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17-1117 Friday “Daily Bugle”

17-1117 Friday “Daily Bugle”

Friday, 17 November 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.

[No items of interest noted today.] 

  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, 18-19 Nov
  4. DHS/CBP Announces ACE Certification Outage, 20 Nov
  5. DoD/DSS Seeks Interns for Summer 2018
  6. State/DDTC: (No new postings.)
  7. Treasury/OFAC: BCC Corporate SA Settles Potential Liability for Apparent Violations of the CACR
  8. Treasury/OFAC Posts FAQ Related to Humanitarian Assistance with Regard to the 12 Nov Earthquake in Iran
  9. UK/DIT ECO Updates OGELs Following Venezuela Sanctions
  1. Pretoria News: “Agent up in Arms over Gun Permits”
  2. WorldECR News Alert, 16 Nov
  1. E.J. Krauland, M. Rathbone & A. Rapa: “A ‘Modest Proposal’ for Cuba: OFAC, BIS and State Department Implement President’s New Cuba Policy”
  2. The Export Compliance Journal: “The Avengers: World-Saving Superheroes, or Walking Export Compliance Violations?”
  3. J. Reeves & K. Heubert: “ATF Publishes Alarming Details on the Inspection Process for Defense Contractors”
  4. J.A. Lee, R. Kirk & P. Alexiadis: “Cuba Sanctions: The Trump Administration Takes Steps to Implement Rollback of Obama Era Sanctions Relief”
  5. M. Volkov: “Trust and Integrity – Bedrock of Corporate Sustainability (Part II of IV)”
  1. List of Approaching Events
  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 (9 Nov 2017), FACR/OFAC (13 Nov 2017), FTR (20 Sep 2017), HTSUS (20 Oct 2017), ITAR (30 Aug 2017)
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMEX/IM ITEMS FROM TODAY’S FEDERAL REGISTER

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OGSOTHER GOVERNMENT SOURCES

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

(Source:
Federal Register)
 

* State; NOTICES; Meetings; Defense Trade Advisory Group [Publication Date: 20 November 2017.]

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(Source:
CSMS #17-000723, 17 Nov 2017.)
 
There will be an ACE PRODUCTION Outage Saturday evening, November 18, 2017 from 2200 ET to 0400 ET Sunday, November 19, 2017, for ACE Infrastructure Maintenance.
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(Source:
CSMS #17-000724, 17 Nov 2017.)
 
There will be an ACE CERTIFICATION Outage Monday evening, November 20, 2017 from 1715 ET to 2100 ET due to ACE Infrastructure maintenance. This Monday CERT outage is in lieu of the normal Wednesday CERT outage due to the Thanksgiving holiday week. 
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(Source:
DoD/DSS, 17 Nov 2017.)
 
The DSS Paid Student Internship Program (PSIP) is now accepting applications for Summer 2018.
Deadline for applications is Friday, December 1.
 
The 2018 Paid Student Internship Program is a highly competitive program that seeks to attract a diverse group of bright and innovative students for positions located throughout the country. This program provides a temporary, summer long work opportunity designed to expose students, pursuing both undergraduate and graduate degrees, to DSS culture and to provide real world experience in various career fields.
 
The program also allows supervisors to evaluate, and provide feedback on, students’ work habits and performance which will facilitate their professional development. DSS is an Excepted Service agency and does not participate in OPM’s Pathways Program. Therefore, successful completion of this program does not guarantee a permanent appointment to full-time Federal service. However, upon completion of the internship, students are encouraged to apply to any available positions within the agency.

All interested students must apply through USAJobs.gov. Job announcements will be open through December 1, 2017 and can be found here.

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(Source:
Treasury/OFAC, 17 Nov 2017.)
 
BCC Corporate SA (“BCCC”) is a Belgium-based credit card issuer and corporate service company that issues various payment products, such as credit cards, to its European-based corporate customers. At the time of the apparent violations, BCCC was a wholly owned subsidiary of Alpha Card Group (“Alpha Card”), which in turn was owned 50 percent by American Express Company (AMEX), a U.S. financial institution. AMEX has agreed to remit $204,277 to settle potential civil liability for 1,818 apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR).
 
Between April 9, 2009 and February 3, 2014, credit cards BCCC had issued to its corporate customers were used to make credit card purchases in Cuba. Although Alpha Card and BCCC had policies and procedures in place to review transactions for matches to OFAC’s List of Specially Designated Nationals and Blocked Persons for compliance with U.S. economic sanctions laws, Alpha Card and BCCC nevertheless failed to implement controls to prevent BCCC-issued credit cards from being used in Cuba. Between April 9, 2009 and February 3, 2014, BCCC processed 1,818 transactions totaling $583,649.43 for more than 100 distinct corporate customers of BCCC whose cards were used in Cuba or that otherwise involved Cuba. [FN/1] The total base penalty amount for the 1,818 apparent violations was $291,825.
 
OFAC has determined that AMEX voluntary self-disclosed the apparent violations to OFAC and that the apparent violations constitute a non-egregious case.
 
The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A. OFAC considered the following to be aggravating factors:
 
  (1) personnel within both Alpha Card and BCCC had reason to know of the conduct that led to the apparent violations;
  (2) despite Alpha Card’s business model prior to its acquisition of BCCC in March 2009, in which it dealt exclusively with AMEX-related products (and therefore had insight into all the parties involved in any transactions throughout the network), none of the companies involved appear to have appreciated the possibility or risk that BCCC-issued credit cards could be used in Cuba, and the company should have taken steps to assess the level of sanctions risk, and related controls, for BCCC-issued credit cards;
  (3) the apparent violations resulted in harm to U.S. sanctions program objectives at the time they occurred;
  (4) AMEX is a large and commercially sophisticated financial institution; and
  (5) during OFAC’s investigation, AMEX and BCCC provided certain information on multiple occasions that was verifiably inaccurate or incomplete, including material omissions.
 
OFAC considered the following to be mitigating factors:
 
  (1) BCCC has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the apparent violations;
  (2) upon discovering the apparent violations, AMEX took swift and appropriate remedial action;
  (3) AMEX and BCCC voluntarily self- disclosed the apparent violations to OFAC; and
  (4) BCCC signed a statute of limitations tolling agreement and tolling agreement extensions.
 
For more information regarding OFAC regulations, please visit: http://www.treasury.gov/ofac.
 
————–
  [FN/1] In January 2015, OFAC revised its regulations to authorize U.S. financial institutions to process credit and debit card transactions and permit the use of their credit and debit cards for certain travel to Cuba by U.S. nationals as well as third-country nationals.
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(Source:
Treasury/OFAC, 17 Nov 2017.)
 

Today, in light of the recent earthquake in Iran, OFAC is publishing a new Frequently Asked Question to highlight ways in which Americans can provide humanitarian assistance to the Iranian people, consistent with the Iran-related sanctions administered by OFAC.

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(Source:
UK/DIT ECO
, 17 Nov 2017.)
 
The Export Control Joint Unit (ECJU) has amended and republished the following open general export licences as a result of the introduction of EU sanctions on Venezuela:
 
  – OGEL (X)
 
These OGELs have been updated to remove Venezuela as a permitted destination. The following open general trade control licences have also been updated for the same reason:
 
 
The sanction measures were summarised in Notice to exporters 2017/25.

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NWSNEWS

(Source:
Pretoria News, 17 Nov 2017.)
 
One of the largest shipping agents in the country, which specialises in the shipment of arms and ammunition, turned to court this week to obtain clarity regarding the police’s policy on import and export permits.  
 
  “The SAPS’s administration of the Central Firearms Registry is, to put it simply, rather chaotic,” said Blu Air Sea and Land Logistics Ltd director Megan Battiss Piller. She said in papers before the Gauteng High Court, Pretoria, that her company had for years successfully applied for permits on behalf of clients across the globe who wanted to either bring firearms into the country or take them out. But the police, out of the blue, had refused the company the right to act on behalf of these people, she said. The SAPS now required that people applied for these permits in person.  
 
This was simply impossible, Piller said, as most of them were abroad. This new policy hampered, among others, the country’s very lucrative hunting trade as it now made it very difficult for hunters to come and hunt in South Africa and to bring their firearms with them. She asked the court to declare that her company was entitled to continue as an agent and to submit import and export permits applications on behalf of licensed firearm dealers. Piller said the Firearms Control Act contained numerous safeguards to protect both the SAPS and the public from abuse by an entity such as her company.
 
The applicant, who went about obtaining these permits by following the law, had in the past lodged about 200 applications for import and export permits. However, since October last year, the acting head of the registry, Colonel Danisile Ndukula, had steadfastly refused permission for the applicant to apply for these permits. Piller said her attorney had pointed out in a letter to the police that the Firearms Control Act did not prohibit these applications being made on behalf of agencies, such as the applicant. She asked the court to order the police to get their house in order, as there was confusion. It was impossible to obtain commitment from the SAPS as to what a particular process should consist of. “I am not aware of a single policy document that the public has access to in order to determine what processes should be adopted and how.”
 
