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18-0724 Tuesday “Daily Bugle”

18-0724 Tuesday “Daily Bugle”

Tuesday, 24 July 2018

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, DOE/NRC, Customs, NISPOM, EAR, FACR/OFAC, FAR/DFARS, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe here for free subscription. Contact us for advertising inquiries and rates
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  1. DHS/CBP Welcomes Industry Feedback Regarding Entry/Immediate Delivery Application and ACE Cargo Release
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS Publishes FAQs Concerning Product Exclusions for Section 232 Steel and Aluminum Tariffs
  3. DHS/CBP Announces Next Customs Broker Exam on 24 Oct
  4. DHS/CBP Releases Updated Drawback Trade Issue Tracker Document
  5. State/DDTC: (No new postings.)
  6. UK ECJU Updates 12 OGELs to Clarify Security Provisions
  7. UK Government Releases Strategic Export Controls Annual Report 2017
  1. BBC: “UK Criticizes Security of Huawei Products”
  2. Expeditors News: “Canada Implements Change to Earliest Time Frames for Release of Imported Goods”
  3. Fox News: “This Marks the End Of Gun Control”
  4. The Jerusalem Post: “Exclusive: German Intelligence Contradicts Merkel On Iran’s Nuclear Drive”
  5. ST&R Trade Report: “Companies Dealing with Specified Products and Countries Advised of NK Sanctions Risk”
  1. K. King, S. MacMichael & R. Ross: “Export Control Reminder: Semi-Annual Encryption Reporting Deadline: 1 Aug 2018”
  2. M. Volkov: “Iran Sanctions and Third Party Risk”
  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 (29 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

1. 
DHS/CBP Welcomes Industry Feedback Regarding Entry/Immediate Delivery Application and ACE Cargo Release
(Source: 
Federal Register, 24 Jul 2018.) [Excerpts.] 
 
83 FR 35018-35019: Agency Information Collection Activities: Entry/Immediate Delivery Application and ACE Cargo Release
 
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security.
* ACTION: 30-Day notice and request for comments; extension of an existing collection of information.
* SUMMARY: The Department of Homeland Security, U.S. Customs and Border Protection will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). The information collection is published in the Federal Register to obtain comments from the public and affected agencies. Comments are encouraged and will be accepted (no later than August 23, 2018) to be assured of consideration.
* ADDRESSES: Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to 
dhsdeskofficer@omb.eop.gov.
* FOR FURTHER INFORMATION CONTACT: Requests for additional PRA information should be directed to Seth Renkema, Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection, Office of Trade, Regulations and Rulings, 90 K Street NE, 10th Floor, Washington, DC 20229-1177, Telephone number (202) 325-0056 or via email 
CBP_PRA@cbp.dhs.gov. Please note that the contact information provided here is solely for questions regarding this notice. Individuals seeking information about other CBP programs should contact the CBP National Customer Service Center at 877-227-5511, (TTY) 1-800-877-8339, or CBP website at
https://www.cbp.gov/.
* SUPPLEMENTARY INFORMATION: CBP invites the general public and other Federal agencies to comment on the proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). This proposed information collection was previously published in the Federal Register (83 FR 16895) on April 17, 2018, allowing for a 60-day comment period. This notice allows for an additional 30 days for public comments. This process is conducted in accordance with 5 CFR 1320.8. Written comments and suggestions from the public and affected agencies should address one or more of the following four points: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of themethodology and assumptions used; (3) suggestions to enhance the quality, utility, and clarity of the information to be collected; and (4) suggestions to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. The comments that are submitted will be summarized and included in the request for approval. All comments will become a matter of public record.
 
