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18-0510 Thursday “Daily Bugle”

18-0510 Tuesday “Daily Bugle”

Thursday, 10 May 2018

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  1. President Continues National Emergency with Respect to Syrian Government 
  2. State Imposes Nonproliferation Measures Against Foreign Entities and Persons, Including a Ban on U.S. Government Procurement 
  3. USTR Announces New 4-Year Charter Term, Welcomes Nominations for ITACs  
  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. DHS/ICE Removes Italian National Convicted of Weapons Trafficking
  4. State/DDTC Recognizes and Honors Foreign Government Classification Markings
  5. Canada Global Affairs Releases Excerpts from Foreign Affairs Minister’s Speech Concerning Arms Export Controls
  6. German BAFA Plans to Extend 4 General Licenses
  7. UK EJCU Updates Guide on Exporting to Iran Following U.S. Withdrawal from Iran Nuclear Deal
  1. American Shipper: “Compliance 360: Minding Export Control Reform”
  2. Ars Technica: “The Trump Administration Just Forced Smartphone Maker ZTE to Shut Down”
  3. C4ISRNET: “In the Future, Iran Could 3D-Print its Way Around Sanctions”
  4. DDTC’s Mike Miller Announces Expected ITAR Changes
  5. The Guardian: “How Trump’s Iran Deal Exit Could Hit Aviation, Oil and Car Industries”
  6. Reuters: “U.S. Sanctions Iranians Days after Trump Withdraws from Nuclear Deal”
  7. ST&R Trade Report: “Import and Export Restrictions on Synthetic Opioid Continued”
  1. The Export Compliance Journal: “The Curious (Export Violation) Case of ZTE”
  2. J. Creek: “Steel and Aluminum Tariff Exemptions Extended… For Now”
  3. S. Kao, H. Keerikatte & S. Oliai: “Impact of U.S. Withdrawal from Iran Nuclear Deal”
  4. T.R. McVey: “FLIR’s ITAR Penalty Case Provides Valuable Compliance Lessons”
  1. ECS Presents “ITAR/EAR Boot Camp (Seminar Level I)” on 12-13 Sep in Annapolis, MD
  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.
President Continues National Emergency with Respect to Syrian Government

(Source: 
Federal Register, 10 May 2018.)
 
83 FR 21839-21840: Continuation of the National Emergency with Respect to the Actions of the Government of Syria
 
On May 11, 2004, pursuant to his authority under the International Emergency Economic Powers Act, 50 U.S.C. 1701-1706, and the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003, Public Law 108-175, the President issued Executive Order 13338, in which he declared a national emergency with respect to the actions of the Government of Syria. To deal with this national emergency, Executive Order 13338 authorized the blocking of property of certain persons and prohibited the exportation or reexportation of certain goods to Syria. The national emergency was modified in scope and relied upon for additional steps taken in Executive Order 13399 of April 25, 2006, Executive Order 13460 of February 13, 2008, Executive Order 13572 of April 29, 2011, Executive Order 13573 of May 18, 2011, Executive Order 13582 of August 17, 2011, Executive Order 13606 of April 22, 2012, and Executive Order 13608 of May 1, 2012.
 
The President took these actions to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the actions of the Government of Syria in supporting terrorism, maintaining its then-existing occupation of Lebanon, pursuing weapons of mass destruction and missile programs, and undermining United States and international efforts with respect to the stabilization and reconstruction of Iraq.
 
The regime’s brutality and repression of the Syrian people, who have been calling for freedom and a representative government, not only endangers the Syrian people themselves, but also generates instability throughout the region. The Syrian regime’s actions and policies, including with respect to chemical weapons, supporting terrorist organizations, and obstructing the Lebanese government’s ability to function effectively, continue to foster the rise of extremism and sectarianism and pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. As a result, the national emergency declared on May 11, 2004, and the measures to deal with that emergency adopted on that date in Executive Order 13338; on April 25, 2006, in Executive Order 13399; on February 13, 2008, in Executive Order 13460; on April 29, 2011, in Executive Order 13572; on May 18, 2011, in Executive Order 13573; on August 17, 2011, in Executive Order 13582; on April 22, 2012, in Executive Order 13606; and on May 1, 2012, in Executive Order 13608, must continue in effect beyond May 11, 2018. Therefore, in accordance with section 202(d) of the National Emergencies Act, 50 U.S.C. 1622(d), I am continuing for 1 year the national emergency declared with respect to the actions of the Government of Syria.
 
In addition, the United States condemns the Assad regime’s use of brutal violence and human rights abuses and calls on the Assad regime to stop its violence against the Syrian people, uphold the Cessation of Hostilities, enable the delivery of humanitarian assistance, and allow a political transition in Syria that will forge a credible path to a future of greater freedom, democracy, opportunity, and justice.
 
The United States will consider changes in the composition, policies, and actions of the Government of Syria in determining whether to continue or terminate this national emergency in the future.
 
This notice shall be published in the Federal Register and transmitted to the Congress.
 
  [Presidential Signature.]
THE WHITE HOUSE, May 9, 2018.

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

EXIM_a2

2.
State Imposes Nonproliferation Measures Against Foreign Entities and Persons, Including a Ban on U.S. Government Procurement

(Source: Federal Register, 10 May 2018.) [Excerpts.] 
 
