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18-1031 Wednesday “Daily Bugle”

18-1031 Wednesday “Daily Bugle”

Wednesday, 31 October 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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[No items of interest noted today.] 

  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Makes Resources Available for Filing TFTEA Drawback Claims
  4. DHS/CBP Posts Notice on ACE In-bond Reports
  5. DHS/CBP Posts Notice on Receipt of Manually Processed GSP Lapse-Period Refunds for Claims made at Entry Summary
  6. DHS/CBP Updates Drawback Trade Issue Tracker Document 
  7. Justice: “Chinese Intelligence Officers and Their Recruited Hackers and Insiders Conspired to Steal Sensitive Commercial Aviation and Technological Data for Years”
  8. State/DDTC Posts Leadership Update
  9. Canada Amends Import Control List
  10. UK/HMRC: “How to Prepare for the Customs Declaration Service”
  1. ST&R Trade Report: “Duty-Free Treatment Removed for Numerous Goods in GSP Proclamation”
  2. WWMT: “Two Plead Guilty in Scheme to Smuggle Guns from Michigan to Lebanon”
  1. J.G. Richardson: “The ‘Emerging and Foundational’ Impact of the Export Control Reform Act”
  2. M. Volkov: “Speak Up is Great – Is Anyone Listening?”
  1. ECTI Presents “Conflicts Between EU and US Export Rules” Webinar, 29 Nov
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: ATF (15 Jan 2016), Customs (19 Sep 2018), DOD/NISPOM (18 May 2016), EAR (30 Oct 2018), FACR/OFAC (29 Jun 2018), FTR (24 Apr 2018), HTSUS (22 Oct 2018), ITAR (4 Oct 2018) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

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OGSOTHER GOVERNMENT SOURCES

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. Items Scheduled for Publication in Future Federal Register Editions
 

(Source:
Federal Register)
 
[No items of interest noted today.]  

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3. DHS/CBP Makes Resources Available for Filing TFTEA Drawback Claims
(Source: CSMS #18-000644, 31 Oct 2018.)
 
Filing of TFTEA drawback claims has been available in ACE since February 24, 2018. Claimants may file drawback pursuant to existing laws (core drawback) or new requirements established by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA drawback).
 
Resources are available to users who have begun filing or who wish to start filing TFTEA Drawback claims. These resources include:
 
  – Drawback Monthly Trade Call (Next call is today, October 31, 2018)
1:00 PM ET – 2:00 PM ET
Call-In Number: 1-877-873-8017
Access Code: 6215791
 
More information on the monthly call and other TFTEA Drawback support resources are available
here.
 
For all other drawback related issues, please contact
OTDrawback@cbp.dhs.gov
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4. DHS/CBP Posts Notice on ACE In-bond Reports

(Source: CSMS #18-000647, 31 Oct 2018.)
 
On Friday November 2nd, 2018, ACE Reports is replacing the “MMM-6009 In-Bond Details” report with two new in-bond reports, “MNFST-001 In-Bond Details” and “MNFST-003 Carrier IRS Details”. The “In-Bond Details” report will act the same way the MMM-6009 did, it will run a list of in-bond movements associated to the carrier’s SCAC code. The new “Carrier IRS Details” report will run the in-bond report using the carrier’s IRS number instead of the SCAC code, as long requested by industry. Both reports will return the in-bond number, bill of lading, bonded and manifested carrier code, the QP filer information, and all the pertinent dates. Both reports will be customizable with the ad hoc options should a carrier want additional details not provided in the canned reports.
 
In order for a carrier to be able to use the “Carrier IRS details” report, their carrier IRS number must be linked to their ACE portal account. To verify this, log into the ACE portal. On your account details home page, your IRS number will be listed under the IRS tab on the bottom of the page. If your IRS number is not associated to your ACE portal carrier account, please contact your assigned CBP Client Representative for further assistance.
 
It is CBP’s recommendation that when running this report, the trade limits the query to a single day or no longer than a one week period, due to the time ACE requires to query the data, verify the security for the IRS number linkage, and provide you the information you requested. If possible, consider setting up a nightly report job for this report.
 
Questions or concerns regarding the new reports can be sent to the ACE Reports mailbox ACE.Reports@cbp.dhs.gov or to the ACE Import Manifest Branch Chief, Amy Hatfield at Amy.E.Hatfield@cbp.dhs.gov.

