17-1213 Wednesday “Daily Bugle”

17-1213 Wednesday “Daily Bugle”

Wednesday, 13 December 2017

The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, Customs, NISPOM, EAR, FACR/OFAC, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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[No items of interest noted today.] 

  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Announces ACE Certification Outage this Evening, 13 Dec
  4. DHS/CBP Performed Two ACE FTZ Related Deployments, 12 Dec
  5. DHS/CBP Updates AESTIR Documentation, Appendices K and X
  6. State/DDTC Announces Informal Structural and Personnel Changes
  1. Expeditors News: “Mexico Updates Automatic Permit Requirements”
  2. ST&R Trade Report: “WCO Adopts Principles to Address E-Commerce Challenges”
  3. Wired: “Tracing ISIS’ Weapons Supply Chain-Back to the US”
  1. Global Trade News: “Weise Wednesday: Which Congressional Developments Are Likely to Impact CBP and the Trade Community?”
  2. M. Volkov Releases Podcast Concerning Data Privacy and EU’s GDPR
  3. Gary Stanley’s ECR Tip of the Day
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Changes: ATF (15 Jan 2016), Customs (8 Dec 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 



[No items of interest noted today.] 

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

[No items of interest noted today.]

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. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)

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CSMS #17-000765, 12 Dec 2017.)
There will be an ACE CERTIFICATION Outage Wednesday evening, 13 December 2017 from 1700 ET to 2000 ET for ACE Infrastructure maintenance.
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CSMS #17-000766, 12 Dec 2017.)
CBP performed two deployments related to ACE FTZ on Tuesday, 12 December 2017.
There was a planned deployment performed at 0500 EST, with the following fixes:
  – Relax of edit on the FT40 record to accommodate house bills that are less than 12 characters
  – Update to logic for HTS code validation that was causing error 078 INVALID UNIT OF MEASURE
Additionally, there was an unplanned deployment which ended at 1800 EST, with the following fixes:
  – Resolved issue causing error 164 NON DIRECT DELIVERY – ADMSN NOT ON FILE
  – Resolved issue casing 076 INVALID TARIFF
  – Resolved issue causing error 107 BILL OF LADING NOT ON FILE for Overage and Zone to Zone Admissions
If you experience any further issues with ACE FTZ admission filings please contact your client representative.

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CSMS #17-000767, 13 Dec 2017.)
U.S. Customs and Border Protection (CBP) has updated two Automated Export System Trade Interface Requirements (AESTIR) Appendices posted on CBP.gov

The updated appendices include:  

* Appendix K – Unit of Measure Codes – UOM codes were updated.

* Appendix X – HTS Codes for PGAs – Additional HTS Codes for the Environmental Protection Agency (EPA) were included in this update. 

Both Appendix K – Unit of Measure Codes and Appendix X – HTS Codes for PGAs can also be located here. 

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State/DDTC, 10 Dec 2017.)
Effective December 8th, the following informal structural and personnel changes were made to optimize resources for increased effectiveness in fulfilling DDTC’s core functions. The web phone roster will be updated within a few days.
  – Senior Analysts Alex Douville and Pete Walker were detailed into Team Co-Lead roles in Division 6 in anticipation of upcoming retirements. Under their leadership, Division 6 will oversee licenses for USML Commodity Categories I and III.
  – Senior Analysts Mike Boyd, Jonathan Dennis, Yolanda Gantlin, Jo Anne Riabouchinsky, Fran Tucker, and Nate Young have been tasked with greater responsibilities for managing case flow and quality control.
  – Licenses for USML Commodity Categories X and XIV are now redistributed to Divisions 5 and 3 respectively for increased load balancing and quality control.
  – The Registration Team, led by Chief Dan Cook, was detailed to the DDTC Front Office (FO) to facilitate greater collaboration on fee collections.
  – The remaining Compliance Office scope was narrowed to core functions and divided into the following three teams to better focus operations:
   (1) Compliance and Civil Enforcement, led by Acting Chief Jae Shin, who was detailed from his current role as Acting Division Chief for the Regional Affairs and Analysis (RAA)
   (2) Law Enforcement, led by Chief Julia Tulino.
   (3) Committee on Foreign Investment in the US (CFIUS) and Mergers/Acquisitions (M&A), led by Team Chief Melanie Flaharty.
  – All AECA Section 3 investigations and reporting are now managed by DDTC’s Military Officers within the Office of Licensing (DTCL).
  – Acting Policy Deputy Director, Rick Koelling, also serves as Acting Division Chief for RAA.
  – Nick Memos was designated as Acting Division Chief for the Commodity Jurisdiction and Classification (CJC) Team.

