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18-0223 Friday “Daily Bugle”

18-0223 Friday “Daily Bugle”

Friday, 23 February 2018

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, DOE/NRC, Customs, NISPOM, EAR, FACR/OFAC, FAR/DFARS, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe here for free subscription. Contact us for advertising inquiries and rates.

  1. President Modifies and Continues National Emergency with Respect to Cuba, Continues Authorization of Regulation of the Anchorage and Movement of Vessels
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. DHS/CBP Releases Deployment G, Release 4, Support Calls Information and U9 Status Message Update
  4. State/DDTC: (No new postings.)
  5. Treasury/OFAC Publishes North Korea Vessel Advisory
  6. EU Implements Regulation Concerning the Classification of Certain Goods in the Combined Nomenclature
  1. Reuters: “U.S. Imposes More North Korea Sanctions; Targets Ships, Firms”
  2. ST&R Trade Report: “Dates and Deadlines: Duty-Free Imports, COAC, Defense Trade, IPR, Export Certificates”
  3. ST&R Trade Report: “Nuclear Trade Advisory Committee Sets Upcoming Meetings”
  1. A. Capri: “Why U.S. Sanctions Are So Lethal: The Anatomy of a Chinese Tech-Company Disaster”
  2. B. Webb: “‘Capable of’ Confusion” 
  3. International Trade Compliance Update: “UK Adopts Export Control (North Korea Sanctions) Order 2018” 
  4. Squire Patton Boggs: “Proposed CFIUS Law Will Impose New Export Controls on U.S. Businesses” 
  1. ECTI Presents “United States Export Control (ITAR/EAR/OFAC) Seminar Series” in Washington, DC, 30 Apr-3 May 
  2. List of Approaching Events – 9 New Events Listed 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: ATF (15 Jan 2016), Customs (22 Feb 2018), DOD/NISPOM (18 May 2016), EAR (16 Feb 2018), FACR/OFAC (28 Dec 2017), FTR (20 Sep 2017), HTSUS (8 Feb 2018), ITAR (14 Feb 2018) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1.
President Modifies and Continues National Emergency with Respect to Cuba, Continues Authorization of Regulation of the Anchorage and Movement of Vessels

(Source:
Federal Register, 23 Feb 2018.) [Excerpts.] 
 
83 FR 8161-8163: Proclamation 9699 of February 22, 2018;
Modifying and Continuing the National Emergency with Respect to Cuba and Continuing to Authorize the Regulation of the Anchorage and Movement of Vessels
 
By the President of the United States of America
 
A Proclamation
 
In order to modify and continue the ongoing national emergency declared in Proclamation 6867 of March 1, 1996, expanded by Proclamation 7757 of February 26, 2004, and modified by Proclamation 9398 of February 24, 2016, in light of the need to continue the national emergency based on a disturbance or threatened disturbance of the international relations of the United States related to Cuba, and,
WHEREAS it is the policy of the United States that a mass migration from Cuba would endanger our security by posing a disturbance or threatened disturbance of the international relations of the United States;
 
WHEREAS the Cuban economy is in a relatively weak state, contributing to an outflow of its nationals toward the United States and neighboring countries;
 
WHEREAS the overarching objective of our policy is stability with our immediate neighboring countries and an outflow of Cuban nationals may have a destabilizing effect on the United States and its neighboring countries;
 
WHEREAS it is the policy of the United States to ensure that engagement between the United States and Cuba advances the interests of the United States and of the Cuban people as described in National Security Presidential Memorandum-5 of June 16, 2017 (Strengthening the Policy of the United States Toward Cuba);
 
WHEREAS the United States continues to maintain an embargo with respect to Cuba;
 
WHEREAS the unauthorized entry of vessels subject to the jurisdiction of the United States into Cuban territorial waters is in violation of the law of the United States and contrary to the policy of the United States;
 
WHEREAS the unauthorized entry of United States-registered vessels into Cuban territorial waters is detrimental to the foreign policy of the United States and counter to the purpose of Executive Order 12807 of May 24, 1992, which is to ensure, among other things, safe, orderly, and legal migration;
 
WHEREAS the possibility of large-scale unauthorized entries of United States-registered vessels into Cuban territorial waters would disturb the international relations of the United States by facilitating a possible mass migration of Cuban nationals;

NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, by the authority vested in me by the Constitution and the laws of the United States of America, including section 1 of title II of Public Law 65-24, ch. 30, June 15, 1917, as amended (50 U.S.C. 191), sections 201, 202, and 301 of the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code, in order to modify the scope of the national emergency declared in Proclamations Start Printed Page 81626867, 7757, and 9398, and to secure the observance of the rights and obligations of the United States, hereby continue the national emergency declared in Proclamations 6867, 7757, and 9398, and authorize and direct the Secretary of Homeland Security (the “Secretary”) to make and issue such rules and regulations as the Secretary may find appropriate to regulate the anchorage and movement of vessels, and delegate to the Secretary my authority to approve such rules and regulations, as authorized by the Act of June 15, 1917. Accordingly, I hereby direct as follows:
 
Section 1. The Secretary may make rules and regulations governing the anchorage and movement of any vessel, foreign or domestic, in the territorial waters of the United States, that may be used, or is susceptible of being used, for voyage into Cuban territorial waters and that may create unsafe conditions, or result in unauthorized transactions, thereby threatening a disturbance of international relations. A rule or regulation issued pursuant to this proclamation may be effective immediately upon issuance if it involves a foreign affairs function of the United States.
 
Sec. 2. The Secretary is authorized, to the extent consistent with international law, to inspect any vessel, foreign or domestic, in the territorial waters of the United States, at any time; to place guards on any such vessel; and, with my consent expressly hereby granted, take full possession and control of any such vessel and remove the officers and crew and all other persons not specifically authorized by the Secretary to go or remain on board the vessel, when necessary to secure the rights and obligations of the United States. … 

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OGSOTHER GOVERNMENT SOURCES

OGS_a12
. Items Scheduled for Publication in Future Federal Register Editions
 

(Source:
Federal Register)
* State; NOTICES;
  – Agency Information Collection Activities; Proposals, Submissions, and Approvals [Concerns Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data; and
  – Designations as Global Terrorists: Ansarul Islam, aka Ansarour Islam, etc. [Publication Dates: 26 Feb 2018.]

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. DHS/CBP Releases Deployment G, Release 4, Support Calls Information and U9 Status Message Update

(Source:
CSMS# 18-000160, 22 Feb 2018.)
 
This is a reminder to the Trade that on February 24, 2018, CBP will deliver ACE Deployment G,  Release 4.
 
Deployment Support Calls
 
Following the deployment, CBP’s Trade Transformation Office (TTO) will host a daily support call from February 26, 2018 to March 2, 2018 between 2:00 PM ET and 3:00 PM ET to answer questions related to the February 24th deployment.
  – Line 1 (877) 336-1828 / PC: 6124214
 
In addition, CBP will host a separate daily support call focused on Drawback issues only.  From 3:00 PM ET to 4:00 PM ET on February 26, 2018 to March 2, 2018, CBP will be addressing questions related to Drawback capabilities included in the February 24th deployment.
  – Line 1 (877) 336-1829 / PC 4840827
 
Additionally, please note:
 
With the deployment of ACE liquidations, the Entry Summary UC9 status notification message will no longer be provided.  The ACE entry summary will no longer be assigned a future liquidation date when moved to CBP control.  Instead, the liquidation status will remain ‘Not Liquidated’ until a liquidation is performed.  Trade will continue to be able to query the entry summary liquidation status and date via the ACE Entry Summary Query.
 
