18-0606 Wednesday “Daily Bugle”

18-0606 Wednesday “Daily Bugle”

Wednesday, 6 June 2018

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. Commerce/BIS Amends EAR, Corrects Unverified List Concerning Two Entries 
  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Posts Update on Submitting Imports of Products Excluded from Duties on Imports of Steel or Aluminum
  4. DoD/DSS Announces Cogswell Award Winners
  5. State/DDTC: (No new postings.)
  6. Treasury/OFAC Posts Important Technical Notice for Users of the OFAC Website
  7. EU Amends Restrictive Measures Concerning Iran
  1. Expeditors News: “Mexico Issues List of Tariffs in Response to U.S. Section 232 Measures for Steel and Aluminum”
  2. Reuters: “Exclusive: China’s ZTE Signed Preliminary Agreement to Lift U.S. Ban: Sources” 
  1. Global Trade News: “Weise Wednesday: Is the Trade War Back On?”
  2. M. Lester: “EU Updates Iran Sanctions (Non-Proliferation of WMD)”
  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 (6 Jun 2018), FACR/OFAC (19 Mar 2018), FTR (24 Apr 2018), HTSUS (1 Jun 2018), ITAR (14 Feb 2018) 
  3. Weekly Highlights of the Daily Bugle Top Stories 



1. Commerce/BIS Amends EAR, Corrects Unverified List Concerning Two Entries
(Source: Federal Register, 6 June 2018) [Excerpts.]
83 FR 26204-26205: Unverified List (UVL); Correction
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule; correcting amendments.
* SUMMARY: The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by correcting one (1) address for one (1) person listed on the Unverified List (UVL) and removing an extraneous name from one (1) other entry listed on the UVL. These omissions were inadvertent and failure to correct them would cause confusion and possibly compromise national security.
* DATES: Effective date: This rule is effective: June 6, 2018.
* FOR FURTHER INFORMATION CONTACT: Kevin Kurland, Director, Office of Enforcement Analysis, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-4255 or by email at UVLRequest@bis.doc.gov.
On May 17, 2018, the Bureau of Industry and Security published a rule entitled “Revisions to the Unverified List (UVL)” in the Federal Register (83 FR 22842). The rule revised the Unverified List (UVL), found in Supplement No. 6 to part 744 of the Export Administration Regulations. This rule corrects the second truncated address for the person “SIC Dipaul” under the country of Russia (83 FR 22845) and removes the extraneous name “Sergey Ivanov” from the entry for “Simms Marine Group OU” under the country of Estonia (83 FR 22844). …
  Dated: May 31, 2018.
Karen H. Nies-Vogel, Director, Office of Exporter Services.

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

* Justice; Alcohol, Tobacco, Firearms, and Explosives Bureau; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals [Publication Date: 7 June 2018.]:
  – Federal Explosives License/Permit Renewal Application
  – Firearms Disabilities for Nonimmigrant Aliens
* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 7 June 2018.]

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CSMS #18-000378, 5 June 2018.)
On March 19, 2018, the Department of Commerce (DOC) published in the Federal Register (FR) the process for parties to submit requests for exclusions from Presidential Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum into the United States under section 232 of the Trade Expansion Act of 1962. See 83 FR 12106.
The functionality described below for the Importer Additional Declaration Field will be available in the Automated Commercial Environment (ACE) as of June 1, 2018. For any exclusions approved by DOC prior to June 1, 2018, importers may submit a Post Summary Correction (PSC) on or after June 1, 2018 to request a refund on applicable previous imports of excluded products, as described in the additional information section below.
Upon receipt of the approved product exclusion from the DOC, for the importer of record listed in the approved exclusion, please provide that company’s name, address and importer of record number, and the associated product exclusion number, to U.S. Customs and Border Protection (CBP) at Traderemedy@cbp.dhs.gov.
You must provide this information to CBP before the importer of record submits the exclusion number with entries to CBP.
Instructions on submitting entries to CBP of steel and aluminum products granted exclusions by DOC from the Presidential Proclamations are as follows:
Importers and filers importing products granted an exclusion should submit the product exclusion number based on the last six digits of the product exclusion docket number at Regulations.gov. The product exclusion number should be submitted in the Importer Additional Declaration Field (54 record) of the entry summary data, based on the following format:
  – For excluded steel mill articles = STLXXXXXX
  – For excluded aluminum articles = ALUXXXXXX
XXXXXX represent the last six digits of the Regulations.gov docket number; do not include spaces or special characters, such as hyphens.
Example: If a steel exclusion is granted under product exclusion docket number BIS-2018-0009-9002, the importer/filer should submit the exclusion number STL099002 (i.e. STL plus the last six digits of the docket number).
Please refer to the Importer’s Additional Declaration Detail (Input 54-Record) of the CBP and Trade Automated Interfaces Requirements (CATAIR) Manual for further guidance. The CATAIR document can be found here.
Only products from importer(s) designated in the product exclusion approved by the DOC are eligible for the exclusion from the Section 232 measures.
Steel importers are reminded to submit mill certificates with their import data as required by 19 CFR 141.89.
Do not submit the corresponding Chapter 99 HTS number for the Section 232 duties when the product exclusion number is submitted.
Exclusions granted by DOC are retroactive on imports to the date the request for exclusion was posted for public comment at Regulations.gov.
To request an administrative refund for previous imports of excluded products granted by DOC, importers may file a PSC and provide the product exclusion number in the Importer Additional Declaration Field.
Once products are excluded from the Section 232 measures, importers may claim Generalized System of Preferences (GSP) or African Growth and Opportunity Act (AGOA) duty preferences on GSP and AGOA-eligible goods. If importers did not receive GSP or AGOA duty preferences on previous imports, and those imports are now covered by a retroactive exclusion, importers may request a refund of the duties subject to GSP or AGOA preferences through a PSC.
If the entry has already liquidated, importers may protest the liquidation.
For more information about submitting Post Summary Corrections, see Section 11 of the ACE Entry Summary Business Process. The ACE Entry Summary Business Process Document can be found at here.
For more information, please refer to the March 19, 2018 FR notice on requesting product exclusions. Questions related to Section 232 entry filing requirements should be emailed to traderemedy@cbp.dhs.gov. Questions from the importing community concerning ACE rejections should be referred to their Client Representative.
  – Related CSMS No. 18-000352
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DoD/DSS, 6 June 2018.)