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5. DHS/CBP Posts Notice on Receipt of Manually Processed GSP Lapse-Period Refunds for Claims made at Entry Summary

(Source: CSMS #18-000646, 31 Oct 2018.)
 
CBP has processed in excess of 400k GSP lapse-period lines and is now manually processing the remaining 22k lines submitted with the special program indicator (SPI) “A” at entry summary. CBP anticipates processing by the Centers to take several months.
 
Although CBP anticipates that the vast majority of these 22,000 GSP lapse-period lines that are being manually processed will be refunded, importers that ultimately do not receive refunds are reminded that they will be able to exercise their protest rights once the entry has reached liquidation (typically one year) and for a period of 180 days, as provided for in 19 USC 1514.
 
Importers and brokers that believe a refund remains due are encouraged to query the Automated Commercial Environment (ACE) to ensure that the importation was made during the lapse period and that GSP was claimed with the SPI “A”. Importers and brokers should not contact CBP for GSP refund status updates. For importations filed without the SPI “A” at entry summary, the post-importation GSP claim period expired on September 19, 2018, and no recourse remains available.
 
The trade is advised that neither refunds of less than $20 (19 CFR 159.6), nor for importations with the country of origin of Argentina will be issued. Lines subject to AD/CVD will be issued only upon receipt of the liquidation order from the Department of Commerce.
 
For additional information see:
  – CSMS 18-000505 of August 30, 2018;
  – CSMS 18-000296 of April 20, 2018;
  – Consolidated Appropriations Act of 2018 (H.R. 1625, Title V / Public Law 115-141); and
 
Questions with respect to entry summary and refund processing, PSC, protest, formal or informal entries, should be directed to Commercial Operations, Revenue and Entry Division (CORE) at otentrysummary@cbp.dhs.gov.
 
Questions with respect to GSP eligibility, and other questions with respect to this correspondence, should be directed to the Trade Agreements Branch at fta@dhs.gov.
 
  – Related CSMS No. 18-000505, 18-000296, 17-000789

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6. DHS/CBP Updates Drawback Trade Issue Tracker Document
(Source: CSMS #18-000645, 31 Oct 2018.)
 
Attached is the latest Drawback Trade Issue Tracker document. As a reminder, questions relating to policy for Drawback should be emailed to the OT Drawback inbox at
OTDRAWBACK@cbp.dhs.gov.
 
Note that supplemental information to this message is available in the form of one or more file downloads.
 
Please go here to access this information.
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7. Justice: “Chinese Intelligence Officers and Their Recruited Hackers and Insiders Conspired to Steal Sensitive Commercial Aviation and Technological Data for Years”
(Source: Justice, 30 Oct 2018.) [Excerpts.]
 
Chinese intelligence officers and those working under their direction, which included hackers and co-opted company insiders, conducted or otherwise enabled repeated intrusions into private companies’ computer systems in the United States and abroad for over five years. The conspirators’ ultimate goal was to steal, among other data, intellectual property and confidential business information, including information related to a turbofan engine used in commercial airliners.
 
The charged intelligence officers, Zha Rong and Chai Meng, and other co-conspirators, worked for the Jiangsu Province Ministry of State Security (“JSSD”), headquartered in Nanjing, which is a provincial foreign intelligence arm of the People’s Republic of China’s Ministry of State Security (“MSS”). The MSS, and by extension the JSSD, is primarily responsible for domestic counter-intelligence, non-military foreign intelligence, and aspects of political and domestic security.
 
From at least January 2010 to May 2015, JSSD intelligence officers and their team of hackers, including Zhang Zhang-Gui, Liu Chunliang, Gao Hong Kun, Zhuang Xiaowei, and Ma Zhiqi, focused on the theft of technology underlying a turbofan engine used in U.S. and European commercial airliners. This engine was being developed through a partnership between a French aerospace manufacturer with an office in Suzhou, Jiangsu province, China, and a company based in the United States. Members of the conspiracy, assisted and enabled by JSSD-recruited insiders Gu Gen and Tian Xi, hacked the French aerospace manufacturer. The hackers also conducted intrusions into other companies that manufactured parts for the turbofan jet engine, including aerospace companies based in Arizona, Massachusetts and Oregon. At the time of the intrusions, a Chinese state-owned aerospace company was working to develop a comparable engine for use in commercial aircraft manufactured in China and elsewhere.
 