Capabilities included in Deployment G, Release 4: 
Drawback including:
 – Core drawback
 – TFTEA drawback provisions
 – Accelerated Payment
 – Entry Type 47
Liquidation including:
 – Weekly processing
 – Temporary Importations Under Bond (TIB) Expiration Notice
 – Temporary Importations Under Bond (TIB) Extensions
 – Temporary Importations Under Bond (TIB) Closures
Reconciliation including:
 – Removal of Blanket flagging
 – Expanding Processing Ports
 – Entry Type 09
Other Functionality
 – Cuban ABI entries
 – eBond updates including:
 – Drawback Bond Decrementation Reports
 – A new Reconciliation universe and a new Liquidation universe are scheduled for deployment on March 17, 2018. Additional information will be provided on these report capabilities at a later date.
 
Details and additional resources may be found in the ACE Deployment G, Release 4 Information Notices posted to
www.CBP.gov/ACE at the links listed below:
ACE Deployment G, Release 4 Information Notices:
 
 – Drawback Information Notice –
here
 – Liquidation Information Notice –
here
 – Reconciliation Information Notice –
here
 – Cuban Entries and eBond Updates –
here

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OGS_a4
6.

Treasury/OFAC Publishes North Korea Vessel Advisory

(Source:
Treasury/OFAC, 23 Feb 2018.)
 
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), with the Department of State and the U.S. Coast Guard, is issuing
this advisory to alert persons globally to deceptive shipping practices used by North Korea to evade sanctions.  These practices may create significant sanctions risk for parties involved in the shipping industry, including insurers, flag registries, shipping companies, and financial institutions.  Parties subject to U.S. and/or United Nations (UN) sanctions should be aware of these practices in order to implement appropriate controls to ensure compliance with their legal requirements. 

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7.

EU Implements Regulation Concerning the Classification of Certain Goods in the Combined Nomenclature

 
Regulations
 
*
Commission Implementing Regulation (EU) 2018/267 of 19 February 2018 concerning the classification of certain goods in the Combined Nomenclature.

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NWSNEWS

NWS_aa1
8.

Reuters: “U.S. Imposes More North Korea Sanctions; Targets Ships, Firms”

(Source:
Reuters, 23 Feb 2018.) [Excerpts.]
 
The United States said on Friday it was imposing its largest package of sanctions against North Korea, intensifying pressure on Pyongyang to give up its nuclear weapons and missile programs.
 
In addressing the Trump administration’s biggest national security challenge, the U.S. Treasury sanctioned one person, 27 companies and 28 ships, according to a statement on the U.S. Treasury Department’s website.
 
The actions block assets held by the firms in the United States and prohibit U.S. citizens from dealing with them. …  
 
The Treasury’s Office of Foreign Assets Control announced the sanctions, which are designed to disrupt North Korean shipping and trading companies and vessels and to further isolate Pyongyang.
 
Treasury Secretary Steve Mnuchin said in a statement the sanctions against the ships would help prevent Kim’s government from conducting “evasive maritime activities that facilitate illicit coal and fuel transports and erode its abilities to ship goods through international waters.”
 
The ships are located, registered or flagged in North Korea, China, Singapore, Taiwan, Hong Kong, Marshall Islands, Tanzania, Panama and Comoros, Treasury said.
 
Those targeted included a Taiwanese passport holder and mainland China, Hong Kong, Taiwan and Singapore shipping and energy firms.
 
  “We imposed today the heaviest sanctions ever imposed on a country before,” Trump said in an address to a conservative activist group in Washington. “And … hopefully something positive can happen, we will see.”  …
 
At another briefing in Washington, Treasury Secretary Steve Mnuchin stood next to enlarged photos he said showed December 2017 images that revealed ship-to-ship transfers of fuel and other products destined for North Korea in an attempt to evade sanctions.
 
Mnuchin said he could not rule out the prospect of the United States boarding and inspecting North Korean ships.
 
He said the new sanctions are targeting virtually all shipping currently being used by North Korea. They bring the total number of U.S. sanctions against North Korea since 2005 to 450, Mnuchin said, with approximately half of those coming in the last year.
 
  “This is very impactful,” he said. “This is virtually all the ships they’re using at this moment in time.”
 
The U.S. government “also issued an
advisory alerting the public to the significant sanctions risks to those continuing to enable shipments of goods to and from North Korea.” … 

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NWS_a2
9.

ST&R Trade Report: “Dates and Deadlines: Duty-Free Imports, COAC, Defense Trade, IPR, Export Certificates”

 
Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week.
 
  Feb. 26 – deadline for comments to FTZ Board on 
expansion of two subzones
  Feb. 27 – deadline for comments to ITC on potential 
IPR import restrictions on jump rope systems
  Feb. 28 – meeting of CBP’s 
Commercial Customs Operations Advisory Committee
  March 1 – deadline for comments on FDA 
export certificate applications for foods and cosmetics
  March 1 – deadline for comments on 
export bonds for distilled spirits and wine
  March 1 – effective date of USDA final rule allowing 
imports of orchids in growing media from Taiwan
  March 1 – deadline for comments to ITC on potential 
IPR import restrictions on magnetic tape cartridges
  March 2 – deadline for applications for membership on 
Defense Trade Advisory Group
  March 2 – deadline for comments to ITC on potential 
IPR import restrictions on clidinium bromide

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NWS_a3
10.

ST&R Trade Report: “Nuclear Trade Advisory Committee Sets Upcoming Meetings”

 
The International Trade Administration’s Civil Nuclear Trade Advisory Committee will hold public meetings March 15 and July 19 in Washington, D.C., and a conference call May 17. Each of these meetings will include an update on the ITA’s civil nuclear trade initiative and a discussion of civil nuclear trade promotion activities.
 
The CINTAC advises the ITA on the development and administration of programs to expand U.S. exports of civil nuclear goods and services in accordance with applicable U.S. laws and regulations, including how U.S. civil nuclear goods and services export policies, programs, and activities will affect the U.S. civil nuclear industry’s competitiveness and ability to participate in the international market.

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COMMCOMMENTARY

COMM_a1
11. A. Capri: “Why U.S. Sanctions Are So Lethal: The Anatomy of a Chinese Tech-Company Disaster”

(Source:
The Diplomat, 23 Feb 2018.)
 
* Alex Capri, Senior Fellow at the National University of Singapore,
acapri@nus.edu.sg.
 
Most business pundits had never heard of ZTE Corp. (ZTE), the Chinese telecoms manufacturer.
 
But, in 2017, ZTE was assessed a $1.19 billion penalty for illegal exports to Iran and North Korea, amounting to the largest civil penalty ever assessed for violation of the U.S. Export Administration Regulations (EAR).
 
Ultimately, ZTE paid $892 million dollars to U.S. enforcement agencies, including the Bureau for Industrial Security (BIS) and the Department of Justice (DOJ). The penalty was especially harsh because ZTE was found to have attempted to obstruct the investigation.
 
What are the important lessons for multinationals – other than don’t break the law and don’t obstruct justice?
 
