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18-0509 Wednesday “Daily Bugle”

18-0509 Wednesday “Daily Bugle”

Wednesday, 9 May 2018

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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 
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  1. State Imposes Nonproliferation Measures Against Rosoboronexport, Including a Ban on U.S. Government Procurement
  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/Census: “The Importance of Export Control Classification Numbers and Administration Regulations”
  3. Commerce/BIS: (No new postings.)
  4. DHS/CBP Announces ACE Certification Scheduled Maintenance for this Evening
  5. State/DDTC: (No new postings.)
  6. Presidential Memorandum: “Ceasing U.S. Participation in the JCPOA and Taking Additional Action to Counter Iran’s Malign Influence and Deny Iran All Paths to a Nuclear Weapon”
  1. Reuters: “China’s ZTE Corp Says Main Business Operations Cease Due to U.S. Ban”
  2. ST&R Trade Report: “Iran Sanctions Affecting Foreign Subsidiaries, Financial Transactions to be Reinstated”
  1. C. Todgham Cherniak: “What Does Trump’s Withdrawal from the Iran JCPOA Deal Mean for Canadian Companies and Trusts”
  2. Global Trade News: “Weise Wednesday: Update on Major Trade Initiatives”
  3. K.C. Georgi, R.K. Alberda & S.G. Costelloe: “President Trump Announces Withdrawal from Iran Nuclear Deal: Details on the Snapback of US Sanctions Beginning to Emerge”
  4. M. O’Kane: “Eu to Seek Exemptions from Us Sanctions Reinstated on Iran”
  5. R. Giambalvo, W. Shahid: “Drone Exports Ready to Soar under New U.S. Policy”
  6. R.C. Burns: “Wind Down Woes by Any Other Name Would Smell as Rotten”
  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 (24 Apr 2018), HTSUS (4 May 2018), ITAR (14 Feb 2018) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. State Imposes Nonproliferation Measures Against Rosoboronexport, Including a Ban on U.S. Government Procurement
(Source: Federal Register, 9 May 2018.)
 
83 FR 21333-21334: Imposition of Nonproliferation Measures Against Rosoboronexport, Including a Ban on U.S. Government Procurement
* AGENCY: Department of State.
* ACTION: Notice.
* SUMMARY: A determination has been made that a foreign person has engaged in activities that warrant the imposition of measures pursuant to Section 3 of the Iran, North Korea, and Syria Nonproliferation Act. The Act provides for penalties on foreign entities and individuals for the transfer to or acquisition from Iran since January 1, 1999; the transfer to or acquisition from Syria since January 1, 2005; or the transfer to or acquisition from North Korea since January 1, 2006, of goods, services, or technology controlled under multilateral control lists (Missile Technology Control Regime, Australia Group, Chemical Weapons Convention, Nuclear Suppliers Group, Wassenaar Arrangement) or otherwise having the potential to make a material contribution to the development of weapons of mass destruction (WMD) or cruise or ballistic missile systems. The latter category includes items of the same kind as those on multilateral lists but falling below the control list parameters when it is determined that such items have the potential of making a material contribution to WMD or cruise or ballistic missile systems, items on U.S. national control lists for WMD/missile reasons that are not on multilateral lists, and other items with the potential of making such a material contribution when added through case-by-case decisions.
* DATES: April 30, 2018.
* FOR FURTHER INFORMATION CONTACT: On general issues: Pam Durham, Office of Missile, Biological, and Chemical Nonproliferation, Bureau of International Security and Nonproliferation, Department of State, Telephone (202) 647-4930, durhampk@state.gov. For U.S. Government procurement ban issues: Eric Moore, Office of the Procurement Executive, Department of State, Telephone: (703) 875-4079, mooren@state.gov.
* SUPPLEMENTARY INFORMATION: On April 30, 2018, the U.S. Government applied the measures authorized in Section 3 of the Iran, North Korea, and Syria Nonproliferation Act (Pub. L. 109-353) against the following foreign person identified in the report submitted pursuant to Section 2(a) of the Act:
  Rosoboronexport (ROE) (Russia) and any successor, sub-unit, or subsidiary thereof.
  Accordingly, pursuant to Section 3 of the Act, the following measures are imposed on these persons:
    (1) No department or agency of the United States Government may procure or enter into any contract for the procurement of any goods, technology, or services from this foreign person, except to the extent that the Secretary of State otherwise may determine. This measure shall not apply to subcontracts at any tier with ROE and any successor, sub-unit, or subsidiary thereof made on behalf of the United States Government for goods, technology, and services for the maintenance, repair, overhaul, or sustainment of Mi-17 helicopters for the purpose of providing assistance to the security forces of Afghanistan, as well as for the purpose of combating terrorism and violent extremism globally. Moreover, the ban on U.S. government procurement from the Russian entity Rosoboronexport (ROE) and any successor, sub-unit, or subsidiary thereof shall not apply to United States Government procurement of goods, technology, and services for the purchase, maintenance, or sustainment of the Digital Electro Optical Sensor OSDCAM4060 to improve the U.S. ability to monitor and verify Russia’s Open Skies Treaty compliance. Such subcontracts include the purchase of spare parts, supplies, and related services for these purposes;
    (2) No department or agency of the United States Government may provide any assistance to this foreign person, and this person shall not be eligible to participate in any assistance program of the United States Government, except to the extent that the Secretary of State otherwise may determine;
    (3) No United States Government sales to this foreign person of any item on the United States Munitions List are permitted, and all sales to this person of any defense articles, defense services, or design and construction services under the Arms Export Control Act are terminated; and
    (4) No new individual licenses shall be granted for the transfer to this foreign person of items the export of which is controlled under the Export Administration Act of 1979 or the Export Administration Regulations, and any existing such licenses are suspended.
  These measures shall be implemented by the responsible departments and agencies of the United States Government and will remain in place for two years from the effective date, except to the extent that the Secretary of State may subsequently determine otherwise.
 