Pillar said that over the past few years there had been at least five different heads of the registry, which resulted in no conformity in policy. “Decisions are made unilaterally, policies changed, directives issued and the people who are the subject of such changes or policies are not even advised about it.”
 
The section commander of the register, Colonel Ramphuti Chabangu, said the Firearms Act did not make provision for agents to obtain import and export permits on behalf of individuals. A firearm owner had to apply in person for an import or export permit, he said. “The act is very clear as to who should apply for an import or export permit.”
 
The application was postponed indefinitely so that the Minister of Police could be added as a party to the dispute.
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  (1) EU announces arms embargo against Venezuela
  (2) Senate Committee approves banking restrictions against North Korea
  (3) Ukraine updates control list in line with Australia Group
  (4) Prime Minister May points finger at ‘meddling’ Russia
  (5) Updated guidance on modern slavery statements
 
[Editor’s Note: Visit
http://worldecr.com/ to subscribe to WorldECR, the journal of export controls and sanctions.]
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COMMCOMMENTARY

 
* Authors: Edward J. Krauland, Esq., ekrauland@steptoe.com, 202-429-8083; Meredith Rathbone, Esq., mrathbone@steptoe.com, 202-429-6437; and Anthony Rapa, Esq., arapa@steptoe.com, 202-429-8120. All of Steptoe & Johnson LLP.
 
Effective November 9, 2017, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s Bureau of Industry and Security (BIS) amended the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR), respectively, to implement changes to US Cuba sanctions policy articulated by President Trump in a presidential memorandum issued June 16, 2017. Concurrently, as required by the presidential memorandum, the Department of State published a list of 180 entities and subentities associated with Cuban military, intelligence, and security services (Cuba Restricted List). As such, US government policy establishes that direct financial transactions conducted by persons subject to US jurisdiction with persons identified on the Cuba Restricted List would disproportionately benefit them at the expense of the Cuban people or private enterprise in Cuba.
 
Although President Trump announced in June that he was “cancelling the last administration’s completely one-sided deal with Cuba,” the memorandum that he issued in June, and the regulatory changes implemented by the State, Treasury, and Commerce Departments last week, reflect relatively moderate changes to US Cuba sanctions policy, as we initially explained our June advisory on the matter. While these changes will limit certain US business activity with, and travel to, Cuba, they do not reflect a roll-back of all (or even most) of the Obama Administration’s significant Cuba sanctions reforms.
 
The key policy changes, explained in more detail below, include:
 
  – New prohibitions on certain “direct financial transactions” with entities and subentities identified on the Cuba Restricted List
  – An expanded definition of “prohibited officials of the Government of Cuba” for which remittances and certain other transactions otherwise authorized by OFAC and BIS are off-limits
  – Additional restrictions on authorized travel to Cuba in the “people-to-people,” other “educational,” and “support for the Cuban people” travel categories
  – Adjustments to certain export controls for Cuba, including (1) a general policy of denial for license applications to export items for use by entities and subentities on the Cuba Restricted List, and (2) simplification and expansion of the license exception
 
SUPPORT FOR THE CUBAN PEOPLE (SCP)
 
Each of these new restrictions is subject to exceptions, such as sector-specific exceptions and grandfathering policies, described below. As with all US sanctions on Cuba, these new restrictions are applicable to persons “subject to the jurisdiction of the United States,” including US citizens, US residents, US-incorporated companies, and non-US branches and subsidiaries of US companies.
 
Prohibition on Direct Financial Transactions with Persons on the Cuba Restricted List
 
OFAC added a new provision to the CACR (§ 515.209) that prohibits persons subject to US jurisdiction from engaging in certain “direct financial transactions” with entities and subentities identified on the Cuba Restricted List. We explain key features of this new restriction below.
 
  (1) Only “direct financial transactions” are prohibited.
 
Consistent with the presidential memorandum, this new prohibition applies only to “direct financial transactions” with entities or subentities specifically identified on the Cuba Restricted List. The definition of “direct financial transaction” is more narrow than the definition of “transaction” or “financial transaction” found elsewhere in OFAC’s regulations. Specifically, Section 209(a) of the CACR indicates that a person engages in a “direct financial transaction” by doing either of the following:
 
  – Acting as the originator on a transfer of funds whose ultimate beneficiary is an entity or subentity on the Cuba Restricted List
  – Acting as the ultimate beneficiary on a transfer of funds whose originator is an entity or subentity on the Cuba Restricted List.
 
On the other hand, “indirect” financial transactions with the entities and subentities on the Cuba Restricted List are not covered by § 515.209. For example, as set out in the note to § 515.209, the general license in § 515.584(d) that authorizes a banking institution subject to US jurisdiction to process “U-turn” transactions – funds transfers originating and terminating outside the United States, provided that neither the originator nor the beneficiary is a person subject to US jurisdiction – remains in place. Similarly, also as set out in the note, banking institutions subject to US jurisdiction can continue to accept, process, and give credit to US dollar monetary instruments presented indirectly by a Cuban financial institution as set out in the general license in § 515.584(g).
 
  (2) No 50% rule for the Cuba Restricted List.
 
The State Department clarified that there is no “50% Rule” for companies owned or controlled by entities on the Cuba Restricted List. Specifically, the State Department stated in a header to the Cuba Restricted List that:
 
“Entities or subentities owned or controlled by another entity or subentity on this list are not treated as restricted unless also specified by name on the list.”
 
In other words, the Cuba Restricted List is a positive list. This means that subsidiaries of listed entities are not treated as restricted unless they are specifically identified on the Cuba Restricted List. However, if a person subject to US jurisdiction knows that a direct financial transaction is being conducted with an unlisted entity or person acting as an agent for or alter ego of an entity or subentity identified on the Cuba Restricted List, then caution is warranted under the §515.209 prohibition. The State Department indicated that it intends to publish periodic updates to the Cuba Restricted List in the Federal Register.
 
  (3) The new restrictions only apply to some pre-existing general licenses and authorizations.
 
The real impact of the new restriction on “direct financial transactions” for entities or subentities on the Cuba Restricted List is with respect to the availability of general licenses or other authorizations for what would be the related, underlying transactions.
 
Although the government of Cuba and military were always considered “blocked” Cuban nationals under the CACR, various general licenses and exemptions within the CACR previously did not prohibit incidental financial transactions with the Cuban government that related to authorized activities. With this new regulatory change, OFAC has explicitly prohibited direct financial transactions with entities and subentities identified on the Cuba Restricted List in certain general licenses, including:
 
  – § 515.530: Exportation of powers of attorney or instructions relating to certain types of transactions;
  – § 515.534: Negotiation of, and entry into, contingent contracts relating to prohibited transactions;
  – § 515.545: Transactions related to information and informational materials;
  – § 515.560: Travel-related transactions to, from, and within Cuba by persons subject to US jurisdiction;
  – § 515.561: Family visits;
  – § 515.564: Professional research and professional meetings in Cuba;
  – § 515.565: Educational activities;
  – § 515.566: Religious activities in Cuba;
  – § 515.567: Public performances, clinics, workshops, athletic and other competitions, and exhibitions;
  – § 515.572: Provision of travel, carrier, other transportation-related, and remittance forwarding services;
  – § 515.573: Physical presence and business presence in Cuba and Cuban news bureaus;
  – § 515.574: Support for the Cuban People;
  – § 515.576: Activities of private foundations or research or educational institutes;
  – § 515.577: Transactions necessary and ordinarily incident to publishing;
  – § 515.578: Exportation, reexportation, and importation of certain internet-based services and importation of software;
  – § 515.581: Transactions related to conferences in third countries;
  – § 515.584: Certain financial transactions involving Cuba; and
  – § 515.590: Certain grants, scholarships, and awards.
 
Consequently, no direct financial transaction by a person subject to US jurisdiction with a person or entity identified on the Cuba Restricted List is authorized by these enumerated general licenses (a specific license issued by OFAC would be required). However, OFAC did not add prohibitions related to the Cuba Restricted List to all of the CACR’s general licenses and exemptions. The June 2017 presidential memorandum allows exceptions to remain in place in a number of areas, including transactions related to the transmittal of remittances, the expansion of direct telecommunications and internet access for the Cuban people; the sale of agricultural commodities, medicines and medical devices; and other categories. As a result, it will be important to carefully review the relevant general licenses in determining the extent to which this new prohibition restricts otherwise authorized transactions.
 
  (4) Pre-existing “commercial engagements” may continue.
 
In order to be “[c]onsistent with the administration’s interest in not negatively impacting US businesses for engaging in lawful commercial opportunities,” OFAC’s regulations state that the prohibition on direct financial transactions does not apply to transactions with a an entity or subentity on the Cuba Restricted List related to “commercial engagements” that were “in place” prior to the State Department’s publication of the Cuba Restricted List. In an FAQ published on November 8, OFAC explained that businesses will be permitted to continue with authorized transactions outlined in “contingent or other types of contractual arrangements” agreed to prior to the issuance of the new regulations (November 9).
 
