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18-0619 Tuesday “Daily Bugle”

18-0619 Tuesday “Daily Bugle”

Tuesday, 19 June 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. Treasury/OFAC Amends Rough Diamonds Control Regulations 
  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Posts Notice on Reconciliation Processing in ACE
  4. State/DDTC: (No new postings.)
  5. President Posts Statement Regarding Trade with China
  6. EU Extends Sanctions Against Russia for 1 Year, Amends Directive Concerning Anti-Money Laundering and Anti-Terrorist Financing
  1. Defense News: “Strict Export Regulations May Be Costing Us Industry Billions in Foreign Sales”
  2. Reuters: “Trump Determined to Hit China as Tit-For-Tat Tariff War Erupts”
  3. ST&R Trade Report: “Trade Enforcement Funding Increased in Senate Appropriations Bill”
  1. B. Webb: “Using National Stock Numbers for Commodity Classification”
  2. G.R. Tuttle: “China List 1 Tariffs Set to Begin on July 6, 2018”
  3. M. O’Kane: “UK Compliance with JCPOA Post Brexit”
  4. M. Volkov: “New Episode Everything Compliance – Four of a Kind Edition”
  1. ECTI Presents “‘ACE Reports for Exports’: The Government’s Watching Your Data, Are You?,” Webinar on 24 Jul
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: ATF (15 Jan 2016), Customs (12 Jun 2018), DOD/NISPOM (18 May 2016), EAR (6 Jun 2018), FACR/OFAC (19 Jun 2018), FTR (24 Apr 2018), HTSUS (8 Jun 2018), ITAR (14 Feb 2018) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

(Source: 
Federal Register, 19 Jun 2018.) [Excerpts.] 
 
83 FR 28370-28375: Rough Diamonds Control Regulations
 
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Final rule.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Rough Diamonds Control Regulations to clarify several reporting requirements and remove another, clarify which entity may issue Kimberley Process Certificates for the export of rough diamonds from the United States, clarify the steps necessary to validate a Kimberley Process Certificate, add two definitions that define rough diamond packaging requirements and Kimberley Process voided certificates, and make certain technical and conforming changes to the penalties section of the regulations.
* DATES: Effective Date:
This rule is effective June 19, 2018. … 
* SUPPLEMENTARY INFORMATION: … On August 4, 2003, OFAC promulgated the Rough Diamonds Control Regulations, 31 CFR part 592 (the “Regulations”), to implement Executive Order 13312 (E.O. 13312) of July 29, 2003. E.O. 13312 was issued to implement the Clean Diamond Trade Act (Pub. L. 108-19) (CDTA) and the multilateral Kimberley Process Certification Scheme for rough diamonds (KPCS). OFAC amended the Regulations on September 23, 2004 to revise certain reporting requirements (69 FR 56936). OFAC further amended the Regulations on May 21, 2008 (73 FR 29433) to enhance the compilation of statistical data relating to the importation and exportation of rough diamonds.
  Today, in consultation with the U.S. Department of Commerce, Bureau of the Census (Census Bureau), Department of State, and Department of Homeland Security, Customs and Border Protection (CBP), OFAC is again amending the Regulations. First, in coordination with a regulatory amendment by the Census Bureau (83 FR 17749), OFAC is incorporating into the Regulations existing Census Bureau requirements for submission of Kimberley Process Certificates in connection with the importation and exportation of rough diamonds. In addition, OFAC is clarifying which entity may issue Kimberley Process Certificates for the export of rough diamonds from the United States and adding two definitions that define rough diamond packaging requirements and Kimberley Process voided certificates. Additionally, OFAC is making certain technical and conforming changes to the penalties section of the Regulations.
  . . . . 
  
OFAC is also defining the term Tamper-resistant container, used in Sec.  592.301(a)(2), by adding new Sec.  592.314. . . .
Penalties. OFAC is also amending Subpart F, which describes the penalties applicable to violations of the Regulations, as well as the procedures governing the potential imposition of a civil monetary penalty or issuance of a Finding of Violation. OFAC is updating the language of this subpart and incorporating references to OFAC’s Economic Sanctions Enforcement Guidelines contained in appendix A to part 501 of this chapter. … 
 
  Dated: June 12, 2018.

