staff versions with section by section analysis circulating, making it now possible to ascertain most of the key details. The bill clearly strives for balance, and for the most part achieves this goal. The questions here will be related to the ability of CFIUS to handle the proposed broadening and deepening of its mandates.
 
First, there is merit in what the bill does not do: no outright ban on Chinese investment; no introduction of economic criteria; no legislatively banned investment in specific technologies; and no legislative list of banned individual countries in specific technology sectors. Further, the bill does not expand CFIUS jurisdiction over green field investments (more on this later).
 
Among the new rules and definitions that will guide CFIUS, two of the most significant are a new mandate to the Defense Department to create a list of “foundational technologies” – that is a list of technologies not necessarily on the Commerce Department’s export control list, but which are still vital to retaining US technological security advantages. And second, the bill directs CFIUS to update its current list of “critical technologies,” including components and critical materials that are essential to national defense.
 
Importantly, the Cornyn bill updates and expands the definition of “covered transaction” to include joint ventures, both in the US and abroad, as well as investments that only result in a minority position for a foreign company. It includes real estate investments that are in proximity to military or other sensitive facility.
 
Finally, in this abbreviated list of the most significant novel provisions, the bill directs the Director of National Intelligence to formulate a list of “countries of special concern,” that is nations that may potentially pose a threat to US national security, including regional security.  When this list is completed (to be updated annually), CFIUS will create a special “analytic framework” for screening investments by these countries in foundational and critical technologies, as well as in critical infrastructure – with the presumption that the president will block such transactions.
 
For both countries of special concern and countries not on that list, the bill sets forth a list of ten factors (some new, some augmentations) that CFIUS must take into account in analyzing transactions for national security purposes, including (among others): whether it will impact cybersecurity; whether it increases the cost of acquiring or maintaining defense-related technology; whether it will contribute to the loss of strategic technology and materials; whether the cumulative investment will reduce US industrial advantage to countries of special concern; and whether the potential foreign investors have a history of complying with US laws.
 
While Sen. Cornyn has made a good faith effort at balance, upcoming hearings and public debate should pose important – and difficult – questions. This is particular true for the sections expanding CFIUS into the realm of joint ventures, minority investment, and investment in US technology start-ups. Cornyn wisely excluded green field investments, of which from 2014-2016
numbered almost 1400
. But Congress and the Trump administration need to examine just what the universe of joint ventures and minority investment consists of. It will certainly number in the thousands of transactions – and as observers have noted, even training sessions could be counted as technology transfer. To avoid overwhelming CFIUS, Congress may want to explore ways to limit the deep analysis in some way – possibly prioritizing “countries of special concern.”
 
There also needs to be a careful look at the process and ultimate definition of “foundational technologies,” as well as some input from civilian experts such as the President’s Science Adviser, the Council of Economic Advisers, and the Commerce Department. Handling dual use technology is tricky, and caution would dictate barriers to guard against slipping from national security to industrial policy.
 
In the end, as noted in my
previous blog
, though China is the proximate cause for the CFIUS update, US political leaders should keep to the fore the fact that FDI from other nations will continue to dominate inward investment. New policies aimed at Beijing must not end up jeopardizing the tremendous benefits of FDI from the rest of the world.

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COMM_JEB
14.

M. Foggerty: “U.S. Economic Sanctions: A 3/4-Year Review”

 
* Author: Matt Fogarty, Consulting Attorney, Torres Law PLLC.
Contact information: 214-593-7120,
info@torrestradelaw.com
.
 
Aside from one last mid-January initiative by the Obama Administration to begin rolling back sanctions targeting Sudan, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) was quiet at the start of 2017 and during the first 100 days of the transition. However, whether because of long-running investigations coming to a close or as a result world events, there have been a number of intriguing and important sanctions developments over the last several months both in the realm of enforcement and in the imposition of new sanctions.
 
New Sanctions: North Korea and Venezuela
 
Aside from a modest rollback regarding the Obama Administration’s effort to allow Americans to travel to Cuba, a number of enforcement cases relating to Iran, some additional designations with respect to Syria, and sanctions-enabling legislation relating to Russia, much of the recent news in economic sanctions has been dominated by two countries: North Korea and Venezuela.
 
Increased tensions between the U.S. and North Korea, prompted by North Korea’s recent missile and nuclear tests, as well as a war of words between Pyongyang and the White House, have led to a flurry of additions of North Korean entities and individuals to OFAC’s List of Specially Designated Nationals (the “SDN List”).  OFAC has added a number of Russian and Chinese entities and individuals to the SDN List under its North Korea sanctions program on the grounds that these entities and individuals are involved in or supportive of North Korea’s nuclear and ballistic missile programs.
 
Finally, on September 20, 2017, President Trump issued a new Executive Order (“EO”) imposing additional sanctions on North Korea. Among other steps, this new EO expanded the grounds on which OFAC is authorized to designate SDNs to include entities that engage in significant transactions with North Korea, initiated restrictions on immigrant and non-immigrant entry into the United States from North Korea, and banned aircraft from landing in the United States and vessels from entering U.S. ports if they have, within the last 180 days, landed or entered ports in North Korea. While the real force of this new EO may not be felt unless and until OFAC identifies new entities and invidivuals to designate, the inclusion of the travel ban and port restrictions strongly resemble prohibitions copied from the more restrictive days of the Cuba embargo.
 