The Defense Security Service is pleased to announce the winners of the 2018 James S. Cogswell Outstanding Industrial Security Achievement Award. Thirty-nine facilities were selected for the award, and you will find the list here.  
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Treasury/OFAC, 5 June 2018.)
The Treasury Department will be updating the HTTPS certificate it uses for the Treasury.gov domain on Thursday, June 7, 2018, during an evening maintenance window. Users may have to reinstall the root certificate for the site if they experience connection problems.  
Users can download this certificate by visiting any secure download path on the Treasury website and using their browser’s certificate management controls to install this new certificate. For general instructions on downloading the new certificate using the following browsers: Chrome (multiple versions), Internet Explorer, and Firefox, please view this pdf.
Please contact OFAC technical support at 1-800-540-6322 Option #8 or O_F_A_C@treasury.gov with any questions that you may have about this change.
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Official Journal of the European Union, 6 June 2018.)
* Council Implementing Regulation (EU) 2018/827 of 4 June 2018 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran
* Council Decision (CFSP) 2018/833 of 4 June 2018 amending Decision 2010/413/CFSP concerning restrictive measures against Iran
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Expeditors News, 5 June 2018.)
On June 5, 2018, the Mexican Ministry of Economy published a decree in the government’s Diario Oficial, which modifies Mexico’s Tariff of the General Import and Export Tax Law on goods originating in North America.
The decree, containing 10 articles, suspends preferential duty rates for 71 statistical breakouts on goods originating in the U.S., with duties on most of these goods increasing from 0% to either 20% or 25%.
The decree further establishes that the origin of the goods will be determined based on the Country Rules of Origin contained in Annex I of the August 30, 1984 Diario Oficial. Any mark, label or legend that identifies these goods originating in the US or coming from the US is evidence of applicable origin.
The goods affected in these changes include pork legs and edibles, cheese, apples, preserved potatoes, blueberries, hot and cold rolled steel, flat steel products, steel wire rods, steel bars, steel profiles, steel pipes and tubes, steel rebar, aluminum household goods, motored boats, industrial electric fans, electric lamps, and metal furniture.
For more information please download the Diario Oficial here.

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(Source: Karen Freifeld, 
Reuters, 6 June 2018.) [Excerpts.]
ZTE Corp has signed an agreement in principle that would lift a U.S. Commerce Department ban on buying from U.S. suppliers, allowing China’s No. 2 telecommunications equipment maker to get back into business, according to sources familiar with the matter.
ZTE ceased major operations since the seven-year ban was imposed on the company in April for breaking a 2017 agreement reached after it was caught illegally shipping goods to Iran and North Korea.
A Commerce Department spokesman said on Tuesday that “no definitive agreement has been signed by both parties.”
ZTE did not immediately respond to requests for comment.
The preliminary deal includes a $1 billion fine against ZTE plus $400 million in escrow to cover any future violations, sources said, adding that the terms were in line with Reuters reporting on the U.S. demands on Friday.
The sources requested anonymity because they were not authorized to publicly discuss the matter.
The Commerce Department plans to amend its 2017 settlement agreement and count the $361 million ZTE paid as a part of that, allowing the United States to claim a total penalty of as much as $1.7 billion, the sources said.
Over the weekend, ZTE signed the agreement drawn up by the United States, the sources said, but the amended settlement has not been signed. …
As part of the deal, sources said, ZTE promised to replace its board and executive team in 30 days. It would also allow unfettered site visits to verify that U.S. components are being used as claimed by the company, and post calculations of U.S. parts in its products on a public website, they added. …

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11. Global Trade News: “Weise Wednesday: Is the Trade War Back On?”