83 FR 21812-21813: Imposition of Nonproliferation Measures Against Foreign Persons, Including a Ban on U.S. Government Procurement
 
* AGENCY: Bureau of International Security and Nonproliferation, Department of State.
* ACTION: Notice.
* SUMMARY: A determination has been made that a number of foreign persons have 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. … 
* 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 persons identified in the report submitted pursuant to Section 2(a) of the Act:
 
  – Abascience Tech Co., Ltd. (China) and any successor, sub-unit, or subsidiary thereof;
  – Easy Fashion Metal Products Trade Company [aka Easyfashion Industries] (China) and any successor, sub-unit, or subsidiary thereof;
  – Emily Liu (Chinese individual);
  – Karl Lee [aka Li Fangwei] (Chinese individual);
  – Raybeam Optronics Co., Ltd (China) and any successor, sub-unit, or subsidiary thereof;
  – Shanghai Rotech Pharmaceutical Engineering Company (China) and any successor, sub-unit, or subsidiary thereof;
  – Sinotech (Dalian) Carbon and Graphite Corporation (SCGC) (China) and any successor, sub-unit, or subsidiary thereof;
  – Sunway Tech Co., Ltd (China) and any successor, sub-unit, or subsidiary thereof;
  – T-Rubber Co. Ltd (China) and any successor, sub-unit, or subsidiary thereof;
  – Sakr Factory for Developmental Industries (Egypt) and any successor, sub-unit, or subsidiary thereof;
  – Mojtaba Ghasemi (Iranian individual);
  – Islamic Revolutionary Guard Corps Qods Force (IRGC QF) (Iran) and any successor, sub-unit, or subsidiary thereof;
  – Pars Aviation Service Company (PASC) (Iran) and any successor, sub-unit, or subsidiary thereof;
  – Defense Industries Organization (DIO) (Iran) and any successor, sub-unit, or subsidiary thereof;
  – Saeng Pil Trading Corporation (SPTC) (North Korea) and any successor, sub-unit, or subsidiary thereof;
  – Second Economic Committee (SEC) Korea Ryonbong General Corporation (North Korea) and any successor, sub-unit, or subsidiary thereof;
  – 183rd Guard Air Defense Missile Regiment (Russia) and any successor, sub-unit, or subsidiary thereof;
  – Instrument Design Bureau (KBP) Tula (Russia) and any successor, sub-unit, or subsidiary thereof;
  – Gatchina Surface-to-Air Missile Training Center (Russia) and any successor, sub-unit, or subsidiary thereof;
  – Russian General Staff Main Intelligence Directorate (GRU) (Russia) and any successor, sub-unit, or subsidiary thereof;
  – 18th Central Scientific Research Institute (18th TsNII) Scientific Research Center (NITs) (Kursk) (Russia) and any successor, sub-unit, or subsidiary thereof;
  – Russian Research and Production Concern (BARL) and any successor, sub-unit, or subsidiary thereof;
  – Scientific Studies and Research Center (SSRC) (Syria) and any successor, sub-unit, or subsidiary thereof;
  – Lebanese Hizballah (Syria) and any successor, sub-unit, or subsidiary thereof;
  – Megatrade (Syria) and any successor, sub-unit, or subsidiary thereof;
  – Syrian Air Force (Syria) and any successor, sub-unit, or subsidiary thereof;
  – Seden Denizcilik Hizmeleri Sanayi de Ticaret Limited (Turkey) and any successor, sub-unit, or subsidiary thereof; and
  – Yona Star International (United Arab Emirates) 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 these foreign persons, except to the extent that the Secretary of State otherwise may determine;
  (2) No department or agency of the United States Government may provide any assistance to these foreign persons, and these persons 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 these foreign persons of any item on the United States Munitions List are permitted, and all sales to these persons 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 these foreign persons 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.

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

EXIM_a3

3.
USTR Announces New 4-Year Charter Term, Welcomes Nominations for ITACs 

(Source: 
Federal Register, 10 May 2018.) [Excerpts.] 
 
83 FR 21813-21815: Notice of Continuation and Request for Nominations for the Industry Trade Advisory Committees
 
* AGENCY: Office of the United States Trade Representative (USTR).
* ACTION: Notice and request for applications.
* SUMMARY: The United States Trade Representative (Trade Representative) and the Secretary of Commerce (Secretary) have established a new four-year charter term ending in February 2022, and are accepting applications from qualified individuals interested in serving as a member of an Industry Trade Advisory Committee (ITAC). The ITACs provide detailed policy and technical advice, information, and recommendations to the Secretary and the Trade Representative regarding trade barriers, negotiation of trade agreements, and implementation of existing trade agreements affecting industry sectors, and perform other advisory functions relevant to U.S. trade policy matters. There currently are opportunities for membership on each ITAC and we will accept nominations throughout the charter term.
* DATES: We will accept nominations for membership on the ITACs throughout the four-year charter term. … 
* SUPPLEMENTARY INFORMATION: … The ITACs provide detailed policy and technical advice, information, and recommendations to the Secretary and the Trade Representative on trade policy matters including: (1) Negotiating objectives and bargaining positions before entering into trade agreements; (2) the impact of the implementation of trade agreements on the relevant sector; (3) matters concerning the operation of any trade agreement once entered into; and (4) other matters arising in connection with the development, implementation, and administration of the trade policy of the United States. The nonpartisan, industry input provided by the ITACs is important in developing unified trade policy objectives and positions when the United States negotiates and implements trade agreements.
  The ITACs address market-access problems, trade barriers, tariffs, discriminatory foreign procurement practices, and information, marketing, and advocacy needs of their industry sector. Eleven ITACs (ITACS 1-11) provide advice and information on issues that affect specific sectors of U.S. industry. Three ITACs (ITACs 12-14) focus on crosscutting functional issues that affect all industry sectors and include specifically appointed members along with non-voting members from the industry specific ITACs to represent a broad range of industry perspectives. The ITACs may address other trade policy issues, e.g., government procurement and subsidies, in ad hoc working groups. … 
  [T]he Secretary and the Trade Representative have established new four-year charter terms for the following ITACs, that began on February 14, 2018 and will end on February 14, 2022.
 