In this respect, the situation with North Korea seems likely to continue to deteriorate as the Trump Administration uses additional designations and, where possible, additional sanctions measures to increase pressure on Moscow, like these to increase pressure on Moscow, Beijing, and other governments to more effectively counter the North Korea threat. For this reason, we anticipate that more Chinese companies, in particular, may be added to the SDN List over the coming months, potentially including companies with significant partnerships in the United States and elsewhere. In this regard, it is critical that companies screen their Chinese and Russian business partners on a regular basis in order to ensure they are not doing business with any newly designated SDNs.
 
As to Venezuela, early in 2017, the Trump Administration identified the Venezuelan Executive Vice President, Tareck El Aissami, as a narcotics trafficker under the Foreign Narcotics Kingpin Designation Act. Subsequently, following months of civil unrest in the country, the Trump Administration added a number of other Venezuelan government officials to the SDN List, most notably including President Nicolas Maduro, several members of his cabinet, and much of the Venezuelan Supreme Court.
 
And then on August 24, President Trump issued an EO imposing sectoral sanctions similar to those used to target Russia. These sectoral sanctions prohibit certain extensions of credit and other investments involving the government of Venezuela and the state-owned oil company, Petroleos de Venezuela, S.A. (“PdVSA”). Along with the EO, OFAC issued a number of general licenses, the most intriguing of which authorized transactions involving Citgo, the retail presence of PdVSA.
 
Old Sanctions: Sudan
 
As noted, in January 2017, the Obama Administration, acknowledging the progress that had been made in resolving the conflict in Sudan, began the process of rolling back the Sudan sanctions. Specifically, President Obama issued an EO establishing a general license to authorize all activities that would otherwise be prohibited under the Sudanese Sanctions Regulations. The January 2017 EO further initiated a six-month review after which, provided the peace process continues, the original EO would be formally revoked.
 
In July, however, President Trump issued a new EO extending the review period for another three months and, essentially, delaying the formal lifting of sanctions. Further, while the general license remains in place and U.S. companies could technically do business with Sudan, the country remains designated a State Sponsor of Terrorism and is still the subject of divestment legislation in a number of U.S. states. For this reason, business involving Sudan continues to carry a heightened level of risk.
 
Enforcement, Enforcement, and More Enforcement
 
In addition to developments in these sanctions programs, both old and new, OFAC was busy during the summer months wrapping up a number of enforcement cases. The most prominent case, which has been discussed widely, is the $1.19 billion penalty issued to Chinese telecom company, ZTE. However, other highlights include:
  – A $2 million penalty issued to ExxonMobil for transactions with a Russian SDN. In particular, in 2014, Exxon signed a number of deals with the Russian oil company, Rosneft. While Rosneft itself was not an SDN at the time, the company’s CEO and the signatory for Rosneft, Igor Sechin, had been designated under one of the Ukraine-related sanctions programs. This case highlights the need to screen both business partners and, to the extent feasible, any executives or counterparties involved in a transaction.
  – American Export Lines paid a more than $500k penalty for transshipping goods through Iran. Specifically, the company had shipped a number of used and junked cars and parts from the United States to Afghanistan. During transit, the cars and parts transited through Iran in violation of the Iranian Transactions and Sanctions Regulations. As this case illustrates, as a general matter, OFAC’s sanctions programs prohibit any business involving sanctioned countries. This includes not only sourcing goods from or supplying goods to sanctioned territories, but simply transiting goods through sanctioned territories, as well.
 
These are just a few of the many enforcement notices issued during the summer. Additional cases can be found on OFAC’s Recent Actions page, which is available
here
.
 
Conclusion
 
While it is impossible to predict how tensions with North Korea or the domestic situation in Venezuela will play out, the Trump Administration has made clear that sanctions-specifically, denying certain parties access to the U.S. financial system-are a preferred method both for countering instability and deterring aggression. As a tool of foreign policy, sanctions developments can happen quickly and often take effect immediately. In this respect, it is critical for all U.S. and non-U.S. companies with significant business in the United States to maintain an effective risk-based compliance program. 

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

COMM_a3
15.

Miller & Company P.C.: “CBP Changes the In-Bond Process Regulations”

(Source: Editor)
 
The long-awaited Final Rule on changes to the CBP In-Bond Process Regulations were published in the
Federal Register today (Thursday).  It finalizes and changes the 2012 Interim Rule.  The process was delayed until CBP automation was substantially in effect.  However, we understand at this point ACE functionality and messaging are not fully operational to support the new regulations. This Final CBP Rule is effective November 27, 2017 with flexible enforcement that will last for ninety (90) days after the effective date.
 
The Rule mandates the use of the electronic QP/WP In-bond process and paper CBP Form 7512’s will no longer be allowed for ocean, rail, and truck transport.  Air transport will continue to allow paper CBPF 7512’s; in-bond within port movements that are not FTZ material continue to use paper Permits to Transfer (PTTs).  We urge clients to carefully review the final Regulations and their current CBP in-bond process to understand exactly what must change by November 27, 2017.
 