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7. Expeditors News: “Mexico Updates Automatic Permit Requirements”
(Source: Expeditors News, 12 Dec 2017.)
On 1 December 2018, Mexico’s Ministry of Economy published through the Federation Official Daily Annex 2.2.2, updating the criteria for obtaining automatic permits for select import products.
The change primarily affects materials, textiles, and footwear in chapters 51, 52, 54, 55, 60, 61, 62 and 64 of the Harmonized Tariff system.   Export documentation may no longer be required from the exporting country when over the benchmark price. While the goods will continue to require the import automatic permit, the permit can be obtained with a commercial invoice of the goods and a Spanish translation.
The changes went into force on the day of the publication.
For more information, please go here.

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8. ST&R Trade Report: “WCO Adopts Principles to Address E-Commerce Challenges”

The World Customs Organization’s Policy Commission recently adopted a resolution aimed at helping customs and other government agencies, businesses, and other stakeholders in the cross-border e-commerce supply chain to understand, coordinate, and better respond to current and emerging challenges. The Policy Commission also issued a communiqué on e-commerce to the World Trade Organization’s ongoing ministerial conference, where this topic could be one of a few on which WTO members are able to reach agreement.
According to the resolution, cross-border e-commerce is characterized by online initiation, cross-border transaction/shipment, physical goods, and destined to consumers (commercial and non-commercial). E-commerce has revolutionized the way businesses and consumers are selling and buying goods, the resolution states, providing wider consumer choices and broader access to customers by micro, small, and medium-sized enterprises. E-commerce thus offers a significant opportunity for the economic growth and competitiveness of nations by providing new growth engines, developing new trade modes, driving new consumption trends, and creating new jobs.
On the other hand, the resolution acknowledges that the exponential growth of e-commerce, particularly the emergence of new trade patterns and the increased role of consumers in individual transactions, presents challenges to governments and businesses in terms of trade facilitation, safety and security, and accurate and efficient collection of duties and taxes. There is thus a need to adequately measure e-commerce flows and the importance of customs agencies’ role therein for well-informed policy decision making, risk assessment, trade and revenue statistics analysis, performance measurement, and information exchange.
In an effort to develop a harmonized approach to e-commerce and deliver common standards, guidelines, and tools for customs clearance and data harmonization, the WCO resolution adopts the following principles and encourages customs administrations to apply them.
  – advance electronic data and risk management (e.g., establishing mechanisms to exchange advance electronic information between post and customs agencies for the purpose of targeting and facilitation, and using data generated by e-commerce when developing and implementing automated risk management tools)
  – facilitation and simplification (e.g., adopting or enhancing customs procedures that provide for expedited release of shipments, and coordinating release among all relevant border agencies through a single window environment)
  – safety and security (e.g., developing and applying risk profiles that identify high-risk shipments in e-commerce channels)
  – revenue collection (e.g., applying alternative models of revenue collection, and reviewing or adjusting de minimis thresholds)
  – measurement and analysis (e.g., establishing mechanisms to capture data at item level to facilitate the development of e-commerce trade statistics while implementing simplified clearance processes)
  – partnerships (e.g., trusted trader programs)
  – public awareness, outreach, and capacity building (e.g., publishing all appropriate regulatory, policy, and procedural information openly, and raising awareness of potential threats to safety and security in the e-commerce supply chain)
  – legislative frameworks