Overview of This Information Collection
 
  – Title: Entry/Immediate Delivery Application and ACE Cargo Release.
  – OMB Number: 1651-0024.
  – Form Number: 3461 and 3461 ALT.
  – Current Actions: This submission is being made to extend the expiration date with no change in the data collected. There is an increase to the annual burden hours based on updated agency estimates. CBP previously submitted a 60 day Federal Register Notice with a change for this OMB control number. That change was an error and has been corrected. There is no change in the data collected under this submission.
  – Type of Review: Extension (without change).
  – Abstract: All items imported into the United States are subject to examination before entering the commerce of the United States. There are two procedures available to effect the release of imported merchandise, including “entry” pursuant to 19 U.S.C. 1484, and “immediate delivery” pursuant to 19 U.S.C. 1448(b). Under both procedures, CBP Forms 3461, Entry/Immediate Delivery, and 3461 ALT are the source documents in the packages presented to Customs and Border Protection (CBP). The information collected on CBP Forms 3461 and 3461 ALT allow CBP officers to verify that the information regarding the consignee and shipment is correct and that a bond is on file with CBP. CBP also uses these forms to close out the manifest and to establish the obligation to pay estimated duties in the time period prescribed by law or regulation. CBP Form 3461 is also a delivery authorization document and is given to the importing carrier to authorize the release of the merchandise.
  CBP Forms 3461 and 3461 ALT are provided for by 19 CFR 141 and 142. These forms and instructions for Form 3461 are accessible 
HERE.
  ACE Cargo Release is a program for ACE entry summary filers in which importers or brokers may file Simplified Entry data in lieu of filing the CBP Form 3461. This data consists of 12 required elements: Importer of record; buyer name and address; buyer employer identification number (consignee number), seller name and address; manufacturer/supplier name and address; Harmonized Tariff Schedule 10-digit number; country of origin; bill of lading; house air waybill number; bill of lading issuer code; entry number; entry type; and estimated shipment value. Three optional data elements are the container stuffing location; consolidator name and address, and ship to party name and address. The data collected under the ACE Cargo Release program is intended to reduce transaction costs, expedite cargo release, and enhance cargo security. ACE Cargo Release filing minimizes the redundancy of data submitted by the filer to CBP through receiving carrier data from the carrier. This design allows the participants to file earlier in the transportation flow. Guidance on using ACE Cargo Release may be found 
HERE. … 
 
  Dated: July 19, 2018.
Seth D. Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection.

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OGSOTHER GOVERNMENT SOURCES

OGS_a12
. Items Scheduled for Publication in Future Federal Register Editions
 

(Source:
Federal Register)
 
 
* Commerce/BIS; NOTICES; National Security Investigations:
Imports of Uranium [Publication Date: 25 Jul 2018.]
 
* State; Designations as Foreign Terrorist Organizations: al-Shabaab (and other aliases) [Publication Date: 25 Jul 2018.]

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

OGS_a23
Commerce/BIS Publishes FAQs Concerning Product Exclusions for Section 232 Steel and Aluminum Tariffs
(Source: 
Commerce/BIS, 24 Jul 2018.)
 
On what basis will a product exclusion be granted?
 
A product exclusion will be granted if the article is not produced in the United States: (1) in sufficient and reasonably available amount; (2) satisfactory quality; or (3) there is a specific national security consideration warranting an exclusion.
 
What is the process for reviewing product exclusion requests?
 
The Department of Commerce reviews each request for conformance with the submission requirements. Those requirements are set forth in the 
Federal Register Notice of March 19, 2018.
 
Once a request is posted, there is a 30 day comment period. If there are no objections to a request, the Department of Homeland Security/Customs and Border Protection (CBP) reviews the Harmonized Tariff Schedule of the United States (HTSUS) code cited in the submission for accuracy. If CBP determines the code is inaccurate, the request is denied and the requester provided CBP contact information. If CBP determines the HTSUS is accurate, the request is approved if there are no national security concerns and the decision posted on 
www.regulations.gov.
 
If objections are submitted, the Department of Commerce reviews each objection for conformance with the submission requirements. If an objection is posted, the Department reviews the request and the objection(s) to the request and determines whether the item is produced in the United States in a sufficient and reasonably available amount of satisfactory quality, or if there is a specific national security consideration warranting an exclusion.
 
How will I know if my product exclusion request has been granted or denied?
 
All product exclusion decisions will be posted on 
www.regulations.gov
 
Will the Department of Commerce identify the reason for the decision?
 
For each Exclusion Request the Department of Commerce will post a Decision Memo identifying whether the request is granted or denied. 
 
If the request is denied due to an incorrect HTSUS classification, the Decision Memo provides information how on to obtain a correct HTSUS classification from CBP. 
 
If the request was denied for other reasons, the Decision Memo will state the reason. 
 
How are requesters notified once a final determination has been made?
 
Decision documents will be posted on regulations.gov, as a document attached to the initial Exclusion Request.
 
Where can I find the decision documents?
 
Decision Memos will be posted on regulations.gov as a document attached to the initial Exclusion Request. The title of the original Exclusion Request on regulations.gov will also be changed to reflect the status of the request. 
 
How do I use my granted product exclusion?
 
CBP has provided detailed instructions on using your granted product exclusion. Please consult 
CSMS #18-000378 for further instructions.
 