Among the changes in response to comments received on the Interim Rule that further simplify, clarify, and facilitate the In-bond process are the following preliminary highlights of the Final Rule:
 
  (1) Retained the current time limit of two (2) working days to report arrival or export of In-bond merchandise.
  (2) Eliminated the requirement in the Interim Rule that the parties submitting the In-bond must identify prohibited and restricted merchandise.  The six-digit HTS classification must be used.  The merchandise must be described in sufficient detail to allow CBP and other Federal agencies to identify shipments of concern.
  (3) Removed the requirements in the Interim Rule concerning additional information regarding textiles and textile products.  The six-digit HTS classification must be used.  Retained requirement in new paragraph (d) in §18.11 governing T&E in-bond movements.
  (4) Changed the requirements from “must” to “may” identify merchandise subject to visa, license, or permit.  The six-digit HTS classification must be used.
  (5) Confirmed that bonded carrier liability is released at time of FTZ admission (concurrence).
  (6) Clarified the quantity of merchandise will be identified in the smallest external packing unit, not the smallest piece count that was in the Interim Rule.
  (7) Provides that when bonded carriers are changed at an interim point during the move of bonded cargo, they must “Arrive” the original in-bond and a new QP/WP must be initiated and approved by CBP.
  (8) Diversions must be reported in advance to CBP and the new destination identified and approved prior to arrival at a destination port that is different than the original destination.
  (9) Movement of bonded and non-bonded cargo in the same conveyance will not require a CBP seal.  The bonded cargo must be clearly separated, identified, and records maintained in accordance with Part 163.
  
(10) Extended the in-transit time for In-bond merchandise by barge to sixty (60) days as requested.
 
We are certain that there is much more to understand once these new regulations are thoroughly reviewed.  We thought that providing you with our initial analysis would be useful as you review the document in detail.

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

COMM_a4
16.

Shearman & Sterling LLP: “DOJ And SEC Bring Major FCPA Enforcement Actions Against Swedish Telecom Firm, Imposing One of Largest FCPA Penalties in History”

 
On September 21, 2017, the Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) announced significant enforcement actions against Telia Company AB, a Swedish telecommunications firm, for alleged violations of the Foreign Corrupt Practices Act (“FCPA”).  
United States v. Telia Company AB
, No. 1:17-cr-00581 (S.D.N.Y. 2017); 
In the Matter of Telia Company AB
, Admin. Proc. No. 3-18195 (September 21, 2017) (“Order”).  Specifically, the DOJ charged Telia and its Uzbek subsidiary, Coscom, with conspiring to violate the anti-bribery provisions of the FCPA by offering and paying at least $330 million in bribes to a shell company in Uzbekistan under the guise of payments for lobbying and consulting services that never actually occurred, while the SEC alleged that Telia violated the anti-bribery and internal accounting controls provisions of the FCPA through the same conduct.  Telia’s subsidiary Coscom pleaded guilty in U.S. District Court for the Southern District of New York; meanwhile, Telia entered into a three-year deferred prosecution agreement (“DPA”) with the DOJ, and the SEC instituted settled administrative proceedings against the company.  In aggregate, Telia agreed to pay criminal penalties of approximately $548 million to resolve the DOJ charges and related charges filed by the Public Prosecution Service of the Netherlands, and agreed to pay approximately $457 million in disgorgement to settle the SEC allegations.  Because of certain offsets, Telia’s total payments to the DOJ, SEC, and foreign regulators will be approximately $965 million.  However, Telia was not required to engage a compliance monitor, in light of the company’s remediation and the state of its compliance program.

The allegations contained in both the DPA and the Order (together, the “Charging Documents”) are substantially similar, and describe illicit payments made to a government official in Uzbekistan.  The alleged bribery scheme is similar to the scheme that was the subject of the VimpelCom enforcement action in February 2016, and involved the same government official.  According to the Charging Documents, from 2007 to at least 2010, Telia paid at least $330 million in illicit payments to a government official in Uzbekistan to obtain and retain business that generated more than $2.5 billion in revenues for Telia.  Initially, payments were allegedly made to enable Telia to acquire a United States-based telecommunications company which owned a subsidiary with operations in Uzbekistan-Coscom-and to enter the telecommunications market in Uzbekistan.  Once Telia had established a foothold in the Uzbek telecom market, additional bribes were allegedly paid first to obtain rights to 3G frequencies, and subsequently to obtain rights to certain 4G frequencies.

According to the Charging Documents, the bribe payments were funneled through payments for sham lobbying and consulting services to a front company controlled by the foreign official.  The Charging Documents also make clear that at least one executive and other members of Telia management were complicit in, or at the very least aware of, the bribery scheme.  An unusually large number of facts were alleged in the Charging Documents to support jurisdiction over the foreign defendants.  For example, the Order noted that “Most of the transactions with Government Official A were denominated in United States dollars, and communications concerning [the government official] were conducted, in part, using electronic mail accounts on United States-based servers.”  Order § 3.  Similarly, the DPA noted that: (1) Telia used U.S. citizens and U.S. companies which were domestic concerns to aid in establishing a corrupt relationship with the foreign government official; (2) certain members of Telia management and Telia agents used U.S.-based email accounts in furtherance of the scheme; (3) Telia and Coscom made numerous corrupt payments that were routed through U.S. financial institutions; and (4) during Telia’s process of entering the Uzbek telecommunications market, at least one company executive sent emails in furtherance of the corrupt scheme “while in the territory of the United States” as that term is used in the FCPA.  United States v. Telia Company AB, No. 1:17-cr-00581, Criminal Information, §§ 15-17.  These facts are indicative of the means by which the U.S. enforcement agencies can bring bribery schemes that transpire almost entirely overseas within their jurisdiction.