  ITAC 1 Aerospace Equipment
  ITAC 2 Automotive Equipment and Capital Goods
  ITAC 3 Chemicals, Pharmaceuticals, Health/Science Products and Services
  ITAC 4 Consumer Goods
  ITAC 5 Forest Products, Building Materials, Construction and Nonferrous Metals
  ITAC 6 Energy and Energy Services
  ITAC 7 Steel
  ITAC 8 Digital Economy
  ITAC 9 Small and Minority Business
  ITAC 10 Services
  ITAC 11 Textiles and Clothing
  ITAC 12 Customs Matters and Trade Facilitation
  ITAC 13 Intellectual Property Rights
  ITAC 14 Standards and Technical Trade Barriers … 
 
Gregory Walters, Assistant United States Trade Representative for Intergovernmental Affairs and Public Engagement, Office of the United States Trade Representative.

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

OGSOTHER GOVERNMENT SOURCES

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

* President; ADMINISTRATIVE ORDERS; Central African Republic; Continuation of National Emergency (Notice of May 10, 2018) [Publication Date: 11 May 2018.] 

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

(Source: 
Commerce/BIS
)

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

(Source: 
DHS/ICE, 10 May 2018.) 
 
An Italian national, and member of the Italian military, convicted of weapons trafficking was returned to his home country Tuesday by U.S. Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations (ERO) deportation officers. This is following a joint investigation by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in New York and the Department of Defense, Defense Criminal Investigative Service, Northeast Field Office (DCIS) which led to a guilty plea and subsequent sentencing.
 
ERO deportation officers escorted Giovanni Zannoni, 35, who was removed from the United States via a commercial flight. Zannoni was transferred into the custody of Italian law enforcement authorities upon arrival in Milan.
 
In May 2017, Zannoni, entered the United States under the Visa Waiver Program (VWP) with authorization to remain in the United States until August 2017.  One day after his entry, Zannoni was arrested by HSI and charged in U.S. District Court-Eastern District of New York (EDNY) with weapons trafficking. On Sept. 22, 2017, Zannoni was convicted in EDNY of a violation of the Arms Export Control Act and sentenced to 11 months imprisonment. Additionally, he agreed to forfeit $436,673, gun parts, and night vision and thermal imaging devices.  Zannoni was transferred to ICE custody in April 2018, while the agency finalized his return.
 
According to court records, between June 2013 and May 2017, Zannoni illegally exported and attempted to export night vision goggles and assault rifle components designated as defense articles on the United States Munitions List. The United States Department of State requires a license for the export of sensitive night vision equipment and assault rifle components, and has placed restrictions on the export of items that it has determined could make a significant contribution to the military potential and weapons proliferation of other nations and that could be detrimental to the foreign policy and national security of the United States.

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

(Source: 
State/DDTC, 10 May 2018.) 
 
According to the current 
Foreign Affairs Manual, the U.S. Department of State recognizes and honors all foreign government classification markings. All documents submitted to DDTC with foreign government classification markings should be treated as classified material and be transmitted in the same manner as U.S.-origin classified documents.
 
Pursuant to guidance by the Bureau of Diplomatic Security, as of February 3, 2005, DDTC will treat all documents marked “UK-Restricted” as Sensitive-But-Unclassified (SBU).

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

(Source: 
Canada Global Affairs, 7 May 2018.)  
 
Excerpt from the Speech by the Honourable Chrystia Freeland, Minister of Foreign Affairs, to the Standing Committee on Foreign Affairs and International Development on February 8, 2018:
 
Last summer, we became aware of media reports of the possible misuse of Canadian-made vehicles in security operations in Saudi Arabia’s Eastern Province.
 
At that time, I asked officials at Global Affairs Canada to conduct a full and thorough investigation of these reports.
  
Today, I can confirm that officials at Global Affairs Canada found no conclusive evidence that Canadian-made vehicles were used in human rights violations. That was the independent, objective opinion of our public service and the advice given to me as minister.
  This experience did, however, cause me to pause and reexamine Canada’s export permit system.
  My conclusion was that Canada can do better.
 
Canada is not alone in the world in taking stock of how we allow and monitor the export of arms, and of the considerations that go into those decisions. I have spoken with my counterparts in Germany, Sweden and The Netherlands, for example, whose countries have all recently-in one way or another-questioned how arms are exported.
 
I am proud of the important commitment that our government made with Bill C-47, which would amend the Export and Import Permits Act to allow Canada to accede to the Arms Trade Treaty [ATT]. This is the first treaty to tackle the illicit trade in conventional weapons, and it sets an essential standard for the international community.
  
It is long overdue that Canada joins many of our NATO and G7 partners by acceding to the ATT.
  
We have heard support for the Arms Trade Treaty from civil society, from NGOs, and from Canadians. We also heard the clear desire to do better. We need to be ambitious and strengthen Bill C-47.
  
We had originally planned to place the criteria by which exports are judged, including human rights, into regulation. But we heard from committee members and civil society that they would like to see the Arms Trade Treaty criteria placed directly into legislation. This would include the consideration of peace and security, human rights and gender-based violence. I can say today that this is something we would welcome.
  
Going further than that, our government is today announcing its support for the inclusion of a substantial risk clause in the law.
  
Such a clause would mean that our government, and indeed future governments, would not allow the export of a controlled good if there were a substantial risk that it could be used to commit human rights violations.
  
A substantial risk clause would mean that Global Affairs Canada would need to ensure-before the export of controlled goods-that we have a high level of confidence that controlled exports will not be used to commit human rights abuses.
  
This is a significant decision. It will mean changes in how Canada regulates selling weapons. This is the right thing to do. Canadians fundamentally care about human rights for all, and Canadians rightly expect that exports are not used to violate human rights…
  
These two amendments will also provide clarity to industry, by laying out the government’s, and Canadians’, expectations for our export control process. We will work with Canadian industry to continue to provide it with appropriate guidance.
 