Am I eligible for retroactive refund?
 
If you have been granted an exclusion, you are eligible for a retroactive refund. Granted product exclusions are retroactive to the date the request for exclusion was posted for public comment at regulations.gov.
 
How do I get a retroactive refund?
 
CBP has provided detailed instructions on how to receive a retroactive refund. Please consult 
CSMS #18-000378 for further instructions on receiving retroactive relief if available.
 
What if a company disagrees with a denial?
 
If the denial is based on an inaccurate HTSUS classification, the requester should contact CBP for the correct classification. The company may then submit a request with the correct HTSUS classification. The request should note it is a resubmission with a revised HTSUS classification and attach the CBP determination.
 
If the denial is based on an objection, the requester may file a new exclusion request and include information documenting the reason why the new request should be granted notwithstanding the prior objection(s). This information could include, for example, the documentation of the inability or refusal of the objector(s) to provide the product.
 
How long is my granted product exclusion effective?
 
Generally, an exclusion is granted for one year from the date of signature. Please see your Decision Memo for this information. 
 
May approved Exclusion Requests be transferred to other internal or external organizations?
 
No. The use of an Exclusion by any entity other than the organization that filed the original Exclusion Request is prohibited.
 
If my organization receives a product exclusion, is there a chance that it could be revoked?
 
Generally, granted product exclusions will be valid for one year. The Department of Commerce will not move to revoke granted product exclusions unless it has been determined that submitted information was falsified.
 
Can I request a product exclusion from countries that are exempt from tariffs (such as through quotas)?
 
No. The Department of Commerce cannot grant exclusion requests for products imported from a country subject to a quota. Under the authority granted by the President, an exclusion request may only be granted for aluminum or steel imported from a country subject to a tariff. 
 
I have additional questions about the exclusion process, who do I contact? 
 
For questions about the exclusion form or objection form, please email or call: 
Aluminum232@bis.doc.gov or 202-482-4757 for aluminum-related inquiries and 
Steel232@bis.doc.gov or 202-482-5642 for steel-related inquiries. 
 
How do I notify CBP of my granted exclusion?
 
CBP will receive a notification from the Department of Commerce of any specific company and product to be excluded from the applicable tariff. You will be required to provide CBP with your granted Exclusion Request number that is provided by the Department of Commerce. 
 
When does my exclusion become effective?
 
If you are granted an exclusion, it will be effective five days after the decision has been posted on 
www.regulations.gov.

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OGS_a3
4. 
DHS/CBP Announces Next Customs Broker Exam on 24 Oct

(Source: 
DHS/CBP, 20 Jul 2018.) 
 
The 
next Customs Broker exam is 24 October 2018. 
The reference material is:
  – Harmonized Tariff Schedule of the United States (2018 Basic Edition, No Supplements)
  – Title 19, Code of Federal Regulations (2017 Revised as of April 1, 2017)
  – Instructions for Preparation of CBP Form 7501 (July 24, 2012)
  – Right to Make Entry Directive 3530-002A
 
All registrants will be required to self-select their exam site after the registration period is closed.
 
  – Registration will open in late August 2018 and close at 8:30 am Eastern Standard Time on September 24, 2018.
  – Watch 
this site for information about registration.
  – CBP is discontinuing the process of providing pencils and scrap paper.
  – Examinees may bring their own pencil and scrap paper to the exam.

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

OGS_4
5. DHS/CBP Releases Updated Drawback Trade Issue Tracker Document

(Source: 
CSMS# 18-000452, 23 Jul 2018.) 

Attached is the latest Drawback Trade Issue Tracker document. As a reminder, questions relating to policy changes for Drawback should be emailed to the OT Drawback inbox at 
OTDRAWBACK@cbp.dhs.gov.

Attachment(s): 

  – 
DepG4_Status_Checkpoint_Trade_Drawback_7_23_18.pdf

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

OGS_5
6. 
State/DDTC: (No new postings.)

(Source: 
State/DDTC)

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

OGS_6
7. 
UK ECJU Updates 12 OGELs to Clarify Security Provisions 

(Source: 
UK ECJU, 24 Jul 2018.) 
 
The UK Export Control Joint Unit (ECJU) has updated the text of 12 open general export licenses to clarify that an approved F1686 fulfils the requirement of having a written letter of clearance. The F1686 procedure itself and actions required to obtain one have not changed.
 
OGELs Updated
 
 

The OGELs listed above will come into force today.