Pursuant to its agreement with the DOJ, Telia agreed to pay a total criminal penalty of $548,603,972, which included a $500,000 criminal fine and $40 million in criminal forfeiture that Telia agreed to pay on behalf of its Uzbek subsidiary, Coscom.  The DOJ also agreed to credit the $240 million criminal penalty to be paid to the Dutch prosecutor; Telia therefore will pay $274,603,972 of the total criminal penalty to the U.S., with the remaining $240 million being paid to the Netherlands.  Pursuant to its resolution with the SEC, Telia agreed to a total of $457,169,977 in disgorgement of profits and prejudgment interest.  The SEC also agreed to credit the $40 million in forfeiture paid to the DOJ pursuant to the DPA.  Thus, the combined total amount of criminal and civil penalties to be paid by Telia and Coscom to the U.S. and foreign authorities will be $965,773,949.

In the criminal charging documents, the DOJ stated that Telia received a 25% discount off the bottom end of the penalty range calculated using the U.S. sentencing guidelines, which represents the maximum discount available under the DOJ’s FCPA pilot program.  Although this might seem surprising, based on the large value of illicit payments made as part of the bribery scheme and the lack of voluntary self-disclosure by Telia, this percentage discount is in line with recent trends suggesting that companies will generally receive a discount as long as they do not refuse to cooperate altogether with the DOJ’s and the SEC’s investigations.  See Shearman & Sterling LLP, Recent Trends and Patterns in the Enforcement of the Foreign Corrupt Practices Act at 7 (July 5, 2017).  In fact, the last two instances in which a company received a sanction within the Sentencing Guidelines range were the 2014 cases of Alstom and Marubeni, where the authorities alleged that neither company initially cooperated.

Telia was not required to engage a compliance monitor by either the DOJ or the SEC, in light of the company’s remediation and the state of its compliance program.  This is relatively surprising, both in light of the scope of the bribery scheme and recent trends in FCPA enforcement by the DOJ.  In February 2016, Andrew Weissmann, then the Chief of the DOJ’s Fraud Section, stated that the DOJ would review its approach to the use of monitors, and that year nine companies that were subject to FCPA enforcement actions saw the DOJ or the SEC impose a corporate monitor requirement as part of the sanction (VimpelComOlympusLas Vegas SandsLATAMOch-ZiffEmbraerOdebrechtBraskem, and Teva).  This trend appeared to be continuing in 2017, with the cases of BiometSQM, and Orthofix all involving the imposition of a corporate monitor.  Nonetheless, the two major enforcement actions of 2017 thus far-Rolls-Royce and Telia-have not required the engagement of a compliance monitor. 

Telia’s global resolution of FCPA charges represents the first major FCPA enforcement action under the Trump administration, and constitutes one of the largest penalty amounts imposed pursuant to the FCPA.  The settlement also represents the most recent example of continued cooperation between U.S. regulators and foreign regulators in FCPA investigations, with penalties similarly being split between the jurisdictions involved. 

The Telia enforcement actions also represent the latest FCPA matters to involve Uzbekistan.  In February 2016, Amsterdam-based VimpelCom paid $795 million to resolve U.S. and Dutch charges of bribing an Uzbek official.  That same month, the DOJ filed civil forfeiture actions to recover nearly $1 billion in bribe money that VimpelCom, Telia, and MTS of Russia allegedly paid to the foreign official involved in this enforcement action-Gulnara Karimova, the eldest daughter of the late Uzbek President Islam Karimov.  Given that MTS has not been the subject of an FCPA enforcement action, it may well be that we have not yet seen the end of FCPA enforcement actions arising out of the Uzbek telecommunications market. 

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

COMM_a5
17.

T. McVey: “Recent ITAR Case Sends Important Message to Small and Midsized Government Contractors”

 
* Author: Thomas B. McVey, Chair of the International Practice Group of Williams Mullen,
tmcmcvey@williamsmullen.com
.
 
A State Department ITAR enforcement case announced last week involving a supplier of military spare parts sends a valuable message to small and mid-sized government contractors of every type.
 
The case involves Bright Lights USA, Inc. (the “Company”), a small New Jersey defense manufacturer.  According to the Directorate of Defense Trade Controls (“DDTC”) Charging Letter, the Company’s business primarily consists of “manufacturing minor spare parts (including rubber stoppers, seals assemblies, and grommets) for both private- and public-sector customers.”  Many of these parts transitioned off of the U.S. Munitions list (“USML”) beginning October 2013 as a result of Export Control Reform.
 
When supplying military parts, the Company periodically sought to obtain components from foreign suppliers.  According to the DDTC Charging Letter, when ordering foreign-made parts the Company sent drawings of export-controlled components to foreign suppliers to obtain quotations without obtaining the requisite export licenses.  Similarly DDTC claimed the Company posted drawings of controlled items online to solicit quotations, including posting on a manufacturing sourcing website where the drawings could be accessed by foreign persons.  DDTC also stated that the Company misclassified certain components as being subject to EAR instead of ITAR.
 
