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17-1228 Thursday “Daily Bugle”

17-1228 Thursday “Daily Bugle”

Thursday, 28 December 2017

TOP
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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  1. DoD Amends DFARS, Incorporates Revised Trade Agreements Thresholds 
  2. Justice/ATF Releases 2017 Annual List of Explosive Materials 
  3. Treasury/OFAC Amends Iraq Stabilization and Insurgency Sanctions Regulations 
  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. DoD/DSS Updates DD Form 254, DoD Contract Security Classification Specification
  4. State/DDTC: (No new postings.)
  1. A. Adams, B.C. Hanifin & E. Siegle: “A Review Of US Economic Sanctions In 2017”
  2. R. Slack: “Distributor Danger: OFAC Case Highlights Sanctions Liability for Bad Acts by Distributors and Foreign Subsidiaries”
  1. Full Circle Compliance and the Netherlands Defense Academy Will Present “Winter School at the Castle”, 5-9 Feb 2018, in Breda, the Netherlands
  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 (27 Dec 2017), FACR/OFAC (28 Dec 2017), FTR (20 Sep 2017), HTSUS (26 Dec 2017), ITAR (30 Aug 2017) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. 
DoD Amends DFARS, Incorporates Revised Trade Agreements 
Thresholds

(Source: Federal Register, 28 Dec 2017.) [Excerpts.] 
 
82 FR 61481-61483: Defense Federal Acquisition Regulation Supplement: Trade Agreements Thresholds (DFARS Case 2018-D001)
 
* AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).
* ACTION: Final rule.
* SUMMARY: DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to incorporate revised thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements, as determined by the United States Trade Representative.
* DATES: Effective: January 1, 2018. …
* SUPPLEMENTARY INFORMATION: … This rule adjusts thresholds for application of the World Trade Organization (WTO) Government Procurement Agreement (GPA) and Free Trade Agreements (FTA) as determined by the United States Trade Representative (USTR). The trade agreements thresholds are adjusted every two years according to predetermined formulae set forth in the agreements. The USTR has specified the following new thresholds in the Federal Register (82 FR 58248, December 11, 2017):


[T]his rule amends the DFARS to revise thresholds for application of the WTO GPA and the FTA. The revisions do not add any new burdens or impact applicability of clauses and provisions at or below the simplified acquisition threshold, or to commercial items. …

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EXIM_a2

2

Justice/ATF Releases 2017 Annual List of Explosive Materials

(Source: Federal Register, 28 Dec 2017.) [Excerpts.]
 
82 FR 61589-61590: Commerce in Explosives; 2017 Annual List of Explosive Materials
 
* AGENCY: Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); Department of Justice.
* ACTION: Notice of List of Explosive Materials.
* SUMMARY: Pursuant to Federal law, the Department of Justice must publish and revise at least annually in the Federal Register a list of explosives determined to be explosive materials. The list covers not only explosives, but also blasting agents and detonators, all of which are defined as “explosive materials.” This notice contains the 2017 Annual List of Explosive Materials, which remains unchanged from the 2016 Annual List of Explosives.
* DATES: The list becomes effective December 28, 2017. …
* SUPPLEMENTARY INFORMATION: Each material listed, as well as all mixtures containing any of these materials, constitute “explosive materials” under 18 U.S.C. 841(c). Materials constituting blasting agents are marked by an asterisk. While the list is comprehensive, it is not all-inclusive. The fact that an explosive material is not on the list does not mean that it is not within the coverage of the law if it otherwise meets the statutory definition in 18 U.S.C. 841. Explosive materials are listed alphabetically and, where applicable, followed by their common names, chemical names, and/or synonyms in brackets. …
 
Thomas E. Brandon, Deputy Director.

[Editor’s Note: The 2017 Annual List of Explosive Materials is available in text-format here.]

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OGS_3

3

Treasury/OFAC Amends Iraq Stabilization and Insurgency Sanctions Regulations

(Source:
Federal Register, 28 Dec 2017.) [Excerpts.]
 