First, U.S. sanctions and export controls have far-reaching jurisdiction and can disrupt global value chains, inflicting collateral damage on a host of innocent parties.
 
Second, “national security” sensitivities are on the rise, and Washington is gearing up for an aggressive campaign of sanctions and stringent export licensing requirements – with a growing number aimed at Chinese companies. These policy tools fall under the umbrella of “strategic industries and economic security” (“SIES”), and U.S. agencies are rolling out new enforcement programs on a monthly basis.
 
Third, technology has become both an enabler and a disrupter. U.S. enforcement agencies are deploying new “traceability” tools when it comes to the policing and monitoring of strategic goods. At the same time the geopolitical landscape is becoming increasingly dangerous as nonstate and state actors seek to “weaponize” ubiquitous technologies. This has led to a further expansion of “controlled item” lists – which means more penalties can be expected.
 
Put all of this together and technology companies are facing a geopolitical landscape fraught with risk and uncertainty.
 
Collateral Damage 
 
By any measure, ZTE is a world-class, multinational enterprise. It’s the largest publicly traded telecom company in China, and the fourth largest telecom equipment company in the world. It makes cutting edge devices. With around $15 billion in global revenue, in 2017, and 80,000 employees spread across 160 countries, it operates in a network of complex global value chains.
 
According to Matt Bell, ZTE Corp’s Chief Export Compliance Officer and Legal Counsel, when the BIS put ZTE on the dreaded “Entity List” and revoked the company’s operating license, its key supply chains instantly ground to a halt.
 
Bell – who was hired by ZTE to manage the crisis and, going forward, advise the company on how to install a framework of effective export control processes – worked with BIS officials and obtained a temporary general license (TGL). Only then was ZTE allowed to resume business.
 
What also became clear was the scale of the collateral damage that U.S. sanctions cause within global value chains. Consider the following.
 
Suppliers. Each year, ZTE purchases $2.5 billion in parts and components from third party suppliers in the United States, including Qualcom, Broadcom, Intel, Oracle, and Google. Many of ZTE’s smaller second and third tier suppliers would have gone out of business had ZTE not obtained a temporary license to continue business. Said Bell, “many small suppliers wouldn’t have lasted 30 days.”
 
Logistics Companies. An entire ecosystem of logistics companies, warehouse operators, agents, and IT professionals are needed to move thousands of parts, components, and materials through ZTE’s supply chain each day. A shutdown of even one week would have impacted many jobs.
 
Consumers. In order to keep operating systems updated with critical data and protected from the latest malware and viruses, phone manufacturers provide users with updated “security patches.” An estimated 20-30 million American consumers own ZTE-made smart phones. During the shutdown, ZTE was unable to provide security patches to its U.S customers. Instead, ZTE had to send brand new phones to its users – at considerable cost.
 
Shareholders. When the ZTE stock price tumbled as news of the U.S. penalty became public, trading of ZTE stock had to be briefly suspended on the Hong Kong and Shenzhen stock exchanges. Markets often react to such headlines irrationally.
 
The Long Arm of Uncle Sam
 
U.S. law requires that if any foreign made item – fabricated by any foreign company – uses more than 10 percent (by value) U.S. “controlled items,” the entire product is subject to U.S. laws. That means that a product that is of 90 percent Chinese origin, for example, still needs to be traced all the way to its end-user, and can’t be sold to any “denied parties.” There are thousands of denied parties on U.S. lists, and new names are added every day.
 
It’s a challenge to manage this process. As Bell explained, “telecoms sell multimillion dollar systems that are tailored to specific customers, who often request that a product is shipped in separate components.” So, how do you assess the value of U.S. controlled technology from one part to the next?  Now imagine trying to manage this process for thousands of subcomponents, and partially assembled gadgets.
 
Why American Sanctions Are So Lethal
 
The United States still enjoys exorbitant privileges when it comes to exerting its will in the international system. One reason is the dominant role of the U.S. dollar. The U.S. Office of Foreign Assets Control (OFAC) can assert jurisdiction over any U.S. dollar transaction because, eventually, that dollar must clear through the U.S. banking system. And that means a transaction can be traced back to a foreign bank account, to individual parties, and blocked. To borrow a phrase from former U.S. Treasury Secretary John Connally, who said, in 1971 – albeit in a different context – “the dollar is our currency but your problem.”
 
This rings painfully true to the Russians and the Iranians. Despite having large energy reserves, to exploit them, they are in need of new supply chains and that requires access to technology that belongs primarily to Western firms. That means dollar-denominated transactions, which instantly disqualifies a large number of Russian and Iranian firms that find themselves on U.S. government sanctions lists.
 
How to Manage Risks
 
ZTE’s Bell hopes to harness technology, as he leads ZTE in the building of a best-in-class compliance process. That means using system automation, AI, robotics, and data analytics to implement transparency and traceability. That and the daily task of educating and informing those across the organization.
 
But, when it comes to U.S. sanctions, the road ahead for tech companies will become increasingly challenging.

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COMM_a2
12. B. Webb: “‘Capable of’ Confusion”

(Source:
Commonwealth Trading Partners, 22 Feb 2018.)
 
* Author: Buce Webb, Director – Technical Programs, Commonwealth Trading Partners. Contact Mr. Webb via
here.
 
“Capable of” is a confusing phrase in the vernacular of the Commerce Control List (CCL). Before I explain, let me first make clear that words or phrases appearing in quotation marks in the CCL are defined terms with a standardized meaning. Since these terms of art appear repeatedly in the CCL it is critical to understand precisely what they mean.
 
The word ‘capable’ is typically defined in dictionaries in terms of human qualities, abilities and characteristics and only rarely used to describe mechanical capability or suitability. For example, Webster’s dictionary defines it as: “having power and ability; efficient; competent” while Collins defines it as: “having the ability or qualities necessary for” and “able or ready to.” Meanwhile, the Longman Dictionary of Contemporary English defines “capable of” as: “(doing) something, capable of (doing) something, having the qualities or ability needed to do something.” Of them all, the latter most closely approaches the intention of the phrase “capable of” in the Export Administration Regulations (EAR).
 
Unfortunately, it is not that simple. The term “capable of” and its definition originated with the CCL sections pertaining to the Missile Technology Control Regime (MTCR) and items controlled by it, but not/not the entries originated by the Wassenaar Arrangement, the Nuclear Suppliers Group or the Chemical Weapons Convention. As a result, the use of “capable of” became inconsistent and confusing since it applies to some CCL entries and not others. As a workaround, there is a partial definition in Part 772 of the EAR that directs the reader to another defined term, saying: “See ‘usable in.'”
 
This approach is often confusing. When one reviews the term “capable of” in various entries throughout the CCL, substituting “usable in” or “usable for” or “usable as” causes several of the control entries to lose their original control intent.
 
Here is an example. The nuclear control entry for certain pumps, ECCN 1B230, contains a technical description of the operating capacity, pressure range and hermetically sealed requirements for pumps used in heavy water production. The entry states in its heading that the controlled pumps are those that are capable of (not in quotes) circulating Potassium Amide liquid, an explosive and flammable material. Substituting “usable in” would not fit the terminology of this control entry, but one could argue that since the words do not appear in quotes, the EAR’s definition is not applicable. Using the words as an undefined term does not provide the exporter with guidance as to what is required to make the pumps capable of circulating such potassium amide solutions, leaving the entry open to imprecise, narrow, or broad interpretation.
 