DDCT concluded that Bright Lights had “significant training and compliance program deficiencies” and charged the Company with a number of violations including:
 
  (1) Exporting ITAR-controlled technical data to foreign suppliers without a license, including to China and India;
  (2) Exporting defense articles without a license to persons in the U.K., Spain, Portugal, Turkey and the UAE;
  (3) Violating the ITAR recordkeeping requirements for failure to maintain records of ITAR-related activities for a five- year period.
 
While the government can pursue criminal, civil and administrative enforcement for ITAR violations, in the current case the Company was only required to pay a $400,000 civil penalty.  Copies of the DDTC Charging Letter, Consent Agreement and Order can be found
here
.
 
Government contracts firms frequently ask questions about the application of ITAR requirements, including how ITAR is applied to small and mid-sized companies.  The Bright Lights case squarely addresses many of these questions.  The following are a number of the most commonly asked questions and the responses based upon the Bright Lights case:
 
Q. 1 – Does the State Department expect small companies to comply with ITAR, and will it actually pursue enforcement cases against them?
 
A. – Absolutely yes.  Being a small or mid-sized company does not exempt a contractor from ITAR requirements.   These obligations apply to companies large and small, and small contractors do not get a “free pass” due to their size.  In fact some of the most sophisticated U.S. defense technologies are developed by small and mid-sized firms. This case clearly confirms that DDTC will initiate enforcement actions against small and mid-sized companies.
 
Q. 2 – Isn’t DDTC really interested in complex defense systems and end items and not incidental “spare parts”?
 
A. – Absolutely not.  DDTC is extremely interested in not just large end items but also in subsystems, parts, components, accessories and attachments for defense products.  These comprise an important part of the defense supply chain and the government is extremely interested in compliance at all levels, including by prime contractors, subcontractors, second and third tier suppliers and service providers.  As the Bright Lights case demonstrates, DDTC will definitely prosecute companies for ITAR violations involving spare parts.
 
Q.3 – If a product is removed from the USML under Export Control Reform, doesn’t DDTC lose interest in the item?
 
A. – Absolutely not.  As set forth in the Bright Lights case, DDTC will pursue enforcement actions even for products that were removed from ITAR jurisdiction under Export Control Reform.  DDTC is very interested in the integrity of the ITAR regulatory system – it will pursue enforcement actions even if particular items are decontrolled or transferred to another agency for regulation.
 
Q.4 – Are the ITAR recordkeeping requirements really that important?  Do these warrant diverting valuable compliance resources from other high priority uses?
 
A. – The ITAR recordkeeping requirements are extremely important and exporters should treat these seriously.  The recordkeeping requirements are an important law enforcement tool for DDTC in conducting export investigations.  In addition, if DDTC discovers shoddy recordkeeping practices in an investigation, this may suggest that the company has lax compliance procedures and possibly other violations as well.  It is imperative for contractors to follow these requirements carefully in their compliance practices.  The Bright Lights case clearly confirms that DDTC will prosecute companies for recordkeeping violations.
 
Q.5 – Does DDTC lose interest in a violation if it occurred more than five years ago?
 
A. –  Not always.  Export enforcement agencies may request companies subject to enforcement actions to waive applicable statutes of limitations and may seek penalties for actions that occurred prior to the five year limitation.  In the current case Bright Lights executed multiple agreements with DDTC to toll the applicable statute of limitations during DDTC’s investigation.
 
Q.6 – I can see how DDTC wishes to control the export of physical products – is it also interested in the transfer of ITAR-controlled technical data?
 
A. – Absolutely yes.  In fact, the export of technical data without a license is often considered as egregious as the export of physical products and possibly worse.  If you illegally export one physical product, the bad guys get one product – but if you illegally export the technical data related to the product the bad guys can manufacture a thousand of them.  The illegal export of controlled technical data (including disclosure to foreign persons in the U.S. and to your company’s own employees) is raised in many ITAR compliance cases and is considered among the most serious export violations.
 
The Bright Lights case sends an important message – export compliance is important for small and mid-sized contractors.  Some of our most sensitive products and services are supplied by small and mid-sized companies, and the integrity of the defense supply chain is critical for even the smallest of replacement parts and components.  The stakes are high in light of the potential civil and criminal penalties, including fines of up to $1 million and twenty years’ imprisonment.  While the $400,000 civil penalty in the Bright Lights case is significant, it is small when compared to the criminal sanctions imposed in other ITAR cases.
 
Steps that small and mid-sized companies can take to come into compliance with ITAR include: (i) reviewing the jurisdiction and classification of their products and services to determine if they are controlled under ITAR and the Export Administration Regulations; (ii) based upon these classifications, determining the licensing and other requirements that apply; and (iii) adopting ITAR compliance programs and conducting employee compliance training.  Additional details regarding the ITAR requirements can be found in the Guide entitled “
ITAR For Government Contractors
.”

Companies in the defense industry have been forewarned – DDTC, along with its companion agencies the Bureau of Industry and Security, Office of Foreign Assets Control and Customs and Border Protection, expect a high level of compliance effort from contractors large and small alike.
 
