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17-1219 Tuesday “Daily Bugle”

17-1219 Tuesday “Daily Bugle”

Tuesday, 19 December 2017

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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. Commerce/Census: “Tips on How to Resolve AES Fatal Errors”
  4. DHS/CBP Posts Immediate Delivery Procedures at Year-End
  5. State/DDTC: (No new postings.)
  6. EU Supports The Hague Code of Conduct and Ballistic Missile Non-Proliferation
  7. UK/DIT ECO Updates Consolidated List of Strategic Military and Dual-Use Items that Require Export Authorization
  1. DVIDS: “USASAC’s Strategic Role in ‘Strengthening Alliances,’ and FMS Growth Highlight FY17”
  2. ST&R Trade Report: “Broker Permits, Importer Verification, Air Cargo Security Among New Rules on CBP Agenda”
  1. M. Volkov Releases Podcast “Episode 15 – The Justice Department’s New FCPA Corporate Enforcement Policy”
  1. Arthur Shulman Moves to Boeing
  1. Full Circle Compliance and the Netherlands Defense Academy will Present “Winter School at the Castle”, 5-9 Feb 2018 in Breda, the Netherlands
  2. U.S. Commercial Service Presents “Avoiding U.S. & Foreign Customs Duties on Aircraft & Aircraft Parts/Repairs: the WTO Aircraft Agreement” Webinar, 18 Jan
  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 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

[No items of interest noted today.] 

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OGSOTHER GOVERNMENT SOURCES

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

* Commerce/BIS; RULES; Certain Entities to the Entity List; Additions: Russian Sanctions [Publication Date: 20 December 2017.]

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When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. However, if the shipment is rejected, a Fatal Error notification is received.
 
To help you resolve AES Fatal Errors, here are some tips on how to correct the most frequent errors that were generated in AES for this month.
 
Fatal Error Response Code: 168
 
  – Narrative: Transportation Reference Number Ineligible
  – Reason: The Transportation Reference Number reported is ineligible.
  – Resolution: The Transportation Reference Number cannot be reported as “UNKNOWN” or have any value not found on the standard keyboard. Verify the Transportation Reference Number, correct the shipment and resubmit.
 
Fatal Error Response Code: 336
 
  – Narrative: Ultimate Consignee State Cannot be Reported
  – Reason: The Country of Destination reported does not allow a State Code.
  – Resolution: Report a State Code only if the Country of Destination is the United States or Mexico. Verify the Ultimate Consignee Country Code and State Code, correct the shipment and resubmit.
 
For a complete list of Fatal Error Response Codes, their reasons, and resolutions, see Appendix A – Commodity Filing Response Messages.
 
It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations. These errors must be corrected prior to export for shipments filed predeparture and as soon as possible for shipments filed postdeparture but not later than five calendar days after departure.
 
For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.
 
  – Telephone: (800) 549-0595, select option 1 for AES
  – Email: askaes@census.gov
  – Online:
www.census.gov/trade

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(Source:
CSMS #17-000786, 18 Dec 2017.)
 
The Office of Trade is issuing a blanket authorization for Immediate Delivery (ID) procedures for merchandise to be released on or after December 18, 2017 through December 31, 2017, in accordance with 19 CFR § 142.21(i). The authorization is offered to filers who may elect to take advantage of the interim Harmonized Tariff Schedule changes, which take effect on or after January 1, 2018.
 
This blanket authorization does not apply to absolute quota merchandise and merchandise moved under an immediate transportation entry (type 61). Tariff rate quota merchandise previously authorized for ID release under 19 CFR § 142.21 (e) may still be released; however, the entry summary shall be presented within the time specified in 19 CFR § 142.23 or within the quota period, whichever expires first.
 
ABI entry transmissions, including the “paperless” provisional messages, will establish the desired entry date by using the estimated entry date in the summary transmission (“AE” transmissions). This will identify the change from “Entry” to “Immediate Delivery” and will allow filers to elect a date of entry in order to take advantage of tariff changes or special programs. Under ID procedures, the entry/entry summary must be filed within 10 working days after release. This blanket authority only extends to shipments released December 18, 2017 through December 31, 2017. No grace period will be granted for the purpose of timely filing ID entry summaries under this one-time allowance.
 
Questions regarding this policy should be addressed to Commercial Operations Revenue and Entry Division at otentrysummary@cbp.dhs.gov.