Another example is ECCN 1C216 where the control language uses the words “capable of” within quotes as follows: “Maraging steel, other than that controlled by 1C116, ‘capable of’ an ultimate tensile strength of 1,950 MPa or more, at 293 K (20° C).” This entry refers to very precise specific technical requirements that are clear on their face but when looking at the “capable of” definition, which refers to “usable in,” “usable for,” or “usable as” then the control entry loses its precision and its intent.
 
A third example is ECCN 9B117.b. for test benches and test stands for solid or liquid propellant rockets, motors or rocket engines, where the control language uses the words capable of (not within quotes) as follows:  Capable of simultaneously measuring the three axial thrust components. When looking at the “capable of” definition in this case and applying “usable for” instead, then the definition could work, albeit loosely.
 
These three examples demonstrate that the phrase “capable of” is used inconsistently in the CCL. When classifying items, be aware of these issues and the confusion they are capable of creating.

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COMM_a3
13International Trade Compliance Update: “UK Adopts Export Control (North Korea Sanctions) Order 2018”

(Source:
International Trade Compliance Update, 21 Feb 2018.)
 
On 21 February 2018, the UK
posted
SI 2018/200 – The Export Control (North Korea Sanctions) Order 2018. The Order makes provision in connection with the trade restrictions against North Korea specified in Council Regulation (EU) No 2017/1509 of 30 August 2017, as last amended by Council Implementing Regulation (EU) No 2018/87 of 22 January 2018 (OJ No. LI 16I, 22.01.2018, p.1) (“the North Korea Regulation”). The Order revokes articles 4 to 16 of the
Export Control (North Korea Sanctions and Iran, Ivory Coast and Syria Amendment) Order 2017
(S.I. 2017/83). The Explanatory Note to the Order states:
 
Article 4 provides for the granting of licences for the purposes of the provisions of the North Korea Regulation which allow a competent authority to authorise trade related activities which would otherwise be prohibited. The competent authority for these purposes is the Secretary of State. A licence granted by the Secretary of State may be varied, suspended or revoked. Article 4(7) makes it an offence to knowingly or recklessly provide false information for the purpose of obtaining a licence. Article 4(9) makes it an offence to fail to comply with any condition attached to a licence.
 
Articles 5 to 19 create offences for contravention of relevant trade restrictions in the North Korea Regulation. “Relevant trade restrictions” do not include restrictions on the export or import of goods. Offences for contravention or circumvention of restrictions on the export or import of goods are to be found in the Customs and Excise Management Act 1979.
 
Article 20 creates an offence of circumventing any relevant trade restriction in the North Korea Regulation.
 
Article 21 makes provision for a defence for a person charged with certain offences under the Order.
 
Article 22 sets out the penalties relating to the offences under this Order. Article 23 makes modifications to the penalties that will apply where a person is guilty of an offence under the 1979 Act in connection with the exportation or importation of goods which is prohibited by the North Korea Regulation.
 
Article 24 applies (with modifications) sections 77A, 138, 145, 146, 146A, 147, 148, 150, 151, 152, 154 and 155 of the Customs and Excise Management Act 1979 for the purposes of the Order. These sections, as applied, make provision in connection with the investigation of and proceedings for offences under this Order. 

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COMM_a4
14Squire Patton Boggs: “Proposed CFIUS Law Will Impose New Export Controls on U.S. Businesses”

(Source:
The Trade Practitioner, 21 Feb 2018.)
 
The Foreign Investment Risk Review Modernization Act of 2017 (S. 2098/H.R. 4311, FIRRMA for short) was introduced in Congress to reform the national security review of foreign acquisitions of US businesses by the Committee on Foreign Investment in the United States (CFIUS or the Committee). However, FIRRMA extends well beyond this purpose of reviewing acquisitions by giving CFIUS authority over technology transfer transactions – both export and domestic.
 
The proposed legislation will give CFIUS authority over a US business’ technology transfers both to an organization outside the US and to a US organization that is “controlled” by a non-US person. As a result, every company that produces military or controlled dual-use items will need to consider CFIUS review for foreign 
and domestic technology transfer transactions. This aspect of the proposed legislation is troubling because it establishes a duplicate government approval process, requires review of technology transfer that the existing export control agencies have determined not to require a license, and imposes a new level of “know your customer” due diligence to understand the ownership of a US recipient.
 
Further, organizations that develop innovative and emerging technologies also must consider CFIUS review, even though their technology is not controlled for export purposes. Over the last 20 years, the most innovative technologies (e.g., various artificial intelligence [AI] applications, information security and encryption technology, nanotechnology, etc.) have been developed, not by the US government or government-sponsored research, but by purely commercial companies – and, in particular, small venture-backed commercial start-ups in Silicon Valley and other technology hubs around the country. However, while many of these emerging technologies may not be listed with an Export Control Classification Number (ECCN) on the Commerce Control List (CCL), they may require CFIUS review under the proposed legislation. As to these decontrolled technologies, including EAR99 technologies, not only does this proposed increase in CFIUS authority add another export control authority in addition to current controls, but it would also create oversight over their transfer. Such a proposal stands to negatively impact US innovation and, indirectly, its technology advantage.
 
Current Scope of CFIUS and Export Control Agencies
 
Under the current CFIUS implementing statute, Section 721 of the Defense Production Act of 1950, CFIUS has authority over “covered transactions,” which are defined as the acquisition of “control” by a “foreign person” over a “US business.” CFIUS authority is thus limited to only certain foreign investments in the US that meet this definition. Currently, Section 721 does not give CFIUS authority over technology transfers between US and foreign persons (i.e., exports) or domestic technology transfers. Review of exports are left to other executive agencies that have the expertise to evaluate the transfer and to determine the impact on national security, foreign policy and other policy and releasability considerations.
 
The transfer of technology by a US business is subject to US export controls: the Export Administration Regulations (EAR), administered by the US Department of Commerce, Bureau of Industry and Security (BIS), and the International Traffic in Arms Regulations (ITAR), administered by the US Department of State, Directorate of Defense Trade Controls (DDTC). Under the EAR and the ITAR, a license, approved agreement, exception or exemption is required to export controlled technology to a foreign person, whether within or outside the US. The requests for approval submitted to these agencies are reviewed by government personnel who understand the technology, policy considerations and releasability guidelines, typically involving review by the Department of Defense, Defense Technology Security Administration and, in appropriate cases, stakeholders in the Armed Services, Department of State, the Intelligence Community and others.
 
Expansion of CFIUS Authority Over Already Regulated Export Activities
 
FIRRMA would expand the definition of a covered transaction, and thus CFIUS’s authority, to include the following: any contribution “of both intellectual property and associated support” to a foreign person as part of “any type of arrangement” if the US business “produces, trades in, designs, tests, manufactures, services, or develops one or more critical technologies, or a subset of such technologies” (i.e., a “Critical Technology Company”).
 
Essentially, FIRRMA empowers CFIUS – as a new export licensing agency – to conduct an interagency review of all covered technology transfers. In addition, FIRRMA would give CFIUS authority to exempt “identified countries,” under its discretion, from this new authority. Accordingly, CFIUS will create the equivalent of a license exception for certain countries, possibly similar to an EAR license exception (e.g., license exceptions for Country Group B Shipments [GBS] or Strategic Trade Authorization [STA]).
 