Bradley T. Smith, Acting Deputy Director, Office of Foreign Assets 

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

OGSOTHER GOVERNMENT SOURCES

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

* Commerce; Industry and Security Bureau; NOTICES; Meetings; Sensors and Instrumentation Technical Advisory Committee [Publication Date: 20 June 2018.]
* * * * * * * * * * * * * * * * * * * *

(Source:
Commerce/BIS)
* * * * * * * * * * * * * * * * * * * *

(Source:
CSMS #18-000393, 19 June 2018.)
 
Reconciliation entry summaries (type 09) may be transmitted to any port and they are processed by the Centers of Excellence and Expertise (Centers).
 
  – If the importer is assigned to a Center, ACE will assign the Reconciliation to that Center.
  – If the importer has not been assigned to a Center but has previously filed Reconciliations, the importer will continue filing their Reconciliations entry summaries at their previously assigned Reconciliation Port of Entry with the appropriate Reconciliation team code.
  – If the importer is new to filing Reconciliation entry summaries and is not assigned to a Center, ACE will assign team number 001 at the Port of Entry for filing. If needed, CBP personnel will reassign the Reconciliation team code to the correct Center for processing.
 
To expedite the collection process, it is recommended that payments for Reconciliation entry summaries be filed at the Port of Entry designated on the Reconciliation Entry Summary, payments made at another Port of Entry could slow down the process.
* * * * * * * * * * * * * * * * * * * *

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

(Source:
The White House, 18 June 2018.)
 
On Friday, I announced plans for tariffs on $50 billion worth of imports from China. These tariffs are being imposed to encourage China to change the unfair practices identified in the Section 301 action with respect to technology and innovation. They also serve as an initial step toward bringing balance to our trade relationship with China.
 
However and unfortunately, China has determined that it will raise tariffs on $50 billion worth of United States exports. China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong.
 
This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods. This is unacceptable. Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States.
 
Therefore, today, I directed the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent. After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced. If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200 billion of goods. The trade relationship between the United States and China must be much more equitable.
 
I have an excellent relationship with President Xi, and we will continue working together on many issues. But the United States will no longer be taken advantage of on trade by China and other countries in the world.
 
We will continue using all available tools to create a better and fairer trading system for all Americans.

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Regulations
* Council Decision (CFSP) 2018/880 of 18 June 2018 amending Decision 2014/386/CFSP concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol
 
Directives
* Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU

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NWSNEWS

(Source:
Defense News, 18 June 2018.)
 
A new RAND report assessing the proliferation of unmanned aerial vehicles suggests existing export controls for drones may hurt the U.S. more than it helps.
 
Limiting U.S. drone exports has left a hole in the global market for the technology, especially in historically U.S.-dominated Middle East markets, which has been readily filled by U.S. competitors – specifically China and Russia. The Trump administration recently unveiled a
new set of export policies regarding military technology in an attempt to facilitate the transfer of military technology, but the changes do not change the status of drones under the Missile Technology Control Regime, or MTCR.
 
How does the MTCR work?
 
The MTCR is a voluntary export control consortium of 35 nations designed to prevent signatories from proliferating longer-range cruise and ballistic missile technology. The arms control regime was extended to UAVs because early iterations of drones were
considered a subset of cruise missile technology due to their active guidance system.
 
The regime divides missiles into two categories. Category I items are capable of delivering a 500 kg payload more than 300 km. The sale of category I systems is restricted by a “strong presumption of denial,” meaning they are only exported in rare circumstances. The
MQ-9 Reaper,
RQ-4 Global Hawk and
MQ-4 Triton are well-known unmanned systems that fall under this category.
 
Over the past several years, U.S. partners such as Jordan, Saudi Arabia and UAE were denied requests to purchase American drones, and have since turned to China to purchase comparable systems.
 
Trump administration officials have been attempting to alter the regime by
adding new language that would drop any vehicle that flies under 650 kilometers per hour to category II systems. This would make all but the most advanced U.S. systems available for international sale. For example, the MQ-9 Reaper clocks in with a cruise speed of 230 mph or 370 kph, according to an Air Force facts sheet.
 
Drone proliferation
 
RAND found that 10 nations operate category I drones, and more than 15 operate near-category I systems that register just below the MTCR’s payload and distance restrictions. The report says increased proliferation rates are due to a handful of countries, specifically China, Israel and the United Arab Emirates, who are not party to the MCTR.
 