  – Link: 
Speech by the Honourable Chrystia Freeland, Minister of Foreign Affairs, to the Standing Committee on Foreign Affairs and International Development. A copy of the document, redacted in accordance with the provisions of the Canada Evidence Act, is available at the link below. The document, classified as “secret” is now considered “unclassified with redactions”.
  – Link: 
Memo (in PDF). 

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

(Source: 
German BAFA, 10 May 2018.)
 
The German Federal Office for Economic Affairs and Export Control (BAFA) plans to extend General Licenses No. 18, No. 19, No. 23, No. 25, and No. 27 until 30 March 2019 due to a continuing coordination process. 
 
Read the BAFA update (in German) 
here.

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

(Source: 
UK DIT/EJCU, 8 May 2018.) 
 
The Export Control Joint Unit (EJCU) of the UK Department of International Trade (DIT) has updated its guide on exporting to Iran to include information about the U.S. withdrawal from the Iran Nuclear Deal. The guide (available 
here) contains information on:
 
  – Iran export overview
  – preparing to do business in Iran
  – Iranian economy and doing business in Iran
  – opportunities for UK businesses in Iran
  – challenges and risks of doing business in Iran
  – starting-up in Iran
  – legal system in Iran
  – banking and finance in Iran
  – tax and customs considerations in Iran
  – entry requirements for doing business in Iran
  
– contacts in Iran

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

NWSNEWS

NWS_a111.
American Shipper: “Compliance 360: Minding Export Control Reform”

(Source: 
American Shipper, 8 May 2018.) [Excerpts.] 
 
The Trump administration may not trumpet it, but U.S. export control reform continues unabated and exporters should stay tuned. … 
 
The State Department seeks to publish changes this year to the USML categories VI (surface vessels of war and special naval equipment); VII (ground vehicles); XII (fire control, range finder, optical and guidance and control equipment); and XX (submersible vessels and related articles), the official said. 
 
The State and Commerce departments also have submitted to the White House Office of Management and Budget (OMB) proposed rules to shift items to the Commerce Control List (CCL) from the three USML categories that the previous administration didn’t touch – categories I (firearms, close assault weapons and combat shotguns), II (guns and armament), and III (ammunition/ordnance). … 
 
OMB completed its review of those proposed rules on April 11, but they have not yet been signed off for publication, the [State Department] spokesperson said.  … 
 
[Editor’s Note: due to copyright restrictions, we are not authorized to include the entire item. To read the remaining sections, please lick on the source link below the item title.]
 

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

(Source: 
Ars Technica, 9 May 2018.) 
 
ZTE apparently couldn’t continue without Qualcomm chips and Android software.
 
One of the leading Chinese smartphone makers, ZTE, is shutting down global operations in the face of crippling sanctions levied by the US government. ZTE is China’s number-two smartphone maker, and as recently as last year it was the 
number-four smartphone vendor in the US.
 
  “The major operating activities of the Company have ceased,” 
ZTE wrote (PDF) in a Wednesday announcement to stock market traders in Hong Kong.
 
ZTE’s business became untenable after a US government order banned American companies from exporting technology to the Chinese smartphone maker. ZTE is heavily dependent on US-made components, especially Qualcomm chips and Google’s Android software stack.
 
Last year, ZTE admitted to an elaborate multi-year scheme to sell US-made technology to Iran and North Korea in violation of US sanctions laws. ZTE paid $890 million in penalties and said it was in the process of disciplining dozens of senior company officials who had orchestrated a scheme to violate US sanctions laws.
 
But last month the Trump administration accused ZTE of continuing to lie to the US government even after last year’s guilty plea. The company told the US government that the guilty executives had received letters of reprimand and had had their 2016 bonuses reduced. But the US now says that was a lie-many of the employees received full bonuses, and they didn’t receive letters of reprimand until early 2018-after the US government challenged ZTE on the issue.
 
In the 
April 15 order activating the export ban against ZTE, US Commerce Department official Richard Majauskas wrote that ZTE had demonstrated a “pattern of deception, false statements, and repeated violations.” A July 2017 letter to US officials was “brimming with false statements,” he said.
 
Since 2011, Majauskas argued, ZTE had “employed multiple strategies in an attempt to conceal and obscure the true nature and extent of the company’s role” in transactions that moved US-made technology to Iran and North Korea. “As a result of the conspiracy, ZTE was able to obtain hundreds of millions of dollars in contracts with and sales from Iranian entities to ship routers, microprocessors, and servers” that were subject to US export restrictions.
 
So on April 15, the US Commerce Department 
invoked the nuclear option, banning US companies from doing business with ZTE.
 
Unfortunately for ZTE, US-made hardware and software are a huge part of ZTE’s products. 
According to Reuters, at least 25 percent of the components in ZTE’s phones came from US companies. ZTE makes heavy use of Qualcomm chips for its smartphones and other products.
 
Even worse, the export ban included Google’s suite of standard Android apps. While the Android operating system itself is open source, Google has maintained control over apps like Google Maps and, most importantly, the Play Store. Outside of China, it’s difficult to sell an Android phone without access to Google’s app store.
 
Now it appears that ZTE is on the verge of going out of business altogether. ZTE says it is “actively communicating with the relevant US government departments” to negotiate a reversal of the export ban. But it’s hard to imagine the Trump administration reversing course at this point. And ZTE would need to redesign many of its products from scratch to manufacture them without US-made chips or software.
 
ZTE’s demise is the latest sign of a deepening trade rift between the United States and China, with information technology being a particular flashpoint. China’s other leading smartphone maker, Huawei, has 
struggled to make deals with 
US wireless carriers due to pressure from US regulators worried about national security. And in the last year, the Trump administration has blocked at least 
two 
deals that would have put US semiconductor firms under the control of Chinese companies.
 