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OGS_a66. EU Supports The Hague Code of Conduct and Ballistic Missile Non-Proliferation


(Source: Official Journal of the European Union, 19 Dec 2017.)
 
Decisions
* Council Decision (CFSP) 2017/2370 of 18 December 2017 in support of the Hague Code of Conduct and ballistic missile non-proliferation in the framework of the implementation of the EU Strategy against Proliferation of Weapons of Mass Destruction

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OGS_a77. UK/DIT ECO Updates Consolidated List of Strategic Military and Dual-Use Items that Require Export Authorization
(Source: UK/DIT ECO, 19 Dec 2017.) 
 
UK/DIT ECO has updated the Consolidated List following amendments to the EU dual-use export control list in Annex I to Regulation (EC) No 428/2009 which came into force on 16 December 2017.
 

The updated Consolidated List can be found here.

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NWSNEWS

NWS_a1
8. DVIDS: “USASAC’s Strategic Role in ‘Strengthening Alliances,’ and FMS Growth Highlight FY17”

(Source: DVIDS, 18 Dec 2017.) [Excerpts.] 
 
From the moment he was sworn in, Secretary of Defense James Mattis makes a resounding pledge to work more closely with the State Department and strengthen U.S. alliances abroad. One of his top three priorities-partnership building-falls squarely in the lane of the U.S. Army Security Assistance Command (USASAC), headquartered at Redstone Arsenal, Ala. USASAC leads the Army Material Command’s security assistance enterprise, developing and managing foreign military sales (FMS) cases and security assistance programs.
 
Its primary FMS mission is a fundamental tool of U.S. foreign policy and a form of security assistance authorized by the Arms Export Control Act of 1976 (AECA). Under the AECA the U.S. may sell defense articles and services to foreign countries and organizations when the president formally finds that to do so will strengthen the security of the United States and promote world peace. With a total FMS portfolio of $181 billion, USASAC currently manages more than 5,700 cases for 153 countries.
 
Despite the impressive tally, USASAC CENTCOM Regional Operations Deputy Director Conrad Bonner said the numbers aren’t as important as what those numbers mean. Measured in real-world impact, Bonner said those figures amount to Readiness for U.S. forces, increased capability for partner nations and increased stability throughout the world. “We have a lot of allies who are using FMS purchased equipment, so they are using the same materiel, they are training with us, talking the same lingo and becoming fully interoperable with us,” he said. “This means when, and if, it’s time to conduct coalitions operations against a common enemy, they are ready and able to fight alongside us on today’s strategically complex battlefield.”
 
Not only are partner nations able to better protect their borders and deter aggression in their corners of the world, they also help conduct counter terrorism, counter narcotics and various other operations throughout the globe. …
 
In its 52nd year, USASAC continues to serve the nation as “The Army’s Face to the World,” employing hundreds of employees at Redstone Arsenal, Ala.; New Cumberland, Pa.; Fort Belvoir, Va.; Fort Bragg, N.C.; and Riyadh, Saudi Arabia and in various geographic locations throughout the globe in support of its worldwide mission. USASAC will continue its vital mission of building partner capacity, supporting geographic Combatant Command strategies and strengthening global partnerships in support of U.S. National Security.

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NWS_a2
9. ST&R Trade Report: “Broker Permits, Importer Verification, Air Cargo Security Among New Rules on CBP Agenda”
 
The departments of Homeland Security and the Treasury have issued their semiannual regulatory agendas, which list the following regulations affecting international trade that could be issued within the next year as well as rulemaking proceedings that have been in process for some time and are not as likely to see further progress in the near term. The expected timeframes for issuance of these rules are indicated in parentheses.
 