More countries are expected to procure drones, which pose a “growing threat to U.S. and allied military operations,” the report says. While category I systems can deploy missiles and other guided munitions, their main threat lies in “their ability to conduct intelligence, surveillance, and reconnaissance (ISR) operations against U.S. forces prior to hostilities,” according to RAND. “Adversaries that would otherwise have difficulty detecting U.S. force deployments, monitoring U.S. operations, and maintaining targeting data on U.S. units can employ UAVs to maintain situational awareness of U.S. capabilities”
The report identifies Russia, China and Iran as unfriendly nations that will seek to utilize drones to complicate U.S. military operations.
 
For example, China and Saudi Arabia recently agreed to set up a UAV manufacturing plant in Saudi Arabia for up to 300 new UAVs, and Italy will receive 20 Hammerhead UAVs from the UAE. The coproduction of regional drone factories “could further exacerbate the proliferation of large UAVs to the degree that these systems are exported to other nations,” according to RAND, and that hurts U.S. industry.
 
A U.S.-sized hole
 
Voluntarily restricting U.S. drone exports have allowed competitors to establish themselves in a market Rand expects to “grow from about $6 billion in 2015 to about $12 billion in 2025.”
 
RAND expect export controls to have a negative impact on the U.S. industrial base, something those in industry already know.
 
“What you are enabling the competition to do is not just to sell some hardware,” Linden Blue, General Atomic’s chief executive, told reporters during an Aug. 16, 2017 roundtable at the company’s headquarters in Poway, California. “You’re enabling it to build a customer base for at least 20 years, I would say. You’re enabling them to build a logistics system. It will take them many years to get to where we are right now, but you’re helping them start out. They should be very thankful.”

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(Source:
Reuters, 19 June 2018.) [Excerpts.]
 
China has underestimated President Donald Trump’s resolve to press ahead with tariffs unless Beijing changes its “predatory” trade practices, a top U.S. trade advisor said on Tuesday, in comments that undercut the chances of a negotiated settlement to a looming trade war between the world’s economic superpowers.
 
The threat of a growing trade conflict with China hit financial markets hard, with Beijing vowing a firm response after Trump on Monday said he would implement tariffs on an additional $200 billion of imports from China if Beijing went ahead with reprisals over an initial set of U.S. tariffs.
 
White House trade adviser Peter Navarro, a sharp critic of Chinese trade actions, said China has more to lose from any trade war.
 
  “The fundamental reality is that talk is cheap,” Navarro told reporters on a conference call, again accusing China of “predatory” trade policies.
 
  “I think that the other side may have underestimated the strong resolve of President Donald J. Trump,” Navarro added. “If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels, that was a miscalculation.”
 
The threat of new tariffs against China pits the world’s two largest economies against each other and looks set to disrupt global supply chains for the tech and auto industries, two sectors that rely heavily on outsourced components.
 
In total, Trump has now threatened up to $450 billion in Chinese imports with tariffs, including another $200 billion in Chinese goods if Beijing retaliates after the step Trump announced on Monday.
 
Mounting concerns over the U.S.-China dispute sent global stock markets skidding and weakened both the dollar and the Chinese yuan on Tuesday. Shanghai stocks plunged to two-year lows. The Dow Jones Industrial Average and the S&P 500 also fell along with commodities. U.S. bond yields fell in a flight to safety.
 
China accused the United States on Tuesday of “extreme pressure and blackmailing” and vowed to retaliate after U.S. Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods in addition to $50 billion of import duties that had already been announced.
 
China’s commerce ministry said Beijing will fight back with “qualitative” and “quantitative” measures if the United States publishes an additional list of tariffs on Chinese goods.
 
  “The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the U.S., but of the world,” the ministry said in a statement.
 
Even as the U.S. trade conflict with China deepens, Trump has raised trade tensions on other fronts. Trump slapped tariffs on steel and aluminum from Canada, Mexico, and the European Union, threatened to kill the North American Free Trade Agreement and is studying new tariffs on car imports. …

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

 
The International Trade Administration, the Bureau of Industry and Security, and the Office of the U.S. Trade Representative would get additional resources to conduct trade enforcement operations in a fiscal year 2019 appropriations bill approved June 14 by the Senate Committee on Appropriations. Highlights of the bill’s funding provisions for trade-related agencies include the following.
 
ITA. The bill funds the ITA at $499 million, $4 million above the FY 2018 enacted level and $47.9 million over the administration’s budget request. It provides an additional $4 million for the Office of Enforcement and Compliance and encourages the ITA to (a) expeditiously reduce backlogs in antidumping and countervailing duty investigations, (b) provide direct assistance to industries in support of self-initiated cases and other AD/CV enforcement, and (c) coordinate with appropriate agencies (e.g., U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, the International Trade Commission, and the departments of Justice and State) to report on legislative remedies that may be needed to support U.S. government-wide efforts to combat trade fraud and evasion.
 