This will likely come as welcome relief to any US companies that have entered into contractual agreements with respect to Cuba-related activity. But other “commercial arrangements” that were not “in place” as of November 9 may be impacted, even if discussions related to those deals had begun before November 9.
 
  (5) The Cuba Restricted List is not an exhaustive list.
 
As we previously explained, the presidential memorandum directed the State Department to publish a list of entities that are both “under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel” and “with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.” In other words, the State Department had discretion not to list certain entities affiliated with the Cuban security sector. Accordingly, while the Cuba Restricted List includes a number of entities and subentities that play significant roles in the Cuban economy, it is not an exhaustive list, and some members of Congress have criticized the State Department for not including certain entities on the list. As noted before, however, the Cuba Restricted List can be changed at any time.
 
Some of the key commercial enterprises identified in the Cuba Restricted List include:
 
  – GAESA – Grupo de Administración Empresarial S.A. (the Cuban military’s commercial conglomerate)
  – CIMEX – Corporación CIMEX S.A. (Cuba’s Export-Import Corporation, founded by the Ministry of the Interior, but reportedly taken over by GAESA)
  – Companía Turística Habaguanex S.A. (the leading hotel chain in Cuba that has reportedly now been taken over by GAESA)
  – Gaviota – Grupo de Turismo Gaviota (prominent tourism brand that is reportedly part of GAESA)
  – Rafin S.A. (a financial services firm reported to be affiliated with GAESA)
  – Zona Especial de Desarrollo Mariel (the economic development zone at the Port of Mariel which is a key area for foreign investment projects).
 
Another significant listing is the Mariel Special Economic Development Zone, including Almacenes Universales and Terminal de Contenedores de Mariel, S.A., two companies that run the seaport’s container terminal. The Mariel Special Economic Development Zone is Cuba’s first special development zone and was established to lure foreign investment to Cuba. Cuba advertises the zone as a “door open to the world.” Prohibiting direct financial transactions with the zone, including with companies that run the seaport container terminal and warehousing and customs, will likely have a chilling effect on potential US investment in the development zone.
 
The Cuba Restricted List also includes dozens of hotels located throughout the country, marinas, stores in Old Havana, government entities that directly serve the defense and security sectors, and rum producers and beverage manufacturers owned by the Cuban government.
 
The list does not include entities from pockets of the Cuban economy reportedly not controlled by GAESA, such as Cuban airports or cruise ship terminals and Cuba’s telecommunications and agriculture sectors. In addition, some entities are notably absent from the Cuba Restricted List, despite reportedly having ties to the Cuban military. For example, a number of US financial services companies reportedly rely on the payment infrastructure of GAESA affiliate Financiera CIMEX, but this company is not listed. Neither did the State Department include VaCuba, which reportedly may be used to pay home and apartment owners for short term rent. Almost immediately after the list was published, Senator Rubio and Representative Diaz-Balart quickly criticized “bureaucrats” at the State Department for failing to give enough muscle to the president’s directive.
 
Expanded Definition of “Prohibited Officials of the Government of Cuba”
 
As mentioned in our earlier advisory, a number of general licenses in the CACR and license exceptions in the EAR carve out transactions with “prohibited officials of the Government of Cuba” from the scope of otherwise authorized activities. For example, CACR general licenses otherwise authorizing the “unblocking” of Cuban nationals resident outside Cuba; receipt of payment for legal services; provision of telecommunications services to individuals in Cuba; people-to-people travel; certain types of remittances; and publishing and internet-based services each have limitations related to “prohibited officials of the Government of Cuba.” Similarly, the EAR license exceptions for Gift Parcels and Humanitarian Donations (GFT) and Consumer Communications Devices (CCD) carve out “prohibited officials of the Government of Cuba.”
 
On October 17, 2016, OFAC narrowed the definition of “prohibited official of the Government of Cuba” in the CACR to cover only the Council of Ministers and flag officers of the Revolutionary Armed Forces. However, the regulatory changes announced on November 9, 2017 revise the definition of “prohibited official of the Government of Cuba” in the CACR to revert back to the definition in place prior to October 17, 2016. BIS also made conforming changes to the EAR.
 
Accordingly, the definition of “prohibited officials of the Government of Cuba” in the CACR and EAR once again includes:
 
  – Ministers and vice-ministers
  – Members of the Council of State and the Council of Ministers
  – Members and employees of the National Assembly of People’s Power
  – Members of any provincial assembly
  – Local sector chiefs of the Committees for the Defense of the Revolution
  – Director Generals and sub-Director Generals and higher of all Cuban ministries and state agencies
  – Employees of the Ministry of the Interior (MININT)
  – Employees of the Ministry of Defense (MINFAR)
  – Secretaries and first secretaries of the Confederation of Labor of Cuba (CTC) and its component unions
  – Chief editors, editors, and deputy editors of Cuban state-run media organizations and programs, including newspapers, television, and radio
  – Members and employees of the Supreme Court (Tribuno Supremo Nacional)
 
Therefore, there is a renewed and more extensive need to engage in due diligence for those attempting to conduct business in Cuba, so as to determine if an OFAC general license cannot be utilized by persons subject to US jurisdiction if involving or benefitting anyone in the now-expanded categories of prohibited officials of the Cuban government.
 
Changes to Cuba Travel Authorizations
 
Although the amendments to the CACR maintained general licenses for all 12 categories of authorized reasons to travel to Cuba, OFAC made two changes to these general licenses that will impact travel from the United States or by persons subject to US jurisdiction to Cuba. First, OFAC made several amendments to the general license authorizing educational travel, eliminating the authorization for individual “people-to-people” educational travel and limiting the scope of this general license to authorize only people-to-people travel conducted under the auspices of an organization. Second, when traveling under the general license for “support for the Cuban people,” travelers must now engage in a full-time schedule of activities that enhances contact with the Cuban people, supports civil society, or promotes the Cuban people’s independence. (As discussed above, OFAC also incorporated the prohibition on direct financial transactions with Cuba Restricted List designees into certain travel-related transactions.)
 
  (1) Changes to authorized educational travel
 
OFAC made several amendments to the general license authorizing travel for “educational activities,” 31 CFR 515.565, including eliminating the authorization for individual “people-to-people” educational travel and adding requirements related to other authorized educational travel.
 
Changes to “people-to people” educational travel
 
Individual “people-to-people” educational travel (educational travel that does not involve academic study and does not take place under the auspices of a sponsoring organization) had been authorized since the January 27, 2011 amendments to the CACR, as described in our advisory. OFAC amended the CACR to eliminate this authorization.
 
Under the amended general license, all educational travel (including people-to-people travel) must be conducted under the auspices of an organization that is a person subject to US jurisdiction. In addition, all “people-to-people” travelers to Cuba are required to be accompanied by a person subject to US jurisdiction who is an employee, paid consultant, agent, or other representative of the sponsoring organization, in order “to ensure that each traveler has a full-time schedule of educational exchange activities[.]” Under limitations existing before the November 9 regulatory changes, people-to-people travel must be for the purpose of engaging, while in Cuba, in a full-time schedule of activities that enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities; and result in meaningful interactions with individuals in Cuba.
 
Individuals who had already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to the June 16, 2017 presidential memorandum may engage in previously authorized related individual people-to-people travel and transactions.
 
Other changes to authorized educational travel
 
OFAC also added requirements that persons subject to US jurisdiction must fulfil in order to avail themselves of the educational travel general license, some of which reflect the CACR prior to January 2011 – before President Obama instituted significant revisions – and some of which reflect restrictions (but not prohibitions) to activities that have been permitted since 2015.
 
For example, travelers to Cuba under several categories of educational travel, such as travel related to research in support of obtaining a graduate degree at a US institution, will not be permitted to travel to Cuba absent proof of association with a US institution that is subject to US jurisdiction. The level of proof of institutional association differs depending on the type of US institution and the activity in which the traveler is engaged. Students and full-time faculty members of accredited US undergraduate or graduate degree-granting academic institutions, for instance, are authorized to engage – “under the auspices of the institutions” – in transactions related to programs of study, so long as the programs are at least 10 weeks long, and the participants obtain letters from the US institutions confirming the associations and supporting the travel. This amendment reflects the pre-2011 CACR.
 
Other categories of educational travel require the traveler to be accompanied by someone who is an employee or representative of the sponsoring US organization. The accompaniment requirement reflects a new restriction on activities that have been permitted since 2015.
 
  (2) Heightened standard for travel related to “Support for the Cuban People”
 
The amended CACR now require that those traveling under the “Support for the Cuban People” general license (31 C.F.R. § 515.574) engage in a full-time schedule of activities that “(i) [e]nhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities; and (ii) [r]esult in meaningful interaction with individuals in Cuba.”
 
This amendment may not significantly restrict this general license, as the general license already required the traveler’s schedule to not include free time in excess of that consistent with a full-time schedule. Further, some activities that previously fell within the “people-to-people” travel category, but no longer do – because the travel does not fall under the auspices of a US institution – may still be authorized under the “Support for the Cuban people” general license. (See § 515.565(b), Example 2.)
 
