;

18-0731 Tuesday “Daily Bugle”

18-0731 Tuesday “Daily Bugle”

Tuesday, 31 July 2018

TOP
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 
here for free subscription. Contact us
for advertising inquiries and rates.

  1. President Continues National Emergency with Respect to Lebanon 
  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. DoD/DSCA Posts Policy Memo 18-37
  4. DoD/DSS Clarifies Guidance for Access to SAPs
  5. DHS/CBP Posts Updated ABI Software Vendors List
  6. State/DDTC: (No new postings.)
  7. EU Amends Restrictive Measures Concerning Combating Terrorism, Ukraine, Libya, and North Korea
  1. BBC: “Brexit: Barnier Rules out Key UK Customs Proposal”
  2. Expeditors News: “Senate Passes Miscellaneous Tariff Bill”
  3. Guns.com: “Court Rejects Bid by Groups to Block 3-D Firearm Files, States Step In”
  4. Reuters: “U.S. Eases Export Controls for High-Tech Sales to India: Ross”
  1. M. Volkov: “Criminal Sentencing and Deterrence: White Collar Crime and Corporate Misconduct (Part I of III)”
  2. R. Cook, M. Banerji & S. Klemencic: “Successful CFIUS Monitorships”
  1. CompTIA Presents “12th Annual CompTIA Global Trade Compliance Best Practices Conference” on 18 Sep in San Diego, CA
  2. ECTI Presents “BIS License Application 748P: How to Prepare It and How to Ensure Best Possible Approval Time” Webinar, 11 Sep
  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
. President Continues National Emergency with Respect to Lebanon

(Source: Federal Register, 31 July 2018.) [Excerpts.]
 
83 FR 37415: Continuation of the National Emergency with Respect to Lebanon
 
On August 1, 2007, by Executive Order 13441, the President declared a national emergency with respect to Lebanon pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions of certain persons to undermine Lebanon’s legitimate and democratically elected government or democratic institutions; to contribute to the deliberate breakdown in the rule of law in Lebanon, including through politically motivated violence and intimidation; to reassert Syrian control or contribute to Syrian interference in Lebanon; or to infringe upon or undermine Lebanese sovereignty. Such actions contribute to political and economic instability in that country and the region.
 
Certain ongoing activities, such as Iran’s continuing arms transfers to Hizballah–which include increasingly sophisticated weapons systems–serve to undermine Lebanese sovereignty, contribute to political and economic instability in the region, and continue to constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared on August 1, 2007, and the measures adopted on that date to deal with that emergency, must continue in effect beyond August 1, 2018. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency with respect to Lebanon declared in Executive Order 13441. …
 
(Presidential Sig.)
THE WHITE HOUSE,
July 27, 2018.

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

OGSOTHER GOVERNMENT SOURCES

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

* Commerce; Industry and Security Bureau; RULES; Addition of Certain Entities; and Modification of Entry on Entity List [Publication Date: 1 August 2018.]

* Justice; Alcohol, Tobacco, Firearms, and Explosives Bureau; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: National Firearms Act Division and Firearms and Explosives Services Division Customer Service Survey [Publication Date: 1 August 2018.]

* U.S. Customs and Border Protection; NOTICES; COBRA Fees to be Adjusted for Inflation in Fiscal Year 2019 [Publication Date: 1 August 2018.]

* U.S. Customs and Border Protection; PROPOSED RULES; Modernized Drawback [Publication Date: 2 August 2018.]

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

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

(Source:
DoD/DSCA, 31 July 2018)
 

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

(Source:
DoD/DSS, 31 July 2018.)
 
The DoD Special Access Program Central Office provides clarifying guidance for granting access to Special Access Programs. You can find the guidance
here.

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

(Source:
CSMS #18-000464, 31 July 2018.)
 

This notice is to inform the Trade that an updated ABI Software Vendors List is now available here.

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

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

OGS_a78. EU Amends Restrictive Measures Concerning Combating Terrorism, Ukraine, Libya, and North Korea

(Source:
Official Journal of the European Union, 31 July 2018.)
 