Chinese President Xi Jinping has responded by calling on China to become more self-sufficient in information technology.

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

(Source: 
C4ISRNET, 9 May 2018.) 
 
Reverse engineering airplane replacement parts is a tricky task, especially when the parts themselves are in short supply and the cost of error is a plane crashing. Which is part of what makes sanctions on airplanes, and repair parts, so damaging: there just aren’t that many ways around not having the right parts. Or at least, there weren’t, but 3D printing changes that whole picture. A new RAND study on the way additive manufacturing, better known as 3D printing, could create new security threats details everything from printed grenades to lost job security. Nested in the report is one risk with a more immediate impact: 3D printing as a way for nations to get around the ramifications of sanctions.
Take, for example, the case of commercial aircraft in Iran. As part of the Joint Comprehensive Plan of Action, or the Iran Deal, the United States agreed to lift sanctions on 
commercial aircraft and aircraft parts. With sanctions lifted, the Iran was set to buy or lease almost 
120 new Boeing aircraft, which the airline boasted as a move that would finally bring the average age of planes in its fleet down 
below 20 years. With the Trump administration withdrawing from the deal, those plane orders are unlikely to go through, and the airline will have to rely on an aging fleet of craft, with whatever spare parts it has on hand to keep them in the air.
 
By the middle of this century, 3D printing could make nations like Iran self-sufficient when it comes to maintaining fleets of foreign-built aircraft. From 
RAND:
 
[The] 2015 Joint Comprehensive Plan of Action nuclear agreement between the United States and Iran specified various forms of sanctions relief for Iran. The January 2017 delivery of an Airbus A321 was particularly noteworthy: It was Iran’s first new Western-made aircraft in several decades, representing a new day for a domestic airline that had become infamous for its crashes as the aging fleet struggled to fly using only “smuggled or improvised parts.” In the future, such challenges could be overcome more easily using [additive manufacturing]. And while [additive manufacturing] might reduce the number of accidents, that benefit comes at the cost of weakening the effectiveness of sanctions, which represent a basic tool for managing geopolitical challenges.
 
For sanctioned nations (and, in this case, the passengers on airlines operated by those nations), 3D printing can be a lifesaving tool. In so doing, it absolutely undermines the coercive power of sanctions regimes. Files for parts are much easier to transmit across borders and around controls than parts or part-making equipment itself. And while 
smuggling industrial plans is as old as the industrial revolution itself, export controls on intellectual property and industrial design are in place to make it extremely difficult. Tools like 3D printing undercut that power, using the interconnectedness of the web as a route around 20th century controls.
 
  “With access to printers, raw materials, and designs,” the RAND paper continues, “a state could more easily weather the hardship of such restrictions.”

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

(Source: 
The Guardian, 9 May 2018.) [Excerpts.] 
 
Billions of dollars of deals signed by international companies with 
Iran
 
are under threat after the US president, Donald Trump, announced he was pulling out of a “rotten” nuclear deal with Tehran. 
 
Iran’s 
agreement in 2015 to curb its nuclear ambitions
 led to the US easing 
crippling sanctions
, in a rapprochement in which big firms seized an opportunity to invest in a global top-30 economy with a population of about 80 million.

Within a year, landmark deals were being signed in sectors including oil and gas, aviation and the automotive industry, with firms in France, the UK and Germany among the quickest to invest. … 
 
A new regime of sanctions means restrictions are expected on many things, from exports of US machine parts to loans made in dollars. 
 
Companies with any exposure to Iran will also have to tread very carefully or face the prospect of huge fines. … 

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

NWS_a616. 
Reuters: “U.S. Sanctions Iranians Days after Trump Withdraws from Nuclear Deal”
(Source: 
Reuters, 10 May 2018.)
 
The U.S. Treasury imposed fresh sanctions on Thursday against six people it linked to the Iranian Revolutionary Guard’s elite Qods Force and three Iranian entities, just days after President Donald Trump withdrew from the Iran nuclear deal.
 
The six individuals and three entities were sanctioned under U.S. regulations targeting specially designated global terrorist suspects and Iranian financial activity, the Treasury Department said in a statement on its website.

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

NWS_a717. 
ST&R Trade Report: “Import and Export Restrictions on Synthetic Opioid Continued” 

(Source: 
Sandler, Travis & Rosenberg Trade Report, 10 May 2018.) 
 
The Drug Enforcement Administration has extended for one year the temporary placement into schedule I of the Controlled Substances Act the synthetic opioid N-[1-[2-hydroxy-2-(thiophen-2-yl)ethyl]piperidin-4-yl]-Nphenylpropionamide, also known as N-[1-[2-hydroxy-2-(2-thienyl)ethyl]-4-piperidinyl]-N-phenylpropanamide (beta-hydroxythiofentanyl), and its isomers, esters, ethers, salts, and salts of isomers, esters and ethers.
 
As a result, effective through May 12, 2019, beta-hydroxythiofentanyl will remain subject to the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, importation, exportation, research, conduct of instructional activities and chemical analysis, and possession of schedule I controlled substances.
 
The DEA has also issued a proposed rule that would permanently place this product into schedule I. Comments are due by June 14.

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COMMCOMMENTARY

COMM_a0
18.
The Export Compliance Journal: “The Curious (Export Violation) Case of ZTE”

(Source: 
The Export Compliance Journal, 9 May 2018.) 
On April 16, 2018, the US Department of Commerce’s Bureau of Industry and Security (BIS) announced that they were re-imposing a denial of export privileges against Chinese tech giant, ZTE.
 
The news follows a previous action from 2017 where ZTE (aka Zhongxing Telecommunications Equipment Corporation) pled guilty to charges of conspiring to violate U.S. sanctions surrounding the shipment of U.S. origin goods to Iran and North Korea from 2010 to 2016. In that case, ZTE admitted to knowingly thwarting the law by intentionally disguising shipments.
 