Adjustments to Cuba Export Controls
 
Beyond its conforming change to the definition of “prohibited officials of the Government of Cuba” explained above, BIS made two additional adjustments to the EAR: (1) a general policy of denial for license applications to export items for use by entities and subentities on the Cuba Restricted List; and (2) simplification and expansion of the license exception SCP.
 
  (1) New BIS licensing policy regarding Cuba Restricted List designees.
 
In a January 27, 2016 rule, BIS eased its licensing policy for the export and reexport of items to meet the needs of the Cuban people, including exports and reexports of items to state-owned enterprises, agencies, and other organizations of the Cuban government that provide goods and services for the use and benefit of the Cuban people. In promulgating this rule in 2016, BIS clarified that it would continue to generally deny applications for the export or reexport of items destined to the Cuban military, police, intelligence, or security services, or for use by organizations that primarily generate revenue for the Cuban government.
 
On November 9, 2017, in accordance with the June 2017 presidential memorandum, BIS amended its licensing policy to clarify that it also generally will deny applications for the export or reexport of items subject to the EAR for use by entities or subentities on the Cuba Restricted List, unless the transactions are determined by BIS, in coordination with the Department of State, to be consistent with the policy in the presidential memorandum. (For example, BIS might approve export or reexport license applications that relate to activities within the enumerated carve-outs described above, such as direct telecommunications and internet access for the Cuban people and the sale of agricultural commodities.)
 
In an FAQ accompanying the publication of the policy changes, BIS clarified that the November 9, 2017 rule change does not affect licenses issued by BIS prior to publication of the rule.
 
  (2) Amendment of License Exception SCP
 
Section 2(d) of the presidential memorandum states that it shall be the policy of the executive branch to “[a]mplify efforts to support the Cuban people through the expansion of internet services, free press, free enterprise, free association, and lawful travel.” Consistent with this policy, BIS simplified and expanded License Exception SCP (15 CFR § 740.21).
 
License Exception SCP authorizes the export and reexport to Cuba of certain items for use by the Cuban private sector for private sector economic activities. Prior to the most recent changes, the license exception identified certain types of items, such as tools and equipment, that were eligible for export or reexport to Cuba for (1) use by the private sector to construct or renovate privately-owned buildings, (2) private sector agricultural activities, or (3) use by private sector entrepreneurs.
 
BIS simplified and expanded the license exception by authorizing the export and reexport to Cuba of items for use by the Cuban private sector for private sector economic activities, without specifying any types of activity or economic sectors. To be eligible for this license exception, the items may not be used to primarily generate revenue for the state or contribute to the operation of the state, including through the construction or renovation of state-owned buildings. Additionally, eligible items are limited to those that are designated as EAR99 or that are controlled for anti-terrorism reasons only on the Commerce Control List.
 
————
N.B. The November 9 regulatory changes, like the sanctions changes in President Trump’s June 2017 memorandum, are measured adjustments to the US Cuba sanctions program. These changes do not necessarily signal a death knell for many of the business and travel initiatives instituted by US businesses over the past few years. However, given the complexities of the US Cuba sanctions program, persons subject to US jurisdiction should carefully review these changes as they engage in business with or travel to Cuba. Those attempting to engage in transactions will likely need to conduct more extensive due diligence, given the publication of the Cuba Restricted List and the expanded definition of prohibited Cuban government officials.
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Marvel heroes raise some interesting regulatory implications that are often touched upon by the movies, but never actually explored in depth. Take the question of export compliance, for instance. How exactly would that apply to the globetrotting characters in the Marvel Universe?
 
As it turns out, far more stringently than you would think.
 
IRON MAN: YOU NEED AN EXPORT LICENSE FOR YOUR SUITS
 
This probably won’t come as a surprise to many of you, but Tony Stark is flagrantly in violation of many U.S. export laws. In fact, in Iron Man 2, his violations of government regulations becomes a plot point because he is in contravention of the International Traffic in Arms Regulations (ITAR). His Iron Man suit is a military weapon, created with the intent of being used for military and paramilitary purposes, and many components of it can also similarly be used as a weapon. So every time Stark decides to go for a joyride around the globe-which happens often-he is violating U.S. export laws. This doesn’t even get into all the countless border control laws he is also violating!
 
Additionally, Stark may also be guilty of engaging in “deemed exports” without a license. A deemed export is defined by the BIS as “releasing or otherwise transferring ‘technology’ or source code to a foreign person in the United States.” [FN/1] Stark’s company primarily deals in military software and technology that can be classified as “dual-use,” and Stark uses this technology in his own Iron Man suits, as well as sharing it with The Avengers. However, a number of the Avengers are not U.S. citizens, and S.H.I.E.L.D. is a non-U.S. entity. Therefore, any exposure of controlled technology to many members of the Avengers or to S.H.I.E.L.D. could be considered a deemed export.
 
THE INCREDIBLE HULK IS INCREDIBLY NON-COMPLIANT
 
Poor Bruce Banner has it really rough. “The Hulk” can easily be classified as a Weapon of Mass Destruction (WMD), bringing him under the jurisdiction of the ITAR, and Banner himself carries the potential of unauthorized sharing of controlled technology with non-U.S. entities by simply exposing them to the Hulk. This means that Banner is in contravention of both the ITAR and the EAR, and his ability to leave the U.S. would be severely restricted-if not outright forbidden. Since Banner definitely does not engage in proper due diligence with the government-he is considered to be a fugitive from justice, after all-we can safely assume he is in violation of export regulations.
 
THOR: THE GOD OF THUNDER-AND OF EXPORT COMPLIANCE VIOLATIONS
 
The God of Thunder was the hardest Avenger to classify for the purposes of this discussion. While Thor himself doesn’t actually violate any export compliance laws, he does violate immigration laws-he is an illegal alien in the truest sense of the word, and he has gained entry into the United States without going through Border Control and Customs. His presence also spells trouble for the other Avengers-since he is not an American citizen, any exposure of U.S. military or dual-use technology to him would be a “deemed export.”
 
His hammer Mjölnir, on the other hand, is an export compliance violation nightmare. It’s made from “the heart of a dying neutron star,” and has significant military implications and applications.  An interesting wrinkle here is that Mjölnir is not American in origin, and it should have been subject to U.S. import laws before it was brought into the country-but now that it is in the U.S., it is subject to American export laws, which places it under the purview of the ITAR. Thor cannot actually take his hammer out of the country without proper licenses and paperwork. I think we can be reasonably certain that addressing the required filing and compliance requirements is not something that Thor has done.
 
A SENSE OF PERSPECTIVE
 
So yes, a simple assessment of just some of the Avengers shows us that the lawmakers and enforcers in the Marvel universe really don’t seem to be too concerned about enforcing U.S. export compliance laws. We don’t think any of the Avengers could have gotten away with their repeated, blatant infractions of export laws in the real world!
 
Then again, they do save the world. A lot. Maybe sometimes, you need a sense of perspective.
 
What do you think about the Avengers and their adherence to export laws? Make sure to let us know your thoughts by tweeting to @eCustoms with the hashtag #MCUECCN.
 
———-
  [FN/1]
Scope of the Export Administration Regulations. Bureau of Industry and Security, Page 10. Accessed November 12, 2017.
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* Authors: Johanna Reeves, Esq., jreeves@reevesdola.com, 202-715-9941; and Katherine Heubert, Esq., khebuert@reevesdola.com, 202-715-9940. Both of Reeves & Dola LLP.
 
On October 20, 2017, ATF posted on its website a document titled, “Department of Defense Contractor Inspections: ATF Inspection Process.” This document, dated October 18, 2017, describes a procedure for ATF field divisions to conduct warrantless compliance inspections of contractors who are licensed under federal law to engage in the business of manufacturing, importing, or dealing in firearms or explosives. The procedure raises significant questions of the authority under the law for ATF, a federal law enforcement agency, to inspect without a warrant the records detailed in the publication. It is important that DOD contractors who are federal firearms licensees (“FFLs”) carefully review this process with legal counsel and consider the potential consequences. The full document is available on ATF’s website.
 
ATF’S AUTHORITY TO INSPECT LICENSEES
 
The Gun Control Act, 18 U.S.C. § 923(g)(1), grants ATF the authority to inspect the business premises of licensed manufacturers, importers, dealers, and collectors of firearms in very specific scenarios. Included in ATF’s inspection powers is the ability to inspect the licensee’s inventory and records without reasonable cause or warrant in three specific instances: (1) in the course of a reasonable inquiry during the course of a criminal investigation of a person or persons other than the licensee; (2) when the inspection may be required for determining the disposition of one or more particular firearm in the course of a bona fide criminal investigation; (3) for ensuring compliance with the GCA record keeping requirements, either (a) at any time with respect to records relating to a firearm involved in a criminal investigation that is traced to the licensee; or (b) not more than once during any 12-month period (also known as the annual compliance inspection).  The latter compliance inspection presumably is the statutory basis for the inspection process outlined in ATF’s publication.