Regulations:
* Council Implementing Regulation (EU) 2018/1071 of 30 July 2018 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation (EU) 2018/468
* Council Implementing Regulation (EU) 2018/1072 of 30 July 2018 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine
* Council Implementing Regulation (EU) 2018/1073 of 30 July 2018 implementing Article 21(2) of Regulation (EU) 2016/44 concerning restrictive measures in view of the situation in Libya
* Council Implementing Regulation (EU) 2018/1074 of 30 July 2018 implementing Regulation (EU) 2017/1509 concerning restrictive measures against the Democratic People’s Republic of Korea
 
Decisions:
* Council Decision (CFSP) 2018/1084 of 30 July 2018 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism, and repealing Decision (CFSP) 2018/475
* Council Decision (CFSP) 2018/1085 of 30 July 2018 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine
* Council Implementing Decision (CFSP) 2018/1086 of 30 July 2018 implementing Decision (CFSP) 2015/1333 concerning restrictive measures in view of the situation in Libya
* Council Decision (CFSP) 2018/1087 of 30 July 2018 amending Decision (CFSP) 2016/849 concerning restrictive measures against the Democratic People’s Republic of Korea

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

NWSNEWS

(Source:
BBC, 26 July 2018.)
 
The EU’s chief negotiator has ruled out allowing the UK to collect customs duties on its behalf, a key UK proposal for post-Brexit trade.
 
Michel Barnier said the UK wanted to “take back control” of its money, law and borders – but so did the EU.  
 
The EU would not delegate “excises duty collection to a non-member”, he said.
 
Both he and UK Brexit Secretary Dominic Raab said progress had been made but “obstacles” remained before reaching a deal in October.
 
Mr Raab said: “We have agreed to meet again in mid-August and then to continue weekly discussions to clear away all the obstacles that line our path, to a strong deal in October – one that works for both sides.”
 
He replaced David Davis, who quit as Brexit secretary in protest at Theresa May’s plans for a future economic relationship between the UK and EU, as set out in the White Paper.
 
That set out in more detail the government’s proposed customs system, the Facilitated Customs Arrangement for goods and agri-foods. The UK’s plan involves it collecting some EU tariffs – in a bid to ensure frictionless trade in goods and to avoid a hard border in Northern Ireland. …

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

(Source:
Expeditors News, 30 July 2018.)
 
On July 26, 2018, the U.S. Senate passed the Miscellaneous Tariff Bill Act of 2018 (MTB) with minor amendments. The bill now goes back to the House of Representatives for approval.
The MTB removes expired duty rate reductions in the Harmonized Tariff Schedule of the U.S., and adds duty suspensions and reductions that last through December 31, 2020.
 
The effective date of the bill will be 30 days after the date of the enactment of the MTB.
 
The Senate’s Congressional Record (CR S5438) may be found
here.
 
The MTB (H.R. 4318), as passed by the House on January 16, 2018, may be found
here.

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

(Source:
Guns.com, 30 July 2018.)
 
A judge in a Texas federal court last week declined to side with gun control groups trying to stop the planned release of downloadable firearm files as states are mobilizing to block the information themselves.
 
U.S. Judge Robert Pitman, a sixth-generation Texan and 2014 appointment by President Obama, on Friday,
denied a motion by the Brady Campaign, Everytown, and Giffords to intervene in the lawsuit between Austin-based Defense Distributed and the U.S. State Department.
 
The gun control advocates argued that the settlement reached between DefDist and the government would allow felons and terrorists to download 3-D files that could assist in unregulated firearm manufacturing. Pittman held the groups lacked standing and, declining to grant a request to halt the pending publication of the files, dismissed the case.
 
  “Just goosed Brady, Gabby and Mike Bloomberg in federal court. Enjoy your weekend,”
tweeted DefDist founder Cody Wilson in the aftermath of the ruling.
 
Wilson, who catapulted to controversy in 2013 when he first released online plans for his 3-D printed single-shot .380 Liberator pistol that quickly garnered over 100,000 downloads, has been mired in legal combat with the State Department ever since as the feds argued the availability of the plans, which recognized no borders, was a violation of International Traffic in Arms Regulations.
 
DefDist filed suit against the Obama administration in 2015 with the help of the Second Amendment Foundation, before the State Department switched gears last month and moved to grant Wilson’s company a special
exemption to ITAR
regulations on Friday, allowing him to post a variety of non-military small arms files on
DefCAD.com.
 
  “The State Department has made a dangerous and baffling mistake,” said Nick Suplina, legal policy director for Everytown. “For years, the State Department worked to prevent these deadly designs from going public, and it’s difficult to fathom why it suddenly reversed course on an issue with such clear consequences for public safety,” he continued. “Allowing unfettered access to these designs will enable felons, terrorists, and domestic abusers to create guns with ease and put public safety at risk.”
 