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

OGS_a7
8. 
UK Government Releases Strategic Export Controls Annual Report 2017 

(Source: 
UK Government, 23 Jul 2018.)
 
Pursuant to Section 10 of the Export Control Act 2002, the UK Government has presented its Strategic Export Controls Annual Report to the House of Commons. The report is available (in PDF) 
HERE.
 
The report includes sections on:
  – information on export licensing processes and responsible departments
  – export Licensing data and performance statistics
  – UK and EU policy developments and a section on Brexit
export licensing and industry
  – UK support to allies and partners
  – international policy and regimes
  – compliance and enforcement
 
It also contains case studies and detailed information about the UK’s export licensing processes and procedure.

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

NWSNEWS

NWS_a019. 
BBC: “UK Criticizes Security of Huawei Products”

(Source: 
BBC, 19 Jul 2018.) [Excerpts.] 
 
A UK government 
report into Huawei’s broadband and mobile infrastructure equipment has concluded that it has “only limited assurance” that the kit poses no threat to national security.
 
The investigation revealed shortcomings in the Chinese firm’s engineering processes, which it said “have exposed new risks in UK telecoms networks”.
 
It added that “significant work” was required to tackle the issues.
In response, Huawei acknowledged there were “some areas for improvement”. … 
 
The report was written by the Huawei Cyber Security Evaluation Centre (HCSEC), which was set up in 2010 in response to concerns that BT and others’ use of the firm’s equipment could pose a threat. … 
 
The news comes as the U.S. steps up efforts to ban Huawei’s equipment from its country’s networks. 
Australia is also 
considering banning the firm from being involved
 in its planned 5G network, over concerns that Beijing could force the firm to hand over sensitive data.
 

This is the UK’s fourth annual report into Huawei. The previous three concluded that any risks posed by the firm to the UK’s national security “had been mitigated”. … 

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

(Source: 
Expeditors News, 21 Jul 2018.)
 
On July 5, 2018, the Canada Border Services Agency (CBSA) announced an upcoming change to the earliest time in which imported goods may be released.
 
Once the change is implemented, the mode-specific timeframes (Memorandum D17-1-4 Release of Commercial Goods) will no longer apply. Additionally, CBSA will not release the goods until their arrival at the final destination. What this change amounts to is that brokers will no longer receive penalties for filing entries with certain modes of transportation prior to arrival.
 
The implementation date is still to be determined. 
The CBSA Customs Notice may be found 
here
.

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

(Source: 
Fox News, 21 Jul 2018.) 
 
Gun control advocates fear plastic guns may be undetectable after a U.S. government ruling that allows 3D gun printing. Kurt Knutsson, The Cyber Guy, with more. … 
 
The U.S. Justice Department 
announced a legal settlement and its surrender to the First Amendment arguments July 10 made in a case brought by Cody Wilson, founder of Defense Distributed. Wilson, 25, created a ruckus in May 2013 when he announced his successful design of a plastic gun. In just two days, 
100,000 copies of the handgun blueprint were downloaded from Wilson’s website.
 
The most downloads came from Spain, followed by the U.S., Brazil and Germany. The heavy downloading in Spain, Brazil and Germany likely reflected attempts to evade extremely restrictive handgun regulations in those countries. … 

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

(Source: 
The Jerusalem Post, 21 Jul 2018.) [Excerpts.] 
 
A German intelligence report from the city-state of Hamburg said Iran’s regime is continuing to seek weapons of mass destruction, delivering another intelligence agency blow to Chancellor Angela Merkel’s belief that the 2015 atomic deal with the Islamic Republic curbed Tehran’s nuclear weapons ambitions.

The Jerusalem Post reviewed the 211- page document that states “some of the crisis countries… are still making an effort to obtain products for the manufacture of atomic, biological and chemical weapons of mass destruction (proliferation) and the corresponding missile carrier technology (rocket technology).”


The Hamburg report on Thursday added that “the current main focus points of countries in the area of relevant proliferation activities are: Iran, Syrian, Pakistan and Syria.” … 


The Federal Republic conducts dual use deals with the Islamic Republic, in which German technology and equipment can be used for military and civilian purposes. … 

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NWS_a5
13. ST&R Trade Report: “Companies Dealing with Specified Products and Countries Advised of NK Sanctions Risk” 

(Source: 
Sandler, Travis & Rosenberg Trade Report, 24 Jul 2018.)
 