82 FR 61450-61451: Iraq Stabilization and Insurgency Sanctions Regulations
 
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Final rule.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is adopting a final rule amending the Iraq Stabilization and Insurgency Sanctions Regulations to implement Executive Order (E.O.) 13668 of May 27, 2014 (“Ending Immunities Granted to the Development Fund for Iraq and Certain Other Iraqi Property and Interests in Property Pursuant to Executive Order 13303, as Amended”). These amendments also implement certain technical and conforming changes.
* DATES: Effective: December 28, 2017. …
* SUPPLEMENTARY INFORMATION: … OFAC issued the Iraq Stabilization and Insurgency Sanctions Regulations, 31 CFR part 576 (the “Regulations”), on September 13, 2010 (see 75 FR 55463), as a final rule to implement E.O. 13303 (68 FR 31931, May 28, 2003) (E.O. 13303), E.O. 13315 (68 FR 52315, September 3, 2003), E.O. 13350 (69 FR 46055, July 30, 2004), E.O. 13364 (69 FR 70177, December 2, 2004) (E.O. 13364), and E.O. 13438 (72 FR 39719, July 19, 2007). OFAC has amended the Regulations on several occasions. Today, OFAC is making amendments to the Regulations to implement E.O. 13668 (79 FR 31019, May 29, 2014) (E.O. 13668).
  In support of the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in Iraq, and the development of political, administrative, and economic institutions in Iraq, E.O. 13303, as amended by E.O. 13364, prohibited and deemed null and void, with certain limited exceptions, any attachment, judgment, decree, lien, execution, garnishment, or other judicial process with respect to: (i) The Development Fund for Iraq; (ii) all Iraqi petroleum and petroleum products, and interests therein, but only until title passes to the initial purchaser, and proceeds, obligations, or any financial instruments of any nature whatsoever arising from or related to the sale or marketing thereof, and interests therein, in which any foreign country or a national thereof has any interest, that are in the United States, that thereafter came within the United States, or that were or thereafter came within the possession or control of United States persons; and (iii) any accounts, assets, investments, or any other property of any kind owned by, belonging to, or held by the Central Bank of Iraq, or held, maintained, or otherwise controlled by any financial institution of any kind in the name of, on behalf of, or otherwise for the Central Bank of Iraq.
  E.O. 13668 terminated the protections granted under amended E.O. 13303 in response to the changed circumstances in Iraq, including the Government of Iraq’s progress in resolving and managing the risk associated with outstanding debts and claims arising from actions of the previous regime. Today, OFAC is amending the Regulations to implement E.O. 13668 by removing the regulatory provisions that implemented the protections granted under amended E.O. 13303. These amendments also make certain technical and conforming changes. …
 
  Dated: December 22, 2017.
John E. Smith, Director, Office of Foreign Assets Control.

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OGSOTHER GOVERNMENT SOURCES

OGS_a14. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register

* Commerce/BIS; NOTICES; Export Privileges; Denials: Mahan Airways; Pejman Mahmood Kosarayanifard; Mahmoud Amini; et al. [Publication Date: 29 Dec 2017; included in the Daily Bugle of 22 Dec 2017, item #2.]
 
* Treasury/OFAC; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 29 Dec 2017.]
* * * * * * * * * * * * * * * * * * * *

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

(Source:
DoD/DSS, 27 Dec 2017.) 
 
The DD Form 254, “Department of Defense Contract Security Classification Specification,” has been updated to add new functionality which includes;
 
  – Lengthening of classification text fields
  – Classification field will autofill the rest of the page
  – Capability to remove pages added to the form
  – Digital signature functionality added to Block 13
  – Ability to add attachments
  – The DoD Forms Manager is aware of the printing issues and is working to resolve those related to the form. In order to print the DD Form 254 as a .PDF, users should select under print setting “Microsoft to PDF.”
 
The form and instructions are available at the Washington Headquarters Services, DoD Forms Management Program website at the following links;
 

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COMMCOMMENTARY

COMM_a01
8. 
A. Adams, B.C. Hanifin & E. Siegle: “A Review Of US Economic Sanctions In 2017”

(Source: Ropes & Gray LLP, 21 December 2017.)
 
* Authors: Ama Adams, Esq., Ama.Adams@ropesgray.com; Brendan Hanifin, Esq., Brendan.Hanifin@ropresgray.com; and Emerson Siegle, Esq., Emerson.Siegle@ropesgray.com. All of Ropes & Gray LLP, Washington DC and Chicago, respectively.
 