States step in
 
In response to a threat by New Jersey state Attorney General Gurbir Grewal and Los Angeles City Attorney Mike Feuer last Thursday warning DefDist of pending legal action should the company allow residents in their state to download the controversial files, Wilson fired back Saturday with a lawsuit against the two, arguing they are violating First Amendment free speech protections.
 
In the 16-page filing, attorneys for DefDist hold that Grewal and Feuer “have waged an ideologically-fueled program of intimidation and harassment against” the company, intending to drag Wilson “before all manner of far-flung criminal and civil tribunals in an effort to silence the organization.”
 
Seeking damages and attorney fees, attorneys Alan Gura and Josh Blackman outline the threats of litigation from Grewal and Feuer also illegally interfere with DefDist’s lawful business under the Dormant Commerce Clause, which restricts the powers of states to get involved in federally-protected interstate commerce.
Pending the outcome of the challenge, Wilson’s group has blocked IP addresses in Los Angeles, New Jersey, and Pennsylvania- where a
similar case was made in a Philadelphia federal court on Sunday- from downloading DefCAD files.
  “Defense Distributed’s mission, & the federal gov’t abdication of their responsibilities, forces my hand into fighting an obscene proposition,”
said Pennsylvania Attorney General Josh Shapiro, like Grewal and Feuer a Democrat. “We have laws in place to keep people safe, & during a time when students aren’t safe in their own classrooms, we need more help – not less.”

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

(Source:
Reuters, 30 July 2018.)
 
The United States has eased export controls for high technology product sales to India, granting it the same access as NATO allies, Australia, Japan and South Korea, U.S. Commerce Secretary Wilbur Ross said on Monday.
 
Ross, speaking at a U.S. Chamber of Commerce event, said the move to grant Strategic Trade Authorization status STA1 to India reflects its efforts to improve its own export-control regime, its adherence to multilateral export rules and its growing status as a U.S. defense partner.
 
  “STA1 provides India greater supply chain efficiency, both for defense, and for other high-tech products,” Ross said, adding that the elevated status would have affected about $9.7 billion worth of Indian goods purchases over the past seven years.
 
India’s ambassador to the United States, Navtej Sarna, told the same forum the U.S. move was a logical step after the United States designated India a major defense partner in 2016.
 
  “It is a sign of trust, not only in the relationship, but also (in) Indian’s capabilities as an economy and as a security partner, because it also presupposes that India has the multilateral export control regime in place which would allow the transfer of more sensitive defense technologies,” he said.
 
  “It also testifies to the excellent record we have had in maintaining non-proliferation of these technologies,” he said. “I certainly think it fleshes out our defense partnership in a big way.”
 
Political and military ties between the countries have expanded significantly in recent years although trade differences have arisen since U.S. President Donald Trump took office in 2017.
 
Ross’s announcement comes ahead of high-level talks between the United States and India in September that will be attended by U.S. Secretary of State Mike Pompeo and Defense Secretary Jim Mattis. The Sept. 6 talks have been twice postponed this year.
 
India and the United States share an interest in countering China’s expanding economic and military weight and the United States has emerged as a top arms supplier to India, selling more than $15 billion of weapons over the past decade as New Delhi modernizes its Soviet-era military.
 
Washington has offered India the armed version of drones that were originally authorized for sale as unarmed and for surveillance purposes. If the deal comes to fruition, it would be the first time the United States has sold a large armed drone to a country outside the NATO alliance.

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

COMMCOMMENTARY

COMM_a0
13. M. Volkov: “Criminal Sentencing and Deterrence: White Collar Crime and Corporate Misconduct (Part I of III)”

(Source: Volkov Law Group Blog, 31 July 2018. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group,
mvolkov@volkovlaw.com, 240-505-1992.
 
The sentencing of criminal defendants continues to create controversy.  There are so many categories of crime and ranges of punishment – the issue always calls for difficult judgments and inevitably results in vigorous debate.
 
In this three-part series, I plan to examine some of the issues surrounding sentencing of white-collar defendants and deterrence.  It is often presumed that stiff sentencing of white-collar defendants is an important means to deter other potential criminals from engaging in white-collar crimes.  To be frank, the question itself is difficult to answer because of definitional issues.  What crimes are included in the definition of white-collar crimes?  The analysis becomes even more difficult when you add corporations into the mix and seek to determine what sentences deter corporate white-collar crimes.
 
Federal judges have broad discretion in determining the appropriate punishment from white-collar defendants.  Specifically, judges are required “to impose a sentence sufficient, but not greater than necessary,” to respond to the “seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense.”  Such a prescription covers the relevant issues but defining each of these factors is the difficult part of the job.
 