Upcoming Regulations
 
  – A U.S. Customs and Border Protection interim final rule (not proposed, as listed previously) to implement a mandatory Air Cargo Advance Screening program for inbound aircraft required to make entry that have commercial cargo aboard (January 2018; previously December 2017)
  – A CBP proposed rule amending the regulations pertaining to the importation of goods that violate or are suspected of violating the copyright laws in accordance with title III of the Trade Facilitation and Trade Enforcement Act and certain provisions of the Digital Millennium Copyright Act (January 2018; previously September 2017)
  – A CBP proposed rule implementing changes to the drawback laws contained in the TFTEA by requiring claims to be filed electronically, extending and standardizing timelines for filing claims, modifying recordkeeping requirements, and establishing a new standard for substituting merchandise based on its tariff classification (January 2018; previously September 2017)
  – A CBP final rule to expand the definition of “importer” under the importer security filing rule for certain types of shipments to ensure that the party that has the best access to the required information is the party responsible for filing the ISF (March 2018, previously December 2017; proposed rule issued in July 2016)
  – A CBP proposed rule to update and modify the (a)(1)(A) list in the appendix to 19 CFR Part 163 (March 2018; previously October 2017)
  – A CBP final rule to give effect to certain liberalized changes to the NAFTA preference rules of origin that have been agreed to by the U.S., Canada and Mexico (March 2018, previously September 2017; proposed rule issued July 2016)
  – A CBP proposed rule to establish procedures for determining the duration and scope of a vessel debarment (i.e., barring from entry into U.S. ports any vessel owned or chartered by an entity found to be in violation of certain immigration laws and regulations) and how entities may request mitigation of the debarment (April 2018; first time published)
  – A CBP proposed rule seeking to promote the speed, accuracy, and transparency of administrative rulings concerning the importation of articles that may be subject to exclusion orders issued by the International Trade Commission under section 337 of the 1930 Tariff Act (April 2018; previously December 2017)
  – A CBP final rule making technical corrections to the rules of origin for goods imported under NAFTA and for textile and apparel goods (April 2018)
  – A CBP final rule shifting authority to make certain decisions regarding customs transactions from port directors to directors of the Centers of Excellence and Expertise (May 2018)
  – A CBP proposed rule to modernize the customs broker regulations, including by allowing national permit holders to conduct customs business in all districts within the U.S. customs territory, removing the requirement to have a district permit in each district where the broker conducts customs business, removing the requirement that brokers maintain physical offices in the districts in which they conduct customs business, and updating the requirements on responsible supervision and control (June 2018; first time published)
  – A CBP proposed rule that would require customs brokers to verify the identity of importers and non-resident importers and would create a process for doing so that is contemporaneous with obtaining power of attorney (June 2018; first time published)
  – A CBP final rule reflecting that the Automated Commercial System is being phased out as a CBP-authorized electronic data interchange system for the processing of electronic entry and entry summary filings (June 2018, previously November 2017; interim final rule issued October 2015)
   – A CBP final rule raising from $200 to $800 the de minimis value of articles that may be imported by one person on one day free of duty and tax (June 2018, previously November; interim final rule published in August 2016)
  – A CBP final rule on procedures for investigating evasion of antidumping and countervailing duty orders (June 2018, previously November 2017; interim final rule published in August 2016)
  – A CBP final rule clarifying the circumstances under which a notice of arrival must be filed for imported pesticides and pesticidal devices, codifying existing required NOA data elements, requiring the submission of additional NOA data elements for unregistered pesticides that are currently optional, and permitting the NOA to be filed electronically in the Automated Commercial Environment (June 2018, previously November 2017; interim final rule published in September 2016)
  – An Alcohol and Tobacco Tax and Trade Bureau proposed rule to update procedures for exports of distilled spirits, wine, beer, and tobacco products and implement the International Trade Data System all-electronic environment (September 2018)
 
Regulations in Process
 
  – A final rule setting forth due process procedures for CBP to follow before suspending or revoking assigned entry filer codes, immediate delivery privileges, or remote location filing privileges
  – A CBP final rule reflecting the U.S.-Singapore free trade agreement
 
Regulations Completed
 
  – A final rule prescribing procedures for the donation of technologies, training, or other support services to assist CBP in intellectual property rights enforcement
  – A final rule to enhance CBP’s ability to regulate and track in-bond merchandise and ensure it is properly entered or exported

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COMMCOMMENTARY

COMM_a01
10. M. Volkov Releases Podcast “Episode 15 – The Justice Department’s New FCPA Corporate Enforcement Policy”

(Source: Volkov Law Group Blog, 17 Dec 2017. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
On November 26, 2017, the Justice Department announced adoption of its new FCPA Corporate Enforcement Policy. Deputy Attorney General Rod Rosenstein announced the new policy at an FCPA Conference in Washington, D.C.
 
