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17-1207 Thursday “Daily Bugle”

17-1207 Thursday “Daily Bugle”

Thursday, 7 December 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. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. State/DDTC Publishes Name and Address Change Announcements
  4. Australia DEC Announces Closure Days During Christmas Period
  1. American Journal of Transportation: “NCBFAA Comments on Census Proposal Regarding Routed Export Transactions”
  2. WorldECR News Alert of 7 Dec
  1. M. Volkov: “Sanctions Updates: Cuba, North Korea, Russia, Sudan, Venezuela”
  2. T. Shaffer: “Evolution of Export Law: What to Do if a Special Agent Comes Knocking”
  1. ECS Presents “ITAR/EAR Boot Camp” in Orlando FL, 13-14 Feb 
  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 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

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OGSOTHER GOVERNMENT SOURCES

OGS_a11
. Items Scheduled for Publication in Future Federal Register Editions
 

(Source:
Federal Register)
 
* DHS/CBP;
NOTICES; Delay of Transition of the Generating, Transmitting and Updating of Daily and Monthly Statements from the Automated Commercial System to the Automated Commercial Environment [Publication Date: 8 Dec 2017.]
 
* DHS/CBP; RULES; Civil Monetary Penalty Adjustment for Inflation [Publication Date: 8 Dec 2017.]

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OGS_a53

State/DDTC Publishes Name and Address Change Announcements

(Source: State/DDTC, 7 Dec 2017.) [Excerpts.]
 
 
Effective immediately, BAE Systems (International) Limited, Karum Is Merkezi, Kat 5 B, No: 434 Iran Caddesi No. 21, Kavaklidere, 06680, Ankara, Turkey will change as follows: BAE Systems (International) Limited, 312 Vista Ofis Binasi, Eskisehir yolu 2176. Cadde No:9 7. Kat D:13, Sogutozu 06530, Ankara, Turkey.  Due to the volume of authorizations requiring amendments to reflect this change, the Deputy Assistant Secretary for Defense Trade Controls is exercising the authority under 22 CFR 126.3 to waive the requirement for amendments to change currently approved license authorizations.  The amendment waiver does not apply to approved or pending agreements. … 
 
 
Effective immediately, NorthStar Aviation USA LLC, 1775 Tysons Boulevard, Suite 5, Tysons, VA  22102 has changed as follows: NorthStar Aviation USA LLC, 1431 General Aviation Drive, Melbourne, FL  32935.  Due to the volume of authorizations requiring amendments to reflect this change, the Deputy Assistant Secretary for Defense Trade Controls is exercising the authority under 22 CFR 126.3 to waive the requirement for amendments to change currently approved license authorizations.  The amendment waiver does not apply to approved or pending agreements. …
 
 
Effective January 1, 2018 , Thales will change as follows:
 
Old Name
New Name
Thales Training & Simulation SAS
Thales AVS France SAS
Thales Avionics LCD SAS
Thales AVS France SAS
Thales Electron Devices SAS
Thales AVS France SAS
Thales Underwater Systems SAS
Thales DMS France SAS
Thales Microelectronics SAS
Thales DMS France SAS
Thales Angenieux SAS
Thales LAS France SAS
TDA Armements SAS
Thales LAS France SAS
Thales Air Operations SAS
Thales LAS France SAS
Thales Cryogenie SAS
Thales LAS France SAS
Thales Optronique SAS
Thales LAS France SAS
Thales Avionics SAS (TAV)
Thales AVS France SAS
Thales Systèmes Aéroportés SAS
Thales DMS France SAS
Thales Air Systems SAS (TR6)
Thales LAS France SAS
Thales LAS France SAS, 3 Avenue Charles Lindbergh, Rungis, Department Val – de – Marne, France 94150
Thales LAS France SAS, 2 Avenue Gay Lussac, Elancourt, Department Yvelines, France 78990
Due to the volume of authorizations requiring amendments to reflect this change, the Deputy Assistant Secretary for Defense Trade Controls is exercising the authority under 22 CFR 126.3 to waive the requirement for amendments to change currently approved li cense authorizations. The amendment waiver does not apply to approved or pending agreements. … 

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OGS_a64
.

Australia DEC Announces Closure Days During Christmas Period

(Source:
Australia DEC, 7 Dec 2017.)
 
Australia Defense Export Controls (DEC) will be closed from 12pm (AEDT) Friday, 22 December 2017 to Tuesday, 2 January 2018 (inclusive) as part of the Defense-wide Christmas stand-down period. Please note that applications cannot be processed during this time. DEC will re-open on Wednesday, 3 January 2018.
 
