;

18-0418 Wednesday “Daily Bugle”

18-0418 Wednesday “Daily Bugle”

Wednesday, 18 April 2018

TOP
The 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
.

[No items of interest noted today.] 

  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. House Foreign Affairs Committee Advances Export Control Reform
  4. State/DDTC: (No new postings.)
  5. Indian Government Promotes Implementation of Internal Compliance Programs for Export Controls
  1. Bloomberg: “Tech Firms May Beat Trump in Debate Over Chinese Joint Ventures”
  2. Defense News: “Trump’s New Drone, Defense Export Rules Expected this Week”
  3. Financial Review: “Chinese Telco ZTE on Australian Spy Agencies Radar After UK, U.S. Bans”
  4. The Guardian: “Italian Officials and German Firm Face Legal Action over Saudi Arms Sales”
  5. Reuters: “Three Belgian Companies in Court Over Chemical Exports to Syria”
  6. ST&R Trade Report: “Electronic Disclosure of Arms Export Violation Under Development”
  7. The Strait Times: “ZTE May Lose Android Software License Under U.S. Export Control Order”
  8. The Wall Street Journal: “U.S. Wants to Retaliate Against China’s Restrictions on American Tech Firms”
  1. M. Volkov: “CCOs and Compromising Positions”
  2. T. Stocker & A. Wood: “UK Signals Increased Export Control Enforcement and Penalties”
  3. Gary Stanley’s EC Tip of the Day
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: ATF (15 Jan 2016), Customs (12 Apr 2018), DOD/NISPOM (18 May 2016), EAR (5 Apr 2018), FACR/OFAC (19 Mar 2018), FTR (20 Sep 2017), HTSUS (16 Apr 2018), ITAR (14 Feb 2018) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

 

[No items of interest noted today.]

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

OGSOTHER GOVERNMENT SOURCES

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

[No items of interest noted today.]

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

OGS_a22. 
Commerce/BIS: (No new postings.)
(Source: 
Commerce/BIS)

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

OGS_a33. 
House Foreign Affairs Committee Advances Export Control Reform

(Source: 
House Foreign Affairs Committee, 17 Apr 2018.)
 
The House Foreign Affairs Committee, chaired by Rep. Ed Royce (R-CA), today passed four bipartisan measures, among others, legislation to reform U.S. export controls.
 
On 
H.R. 5040, as amended, which modernizes U.S. export control regulations, Chairman Royce said: 
 
Crucially, this bill closes gaps in our export controls that could permit transfers of cutting-edge technologies, like artificial intelligence and advanced semiconductors, to potential adversaries like China. It also ensures that transfers of sensitive manufacturing know-how are subject to more rigorous export controls. We urgently need to identify and appropriately control critical emerging technologies that are not currently subject to export controls, but that could be essential to U.S. national security.
 
Along with other reforms, this bill will enable the U.S. to remain a leader in innovation, strengthen our industrial base and protect technologies essential to national security.
 
[Editor’s Note: a webcast of the meeting is available 
here
.] 

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

OGS_a4
4. 
State/DDTC: (No new postings.)

(Source: 
State/DDTC)

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

OGS_a5
5
Indian Government Promotes Implementation of Internal Compliance Programs for Export Controls 

 
The Director General of Foreign Trade, Mr. Alok Vardhan Chaturvedi, today called upon industry to adopt and implement internal compliance programs (ICP) for export controls as it scouts for new business opportunities that have opened up following India’s entry into new multilateral export control regimes.
 
While inaugurating FICCI’s second National Conference on Export Control and launching the Federation of Indian Chambers of Commerce and Industry (FICCI) ICP module for Indian industry, Mr. Chaturvedi said that while India’s accession to global export control agreements has given rise to opportunities for industry, it cannot lose sight of its onerous responsibility in ensuring a safe and secure world.
 
  “Implementation of ICP by industry is an example of a best practice in discharging its responsibility”, he said, adding that the ICP module should be used by industry as a template for creating its own ICP depending upon whether a company is a large systems integrator or an SME. He suggested that an institutional structure should be evolved by industry with an active ‘To Do’ list that should be monitored regularly.
 
The recently released draft Defense Production Policy envisages an export market of US$ 50 billion by 2032. Industry feels that to achieve this target, the Government of India needs to handhold and expedite the licensing process.
 