  Christopher A. Ford, Assistant Secretary of State for International Security and Nonproliferation.

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OGSOTHER GOVERNMENT SOURCES

OGS_a12. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

* Commerce; Office of the U.S. Trade Representative; NOTICES; Requests for Nominations; Industry Trade Advisory Committees [Publication Date: 10 May 2018.]
 
* President; ADMINISTRATIVE ORDERS; Syria; Continuation of National Emergency (Notice of May 9, 2018) [Publication Date: 10 May 2018.]
 
* State; NOTICES; Imposition of Nonproliferation Measures Against Foreign Persons, Including a Ban on U.S. Government Procurement [Publication Date: 10 May 2018.]
 

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(Source:
Global Reach Blog, 8 May 2018.) 
 
One of the fields that the export trade community tends to have questions on is the Export Control Classification Number (ECCN) and how to know if their product has an ECCN. This blog seeks to provide an overview and resources available for these frequently asked questions.
 
What is an Export Control Classification Number?
 
An ECCN is an alphanumeric designation (i.e., 1A984 or 4A001) used in the Commerce Control List (CCL) to identify (for export control purposes) commercial or certain military items (i.e., commodities, technology and software) that have, or may have, military, terrorist or proliferation applications. The ECCN is based on the technical characteristics of the item and requires a detailed analysis of the item in order for it to be classified, and is not the same as a Schedule B number.
 
What is an Export Administration Regulation designation?
 
EAR99 is the designation for items that are subject to the Export Administration Regulations (EAR), but are not specifically listed in any of the CCL categories. Generally, EAR99 items may be shipped under the designation “NLR” which stands for “No License Required.” However, if your export of an EAR99 item is to an embargoed or sanctioned country, to an end-user of concern or in support of a prohibited end-use, you may be required to obtain an export license.
 
Determining Your ECCN:
 
  (1) Go to the source: Contact the manufacturer, producer or developer. Keep in mind that ECCNs may change over time, so you still need to review the ECCN to ensure its accuracy.
  (2) Self-classify (Part 738): This will require a technical understanding of the item.  Additionally, you need to be familiar with the structure and format of the CCL. For information on the
CCL structure, visit the
BIS website.
  (3) Official request to BIS:You may request an official classification from BIS after obtaining a Company Identification Number (CIN) and using the electronic application processing system, SNAP-R.
 
Once you have determined your ECCN – Next Steps:
 
Once you have classified the item, turn to the information below your ECCN entry on the CCL to determine whether a license is required. You do this by cross-referencing the “Reasons for Control” of the item and the country of ultimate destination in the “Commerce Country Chart” (Supp.1 to part 738). Some controls apply only to certain subparagraphs, so note carefully which apply to your item. Also, an item may have more than one control associated with it.
 
If there is an “X” in the intersection of the column based on the reason(s) for control of your item and the line for your destination in the “Commerce Country Chart” (Supp.1 to part 738), you have a licensing requirement, unless a license exception is available. If there is no “X” at the intersection of the control column(s) specified under your ECCN and your ultimate destination, you will not need an export license unless you are exporting to an end-user or end-use of concern or any other General Prohibition applies. For additional information on license exceptions (part 740), General Prohibitions (part 736), or end-users or end-uses of concern (part 744), refer to “Introduction to the Commerce Department’s Export Controls.”
 
Need Further Assistance?
 
Visit the
BIS website for more information regarding
SNAP-R and CINs.
 
For assistance with self-classification or submitting a request for classification, the Office of Exporter Services has counselors available in Washington, D.C., at 202-482-4811, and in the Western Regional Office in California at 949-660-0144 or 408-998-8806.
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(Source:
CSMS #18-000334, 9 May 2018.)
 
There will be ACE CERTIFICATION Scheduled Maintenance this evening, Wednesday, May 9, 2018 from 1715 ET to 2000 ET for the following ACE Deployment:
 
ACE Import Manifest
  – Air Manifest: FER “071-Cargo Location Mismatch” error when a carrier amended and deleted split air waybills after a filer misfiled a bill on the flight as a PTP (permit-to-proceed) with the wrong airport of arrival.
  – Air Manifest: Fixed exception when Deleting Advanced house bill with TRN (in-bond) line.
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(Source:
The White House, 8 May 2018.)
 
As President, my highest priority is to ensure the safety and security of the United States and the American people.  Since its inception in 1979 as a revolutionary theocracy, the Islamic Republic of Iran has declared its hostility to the United States and its allies and partners.  Iran remains the world’s leading state sponsor of terrorism, and provides assistance to Hezbollah, Hamas, the Taliban, al-Qa’ida, and other terrorist networks.  Iran also continues to fuel sectarian violence in Iraq, and support vicious civil wars in Yemen and Syria.  It commits grievous human rights abuses, and arbitrarily detains foreigners, including United States citizens, on spurious charges without due process of law.
 
There is no doubt that Iran previously attempted to bolster its revolutionary aims through the pursuit of nuclear weapons and that Iran’s uranium enrichment program continues to give it the capability to reconstitute its weapons-grade uranium program if it so chooses.  As President, I have approved an integrated strategy for Iran that includes the strategic objective of denying Iran all paths to a nuclear weapon.
 
The preceding administration attempted to meet the threat of Iran’s pursuit of nuclear capabilities through United States participation in the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear program.  The JCPOA lifted nuclear-related sanctions on Iran and provided it with other significant benefits in exchange for its temporary commitments to constrain its uranium enrichment program and to not conduct work related to nuclear fuel reprocessing, the two critical pathways to acquiring weapons-grade nuclear material.  Some believed the JCPOA would moderate Iran’s behavior.  Since the JCPOA’s inception, however, Iran has only escalated its destabilizing activities in the surrounding region.  Iranian or Iran-backed forces have gone on the march in Syria, Iraq, and Yemen, and continue to control parts of Lebanon and Gaza.  Meanwhile, Iran has publicly declared it would deny the International Atomic Energy Agency (IAEA) access to military sites in direct conflict with the Additional Protocol to its Comprehensive Safeguards Agreement with the IAEA.  In 2016, Iran also twice violated the JCPOA’s heavy water stockpile limits.  This behavior is unacceptable, especially for a regime known to have pursued nuclear weapons in violation of its obligations under the Treaty on the Non-Proliferation of Nuclear Weapons.
 