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9. Wired: “Tracing ISIS’ Weapons Supply Chain-Back to the US”

(Source: Wired, 12 Dec 2017.) [Excerpts.]
“Habibi! Aluminium!”
The call echoes through the courtyard of a trash-strewn home in Tal Afar, a remote outpost in northern Iraq. It is late September and still hot, the kind of heat that seems to come from all sides, even radiate up from the ground, and the city is empty except for feral dogs and young men with guns. …
Spleeters is a field investigator for Conflict Armament Research (CAR), an international organization funded by the European Union that documents weapons trafficking in war zones. He is 31 years old, with a 1980s Freddie Mercury mustache and tattoos covering thin arms that tan quickly in the desert sun. In another context, he’d be mistaken for a hipster barista, not an investigator who has spent the past three years tracking down rocket-­propelled grenades in Syria, AK-47-style rifles in Mali, and hundreds of other weapons that have found their way into war zones, sometimes in violation of international arms agreements. The work Spleeters does is typically undertaken by secretive government offices, such as the US Defense Intelligence Agency’s Military Material Identification Division, known as Chuckwagon. But while Chuckwagon is barely discoverable by Google, Spleeters’ detailed reports for CAR are both publicly available online and contain more useful information than any classified intelligence I ever received when I was commanding a bomb disposal unit for the US military in Iraq in 2006. …
The aluminum paste in the bucket, for example, which ISIS craftsmen mix with ammonium nitrate to make a potent main charge for mortars and rocket warheads: Spleeters discovered the same buckets, from the same manufacturers and chemical distributors, in Fallujah, Tikrit, and Mosul. “I like to see the same stuff” in different cities, he tells me, since these repeat sightings allow him to identify and describe different steps in ISIS’ supply chain. “It confirms my theory that this is the industrial revolution of terrorism,” he says. “And for that they need raw material in industrial quantities.”
But he needs more evidence to prove it. If he can find more launchers and more warheads, Spleeters believes he can build up enough proof-for the first time-that ISIS is repurposing powerful explosive ordnance, purchased by the US, for use in urban combat against the Iraqi army and its American special operations partners. For ISIS to produce such sophisticated weapons marks a significant escalation of its ambition and ability. It also provides a disturbing glimpse of the future of warfare, where dark-web file sharing and 3-D printing mean that any group, anywhere, could start a homegrown arms industry of its own. …
So how exactly did American weapons end up with ISIS? Spleeters can’t yet say for sure. According to a July 19, 2017, report in The Washington Post, the US government secretly trained and armed Syrian rebels from 2013 until mid-2017, at which point the Trump administration discontinued the program-in part over fears that US weapons were ending up in the wrong hands. The US government did not reply to multiple requests for comment on how these weapons wound up in the hands of Syrian rebels or in an ISIS munitions factory. The government also declined to comment on whether the US violated the terms of its end-user certificate and, by extension, failed to comply with the United Nations Arms Trade Treaty, of which it is one of 130 signatories. …