Companies in the defense industry have been forewarned – DDTC, along with its companion agencies the Bureau of Industry and Security, Office of Foreign Assets Control and Customs and Border Protection, expect a high level of compliance effort from contractors large and small alike.
 
Author’s Note:  This article contains general, condensed summaries of actual legal matters, statutes and opinions for information purposes.  It is not intended and should not be construed as legal advice.
 
[Editor’s Note: Thomas McVey’s Guide “ITAR for Government Contractors” was published in parts in the Daily Bugle of 31 August, and 1, 5 and 6 September 2017.]  

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

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a118
. ICPA Presents Annual Asia Conferences: 5-7 Nov in Singapore and 9-10 Nov in Shanghai

(Source: Ann Lister, Anngelfire@yahoo.com
 
* What: ICPA Annual Asia Conferences 2017
* When: Singapore: 5-7 Nov 2017; Shanghai: 9-10 Nov 2017.
* Where:
  – Singapore: Grand Copthorne, Singapore. Book here.

  – Shanghai: Four Seasons Hotel Shanghai. Book 
here
.

* Sponsor: International Compliance Professionals Association (ICPA).
* Speakers: Large number of experienced, knowledgeable professionals (see agendas). 

* Agenda:
  – Singapore: View 
here
  – Shanghai: View 
here
* Register:  
  – Singapore: 
SGD 
here
; or USD 
here
  – Shanghai: RMB 
here
; or USD 
here

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

TE_a219
. Friday List of Approaching Events

(Sources: Event Sponsors) 
 
Published every Friday or last publication day of the week. Send events to
jwbartlett@fullcirclecompliance.eu
, composed in the below format:

* DATE: PLACE; “TITLE;” SPONSOR; WEBLINK; CONTACT (email and phone number)

#” New listing this week:   
 
Continuously Available Training:
 
* E-Seminars: “
US Export Controls” / “Defense Trade Controls
;” Export Compliance Training Institute;
danielle@learnexportcompliance.com
 
* On-Line: “
Simplified Network Application Process Redesign (SNAP-R)
;” Commerce/BIS; 202-482-2227
* E-Seminars: “
Webinars On-Demand Library
;” Sandler, Travis & Rosenberg, P.A.
 
Training by Date:


* Oct 2-5: Columbus OH; “
University Export Controls Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977

* Oct 3: Kansas City, MO; ”
Import/Export 101;” Miller and Company P.C.; Register
here.

* Oct 4: Kansas City, MO; ”
Import/Export 201;” Miller and Company P.C.; Register
here.

* Oct 3-5: Washington, D.C.; BIS Annual Update: ”
Protecting American Technology, Growing American Industry;” Bureau of Industry and Security

* Oct 4: Itasca, IL; ”
Understanding Incoterms;” Mohawk Global Trade Advisors; Adrienne Graddy; 
agraddy@mohawkglobalta.com
; 630-994-3036

*
 Oct 4: Kansas City, MO;
 
2017 Trade Compliance and Policy Seminar
; C.H. Robinson

* Oct 4: Toronto, Canada; ”
2nd National Institute on US-Canadian Securities Litigation;” American Bar Association
* Oct 4: Webinar; “
Exports – New Incentives, Old Rules
;” 
Sandler, Travis & Rosenberg, P.A.; 
webinarorganizers@strtrade.com

* Oct 4-5:  Miramar (Miami/Fort Lauderdale), FL; ”
9th Maritime Logistics Training Course
“; Contact ABS Consulting, phone:
 
(954) 218-5285

* Oct 5: New York, NY; 
Trade and Customs Updates
; KPMG LLP; 


* Oct 5-6: London, UK; ”
The World ECR Forum 2017;” World ECR 
* Oct 6: Allston, MA; ”
Developing Your Export Compliance Program;” Compliance Alliance


* Oct 10: Aberdeen, UK; ”
UK Strategic Export Controls: Control List Classification – Combined Dual Use and Military;” Code Coct2017; or contact
Denise Carter at 020-7215-4459; 
UK Department for International Trade
* Oct 10: Aberdeen, UK; “UK Strategic Export Controls: Licenses Workshop;” Code Loct2017; or contact Denise Carter at 020-7215-4459; UK Department for International Trade;

* Oct 10-12: Dallas, TX; “
‘Partnering for Compliance™’ West Export/Import Control Training and Education Program
;” Partnering for Compliance
 


*
 Oct 10: Rotterdam, the Netherlands; “
Awareness Training Export Control, Dual-Use, and Sanctions
” day I/3 [in Dutch]; Fenex 

*
Oct 10 & 24: Webinar; “Two Part Webinar Series: Harmonized System Classifications: Learning By Doing;” ECTI; 540-433-3977

* Oct 11: Aberdeen, UK; “UK Strategic Export Controls: Intermediate Oil and Gas Seminar;” Code loct2017-2; or contact Denise Carter at 020-7215-4459; UK Department for International Trade;

* Oct 11-12: Detroit, MI;
 
2017 Trade Compliance and Policy Seminar
; C.H. Robinson

# Oct 11: Webinar; ”
Basics of Importation Under the Gun Control Act;” Reeves & Dola LLP; Teresa Ficaretta;
tficaretta@reevesdola.com; 202-715-9183