Prior to 1986, there were no limits on the number of compliance inspections ATF conducted. However, due to Congressional concern over ATF harassing licensees by spending unlimited time examining records at a licensee’s premises without any reason to suspect violation, the GCA was amended by the Firearms Owners Protection Act (FOPA). See Stephen P. Halbrook, Firearms Law Deskbook §§ 3:4 and 3:5 (2017-18 ed.).
 
Pursuant to FOPA, we now have the following limitations on warrantless inspections:
 
 
(1) Business hours
:
 The GCA requires compliance inspections be conducted during the licensee’s business hours. Although not defined in the statute, “business hours” is generally interpreted as the hours of operation indicated on the Form 7 Application for Federal Firearms License
 
(2)
Inspection at Place of Business
:
 ATF may conduct warrantless compliance inspections only at the business premises identified on the Form 7 license application, as well as places of storage. If a licensed premises is only a part of a larger building, ATF may inspect only the licensed part. If a licensee conducts business temporarily at a gun show or other similar event in the same state, ATF may inspect the records and firearms inventory located at the gun show or other temporary location.
 
 
(3) Inspection of Required Records and Inventory
:
 ATF’s authority to conduct warrantless inspections under the GCA is limited to examining records required by ATF’s regulations, and firearms and ammunition stored at the licensed premises or a separate storage facility. The required records include:
    – Record of acquisitions and dispositions; 
    – Form 4473 Firearms Transaction Record;
    – Form 6 Application and Permit for Importation of Firearms, Ammunition and Defense Articles;
    – Form 6A Release and Receipt of Imported Firearms, Ammunition and Implements of War;
    – ATF Form 3310.11 Federal Firearms Licensee Firearms Inventory Theft/Loss Report;
    – ATF Form 3310.4 Report of Multiple Handgun Sale;
    – ATF Form 5300.11 Annual Firearms Manufacturing and Exportation Report;
    – ATF Form 3310.6 Interstate Firearms Shipment Theft/Loss Report; and
    – Marking variances.
 
During a warrantless compliance inspection under the GCA, ATF is not entitled to inspect records that are not required to be kept under the regulations, including emails, other types of correspondence, lists of suppliers, customer lists, or commercial records, such as invoices, bills of lading, and records of production.  Section 923(g)(1)(A) of the GCA (18 U.S.C. 923(g)(1)(A)) clearly states, “[s]uch importers, manufacturers, and dealers shall not be required to submit to the Attorney General reports and information with respect to such records and the contents thereof, except as expressly required by this section.“). See also Teresa G. Ficaretta, Esq. & Johanna E. Reeves, Esq., Compliance Inspections Under the Gun Control Act – Know ATF’s Limitations and Boundaries, Small Arms Review, Vol. 19, No. 10, at 16, 17 (Dec. 2015). However, it is important to note that in instances when the licensee has not yet recorded an acquisition or disposition of a firearm because it is within the seven-day window, the licensee may present a commercial sales invoice or similar document to show either the acquisition or disposition and refute any presumption of a lost firearm and subsequent Report of Violation for failure to report a theft or loss of a firearm. See Halbrook § 3:11.
 
If the licensee is a Special (Occupational) Taxpayer, ATF will also inspect records required under the National Firearms Act (NFA), including registration and transfer forms and Special Tax Registration and Returns. Like the GCA, the NFA grants ATF the authority to enter a licensed premises and places of storage during business hours to examine records required to be kept under the NFA. However, NFA compliance inspections are not subject to the same frequency limitations as GCA inspections, and ATF is authorized to conduct warrantless NFA inspections as often as necessary. Similarly, ATF inspections under the explosives regulations are not limited to one annual compliance inspection. That said, warrantless inspections of SOTs and explosive licensees are limited to those records required under ATF regulations in 27 C.F.R. Pts. 479 (NFA) and 555 (explosives). 
 
ATF’S DEFENSE CONTRACTOR INSPECTION PROCESS
 
ATF presents the October 18, 2017 document as a “discussion of ATF’s compliance inspection process…intended to help Federal firearms or explosives licensees who are DOD contractors prepare for and participate in an ATF compliance inspection, and it should help minimize any intrusion and on-site complications during such inspections.” The document is broken into five parts ranging from the pre-inspection preparation stage to the closing conference with ATF, and outlines the documents and information ATF Industry Operations Investigators should have access during a warrantless compliance inspection.
 
Pre-Inspection
: During the pre-Inspection period leading up to the on-site inspection, the guidance explains licensee should provide the following documents to the Industry Operations Investigator (“IOI”) will review the following:
 
  (1) Licensee business operations, including products and current licenses and permits
  (2) Copies of U.S. government contracts (both primary and secondary contractor information)
  (3) Any issued variances
  (4) Any other documents relating to the licensee’s operations.
  (5) Name and contact information of the Defense Contract Management Agency (DCMA) point of contact (quality assurance representative or administrative contracting officer), if any.
  (6) DOD security protocols and procedures, including requirements for safety training and access to the facility.
 
Opening Conference
: During the opening conference, the IOI will come to the licensee’s business during business hours, or at an agreed upon time, and will review the following:
  (1) Corporate structure and list of responsible persons and employee possessors.
  (2) All Federal Firearms Licenses (FFL) and Explosive licenses/permits (FEL), Special (Occupational) Tax stamps (SOT), and any other licenses or permits.
  (3) Terms of the DOD contract the licensee services.
  (4) Any variances held.
  (5) Specifics on business operations including:  
    (a) information on U.S. Government sales;  
    (b) direct commercial sales (including to foreign governments);  
    (c) manufacturing and/or importing activities;  
    (d) subcontractors; and  
    (e) shipping procedures.
  (6) Facility tour, including location of records and storage facilities.
  (7) Plat plan and table of distances (if FEL).
  (8) Other supplemental records, including:  
    (i) DOD magazine information;  
    (ii) DODIC numbers; (iii) safety data cards;  
    (iv) State Department Directorate of Defense Trade Controls registration information;  
    (v) purchase orders;  
    (vi) shipping documents;  
    (vii) bills of lading;  
    (viii) invoice shipping documents;  
    (ix) DD250 – Material Inspection and Receiving Reports;
    (x) documentation that Certified Statements of Use were provided to suppliers; and  
    (xi) “other records.”
 
Records/Inventory/Storage Review
: This portion is broken into firearms and explosives, and outlines the types of records and information the IOI will review for each.
 
For Firearms:
  (1) Acquisition and Disposition records.
  (2) The annual National Firearms Act (NFA) exemption letter, if manufacturing for the U.S. Government.
  (3) Physical inventory inspection, part of which will distinguish between DOD exempt products/storage and commercial products.
  (4) Documentation to confirm items exempt under Title 27, CFR Parts 478.141 and 555.141.
  (5) Applicable variances for residual completed munitions that are not part of U.S. Government contracts and are not marked, registered, or stored properly.
 (6) Importer Forms 6 and 6A.
  (7) NFA Forms 2, 3, 5, and 9.
 
For non-exempt explosives:
  (1) Acquisition and Disposition records.
  (2) Physical inventory inspection.
  (3) Inspection of explosive storage magazines and process buildings.
  (4) Verification of commercial markings and markings pertaining to a DOD contract.
  (5) Applicable variances for residual completed munitions that are not part of U.S. Government contracts and are not marked, registered, or stored properly. 
 
DOES THE DOD CONTRACTOR INSPECTION PROCESS EXCEED ATF’S WARRANTLESS INSPECTION AUTHORITY?
 
Many of the documents and information points ATF seeks to review during an inspection are directly related to DOD contracts and performance thereunder, activities that fall under the purview of the Defense Contract Management Agency (DCMA), a component of the Department of Defense authorized to work directly with Defense suppliers to help ensure that DoD, Federal, and allied government supplies and services are delivered on time, at projected cost, and meet all performance requirements. DCMA directly contributes to the military readiness of the United States and its allies, and helps preserve the nation’s freedom. Among other responsibilities, DCMA “monitors DOD contractors’ performance and management systems to ensure that cost, product performance, and delivery schedules are in compliance with the terms and conditions of the DOD contracts a company is fulfilling.”
 
As stated previously, ATF does not have the authority during a warrantless compliance inspection to review records not required under its regulations in 27 C.F.R. Pts. 478, 479 or 555. A review of the DOD compliance inspection process reveals that ATF includes documents and information that is well outside the scope of any of its regulations.
 
It may be tempting to think it economical to piggy back ATF inspections on DCMA inspections. However, it is important to remember that ATF’s authority to conduct warrantless inspections is different from the authority granted to DCMA. Compliance inspections will have consequences if they reveal inaccurate or incomplete records, discrepancies, or missing firearms. ATF’s responses in such situations can range from a report of violations, warning conference, license revocation, and criminal prosecution. The warrantless ATF inspection process for DOD contractors should cause concern and trigger critical questions.  For example, what is the legal authority for ATF to review DOD contracts and related operation procedures and documents that are outside the scope of ATF firearms or explosives regulations?  What will ATF do with such information and records it obtains from a DOD contractor?  
 