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10. Global Trade News: “Weise Wednesday: Which Congressional Developments Are Likely to Impact CBP and the Trade Community?”
Integration Point Blog
, 13 Dec 2017.)
Welcome to Weise Wednesday! Twice a month we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. If you have questions, we encourage you to send them to AskGeorge@IntegrationPoint.com.
Q: As 2017 is drawing to a close, are there any congressional developments likely to impact CBP and the Trade community?
A: The most significant recent developments relate to the status of political appointees at U.S. Customs and Border Protection (CBP) and the Department of Homeland Security (DHS).
Kevin McAleenan, Acting Commissioner of Customs
As discussed in an earlier blogpost, Kevin McAleenan was nominated by President Trump on March 30, 2017, to the position of Commissioner. He has been awaiting the completion of the Senate confirmation process since his nomination was submitted to the Senate Finance Committee on May 22. McAleenan is the Deputy Commissioner of Customs and has been Acting Commissioner since the departure of former Commissioner Gil Kerlikowski on January 20. 
The Senate Finance Committee held a hearing on the McAleenan nomination on October 24, and it was hoped that final Senate approval of his nomination would be completed soon thereafter. However, the committee was tied up working on the tax bill, and the nomination continued to languish. 
The breakthrough occurred last week when the Committee voted unanimously to approve the nomination and send it forward for full Senate approval. That vote is expected to occur any day now, and Kevin will finally be able to drop the “Acting” from his title.
Kirsten M. Nielsen, Secretary of DHS
In sharp contrast to McAleenan’s lengthy confirmation process, the Senate moved very swiftly to approve the nomination of Kirsten M. Nielsen to succeed John Kelly as the Secretary of DHS after he departed to become the White House Chief of Staff. Nielsen was nominated by President Trump on October 11, and her confirmation hearing by the Senate Committee on Homeland Security was held on November 8. She was confirmed by the full Senate on December 5 and sworn into office on December 6.
Nielsen was the Chief of Staff to Secretary Kelly when he was DHS Secretary, and moved to the White House with Secretary Kelly to serve as the Deputy Chief of Staff and Special Assistant to the President. She served in several high-level positions at DHS under former President George W. Bush earlier in her career.
Moving forward into 2018
On the bad news front, with so few legislative days left in the session, it does not appear that legislation to extend GSP beyond its scheduled expiration date of December 31, or to enact so-called miscellaneous tariff bills, will happen this year. Hopefully, those bills will move early in 2018, and the GSP extension will be retroactive to December 31, 2017.
Stay tuned for future developments. I’ll share another update at the beginning of 2018. Until then, I wish you all a merry Christmas and a happy new year.

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. M. Volkov Releases Podcast Concerning Data Privacy and EU’s GDPR

Volkov Law Group Blog, 10 Dec 2017. Reprinted by permission.)
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
Compliance officers have to be mindful of new and emerging threats. In the past few years, cyber security and data privacy have been quickly rising as new and significant threats that corporations face in the global marketplace.
The European Union has adopted a far-reaching new regulatory regime applicable to companies that conduct business in the European Union and collect any sensitive data relating to EU individuals. The General Data Privacy Regulation or GDPR, which is effective on May 18, 2018, will impose a number of new regulatory requirements to global companies and includes significant penalties for non-compliance.
Michael Volkov interviews Lauren Connell, Managing Associate at The Volkov Law Group, about the GDPR, the role of compliance officers and the implications of this new regulatory regime.
The podcast is available here.

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12. Gary Stanley’s ECR Tip of the Day

(Source: Defense and Export-Import Update; available by subscription from
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059,
Under § 770.2 of the EAR, Interpretation 7 provides guidance on arms, ammunition, and implements of war that have been reduced to scrap. If such commodities “have been rendered useless beyond the possibility of restoration to their original identity only by means of mangling, crushing, or cutting,” then such commodities are considered scrap. Generally, scrap would be designated EAR99, provided the resulting material is not enumerated or otherwise described in an Export Control Classification Number (ECCN) on the Commerce Control List (CCL). If an ECCN includes a note or other guidance in regards to the classification of scrap commodities under that specific ECCN, then that note or guidance would take precedent over Interpretation 7.

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Heinrich Heine (Christian Johann Heinrich Heine 13 Dec 1797 – 17 Feb 1856; was a German poet, journalist, essayist, and literary critic.)
  – “Wherever they burn books they will also, in the end, burn human beings.”

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. 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.
: 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. 
: 19 CFR, Ch. 1, Pts. 0-199
  – Last Amendment: 8 Dec 2017: 82 FR 57821-57825: Civil Monetary Penalty Adjustments for Inflation

  – 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 

: 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

: 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

: 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
  – The latest edition (20 Sep 2017) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and footnotes containing case annotations, practice tips, Census/AES guidance, and to many errors contained in the official text. Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR.
, 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, containing 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.

  – 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 

, 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
. BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please
contact us
to receive your discount code.

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Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor) 

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

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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 of this newsletter cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.

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