Businesses with operations in industries and/or countries identified in a new U.S. government advisory as being at high risk of violating sanctions against North Korea should closely examine their supply chains and adopt appropriate due diligence practices. This advisory highlights sanctions evasion tactics used by North Korea and notes that well-documented due diligence policies and practices to counter these tactics may be considered mitigating factors when enforcement responses are determined.
 
Existing Sanctions
 
The U.S. maintains a wide range of restrictions on trade with North Korea, including prohibitions on the exportation or reexportation to, or importation from, North Korea of any goods, services, or technology; a ban on imports of goods, wares, articles, and merchandise mined, produced, and manufactured wholly or in part by North Korean citizens or nationals; and any approval, financing, facilitation, or guarantee by a U.S. person of a transaction by a foreign person that would be prohibited if performed by a U.S. person or within the U.S. Those who violate these sanctions can be subject to civil and criminal penalties as well as denial of entry, seizure, and forfeiture of imported goods.
 
In addition, United Nations member countries are required to (a) prohibit imports from North Korea of 21 categories of goods, including textiles, seafood, metals, food and agricultural products, machinery, electrical equipment, wood, and vessels; (b) prohibit all joint ventures with North Korean entities and individuals; and (c) repatriate all North Koreans earning income no later than Dec. 22, 2019.
 
Identified Risks
 
According to the advisory, one of the primary risks of violating these sanctions is the inadvertent sourcing of goods, services, or technology from North Korea, which has been associated with the following.
 
  – Third-country suppliers shift manufacturing or subcontracting work to a North Korean factory (e.g., for embroidery detailing on garments) without informing the customer or other relevant parties.
  – North Korean exporters disguise the origin of goods produced in North Korea (e.g., seafood and garments) by affixing country of origin labels that identify a third country.
  – North Korean firms have established hundreds of joint ventures with partners from other countries in industries such as textiles, apparel, construction, small electronics, hospitality, minerals, precious metals, and seafood. Companies should carefully review the list of JVs in annex 2 of the advisory to ensure they are not working with these companies, though it should be noted that this list is not comprehensive or up to date.
  – North Korean exporters sell goods and raw materials (e.g., minerals) well below market prices to intermediaries and other traders.
  – North Korea sells a range of information technology services and products abroad, including website and application development, security software, and biometric identification software that has military and law enforcement applications.
 
Another sanctions violation risk is the presence in companies’ supply chains of North Korean citizens or nationals whose labor generates revenue for the North Korean government. Affected industries include textiles, apparel, construction, footwear, hospitality, IT services, logging, medical, pharmaceutical, restaurant, seafood processing, and shipbuilding. The advisory identifies 42 countries where North Korean laborers working on behalf of the North Korean government were present in 2017-2018, including Cambodia, China, Indonesia, Malaysia, Nigeria, Peru, Poland, Russia, Singapore, Taiwan, Thailand, the United Arab Emirates, and Vietnam.
 
Businesses should use due diligence best practices to guard against these risks.

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COMM_a1
14. 
K. King, S. MacMichael & R. Ross: “Export Control Reminder: Semi-Annual Encryption Reporting Deadline: 1 Aug 2018”

(Source: 
Cooley LLP, 23 Jul 2018.) 
 
* Authors: Kevin King, Esq., 
kking@cooley.com; Shannon MacMichael, Esq., 
smacmichael@cooley.com; and Rebecca Ross, Esq., 
rross@cooley.com.
 All of Cooley LLP, Washington DC.
 
August 1, 2018, is the deadline for submitting semi-annual reports for certain ENC Restricted encryption items exported or re-exported between January 1 and June 30, 2018, pursuant to paragraphs (b)(2) and (b)(3)(iii) of License Exception ENC (15 CFR 740.17). The encryption items subject to the semi-annual reporting requirement include, but are not limited to, network infrastructure items, items with an open cryptographic interface, certain encryption source code and encryption items performing vulnerability or forensic analyses.
 
Certain “network infrastructure” items (including WAN, MAN, VPN, backhaul or long-haul equipment, certain satellite infrastructure, media gateways and terrestrial wireless infrastructure) may no longer be subject to the semi-annual reporting requirement due to changes to the encryption controls under the US Export Administration Regulations (EAR), effective September 20, 2016. In addition, network infrastructure items no longer require a license for export to “less-sensitive government end-users” in any country (other than the designated terrorist-supporting countries or countries/territories subject to US economic embargoes – currently, Cuba, Iran, North Korea, Sudan, Syria and the Crimea region of Ukraine). “Less-sensitive government end-users” include local, municipal and provincial governments and federal government agencies responsible for civil public works; civil service human resources administration; public health; energy regulation and administration, including oil, gas and mining sectors; and economic and business development functions.