In determining whether to comply with requests from ATF for documents that are not within the scope of ATF’s inspection authority during a warrantless compliance inspection, licensees and SOTs should consult with qualified legal counsel. All records that ATF is entitled to inspect should be kept in a designated area to allow convenient and ready inspection by IOIs. Records that are not subject to a warrantless ATF inspection should be kept in a separate location that is accessible only to authorized personnel. Inspections can have significant consequences, and any demands by an IOI to inspect records that are not within ATF’s warrantless inspection authority should be brought immediately to the attention of corporate counsel and ATF counsel to determine the appropriate next steps. 
 
————

The authors extend their sincere thanks and appreciation to Stephen P. Halbrook, Esq.,
(
stephenhalbrook.com
for his invaluable contributions to this alert. Mr. Halbrook is an attorney and author of numerous firearms-related historical and legal publications, including the 
Firearms Law Deskbook (Thomson Reuters, 2017-18 ed.).

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* Authors: Judith A. Lee, Esq., jalee@gibsondunn.com, +1 202-887-3591; Ronald Kirk, Esq., rkirk@gibsondunn.com, +1 214-698-3295; and Peter Alexiadis, Esq., palexiadis@gibsondunn.com, +32 2 554 72 00.  All of Gibson, Dunn & Crutcher LLP.
 
On November 8, 2017, the Treasury Department’s Office of Foreign Assets Control (“OFAC”), the Commerce Department’s Bureau of Industry and Security (“BIS”), and the State Department released amendments to the Cuban Assets Control Regulations (“CACR”) and Export Administration regulations (“EAR”), effective November 9, 2017, implementing President Trump’s June 16, 2017 National Security Presidential Memorandum (“NSPM”), “Strengthening the Policy of the United States Towards Cuba.” [FN/1]  Additionally, while certain transactions with Cuban parties by U.S. persons remain permitted, the CACR now prohibit transacting with entities listed on the State Department’s new “Cuba Restricted List” (“List”), which was released simultaneously and consists of Cuban entities that the Administration considers to be “under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services personnel.” [FN/2]
 
Days earlier, United States Ambassador to the United Nations Nikki Haley rebuked the General Assembly’s adoption of its annual resolution calling for the end of the U.S. embargo on Cuba, which was overwhelmingly approved with 191 of the 193 member states voting in favor. In her remarks, Ambassador Haley proclaimed that the American people have spoken by choosing a new President, and that the United States will stand with the Cuban people and against the suffering and abuses inflicted by the Cuban government. [FN/3]
 
We have previously detailed President Trump’s June 2017 announcement that his administration would reimpose some of the sanctions on Cuba that were relaxed under President Obama.  Broadly speaking, the recent amendments achieve the goals articulated in the announcement:  keeping the Grupo de Administración Empresarial, a conglomerate run by the Cuban military, from benefiting from the opening in U.S.-Cuba relations and enhancing travel restrictions to “better enforce” the existing ban on U.S. tourism to Cuba. [FN/4]
 
As detailed below, certain provisions of the amendments allow for continued travel to, and, with respect to the Cuban private sector, increased trade with Cuba.  While this can be viewed as consistent with the Administration’s declared goal of “channel[ing] economic activities away from the Cuban military, intelligence, and security services, while maintaining opportunities for Americans to engage in authorized travel to Cuba and support the private, small business sector in Cuba,” [FN/5] these provisions, when viewed together with the increased restrictions, muddy the already difficult-to-navigate regulatory waters.
 
The new OFAC and BIS amendments cover three main areas: 
 
First
, the OFAC amendments now prohibit U.S. persons and entities from engaging in direct financial transactions with entities listed on the State Department’s new “Cuba Restricted List,” while the BIS amendments state that BIS will generally deny license application for the export of items for use by entities on the list. [FN/6] The List includes over 175 entities and sub-entities that operate in a variety of economic sectors, notably, over 80 of which are hotels. [FN/7]
 
Second
, the OFAC amendments restrict people-to-people travel that had previously been authorized, requiring, among other things, that nonacademic educational travel be conducted under “the auspices of an organization that is a person subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact” and that such travelers are accompanied by a representative of that organization and participate in full-time schedule of activities. [FN/8]
 
Third, 
BIS has simplified the Support for the Cuban People (“SCP”) License Exception to the Cuba Embargo, now allowing for the export of all EAR99 items (and those controlled only for anti-terrorism reasons on the Commerce Control List (“CCL”)) to Cuba, provided the intended end user is in the Cuban private sector. [FN/9]
 
CUBA RESTRICTED LIST
 
What is Prohibited:
            
 
According to OFAC’s amended regulations, those under U.S. jurisdiction are now prohibited from engaging in direct financial transactions with those on the State Department’s new Cuba Restricted List. [FN/10]  Additionally, BIS has instituted a policy of general denial of any application for license to export to Cuba where the end-user is on the List. [FN/11]  Importantly, though, U.S. persons and entities that have already entered into “contingent or other types of contractual arrangements” prior to the issuance of the new regulations on November 9, 2017 (or the date on which the listed entity was added to the List), will be permitted to proceed with the transactions. [FN/12]  This qualification is significant and suggests that the substantial investments made in Cuba by various U.S. parties since the Obama Administration’s easing of sanctions may not need to be unwound. 
 
Who is on the List:
 
As noted, the Cuba Restricted List contains over 175 entities and subentities that are now blacklisted from engaging in financial companies with persons and entities under U.S. jurisdiction.  In addition to the over 80 hotels previously mentioned, the list contains Cuban ministries, holding companies and their subentities, retail stores, and manufacturers (including those in the beverage, fashion, real estate, rum production, and other industries). [FN/13]
 
Who is not on the List:
 
Interestingly, however, the State Department has clarified that entities or subentities controlled by those on the List are not treated as restricted unless also specified by name.  Almost all other U.S. sanctions programs operate according to the “50 Percent Rule” which provides that non-listed entities owned or controlled by a listed entity (or entities) are automatically and identically restricted.  However, in this context, U.S. entities and individuals may continue to transact with those non-Listed entities and subentities. [FN/14]  For instance, though the list includes the holding company Corporación CIMEX, S.A., it does not include Fincimex which is its financial services arm (and is involved in all remittances to the island).  This too is an important qualification that eases the impact of some of the new prohibitions. 
 
ELIMINATION OF INDIVIDUAL PERSON-TO-PERSON TRAVEL
 
As mentioned, the OFAC amendments eliminate the authorization for individual person-to-person educational travel to Cuba.  Instead, individuals who desire to travel to Cuba on this basis must do so under the auspices of an organization that is “subject to U.S. jurisdiction and sponsors such exchanges to promote people-to-people contact,” and the individual traveler must be accompanied by a representative of the sponsoring organization. [FN/15]  Further, those traveling under this general license must maintain a “full-time schedule of education exchange activities intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba.” [FN/16]  Of course, all authorized travel must now exclude direct financial transactions with those entities included on the Cuba Restricted List. [FN/17]
 
Despite these new restrictions, individuals who have made travel plans under the pre-amendment regulations may proceed with their plans, so long as certain requirements are met.  For example, individuals who made person-to-person travel plans and completed at least one travel-related transaction prior to June 16, 2017 may engage in person-to-person travel and related transactions. [FN/18]  Moreover, OFAC has stated that any authorized travel (under any of the travel licenses) that has already been “initiated” that involves direct financial transactions with entities on the Cuba Restricted List will continue to be permitted so long as “those travel arrangements were initiated prior to the State Department’s addition of the entity or subentity to the list.” [FN/19]  The vague wording of this exception leaves open the question of what constitutes an already “initiated” authorized travel and what is considered to “involve a direct financial transaction” with an entity on the Cuba Restricted List. [FN/20]  The fact that transactions with unlisted entities owned or controlled by listed parties remain permitted further complicates the situation.
 
SUPPORT FOR THE CUBAN PEOPLE
 
The last significant amendment to the Cuba sanctions regime relates to the Support for the Cuban People (“SCP”) License Exception.  In October 2016, BIS had already broadened the Exception to authorize direct sales, including through online platforms, of eligible consumer goods to eligible individuals in Cuba for their personal use.  The Exception had listed certain types of items that qualified for export, including “tools and equipment,” so long as those items were for use by, inter alia, private sector entrepreneurs. [FN/21]  The current amendments remove the categorical requirements and allow for the export to Cuba of all items designated EAR99 or those controlled only for anti-terrorism reasons on the CCL, so long as they are for use by the Cuban private sector for private sector economic activities. [FN/22]
 
While the amendments categorize this change as a “simplification,” it broadens the scope of the License Exception by alleviating the burden of determining whether items qualify for export under the License’s prior categorizations. 
 
A RETURN TO THE EMBARGO?
 
