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18-1101 Thursday “Daily Bugle”

18-1101 Thursday “Daily Bugle”

Thursday, 1 November 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
.

[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 Posts Harmonized System Update 1819
  4. DoD/DSCA Posts Two Policy Memos
  5. OMB/OIRA Reviews of Proposed Ex/Im Regulations
  6. State/DDTC: (No new postings.) 
  7. Treasury/OFAC Posts Notice on Issuance of a New Venezuela-related Executive Order and Associated FAQ
  8. Singapore Customs Posts Advisory on Customs Supervision for Unstuffing Containers
  1. Inverse: “SpaceX’s Barista Job Posting Has One Requirement Most Don’t”
  2. Reuters: “Germany Will Back Extension of Sanctions against Russia: Merkel”
  1. A.L. Petterd & B. Vong: “Considerations for Supply Contracts During Trade Tensions October 2018”
  2. N. Bolin: “New Report Signals Further Changes to U.S. Policy toward IoT Technology from China”
  3. T.M. Polino, B. Matthiesen & D.R. Hamill: “The ‘New NAFTA’: Now is the Time to Prepare for the USMCA, Part 1: The Energy Sector”
  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 (1 Nov 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

OGS_a11
. Items Scheduled for Publication in Future Federal Register Editions
 

(Source:
Federal Register)
 

* Commerce; Industry and Security Bureau; RULES; Wassenaar Arrangement 2017 Plenary Agreements Implementation [Publication Date: 2 November 2018.]
 
* President; ADMINISTRATIVE ORDERS; Sudan; Continuation of National Emergency (Notice of October 31, 2018) [Publication Date: 2 November 2018.]

 

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OGS_a03
3. DHS/CBP Posts Harmonized System Update 1819
(Source: CSMS #18-000648, 1 Nov 2018.)
 
Harmonized System Update (HSU) 1819 was created on October 31, 2018 and contains 1,200 ABI records and 245 harmonized tariff records.
 
Modifications include those mandated by Presidential Proclamation 9813, To Modify the List of Products Eligible for Duty-Free Treatment Under the Generalized System of Preferences. These changes are effective November 1, 2018 and the proclamation can be accessed
here.
 
Adjustments required by the verification of the 2018 Harmonized Tariff Schedule (HTS) are included as well.
 
The modified records are currently available to all ABI participants and can be retrieved electronically via the procedures indicated in the CATAIR. For further information about this process, please contact your client representative. For all other questions regarding this message, please contact Jennifer Keeling via email at
Jennifer.Keeling@cbp.dhs.gov
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OGS_a04
4. DoD/DSCA Posts Two Policy Memos

(Source: DoD/DSCA, 1 Nov 2018.)
 
 
Program Codes “QC”, “QD”, and “QE” assigned to track FY 2019/2020 O&M and SC OCO funds will be executed under the authority of Section 333 of title 10, United States Code. Funds are provided under Division A of the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act and Continuing Appropriations Act, 2019 (P.L. 115-245); “QD” and “QE” funds will remain available for obligation until September 30, 2020.
 
This memo revises the following LOA notes:
 
  – This memorandum updates the SAMM with clerical and administrative changes. This memorandum does not contain contextual policy changes.
 

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OGS_a05
5. OMB/OIRA Reviews of Proposed Ex/Im Regulations
(Source: OMB/OIRA, 31 Oct 2018.)
 
* Modernized Drawback
  – AGENCY: TREAS-CUSTOMS
  – STAGE: Final Rule
  – RECEIVED DATE: 31 October 2018
  – RIN: 1515-AE23
  – STATUS: Pending Review
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OGS_a6
6. State/DDTC: (No new postings.)

(Source: State/DDTC)

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OGS_a7
7. Treasury/OFAC Posts Notice on Issuance of a New Venezuela-related Executive Order and Associated FAQ
(Source: Treasury/OFAC, 1 Nov 2018.)   
 
Today, the President signed an Executive Order
Blocking Property of Additional Persons Contributing to the Situation in Venezuela. The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing
two frequently asked questions in connection with the issuance of the Executive Order.
 
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OGS_a8
8. Singapore Customs Posts Advisory on Customs Supervision for Unstuffing Containers
(Source: Singapore Customs, 31 Oct 2018.)
 