Defendant Zhang Zhang-Gui is also charged, along with Chinese national Li Xiao, in a separate hacking conspiracy, which asserts that Zhang Zhang-Gui and Li Xiao leveraged the JSSD-directed conspiracy’s intrusions, including the hack of a San Diego-based technology company, for their own criminal ends. …
 
On October 10, the Department of Justice announced that a JSSD intelligence officer was extradited to the Southern District of Ohio, on charges that he attempted to steal trade secrets related to jet aircraft engines, and in September, in the Northern District of Illinois, a U.S. Army recruit was charged with working as an agent of a JSSD intelligence officer, without notification to the Attorney General.
 
As the indictment in the Southern District of California describes in detail, China’s JSSD intelligence officers and hackers working at their direction masterminded a series of intrusions in order to facilitate intrusions and steal non-public commercial and other data. The hackers used a range of techniques, including spear phishing, sowing multiple different strains of malware into company computer systems, using the victim companies’ own websites as “watering holes” to compromise website visitors’ computers, and domain hijacking through the compromise of domain registrars.
 
The first alleged hack began no later January 8, 2010, when members of the conspiracy infiltrated Capstone Turbine, a Los-Angeles-based gas turbine manufacturer, in order to steal data and use the Capstone Turbine website as a “watering hole.”  
 
China’s intelligence service also sought, repeatedly, to hack into a San Diego-based technology company from at least August 7, 2012 through January 15, 2014, in order to similarly steal commercial information and use its website as a “watering hole.”
 
Chinese actors used not only hacking methods to conduct computer intrusions and steal commercial information, they also coopted victim company employees. From at least November 2013 through February 2014, two Chinese nationals working at the direction of the JSSD, Tian Xi and Gu Gen, were employed in the French aerospace company’s Suzhou office. On January 25, 2014, after receiving malware from an identified JSSD officer acting as his handler, Tian infected one of the French company’s computers with malware at the JSSD officer’s direction. One month later, on February 26, 2014, Gu, the French company’s head of Information Technology and Security in Suzhou, warned the conspirators when foreign law enforcement notified the company of the existence of malware on company systems. That same day, leveraging that tip-off, conspirators Chai Meng and Liu Chunliang tried to minimize JSSD’s exposure by causing the deletion of the domain linking the malware to an account controlled by members of the conspiracy.
 
The group’s hacking attempts continued through at least May of 2015, when an Oregon-based company, which, like many of the other targeted companies, built parts for the turbofan jet engine used in commercial airliners, identified and removed the conspiracy’s malware from its computer systems.
 
Count Two of the indictment charges a separate conspiracy to hack computers in which Zhang Zhang-Gui, a defendant charged in Count One, supplied his co-defendant and friend, Li Xiao, with variants of the malware that had been developed and deployed by hackers working at the direction of the JSSD on the hack into Capstone Turbine. Using malware supplied by Zhang, as well as other malware, Li launched repeated intrusions that targeted a San Diego-based computer technology company for more than a year and a half. These intrusions caused thousands of dollars of damage to protected computers.
 
Count Three of the indictment charges Zhang Zhang-Gui with the substantive offense of computer hacking a San Diego technology company, which was one of the targets of the conspiracies alleged in Counts One and Two. …
 
  – Case Number: 13CR3132-H
  –
Indictment
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8. State/DDTC Posts Leadership Update
(Source: State/DDTC, 31 Oct 2018.)
 
  – Effective October 14, 2018, Mr. Robert Hart in the Office of Defense Trade Controls Policy is the new Division Chief for the Regulatory and Multilateral Affairs (RMA) Division.
  – Effective October 28, 2018, Mr. Jae Shin in the Office of Defense Trade Controls Compliance is the new Director of Compliance. He will maintain his leadership over the Compliance and Civil Enforcement Team until he decides who should be Acting in that capacity.
 
As a reminder, the following DDTC Acting positions are still effective:
 
Licensing:
  – Mr. Alex Douville and Mr. Pete Walker continue to co-lead the Light Weapons Division.
  – Mr. Jonathan Dennis and Ms. Yolanda Gantlin continue to co-lead the Space, Missile, and Sensor Systems Division.
 