They were ultimately charged with violating U.S. sanctions, obstruction of justice, and making “a materially false statement.” The result was a USD $1.19 billion fine-the single largest export violation in history. [FN/1]
 
The U.S. government ultimately lessened the financial penalty by $300 million, and suspended the seven-year trade debarment, so long as the offending employees were punished (among other stipulations).
 
And that should have been the end of it.
 
Out of the Export Sanctions Frying Pan…
 
Except that it was not. Incredibly, ZTE recently fell afoul of the law again. Instead of reprimanding those involved with the initial illegal conduct, they were paid full bonuses. [FN/2] Upon discovery, the U.S. Department of Commerce responded by re-imposing the seven-year export ban that forbids U.S. companies from engaging in business with ZTE.
 
The ensuing fallout for ZTE has been severe. Following the April 16 announcement, the company’s shares were suspended from trading in Hong Kong and Shenzen, and the debarment, the company says, could “threaten its very survival.” [FN/3]
 
Also impacting ZTE is a warning from the U.K.’s National Cyber Security Center to phone carriers against using ZTE equipment, citing threats to national security. [FN/4]
 
The Story Continues
 
What will ultimately happen to ZTE remains unclear, for the story is still unfolding-due, in part, by the Trump administration’s ongoing trade negotiations with China. [FN/5] But regardless of ZTE’s ultimate fate, there’s a lesson to be learned over and above not willfully breaking U.S. export laws:
 
If caught, be sure to live up to the agreement made with the U.S. government to ensure those who broke the law are punished. If corrective measures have also been mandated, make sure they’re implemented swiftly and to the letter.
 
Or maybe just don’t break the law in the first place.
 
————- 
  [FN/1] US hits major Chinese tech firm with export ban. CNN Money. Available 
here. Accessed May 7, 2018.
  [FN/2] Secretary Ross Announces Activation of ZTE Denial Order in Response to Repeated False Statements to the U.S. Government. US Department of Commerce. Available 
here. Accessed May 7, 2018.
  [FN/3] China’s ZTE slams U.S. ban, says company’s survival at risk. Reuters. Available 
here. Accessed May 7, 2018.
  [FN/4] China’s ZTE ‘poses risk to UK security’. BBC News. Available 
here. Accessed May 7, 2018.
  [FN/5] China’s ZTE to US: Let us buy American technology again. CNN Tech. Available 
here. Accessed May 7, 2018.

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COMM_a01
19.
J. Creek: “Steel and Aluminum Tariff Exemptions Extended… For Now”

(Source: 
Torres Law PLLC, 7 May 2018.) 
 
* Jonathan Creek, Associate, Torres Law PLLC. 
 
On April 30, 2018, President Trump announced that he was extending exemptions for the steel and aluminum tariffs. [FN/1] President Trump announced the 25% tariff on steel and the 10% tariff on aluminum in his original Presidential Proclamations on March 8. On March 22, President Trump announced he was granting temporary exemptions to Argentina, Australia, Brazil, Canada, Mexico, South Korea, and the EU, which would last until May 1, 2018. The exemptions would become permanent if the countries could agree with the U.S. on alternative means to address the national security threat posed by the imports of steel and aluminum. South Korea and the U.S. were the first to come to an agreement. [FN/2] In the April 30 Presidential Proclamations, President Trump announced that the U.S. has an agreement in principle with Argentina, Australia, and Brazil. Because of these agreements, these three countries will be granted permanent exemptions from the steel and aluminum tariffs. These agreements are not finalized, and the terms of the agreements are not known yet. However, President Trump said he would consider re-imposing tariffs on these countries if the agreements were not finalized shortly.
 
Additionally, President Trump announced that discussions with Canada, Mexico, and the EU are currently ongoing. Because the discussions are ongoing, President Trump announced that he would be extending the exemptions for these countries from May 1 to June 1, 2018. Unless the countries are able to agree to satisfactory alternative means to address the threat to national security posed by imports of steel and aluminum from these countries, then the tariffs will become effective on June 1. The tariffs already apply to all non-exempted countries.
In addition to the country specific exemptions, companies can now apply for product specific exclusions. To date, there are approximately 130 filed aluminum exclusion requests, and 1,300 filed steel exclusion requests. Currently, exclusion requests focus on insufficient or no supply in the U.S. Many comments argue that there are little to no companies in the U.S. who are still producing some of these affected products. Additionally, companies have also made a variety of policy arguments such as negative environmental effects. Individuals or organizations who wish to file an exclusion for an affected product should do so as soon as possible. [FN/3]
 
——– 
  [FN/1] Whitehouse.gov, Proclamations, Presidential Proclamation Adjusting Imports of Steel into the United States, available 
here (last visited May 1, 2018); Whitehouse.gov, Proclamations, Presidential Proclamation Adjusting Imports of Aluminum into the United States, available 
here (last visited May 1, 2018).
  [FN/2] For more information, please see our previous article 
Tariff Updates: New Exemptions, Deals Made to Avoid Tariffs, and New China Tariffs Incoming
.
  [FN/3] Product exclusions can be filed at regulations.gov. Exclusions for aluminum products are filed under docket number BIS-2018-0002. Exclusions for steel products are filed under docket number BIS-2018-0006.

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COMM_a220
.
S. Kao, H. Keerikatte & S. Oliai: “Impact of U.S. Withdrawal from Iran Nuclear Deal”
(Source: S. Kao, 
Deloitte Tax@Hand, 9 May 2018.) 
 
* Authors: Suzanne Kao, Export Controls & Sanctions Lead, Global Trade Advisory, Deloitte Tax LLP, 
skao@deloitte.com; Holland Keerikatte, 
hkeerikatte@deloitte.com; Sarah Oliai, 
soliai@deloitte.com.
 