The bill rejects proposed cuts to the U.S. and Foreign Commercial Service and directs the ITA to (a) fund this agency at the highest possible level in FY 2019, (b) not close any US&FCS offices in FY 2019 without committee approval, (c) report on any instances of US&FCS staff diverted from working on trade promotion in the last year to other priorities, and (d) submit a breakdown of global markets funding for the US&FCS and other activities. The committee adds that it will not approve requests to close any Export Assistance Centers that are the only one in a given state.
 
BIS. The bill appropriates $121.6 million to BIS, which is $8.1 million above the FY 2018 enacted level and just under $1 million above the administration’s budget request.
 
The committee directs BIS to continue its exporter outreach program to educate companies on their obligations related to export controls. In this effort, BIS should continue targeting small and medium-sized businesses and working with state and local trade and export associations, in addition to national industry groups, to ensure that SMEs have clear, easy-to-understand information about complying with export control regulations.
 
USTR. The bill provides $57.6 million for USTR, unchanged from FY 2018 but $5.4 million below what the administration requested. This amount includes up to $15 million derived from the Trade Enforcement Trust Fund for enforcement activities authorized by the Trade Facilitation and Trade Enforcement Act of 2015. The committee requests that USTR break down how these funds are spent, including a detailed list of the enforcement actions taken by the Trust Fund since 2015, such as the initiation of consultations with trading partners, the filing of World Trade Organization cases, and the commencement of dispute settlement proceedings under free trade agreements.
 
The committee also urges USTR to (a) fully evaluate and consider the impact foreign tariffs and other retaliatory actions have on U.S. farmers and ranchers when negotiating with trade partners and making trade-related decisions, (b) consider the disproportionate impact that the current disparity in de minimis thresholds has on small businesses, which often take advantage of e-commerce to send low-value shipments to customers in foreign countries, when negotiating this issue with trading partners, and (c) continue to provide quarterly reports outlining the status of ongoing trade negotiations, enforcement activities, and objectives achieved for existing trade agreements.
 
ITC. The ITC would receive $95 million in FY 2019, up from $93.7 million in FY 2018 and about $7.5 million more than the administration requested.

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COMMCOMMENTARY

COMM_a0
11. B. Webb: “Using National Stock Numbers for Commodity Classification”
(Source: CTP Compliance Solutions, 19 June 2018.)
 
* Author: Bruce Webb, Director, Technical Programs, CTP Compliance Solutions, contact here.
 
Compliance practitioners know that commodity classifications are the essential first step in determining export control requirements, responsibilities and risks. However, in situations where the exporter is not the original manufacturer of an item or specific product specifications are unavailable, making an export classification determination can be difficult. One valuable and often overlooked piece of information is the National Stock Number (NSN) but it must be used with caution.
 
First, a little background. An NSN is a 13-digit numeric code applied to an item that is repeatedly procured, stocked, stored, issued, and used through the federal supply system. Once assigned to an item, additional data elements are added to the NSN entry describing the item, such as the product name, manufacturer’s part number, performance characteristics, etc. The NSN system allows for increased ease in managing the military’s logistics supply chain by accounting for existing inventory, centralizing information on all items managed, standardization of item names and characteristics, and the reduction of the potential for duplication. As a result, everything from aircraft parts to light bulbs and washers can be assigned an NSN.
 
The need for the NSN concept followed from World War II where it was common to find a single item referred to by various product names depending on what military branch was using the item. When it came to checking a supply inventory, inconsistencies with product names led to surpluses in some areas and depletions in another. The Federal Stock Number (FSN) predated the NSN and was first used in 1949 to identify items in the Joint Army-Navy Catalog System. The NSN replaced the FSN in 1974 and has principally been administered by the Defense Logistics Agency (DLA) within the U.S. Department of Defense since 1998. NSNs are now used by the U.S. government, the North Atlantic Treaty Organization (NATO), as well as governments around the globe.
 
While the need and usefulness of NSNs are obvious for agencies like the DoD who buy and manage billions of dollars’ worth of supplies on an annual basis, NSN listings can also be helpful for export classification purposes. Typically, the top of the NSN entry is a general description, whereas the body contains technical specifications and useful text descriptions of how and where the item is used. In many situations, the entry may also include information such as whether the item is ITAR-controlled or even the Export Control Classification Number (ECCN). Many NSN entries contain “Original Equipment Manufacturer” (OEM) part numbers, which allows the classifier to search on various publicly available databases to find important technical details.
 