The proposed legislation also leaves much open to CFIUS interpretation. What exactly qualifies as an “arrangement” or “contribution” is not clear, but FIRRMA’s description of these concepts seems extremely broad. For example, the legislation states that arrangements include any contribution “other than through ordinary customer relationship … such as a joint venture.” However, this language would likely include joint development agreements, technology licenses and other joint collaborations and initiatives. FIRRMA would thus give CFIUS authority over almost any technology transfer involving foreign persons that fall outside of ordinary course buy/sell transactions by a US company that falls within the broad definition of a Critical Technology Company.
 
Because CFIUS is an interagency body, technical reviews are often carried out by its member agencies – such as the Department of Commerce (through BIS). As a result, a CFIUS review of a transfer of controlled technology under FIRRMA would likely be handled by the same export control agency that would handle it outside of the CFIUS process, duplicating the regulatory review of such transfers. Alternatively, CFIUS could have other agency members handle the review of a technology transfer, but such a scenario would likely result in inefficiencies and inconsistent results, as the institutional expertise on technology transfers resides with the export control agencies. So, under either scenario involving a CFIUS review of already controlled technologies, the result is either duplicative or inefficient and inconsistent.
 
Deals by Every US Company Operating in Controlled Technologies Will Be Subject to CFIUS Review
 
The definition of a Critical Technology Company includes any company dealing in already controlled technologies. This includes any company dealing in Defense Articles or Defense Services under the ITAR or dealing in certain technologies on the CCL under the EAR. The EAR covered technologies include ECCNs on the CCL that are controlled for any of the following reasons: national security, chemical and biological weapons proliferation, nuclear nonproliferation, missile technology, regional stability, surreptitious listening, as well as certain agents and toxins and if controlled pursuant to multilateral regimes. Also included are nuclear-related products regulated by the Nuclear Regulatory Commission Controls.
 
However, unlike the existing export controls regime, which triggers a licensing requirement based on the technology to be exported, the CFIUS review proposed by FIRRMA would be triggered by the type of company engaged in the technology transfer. That is, every technology transfer by a Critical Technology Company is potentially subject to CFIUS review, even if the technology being transferred is not a critical technology. Accordingly, a decontrolled technology transfer (e.g., EAR99 technology) by a Critical Technology Company could be subject to CFIUS review under the proposed legislation.
 
Deals by US Companies In Emerging Technologies Will Be Subject to CFIUS Review
 
FIRRMA adds to the current definition of critical technology by including the concept of “emerging technologies,” defined under FIRRMA as any technology that CFIUS deems “essential for maintaining or increasing the technological advantage of the US over 
countries of special concern with respect to national defense, intelligence, or other areas of national security, or gaining such an advantage over such countries in areas where such an advantage may not currently exist.” (Emphasis added.)
This definition under FIRRMA would give CFIUS discretionary authority to deem certain technologies that are not listed on the US Munitions List, CCL or any other list, as emerging technologies. Indeed, under FIRRMA, CFIUS is the arbiter as to which technologies are “emerging technologies.” As a result, any US organization with new or innovative technology will need to consider seeking CFIUS clearance for its transfer of technology if the technology has a potential military or intelligence application, or simply provides and advantage over some country of “special concern” (to be defined in CFIUS’s discretion).
 
Domestic Technology Transfers Will Be Subject to CFIUS Review
 
FIRRMA would establish a new form of government approval for domestic technology transfers. Currently, under the ITAR and EAR a business organized to do business in the US is a US person. This is true even if the company is partly or wholly owned by a non-US person. There are numerous examples of US companies that are vital to our defense industrial base and critical infrastructure of the US but are foreign owned in whole or in part. Under FIRRMA, these US companies would be treated as foreign persons, and transfers of technology of the type described above would be subject to CFIUS clearance. That is because for CFIUS purposes a “foreign person” includes any entity that is directly or indirectly “controlled” (a concept broadly interpreted beyond majority holdings to include minority holdings or special voting rights) by a foreign person.
 
FIRRMA Adds an Additional Layer to “Know Your Customer” Due Diligence
 
The treatment of a US company as a foreign person for the purpose of transferring technology adds an entirely new compliance burden on US companies. Now, prior to making even a domestic technology transfer, a US company must undertake diligence to know if there is, or could be, foreign control of the recipient. Because of the broad concept of “control” for CFIUS purposes, companies would need to determine whether the recipient organization has even small foreign ownership interests. Over 10% voting interest is often considered controlling by CFIUS standards, and CFIUS will even find control when there is less than 10% foreign voting interest coupled with other indicia of control.
 
Current export compliance knows your customer measures are not structured to identify triggering foreign interests in a CFIUS context. Not only will many companies need to revamp their internal controls, but additional compliance resources will also certainly be required to address the proposed changes.
 
FIRRMA Will Chill Cross-border Cooperation and Innovation and Will Deprive Our Military of the Best Technologies and Solutions
 
The FIRRMA changes discussed herein appear to be based on outdated concepts of US technological dominance. FIRRMA will likely be a tremendous setback in the efforts made through export control reform to improve US competitiveness and innovation and US military access to the best technologies and capabilities. The historical narrative of US export control reform was strengthening controls around a smaller set of items. However, the driving force was to avoid the trend of non-US industry becoming “ITAR free” because of the extraterritorial impact of the ITAR on non-US business. This is a reality that was learned all too well in the space industry after commercial communications satellites were moved to ITAR, resulting in the assisted development of a European satellite industry.
While the proposed legislation is certainly well intended, we expect that the changes will have a chilling effect on future technology transfer and cooperative arrangements to develop and extend critical existing technologies, and perhaps, more importantly, to advance and fund new emerging technologies.
 
Conclusion
 
The proposed CFIUS authority over any arrangement, collaboration or venture involving technology transfers presents a realistic chill to US innovation. This expansive oversight creates an obstacle to US businesses that can wall off the US technology sector from the benefits of global competition and collaboration. These expansions have already raised concerns among US technology companies that operate globally, with one leading technology company stating that FIRRMA would turn CFIUS into a “super export control agency.” [FN/1] Our concern is that FIRRMA in its proposed structure will do more to harm US national security interests in the long run than it will to protect them.
 
———–
  [FN/1] Statements by Christopher Padilla, Vice President for Government and Regulatory Affairs, IBM Corporation, testifying before the Senate Banking, Housing, and Urban Affairs Committee, January 18, 2018.

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

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a1
15ECTI Presents “U.S. Export Control (ITAR/EAR/OFAC) Seminar Series” in Washington, DC, 30 Apr-3 May

(Source: Jill Kincaid;
jill@learnexportcompliance.com.)
 
* What: United States Export Control (ITAR/EAR/OFAC) Seminar Series in Washington, DC
* When: ITAR Seminar: April 30-May 1, 2018; EAR/OFAC Seminar: May 2-May 3, 2018
* Where: Alexandria, VA: Hilton Alexandria Old Town
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker Panel: John Black, Scott Gearity, Greg Creeser, Marc Binder, Melissa Proctor, and James Bartlett
* Register:
Here or Jessica Lemon, 540-433-3977,
jessica@learnexportcompliance.com.