Iran’s behavior threatens the national interest of the United States. On October 13, 2017, consistent with certification procedures stipulated in the Iran Nuclear Agreement Review Act, I determined that I was unable to certify that the suspension of sanctions related to Iran pursuant to the JCPOA was appropriate and proportionate to the specific and verifiable measures taken by Iran with respect to terminating its illicit nuclear program.  On January 12, 2018, I outlined two possible paths forward – the JCPOA’s disastrous flaws would be fixed by May 12, 2018, or, failing that, the United States would cease participation in the agreement.  I made clear that this was a last chance, and that absent an understanding to fix the JCPOA, the United States would not continue to implement it.

That understanding has not materialized, and I am today making good on my pledge to end the participation of the United States in the JCPOA.  I do not believe that continuing to provide JCPOA-related sanctions relief to Iran is in the national interest of the United States, and I will not affirm what I know to be false.  Further, I have determined that it is in the national interest of the United States to re-impose sanctions lifted or waived in connection with the JCPOA as expeditiously as possible.
 
Section
1Policy.  It is the policy of the United States that Iran be denied a nuclear weapon and intercontinental ballistic missiles; that Iran’s network and campaign of regional aggression be neutralized; to disrupt, degrade, or deny the Islamic Revolutionary Guards Corps and its surrogates access to the resources that sustain their destabilizing activities; and to counter Iran’s aggressive development of missiles and other asymmetric and conventional weapons capabilities.  The United States will continue to pursue these aims and the objectives contained in the Iran strategy that I announced on October 13, 2017, adjusting the ways and means to achieve them as required.
 
Sec
. 2Ending United States Participation in the JCPOA.  The Secretary of State shall, in consultation with the Secretary of the Treasury and the Secretary of Energy, take all appropriate steps to cease the participation of the United States in the JCPOA.
 
Sec
. 3Restoring United States Sanctions.  The Secretary of State and the Secretary of the Treasury shall immediately begin taking steps to re-impose all United States sanctions lifted or waived in connection with the JCPOA, including those under the National Defense Authorization Act for Fiscal Year 2012, the Iran Sanctions Act of 1996, the Iran Threat Reduction and Syria Human Rights Act of 2012, and the Iran Freedom and Counter-proliferation Act of 2012.  These steps shall be accomplished as expeditiously as possible, and in no case later than 180 days from the date of this memorandum.  The Secretary of State and the Secretary of the Treasury shall coordinate, as appropriate, on steps needed to achieve this aim.  They shall, for example, coordinate with respect to preparing any recommended executive actions, including appropriate documents to re-impose sanctions lifted by Executive Order 13716 of January 16, 2016; preparing to re-list persons removed, in connection with the JCPOA, from any relevant sanctions lists, as appropriate; revising relevant sanctions regulations; issuing limited waivers during the wind-down period, as appropriate; and preparing guidance necessary to educate United States and non-United States business communities on the scope of prohibited and sanctionable activity and the need to unwind any such dealings with Iranian persons.  Those steps should be accomplished in a manner that, to the extent reasonably practicable, shifts the financial burden of unwinding any transaction or course of dealing primarily onto Iran or the Iranian counterparty.
 
Sec
. 4Preparing for Regional Contingencies.  The Secretary of Defense and heads of any other relevant agencies shall prepare to meet, swiftly and decisively, all possible modes of Iranian aggression against the United States, our allies, and our partners.  The Department of Defense shall ensure that the United States develops and retains the means to stop Iran from developing or acquiring a nuclear weapon and related delivery systems.
 
Sec
. 5Monitoring Iran’s Nuclear Conduct and Consultation with Allies and Partners.  Agencies shall take appropriate steps to enable the United States to continue to monitor Iran’s nuclear conduct.  I am open to consultations with allies and partners on future international agreements to counter the full range of Iran’s threats, including the nuclear weapon and intercontinental ballistic missile threats, and the heads of agencies shall advise me, as appropriate, regarding opportunities for such consultations.
 
Sec
. 6General Provisions
  (a)  Nothing in this memorandum shall be construed to impair or otherwise affect:
(i)   the authority granted by law to an executive department or agency, or the head thereof; or
(ii)  the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
  (b)  This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
  (c)  This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
 
DONALD J. TRUMP
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NWSNEWS

(Source:
Reuters, 9 May 2018.) [Excerpts.]
 
ZTE Corp’s main business operations have ceased due to a ban imposed by the U.S. government, but China’s second biggest telecom equipment maker is trying to have the ban modified or reversed, it said on Wednesday.
 
ZTE was hit by a ban last month from Washington, forbidding U.S. firms from supplying it with components and technology after it was found to have violated U.S. export restrictions by illegally shipping goods to Iran.
 
  “As a result of the Denial Order, the major operating activities of the company have ceased,” ZTE said in the exchange filings late on Wednesday.
 
  “As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations,” it said. …

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President Trump announced May 8 his decision to cease the United States’ participation in the Joint Comprehensive Plan of Action and to begin reimposing the U.S. nuclear-related primary and secondary sanctions against Iran that were lifted to effectuate the JCPOA sanctions relief. The Treasury Department’s Office of Foreign Assets Control states that persons engaging in activities undertaken under this relief should take the steps necessary to wind down those activities by Aug. 6 or Nov. 4, as applicable, to avoid exposure to sanctions or enforcement action.
 
Under the JCPOA, the U.S. and the European Union lifted economic and financial nuclear-related sanctions on Iran in January 2016 in exchange for Iran’s significant curtailment of its nuclear program. OFAC now states that, as soon as is administratively feasible, it expects to revoke or amend general and specific licenses issued in connection with the JCPOA. At that time, OFAC will issue new authorizations to allow previously authorized transactions and activities during the applicable wind-down periods, after which the sanctions will come back into full effect.
 