Singapore Customs conducts selective customs supervision for unstuffing transhipment containers going to unmanned places and import containers to ensure compliance with regulatory requirements, such as to check that all goods conveyed in the containers have been accurately declared to Customs.
 
A container that has been selected for customs supervision for unstuffing will be sealed with a customs red seal and affixed with a warning sticker (see Annex B) at the time of clearance at the checkpoint. A “Notice to Haulier” (see Annex C) will be issued to the prime mover driver to inform the trader of the customs supervision requirement. Traders are reminded not to break the customs red seal and/or unstuff the container without prior approval from Singapore Customs.
 
Traders should apply for customs supervision for unstuffing within one working day of clearance of the container from the checkpoint. The application is to be submitted via e-filing at
www.customs.gov.sg > eServices > Customs Forms & Service Links > Customs Supervision Forms. The intended date of unstuffing operation should be at least one working day after the date of e-filing. The actual time slot allocated for the customs supervision operation is subject to our manpower availability.
 
The hours for conducting customs supervision for unstuffing are 8.00 am to 5.00 pm on Mondays to Fridays and 8.00 am to 12.30 pm on Saturdays. No customs supervision is conducted on Sundays and Public Holidays.
 
The unauthorised breaking of customs red seal is an offence under Regulation 16(4) of the Customs (Container) Regulations. Any person guilty of breaking a customs red seal shall be liable on conviction to a fine not exceeding $5,000 and, in the case of a second or subsequent conviction, to a fine not exceeding $8,000.
 
This circular supersedes the earlier Circular No: 13/2015 issued on 28 Sep 2015.
 
A list of frequently asked questions (FAQ) is provided in Annex A for your reference. Should you require further clarification on the content of this circular, please write to
customs_whsg_supervision@customs.gov.sg.
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NWSNEWS

(Source:
Inverse, 31 Oct 2018.)
 
The barista position is one held by aspiring actors, writers, and leaders in public service. It is a good, honest profession that performs a service for the masses that is
mission critical for anyone’s day. The job welcomes people of all backgrounds. But to be a barista at
SpaceX, you’ll have to meet one standard that’s not required at Starbucks or even your preferred independent coffeeshop.
 
Making lattes at SpaceX requires you
comply with rules for the International Traffic in Arms Regulations, or ITAR for short. When you serve coffee to the people who develop rockets that carry
spy technology into space, you must be a few things: You must be a U.S. citizen, a lawful permanent resident of the United States, a protected individual as defined by the Constitution, or eligible to obtain the required authorization from the State Department. You must also be ok with “frequent bending and stooping” – though that’s a barista requirement, not one of ITAR.
 
The barista job opening at SpaceX is one for its Redmond, Washington facility, where the SpaceX Starlink program – the one that is making internet satellites – is based.
 
On Wednesday, Reuters dropped a bombshell report that SpaceX CEO Elon Musk flew to the Redmond location back in June, and “within hours of landing … had fired at least seven members of the program’s senior management team … the culmination of disagreements over the pace at which the team was developing and testing its Starlink satellites.
 
There are some 22 open jobs at the facility, Reuters noted in its report. One of them is for barista, a position that may require you prepare coffee for Musk.
 
  “I used to have so much coffee and Diet Coke that I’d get really wired and then I’d get over-caffeinated and it wouldn’t be good. I’m cutting down to, I think, more reasonable portions these days,” he told
AutoBild in 2014.
 
In February, SpaceX launched two Starlink satellites, part of its wider plan to send 4,425 satellites into orbit to bring broadband connectivity to the 57 percent of the globe without the internet.
 
If all goes to plan, the company could begin deploying its wider array as soon as next year, with the goal of completing the array by 2024. That’s the same year as SpaceX’s proposed first Mars mission with humans, and Musk is hoping that the revenue from the business will fund its other projects. SpaceX is aiming big, suggesting that it could have 40 million subscribers bringing in $30 billion revenue by the year 2025.
 
Musk addressed the question of
why SpaceX has to follow ITAR rules a little more than two years ago at the International Aeronautical Congress in Australia.
“When are you gonna hire people from other countries than the US,” asked an audience member during a Q&A session, eliciting cheers from the crowd.
 