FICCI believes that once industry voluntarily puts in place checks and balances by adopting ICP, it could ask the government for any exemption or bulk licenses which the government would be in a better position to consider.
 
The FICCI Export Control Compliance Manual 2018, which has templates for large, medium and small industries as per their needs, is an attempt to combine best practices in internal compliance policies and procedures to safeguard organizations from exporting unauthorized items and consequently damaging the reputation of their firms and of the country, in addition to facing export penalties. Companies looking to enter these strategic sectors can benefit from the growing goodwill accrued to India must align themselves to the rules laid down by the Government of India under the guidelines for SCOMET (Special Chemicals, Organisms, Materials, Equipment & Technology) items for the export of dual-use commodities, software, and technology.
 
The ICP guides an organization in establishing and maintaining trade compliance and further helps in planning and maximizing international trade. It includes steps, in varying capacities, for not only finished products but also for licenses, software and counter parties, as it is in these matters that most violations occur. … 
  
The conference deliberated on topics such as ‘India’s Membership to Multilateral Export Control Regimes & Implication on Indian Industry’, ‘Best Practices in Internal Compliance – Importance of ICPs to Stem Export Control Violations’, ‘Role of Export Control in Creating Secure Supply Chains’ and ‘Technology Transfer and Export of Intangibles’.

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

NWSNEWS

NWS_a1
6.
Bloomberg: “Tech Firms May Beat Trump in Debate Over Chinese Joint Ventures”

(Source: 
Bloomberg, 17 Apr 2018.) [Excerpts.]
 
Lobbyists for IBM and other large U.S. technology companies may succeed in gutting a key part of proposed legislation that aims to subject partnerships with Chinese firms to approval by a secretive national security panel. … 
 
The legislation, co-sponsored by the second-ranking Senate Republican, John Cornyn of Texas, aims to strengthen CFIUS and expand its scope in particular to prevent the Chinese from obtaining sensitive U.S. technologies. The provision on joint ventures is a key component of the bill and marks the most significant change to the current CFIUS framework.
 
  “China has a long track record of pressuring U.S. companies into joint ventures to coerce them into sharing technology critical to our national security,” said Drew Brandewie, a spokesman from Cornyn’s office. “This happens in spite of our export control system, so it’s a national security imperative that CFIUS be allowed to review these types of joint ventures.” … 

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

NWS_a2
7.
Defense News: “Trump’s New Drone, Defense Export Rules Expected this Week”

(Source: 
Defense News, 17 Apr 2018.)
 
Restrictions on unmanned exports expected to be eased
 
The Trump administration this week is expected to announce new guidance on the export of defense equipment, as well as new rules 
loosening restrictions on drone exports, all as part of a broader push by President Donald Trump to encourage growth in the defense industrial base.
 
The rules could be made public as early as Wednesday, but sources familiar with the issue cautioned that the schedule has already shifted for announcing these changes 
several times in the past few months. 
 
The Obama administration started a comprehensive review of how defense technologies are classified, which resulted in a large number of common technologies that had previously been protected under national security restrictions being moved to commercial classifications. The Trump administration has continued that work, with an eye toward supporting the American industrial base.
 
The item most likely to attract attention, however, is a change in the rules governing the export of unmanned systems, commonly known as drones. The change would alter a 
2015 guidance from the Obama administration governing unmanned system exports, with an eye on making it easier to sell the systems to partners abroad. Such a change has been on the Trump administration’s docket going back to August 2017.
 
A source familiar with the discussions told Defense News that the upcoming announcement will make it easier to sell drones through the Direct Commercial Sales process, under which a company and another nation can directly negotiate, rather than requiring a more formal 
Foreign Military Sales process, where the U.S. government acts as something of a go-between. (Systems sold under Direct Commercial Sales must still go through regulation checks in the U.S. State Department.)
 
The new policy effectively reinterprets the “strong presumption of denial” clause in the Missile Technology Control Regime, an international arms control agreement among 35 nations that governs the export of missiles and drones, a second source explained.
 
The current clause makes it difficult to approve the sale of category-1 drones capable of carrying 500-kilogram payloads for more than 300 kilometers.
 
Instead, the Trump administration’s policy sets a “presumption of approval” for drone sales to a specific set of allies and partners in Europe, the Middle East and the Asia-Pacific region, the second source added.
 