By any metric, measure or perspective, 2017 has been a remarkably active year for developments in U.S. economic sanctions. Among other developments, the U.S. government enacted a sweeping new sanctions law against Russia, strengthened sanctions targeting Venezuela, North Korea and Cuba, and continued to stake out aggressive positions with respect to extraterritorial jurisdiction and interpretation of existing sanctions regulations.
 
Regulatory Developments
 
The following section summarizes significant changes in U.S. sanctions policy over the past year.
 
CAATSA
 
On Aug. 2, President Donald Trump signed the Countering America’s Adversaries Through Sanctions Act, which introduced new sanctions against Russia, North Korea and Iran.
 
The Russia section of the law, titled “Countering Russian Influence in Europe and Eurasia Act of 2017,” expands sectoral sanctions targeting Russia and introduced new secondary sanctions. Among other provisions, CRIEEA required (or requires):
 
  – The Office of Foreign Assets Control to amend Directives 1 and 2 to shorten the maturity date of new debt for targeted Russian financial and energy firms.
  – OFAC to amend Directive 4 to expand the scope of prohibitions on exports of goods, services and technology to certain energy projects outside of Russia.
  – The president to impose a range of sanctions against any party who the president determines knowingly engages in a significant transaction with or on behalf of the Russian defense or intelligence sectors. [FN/1]
  – The sanctions imposed under CRIEEA significantly complicate efforts by U.S. companies – particularly those operating in the energy or defense sectors – to conduct business with certain Russian counterparties.
 
The North Korean section of the law, titled “Korean Interdiction and Modernization of Sanctions Act,” requires the imposition of sanctions against parties who knowingly engage in a wide range of transactions with North Korea, such as transactions involving North Korean financial institutions or the North Korean defense sector. Prior to CAATSA, U.S. persons already were prohibited from engaging in most dealings involving North Korea or North Korean counterparties. KIMSA is significant because it provides for secondary sanctions against non-U.S. persons who engage in specified dealings with North Korea. As such, U.S. companies that conduct business with potential North Korean trading partners (e.g., counterparties in China and Russia) must reassess the sanctions risk presented by these relationships.
 
The Iran section of the law, titled “Countering Iran’s Destabilizing Activities Act of 2017,” had limited impact on U.S.-person activities under existing Iranian sanctions. Of note, CIDAA required (or requires) the president to impose sanctions against (1) the Islamic Revolutionary Guard Corps pursuant to Executive Order 13244, which targets terrorist activity; and (2) any party who knowingly and materially contributes to the development of Iran’s ballistic missile program.
 
Venezuela
 
On Aug. 24, President Trump issued Executive Order 13808, which prohibits most transactions and dealings involving new debt of the government of Venezuela, as well as certain bonds issued by the government of Venezuela. EO 13808 also prohibits direct or indirect purchases of securities from the government of Venezuela.
 
OFAC took steps to mitigate the adverse impact of the new sanctions on U.S. business interests. For example, OFAC issued general licenses authorizing U.S. persons to engage in transactions involving (1) specified bonds issued by the government of Venezuela; and (2) CITGO Holding Inc., the U.S.-based subsidiary of Petróleos de Venezuela SA, Venezuela’s state-owned oil and gas company. Despite these steps, the new sanctions present significant practical challenges for U.S. companies that conduct business with the Venezuelan government, including how to address the collection of late payments.
 
The sanctions introduced by EO 13808 are a variation on the sectoral sanctions that the United States imposed against Russia following its 2014 annexation of Crimea. Unlike the Russian sectoral sanctions, however, the new Venezuelan sanctions target the government of Venezuela (as opposed to specific sectors of the Venezuelan economy). Nevertheless, EO 13808 is consistent with the United States’ preference for sanctions that target specific actors and categories of transactions over broader comprehensive sanctions.
 
North Korea
 
On Sep. 21, President Trump issued Executive Order 13810, which granted OFAC broad authority to impose sanctions against individuals and entities that conduct or facilitate business with North Korea. In particular, EO 13810 authorizes OFAC to impose sanctions against, inter alia, any person who (1) operates in specified North Korean industries; (2) has engaged in at least one significant import from, or export to, North Korea; or (3) is a citizen of, or organized under the laws of, North Korea. EO 13810 also authorizes OFAC to sanction foreign financial institutions that knowingly conduct or facilitate significant transactions involving trade with North Korea.
 