Another significant and often overlooked aspect of the NSN listing is the DEMIL code. This is a letter code beginning with ‘A’ and running through ‘Q’, with each letter providing varying guidance for DoD or NATO countries for disposing (demilitarizing) items that are no longer serviceable. From a classification standpoint, the letter codes ‘A’ or ‘Q’ indicate that item to be a CCL jurisdiction item. Furthermore, the letter A indicates the item may require an export license to certain destinations but has no DEMIL requirement whereas Q indicates the item is not only subject to DEMIL requirements but also requires export licensing under more stringent Commerce Control List (CCL) requirements. The letters ‘B’ through ‘G’ and ‘P’ formerly indicated that the item was ITAR controlled.
 
While this information is often helpful, there is an important caveat here. The OEM databases and NSN entries may be out of date, indicating that an item is controlled by the ITAR when, in fact, the item has moved to the 600 series of the Commerce Control List (CCL) as part of the Export Control Reform (ECR) initiative in recent years. Thus, exporters should realize that products may have changed jurisdictions subsequent to the assignment of their DEMIL code.
 
Although imperfect, the NSN is still a trove of valuable information, particularly in the modern web-driven era when searching on an NSN number will often provide data at a variety of different sites. It is actually advisable to consult more than one site as they often format and feature the information differently, occasionally revealing pertinent facts. In summary, NSN numbers are useful for finding the information necessary to make classification and jurisdiction determinations but users have to double check in this era of export control reform.

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COMM_a01
12. G.R. Tuttle: “China List 1 Tariffs Set to Begin on July 6, 2018”
(Source: Tuttle Law Offices, 18 June 2018.)
 
* Author: George R. Tuttle, III, Esq., Tuttle Law Offices,
geo@tuttlelaw.com, 415-986-8780.
 
On June 15, 2018 the Office of United States Trade Representative (USTR) released its 
final notice of items affected by an additional 25% duty. This action is a result of the Section 301 investigation in which the USTR found “China’s acts, policies and practices relating to technology transfer, intellectual property, and innovation were unreasonable, discriminatory and a burden to the U.S. commerce.” 
 
Beginning 
July 6, 2018, the additional 25% duty will be imposed under the new tariff heading 9903.88.01. These new duties apply in addition to all other applicable duties, fees, exactions, and charges.  
 
The 
final list (List 1) contains a pared down list of 818 lines from the original 1,333 lines published on April 6, 2018. The list covers subheadings under HTUS chapters 84, 85, 87, 88, and 90, including:
 
  – engines and motors, 
  – construction, drilling, and agricultural machinery, 
  – machines for working minerals, glass, rubber, or plastic, 
  – rail locomotives and rolling stock, 
  – motor vehicles and motorcycles, 
  – helicopters and airplanes, and
  – testing, measuring, and diagnostic instruments and devices.
 
USTR Proposes to Expand China Duty List
 
The USTR also released a 
list of additional goods that may be subject to the 25% duty (List 2). List 2 
proposes to add an additional 284 tariff subheadings as benefiting from Chinese industrial policies, ranging from HTSUS Chapters 27, 34, 38, 39, 70, 73, 76, 84, 85 88 and 90. Goods include:
 
  – plastics and plastic products,
  – industrial machinery,
  – machinery for working stone, ceramics, concrete, wood, hard rubber or plastic, and glass,
  – cargo containers,
  – tractors, and 
  – optical fibers.
 
These items have an approximate annual trade value of $16 billion. The products on List 2 will undergo further review and public notice, and a comment process, including a hearing.
Written comments for List 2 only are due by July 20, 2018, with post-hearing comments due by July 31, 2018. Hearings will be held beginning July 24, 2018 at 9:30am; requests to appear are due by June 29, 2018. Requests must include a summary of the testimony and may be accompanied by a pre-hearing submission.   
 
Requests must be in English and sent electronically via
www.regulations.gov under document 
USTR-2018-0018. See how to make a request 
Submission Requests.
 
We suggest reviewing both lists for specific subheading items. 
The 
USTR recognizes that some U.S. companies may have an interest in importing items from China that are covered by the additional duties. An opportunity will be provided for the public to request the exclusion of particular products from the additional duties subject to this action. The USTR will issue a notice in the Federal Register with details regarding this process within the next few weeks. 