Policy:
  – Acting Policy Deputy Director, Mr. Rick Koelling, also serves as Acting Division Chief for the Regional Affairs and Analysis (RAA) Division.
  – Mr. Nick Memos continues to serve as Acting Division Chief for the Commodity Jurisdiction and Classification (CJC) Division.
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9. Canada Amends Import Control List

(Source: Canada Gazette, 31 Oct)
 
The order amending the Import Control List can be found here.

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10. UK/HMRC: “How to Prepare for the Customs Declaration Service”

(Source: UK/HMRC, 31 Oct 2018.)
 
Get ready to submit CDS declarations
 
CDS is being introduced gradually and the timing of your move to this system from the Customs Handling of Import and Export Freight (CHIEF) will depend on your or your agent’s software developer or Community System Provider.
 
It is expected that the majority of importers will start using CDS early in 2019. Exporters will migrate to CDS when export functionality becomes available in March 2019. Meanwhile they should continue to use CHIEF. This means that CDS and CHIEF will run in parallel for a short period of time.
 
To make declarations using CDS you’ll need to:
  – have an Economic Operator Registration and Identification (EORI) number and a Government Gateway user ID and password
  – understand the different information needed for CDS so you’re compliant with the
Union Customs Code and the
CDS Trade Tariff
  – provide any training or information needed by your staff, for example on the tariff changes and new data requirements
  – understand any financial or process implications the changes may have including to your Direct Debit payments if you use a duty deferment account, HMRC will write to you if you’re affected by this
 
Importers using third party software
 
If you use third party software, in addition to the steps outlined for all users, you should:
  – register for CDS using your Government Gateway user ID and password, and authorise your software provider to make declarations on your behalf – you do not need to do this until HMRC or your software provider or agent tells you
  – make sure your provider is working with HMRC to understand the technical requirements for the new system
  – make sure they’re providing you with any software specific updates that may affect your internal processes or policies, or the information you request from customers
 
Importers using agents
 
If you use an agent to make declarations, you should familiarise yourself with the changes outlined for all users.
 
Your agent may need additional information from you, which you in turn may need to request from your customers.
Agents
 
If you’re an agent, depending on how you make declarations on behalf of your customers, you should refer to one of the examples above. If you act on behalf of multiple clients, depending on the software you use, you might need to authorise the software for each client. Your software developer will be able to help you with this and you should contact them for more information.
 
Forms C88
 
If you currently make declarations by sending a C88 form to the
National Clearance Hub you will not be able to do this once you’re on CDS. If you only make small numbers of import declarations you’ll be able to do these by a new online system. This will be limited to 10 per year and can only be used where the goods are being imported through non-inventory linked locations.
 
HMRC will also continue to provide a service to those who cannot access digital services and will publish a replacement to the current C88 form.
 
National Export System
 
If you use the National Export System (NES) to make export declarations, you’ll still be able to do this once CDS is introduced. This will look different and factor in any changes required by the Union Customs Code.
 
HMRC will publish more information about making export declarations once it is available.
 
Further information and updates
 
If you would like to receive email updates on CDS,
register for the HMRC Business help and education email service. Updates will be under the education topic ‘trading with other countries.’

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NWSNEWS

 
Dozens of goods are being removed from eligibility for preferential duty treatment under the Generalized System of Preferences in a
presidential proclamation issued Oct. 30. These and the other changes set forth below will be effective with respect to goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on Nov. 1.
 
Removals. The following HTSUS numbers are being removed from GSP eligibility when imported from the countries indicated because they exceeded the applicable competitive need limitations in 2017.
 