While the change will be internally focused, the announcement will leave open the door for a U.S. push toward change to the MTCR itself, the first source said. Last October, American officials 
floated a whitepaper proposing new language to the treaty: that any air vehicle that flies under 650 kilometers per hour would drop to “category-2” and thus be subject to approval on a case-by-case basis.
 
While the new changes have been heavily anticipated by industry, arms control organizations have raised concerns that the Trump administration may downplay human rights concerns in favor of economic benefit. 
 
Speaking in early April at an event hosted by the Forum on the Arms Trade, Rachel Stohl of the Stimson Center said she had heard human rights were a lesser factor in the new policy than previous ones, and warned that could make it harder for the U.S. to push other countries on rights issues. 
 

  “I’ll be looking to see how the U.S. is placing itself as a standard bearer,” she said. “In many international meetings, the U.S. says, ‘we have the gold standard,’ [but] if in your policy guidance document those are absent, I think that is a noteworthy development.”

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

NWS_a3
8.
Financial Review: “Chinese Telco ZTE on Australian Spy Agencies Radar After UK, U.S. Bans”

(Source: 
Financial Review, 18 Apr 2018.) [Excerpts; subscription required.]
 
A second Chinese telecommunications company could be subjected to an Australian government blacklist after the United Kingdom and United States slapped restrictions on ZTE on national security grounds.
 
With the Turnbull government 
already under pressure to ban Huawei from participating in the roll out of the 5G network, security agencies are also examining the decisions around ZTE, which is China’s second biggest telco equipment manufacturer. … 

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

NWS_a4
9
The Guardian: “Italian Officials and German Firm Face Legal Action over Saudi Arms Sales”

(Source: 
The Guardian, 18 Apr 2018.) [Excerpts.] 
 
Human rights groups file complaint challenging arms exports used in Yemen bombing
 
A rare legal action has been launched against Italian government officials and a major European arms manufacturer over alleged involvement in the aerial bombardment of Yemen that has killed thousands of civilians.
 
A coalition of human rights organizations from Germany, Italy and Yemen filed a complaint on Tuesday with the prosecutors’ office in Rome against officials from the Italian foreign ministry and the local subsidiary of the German conglomerate Rheinmetall, RWM Italia, over arms sales to Saudi Arabia. … 
 
Linde Bryk, a Dutch lawyer who worked in Kosovo and is now with the [European Center for Constitutional and Human Rights], said: “What makes this case special are the remnants found at the site of the airstrike. This case is emblematic as it not only concerns Italy’s role but the general question on the responsibility of European governments and European arms manufacturers for the consequences of arms exports used by the Saudi-led coalition.”
 
She added that the case aimed to address the fact that merely having government export authorization for arms sales does not shield these companies from liability.
 

Politicians and military personnel enjoy a high degree of protection against prosecution, but those who filed the case are hoping a precedent can be set in which officials who authorize exports as well as arms manufacturers are not exempted. … 

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

NWS_a510

Reuters: “
Three Belgian Companies in Court Over Chemical Exports to Syria”

(Source: Reuters, 18 Apr 2018.) 
 
A Belgian court has set a trial date for three Belgian companies accused of exporting chemicals to Syria, including isopropanol, a common substance that can also be used in the production of sarin nerve gas, a spokesman said on Wednesday.
  
The case, which will commence in Antwerp on May 15, centres on the export of several chemical substances between 2014 and 2016 to Lebanon and Syria by Belgian chemical group AAE Chemie and two handling agents, Danmar Logistics and Anex Customs.
 
  “The companies had no export licence for these products,” a spokesman for the court said.
 
  “Both my companies and AAE Chemie have always acted in good faith. We have always fully complied with the checks of customs officers at the port of Antwerp,” a spokesman for Danmar Logistics said. Under Belgian law a defendant is not required to enter a plea.
 
Western countries say the Syrian government of President Bashar al-Assad has used chemical weapons, including sarin, against its own population, most recently on the town of Douma on April 7. The Syrian government denies this.
 
Widely used as an industrial solvent and also in some medical products, isopropanol, or rubbing alcohol, is one of two key ingredients for sarin. Since 2013 companies need a licence to export chemicals to Syria.
 

Belgium’s finance ministry, which oversees customs, said it was awaiting the court’s decision and could not give further details.

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

NWS_611

ST&R Trade Report: “Electronic Disclosure of Arms Export Violation Under Development” 

(Source: 
Sandler, Travis & Rosenberg Trade Report, 18 Apr 2018.)
 