Sanctions to be reimposed after Aug. 6 include sanctions on the direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes and sanctions on Iran’s automotive sector. Also after Aug. 6 the U.S. will revoke JCPOA-related authorizations for imports of Iranian-origin carpets and foodstuffs and certain related financial transactions as well as activities undertaken pursuant to specific licenses allowing exports of commercial passenger aircraft and related parts and services to Iran for exclusively civil aviation end-use (which will also be revoked).
 
Sanctions to be reimposed after Nov. 4 include sanctions on Iran’s port operators and shipping and shipbuilding sectors, sanctions on petroleum-related transactions with certain entities, and sanctions on the provision of underwriting services, insurance, or reinsurance. In addition, effective Nov. 5 the U.S. will revoke the authorization for U.S.-owned or -controlled foreign entities to wind down certain activities with the government of Iran or persons subject to the jurisdiction of the government of Iran that were previously authorized pursuant to General License H. Finally, no later than Nov. 5 the U.S. will reimpose the sanctions that applied to persons removed from the List of Specially Designated Nationals and Blocked Persons and/or other lists maintained by the U.S. government on Jan. 16, 2016.

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COMMCOMMENTARY

COMM_a0
10.
C. Todgham Cherniak: “What Does Trump’s Withdrawal from the Iran JCPOA Deal Mean for Canadian Companies and Trusts”
(Source: Author, 8 May 2018.)
 
* Author: Cyndee Todgham Cherniak, Esq, LexSage PC, cyndee@lexsage.com, 416-307-4168.
 
On May 8, 2018, U.S. President Donald Trump announced that the United States (“U.S.”) will withdraw from the Joint Comprehensive Plan of Action (“JCPOA”) with Iran. Canada was not a party to the JCPOA.  So, the U.S. being in or out of the JCPOA does not affect Canada directly.
 
That being said, President Trump’s has directed the U.S. Administration to immediately start the process to re-impose economic sanctions against Iran.  Whether this means the Trump Administration will re-impose the pre-JCPOA sanctions or develop a new and improved/revised list that comprises old and new sanctions against key sectors of the Iranian economy (e.g., energy/oil, airlines, financial sectors) is anyone’s guess.  What we do know is that new U.S. economic sanctions and trade restrictions against Iran are imminent and will be meant to punish Iran.

What does this mean for Canadian Companies and Trusts?
 
The short answer is that some Canadian businesses will not be able to engage in certain business activities with Iran or Iranian persons.  What is currently legal may become illegal or restricted under U.S. law.  This change can happen quickly.

Canadian companies (including subsidiaries of U.S. companies, affiliates of U.S. companies, and trusts) should undertake a risk assessment as soon as possible to determine whether any aspect of their business will be affected by the new U.S. economic sanctions against Iran.  The time to ask the questions is now.
 
First Question: Is there Exposure?
 
Canadian companies, Canadian subsidiaries of U.S. companies, Canadian branches of U.S. companies and Canadian companies that purchase business inputs from the United States need to ask questions to define their exposure, such as:
 
  – Does the company/branch have any dealings with Iran or Iranian persons?
  – Are any existing contracts with Iran or Iranian persons?
 
If the answer is “yes” to either of these questions, it will be necessary to ask more questions. If the answer is “no”, then there is little to worry about with respect to the new U.S. economic sanctions and trade restrictions against Iran.
U.S. sanctions can and do reach subsidiaries and branches of U.S. companies that are located in Canada. U.S. subsidiaries and branches will need to consider whether certain future transactions (or completion of existing transactions) will be prohibited by the re-imposition of sanctions by the Trump Administration.  We will talk about the exposure of wholly owned Canadian companies below in the section “Canadian Export Permits”.
 
Second Area of Inquiry: Employees/Officers/Directors
 
For Canadian companies and multi-nationals in Canada (we assume that U.S. subsidiaries and branches will have Americans in the organization), an important question is whether decision makers are Americans.  U.S. law applies to Americans in the U.S. and outside the U.S. If there are American individuals in the company, it may be that the decision tree within the organization may need to be adjusted to remove Americans from decisions on business with Iran and/or you may need to take further steps to ensure they are not in violation of U.S. sanctions.
 
Third Area of Inquiry – the Goods Sold to Iran
 
If there is business with Iran, what is the status of that business? Will there be deliverables after the re-imposition of US sanctions.  Will the Canadian company need to apply for a U.S. export permit or OFAC approval before completing a contract or fulfilling an existing contract?
 
We do not yet know the details about what is to be covered by the new economic sanctions.  In the meantime, each Canadian company with business in Iran needs to identify the contracts with Iran and what goods will be delivered and to whom.  Canadian companies need to be ready to stop certain export transactions. Even though the transaction may not be prohibited under Canadian economic sanctions, the U.S. economic sanctions and trade restrictions may apply
 
Canadian Export Permits
 
Canada controls the export from Canada of goods and technology that originates in the United States.  As a general rule (and pursuant to item 5400 of the Export Control List), exporters from Canada must obtain an individual export permit from Global Affairs Canada for U.S. origin goods and technology.  ECL Item 5400 covers:
 
All goods and technology of United States origin, unless they are included elsewhere in this List, whether in bond or cleared by the Canada Border Services Agency, other than goods or technology that have been further processed or manufactured outside the United States so as to result in a substantial change in value, form or use of the goods or technology or in the production of new goods or technology.
 
Canadian companies who export goods and/or technology to Iran must obtain a Canadian Individual Export Permit for each shipment.  Global Affairs Canada will require a copy of a U.S. export permit.  If the new U.S. sanctions cover the goods in question, it is unlikely the Trump Administration will grant the U.S. export permit required by Global Affairs Canada.
 