On May 8, 2018, US President Trump announced his intent to withdraw from the Iran Nuclear Deal (i.e. the Joint Comprehensive Plan of Action or JCPOA). The JCPOA is the international agreement reached in 2015 between China, France, Germany, Russia, the UK, the US, the High Representative of the EU and Iran that is targeted at limiting Iran’s nuclear program. The JCPOA structured certain economic and sanctions relief for Iran in exchange for limitations to Iran’s nuclear program. The Administration’s announcement comes in advance of its May 12, 2018 deadline to waive certain provisions affecting foreign financial institutions and countries purchasing oil from Iran; this waiver and others were required to fulfill US obligations under the JCPOA. 
 
Sanctions relief to Iran provided under JCPOA
 
The JCPOA seeks to limit Iran’s nuclear program to peaceful purposes through restrictions, monitoring, and incentivizing compliance by using sanctions relief. Key aspects of the JCPOA restrict Iran’s nuclear program in many ways, including prohibitions on weaponization activities, research, and development; restrictions on acquisition, enrichment, and stockpiling of plutonium and uranium; multifaceted restrictions on specific facilities and centrifuge manufacturing; and continuous access to facilities and monitoring by the International Atomic Energy Agency (IAEA). 
 
In exchange, the EU member states and the US agreed to provide sanctions relief in specific economic sectors, including nuclear-related sanctions, energy sectors, and financial and banking measures. Most of the US sanctions relief under the JCPOA impacts foreign subsidiaries of US companies. Key sanctions relief measures directly affecting US entities also include US specific licensing for commercial passenger aircraft and related parts. US sanctions related to Iran’s ballistic missile program, human rights violations and terrorism, however, fall outside the scope of the JCPOA. 
 
Impact on US businesses
 
The withdrawal from the JCPOA and the re-imposition of nuclear-related sanctions ends US sanctions relief under the JCPOA. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) released new 
FAQs to assist with the withdrawal from the JCPOA. The FAQs state that there will be 90 and 180-day periods during which businesses and individuals engaging in activities pursuant to the US JCPOA sanctions relief can wind down those activities. OFAC cautions that these activities should be concluded by August 6, 2018, or November 4, 2018, as applicable, to avoid US sanctions violations and enforcement actions. The sanctions that were re-imposed impact both US and non-US entities and individuals and affect the myriad sectors that were subject to JCPOA relief, including finance/banking, energy, shipping, automotive, civil aviation, metals and software. Imports of certain Iranian-origin items also will be prohibited. Additionally, OFAC anticipates revoking certain specific licenses that have been issued. 
 
US businesses and their foreign branches and subsidiaries should begin winding down and have contingency plans in place for any operations that may be affected by the re-imposition of US sanctions. For US persons and US-owned or US-controlled foreign entities, OFAC will also replace 
General License H
General License I, and the general licenses under the Iranian Transactions and Sanctions Regulations (ITSR, at 31 C.F.R. §§ 
560.534 and 
560.535) with narrower authorizations for winding down activities previously allowed under these authorities. Over the next several months and by the end of the wind-down period, OFAC will announce additional persons and entities that will be added to its Specially Designated Nationals sanctions list, impacting blocking actions and other restrictions relating to these individuals and entities. 
 
OFAC also clarifies in its FAQs that non-US, non-Iranian persons may receive payment for goods or services or may receive repayment of loans or credits extended, under certain conditions. These conditions include that the goods or services were provided before the end of the applicable wind-down period, or loans and credits extended before the end of the wind-down period, and as agreed to prior to May 8, 2018, following US sanctions in effect at the time. All payments must be consistent with US sanctions. Companies with any activities pursuant to OFAC General Licenses H, I, or any other US JCPOA-related sanctions relief should carefully examine their operations and sanctions compliance controls. 
 
Impact in the EU
 
The EU 
stated on May 5, 2018 that it remains committed to continued implementation of the JCPOA and will continue to follow the terms of the JCPOA, maintaining its sanctions relief under the agreement provided that Iran adheres to its commitments. This may result in potentially conflicting compliance obligations between the EU and US sanctions programs regarding Iran. As the EU and US positions on Iran policy and sanctions diverge with additional developments, companies also should consider potentially conflicting regulatory obligations in all jurisdictions in which they operate.

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

(Source: 
JDSupra
, 4 May 2018.) 
 
* Author: Thomas B. McVey, Esq., Williams Mullen, 
tmcvey@williamsmullen.com, (202) 293-8118.
 
On April 25, 2018 the Directorate of Defense Trade Controls (“DDTC”) announced another major enforcement case for violations of the International Traffic in Arms Regulations (“ITAR”).  The case, involving FLIR Systems, Inc. (“Respondent”), involved a wide range of alleged violations and resulted in a $30,000,000 civil penalty. [FN/1] This case is a sobering reminder of DDTC’s serious commitment to investigate ITAR violations and provides an important compliance lesson for U.S. and foreign companies.
 
The Respondent is a manufacturer of advanced sensors used to protect borders, gather intelligence and protect critical infrastructure.  DDTC alleged that the Respondent engaged in multiple violations of the Arms Export Control Act (“AECA”) and 
ITAR Part 127 including:
 
  – Failure to apply for and manage export licenses;
  – Failure to comply with terms, conditions and provisos of licenses;
  – Poor management of use of license exemptions;
  – Inaccurate or incomplete shipping documents;
  – Improper actions at trade shows;
  – Failure to obtain Non-transfer and Use Certificates;
  – Failure to properly decrement or report quantities of items shipped;
  – Failure to properly record shipments;
  – Failure to return items to the U.S. under temporary export licenses;
 – Failure to file reports of payments of contributions, fees and sales commissions as required under 22 CFR Part 130;
  – Multiple recordkeeping violations.
 