  “I think people are a bit confused about this; unfortunately, this is not up to us,” Musk replied. “U.S. Government regulations make getting a job in the U.S. hard as it is, but if you’re working on rocket technology, that’s considered an advanced weapons technology, so even a normal work visa isn’t sufficient unless you get a special permission from the Secretary of Defense or the Secretary of State. So I want to be clear, this is not out of some desire of SpaceX to just hire people with green cards.”
 
He continued: “I think that this is not a wise policy for the U.S., because there are so many talented people all around the world that would love to have worked at our company, but unless they can somehow get a green card we’re legally prevented from hiring anyone … I really wish we could do more, it’s just our hands are tied.”
 
So, if you want to keep the engineers who are taking humanity into space caffeinated, you must follow ITAR rules, because those same engineers may also be working on projects related to space weapons.

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NWS_a210. Reuters: “Germany Will Back Extension of Sanctions against Russia: Merkel”
(Source: Reuters, 1 Nov 2018.)
 
Chancellor Angela Merkel said on Thursday that Germany would push for an extension of Western sanctions against Russia in December because Moscow had failed to fully implement a Ukraine peace deal brokered in Minsk in 2015.
 
  “The Minsk agreement is not being fulfilled and we’re only making inching progress if at all and sometimes we’re going backwards,” Merkel said during a visit to Kiev, where she met with Ukrainian President Petro Poroshenko.
 
  “So based on the situation we have today, Germany will push for an extension of the sanctions in December too,” she said, adding that among the violations of the Minsk peace deal were elections planned for Nov. 11 in areas controlled by Moscow-backed separatists.

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COMMCOMMENTARY

 
* Authors: Anne L. Petterd, Esq., Anne.Petterd@bakermckenzie.com; and Binh Vong, Esq., Binh.Vong@bakermckenzie.com. Both of Baker McKenzie.
 
Considerations for Supply Contracts During Trade Tensions
 
Shifts in supply chains are becoming more common as the tit-for-
tat tariffs imposed between the US and China continue on without an end in sight. And China and the US are not the only countries imposing increased tariffs as well as non-tariff barriers to trade. Other countries that have a history of higher tariffs and non-tariff barriers to trade, may also be looking to make trade policy adjustments in order to adapt to the changing trade landscape.
 
How Should Suppliers Respond?
 
Both China and the US and other governments have relatively quick processes in place for imposing new tariffs , however, most product suppliers need time to assess their options and re-plan their manufacturing processes and supply chains in order to respond to these measures and avoid the higher duty rates. Similarly, governments can also nimbly remove the higher tariffs, but product suppliers often have supply chains that cannot be changed as quickly and they need to determine the risk associated with creating new supply chain routes. It is not just product suppliers who are impacted. New tariffs disrupt many businesses in the supply chain and impact decisions made on product sourcing, routes to market and manufacturing.
 
The mere threat of new measures can also be severely disrupting. Product suppliers have to consider the likelihood of whether the trade tensions will end sooner or later and whether they should take no action or adjust vulnerable supply chains. All these factors can make it difficult for product suppliers to plan for and deal with the risk of higher production costs due to increases tariffs.
 
Businesses need to determine how to respond to the higher tariffs. Some businesses might consider a tariff classification review or a review of the location of supply chain activities including manufacturing and assembly process. We focus here on the careful drafting of sourcing contracts, which can create flexibility and adaptability but also add additional costs.
 
A Closer Look at Supply Chain Contracts: Flexibility and the Associated Costs
 
In order to ensure a supply chain is adaptable and flexible, supply chain contracts should include language that allows for the ability to restructure manufacturing processes and other parts of the supply chain on short notice. More flexible terms may allow a product supplier to restructure quickly, however, this may come with higher costs. Businesses must balance the benefits with the costs of more flexible terms. We list below some of the supply contract terms that will be critical to flexibility, together with the concessions that may need to be given in order to gain flexibility.
 