Argentina: 1702.90.10, 2008.11.25, 3301.13.00
 
Belize: 0713.34.20
 
Bosnia and Herzegovina: 3603.00.60
 
Brazil: 2906.19.30, 1602.50.05, 2909.19.18, 2914.40.10, 2926.10.00, 3802.90.10, 3824.99.32, 4012.90.45, 4101.90.40, 4107.99.80, 4411.12.90, 6802.99.00, 7202.11.10, 7403.19.00, 8410.13.00
 
Ecuador: 0304.91.90, 0714.50.60, 1202.41.40, 1806.90.01
 
Egypt: 9614.00.26
 
Falkland Islands: 0304.92.90
 
India: 0405.20.80, 0711.40.00, 0713.60.60, 0802.80.10, 1103.19.14, 1301.90.40, 2001.90.45, 2516.20.20, 2827.39.25, 2827.39.45, 2828.10.00, 2831.90.00, 2834.10.10, 2841.61.00, 2841.70.50, 2844.30.10, 2903.83.00, 2904.10.08, 2904.99.04, 2907.15.10, 2907.29.25, 2908.19.20, 2913.00.50, 2914.31.00, 2915.50.20, 2918.13.50, 2920.23.00, 2921.42.21, 2921.42.23, 2922.29.26, 2924.29.36, 2924.29.43, 2930.90.30, 2931.32.00, 2931.34.00, 2932.99.08, 2933.19.35, 2933.99.06, 2933.99.85, 2935.90.20, 3920.94.00, 4104.11.30, 4107.12.40, 4107.19.40, 4107.91.40, 5209.31.30, 5209.41.30, 5702.92.10, 7113.20.25, 9205.90.14
 
Indonesia: 2916.19.50
 
Kazakhstan: 8112.19.00
 
Pakistan: 0305.20.20
 
Philippines: 0714.30.60, 4602.19.23, 5607.90.35
 
Suriname: 0304.93.90
 
Thailand: 0603.13.00, 0810.60.00, 0813.40.10, 0813.40.80, 2005.80.00, 2006.00.70, 2008.99.50, 4418.73.30, 8443.11.10, 8450.20.00, 9620.00.15
 
Turkey: 0710.80.50, 2833.29.40, 2840.11.00
 
Continuations. GSP eligibility is being continued for the following HTSUS numbers from the countries indicated that were determined to be eligible for CNL waivers.
 
  – HTSUS 0410.00.00, edible products of animal origin, from Indonesia
  – HTSUS 2836.91.00, lithium carbonates, from Argentina
  – HTSUS 7202.50.00, ferrosilicon chromium, from Kazakhstan
 
Redesignation. Ammonium perrhenate (HTSUS 2841.90.20) from Kazakhstan has been redesignated as eligible for GSP treatment because imports of this product did not exceed the applicable CNL in 2017.
 
Fruit Juice. HTSUS 2009.89.60 is replaced with HTSUS 2009.89.65 (cherry juice), which is eligible for GSP unless imported from Turkey or Ukraine, and 2009.89.70 (other fruit juices), which is eligible for GSP unless imported from Ukraine.

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. WWMT: “Two Plead Guilty in Scheme to Smuggle Guns from Michigan to Beirut”

(Source: WWMT, 31 Oct 2018.) [Excerpts.]
 
Two Ohio men have pleaded guilty to federal weapons charges in a scheme that involved a West Michigan man hiding guns inside engine blocks for shipping to Beirut, Lebanon.
 
Abdul Majid Saidi, 42, and Walid Mounir Chehade, 38, both of metro Cleveland, Ohio, pleaded guilty in U.S. District Court in Grand Rapids to one count each of conspiring to violate the Arms Export Control Act. Each faces a maximum of five years in prison, three years of supervised released, and a $250,000 fine. They will be sentenced in February.
 
Prosecutors said Saidi and Chehade plotted with Grand Rapids-area resident Gilbert Elian to conceal 20 semiautomatic pistols inside automobile engine blocks and transmissions. The guns were wrapped in wrapped in felt and plastic. Many of the firearms were purchased in West Michigan. The engine blocks and transmissions were then placed in a cargo shipping container addressed to a someone in Beirut, Lebanon.
 
The cargo container shipment was intercepted after a U.S. Customs and Border Patrol inspectors found the shipment in Virginia.
 
Elian was convicted of the same offense in 2016. …

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COMMCOMMENTARY

 
* Author: Jeffrey G. Richardson, Esq., Miller, Canfield, Paddock and Stone, P.L.C., richardson@millercanfield.com, +1 248-267-3366.
 
The Export Control Reform Act of 2018 (ECRA) will have a foundational and emerging impact on the future of U.S. export controls and foreign direct investment.
 
The ECRA sits within the voluminous John S. McCain National Defense Authorization Act for fiscal year 2019 (signed by President Trump on August 3rd, 2018), tucked right behind the Foreign Investment Risk Review Modernization Act (FIRRMA) revising foreign direct investment requirements in the U.S.
 