Applications received after Monday, 11 December 2017 may not be completed prior to the Christmas stand-down period and processing of these applications will recommence from 3 January 2018. Please contact DEC as soon as possible should you urgently require a permit after 11 December.

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NWSNEWS

NWS_15
.

American Journal of Transportation: “NCBFAA Comments on Census Proposal Regarding Routed Export Transactions”

 
In a letter to the Bureau of the Census, the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) has submitted comments on Census’ Advanced Notice of Proposed Rulemaking regarding standard and routed export transactions.
 
In its letter, the NCBFAA focused on three specific areas:
 
  – Defining routed exported transaction
  – Who files data elements
  – Clarifying agent responsibilities
 
The NCBFAA recommends amending the Census Bureau’s definition of a routed export transaction to bring it in line with Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) by no longer including in the definition the requirement to prepare or file Electronic Export Information (EEI).
 
  “Accordingly, as the existing definition of a routed export is not consistent with the EAR, appears to require a step that really has nothing to do with whether the transaction is a routed export (i.e., whether the export process is controlled by the [“foreign principal party in interest”] FPPI, and is internally inconsistent, we suggest that the last phrase [“and prepare and file the EEI”] should be deleted,” the NCBFAA said.
 
The NCBFAA reiterated its belief that Census is correct to require that the party, with the information at the time of the export transaction, provide the data elements to the AES filer. However, “the NCBFAA believes that several modifications should be made to the regulations to both ensure that accurate information concerning the nature of the export is properly transmitted to the government and that the responsibilities of the various parties are better defined.”
 
Currently, the rule states that the U.S. principal party in interest (USPPI) is responsible for providing the FPPI’s agent with the “Export Control Classification (ECCN) or sufficient technical information to determine the ECCN.” The NCBFAA recommends changing the language to, “Export Control Classification Number (ECCN) and any other licensing authority that is relevant to the export,” to eliminate uncertainty about the obligation to provide this information as well as to make it clear that this responsibility pertains to all licensing issues.
 
In addition, the NCBFAA suggested clarifications to the responsibilities of the authorized agent and noted that the USPPI should be responsible for providing certain enumerated data elements (viz., hazardous material indicator, FTC identifier, VIN/product ID, vehicle title number, vehicle title state code, filing option indicator, KPC number, related party indicator and export information code) to the authorized filing agent.
 
In conclusion, the NCBFAA strongly encouraged Census to require that the FPPI’s U.S. agent must agree in writing to take on that responsibility for determining and obtaining license authority before the USPPI can properly delegate that function. 

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NWS_a2
6.

WorldECR News Alert of 7 Dec

(Source:
WorldECR, 7 Dec 2017.)
 
  (2) Apple’s supply chain integrity under fire
  (3) OFAC: ‘We are freezing assets and cutting them off from the financial system.’
  (4) UK’s ECO delays changes to nine open general export licenses
  (5) New FCPA enforcement policy ‘codifies Pilot Program’
 

[Editor’s Note:
Visit
http://worldecr.com/
to subscribe to WorldECR, the journal of export controls and sanctions.]

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COMMCOMMENTARY

COMM_a17.

M. Volkov: “Sanctions Updates: Cuba, North Korea, Russia, Sudan, Venezuela”

(Source:
Volkov Law Group Blog, 6 Dec 2017. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
Sanctions compliance is challenging because of the changing nature of sanctions regulations and individuals identified as Specially Designated Nationals. With each new administration, foreign policy priorities are usually played out in a variety of sanctions regimes and policies.
 
This year, however, saw Congress enter the regulatory fray, when it imposed detailed regulatory requirements and procedures designed to constrain the current administration from making major changes to the Russia/Ukraine Sanctions Program. The current administration was slow to implement the required changes, ignoring a deadline set by Congress in the new law and blaming the delay on the State Department.
 
In order to assist compliance officers, here is a summary of changes occurring in 2017 so that you can keep your scorecards up to date. This is not an exhaustive list, so please make sure you check the OFAC website (available here).
 
Cuba Sanctions
– The current administration modified the Cuba sanctions program to restrict certain activities that were previously permitted under the Obama administration. Additionally, the new regulations apply broader restrictions against entities related to Cuban military, intelligence or security services.
 
US persons are now prohibited from engaging in financial transactions with certain entities and sub-entities identified by the State Department. OFAC also restricted educational travel and non-academic educational travel to Cuba.
 