There is an important clarification to the above rule.  Goods and technology that “have been further processed or manufactured outside the United States so as to result in a substantial change in value, form or use of the goods or in the production of new goods” are excluded from the controls is item 5400.  There is no written guidance on what “significant change” means.  While, as a rule of thumb, a “significant change” normally is normally around 50% of the regional value content in Canada, there are no rules for the calculation of regional value content in the context of Item 5400.  Other factors and considerations come into play.
 
When conducting the analysis, it is important to prepare a bill of materials for the finished product to be exported from Canada and identify which inputs are of U.S. origin. You will need to include the B3 customs documentation relating to the imports of the U.S. origin goods or the invoice received from a distributor or seller in Canada.  This is a starting point and the result can be influenced by the role of particular inputs in the finished product. For example, if the essential character of a finished product is derived from U.S origin goods, it can be that the finished good is controlled.
 
Canadian companies and trusts that sell Canadian manufactured goods to Iran will need to undertake a compliance review with respect to goods made from U.S. inputs and revisit their analysis.
 
Getting Paid
 
If the U.S. re-imposes economic sanctions on Iranian financial institutions, Canadian companies may find it more difficult to get paid.  Most business is conducted in U.S. dollars.  Many USD payments go through U.S.-based financial institutions.  If U.S. financial institutions cannot deal with certain Iranian banks, Canadian companies may run into difficulties getting paid too.
Canadian companies doing business with Iran should review the financial arrangements in contracts and restructure payment arrangements as needed.
 
Review Existing Lines of Credit and Loan Documentation
 
Canadian companies and trusts that do business with Iran should review all existing credit facility and loan agreements.  Many contracts contain representation and warranty provisions and covenants to comply with all laws, including U.S. economic sanctions laws.  Some agreements specify compliance with U.S. economic sanctions laws.  It is possible that a Canadian business will have to report certain business to their financial institutions under the credit facility and loan contracts and that activities relating to Iran would put those agreements in jeopardy.

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COMM_a01
11. Global Trade News: “Weise Wednesday: Update on Major Trade Initiatives”
(Source: Integration Point Blog, 9 May 2018.)
 
Welcome to Weise Wednesday! Twice a month we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. If you have questions, we encourage you to send them to AskGeorge@IntegrationPoint.com.
 
Q. Could you provide an update on the status of major Trump administration trade initiatives that you discussed in recent Weise Wednesdays?

A. These certainly have been very busy times on a range of trade fronts. Today I will provide updates on NAFTA renegotiations, the section 232 steel and aluminum tariffs, and ongoing negotiations between the United States and China to resolve trade disputes in advance of the implementation of section 301 tariffs on designated Chinese goods.
 
NAFTA renegotiation
 
The trade ministers of the U.S., Canada, and Mexico are meeting this week to resume official negotiations to revise NAFTA. The ministers met informally in Washington, D.C. recently in an effort to resolve the outstanding issues. Although no specifics have been announced on the status of the outstanding issues, Canada’s trade minister commented that the talks resulted in “very solid, very positive, very good progress.” U.S. Trade Representative Lighthizer stated that the hope is to conclude an agreement between the three parties by the end of May. That is an ambitious timetable, and the talks this week should give a better indication as to whether that goal can be reached. 
 
Section 232 steel and aluminum tariffs
 
You will recall the U.S. recently imposed a 25% additional tariff on designated steel products and a 10% increase in tariffs on designated aluminum products. At the time those tariffs were imposed, a delay in implementation of the tariffs for several countries was granted until May 1 while bilateral discussions with those countries took place. The Trump administration issued proclamations last week clarifying the status of the exempted countries.
 
As a result of successful bilateral negotiations, it was announced that South Korea would be permanently exempted from the additional steel tariffs but would be subject to the tariffs on aluminum products from May 1 on. Under the bilateral agreement, South Korea agreed to limit its steel exports to the U.S. through a quota and made some additional trade concessions to the U.S.
 
The steel and aluminum tariff exemptions for Argentina, Australia, and Brazil will be postponed indefinitely as bilateral agreements tentatively reached with each of these countries are finalized. It is expected that such agreements will impose quotas on steel and aluminum exports from those countries to the U.S.
 
The exemptions for steel and aluminum products from Canada, Mexico, and the European Union (EU) will continue until May 31, 2018, while bilateral discussions with each continue. No tentative agreement has been reached with any of these countries, and all appear to be resisting U.S. insistence on quotas on steel and aluminum exports. The EU has publicly threatened to impose retaliatory tariffs against U.S. exports if a permanent exemption is not granted.
 
Section 301 tariffs on China
 
On April 3, the Office of U.S. Trade Representative (USTR) published a list of Chinese products that would be subject to an additional 25% tariff as a result of a 301 action brought against China concerning intellectual property issues. USTR has solicited public comments on the proposed list and announced that a public hearing would be held on May 15 to receive public input. Meanwhile, China published its own list of U.S. products that would be subject to retaliatory tariffs if the U.S. goes forward on imposing additional tariffs on Chinese goods. 
 
The U.S. tariffs will not go into effect until 60 days after the public comment process is complete and the final product list is complete. As expected, the U.S. and China recently launched bilateral talks in an effort to resolve the underlying dispute between the parties. Last week a U.S. delegation of Secretary of Treasury Mnuchin, Secretary of Commerce Ross, and USTR Lighthizer went to China and engaged in two days of serious discussions on a wide range of issues surrounding Chinese trade practices and its trade relationship with the U.S. 
 
Public comments from the two parties made clear that little progress was made in resolving the underlying issues and that the gap between the two is quite wide. There were no announcements at the conclusion of the talks about next steps in the process. Presumably, talks will continue, and hopefully progress can be made.
 
Conclusion
 
All of these issues obviously have major potential consequences for the trade community, and it is not clear how the issues will be resolved. It is, therefore, imperative that interested parties stay engaged to make your views known to the government on the potential impact of these issues on your business. Stay tuned for further developments.