The State Department’s Directorate of Defense Trade Controls is developing an electronic version of form DS-7787, Disclosure of Violations of the Arms Export Control Act. As an alternative to paper and mail, the online version will allow industry personnel to submit this form directly through DDTC’s Defense Export Compliance and Control System.
 

In an effort to improve this electronic form before it is made publicly available, DDTC is enabling a test version for industry feedback between April 16 and April 30. Those interested in participating should visit the DDTC website for more information on how to access and use the test version and submit feedback. 

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

NWS_712
The Strait Times: “ZTE May Lose Android Software License Under U.S. Export Control Order”

(Source: 
The Strait Times, 18 Apr 2018.) [Excerpts.] 
 
Chinese smartphone-maker ZTE Corp’s U.S. woes deepened on Tuesday (April 17) as regulators proposed new rules that could cut into its sales, while a supply ban means it may not be able to use Android software in its devices, according to a source.
 
The U.S. Commerce Department banned American firms on Monday from selling parts and software to ZTE for seven years.
 
The move was sparked by ZTE’s violation of an agreement that was reached after it was caught illegally shipping U.S. goods to Iran.
 
Then on Tuesday, a U.S. telecoms regulator proposed new rules that would bar government programs from buying from companies that it says pose a security threat to U.S. telecoms networks, which will likely hurt both ZTE and rival Chinese smartphone-maker Huawei Technologies. … 
 
The Commerce Department decision means ZTE Corp may not be able to use Google’s Android operating system in its mobile devices, a source familiar with the matter said on Tuesday.
 
ZTE and the Alphabet Inc unit have been discussing the impact of the ban, the source added, but the two companies were still unclear about the use of Android by ZTE as of Tuesday morning. … 
 
The proposed new rules from the Federal Communications Commission (FCC), meanwhile, which are expected to be finalized this year, appear to be another prong in a US effort to prevent ZTE and Huawei from gaining significant market share in the United States. 
 
They would prevent money from the US$8.5 billion (S$11.15 billion) FCC Universal Service Fund, which includes subsidies for telephone service to poor and rural areas, from being spent on goods or services from companies or countries which pose a “national security threat to the integrity of communications networks or their supply chains”, the FCC said.
 
  “Hidden ‘backdoors’ to our networks in routers, switches, and other network equipment can allow hostile foreign powers to inject viruses and other malware, steal Americans’ private data, spy on US businesses, and more,” said FCC Chairman Ajit Pai, who introduced the proposal.
 
Mr Pai did not specify China or specific companies. But in a letter to Congress last month, Mr Pai said he shared the concerns of US lawmakers about espionage threats from Huawei, the world’s third-largest smartphone maker.
 
USTelecom, an industry trade group, praised the FCC’s “proposal to confront nation-state actions that threaten the confidentiality, integrity and availability of our nation’s network infrastructure”.
 
Republican U.S. senators have also introduced legislation that would block the U.S. government from buying or leasing telecoms equipment from Huawei or ZTE.
 
Huawei’s planned deal with U.S. carrier AT&T Inc to sell its smartphones in the United States collapsed in January after US lawmakers sent a letter to Mr Pai citing concerns about Huawei’s plans to launch US consumer products.
 
Amid a steady drip of bad news, Huawei has laid off its vice-president of external affairs, Mr Bill Plummer, and four other employees at its Washington office, according to sources familiar with the matter. … 

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

NWS_813
The Wall Street Journal: “U.S. Wants to Retaliate Against China’s Restrictions on American Tech Firms”

(Source: 
The Wall Street Journal, 16 Apr 2018.) [Excerpts.] 
 
Trade representative’s complaint under consideration would target such services as cloud computing
 
The U.S. is examining ways to retaliate against Beijing’s restrictions on U.S. providers of cloud computing and other high-tech services, effectively opening a new front on its trade offensive against China. 
 
According to individuals familiar with the administration’s thinking, the U.S. trade representative’s office is putting together a fresh trade complaint, probably under Section 301 of the Trade Act of 1974, arguing that Beijing unfairly restricts U.S. trade in these high-tech services. 
 
The trade representative has yet to decide whether to go ahead with the complaint, the individuals said, which would be in addition to recent moves to ratchet up pressure on China, including the imposition of tariffs on a total of $150 billion in Chinese imports. But USTR, which has taken the lead in the China trade fight, views China’s restrictions on cloud computing as providing a clear-cut example that might garner public support. 
 