As to its foundational impact on export controls, the ECRA codifies existing U.S. export control law by providing permanent statutory authority for the Export Administration Regulations (EAR), which are administered and enforced by the Department of Commerce. The initial authority for the EAR was provided by the Export Administration Act of 1979 (EAA), which lapsed in 2001. Since the 2001 EAA lapse, the President annually reauthorizes and continues the EAR by executive order and annual continuation notice. Although noteworthy, for most exporters the ECRA’s permanent statutory authority function is only a minimally impactful administrative footnote.
 
As to its emerging impact on exports, Section 1758 of the ECRA creates a mandate for the U.S. government to identify and control the export of “emerging and foundational technologies” (E&F Technologies) essential to U.S. national security. ECRA establishes an interagency review process to continually identify E&F Technologies and, if warranted, control any essential E&F Technology under EAR export controls. The Departments of Commerce, Defense, Energy and State will be the lead agencies conducting the interagency review process, with support from other federal agencies as appropriate.
 
The public debate surrounding the enactment of FIRRMA and ECRA suggest that E&F Technologies may focus on technology for the following types of items: autonomous vehicles and automatized driving assistance systems, 5G, hydrogen and fuel cells, and biotechnology, as well as robotics, artificial intelligence and machine learning.[1]The ECRA excludes from review as a potential E&F Technology those items already listed on the United States Munitions List (USML) of the International Traffic in Arms Regulations (ITAR) and the Commerce Control List (CCL) of the EAR. Identified E&F Technologies will drop their default designation as EAR99 items, becoming classified and listed on the CCL and subjected to item-based export controls and license requirements under the EAR. The level of item-based export controls imposed on an E&F Technology by the Department of Commerce will take into account the potential end uses and end users of the technology. At a minimum, Section 1758 of the ECRA directs the Commerce Department to require a license for the export of any E&F Technology destined to a country that is subject to an arms or other U.S. embargo – including the U.S. arms embargo with China. A license application to export an E&F Technology to a U.S.-embargoed country may have a presumption of denial.
 
For E&F Technologies subject to item-based export controls under the EAR, ECRA permits the Commerce Department to create license exceptions for the provision of technology associated with the following types of transactions:
 
  – the sale or license of a finished item when such technology is generally made available with the finished item;
  – integration services or similar services, if the U.S. person supporting the transaction generally makes such services available;
  – transfer of equipment and the provision of associated technology to operate the equipment, if the transfer could not result in the foreign person using the equipment to produce critical technologies;
  – procurement by the U.S. person of goods or services from a foreign person, if the foreign person has no rights to exploit any technology contributed by the U.S. person; and,
  – any contribution and associated support to an industry organization related to an applicable standard or specification by a U.S. person that is a party to the transaction.
 
As a significant note, Section 1758 of the ECRA compels the Department of Commerce to coordinate and work with U.S. allies to subject E&F Technologies (once identified) to global controls under multilateral export control regimes, such as the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies.
 
Finally, FIRRMA imposes multiple requirements on the Committee on Foreign Investment in the United States (CFIUS) to review proposed foreign investments in E&F Technologies located in the U.S. Pointedly, E&F Technologies (once identified) are now included within the FIRRMA definition of critical technologies, thereby subjecting certain covered transactions containing E&F Technologies to CFIUS review.
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(Source:
Volkov Law Group Blog, 30 Oct 2018. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group,
mvolkov@volkovlaw.com, 240-505-1992.
 
Chief compliance officers face a mountain of tasks – it is easy to get overwhelmed. Add to the mix the fact that CCOs are under extraordinary pressure to “prevent and detect” potential violations of the company’s code and any law or regulation. When you think about it, that is quite a heavy responsibility.
 
In the ebb and flow of ethics and compliance ideas, one constant is the importance of implementing a robust speak up culture. Not to be a naysayer or a “nattering nabob of negativism,” but there is a whole side of the equation missing in the term “speak up culture.”
 
Maybe it is implicit in the concept but all too often I hear about employees who raise concerns, trust the system, cooperate and provide information, only to be disappointed when the company rejects or turns away from the employee. I am not suggesting that employee concerns are always accurate – but there are times when companies fail; to listen or take the required action. When that happens, it can be devastating to any company effort to build a system of trust.
 