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

(Source:
Arent Fox LLP, 9 May 2018.)
 
* Authors: Kay C. Georgi, Esq., kay.georgi@arentfox.com, +1 202-857-6293; Regan K. Alberda, Esq., regan.alberda@arentfox.com, +1 202-775-5771; and Sylvia G. Costelloe, Esq., sylvia.costelloe@arentfox.com, +1 202-350-3708.  All of Arent Fox LLP.
 
On May 8, 2018, President Trump announced that the United States is withdrawing from the Joint Comprehensive Plan of Action (JCPOA).
Before former President Obama left office, in late 2016, OFAC had published a list of FAQs to address the possibility of the relaxation of sanctions on Iran being revoked (snapback), meaning, in large part, the re-imposition of certain secondary sanctions on non-US persons for certain dealings with Iran.
 
On May 8, 2018 OFAC published several new FAQs explaining how the re-imposition of sanctions (or snapback) will go into effect. While the FAQs leave a number of issues undecided, some of the key takeaways from the new FAQs are as follows:
 
* Wind-down Periods
: The US government will  provide either a 90 or a 180-day period for persons to wind down operations previously authorized under the JCPOA and entered into prior to May 8, 2018. Some sanctions will be re-imposed after a 90-day “wind-down” period (August 6, 2018) and other sanctions will be re-imposed a 180-day wind-down period (November 4, 2018). With the exception of goods or services necessary to wind down operations in or business involving Iran entered into prior to May 8, 2018 during the 90/180-day wind-down period, the provision or delivery of additional goods or services and/or the extension of additional loans or credits to an Iranian counterparty after the wind-down period, including pursuant to contracts entered into prior May 8, 2018, may result in the imposition of US sanctions.
 
* Retroactivity
: Sanctions will not be applied retroactively to authorized transactions entered into before May 8, 2018 or to authorized transactions that took place during a wind-down period, but transactions conducted after these periods could be subject to penalties (if subject to US laws) or secondary sanctions to the extent they involve conduct for which sanctions have been re-imposed. Contracts entered into prior to the snapback will not be grandfathered past the applicable 90 or 180-day wind-down period.
 
* Primary Sanctions/General License H and the other General Licenses
: US-owned or -controlled foreign entities will have a 180-day wind-down period for transactions under General License H, and US persons will have a 90-day wind-down period under the other licenses that were issued under the JCPOA on January 16, 2016. Effective November 5, 2018, US-owned or -controlled foreign entities will no longer be authorized to wind down certain activities involving Iran that were previously authorized under General License H. OFAC intends to replace General License H, General License I, and the general licenses in §§ 560.534 and 560.535 (relating to trade in Iranian-origin carpets and foodstuffs) with more narrowly scoped authorizations to allow US persons and, as appropriate, US-owned or -controlled foreign entities to engage in transactions ordinarily incident and necessary to wind down activities that had been previously authorized.
  – The detailed provisions of the revised authorizations, including General License H, are not yet known; in other words, we do not know what wind-down activities will be authorized under the revised General License H or the other general licenses. However, the new authorizations are expected to permit the receipt of payments under written agreements that were entered into prior to May 8, 2018. We will provide an updated alert when OFAC reissues the general licenses.
 
* Secondary Sanctions
: If a non-US, non-Iranian person is owed payment at the time of the end of the wind-down period for goods or services (as well as owed repayment for loans or credits extended) fully provided or delivered to an Iranian counterparty prior to the end of the wind-down period pursuant to contracts entered into prior to May 8, 2018, the US government will not impose sanctions on the non-US, non-Iranian person for receiving payment for those goods and services. Any payments would need to be consistent with US sanctions, including that payments could not involve US persons or the US financial system.
 
* Other General Licenses
: The FAQs only address actions taken on January 16, 2016 in connection with the JCPOA. Neither the President nor OFAC has mentioned changing any of the general licenses that predated the JCPOA, such as the general license for agricultural, medicine and medical devices, or general license D-1, the General License with Respect to Certain Services, Software, and Hardware Incident to Personal Communications. We have no reason to believe that these non-JCPOA general licenses will be revoked or revised. However, the movement of a number of Iranian Banks back to the SDN list by November 5, 2018 (see final bullet below) may make payment more difficult. 
 
90-Day Wind-Down Period Breakdown
 
This 90-day wind-down period (August 6, 2018) applies to some secondary sanctions, as well as some primary sanctions:
 
Secondary Sanctions Involving Non-US Persons
  (1) Sanctions on the purchase or acquisition of US dollar banknotes by the Government of Iran;
  (2) Sanctions on Iran’s trade in gold or precious metals;
  (3) Sanctions on the direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes;
  (4) Sanctions on significant transactions related to the purchase or sale of Iranian rials, or the maintenance of significant funds or accounts outside the territory of Iran denominated in the Iranian rial;
  (5) Sanctions on the purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt; and
  (6) Sanctions on Iran’s automotive sector.

Primary Sanctions Involving US Persons
In addition to lifting certain secondary sanctions on non-US persons, the JCPOA authorized certain primary sanctions applicable to US persons, several of which will now be re-imposed after August 6, 2018.
  (1) The importation into the United States of Iranian-origin carpets and foodstuffs and certain related financial transactions pursuant to general licenses under the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560;
  (2) Activities undertaken pursuant to specific licenses issued in connection with the Statement of Licensing Policy for Activities Related to the Export or Re-export to Iran of Commercial Passenger Aircraft and Related Parts and Services (JCPOA SLP); and
  (3) Activities undertaken pursuant to General License I relating to contingent contracts for activities eligible for authorization under the JCPOA SLP.
– OFAC has rescinded the JCPOA SLP and will no longer consider applications.
– OFAC expects to revoke any current specific licenses issued under the JCPOA SLP, but it will issue authorizations for related wind-down activities until August 6, 2018.
 