Integration Point Blog
, 6 June 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. Do you think recent developments in the trade arena mean the so-called trade war is back on?
A. In my last blog, it appeared that the prospects of a trade war, particularly with China, had diminished in light of a tentative agreement reached in Washington last month between U.S and China leaders that suspended the proposed tariffs on Chinese products. How quickly things change.
Although talks between the two countries are continuing with a senior U.S. delegation led by Secretary of Commerce Ross in China this week, the U.S. recently announced its intention to reinstate the proposed tariff increases unless China resolved the intellectual property complaints lodged by the U.S. China promptly announced its intention to impose retaliatory tariffs on a wide range of U.S. exports to China.
The final U.S. list of covered imports will be announced by June 15, 2018. Unless an agreement is reached with China on the fundamental trade dispute, the additional tariffs are expected to become effective 60 days after the final product list is published.  
Again, unless a fundamental agreement is reached between the two parties, the U.S. also intends to implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology. The list of restrictions and controls will be announced by June 30, 2018.
Clearly, these actions raise the threat of a trade war between the U.S. and China. But the good news is that both parties are actively engaged in negotiations to resolve the dispute. Hopefully, an agreement can be reached between the parties before the U.S. tariffs go into effect.
As discussed in my last blog, the exemptions for steel and aluminum products from Canada, Mexico, and the European Union (EU) were scheduled to expire on May 31, 2018. The U.S. had engaged in bilateral discussions with all three countries in an attempt to reach a mutual agreement to restrict the volume of exports of steel and aluminum products to the U.S. 
The big news here is that those discussions were unsuccessful. The U.S. announced that, effective June 1, the 25% additional tariff on designated steel products and 10% additional tariff on designated aluminum products would go into effect for Canada, Mexico, and the EU. 
All three parties immediately announced their intention to retaliate on a wide range of U.S. products.
The EU submitted two lists of retaliatory tariffs against the U.S. to the World Trade Organization (WTO). The first list includes hundreds of U.S. goods upon which the EU intends to impose an additional 25% tariff beginning June 20. The second list enumerates U.S. goods that would be subject to additional duties of up to 50%.  These additional duties would become effective on the earlier of March 23, 2021, or the date that the WTO determines that the U.S. tariffs are in violation of WTO rules. The tariffs on both lists would remain in effect as long as the U.S. tariffs against EU products remain in effect.
Canada announced its intention to impose retaliatory tariffs of 10% or 25% on a broad range of U.S. exports, effective July 1. A public comments period on the proposed measures expires on June 15.
Mexico also announced its intention to retaliate against the U.S. actions by imposing additional tariffs on a number of products imported from the U.S. This week Mexico published a list of diverse U.S. products that would be subject to additional tariffs of up to 25%, effective immediately.
It is unclear what impact these actions will have on the continuing negotiations of NAFTA. But based on a number of reports, the parties do not appear to be close to reaching an agreement, and these developments will not help.
These collective actions reflect the early stages of a trade war that is deeply troubling to global traders. At this point, it is impossible to predict where all this will lead.  But clearly, the cost of moving a wide range of goods between these countries will increase dramatically. These are indeed challenging and uncertain times. Hopefully, these issues can be resolved between the parties in the coming weeks and months. Now more than ever, it is critically important to stay engaged and stay informed. 

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12. M. Lester: “EU Updates Iran Sanctions (Non-Proliferation of WMD)”
(Source: European Sanctions Blog, 6 June 2018.)
* Author: Maya Lester, Esq., Brick Court Chambers, maya.lester@brickcourt.co.uk, +44 20 7379 3550.
The EU has updated a number of entries appearing on its Iran sanctions list in relation to the non-proliferation of weapons of mass destruction (WMD). Although the EU lifted all of its Iran nuclear sanctions under the JCPOA, these proliferation-related measures and restrictions remained in place. See Council Decision (CFSP) 2018/833 and Council Implementing Regulation (EU) 2018/827.

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* Lao-Tzu (dates of birth and death unknown, but presumed during 6th to 4th centuries, BC; was an ancient Chinese philosopher and writer. He is the reputed author of the Tao Te Ching, the founder of philosophical Taoism, and a deity in religious Taoism and traditional Chinese religions.)
  – “Take care of what is difficult while it is still easy; deal with what will become big while it is still small.”

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. 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.
: 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. 
: 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)

  – 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 

: 15 CFR Subtit. B, Ch. VII, Pts. 730-774

  – Last Amendment: 6 June 2018: 83 FR 26204-26205: Unverified List (UVL); Correction

: 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

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

: 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
  – 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.  
, 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:
1 Jun 2018: Harmonized System Update 1808, containing 11,876 ABI records and 2,228 harmonized tariff records  

  – HTS codes for AES are available 
  – HTS codes that are not valid for AES are available 

  – 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 

, 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
. BAFTR subscribers receive a 25% discount on subscriptions to the BITAR, please
contact us
to receive your discount code. 

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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 

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* 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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