North Korea Sanctions
– Recently, the current administration announced the designation of North Korea as a state sponsor of terrorism, a designation that will have little practical impact since North Korea already is subject to stringent sanctions.
 
A long list of individuals, entities and vessels were recently added to the prohibited list (available here).
 
As the current administration continues to ramp up sanctions enforcement against North Korean entities or affiliated entities, it is important to adhere strictly to OFAC’s 50 percent rule, which extends the sanctions prohibition to any entity owned 50 percent or more by one or more prohibited SDN. In a set of complex financial and commercial transactions involving potential North Korean entities, companies have to carefully scrutinize transactions and related entities, particularly any involving China, given the close association between North Korean an Chinese entities.
 
In September 2017, OFAC designated eight North Korean banks and 26 individuals linked to North Korean financial networks, including nationals who operate in China, Russia, Libya and the UAE.
 
Russia/Ukraine Sanctions
– In October 2017, OFAC issued a revised version of Directive 4 to implement the Countering America’s Adversaries Through Sanctions Act. As amended, the revised Directive 4 creates two prohibitions on the export, reexport of goods, services or technology for certain activities in the energy sector of Russia.
 
First, Directive 4 prohibits designated individuals and entities from export, re-export of goods, services or technology in support of exploration or production for deepwater (defined as activities occurring deeper than 500 feet), Arctic offshore or shale projects that have the potential to produce oil in Russia, or in maritime area claimed by Russia.
 
Second, Directive 4 further prohibits the export or reexport of goods, services, or technology in support of exploration or production for deepwater (defined as activities occurring deeper than 500 feet), Arctic offshore, or shale projects that meet all three of the following criteria: (1) the project was initiated on or after January 29, 2018; (2) the project has the potential to produce oil in any location; and (3) any person determined to be subject to Directive 4 either has a 33 percent or greater ownership interest in the project or owns a majority of the voting interests in the project.
 
The Directive 4 prohibitions have a broad application to drilling services, geophysical services, logistical services, management services, modeling capabilities and mapping technologies. The prohibitions do not apply to related financial services (e.g. clearing transactions or providing insurance).
 
Sudan Sanctions
– A long list of entities with ties to Sudan were removed from the Specially Designated Nationals List (see here).
 
Venezuela Sanctions
– In August 2017, Executive Order 13808 implemented sectoral sanctions (similar to the Russia/Ukraine sanctions) that prohibited new debt with maturity of longer than 90 days involving PDVSA; longer than 30 days involving the Government of Venezuela; engaging in transactions involving Venezuela bonds; and payment of dividends or other distribution of profits to the Government of Venezuela. OFAC issued four general licenses relating to the sanctions, including one to permit transactions involving Citgo.
 

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COMM_a2
8.

T. Shaffer: “Evolution of Export Law: What to Do if a Special Agent Comes Knocking”

(Source:
International Law Office, 7 Dec 2017.) [Excerpts. Subscription required.]
 
* Author: Troy Shaffer, Esq. tshaffer@gardere.com, Gardere, Dallas TX. 
 
As evidenced by the numbers, export investigations are increasing significantly – and so are the penalties. Export enforcement penalties have increased twenty-fold in the past few decades, as evidenced by the fines that made headlines in recent years – for example:
 
  – Weatherford International agreed to pay $100 million in export penalties in 2013;
  – Schlumberger paid $232 million in 2015; and
  – ZTE was fined $1.19 billion in 2017.
 
Since 2001 the three major export licensing agencies – the Department of Commerce, the State Department and Treasury – have significantly increased the size and number of penalties. The question remains: why? … 

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TEEX/IM TRAINING EVENTS & CONFERENCES

 
* What: ITAR/EAR Boot Camp, Orlando, FL

* When: February 13-14. 2018

* Where: 
Walt Disney World Swan & Dolphin Resort

* Sponsor: Export Compliance Solutions (ECS)

* ECS Speaker Panel:  Suzanne Palmer, Mal Zerden

* Register 
Here or by calling 866-238-4018 or e-mail
spalmer@exportcompliancesolutions.com 

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ENEDITOR’S NOTES

EN_a110
. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 
* Willa Cather (Willa Sibert Cather: 7 Dec 1873 – 24 April 1947; was an American writer who achieved recognition for her novels of frontier life on the Great Plains, including O Pioneers!, The Song of the Lark, and My Ántonia. In 1923 she was awarded the Pulitzer Prize for One of Ours, a novel set during World War I.)
  – “Where there is great love, there are always wishes.”

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EN_a211. 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: 19 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.
 

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EN_a312
. 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.

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* 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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