EO 13810 marked a significant expansion of U.S. sanctions targeting North Korea, and permits OFAC to impose sanctions against non-U.S. persons who conduct business with North Korea. To date, most parties designated pursuant to EO 13810 have been North Korean nationals or businesses. While OFAC also has imposed sanctions against certain individuals, companies and financial institutions located in China and Russia, OFAC thus far appears to be exercising its new authority under EO 13810 cautiously.
 
Sudan
 
On Oct. 12, the U.S. government formally revoked the Sudanese Sanctions Regulations, the final step of a nine-month process initiated by the Obama administration. [FN/2] Although the revocation of the SSR creates new opportunities for U.S. companies – particularly, within the oil and gas industry – to pursue business opportunities in Sudan, significant challenges remain. Most exports to Sudan still require a license from the U.S. Department of Commerce pursuant to the Export Administration Regulations, and certain Sudanese individuals and entities (as well as parties in neighboring South Sudan) remain on the “specially designated nationals and blocked persons” list.
 
Iran
 
On Oct. 13, President Trump declined to certify Iran’s compliance with the terms of the Joint Comprehensive Plan of Action. President Trump also threatened to withdraw the United States from the JCPOA if Congress and other parties to the JCPOA (collectively, the “P5+1”) did not address his concerns with respect to the Iran nuclear agreement. The announcement triggered a 60-day window during which the U.S. Congress could decide whether to reimpose nuclear-related sanctions suspended by the JCPOA. Congress did not act, and the 60-day window expired on Dec. 14. President Trump still has the opportunity to act unilaterally to narrow the scope of U.S. sanctions relief that Iran secured pursuant to the JCPOA. Among other steps, President Trump could instruct OFAC to (1) revoke, or narrow the scope of, General License H; [FN/3] or (2) impose new, non-nuclear-related sanctions targeting Iran’s petrochemical industry.
 
As a result, there is significant uncertainty regarding the future of U.S. sanctions targeting Iran. If the United States were to impose new sanctions against Iran – or to limit the scope of sanctions relief accorded under the JCPOA – the remaining members of the P5+1 appear unlikely to follow suit. Further, Iran may claim that such unilateral action by the United States violates the JCPOA, justifying Iran’s withdrawal from the agreement. Against this uncertain geopolitical climate, companies required to comply with the Iranian sanctions – including non-U.S. companies owned or controlled by U.S. persons – would be well-advised to proceed with caution in pursuing business opportunities in Iran that currently are authorized pursuant to general or specific licenses (as their scope could change in the relatively near future).
 
Cuba
 
On Nov. 8, the U.S. government announced changes to the Cuban Assets Control Regulations and the EAR that implement President Trump’s June 2017 national security memorandum, “Strengthening the Policy of the United States Toward Cuba.” Among other changes, OFAC added a new provision to the CACR that prohibits persons subject to U.S. jurisdiction from engaging in “direct financial transactions” with parties designated by the U.S. State Department as being controlled by, or acting on behalf of, the Cuban military, intelligence or security services. [FN/4] In addition, OFAC revised existing general licenses to narrow the scope of authorized travel to Cuba in an effort to curb unauthorized tourist travel to Cuba.
 
The Nov. 8 changes to the CACR are relatively modest, but will continue to complicate U.S. businesses’ pursuit of commercial opportunities in Cuba (and may dissuade some companies from pursuing such opportunities altogether). In addition, U.S. companies can expect Cuba-related license applications to be subject to increased scrutiny under the Trump administration.
 
Enforcement Developments
 
As of Dec. 18, OFAC has announced 18 enforcement actions that have collectively resulted in $118,307,445 in penalties, [FN/5] as compared to nine enforcement actions in 2016 that collectively netted $21,609,315 in penalties. OFAC has pursued enforcement actions in 2017 under a wide range of sanctions programs, including programs targeting Cuba, Iran, Sudan, Ukraine/Russia, weapons of mass destruction proliferators, and narcotics traffickers. The uptick in enforcement activity suggests that OFAC is actively pursuing violations of its sanctions regulations, and that sanctions compliance will continue to be a significant risk area for U.S. and non-U.S. companies. The following are a few of the notable enforcement actions:
 
ZTE Corp.
 
On Mar. 7, China-based Zhongxing Telecommunications Equipment Corp. entered into a settlement agreement with OFAC, the Bureau of Industry and Security, and the U.S. Department of Justice, agreeing to pay a combined penalty of at least $892 million to resolve alleged violations of U.S. sanctions and export control laws related to dealings with Iran and North Korea.
 