It is too early to tell whether these amendments signify that an eventual return to the pre-Obama era nearly total embargo is imminent.  Recent stories about human rights abuses in Cuba, attacks on U.S. diplomats in Havana, and the expulsion of various Cuban diplomats serving in the United States are not a promising sign.  However, while the regulations certainly impose new limits on parties with whom U.S. persons may transact and claw back the types of permitted travel, the amendments do not fully rescind any of the Obama era authorizations.  Indeed, the amendments leave open the door to continued trade through grandfathering in pre-existing contracts and travel-related transactions with parties on the Cuba Restricted List, allowing person-to-person travel if such travel plans were made prior to the issuance of the new regulations, and simplifying the SCP License Exception.
 
The amendments additionally raise further questions:  What qualifies as an existing “contingent or other types of contractual arrangement” with an entity on the List?  Can such contracts be renewed in perpetuity?  What is the rationale behind including some Cuban military controlled entities on the List and not others, and will the authorization to trade with the non-listed subentities of blacklisted entities persist?  How many additional Cuban entities will be added to the Restricted List?  What constitutes “initiated” for the purposes of existing person-to-person travel plans?  OFAC and BIS will need to clarify these and other ambiguities in the time ahead.
 
LOOKING FORWARD
 
Despite the political rhetoric, the doors to Cuba, unlocked by the previous administration, remain open. While the amendments certainly restrict certain activities, they do not go so far as to completely revoke the previous administration’s authorizations. Perhaps most significantly, the prohibitions against transacting with those on the Cuba Restricted list undoubtedly will hamper future economic opportunities especially in the core tourism sector which was a primary focus of the State Department’s list. Nevertheless, even the Department’s list is partial, allowing transactions with non-listed subentities. Moreover, the “simplification” of the SCP License Exception removes doubt concerning permissible items for export to the Cuban private sector – which may allow greater certainty with respect to the rules of the road for those entities who seek to take advantage of the narrower opportunities for trade and travel.
 
————-
  [FN/2]   See id.
  [FN/4]   Fact Sheet, “White House Fact Sheet on Cuba Policy” (June 16, 2017).
  [FN/6]   See id.
  [FN/7]   See 82 Fed. Reg. 52089 (Nov. 9, 2017).
  [FN/8]   31 C.F.R. § 515.565(b).
  [FN/9]   15 C.F.R. § 740.21.
  [FN/10]   31 C.F.R § 515.209.
  [FN/12]   OFAC, “Frequently Asked Questions Related to Cuba” (Updated Nov. 8, 2017), at 22-23.
  [FN/13]   See 82 Fed. Reg. 52089 (Nov. 9, 2017).  The State Department may add additional entities or subentities in the future.  See id.
  [FN/14]   See Department of State, “Frequently Asked Questions on the Cuba Restricted List” (Nov. 8, 2017).
  [FN/15]   OFAC, “Frequently Asked Questions Related to Cuba” (Updated Nov. 8, 2017), at 5-6.  According to OFAC’s FAQ’s, an organization for this purpose “is an entity that sponsors educational exchanges that do not involve academic study pursuant to a degree program that promote people-to-people contact.”  Id. at 6.  Similarly, the amendments restrict authorized educational travel (travel under the auspices of an academic educational program) to be conducted under the auspices of an organization that is subject to U.S. jurisdiction.  See id. at 4-5.
  [FN/16]   Id. at 5-6.
  [FN/17]   See id.
  [FN/18]   Id. at 6.  Interestingly, educational travel that is not compliant with the amended regulations that was planned will be permitted so long as at least one transaction occurred prior to the date the regulations went into effect (November 9, 2017) and not the date of the announcement (June 16, 2017).  See id. at 5.
  [FN/19]   Id. at 2.
  [FN/20]   OFAC provides examples of “initiated” travel arrangements elsewhere in the FAQs as “at least one travel-related transaction (such as purchasing a flight or reserving accommodation).”  See id. at 3.  However, it is unclear whether this definition applies broadly, and if so, what other activities may constitute a “travel-related transaction.”
  [FN/22]   Id; 15 C.F.R. § 740.21.
* * * * * * * * * * * * * * * * * * * *

(Source:
Volkov Law Group Blog, 14 Nov 2017. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
[Editor’s Note: Part 1 was included in the Daily Bugle of 16 November.]
 
Here is another profound grasp of the obvious – all companies need to make a profit.
 
However, as companies begin to focus on long-term performance rather than short-term quarterly objectives, innovative leaders believe that profitability can be achieved without sacrificing social, environmental and moral considerations. To the contrary, the long-term success of a business may only thrive when it reflects the needs of its stakeholders such as employees, government, suppliers, communities, and customers.
 
The link among ethics, productivity, performance and ultimately profits is inextricable. I have written and spoken extensively on the subject. The link is backed by extensive research and common sense. (e.g. Here, Here and Here).
 
Managers and employees want to believe in their company. It is a natural human instinct – we want to believe that our work is important and contributes to the overall good. In this case, the company’s mission, if defined in a positive way, will incentivize employees who want to believe in the greater good. Employees want to believe in what the company believes and share the common objective. Of course, employees want to be treated fairly and compensated but when the link between employee morale is enhanced, employee productivity increases and employee misconduct rates decline (significantly).
 
Ethical behavior improves performance – financially and personally. To put it simply, ethical conduct is good business. But ethical conduct cannot be imposed by detailed rules and requirements. Ethical conduct is built on principles and values, exemplary conduct, communications and observation.
 
Ethical business can also be a lot easier than running an unethical business. Assuming that people operate with a conscience (sometimes I wonder), unethical conduct requires worrying, rationalization and efforts to hide or disguise the conduct. In other words, unethical conduct takes energy and effort.
 
It is easier to run a business with honesty and integrity as your cornerstones. An ethical business owner can harness the company’s passion, drive and energy. A leader who believes in the company’s business can inspire others at the company to believe in the business. Such an attitude can extend beyond the company to interactions with external stakeholders and exponentially increase positive benefits to the company.
 
Consumers share the common desire to believe in a company’s product or service. Consumers who display brand loyalty make purchasing decisions based in significant measure of belief in a company and its mission. Simon Sinek, a fascinating speaker, has outlined this connection. See here for a fascinating discussion on great leaders and successful companies such as Apple (see here).
 
The message from the company should be that the company’s ethical values encompass not just what the company does but how the company does it. This is an important building block to achieving a sustainable business. Of course, some consumers will embrace unethical companies, especially if there is a price discount that goes along with the transaction. But research has shown that companies that communicate ethical conduct may be able to charge consumers an ethical premium (see here).
 
In this era of so-called “fake news” and other controversies surrounding information accuracy and misleading behaviors, we will inevitably (or at least hopefully) demand a return to honesty, especially when it comes to our corporate business leaders and employers. It is a turbulent time, for sure, but employees and consumers desire honesty and integrity in the workplace. Consumers and the general public are ready to reward honesty and businesses need to take account of this trend.
 
Companies will find that trust and integrity are the bedrock principles that foster sustainable corporate business. Trust demands accountability by management in its relationship with employees. If accountability is ignored, then the fabric of trust will be stretched. Corporate leaders only have one chance to ensure trust – once broken, it is nearly impossible to restore.
 
[Editor’s Note: The parts 3 and 4 of this item will be included next week.]

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

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a217
. List of Approaching Events

(Sources: Editor and Event Sponsors) 
 
Published every Friday or last publication day of the week. Please, send event announcements to
jwbartlett@fullcirclecompliance.eu
, composed in the below format:

# DATE: LOCATION; “EVENT 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
 
* E-Seminars: “ITAR/EAR Awareness;” Export Compliance Solutions; spalmer@exportcompliancesolutions.com 
* Online: “
Simplified Network Application Process Redesign (SNAP-R)
;” Commerce/BIS; 202-482-2227
* E-Seminars: “
Webinars On-Demand Library
;” Sandler, Travis & Rosenberg, P.A.