DDTC also identified significant alleged violations by the Company for permitting certain of its employees who are foreign or dual nationals to have access to ITAR-controlled technical data stored in the Company’s computer system.  DDTC alleged that the Company failed to have adequate controls in the data system to prevent foreign national employees from accessing controlled files through their use of the system.  In addition, DDTC stated that the Respondent failed to collect citizenship information necessary to determine licensing requirements for its foreign-person employees, including employees holding nationalities from more than one country.
 
DDTC identified a number of aggravating factors including significant compliance program deficiencies and “deficient ITAR expertise and senior leadership oversight.”  As part of the proceedings, the Respondent entered an agreement with DDTC to toll the statute of limitations.
 
As referenced above, as part of the settlement the Respondent agreed to $30 million in civil fines and remedial compliance measures – of this amount $15 million will be suspended on the condition that the Respondent applies the suspended amount to pay for remedial compliance measures.  The Respondent also agreed to appoint a “special compliance officer” to monitor ITAR compliance for a minimum of three years in consultation with DDTC.  In addition, the Consent Agreement requires the Respondent to adopt policies and procedures to address the following:
 
  – Identification and classification of defense articles and defense services;
  – Identification of technical data and marking thereof;
  – Maintenance and protection of and access to technical data on computer networks or other electronic methods of storage and transfer;
  – Ensuring physical security of facilities where ITAR-regulated activity occurs;
  – Screening and control of persons who are not authorized for access to ITAR-controlled defense articles and defense services;
  – Obtaining, managing, and complying with the scope of ITAR authorizations, particularly for business development;
  – Maintaining appropriate records;
  – Company logistics department responsible for exporting, reexporting, or retransferring defense articles;
  – Employment and management of foreign persons, to include dual national/third country nationals, who may be engaged in ITAR-regulated activity, or have access to ITAR-regulated technical data;
  – Compliance with ITAR Part 130;
  – Procurement, to include using known and unknown U.S. suppliers with foreign manufacturing facilities;
  – Incorporating AECA and ITAR compliance into management business plans at the senior executive level;
  – Using overseas representatives who will be involved with temporary exports;
  – Preventing, detecting, and reporting AECA and ITAR violations;
  – Submitting voluntary disclosures to the State Department
  – Meeting and maintaining adequate AECA and ITAR compliance staffing levels at all divisions and facilities that involve ITAR-regulated activities.
 
The Consent Agreement provides significant details regarding the requirement for the appointment of a Special Compliance Officer (“SCO”) to oversee the adoption of remedial measures and future ITAR compliance.  The SCO’s responsibilities include:(i) monitoring the Respondent’s adoption of enhanced policies and procedures; (ii) implementation of the enhanced compliance measures required in the Consent Agreement; and (iii) reporting to DDTC and the Respondent’s CEO on the status of the compliance activities.
 
The Respondent was also required to adopt an “automated export compliance system” as part of the remedial measures.  The Consent Agreement provided the following description of the automated compliance system:
 
This system shall track the decision process from the initiation to conclusion of a request for export, reexport or retransfer authorization.  The automated export compliance system shall improve Respondent’s ability to oversee and monitor export, reexport, or retransfer activity.  This system shall also cover the initial identification of all technical data and technical assistance in any form proposed to be disclosed to any foreign-persons and shall be accessible to DDTC upon request.  Respondent shall ensure the use of a means of alerting users to the AECA and ITAR requirements on electronic transmissions of ITAR-controlled technical data.  In order to prevent unintentional or accidental transmissions to unauthorized recipients, Respondent shall also provide training to all employees to ensure that any type of electronic transmissions of ITAR-controlled technical data are sent in accordance with Respondent’s export compliance policies and procedures.[FN/2] 
 
The respondent was also required to submit to two compliance audits during the term of the Consent Agreement.
 
This case is an important reminder to U.S. companies of the importance of following basic principles of ITAR compliance in their day-to-day business activities.  The basic “blocking and tackling” in ITAR-compliance, of course, includes conducting classifications of the company’s products and services, obtaining requisite licenses and TAA’s, protection of controlled technical data, complying with terms and conditions of authorizations, proper use of license exemptions, proper license administration, denied party screening, employee training and compliance with ITAR recordkeeping requirements.  Adopting an ITAR compliance program can assist in reducing violations and provide a basis for reducing penalties if violations do occur.  
 
This case confirms that what may initially appear to be mere “routine” ITAR violations can turn out to be a $30 million problem very quickly.
Relevant documents:
  – 
Consent Agreement 
  – 
Order

 
———
  [FN/1] Of this amount $15 million will be suspended on the condition that the Respondent applies the suspended amount to pay for self-initiated remedial compliance measures. 
 [FN/2] Consent Agreement p. 11.

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

TECEX/IM TRAINING EVENTS & CONFERENCES

TEC_a122.
ECS Presents “ITAR/EAR Boot Camp (Seminar Level I)” on 12-13 Sep in Annapolis, MD

(Source: S. Palmer, 
spalmer@exportcompliancesolutions.com
.)
 
* What: Seminar Level I: ITAR/EAR Boot Camp, Annapolis, MD
* When: September 12-13, 2018
* Sponsor: Export Compliance Solutions (ECS)
* ECS Speaker Panel:  Suzanne Palmer, Mal Zerden
* Register: 
Here 
or by calling 866-238-4018 or e-mail

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

ENEDITOR’S NOTES

 

Ariel Durant (Ariel Durant (10 May 1898 – 25 Oct 1981; was a Russian-born American researcher and writer and the coauthor of The Story of Civilizationwith her husband Will Durant.
  – “A great civilization is not conquered from without until it has destroyed itself from within.”
  – “The conservative who resists change is as valuable as the radical who proposes it.”

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

EN_a324
. 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_a0325
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.


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