In focusing on white-collar defendants, judges face a difficult set of considerations.  According to Judge Jed Rakoff (see
Here), an outspoken federal judge on these issues, the most effective way to deter white-collar crime is to impose stiff sentences on individual actors.  Judge Rakoff argues that sentencing individuals has more deterrence value than imposing large corporate fines for a criminal conviction, and imposing a deferred prosecution agreement or non-prosecution agreement.
 
Judge Rakoff contends that corporations that pay large fines and suffer negative publicity have no incentive to change their cultures. In his view, corporate punishments are viewed as a cost of doing business. In criticizing the current DOJ focus on corporate crime, Judge Rakoff suggests that DOJ’s focuses on corporate prosecutions instead of individual senior executives because it is easier to prosecute a corporation than to build a criminal case against individual defendants. Judge Rakoff has a point – it takes more time and effort for prosecutors to build cases against individual defendants, and such cases are not always easy to win at trial.
 
A prosecutor has to devote time to building cases against lower-level offenders and “flipping” them to cooperate against higher-level executives in the food chain. To build a case requires time, and carries with it significant risks that such an effort may not be successful.
 
As a result, federal prosecutors have outsourced prosecution work to large law firms and relied on them to develop evidence sufficient to charge a corporation (or at least threaten the company with criminal charges). Such prosecutions rarely, if ever, go to trial. Prosecutors hold all the cards in these investigations given the broad sweep of respondeat superior and corporate liability.
 
Along with the focus on corporate crime, prosecutors have applied tools previously used in individual criminal cases – a deferred prosecution or non-prosecution agreement – to corporate prosecutions. Prosecutors have argued that such agreements provide an incentive for companies to change their corporate culture and reduce the risk of misconduct.
 
Whether such agreements have had a positive impact on corporate cultures is up for debate. No significant research has been completed in this area, and it is an important issue to be resolved.
 
Notwithstanding these developments, and based on his lengthy career, Judge Rakoff contends that white-collar criminals, almost universally, fear going to prison. He argues that the threat of going to jail is a major deterrent, and is much more effective than corporate prosecutions in preventing corporate misconduct.
 
Judge Rakoff contends that more than half of white-collar offenders are recidivists.  Based on this fact alone, Rakoff contends that prosecuting corporations instead of individuals has had no significant impact on corporate crime.
 
Unfortunately, Judge Rakoff’s reliance on US Sentencing Commission data to prove his point may not be so persuasive.  According to a recent report issued by the US Sentencing Commission (
Here),
The Criminal History of Corporate Offenders, just over half (52.4 percent) of serious fraud offenders in fiscal year 2016 had a prior criminal record.  However, of the serious fraud offenders, traffic offenses were the most common (44 percent), followed by larceny (41.7 percent), public order (39.1 percent), fraud (36.8 percent) and drug possession (24.8 percent).  To the extent this data supports the claim that many white-collar offenders are recidivists, Judge Rakoff’s point has merit – criminal deterrence and stiff prison sentences for individuals falling into this category may be warranted.
 
[Editor’s Note: The subsequent parts in this series will be included in the Daily Bugle when they are available.]

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

COMM_a01
14. R. Cook, M. Banerji & S. Klemencic: “Successful CFIUS Monitorships”

 
* Authors: Randall Cook, Esq.,
randy.cook@ankura.com, +1 646-291-8545; Mona Banerji, Esq.,
mona.banerji@ankura.com, +1 212-449-7183; Steven Klemencic,
steven.klemencic@ankura.com, +1 202-449-7185.
 
This post describes critical considerations for a successful monitorship of mitigating controls required by the Committee on Foreign Investments in the United States (“CFIUS” or the “Committee”). CFIUS is an 
interagency US Government committee that reviews Foreign Direct Investment (“FDI”) into the United States to identify and address any consequent national security risks. Growing concern with the impact of foreign countries acquiring national security-critical technologies and other strategic advantages through investment activity has 
prompted CFIUS to become more active and assertive. Moreover, 
legislation is pending in both houses of Congress that will significantly expand CFIUS’s jurisdiction to review FDI and require mandatory declaration of specified investment types.
 
When CFIUS identifies possible national security risks arising from a reviewed transaction, the Committee may make implementation of mitigating control measures a condition of allowing the deal to go forward. In order to assure the effectiveness and persistence of such measures, CFIUS often requires the concurrent appointment of an independent third-party monitor (“TPM”) to oversee and periodically report on these controls. Indeed, given the 
increasing demands on scarce CFIUS resources consequent to the policy trends described above, both the Committee and industry are increasingly looking to TPMs to play a critical facilitating role to enable valuable transactions to proceed while addressing national security concerns.
 