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

TE_a3
16.
List of Approaching Events – 9 New Events Listed
(Sources: Editor and Event Sponsors)

Published every Friday or last publication day of the week. Please, send event announcements to 
jwbartlett@fullcirclecompliance.eu, composed in the below format:

# DATE: LOCATION; “EVENT TITLE”; SPONSOR; WEBLINK; CONTACT (email and phone number)

#” New listing this week  

 
Continuously Available Training:
 
* E-Seminars: “US Export Controls” / “Defense Trade Controls“; Export Compliance Training Institute; danielle@learnexportcompliance.com 
* E-Seminars: “ITAR/EAR Awareness“; Export Compliance Solutions;
spalmer@exportcompliancesolutions.com
* On-Demand Webinar; “Is Your Organization Ready for the Challenges of Global Trade?“; Amber Road 
*Online: “Simplified Network Application Process Redesign (SNAP-R)“; Commerce/BIS; 202-482-2227
* E-Seminars: “Webinars On-Demand Library“; Sandler, Travis & Rosenberg, P.A.
* Online: “International Trade Webinars“; Global Training Center
*
 
Online: “On-Demand Webinars“; “General Training“; Center for Development of Security Excellence; Defense Security Service (DSS)
* Online: “ACE Reports Training and User Guide“; DHS/CBP

* Online: ”
Increase Your International Sales – Webinar Archive;” U.S. Commercial Service

* Web Form: “Compliance Snapshot Assessment“; Commonwealth Trading Partners (CTP) 
 
Training by Date:


Feb 26: Miami, FL; “
Certified Classification Specialist (CCLS)
“; Global Trade Academy


*
 
Feb 27: London, UK; “International Documentation & Customs Compliance
“; IOEx

* Feb 27: Webinar; “The ABCs of Embargoes and Sanctions – Part I“; ECTI; 

* Feb 27-28: Amsterdam, Netherlands; “10th Pharma & Biotech Patent Litigation Conference“; C5 Group

* Feb 27-28: London, UK; ”
ITAR and the EAR US Trade Controls Compliance in Europe“; C5 Group
* Feb 28: Webinar; ”
Impact of Trade Investigations on FTZs“; National Association of Foreign Trade Zones (NAFTZ)
* Feb 28: Webinar: ”
The Fundamentals of Product Classification“; ECTI, 540-433-3977

* Feb 28-Mar 1: Dubai, UAE; “GESS Dubai 2018“; Global Educational Supplies and Solutions
* Feb 28 – Mar 2: Arlington, VA; “29th Annual SO/LIC Symposium & Exhibition“; NDIA
* Mar 1: Manchester, UK; “An Introduction to Exporting – Physical Goods“; IOEx
* Mar 1: Dubai, UAE; “Anti-Bribery Workshop“; TRACE Anti-Bribery Compliance Solutions
* Mar 5-7: Sugar Land, TX; “2018 Winter Basics Conference“; Society for International Affairs (SIA)

* Mar 6: Tysons Corner, VA; ”
KPMG LLP’s International Trade, Export Compliance, and Customs Update“; 
contact
Amie Ahanchian at aahanchian@kpmg.com or 202-533-3247

Mar 6: Webinar; ”
Legal Aspects of Doing Business in Canada“; U.S. Commercial Service

# Mar 7: Waltham, MA; ”
Important Changes in Export Control Laws in the Trump Era“; National Contract Management Association

* Mar 7: London, UK; “Operations and Maintenance for Offshore Wind“; ACI 
* Mar 7-8: Portland, OR; “Complying with US Export Controls“; Bureau of Industry and Security

# Mar 8: Free Webinar: “AES Response Messages with a Focus on Fatal Errors“; U.S. Census Bureau; Dial-In: 1-(888)-989-6511; Passcode: 4834428
# Mar 8: Webinar; ”
Europe’s GDPR and EU – U.S. Privacy Shield For U.S. Education Sector“; U.S. Commercial Service

* Mar 8: Manchester, UK; “International Documentation & Customs Compliance“; IOEx
* Mar 8-9: Washington, D.C.; “14th Annual TRACE Forum“; TRACE Anti-Bribery Compliance Solutions
* Mar 9: Orlando, FL; “Customs/Import Boot Camp“; Partnering for Compliance
* Mar 9: Webinar; “ECCN Classification Numbers“; U.S. Commercial Service
* Mar 11-14: San Diego, CA; “
ICPA Annual Conference“; International Compliance Professionals Association; wizard@icpainc.org

* Mar 12-14: Las Vegas, NV; ”
2018 General Audit Management Conference;” Institute of Internal Auditors
* Mar 13: Hook, UK; ”
General Counsel Connect“; C5 Group
* Mar 13: Webinar; ”
Canada’s Non-Resident Importer Program“; U.S. Commercial Service

* Mar 13: London, UK; “International Documentation & Customs Compliance“; IOEx

* Mar 14: “Wednesday Webinar: Due Diligence for Exports;” Reeves & Dola LLP

* Mar 14; London, UK; “Letters of Credit“; IOEx
* Mar 14: Birmingham, UK; “Intermediate Seminar“; UK Department for International Trade; denise.carter@trade.gsi.gov.uk 

* Mar 14: Las Vegas, NV; ”
Women in Internal Audit Leadership“; Institute of Internal Auditors

* Mar 14-15: Austin, TX; “Establishing an ITAR/EAR Export Compliance Program“; Export Compliance Solutions; spalmer@exportcompliancesolutions.com; 866-238-4018
* Mar 15: Birmingham UK; “Beginners Workshop“; UK Department for International Trade; denise.carter@trade.gsi.gov.uk 
* Mar 15: Birmingham UK; “Licences Workshop“; UK Department for International Trade; denise.carter@trade.gsi.gov.uk 
* Mar 15: Birmingham UK; “Control List Classification – Combined Dual Use and Military“; UK Department for International Trade; denise.carter@trade.gsi.gov.uk 
* Mar 15-16: Geneva, Switzerland;Fraud, Asset Tracking, & Recovery;” C5 Group
* Mar 15-16: McLean, VA; “ITAR Fundamentals“; FD Associates 

Mar 19: Tysons Corner, VA; “
Import 5-Day Boot Camp
“; Global Trade Academy

* Mar 20: London, UK; “Board Engagement for Ethics and Compliance Buy-In“; NAVEX Global
* Mar 20: Webinar; ”
Sending Temporary Workers to Canada“; U.S. Commercial Service
* Mar 20: Webinar; ”
Tax Avoidance in the U.S. – Lessons for Canada“; The Conference Board of Canada

* Mar 20: Zurich, Switzerland; “Anti-Corruption in Switzerland“; TRACE Anti-Bribery Compliance Solutions
* Mar 20: London, UK; “An Introduction to Importing“; IOEx
* Mar 20: London, UK; “UK & US Export Controls: A Basic Understanding“; IOEx
* Mar 20-21: San Diego, CA; “ITAR/EAR Beyond the Basics Establishing A Rock Solid Export Compliance Program“; Export Compliance Solutions, spalmer@exportcompliancesolutions.com; 866-238-4018

* Mar 20-21: Nashville, TN;
 “Complying with US Export Controls“; Bureau of Industry and Security
* Mar 22: Nashville, TN; “How to Build an Export Compliance Program“; Bureau of Industry and Security