180-Day Wind-Down Period Breakdown
 
This 180-day wind-down period (November 4, 2018) applies to the remaining secondary sanctions, as well as the primary sanctions lifted by General License H:
 
Secondary Sanctions Involving Non-US Persons
  (1) Sanctions on Iran’s port operators, and shipping and shipbuilding sectors, including on the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line Iran, or their affiliates;
  (2) Sanctions on petroleum-related transactions with, among others, the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC), including the purchase of petroleum, petroleum products, or petrochemical products from Iran;
  (3) Sanctions on transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions under Section 1245 of the National Defense Authorization Act for Fiscal Year 2012 (NDAA);
  (4) Sanctions on the provision of specialized financial messaging services to the Central Bank of Iran and Iranian financial institutions described in Section 104(c)(2)(E)(ii) of the Comprehensive Iran Sanctions and Divestment Act of 2010 (CISADA);
  (5) Sanctions on the provision of underwriting services, insurance, or reinsurance; and
  (6) Sanctions on Iran’s energy sector.

Primary Sanctions Involving US Persons
 
As noted above, US-owned or -controlled foreign entities will have a 180-day wind-down period, but we have to wait for OFAC to reissue General License H to know the scope of the wind-down activities that will be authorized. Effective November 5, 2018, US-owned or -controlled foreign entities will no longer be authorized to wind down certain activities involving Iran that were previously authorized under General License H. OFAC intends to replace General License H with a more narrowly scoped authorization to allow US-owned or -controlled foreign entities to engage in transactions ordinarily incident and necessary to wind down activities that had been previously authorized. Until OFAC issues the revised General License H, we will not know the scope of the revised authorization.
 
Persons to be Replaced from the EO 13599 List to the SDN List No Later than Nov 5, 2018
 
The US government will also re-impose sanctions on persons that had been removed from the SDN list as part of the JCPOA on January 16, 2016. No later than November 5, 2018, OFAC expects to move persons from the E.O. 13599 List (i.e., persons meeting the definition of “Government of Iran” or “Iranian financial institution”) back to the SDN list. The move is not effective immediately in order to facilitate wind-down activities by non-US, non-Iranian persons involving E.O. 13599 List persons, with whom transactions were authorized under the JCPOA. Beginning November 5, 2018, however, activities with most persons moved from the E.O. 13599 List to the SDN list will be subject to secondary sanctions, identifiable by the following notation on their SDN list entry: “Additional Sanctions Information – Subject to Secondary Sanctions.”

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

 
* Author: Michael O’Kane, Esq., Peters & Peters Solicitors LLP, mokane@petersandpeters.com.
 
Following President Donald Trump’s decision yesterday to withdraw from the JCPOA and to reimpose sanctions on Iran, EU leaders have stated that they will use the next 3 to 6 months – before US sanctions are reinstated – to seek exemptions for European companies.
 
US Treasury Secretary Steven Mnuchin also stated yesterday that export licences for Boeing Co and Airbus to sell passenger jets to Iran would be revoked.
 
In addition, the UK Office of Foreign Affairs has updated its guidance for British companies doing business in Iran.

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

 
* Authors: Rosanne Giambalvo, Esq., rosanne.giambalvo@ankuraconsulting.com, 646-291-8575
Waqas Shahid, Esq., waqas.shahid@ankuraconsulting.com, 646-291-8546.  Both of Ankura Consulting Group LLC.
 
The demand for U.S.-manufactured drones and related technology (collectively known as “unmanned aerial systems” or “UASs”) is robust.  Our allies want to buy the most sophisticated and effective drone systems and the U.S., the global leader in drone technology, would appear to be the perfect partner. Given the obvious tactical and strategic advantages of having unequal access to drone technology, however, the Bush and Obama Administrations chose to impose tight controls on the transfer – even to U.S. allies – of UASs to curtail global proliferation.  In the absence of U.S. exports, other countries (specifically Israel and China) have stepped up to satisfy the global demand.  However, on April 19, 2018, President Trump approved a new policy on the export of UASs that will provide a much-needed boost to U.S. drone manufactures by making it easier for them to sell UASs and related technology to U.S. allies.
 
Highlights of the New Policy 
 
The stated objectives of the new policy are to increase trade opportunities for U.S. companies, bolster partner security and counterterrorism capabilities, and strengthen bilateral relationships, while simultaneously preserving the U.S. military advantage and  continuing to prevent the proliferation of weapons of mass destruction delivery systems.  The Administration will seek to achieve these goals through the following specific initiatives: 
 
  – The majority of military UAS sales, whether armed or unarmed, will now be permitted through direct commercial sales (“DCS”) to foreign purchasers.  DCS of UASs will give US manufacturers an alternative to the more time-consuming foreign military sales (“FMS”) process, which requires engagement with and facilitation by the US Department of Defense.
  – The new rules reclassify UASs with strike-enabling technology (e.g., laser target designators) as “unarmed,” making it easier to export them. 
  – Contrary to what the UAS industry had hoped for, the new policy does not shift the “strong presumption of denial” that the Missile Technology Control Regime (“MTCR”) requires members to use when considering exports of certain long-range systems.  However, the US will seek to work with its partners to revise the MTCR so that UASs will no longer be classified as “cruise missiles”, allowing the Administration to further streamline the export process.
  – The policy requires recipient nations to arm UASs with US weapons only, to reduce recipient nations’ reliance on Chinese knock-offs and Russian systems. 
  – Consistent with prior policy, recipients of armed UASs will continue to be subject to end-use monitoring and periodic consultations with the US government on the use of certain UASs.  Recipients will also continue to be prohibited from using armed UASs against their domestic populations.
 