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COMM_a3
13. M. O’Kane: “UK Compliance with JCPOA Post Brexit”
(Source: European Sanctions Blog, 19 June 2018.)
 
* Author: Michael O’Kane, Esq., Peters & Peters Solicitors LLP, mokane@petersandpeters.com.
 
UK Foreign Secretary Boris Johnson, in response to a letter from the House of Commons Foreign Affairs Committee, has confirmed that after Brexit the UK will remain part of the JCPOA and continue to comply with it, and that the UK will:
 
  – work closely with the EU to maintain Iran’s compliance and sanctions relief.
  – carry over all existing EU sanctions regimes on Iran.
  – “engage” at national and EU level to ensure that “business gets as much clarity and guidance as possible” on the EU blocking regulation.
  – call on the US to “preserve the gains” the JCPOA has brought and to avoid actions “that would prevent the remaining parties from meeting their commitments to upholding the deal”.

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COMM_a4
14. M. Volkov: “New Episode Everything Compliance – Four of a Kind Edition”

(Source: Volkov Law Group Blog, 18 June 2018. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group,
mvolkov@volkovlaw.com, 240-505-1992.
 
Tom Fox, Matt Kelly, Jonathan Armstrong, Jay Rosen and myself recently recorded a new episode of Everything Compliance – Four of a Kind Edition.  You can listen to it
here.
 
Everything Compliance is the only roundtable podcast in compliance, with four of the top compliance practitioners around. This week the gang returns to its four focused topics on its Four of a Kind edition. After the commentary we follow with rants.
 
  (1) Matt Kelly considers the new management strategy of reducing middle management in corporations. Where does compliance fit into this new structure? Matt rants on DOJ advisory opinions for Foreign Agent Registration Act (FARA) issues.
 
  (2) Mike Volkov explores the upcoming compliance reckoning. What is it and how should compliance professionals prepare?
  (3) Jonathan Armstrong reviews the new UK Data Privacy-Data Protection Law. Jonathan rants on lack of engagement by the British public in the electoral process and governance debate.
  (4) Jay Rosen considers the importance of corporate culture. How does one survey, understand and then improve corporate culture? How can you demonstrate any of these steps to a regulator or the DOJ? Jay has a heavy heart around the losses this week of Anthony Bourdain and Kate Spade, both by their own hand.
 
The members of the Everything Compliance panel are:
 
  –
Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at 
JRosen@affiliatedmonitors.com 
  –
Mike Volkov– One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at 
mvolkov@volkovlawgroup.com 
  –
Matt Kelly– Founder and CEO of Radical Compliance. Kelly can be reached at 
mkelly@radicalcompliance.com 
  –
Jonathan Armstrong– Rounding out the panel is our UK colleague, who is an experienced lawyer with Cordery in London. Armstrong can be reached at 
armstrong@corderycompliance.com 
 
The host and producer of Everything Compliance is 
Tom Fox, the 
Compliance Evangelist.

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MSEX/IM TRAINING EVENTS & CONFERENCES

(Source: Danielle Hatch,
danielle@learnexportcompliance.com)
 
* What: “ACE Reports for Exports”: The Government’s Watching Your Data, Are You?
* When: July 24, 2018; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Jonathan Young
* Register: Here or Danielle Hatch, 540-433-3977, danielle@learnexportcompliance.com.
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ENEDITOR’S NOTES

 

Blaise Pascal (19 Jun 1623 – 19 Aug 1662; was a French mathematician, physicist, inventor, writer, and Catholic theologian. He was a child prodigy educated by his father, a tax collector in Rouen. Pascal’s earliest work was in the natural and applied sciences where he made important contributions to the study of fluids, and clarified the concepts of pressure and vacuum.)
 – “Small minds are concerned with the extraordinary, great minds with the ordinary.”
  – “The strength of virtue should not be measured by special exertions, but by habitual acts.”

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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 Jun 2018: 83 FR 27380-27407: Air Cargo Advance Screening (ACAS)
 
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: 6 Jun 2018: 83 FR 26204-26205: Unverified List (UVL); Correction

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

  – Last Amendment: 
19 Jun 2018: 
83 FR 28370-28375
: Rough Diamonds Control Regulations 

 
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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.  
 
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HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jan 2018: 19 USC 1202 Annex. (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment:
8 Jun 2018: Harmonized System Update 1809, containing 901 ABI records and 192 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. 

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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.

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* 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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