  – Multi-layered contract.
Where the arrangement with a manufacturer/ transporter/ distributor is long-term, consider having a foundational contract that frames the general conditions for the relationship while specific terms, such as the price, time and amount of each transaction, may be fixed by additional individual contracts. Such arrangement allows for a change in the price, quantity, timing, etc. with each transaction. The trade off is that this arrangement may require renegotiation for each subsequent contract, which could be costly and time consuming.
  – Force majeure clauses.
Force majeure clauses contemplate events beyond the parties’ control, which allow one party to unilaterally suspend a contract for a period of time or, if the situation does not improve, terminate the contract. Many contracts adopt boilerplate force majeure clauses. The contract should clearly define a “force majeure” event. Typically, significant increases in tariffs are not force majeure events. However, it is a point of consideration for contracts moving forward.
  – Hardship clauses.
Hardship clauses generally require the parties to implement and enforce the contract fairly and without detriment to any party’s interest. If a substantial hardship does arise, the parties will work together to rectify or remove the hardship and remedy any detriments suffered by either party. Businesses should consider expanding the scope of a hardship clause to allow for higher tariffs.
  – Cancellation/re-issuing rights.
In some circumstances, tariffs may significantly increase the costs of goods to the point where it no longer makes sense for product suppliers to receive the ordered products. Consider seeking rights to cancel and re-issue purchase orders and invoices at short notice to accommodate a sudden change in cost from higher tariffs. There is a trade off. Broader cancellation rights result in higher costs borne by the manufacturer/ transporter / distributor in order to account for the risk of cancellation. Such costs would be reflected in the terms of the agreement.
  – Minimum volume.
Many supply contracts include minimum volume and other sourcing commitments that require a product supplier to purchase a minimum amount from the manufacturer during a specified period of time to secure a certain price. Similarly, transport and distribution contracts may also require a minimum volume for transport/distribution services. Businesses should consider negotiating hardship exceptions to cover minimum volume requirements and such hardship exceptions would cover significantly higher duty rates.
  – Provisions binding the supplier to a manufacture.
Significantly higher tariffs may push product suppliers to consider moving manufacturing to another country. This can be a difficult and expensive process. It takes time and money to set up a manufacturing process and conduct due diligence on a new manufacturer. Among other things, product suppliers must ensure that they have all the legal mechanisms in place allowing them to switch manufacturers. Product supplier should ensure that there is no contractual restriction on switching a manufacturer and that the product supplier holds all of the intellectual property rights and technical data to the products so that they may give manufacturing instructions to another manufacturer on short notice.
  – Flexible language.
Most contracting parties put in great effort and resources in order to clearly spell out the contractual terms. Depending on the nature of the transaction, consider using terms that can be tailored to different events and circumstances. For example, consider employing terms such as “reasonable,” “good faith,” and “commercially reasonable in light of the circumstance” instead of more specified, rigid terms that are less malleable. Of course, these flexible terms are sometimes a double-edge sword because they also could result in different interpretations of what is “reasonable” or “good faith” and thus creates higher uncertainty, especially when dealing with a new partner.
 
Similarly, a cooperative relationship may promote further flexibility when dealing with the uncertainties of higher tariffs. Highlighted below are some contractual terms for fostering collaboration between a product supplier and its manufacturer, transporter and distributor.
 
  – Emphasis of cooperation.
Requiring the parties to cooperate may be critical to finding an amicable solution. Hardship and force majeure clauses can require the parties, upon the occurrence of certain events, to renegotiate in good faith or using their best effort.
  – Clear process to handle disputes and contingencies.
Disputes and contingencies cannot be entirely avoided in business transactions. Having a clear process to deal with such events is crucial and fundamental. The parties must decide beforehand what processes the parties will take to resolve a dispute. Would the parties try to amicably resolve the issues or utilize another means, such as arbitration or judicial proceedings? If the cost of products is significantly increased, how will that burden be shared between the parties? Should an expert valuer for example be engaged to determine cost impact? The supply contract should clearly lay out the processes for handling disputes and contingencies.
 
While the contractual terms above provide product suppliers with more flexibility in the face of higher tariffs and other unexpected events, such flexibility does not come without costs. The challenge for product suppliers then is to balance the costs and benefits of flexible terms to determine whether such terms make sense for their business, both short-term and long-term.
 
Big Picture Considerations
 
The trade tensions do not appear to be going away anytime soon and so it is critical for businesses to adapt their supply chain to manage for the higher tariffs. The issues raised here are also part of broader considerations for modern supply chain planning. For example, cross-border suppliers might want to consider building in redundancy by having multiple manufacturers in different jurisdictions. That way, when it becomes too costly to purchase from one manufacturer, the supplier could increase the quantity of purchase from a manufacturer in a different country. To this end, suppliers should also ensure that they have the ability to ramp up supply with a manufacturer at short notice or they could consider potentially paying a fee to have a new manufacturer on standby.
 