Beijing requires U.S. cloud-computing firms, such as Amazon.com Inc. and Microsoft Corp. to form joint operations with Chinese companies and license their technology to the Chinese partners. The USTR has said in reports on Chinese trade practices that Beijing withholds licenses that would allow U.S. firms to operate independently in China. …  

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

COMMCOMMENTARY

COMM_a0
14.
M. Volkov: “CCOs and Compromising Positions”

(Source: 
Volkov Law Group Blog, 17 Apr 2018. Reprinted by permission.) 
 
* Author: Michael Volkov, Esq., Volkov Law Group, 
mvolkov@volkovlaw.com, 240-505-1992. 
 
The chief compliances officer is the guardian of a company’s most important intangible asset – its culture. Everyone at a company is responsible for a company’s culture; the board of directors, CEO, senior executives play an important leadership role and have to exercise responsibility for preserving and promoting a company’s culture.
 
CCOs, however, are responsible for a company’s ethics and compliance program.  I have regularly advocated for CCOs to focus their work to include oversight, measurement and promotion of the company’s culture.  Like any other aspect of an effective ethics compliance program, CCOs have to add or replace items on its dashboard that are relevant to its culture.
 
A recent Ethics Resource Initiative survey (available 
here) confirmed increasing pressure on  employees to circumvent company rules and controls.  No one is surprised by this trend.  Pressure on managers and employees has been increasing for years.    History is replete with instances where CEOs, senior managers, general counsels and others have engaged in misconduct, sometimes as leaders of illegal conduct and other times as willing participants.
 
There is pressure on corporate actors to generate profits.  The slavish devotion to quarterly financial reporting creates inevitable pressure on senior leaders to cut corners, ignore business ethics and maintain a singular focus on financial reports.  Such a narrow focus inevitably creates an environment in which misconduct is much more likely to occur, corporate scandals are likely to occur and government investigation and prosecutions are a significant risk.
 
In such an environment, CCOs are likely to face a real professional dilemma.  CCOs will face pressure to compromise their own position as guardian of the company’s culture.  It is in these critical times that CCOs have to speak up, calculate when and where to raise concerns, and how to navigate the corporate governance system to ensure that business ethics and culture are included in any decision-making process.
 
CCOs face a difficult choice – if they speak up, they may be marginalized; if they keep their mouth shut, they are sacrificing their responsibility to key stakeholders to protect and promote the company’s culture.  Every CCO has faced this quandary – even in ethical companies, CCOs may face these issues.  In the less ethical companies, CCOs may be heard only when senior management believes it is “convenient,” meaning there is no “cost” to the business.
 
Every CCO has to ask themselves two important questions:
 
  – Is this an issue that requires me to speak up?
  – If I do not, what are the implications for my role in this company?
 
Most, if not all, CCOs do not find this situation to be a hard question.  Many CCOs have responded to these situations by speaking with their feet – and leave the company.   It is unfortunate that CCOs are limited to this solution – it is not fair to the company, the CCO and ultimately company shareholders, the real party in interest.
 
CCOs often face these pressures and sometimes may give in to the pressure based on the reality that perfection in the corporate governance world is impossible to achieve.  But if the CCO does not stand up, who will?  Is it fair for a CCO to always speak as the conscience of the company?
 
We all hope that CCOs never are put in a compromising situation.  CCOs have a significant burden to carry – they speak for a company’s culture and have to adhere to a company’s values and principles.   If the CCO is compromised, you can rest assured that other C-Suite leaders have embraced circumvention of the company’s ethical culture.
 
In this case, CCOs may have no option other than to speak up, advocate his/her position, and continue to promote the company’s culture.  If the CCO’s influence is diminished as a result of his/her advocacy, the CCO has to continue to act in accordance with ethical principles.  A CCO has to continue to demonstrate the importance of integrity.  A company that retaliates or compromises integrity may cause the CCO to leave the company.  It is an unfortunate result but it reflects the reality of today’s corporate governance world.

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

COMM_a01
15.
T. Stocker & A. Wood: “UK Signals Increased Export Control Enforcement and Penalties”

(Source: 
Out-Law.com, 13 Apr 2018.) 
 