ZTE Corp. allegedly developed a companywide strategy to evade U.S. sanctions and export control laws in order to build and service telecommunications networks in Iran using U.S.-origin equipment and software through code names, the concealment of the ultimate country of origin, and altering references to Iran. Moreover, the company resumed its Iran-related activities after coming under investigation and representing to the U.S. government that all violative conduct had ceased.
 
As part of the global settlement, ZTE Corp. agreed to pay OFAC a civil penalty of $100,871,266, representing the largest settlement that OFAC has entered into with a nonfinancial entity for sanctions violations. The ZTE Corp. settlement underscores that U.S. regulators – including OFAC – are committed to actively enforcing violations of the Iranian sanctions, whether committed by U.S. or non-U.S. companies.
 
ExxonMobil
 
OFAC’s July 30 enforcement action against ExxonMobil Corp. for alleged violations of the Ukrainian sanctions attracted significant attention. In 2014, Exxon executed eight legal documents with Rosneft, a Russian oil company, that were countersigned by Rosneft’s president, Igor Sechin. While Rosneft has not been designated on the specially designated nationals list, Sechin was added to the list in 2014.
 
OFAC determined that Exxon’s execution of the legal documents with Sechin constituted a violation of U.S. sanctions and issued a $2 million penalty. OFAC dismissed Exxon’s arguments that its dealings with Sechin were consistent with previous public statements by Treasury Department officials. [FN/6] Exxon filed a lawsuit in federal court challenging OFAC’s penalty, and the litigation is pending. The Exxon enforcement action demonstrates some of the challenges for U.S. companies that transact business with companies whose senior executives are specially designated nationals.
 
TransTel
 
On Jul. 27, OFAC announced a settlement agreement with Singapore-based CSE TransTel Pte. Ltd., which agreed to pay over $12 million to resolve allegations that it had violated the Iran sanctions by originating over 100 wire transfers from a U.S. dollar-denominated account to various third parties for services provided in support of Iranian oil and gas projects. OFAC alleged that these wire transfers were processed through the United States, causing both U.S. and non-U.S. financial institutions to inadvertently violate the Iranian sanctions.
 
The TransTel settlement marked the first time that OFAC has brought an enforcement action against a non-U.S., nonfinancial entity for causing violations of the Iran sanctions (and underscores OFAC’s expansive view of its extraterritorial jurisdiction). In addition, the settlement highlights the risk to non-U.S. entities of conducting transactions involving sanctioned countries in U.S. dollars, which are routinely cleared through correspondent accounts located in the United States or accounts at non-U.S. branches of U.S. financial institutions.
 
Looking Forward
 
The past 12 months have been an extraordinarily active period and, given recent international developments, the pace of change for U.S. sanctions policy is unlikely to slow in the foreseeable future. Further changes to country-based sanctions programs reportedly are under consideration, and sources have reported that OFAC currently is negotiating a potential multimillion-dollar settlement with Zimbabwean bank CBZ Bank. [FN/7] For these reasons, monitoring developments in U.S. sanctions policy and enforcement has never been more important.
 
———-
  [FN/1] Pursuant to CRIEEA, the U.S. Department of State has published a list of over 30 entities that are part of, or operate on behalf of, the Russian defense or intelligence sectors.
  [FN/2] On Jan. 17, OFAC issued a general license authorizing all transactions prohibited under the SSR.
  [FN/3] General License H permits non-U.S. entities owned or controlled by U.S. persons to conduct certain types of transactions involving Iranian counterparties or Iranian-origin items, subject to restrictions.
  [FN/4] Concurrently, the State Department published a List of Restricted Entities and Subentities Associated With Cuba, which currently identifies over 100 Cuban entities controlled by, or acting on behalf of, the Cuban military, intelligence, or security services.
  [FN/5] OFAC resolved two enforcement actions by issuing a “Finding of Violation” without imposing a monetary penalty. Notably, a single enforcement action, discussed below, has accounted for nearly 85% of total sanctions penalties collected in 2017 to date
  [FN/6] In 2014, The Wall Street Journal published at least two articles reporting that Treasury Department officials had opined that BP CEO Bob Dudley’s interactions with Mr. Sechin in their capacities as corporate directors were permissible. See Justin Schenk, BP’s American CEO in Uncomfortable Place: Rosneft’s Boardroom, Wall Street Journal (May 15, 2014), available here; Liam Moloney, Pirelli Names Rosneft Chairman Igor Sechin to Board, Wall Street Journal (Jul. 11, 2014), available here.
  [FN/7] Clif Burns, OFAC and Zimbabwe Bank Negotiating over Penalties, ExportLawBlog (Oct. 30, 2017), available here.