Given the uncertainties around existing and potential future tariffs, businesses must have plans to identify solutions for managing supply chains in order to reduce the burdensome costs and associated with the increased tariffs and consider all the opportunities and risks associated with changes.
Supply chain contract considerations are just one of many tools to consider in responding to increases in tariffs. Businesses should also consider revisiting classification of its products and utilisation of existing and the expected new free trade agreements.
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(Source:
DBR on Data Blog, 29 Oct 2018.)
 
* Author: Nate Bolin, Esq., Drinker Biddle & Reath LLP, nate.bolin@dbr.com, +1 202-230-5888.
 
In recent months, a series of U.S. government reports have documented U.S. policymakers’ growing concerns over Chinese government policies and programs designed to advance China’s competitive edge in a range of technologies and industries. In turn, the findings of these reports are shaping U.S. economic and national security laws and policies, as illustrated by the recent Section 301 tariff actions, national security reviews of investment by Chinese firms under the Committee on Foreign Investment in the United States (CFIUS) process, and provisions of the recently-passed John McCain National Defense Authorization Act that restrict exports of “emerging and foundational technologies” and U.S. government use of certain Chinese-made telecommunications equipment. Against this background, a report released on October 26, 2018, is likely to further increase U.S. government scrutiny of China-manufactured devices with internet connectivity features – so-called “Internet of Things” or “IoT” devices.
 
The report, entitled China’s Internet of Things, was prepared at the direction of the U.S.-China Economic and Security Review Commission. The Commission was established by Congress to identify and analyze tensions and issues in the U.S.-China relationship, and its reports and studies are widely read by U.S. government officials and policymakers. For example, past findings of the Commission on China’s trade and industrial policies have formed part of the basis for U.S. trade actions against China, including the Section 301 tariffs that were recently imposed on nearly $267 billion in imports from China.
 
The latest report to the U.S.-China Economic and Security Review Commission emphasizes that while IoT devices and IoT technologies offer tremendous benefits to industries and consumers, they also pose significant security threats. According to the report, these threats are heightened by China’s growing dominance of the IoT industry. Specifically, through its promotion of IoT manufacturing and development under various government policies and industry programs, China is now on the cusp of being in a position to dictate the direction of the global IoT industry and IoT technical standards. As a result, China could “wield an outsize impact on the security of IoT devices against unauthorized access,” and gain largely unfettered access to U.S. consumer and industry data generated through the use of such devices.
 
To prevent such access and growing market dominance from posing a risk to U.S. industries, consumers, and national security, the report recommends that the U.S. government:
 
  – Enact a tiered disclosure regime for IoT products broad enough to cover multiple aspects of authorized IoT data collection;
  – Mandate data expiration and de-identification of data where appropriate according to existing principles of data minimization, especially for information resellers;
  – Codify existing U.S. data regulations and others in a single, comprehensive federal law governing data privacy;
  – Require foreign IoT products to disclose affiliation with foreign entities that may pose a significant risk of harmful but authorized access to U.S. data;
  – Refer corporate-level attempts to transfer U.S. data to foreign entities to CFIUS for approval; and
  – Expedite passage of a unified federal data privacy statute applicable to both foreign and domestic IoT companies.
 
It is likely that the report’s findings and recommendations will soon inform additional steps by the Trump Administration and Congress to address these concerns. Companies and industry groups with an interest in IoT technology and security should closely monitor these developments and be prepared to make their own voices heard as such legislative and policy initiatives move forward.
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(Source:
Arent Fox LLP, 30 Oct 2018.)
 
* Authors: Teresa M. Polino, Esq., Teresa.Polino@arentfox.com, +1 202-350-3745; Birgit Matthiesen, Director of Canada-U.S. Cross Border Business Affairs, birgit.matthiesen@arentfox.com, +1 202-350-3620; and David R. Hamill, Esq., david.hamill@arentfox.com, +1 202-857-8940. All of Arent Fox LLP.
 
If the turbulence of 2018 caused business executives grief, the year ahead is unlikely to provide much relief. Foremost is the United States-Mexico-Canada Agreement (USMCA). If most political pundits are correct, the three governments will likely be able to ratify the USMCA in time to be in full force by the beginning of 2020, if not earlier.
 