New Opportunities and New Challenges
 
The new UAS policy sets the stage for making the U.S. more competitive in the global UAS market by easing several prior restrictions on UAS exports.  Although DCS (often seen as the preferred method of procurement for exports of defense articles) should help in this regard, US manufacturers should review their internal compliance capabilities to assess their readiness to take advantage of DCS opportunities:
 
  – Export Licensing Infrastructure & Compliance – Unlike FMS, DCS requires the manufacturer to obtain an export license from the Department of State prior to delivering the defense article. Export licensing carries additional compliance obligations and may require an organization to invest in additional compliance resources, capabilities, and systems.
  – Government Engagement – One advantage of FMS is that the US government is often involved early in the transaction, leading to fewer surprises later in the process.  In contrast, when utilizing the DCS process, manufacturers can sometimes fail to engage the US Government prior to submission of export license applications, surprising and frustrating regulators.  This can result in delay of export licensing, and can sometimes lead to denial altogether.  Accordingly, manufacturers planning to increase utilization of DCS should ensure they have the necessary capabilities and resources to effectively engage US Government stakeholders.
  – Logistics Systems- Unlike FMS where the U.S. Government is essentially a domestic buyer of the defense articles at issue and delivery usually takes place within the US, DCS involves sale of defense articles directly to foreign buyers, potentially with delivery overseas. Accordingly, the logistics of defense articles through a DCS program are more complex than FMS delivery obligations.  Companies using DCS should assess and enhance their logistics capabilities, including policies, procedures and systems to meet the new compliance obligations.
  – Contracts Management –  In comparison to FMS contracts, DCS contracts offer more flexibility in their terms, including negotiated delivery schedules, warranty provisions, equipment trade-ins, and penalties for non-compliance.  Manufacturers should consider whether their contracts organization is ready to handle highly complex negotiated contracts, and whether they have necessary internal controls and mechanisms to effectively monitor such contracts.
  – ABAC (including Part 130) Risks & Obligations – Selling high-value items to foreign buyers may involve engagement with foreign sales agents to identify and facilitate sales opportunities. As such, drone manufacturers contemplating usage of DCS should ensure their compliance programs assess and address risks and requirements associated with US and foreign anti-bribery and anti-corruption (ABAC) laws, as well as International Traffic in Arms Regulations Part 130 requirements.
                                         
The new UAS policy should be a boon for U.S. manufacturers of UASs and allow this important manufacturing sector to continue growing through exports.  However, this new opportunity also comes with new compliance responsibilities and manufacturers should prepare themselves by thoroughly reviewing and enhancing their current export compliance programs.

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

(Source:
Export Law Blog
, 8 May 2018. Reprinted by permission.)
 
* Author: R. Clifton Burns, Esq., Bryan Cave LLP, Wash DC,
Clif.Burns@bryancave.com
, 202-508-6067).
 
Today’s [ed. Yesterday, 8 May 2018.] revocation of U.S. participation in the Iran nuclear deal principally resurrects a number of secondary sanctions aimed at European allies and other countries. Those that relied on the nuclear deal will now see that commercial arrangements with Iran that they entered into relying on that deal and on their false hopes that the U.S. would not later simply walk away from it will be the collateral damage of the White House’s new trade war on Iran.
 
Shortly after the announcement of the U.S. withdrawal from the deal, OFAC issued FAQs explaining the action. (Why on earth are these called FAQs? They were issued within seconds of the announcement. How can there already be “frequently asked questions”? Perhaps OFAC thinks that FAQs stands for something else – maybe “frightening answers to questions.”)
 
Those FAQs preface the explanation of the wind-down provisions with this:
 
The U.S. government has a past practice of working with U.S. or third-country companies to minimize the impact of sanctions on the legitimate activities of those parties undertaken prior to the imposition of sanctions.
 
Any hopes that this is a true statement are quickly dashed by looking at the wind-down provisions themselves. Depending on the sanctions, companies have either 90 or 180 days to finish up activities commenced before today’s date. For activities engaged in under General License H – which permits foreign subsidiaries of U.S. companies to engage in certain activities with Iran – the wind-down period is 180 days. If a company has a contract to deliver goods to Iran, then, according to FAQ 2.1, those goods must be “fully delivered” within the wind-down period. Payment can be made outside that period for those fully delivered goods provided that payment is made pursuant to the terms of the written agreement.
 
But suppose you’ve made an investment in producing a complex item, have started to manufacture it, but can’t complete it within the wind-down period. You’re out of luck. Plus, when the Iranian customer sues you and gets a judgment in the court of your home country, you can’t pay the judgment without violating U.S. law. That’s not a good position to be in.
 
Another conundrum: what’s meant by fully delivered? Is the item fully delivered if the contract specifies FOB Incoterms 2010 and the item is placed on the boat before the wind-down period expires but is delivered to the customer in Iran after the wind-down period? Your guess is as good as mine, even though under an FOB delivery term the seller has satisfied its delivery obligations once the item is on the boat.
 
FAQ 2.2 provides the answer, of sorts, to the question about new business in Iran that starts after today but is completed before the wind-down period expires. OFAC says in that case you’re okay, but that if there is an enforcement action based on things done after the period expires, these new activities undertaken after today will be considered in determining the penalty. In other words, engage in new activities after today at your own risk.
 
Of course, it’s not at all clear what might count as new activities. Suppose you have an office in Tehran to assist in completing the contract. Can you order more paper when the copying machine runs out? Can you order lunch for a working meeting in the office? Hire a temp?
 
There’s one thing that can be guaranteed by these wind-down provisions: full employment for sanctions lawyers.

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

ENEDITOR’S NOTES

 

* James M. Barrie (Sir James Matthew Barrie; 9 May 1860 – 19 Jun 1937; was a Scottish novelist and playwright, best remembered today as the creator of Peter Pan.)
  – “Temper is a weapon that we hold by the blade.”  

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

EN_a317
. 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: 
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: 24 Apr 2018: 3 FR 17749-17751: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates
  – HTS codes that are not valid for AES are available
here.
  – The latest edition (30 Apr 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: 4 May 2018: Harmonized System Update 1807, containing 289 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: 25 Apr 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_a0318
Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor) 

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

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EPEDITORIAL POLICY

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, John Bartlett. The Ex/Im Daily Update is emailed every business day to approximately 8,000 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, 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.


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