So, what makes for a successful monitorship? Since no two CFIUS related transactions are the same, each monitorship is unique to the facts and dynamics of the transaction on which it is based. However, there are certain features that are foundational to a successful CFIUS monitorship. To best achieve the purposes of CFIUS mitigation agreements, the monitorship needs to be designed, and the TPM selected, with four key considerations in mind: CFIUS experience, technical capability, business cognizance, and trust.
 
CFIUS Experience
 
CFIUS may require mitigating controls to address risks identified during a 
national security threat assessment that focuses on the foreign party and a vulnerability assessment that focuses on the US party in a covered transaction. These transactions are becoming increasingly complex
in terms of business organization and ownership, the technologies and assets at issue, and the corresponding risks presented to US national security. Depending on the nature of the business and assets involved, these risks may include (among numerous other concerns):
 
* Access to or influence over critical technologies or infrastructure;
* Sensitive supply chain integrity;
* Access to quantities of personal identifying information (PII) or personal health information (PHI);
* Communication and financial network security; and
* Insight into or the ability to monitor sensitive US security and intelligence operations.
 
A successful CFIUS monitorship must assure the Committee’s designated monitoring agencies that the required controls are being implemented effectively and persistently to address the identified risks. Thus, it is crucial that the TPM have a deep understanding of the process, equities, and concerns that underlie the controls, and how the controls need to operate and be reported to address these issues. It is also enormously helpful for the TPM to be thoroughly familiar with the monitoring agencies’ process for keeping tabs on mitigation controls, and know how to effectively and efficiently inform the agencies that the underlying national security risks continue to be addressed.
 
Technical Capability
 
In order to mitigate complex risks, CFIUS frequently requires a combination of management, technical, and operational controls. Areas where the CFIUS frequently requires mitigating controls include:
 
* Access: Measures intended to limit access to sensitive data, critical technology, and operational information, including:
  – Physical Controls: Limitation of access to company facilities through such measures as electronic badging, camera surveillance, physical barriers, and personnel screening.
  – Systems Controls: Limitation of access to sensitive information and critical controls through such measures as (among numerous others):
  (a) Partition of business technology systems;
  (b) Demonstrated compliance with best practice standards for cybersecurity and technology security (e.g., NIST, ISO);
  (c)Enhanced network security monitoring;
  (d) Persistent suppression and/or deletion of sensitive information in business systems and processes; and
  (e) Active penetration testing of both physical and network environments.
* Protocols and Procedures: Comprehensive updates to 
company policies, processes, and systems to integrate the requirements of the mitigation agreement to integrate the requirements of the mitigation agreement into the company’s governance, operations, and culture. Examples of protocols that facilitate a CFIUS monitorship include:
  – Management protocols that clearly define roles and duties,
  – Data and cybersecurity governance procedures,
  – Third -party vendor assessment and management procedures,
  – Data use and handling policies,
  – Electronic communications protocol, and
  – Incident response protocol.
* Training: Programmatic, tailored education of company personnel regarding the purposes and requirements of the mitigation agreement, specifically including individual responsibility for compliance and incident reporting.
* Incident Response and Reporting: CFIUS mitigation agreements always require processes to identify, promptly respond to, and notify the Committee of the violation or failure of a mandated control.
 
A TPM that integrates the right technical competencies with practical experience designing, implementing, auditing, and overseeing compliance with mitigation controls is crucial to success. Required capabilities may include: cybersecurity and response, data and privacy management, data analytics, business process improvement, re-engineering, and automation, forensic auditing and investigations, project management, and regulatory expertise. A seasoned TPM provides critical hands-on guidance and assistance to the company as it works through the practical problems of implementing and integrating mitigation controls. Concurrently, a technically-competent TPM will be able to credibly demonstrate to the CFIUS monitoring agencies the effectiveness of the monitorship program.
 
Business Cognizance
 
By definition, the original impetus for a CFIUS-reviewed transaction is an underlying business proposition that drives the opportunity for a deal. The mitigating controls and monitorship will operate in the context of what all parties anticipate will be a successful business organization. The controls and monitorship must be effective at addressing the identified national security risks, and they also need to enable the company and its people to successfully operate. A successful TPM will recognize that those twin objectives are frequently best-achieved by working with business leaders and operations teams to integrate compliance requirements into corporate structure, systems, and processes. By uniting CFIUS compliance with organizational DNA, the company and the monitorship have the best opportunity for success. Operationally, the TPM needs to have a good understanding of the business and its commitments, and an innovative, risk-based approach that enables achievement of the monitorship’s purposes without unnecessarily exercising the company or the CFIUS monitoring agencies.
 