# Mar 22: Free Webinar; “Creating an Effective Export Compliance Program and Actions to Take if an Export Violation Occurs“; U.S. Census Bureau; Dial-In: 1-(800)-369-1749; Passcode: 8836707
* Mar 21-22: London, UK; ”
Women in Compliance Conference“; C5 Group

* Mar 23; Nashville, TN; “How to Build an Export Compliance Program“; Bureau of Industry and Security
* Mar 25-28: Frankfurt, Germany; “6th Annual European Compliance & Ethics Institute“; Society of Corporate Compliance and Ethics
* Mar 26: East Rutherford, NJ; “Advanced Classification of Plastics and Rubber“; Global Trade Academy

* Mar 27: London, UK; “Brexit – Customs, Sanctions and Export Controls“; TechUK
* Mar 27: Webinar; “The ABCs of Embargoes and Sanctions – Part II“; ECTI;

* Mar 27-28: San Francisco, CA; “
8th Advanced Industry Forum on Global Encryption, Cloud, and Cyber Export Controls
“; American Conference Institute

* Mar 27-28: Brussels, Belgium; ”
Global Customs Compliance Forum“; C5 Group

* Mar 27-28: Santa Clara, CA; “Export Control Forum“; Bureau of Industry and Security
* Apr 
4-5: Des Moines, IA; “
Complying with US Export Controls
“; Bureau of Industry and Security 
* Apr 9: Toronto, Canada; “Certified Classification Specialist (CCLS)“; Amber Road
* Apr 10: Webinar; “Letters of Credit“; U.S. Commercial Service
* Apr 11: “Wednesday Webinar: Anatomy of a Compliance Program;” Reeves & Dola LLP
* Apr 11-12: Denver, CO; “Complying with US Export Controls“; Bureau of Industry and Security
* Apr 16-17: Los Angeles, CA; “APBO Conference, 2018“; Asia Pacific Business Outlook
* Apr 16-19: Las Vegas NV; “ITAR Defense Trade Controls / EAR Export Controls Seminar“; ECTI;
 
jessica@learnexportcompliance.com; 540-433-3977

* Apr 16-20: Washington, D.C.; ”
Excellence in Anti-Corruption – ISO Standards 37001 and 19600“; ETHIC Intelligence

* Apr 17-19: Kansas City, MO;
NNSA Export Control Coordinators Org Annual Training; Kimberly.galloway@pnnl.gov; 509-372-6184

Apr 18: Ottowa, Canada; ”
U.S. Ocean Tech Innovation Showcase“; U.S. Embassy in Canada

* Apr 18: Melbourne, Australia; ”
Australia/North Asia FTA Training Session for SMEs: Cultural Awareness – Negotiating Business in South Korea“; Victorian Chamber of Commerce and Industry

* Apr 18-19: Miramar (Miami), FL; “
10th Maritime Logistics Training Course

; ABS Consulting; contact Albert Saphir, 954-218-5285

* Apr 19: McLean, VA; “ITAR for the Empowered Official“; FD Associates
* Apr 23: Copenhagen, Denmark; “Anti-Bribery Roundtable“; TRACE Anti-Bribery Compliance Solutions
* Apr 24: Los Angeles, CA; “Duty Drawback Specialist – Certification“; Global Trade Academy
* Apr 24-25: Dubai, UAE; “Trade Compliance in the Middle East“; NeilsonSmith
* Apr 25-26: Berlin, Gernamy; “Global Anti-Bribery In-House Network (GAIN)“; TRACE Anti-Bribery Compliance Solutions
* Apr 25-26: Costa Mesa, CA; “Complying with US Export Controls“; Bureau of Industry and Security
* Apr 30-May 2: Kansas City, MO; “Discover Global Markets“; U.S. Department of Commerce
* May 2-3; Scottsdale, AZ; “Complying with US Export Controls“; Bureau of Industry and Security 

* May 3-4: Milan, Italy; ”
Trade Compliance Southern Europe“; C5 Group

* May 6-8: Toronto, Canada; “2018 ICPA Canadian Conference“; ICPA

* May 6-11: Miami, FL; ”
U.S. Commercial Service Trade Mission to the Carribean Region“; (Additional dates are available for B2B meetings in listed countries.)

* May 7-8: Denver, CO; “2018 Spring Advanced Conference“; Society for International Affairs (SIA)

* May 8: Webinar; “U.S. Harmonized Tariff Classification Numbers“; U.S. Commercial Service
* May 8: Mexico City, Mexico; “Anti-Bribery Workshop“; TRACE Anti-Bribery Compliance Solutions
* May 9: ”
Wednesday Webinar: Demonstrations and Plant Visits“; Reeves & Dola LLP

* May 9: London, UK; “Advanced Financing of International Trade“; IOEx
* May 15-16; Cleveland, OH; “Complying with US Export Controls“; Bureau of Industry and Security

* May 16-17: Amsterdam, Netherlands; “Digital Utilities Europe 2018“; American Conference Institute

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


* May 20-22: Portland, OR; “Spring 2018 Seminar;” National Association of Foreign Trade Zones (NAFTZ)
* May 22-23: London, UK; “
Upstream Oil and Gas Legal Forum“; C5 Group

* May 22-24: Las Vegas, NV; ”
Licensing Expo 2018: The Meeting Place for the Global Licensing Industry“; U.S. Commercial Service

* May 23-24: Berlin, Germany; ”
12th Annual Exporters’ Forum on Global Economic Sanctions“; C5 Group

* Jun 6-7: Seattle, WA; “Complying with US Export Controls“; Bureau of Industry and Security
* Jun 6-7: Munich, Germany; “US Trade Controls Compliance in Europe“; NielsonSmith
* Jun 6-7: Munich, Germany; “Pharma Patent Term Extensions“; C5 Group

* Jun 6-8: Baltimore, MD; ”
97th Annual AAEI Conference and Expo“; American Association of Importers and Exporters

* Jun 8: Stafford, VA; “Spring Golf Outing“; Society for International Affairs;

* Jun 12: Webinar; “Duty Drawback and Refunds“; U.S. Commercial Service

* June 12-13; Stockholm, Sweden; ”
Trade Compliance Nordics“; C5 Group

* Jun 13: San Diego, CA; “Made in America, Buy America, or Buy American: Qualify your Goods and Increase Sales“; Global Trade Academy
* Jun 13-14: McLean, VA; “ITAR Fundamentals“; FD Associates
* Jun 17-19: Amsterdam, Netherlands; “2018 ICPA European Conference“; International Compliance Professionals Association
* Jun 18: Los Angeles, CA; “Certified Classification Specialist (CCLS)“; Global Trade Academy