#
Online
:
 “
On-Demand Webinars;” “General Training;” Center for Development of Security Excellence; Defense Security Service

 
Training by Date:

 

* Nov 22: London, UK; ”
International Documentation and Customs Compliance;” Institute of Export and International Trade
* 28-29 Nov: Munich, Germany; ”
US Defence Contracting and DFARS Compliance in Europe;” Institute of Export and International Trade

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


* Nov 29: Manchester, UK: ”
International Business Essentials;” IOEx
# Nov 29: Webinar; ”
Global Antitrust Enforcement Risks and Compliance Programs;” Michael Volkov


* Nov 30: Free Webinar; ”
Exporting Vehicles to Canada;” U.S. Census Bureau
# Nov 30: Free Webinar; ”
DoD Insider Threat Enterprise Program Management Office (EPMO);” 
Center for Development of Security Excellence; Defense Security Service

* 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: Manchester, UK; ”
An Introduction to Exporting – Physical Goods;” IOEx

*
Dec 5
: Free Webinar; “
ACE AESDirect Demonstration
;
” U.S. Census Bureau

* 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 5-6: New York, NY; ”
8th Annual Forum on Economic Sanctions;” American Conference Institute
*
 Dec 5-6: London, UK; “Customs Compliance in Partnership with HMRC;” IOEx

* Dec 6-7: Adelaide, Australia; ”
Defence Export Controls Outreach Program;” Australian Department of Defence/Defence Exports Controls

* Dec 6: London UK; ”
Intermediate Seminar;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* 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: Webinar; ”
Counterintelligence and Insider Threat Training Products;” Center for the Development of Security Excellence; DSS

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

* Dec 7: London UK; ”
Beginners Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Dec 7: London UK; ”
Licences Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Dec 8: Boston, MA; ”
Export Expo;” Compliance Alliance and Massachusets Export Center
* 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 12: London, UK; ”
International Documentation & Customs Compliance;” IOEx

* Dec 12: London, UK; ”
Control List Classification – Combined Dual Use and Military;” UK Department for International Trade;  
denise.carter@trade.gsi.gov.uk 
* Dec 12-13: Los Angeles, CA; ”
Advanced Classification of Plastics and Rubber;” Global Trade Academy

* Dec 13: Washington, DC; “DDTC In-House Seminar;”

*
 Dec 14: Minneapolis, MN; “
Import Audit Compliance Seminar
;” International Business Training

* Dec 14: Manchester, UK; ”
UK & US Export Controls: A Basic Understanding;” Institute of Export and International Trade

* Dec 14: London, UK; ”
UK & US Export Controls: A Basic Understanding;” IOEx

* Dec 15: Atlanta, GA; ”
Incoterms 2010: Terms of Sale Seminar;” International Business Training


* Dec 19: Brussels, Belgium; ”
2017 Export Control Forum;” European Commission
* Dec 20: London, UK; ”
An Introduction to Exporting;” Institute of Export and International Trade

 
2018
 

* Jan 17: Bristol UK; ”
Intermediate Seminar;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Jan 18: Bristol UK; ”
Beginners Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Jan 18: Bristol UK; ”
Licences Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Jan 18: Bristol UK; ”
Control List Classification – Combined Dual Use and Military;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

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

* Jan 23-24: Houston, TX; ”
Complying with US Export Controls;” 
Bureau of Industry and Security

*
Jan 23: London, UK; “International Documentations and Customs Compliance;” Institute of Export and International Trade

* Jan 25: Houston TX; ”
Technology Controls;” 
Bureau of Industry and Security

* Jan 27: Indian Harbor Beach, FL (Melbourne area); ”
Global Challenges: A Conversation with James Clapper;” Rotary Club of Indialantic;


 
http://www.indialanticrotary.org/

321-952-2978.


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

*
 Jan 30: Miami, FL; “
Duty Drawback Specialist – Certification
;” Global Trade Academy 

* Jan 31: Washington, D.C.; “4th National Forum on CFIUS and Team Telecom;” American Conference Institute

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

*
 Feb 6-7: San Diego, CA; “Complying with US Export Controls;” 
Bureau of Industry and Security
# Feb 7-8: Munich, Germany; “Export Compliance in Europe, 2018;”

*
 Feb 13-14: Miami, FL; “Complying with US Export Controls;” 
Bureau of Industry and Security 

* Feb 13-14: Orlando FL; “
ITAR/EAR Boot Camp
;” Export Compliance Solutions; 
spalmer@exportcompliancesolutions.com
; 866-238-4018

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

* Feb 21: Newcastle UK; ”
Intermediate Seminar;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Feb 22: Newcastle UK; ”
Beginners Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Feb 22: Newcastle UK; ”
Licences Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Feb 22: Newcastle UK; ”
Control List Classification – Combined Dual Use and Military;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* 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 7: London, UK; “
Operations and Maintenance for Offshore Wind
;” ACI 

*
 Mar 7-8: Portland, OR; “Complying with US Export Controls;” 
Bureau of Industry and Security

* Mar 9: Orlando, FL; ”
Customs/Import Boot Camp
;” Partnering for Compliance

* Mar 11-14: San Diego, CA; “ICPA Annual Conference;” International Compliance Professionals Association; wizard@icpainc.org

* Mar 14-15: Austin, TX; “
Establishing an ITAR/EAR Export Compliance Program
” Export Compliance Solutions;
spalmer@exportcompliancesolutions.com
;
866-238-4018 

* Mar 14: Birmingham UK; ”
Intermediate Seminar;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Mar 15: Birmingham UK; ”
Beginners Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Mar 15: Birmingham UK; ”
Licences Workshop;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Mar 15: Birmingham UK; ”
Control List Classification – Combined Dual Use and Military;” UK Department for International Trade;
denise.carter@trade.gsi.gov.uk 

* Mar 20-22: Nashville, TN;
 “Complying with US Export Controls;” 
Bureau of Industry and Security

* Mar 23; Nashville, TN; ”
How to Build an Export Compliance Program;” Bureau of Industry and Security

*
 Mar 26: East Rutherford, NJ; “
Advanced Classification of Plastics and Rubber
;” Global Trade Academy 

* Mar 27-28; Santa Clara, CA; ”
Export Control Forum;” Bureau of Industry and Security
*
 Apr 5-6; Des Moines, IA;
 “Complying with US Export Controls;” 
Bureau of Industry and Security 

*
 Apr 11-12; Denver, CO;
 “Complying with US Export Controls;” 
Bureau of Industry and Security 

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

*
 Apr 24: Los Angeles, CA; “
Duty Drawback Specialist – Certification
;” Global Trade Academy 
# Apr 24-25: Dubai, UAE; ”
Trade Compliance in the Middle East;” NeilsonSmith

*
 Apr 25-26: Costa Mesa, CA;
 “Complying with US Export Controls;” 
Bureau of Industry and Security

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

*
 May 2-3; Scottsdale, AZ;
 “Complying with US Export Controls;” 
Bureau of Industry and Security
 

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

*
 May 15-16; Cleveland, OH;
 “Complying with US Export Controls;” 
Bureau of Industry and Security

* May 16-17: National Harbor, MD; “
ITAR/EAR Compliance: An Industry Perspective
;” Export Compliance Solutions;
spalmer@exportcompliancesolutions.com
;
 866-238-4018 

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

*
 Jun 6-7: Seattle, WA;
 “Complying with US Export Controls;” 
Bureau of Industry and Security

# Jun 6-7: Munich, Germany; ”
US Trade Controls Compliance in Europe;” NielsonSmith

* Jun 13: San Diego, CA; ”
Made in America, Buy America, or Buy American: Qualify your Goods and Increase Sales;” Global Trade Academy

*
 Jul 10: Chicago, IL; “
Duty Drawback Specialist – Certification
;” Global Trade Academy

* Jul 10-11: Columbia, SC; 
 “Complying with US Export Controls;” 
Bureau of Industry and Security

* Jul 10-11: Long Beach, CA; ”
ITAR/EAR Boot Camp;”  Export Compliance Solutions; 
spalmer@exportcompliancesolutions.com
; 866-238-4018

* Jul 17:
 Los Angeles, CA; “
Advanced Classification of Plastics and Rubber
;” Global Trade Academy

* Aug 14-15: Milpitas, CA; 
 “Complying with US Export Controls;” 
Bureau of Industry and Security

* Aug 16: Milpitas, CA ”
Encryption Controls;” Bureau of Industry and Security

* Sep 12-13: Annapolis, MD; “
ITAR/EAR Boot Camp
;” Export Compliance Solutions; 
spalmer@exportcompliancesolutions.com
; 866-238-4018


* Sep 12-13: Springfield, RI; 
Complying with US Export Controls;” 
Bureau of Industry and Security

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

*
 Nov 13: Tysons Corner, VA; “
Made in America, Buy America, or Buy American: Qualify your Goods and Increase Sales
;” Global Trade Academy

*
 Nov 27: Houston, TX; “
Duty Drawback Specialist – Certification
;” Global Trade Academy

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

ENEDITOR’S NOTES

EN_a118
. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 
* Shelby Foote (Shelby Dade Foote Jr.; 17 Nov 1916 – 27 Jun 2005; was an American historian and novelist who wrote The Civil War: A Narrative, a three-volume history of the American Civil War.)
  – “Longevity conquers scandal every time.”
 
* Louis XVIII of France (Louis Stanislas Xavier; 17 Nov 1755 – 16 Sep 1824), ruled as King of France from 1814 to 1824, except for a period in 1815 known as the Hundred Days. He spent twenty-three years in exile, from 1791 to 1814, during the French Revolution and the First French Empire, and again in 1815, during the period of the Hundred Days, upon the return of Napoleon I from Elba.
  – “Punctuality is the politeness of kings.”
 
Friday funnies:
 
What did the baby mouse say the first time he saw a bat fly overhead? “Look mama, an angel!”
  — Jeff Snyder, Los Angeles, CA

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

EN_a219. 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:
9 Nov 2017: 82 FR 51983-51986: Amendments to Implement United States Policy Toward Cuba

  

FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

  – Last Amendment:
13 Nov 2017: 82 FR 52209-52210: Removal of Côte d’Ivoire 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: 20 Oct 2017: 
Harmonized System Update 1707, c
ontaining 
27,291 ABI records and 5,164 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: 17 Nov 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_a320
. 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.

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