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COMM_a2
15. 
M. Volkov: “Iran Sanctions and Third Party Risk”

(Source: 
Volkov Law Group Blog, 23 Jul 2018. Reprinted by permission.) 
 
* Author: Michael Volkov, Esq., Volkov Law Group, 
mvolkov@volkovlaw.com, 240-505-1992. 
 
United States businesses are experiencing a sanctions whipsaw.  Since 1979, the President has issued twenty-six Executive Orders restricting trade and commerce with Iran.
 
The Iran Sanctions Program imposed strict prohibitions in a range of areas.  The Iran Sanctions Program and the Cuba Embargo are the two most restrict sanctions program implemented by the United States.
 
All of this changed in January 2016 when the Joint Comprehensive Plan of Action (JCPOA) was reached between Iran and the P5+1 countries.  In exchange for sanctions relief, Iran agreed to curb its nuclear-related programs.  The JCPOA lifted secondary sanctions against non-US persons, removed approximately 300 persons from the Specially Designated Nationals List, and authorized U.S. companies to conduct business with Iran through foreign subsidiaries under General License H.
 
On May 8, 2018, the Iran Sanctions Program world changed again when the Trump Administration announced its withdrawal from the JCPOA and its plan to reimpose the U.S. nuclear-related sanctions.  Under the new policy, all of the sanctions in existence prior to the JCPOA, including nuclear secondary sanctions, will be reimposed effective November 5, 2018.  Businesses have to wind-down Iran-related activities pursuant to JCPOA authorizations, some within 90 days of the announcement, and the remaining within 180 days of the announcement. 
 
The U.S. Secretary of State Mike Pompeo has stated that the administration plans to implement the “strongest sanctions in history,” including “secondary sanctions” that target foreign companies that do business with any U.S. person or entity.
The European Union has decided not to follow the United States’ action.  Germany, Britain and France have requested that the U.S. exempt EU companies from compliance with the U.S. re-imposed sanctions but the U.S. rejected that request.
 
U.S. companies will face a challenge complying with the new, re-imposed Iran Sanctions Program.  The EU’s decision not to follow suit complicates sanctions compliance, particularly with respect to third party risks.
 
The Iran Sanctions Program broadly prohibits the exportation, sale, or supply of goods, technology or services to Iran.  See Section 560.204.  Even if an exported good is not destined for Iran, a person or business may violate sanctions prohibiting transshipments through Iran.  
See Section 560.403.
 
More significantly, the Iran Sanctions Program prohibition includes the exportation, re-exportation, sale, or supply of goods to a person in a third country undertaken with 
knowledge or 
reason to know that the goods are intended for supply, transshipment, or re-exportation to Iran or the Government of Iran.
 
U.S. companies have to take affirmative steps to ensure that any export of goods or services to a person in a third country are not intended for Iran.  When selling goods to a foreign distributor, for example, U.S. companies have to make sure that such goods will not be reshipped to Iran or an Iranian business.
Such a prohibition increases significantly a company’s third-party risk and the need to conduct due diligence, secure appropriate written assurances, and review shipping plans for any export to ensure that it does not pass through Iran.  Sanctions compliance requires not only managing third party risks but also identifying a company’s customers and the intended use of goods exported to a foreign company.

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ENEDITOR’S NOTES

EN_a116
. Bartlett’s Unfamiliar Quotations

(Source: Editor)


Simon Bolivar (Simón José Antonio de la Santísima Trinidad Bolívar Palacios Ponte y Blanco; 24 Jul 1783 – 17 Dec 1830; was a Venezuelan military and political leader who played a leading role in the establishment of Venezuela, Bolivia, Colombia, Ecuador, Peru, and Panama as sovereign states, independent of Spanish rule.
  – “Good judgement comes from experience, and experience comes from bad judgement.”

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EN_a217. 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 June 2018: 83 FR 26204-26205: Unverified List (UVL); Correction 

 

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

  – Last Amendment:
29 June 2018: 83 FR 30541-30548: Global Magnitsky Sanctions Regulations; and 83 FR 30539-30541: Removal of the Sudanese Sanctions Regulations and Amendment of the Terrorism List Government Sanctions Regulations 

 

FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30  

  – Last Amendment: 24 Apr 2018:
83 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 April 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 
website
BITAR 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: 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_a318
. Weekly Highlights of the Daily Bugle Top Stories
(Source: Editor)
 

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

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

* 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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