* Jun 27-28: London, UK; ”
12th Annual Conference on Anti-Corruption“; C5

* Jul 10: Chicago, IL; “Duty Drawback Specialist – Certification“; Global Trade Academy
* Jul 10-11: Columbia, SC; “Complying with US Export Controls“; Bureau of Industry and Security
* Jul 16-18: National Harbor, Maryland; “2018 Summer Basics Conference“; Society for International Affairs
* Jul 17: Los Angeles, CA; “Advanced Classification of Plastics and Rubber“; Global Trade Academy
* Jul 19: McLean, VA; “ITAR for the Empowered Official“; FD Associates
* Aug 1-3: Washington, D.C.; “NSSF and Fair Trade Import/Export Conference“; NSSF
* Aug 6: Detroit, MI; “Export Compliance and Controls“; Global Trade Academy
* Aug 7-9: Detroit, MI; “Export Controls Specialist – Certification“; Global Trade Academy
* Aug 14-15: Milpitas, CA; “Complying with US Export Controls“; Bureau of Industry and Security
* Aug 16: Milpitas, CA; “Encryption Controls“; Bureau of Industry and Security
* Sep 12-13: Springfield, RI; “Complying with US Export Controls“; Bureau of Industry and Security
* Sep 13: McLean, VA; “EAR Basics“; FD Associates
* Sep 13-17: Galveston, TX (Cruise); “ICPA @ SEA!“; International Compliance Professionals Association (ICPA)
* Sep 16-19: Atlanta, GA; “2018 Annual Conference and Exposition“; National Association of Foreign Trade Zones (NAFTZ)
* Sep 17: Los Angeles, CA; “Import Compliance“; Global Trade Academy
* Sep 17-20: Columbus, OH; “University Export Controls Seminar at The Ohio State University in Columbus“; Export Compliance Training Institute (ECTI); jessica@learnexportcompliance.com; 540-433-3977
* Sep 17-21: Los Angeles, CA; “Import 5-Day Boot Camp“; Global Trade Academy  
* Sep 18: Los Angeles, CA; “Tariff Classification for Importers and Exporters“; Global Trade Academy 
* Sep 19: Los Angeles, CA; “NAFTA and Trade Agreements“; Global Trade Academy
* Sep 20: Los Angeles, CA; “Country and Rules of Origin“; Global Trade Academy
* Sep 21: Los Angeles, CA; “Customs Valuation – The Essentials
“; Global Trade Academy

* Oct 9-11:  Dallas, TX; ”
Partnering for Compliance West Export/Import Control Training and Education Program“; Partnering for Compliance

* Oct 12: Dallas TX; ”
Customs/Import Boot Camp“; Partnering for Compliance

* Oct 18-19: McLean, VA; “ITAR Fundamentals“; FD Associates
* Oct 21-23: Grapevine, TX; “2018 Fall Conference“; ICPA
* Oct 22-23: Arlington, VA; “2018 Fall Advanced Conference
“; Society for International Affairs (SIA)
* Oct 29 – Nov 1: Phoenix, AZITAR Defense Trade Controls / EAR Export Controls Seminar“; ECTIjessica@learnexportcompliance.com; 540-433-3977
* Oct 30 – Nov 1: Seattle, WA; “Export Controls Specialist – Certification“; Global Trade Academy
* Nov 6: Detroit, MI; “Classification: How to Classify Parts“; Global Trade Academy
* Nov 7-9: London, UK; “TRACE European Forum, 2018“; TRACE Anti-Bribery Compliance Solutions
* Nov 7-9: Detroit, MI; “Advanced Classification for Machinery & Electronics
“; Global Trade Academy
* Nov 12-15: Washington, D.C.; “ITAR Defense Trade Controls / EAR Export Controls Seminar“; ECTIjessica@learnexportcompliance.com; 540-433-3977
* Nov 13: Tysons Corner, VA; “Made in America, Buy America, or Buy American: Qualify your Goods and Increase Sales“; Global Trade Academy
# Nov 14-15: London, UK; “Economic Sanctions & Financial Crime“; C5 Group
* Nov 15: McLean, VA; “ITAR For the Empowered Official“; FD Associates
* Nov 27: Houston, TX; “Duty Drawback Specialist – Certification“; Global Trade Academy

* Dec 4-5: Frankfurt, Germany; ”
US Defence Contracting and DFARS Compliance in Europe;” C5 Group

* Dec 3-7: Tysons Corner, VA; “Certified Classification Specialist“; Global Trade Academy
* Dec 6: London, UK; “International Documentation and Customs Compliance
“; Institute of Export and International Trade
* Dec 11: Manchester, UK;International Documentation and Customs Compliance“; Institute of Export and International Trade

2019
* May 5-7: Savannah, GA; ”
2019 Spring Seminar
; National Association of Foreign Trade Zones (NAFTZ)
* Sep 8-11: Chicago, IL; “2019 Annual Conference and Exposition“; National Association of Foreign Trade Zones (NAFTZ)

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

ENEDITOR’S NOTES

EN_a117
. Bartlett’s Unfamiliar Quotations

(Source: Editor)
Dakota Fanning (Hannah Dakota Fanning; 23 Feb 1994; is an American actress and model. She rose to prominence at age seven for her performance as Lucy Dawson in the drama film, I Am Sam, for which she was nominated for a Screen Actors Guild Award at age eight, making her the youngest nominee in SAG history.)
  – “I think I was a Japanese schoolgirl in another life. That’s how much I love Hello Kitty.”
 
Samuel Pepys (23 Feb 1633 – 26 May 1703; was an administrator of the navy of England and Member of Parliament who is most famous for the diary that he kept for a decade while still a relatively young man. Pepys had no maritime experience, but he rose to be the Chief Secretary to the Admiralty under both King Charles II and King James II through patronage, hard work, and his talent for administration.)
  – “Thanks be to God. Since my leaving the drinking of wine, I do find myself much better, and do mind my business better, and do spend less money, and less time lost in idle company.”
 
Friday Funnies:
 
* Q. What do Alexander the Great and Winnie the Pooh have in common?
   A.  Same middle name.
  
* Q&A from watching the Olympics:
Q. What’s the best thing about Switzerland?
A. I don’t know, but their flag is a big plus.
 
* A man walks into a lawyer’s office and asks, “How much do you charge?”
The lawyer says, “$5,000 for three questions.”
  “Wow, that’s pretty expensive, isn’t it?” the man asks.
  “Yes,” says the lawyer. “Now, what’s your third question?

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

EN_a218. 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.  The latest amendments 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: 22 Feb 2018: 83 FR 7608-7610: Technical Amendment to List of User Fee Airports: Name Changes of Several Airports and the Addition of Five Airports 
 
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: 16 Feb 2018:
83 FR 6949-6956: Russian Sanctions: Addition of Certain Entities to the Entity List [Addition of 21 Entities to Entity List.]


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 (1 Jan 2018) 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 2018: 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: 8 Feb 2018:
83 FR 5674
: Technical Corrections to the Harmonized Tariff Schedule of the United States [Concerns HTSUS Chapter 99, Subchapter III]
 

  – 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: 14 Feb 2018:
83 FR 6457-6458: Amendment to the International Traffic in Arms Regulations: Addition of South Sudan [Amends ITAR Part 126.]

  – The only available fully updated copy (latest edition: 14 Feb 2018) of the ITAR with all amendments is contained in Bartlett’s Annotated ITAR
(“BITAR”), by James E. Bartlett III. The BITAR contains all ITAR amendments to date, plus a large Index, over 800 footnotes containing amendment histories, case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text. Subscribers receive updated copies of the BITAR in Word by email, usually revised within 24 hours after every ITAR amendment.
 The BITAR is available by annual subscription from the Full Circle Compliance 
website
. BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please
contact us
to receive your discount code.
 

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

EN_a319
. Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor)
 

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

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

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, John Bartlett. The Ex/Im Daily Update is emailed every business day to approximately 8,000 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, 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, provided attribution is given to “The Export/Import Daily Bugle of (date)”. 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.

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