I know it is trite to say that there is a skill in listening. It requires attention, interpersonal skills, and patience. The same principles apply to a company that listens to employee concerns and responds to those concerns. Sometimes it requires companies to take actions that are not so easy. Sometimes it even requires companies to hold its leaders accountable.
 
A speak up culture is only as good as its response to an employee concern. It only take a few missteps for a system that depends on trust to collapse.
 
Putting aside al my general observations, how can we start to get a handle on creating a listening and accountability culture. There are a few easy items to handle:
 
  – first, routine employee concerns have to be resolved in 60 days or less;
  – second, employee concerns that raise significant issues have to be elevated to senior management and even the board, if necessary;
  – third, company investigators have to contact employees after they raise a concern, and should be kept apprised as to the status of the investigation and the ultimate resolution of the concern; and
  – fourth, corporate leaders, managers and investigators have to repeat (over and over again) that the company has a zero-tolerance policy for overt and subtle efforts to retaliate against employees how raise concerns.
 
These are four basic requirements that have to exist for a speak up and listening culture to thrive. If you do not have these four basic requirements, you have work to do, and the company has to take action.
 
For all the planning and resources dedicated to a speak up culture, CCOs have to devote the same level of effort to implementing a listening culture – a responsive system where employees are treated with respect, their concerns are taken seriously, and most importantly, where actions are taken to respond and fix concerns that employees raise. This sounds easier than the reality of implementation.
 
Companies are reluctant to bite the bullet, hold their leaders accountable and take decisive action when legitimate employee concerns are raised. It is almost as if corporate leaders will act only when forced to do so, by the board, shareholders, or the government. A sense of urgency only exists when pressure is put on corporate leaders to act and they are “persuaded” as to the wisdom of such actions.
 
A company with innovative and ethical leaders will take proactive steps, some of which may be hard to implement, in recognition of doing the right thing and holding colleagues accountable. When that happens, companies have a real chance to encourage employee communications and to turn their employees into valuable sources of information about corporate activities and operations. A listening culture is one which encourages such communications and provides real and meaningful responses to employee concerns.
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TEEX/IM TRAINING EVENTS & CONFERENCES

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15. ECTI Presents “Conflicts Between EU and US Export Rules” Webinar, 29 Nov
(Source: Danielle Hatch, danielle@learnexportcompliance.com)
 
* What: Conflicts Between EU and US Export Rules
* When: November 29, 2018
  – Specific time zones here:
9:00-10:30 AM EST
3:00-4:30 PM Europe Time
2:00-3:30 PM GMT
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Stephan Müller
* Register: Here or Danielle Hatch, 540-433-3977, danielle@learnexportcompliance.com.

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ENEDITOR’S NOTES

EN_a116
. Bartlett’s Unfamiliar Quotations

(Source: Editor)
* John Keats (31 Oct 1795 – 23 Feb 1821; was an English Romantic poet. He was one of the main figures of the second generation of Romantic poets, along with Lord Byron and Percy Bysshe Shelley, despite his works having been in publication for only four years before his death from tuberculosis at the age of 25.)
  – “My imagination is a monastery and I am its monk.” 
And a few 31 October Q&As:
* Q. Why kind of music to mummies like to listen to?
      A. Wrap music.
* Q. Why do all witches wear name tags when they get together?
      A. So that they know which witch is which. 
* Q. How do you fix a damaged jack-o-lantern?
      A. With a pumpkin patch!
* Q, Why is a cemetery a great place to write a story?
      A: Because you can find so many plots there.

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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: 19 Sep 2018: 
83 FR 47283-47284
: Extension of Import Restrictions Imposed on Archaeological Material From Cambodia 
 
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: 30 Oct 2018: 83 FR 54519-54521: Addition of an Entity to the Entity List 

 

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: 22 Oct 2018: Harmonized System Update 1818
containing 1,544 ABI records and 286 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: 
4 Oct 2018: 
83 FR 50003-50007
: Regulatory Reform Revisions to the International Traffic in Arms Regulations
  – The only available fully updated copy (latest edition: 4 Oct 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.

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* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, Alex Witt. The Ex/Im Daily Update is emailed every business day to approximately 6,000 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 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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