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COMM_a2
9. R. Slack: “Distributor Danger: OFAC Case Highlights Sanctions Liability for Bad Acts by Distributors and Foreign Subsidiaries”

(Source: Trade and Manufacturing Monitor, 15 Dec 2017.)
 
* Authors: Robert Slack, Esq., rslack@kelleydrye.com, Kelley Drye & Warren LLP.
 
Many companies supply goods and services through third party distributors.  When well-structured, the use of distributors can shift some of the cost and compliance risk of selling products outside of your home territory.  But distributors can also create sanctions liability for companies, especially when foreign subsidiaries or others within the company are in on the bad acts.
 
A recent enforcement action by OFAC highlights some of these risks.  OFAC fined a U.S.-based dental supply company over $1.2 million for shipments from foreign subsidiaries to third party distributors for ultimate end use in Iran.  The sales continued after the foreign subsidiaries confirmed that the distributors had shipped their products to Iran in the past.  OFAC also indicated that company personnel knew that some of the sales were destined for Iran and took steps to conceal the end use of these sales from the U.S.-based parent company.
 
Foreign subsidiaries of U.S. companies cannot shield their U.S. parent companies from liability under OFAC’s regulations simply by lying to the parent company or concealing evidence of the end use of a sale.  Under OFAC’s Iran rules, parent companies are liable for the actions of their foreign subsidiaries.  OFAC’s rules also generally operate under the principle of strict liability, which means that the U.S. parent is liable even if it did not know that shipments were ultimately destined for Iran.  Under other provisions of the rules, OFAC could have also charged the non-U.S. actors in the case – including the distributors and foreign subsidiaries – for illegal transactions involving Iran.
 
To avoid these kinds of pitfalls, U.S. companies need to exercise oversight over non-U.S. sales channels, including those managed by foreign subsidiaries.  Compliance steps like sanctions policies and procedures, written agreements with distributors, training, due diligence on third parties, and auditing or monitoring rights (with actual follow-up) can also help strengthen oversight of non-U.S. subsidiaries and distributors and reduce the risk of sanctions violations for the U.S. company.

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TEEX/IM TRAINING EVENTS & CONFERENCES

(Source: Editor)
 
The Netherlands Defense Academy presents a winter seminar, “Compliance and Integrity in International Military Trade,” 5-9 February 2018, in the charming town of Breda, the Netherlands, an hour’s drive south of Amsterdam. Many hotels and restaurants are within walking distance of the Defense Academy, which is the Dutch equivalent of the U.S. military academies. The course is designed for NATO+ military officers, government employees, and employees of NATO+ defense contractors. Participants will receive certificates of completion from the Academy.
* Course contents:
  – 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
* 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, JD, LL.M; Michael E. Farrell; and Drs. Alexander P. Bosch.

  
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ENEDITOR’S NOTES

 


Mortimer Adler
(
Mortimer Jerome Adler; 28 Dec 1902 – 28 Jun 2001; was an American philosopher, educator, and popular author. As a philosopher, he worked within the Aristotelian and Thomistic traditions. With Robert Hutchins, Adler founded the Great Books of the Western World program and the Great Books Foundation.)
– “Love consists in giving without getting in return; in giving what is not owed, what is not due the other. That’s why true love is never based, as associations for utility or pleasure are, on a fair exchange.”
  – “In the case of good books, the point is not to see how many of them you can get through, but how many can get through to you.”

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EN_a312
. 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: 27 Dec 2017: 82 FR 61153-61162: Revisions, Clarifications, and Technical Corrections to the Export Administration Regulations

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders
  – Last Amendment: 28 Dec 2017: 
82 FR 61450-61451: Iraq Stabilization and Insurgency 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: 26 Dec 2017: Harmonized System Update 1709, containing 2,415 ABI records and 489 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”)
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EN_a0313
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.

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