* Authors: Tom Stocker, Esq., 
tom.stocker@pinsentmasons.com; and Alistair Wood, Esq., 
alistair.wood@pinsentmasons.com. Both of Pinsent Masons LLP.
 
The announcement, that HM Revenue and Customs (HMRC) issued a ‘compound penalty’ of £109,312.50 to a UK exporter for unlicensed exports of military goods controlled by the 2008 Export Control Order, is a significant one. HMRC does not generally announce the imposition of compound penalties.
 
Export control breaches are criminal offences but, in this case, the matter was dealt with by way of a compound penalty. So what is a compound penalty, and when are they used?
 
Under the 1979 Customs and Excise Management Act, it is a criminal offence to ship unlicensed goods. There is a strict liability offence which covers inadvertent breaches, and a more serious offence for deliberate evasion of export controls. However, section 152 of the Act provides HMRC with a discretionary power to “compound” offences. The discretionary power, in essence, means that HMRC can offer an offender the opportunity to avoid prosecution in return for the payment of an administrative penalty. HMRC commonly uses this power to deal with export control, duty and excise breaches.
 
HMRC may be persuaded to compound an offence if the offender makes a voluntary and fulsome disclosure directly to HMRC. Should HMRC learn of an export control or other customs and excise related offence through its own investigations or via a report from ECO, it is less likely to proceed by way of a compound penalty. Other factors that HMRC takes into consideration when deciding whether to proceed by way of a compound penalty are:
 
  – the seriousness of the alleged offence;
  – whether fraudulent intent can be proven;
  – the extent of the offender’s efforts to perpetrate the alleged offence;
  – the offender’s previous history;
  – the type and value of any goods involved;
  – whether the offender has taken remedial action such as implementing a review of company systems and compliance, or terminating the employment of culpable officers or employees; and
  – whether the offender has been otherwise compliant.
 

There are a number of benefits of seeking to negotiate a compound penalty with HMRC. A compound penalty does not amount to a criminal prosecution, and when compared to a criminal prosecution there is often far less publicity for the company. For companies that endeavor to be compliant, but which experience an inadvertent contravention – including, potentially, a serious contravention – making a voluntary disclosure to HMRC may be the best course.

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

COMM_a2
16. 
Gary Stanley’s EC Tip of the Day

(Source: Defense and Export-Import Update; 17 Apr 2018. Available by subscription from 
gstanley@glstrade.com.)
 
* Author: Gary Stanley, Esq., Global Legal Services, PC, (202) 352-3059, 
gstanley@glstrade.com.
 
For transactions relating to the temporary import of foreign-manufactured defense articles for trade shows and demonstration, a DSP-61 temporary import license application must be supported by documentation identifying the U.S. or foreign entity responsible for the defense articles while in the U.S. and/or trade show registration documentation from the foreign party.

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

ENEDITOR’S NOTES


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

EN_a318
. 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: 12 Apr 2018: 83 FR 15736-15740: CBP Decision No. 18-04; Definition of Importer Security Filing Importer (ISF Importer)
 
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: 
2 Apr 2018:
83 FR 13849-13862
: Implementation of the February 2017 Australia Group (AG) Intersessional Decisions and the June 2017 AG Plenary Understandings; Addition of India to the AG [Amendment of EAR Parts 738, 740, 745, and 774.]; and 5 Apr 2018: 83 FR 14580-14583: Reclassification of Targets for the Production of Tritium and Related Development and Production Technology Initially Classified Under the 0Y521 Series [Imposes License Requirements on Transfers of Specified Target Assemblies and Components for the Production of Tritium, and Related “Development” and “Production” Technology.]

  
*
FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR)
: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

  – Last Amendment: 19 Mar 2018:
83 FR 11876-11881: Inflation Adjustment of Civil Monetary Penalties 

 
*
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 (16 March 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 approximately 250 footnotes containing case annotations, practice tips, Census/AES guidance, and explanations of the numerous errors contained in the official text. Subscribers receive revised copies in Microsoft Word every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance websiteBITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR. Government employees (including military) and employees of universities are eligible for a 50% discount on both publications at www.FullCircleCompiance.eu.  
 
*
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: 
16 Apr 2018: 
Harmonized System Update 1805 
[contains 267 ABI records and 60 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: 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_a0319
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

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

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


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

* BACK ISSUES: An archive of Daily Bugle publications from 2005 to present is available HERE.

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

Scroll to Top