Trust
 
Successful CFIUS monitorships are built on a foundation of trust among the parties and the monitoring agencies. The TPM plays the crucial role of honest broker for all equities in this trust relationship. The TPM needs to have the Government’s confidence that national security concerns will be addressed with the same energy as would be the case if the monitoring agencies were directly executing the monitorship. Similarly, the TPM needs to have the business’s trust that the monitorship’s purposes will be addressed with an approach that harnesses innovation and pragmatism to avoid unnecessary friction. To earn and sustain this trust, the TPM needs several characteristics:
 
* A well-earned reputation for integrity and independence,
* A commitment to transparency and open communications with the parties and monitoring agencies,
* A collaborative, engaging approach to executing the monitorship, and
* Consistent, disciplined, and known processes for identifying and resolving issues and monitorship reporting.
 
Conclusion
 
The policy dynamics and anticipated statutory changes that are driving increased CFIUS activity are unlikely to abate. Deals involving US companies and FDI with a nexus to national security are increasingly likely to become subject to CFIUS review. When a monitorship is required, integrating the considerations described above in the design of the monitorship and the selection of the TPM will substantially improve the prospects for a successful transaction.

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

TECEX/IM TRAINING EVENTS & CONFERENCES

TEC_a115. CompTIA Presents “12th Annual CompTIA Global Trade Compliance Best Practices Conference” on 18 Sep in San Diego, CA

(Source: 
CompTIA
)
 
* What: 12th Annual CompTIA Global Trade Compliance Best Practices Conference
* When: Tuesday, September 18, 2018
* Where: Qualcomm, 10155 Pacific Heights Boulevard, San Diego, California 92121
* Sponsor: CompTIA
* Contact: Ken Montgomery, 

kmontgomery@comptia.org
  
* Information & Registration: 

HERE
.
* * * * * * * * * * * * * * * * * * * * 

 
* What: BIS License Application 748P: How to Prepare It and How to Ensure Best Possible Approval Time
* When: September 11, 2018; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Felice Laird
* Register: Here or Danielle Hatch, 540-433-3977, danielle@learnexportcompliance.com.

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

ENEDITOR’S NOTES

* Emily Bronte (Emily Jane Brontë; 30 Jul 1818 – 19 Dec 1848) was an English novelist and poet who is best known for her only novel, Wuthering Heights, now considered a classic of English literature. Emily was the third-eldest of the four surviving Brontë siblings, between the youngest Anne and her brother Branwell. She wrote under the pen name Ellis Bell.)
  – “A person who has not done one half his day’s work by ten o clock, runs a chance of leaving the other half undone.”
 
Milton Friedman (Milton Friedman; 31 Jul 31, 1912 – 16 Nov, 2006; was an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.)

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

EN_a318
. 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: 3 FR 17749-17751: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates
  – HTS codes that are not valid for AES are available
here.
  – The latest edition (30 Apr 2018) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and approximately 250 footnotes containing case annotations, practice tips, Census/AES guidance, and explanations of the numerous errors contained in the official text. Subscribers receive revised copies in Microsoft Word every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance websiteBITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR. Government employees (including military) and employees of universities are eligible for a 50% discount on both publications at www.FullCircleCompiance.eu.  
 
*
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jan 2018: 19 USC 1202 Annex. (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment:
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.  

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

EN_a0319
Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor) 

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

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

EPEDITORIAL POLICY

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, John Bartlett. The Ex/Im Daily Update is emailed every business day to approximately 8,000 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

* RIGHTS & RESTRICTIONS: This email contains no proprietary, classified, or export-controlled information. All items are obtained from public sources or are published with permission of private contributors, and may be freely circulated without further permission, provided attribution is given to “The Export/Import Daily Bugle of (date)”. Any further use of contributors’ material, however, must comply with applicable copyright laws.  If you would to submit material for inclusion in the The Export/Import Daily Update (“Daily Bugle”), please find instructions here.

* 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.


* SUBSCRIPTIONS: Subscriptions are free.  Subscribe by completing the request form on the Full Circle Compliance website

* BACK ISSUES: An archive of Daily Bugle publications from 2005 to present is available HERE.

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

Scroll to Top