*
Oct 11: Webinar; “Encryption Export Controls 2017 Update;” ECTI; 540-433-3977

* Oct 12: Brussels, Belgium; 
Compliance in Export Control of Dual-Use Items; EU Federal Ministry for Economic Affairs and Energy


* Oct 12-13: Boston, MA; “Automated Export System Compliance Seminar and Workshop;” Commerce/Census, Commerce/BIS, DHS/CBP, State/DDTC, Treasury 

*
Oct 12: Webinar; “OFAC Enforcement Trends: Exporters in the Crosshairs;” ECTI; 540-433-3977

* Oct 13: Dallas, TX; “
Customs/Import Boot Camp
;” Partnering for Compliance

* Oct 16: Toronto; ”
3rd Canadian Forum on Economic Sanctions Compliance and Enforcement, Toronto;” American Conference Institute and Canadian Institute

*
Oct 17 & 26: Webinar; “Two Part Webinar Series: EAR License Exceptions: Learning By Doing;” ECTI; 540-433-3977
# Oct 19: Free Webinar; “Duty Drawback;” Citta Brokerage Company

*
 Oct 19: Boston, MA;
 
2017 Trade Compliance and Policy Seminar
; C.H. Robinson
# Oct 19: Boston, MA; “Import Documentation and Procedures Seminar;” International Business Training
# Oct 20: Milwaukee, WI; Import Audit Compliance Seminar; International Business Training

* Oct 22-24: Grapevine, TX; “
Annual ICPA Fall Conference
;” International Compliance Professional Association;
Wizard@icpainc.org 

* Oct 23-24: Arlington, VA; “
2017 Fall Advanced Conference
;” Society for International Affairs

*
 Oct 24-25: Cleveland, OH;
 
2017 Trade Compliance and Policy Seminar
; C.H. Robinson

*
 Oct 24: Rotterdam, the Netherlands; “
Awareness Training Export Control, Dual-Use, and Sanctions
” day 2/3 [in Dutch]; Fenex

* Oct 25-26: Tysons Corner, VA;
ITAR Fundamentals; FD Associates
* Oct 26: Coventry, UK;
Export Control Symposium; Midlands Aerospace Alliance and UK Department of International Trade

* Oct 30-Nov 2: Phoenix, AZ; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
;” ECTI;
jessica@learnexportcompliance.com
; 540-433-3977
* Oct 31: Manchester, UK; “UK Strategic Export Controls: Intermediate Seminar;” Code loct2017; or contact Denise Carter at 020-7215-4459; UK Department for International Trade;
* Nov 1: Manchester, UK; “UK Strategic Export Controls: Beginner’s Workshop;” Code Bnov2017-1; or contact Denise Carter at 020-7215-4459; UK Department for International Trade; 
* Nov 1: Manchester, UK; “UK Strategic Export Controls: Licenses Workshop;” Code Lnov2017-1; or contact Denise Carter at 020-7215-4459; UK Department for International Trade; 
* Nov 1: Manchester, UK; “UK Strategic Export Controls: Control List Classification – Combined Dual Use and Military;” Code Cnov2017-1; or contact Denise Carter at 020-7215-4459; UK Department for International Trade;
* Nov 2-3: Las Vegas, NV; “The 22nd National M&A Institute;” American Bar Association
*
Nov 2: Webinar; “DIY Encryption Classification 2017 Edition;” ECTI; 540-433-3977

* Nov 5-7: Singapore; ”
ICPA Singapore Conference;”
International Compliance Professionals Association;
wizard@icpainc.org
*
 Nov 6: Rotterdam, the Netherlands; “
Awareness Training Export Control, Dual-Use, and Sanctions
” day 3/3 [in Dutch]; Fenex 

* Nov 6-8: Chicago, IL; “Basics of Government Contracting;” Federal Publications Seminars

* Nov 7: Norfolk, VA; “
AES Compliance Seminar
;
” Dept. of Commerce/Census
Bureau;
itmd.outreach@census.gov

* Nov 8: Webinar; “Introduction to the National Firearms Act;” Reeves & Dola LLP; Teresa Ficaretta; tficaretta@reevesdola.com; 202-715-9183

* Nov 9-10: Shanghai, China;ICPA China Conference;” International Compliance Professionals Association; wizard@icpainc.org  
* Nov 9: Tysons Corner, VA; ITAR for the Empowered Official; FD Associates

# Nov 13: San Diego, CA; 
 “
Import Documentation and Procedures Seminar
;” International Business Training

* Nov 13-16: Wash DC; “ITAR Defense Trade Controls / EAR Export Controls Seminar;” ECTI; jessica@learnexportcompliance.com; 540-433-3977

* Nov 15: Leeds, UK; ”
Intermediate Seminar;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Nov 16: Leeds, UK; ”
Beginners Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Nov 16: Leeds, UK; ”
Licenses Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Nov 16: Leeds, UK; ”
Control List Classification – Combined Dual Use and Military;” UK Department for International Trade  
denise.carter@trade.gsi.gov.uk 

* Nov 16: Nijkerk, the Netherlands; “Training Export Control” [in Dutch]; Fenedex

# Nov 16: Chicago, IL;
 “
Import Documentation and Procedures Seminar
;” International Business Training
#
 Nov 17: Chicago, IL; “
Import Audit Compliance Seminar
;” International Business Training