Under the new policy, corporations that voluntarily disclose potential FCPA violations, fully cooperate with the investigation and implement timely and appropriate remediation will earn a presumptive declination, subject to the absence of aggravating factors. If the company does not earn the declination, presumably because of the presence of one or more aggravating factors, the company can still earn a 50 percent reduction from the lower end of the US Sentencing Guidelines range and will probably avoid the imposition of a corporate monitor.
 
In this episode, Michael Volkov reviews the new enforcement policy and provides his insight on the impact of the Justice Department’s new program.
 
The podcast is available here.

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MSEX/IM MOVERS & SHAKERS

MS_a211. Arthur Shulman Moves to Boeing

(Source: Editor)
 
Arthur Shulman, former Acting Director, Office of Defense Trade Controls Compliance, has moved to his current position as Director, Global Trade Compliance, The Boeing Company. Contact Arthur at 703-465-3312 or Arthur.Shulman@boeing.com

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TEEX/IM TRAINING EVENTS & CONFERENCES

(Source: Editor)
 
* What: Winter Seminar “Compliance and Integrity in International Military Trade”, including the following topics:
  – Day 1: International Trade in Defense Markets and Relevance of Trade Compliance
  – Day 2: U.S. Export Control Regulations (International Traffic in Arms Regulations), and the EU Perspective
  – Day 3: U.S. Export Control Regulations (Export Administration Regulations), and EU Export Control Regulations (Military and Dual-Use)
  – Day 4: Compliance & Integrity / Ethics, and Setting up an Internal Compliance Program
  – Day 5: Setting up an Internal Compliance Program (continued)
* When: 5-9 February 2018.
* Where: the Netherlands Defense Academy (“The Castle”), Breda, the Netherlands.
* Event Sponsors: Full Circle Compliance & the Netherlands Defense Academy, Faculty of Military Sciences
* Speakers include: Prof. dr. J.M. Beeres; Col. Dr. Robert M.M. Bertrand RA RC RO; Drs. Ghislaine C.Y. Gillessen RA; James E. Bartlett III, LLM; Michael E. Farrell; and Drs. Alexander P. Bosch.

  
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* What: U.S. aerospace exporters will learn how to avoid customs duties in connection with a WTO agreement. U.S. importers of civil aircraft parts will learn how to navigate procedures under the agreement to import aircraft parts duty free.
* When: Thursday, 18 Jan 2018.
* Where: Webinar.
* Register: Here.
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ENEDITOR’S NOTES

 

* Edith Piaf (nee Édith Giovanna Gassion; 19 Dec 1915 – 10 Oct 1963; was a French cabaret singer, songwriter, and actress who became widely regarded as France’s national chanteuse, as well as being one of France’s greatest international stars.  Piaf has acquired a legacy as one of the greatest performers of the 20th century, and her voice and music continue to be celebrated globally.)
  – “Tell me what you’d like to hear me sing. I’ll sing whatever you like, after which I’ll take up a collection, if you don’t mind.”
 
* Carter G. Woodson (Carter Godwin Woodson; 19 Dec 1875 – 3 Apr 1950; was an African-American historian, author, journalist and the founder of the Association for the Study of African American Life and History. He was one of the first scholars to study African-American history.)
  – “The difference of races is no evidence of superiority or of inferiority. This merely indicates that each race has certain gifts which the others do not possess.”

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EN_a315
. 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: 8 Dec 2017: 82 FR 57821-57825: Civil Monetary Penalty Adjustments for Inflation
 
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, Census/AES guidance, and to many errors contained in the official text. Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR.
 
*
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jan 2017: 19 USC 1202 Annex. (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment: 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.

 
INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130.
  – Last Amendment: 30 Aug 2017: 82 FR 41172-41173: Temporary Modification of Category XI of the United States Munitions List
  – The only available fully updated copy (latest edition: 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_a0316
Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor) 

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

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EPEDITORIAL POLICY

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, John Bartlett. The Ex/Im Daily Update is emailed every business day to approximately 8,000 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOJ/ATF, DoD/DSS, DoD/DTSA, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

* RIGHTS & RESTRICTIONS: This email contains no proprietary, classified, or export-controlled information. All items are obtained from public sources or are published with permission of private contributors, and may be freely circulated without further permission. Any further use of contributors’ material, however, must comply with applicable copyright laws.

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

* SUBSCRIPTIONS: Subscriptions are free.  Subscribe by completing the request form on the Full Circle Compliance website.

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