In 2018, the US imposition of “Section 232” tariffs on many steel and aluminum imports wreaked havoc around the globe. They are likely to continue throughout next year as will the “Section 301” tariffs on over $200 billion worth of imports from China. In addition, in late 2018, Commerce Secretary Ross announced a possible new “Section 232” investigation on automotive imports, a decision he must make by February 2019.
 
2018 was also the year that US Trade Representative Robert Lighthizer announced the Administration’s intent to start talks on new trade pacts with the EU, England, and Japan. Those negotiations, once Congress approves the plan, will inject their own uncertainty in the overall international trade environment throughout 2019.
 
Clearly 2019 will be a busy year. And, unfortunately, there is no crystal ball to help guide us through Trump’s 2019 Trade Agenda.
 
But we do know this. On September 30, 2018, negotiating teams finally reached agreement on the USMCA. Government leaders in all three countries will now act to debate and approve the negotiated provisions. And this will launch a critical period of rule implementation by all three countries.
 
This period should not be viewed as a “lull.” To the contrary, it represents an important time during which companies can develop their programs and compliance efforts for taking full advantage of the USMCA.
 
Equally important is the opportunity this period presents to develop a forward looking strategy of international trade competitiveness.
 
The USMCA will have real world financial consequences for many companies. And many company executives are already starting to plan for the changes ahead.
 
We can help. Our team comprises many former top professionals from the Administration who had hands-on experience drafting and implementing rules and regulations under the NAFTA. They know what to watch, how best to interpret the new rules and how the rules can make the difference for an industry’s immediate and longer term production goals.
 
In the weeks ahead and on these pages, the Arent Fox team will be offering their insights on those devils and those details.
 
Our goal is to help readers understand how sound legal advice now can best position a company to take fullest advantage of the USMCA well before January 2020.
 
For example one of the primary objectives for the three countries during this implementation period will be the completion of the Uniform Regulations. These regulations must be in place before the USMCA comes into force and so 2019 is the year of the Agreement’s rulemaking. The final set may come quickly. And that means that company executives must stay on top of developments – be informed, understand the risk calculation and prepare sound strategy based on sound understanding.
 
Like its NAFTA predecessor, the regulations must be implemented consistently by all three countries, hence the term “uniform” regulations. Why? Because these will dictate the how, when and what of the hundreds of new requirements under the USMCA. In other words, the Uniform Regulations will provide the guidelines for much of the critical fine print relating to qualifying for and claiming USMCA duty-free treatment.
 
Virtually every chapter and every aspect of the USMCA uniform regulations will present opportunities for companies to affect the manner in which the Agreement is implemented and the manner in which the company can best utilize the provisions of the Agreement.
 
Below are a few related to the energy industry:
 
  – Use of the “Average” Inventory Method was vital in the NAFTA, especially the manner in which the “average” inventory method was implemented. How will the USMCA rules treat this approach?
  – The manner in which fungible goods subject to the average inventory method would then be determined “originating” or “non-originating.” Terry reminds us that, in the NAFTA rules, US and Canada ended up with different allocation methods.
  – Possible “guidelines” for use in verifications. For example, in the petroleum industry, NAFTA rules provided that “diluent” used to dilute bitumen will be disregarded as long as it does not exceed 40% in volume of the product. How will this be treated and verified in the USMCA implementing rules?
  – Also in the energy field, a NAFTA rule involving natural gas changed the origin to allow the re-gasification of liquefied natural gas to meet the tariff shift rule. Terry is watching whether the new rules could establish a presumption that, absent information to the contrary, all natural gas imported from Canada should be considered originating.
 
These are but a few examples of why the USMCA uniform regulations in 2019 will be important to fully understand. They will be complex and potentially far reaching. …
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ENEDITOR’S NOTES

EN_a114
. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 
* Matthew Hale (Sir Matthew Hale; 1 Nov 1609 – 25 Dec 1676; was an influential English barrister, judge and lawyer most noted for his treatise Historia Placitorum Coronæ, or The History of the Pleas of the Crown.)
  – “The more business one has, the more you are able to accomplish, for you learn to economize your time.”

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EN_a215. 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: 1 Nov 2018: Harmonized System Update 1819
containing 1,200 ABI records and 245 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.

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

EN_a316
. 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, 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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