* Nov 29: Wash DC; ”
4th U.S. Customs Compliance Boot Camp, Washington, DC;” American Conference Institute

* Dec 4: NYC; ”
8th Annual New York Forum on Economic Sanctions, New York“, American Conference Institute

 * Dec 4-7: Miami FL; “ITAR Defense Trade Controls / EAR Export Controls Seminar;” ECTI; jessica@learnexportcompliance.com; 540-433-3977

# Dec 5: Webinar; “NAFTA Rules of Origin;” International Business Training

* Dec 5: Brussels, Belgium; ”
Dual Use For Beginners
” [In Dutch]; Flemish Department of Foreign Affairs

* Dec 5: San Juan, PR; “AES Compliance Seminar in Spanish;” Dept. of Commerce/Census Bureau; itmd.outreach@census.gov

* Dec 6: Webinar; ”
Introduction to Firearms and Ammunition Excise Tax (FAET);” Reeves & Dola LLP; Teresa Ficaretta;
tficaretta@reevesdola.com; 202-715-9183

* Dec 6: Wood Ridge, NJ; “
AES Compliance Seminar
;” Dept. of Commerce/Census Bureau;
itmd.outreach@census.gov 

* Dec 7: Laredo, TX; “AES Compliance Seminar in Spanish;” Dept. of Commerce/Census Bureau; itmd.outreach@census.gov 

* Dec 8: Boston, MA; ”
Export Expo;” Compliance Alliance
# Dec 8: Minneapolis, MN; 

Incoterms 2010: Terms of Sale Seminar
;” International Business Training
# Dec 8: Washington, D.C.; ”
2017 SIA Holiday Party;” Society for International Affairs (SIA)

* Dec 11-13: Sterling, VA; “
Basics of Government Contracting
;” Federal Publications Seminars
# Dec 14: Minneapolis, MN; “Import Audit Compliance Seminar;” International Business Training
# Dec 15: Atlanta, GA; “Incoterms 2010: Terms of Sale Seminar;” International Business Training

2018
 

* Jan 22-25: San Diego CA; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
;” ECTI; 
jessica@learnexportcompliance.com
; 540-433-3977

*
Jan 29-30: Toronto, Canada;
7th Industry Forum on Export and Re-Export Compliance for Canadian Operations;”
American Conference Institute

# Feb 6: Las Vegas, NV;
 “
Import Documentation and Procedures Seminar
;” International Business Training

* Feb 19-22: Huntsville AL; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
;” ECTI; 
jessica@learnexportcompliance.com
; 540-433-3977

# Mar 5-7: Sugar Land, TX; ”
2018 Winter Basics Conference;” Society for International Affairs (SIA)
* Mar 6-8: Orlando, FL; “
‘Partnering for Compliance’ East Export/Import Control Training and Education Program
;” Partnering for Compliance
* Mar 11-14: San Diego, CA; “ICPA Annual Conference;” International Compliance Professionals Association; wizard@icpainc.org
* Mar 9: Dallas, TX; “
Customs/Import Boot Camp
;” Partnering for Compliance

* Apr 16-19: Las Vegas NV; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
;” ECTI; 
jessica@learnexportcompliance.com
; 540-433-3977
* Apr 30-May 3: Wash DC; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
;” ECTI; 
jessica@learnexportcompliance.com
; 540-433-3977

* May 6-8: Toronto, Canada;
2018 ICPA Canadian Conference; ICPA
# May 7-8: Denver, CO; ”
2018 Spring Advanced Conference;” Society for International Affairs (SIA)

* Jun 4-7:
San Diego, CA; “
 
ITAR Defense Trade Controls / EAR Export Controls Seminar
;” 
jessica@learnexportcompliance.com
; 540-433-3977

# Jul 16-18; Oxon Hill, MD; “2018 Summer Basics Conference;” Society for International Affairs (SIA)

#
Oct 22-23; Arlington, VA; “2018 Fall Advanced Conference;” Society for International Affairs (SIA)

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

ENEDITOR’S NOTES

EN_a120
. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 
* Miguel de Cervantes (Miguel de Cervantes Saavedra; 29 Sep 1547 – 22 Apr 1616; was a Spanish writer who is widely regarded as the greatest writer in the Spanish language and one of the world’s pre-eminent novelists. His major work, Don Quixote, is considered the first modern novel, a classic of Western literature, and is regarded among the best works of fiction ever written. His influence on the Spanish language has been so great that the language is often called la lengua de Cervantes (“the language of Cervantes”).
– “To be prepared is half the victory.”
  – “A proverb is a short sentence based on long experience.”
 
Friday Funnies:
 
Q. What did one strand of DNA say to the other strand of DNA?
A: Do these genes make me look fat?

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

EN_a221. 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 Sep 2017: 82 FR 45366-45408: Changes to the In-Bond Process [Effective Date: 27 Nov 2017.]
 
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: 25 Sep 2017:
82 FR 44514-44517
: Removal of Certain Entities from the Entity List; and Revisions of Entries on the Entity List

  

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, and Census/AES guidance.  Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance 
website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR.
 

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 1704, containing 
2,564 ABI records and 463 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: 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.

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

EN_a322
. Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor)
 

Review last week’s top Ex/Im stories in “Weekly Highlights of Daily Bugle Top Stories” posted here.

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

* 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 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.

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