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18-1114 Wednesday “Daily Bugle”

18-1114 Wednesday “Daily Bugle”

Wednesday, 14 November 2018

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The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, DOE/NRC, Customs, NISPOM, EAR, FACR/OFAC, FAR/DFARS, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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[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 Announces ACE Certification Scheduled Maintenance for Tonight
  4. DHS/CBP Publishes Updated Notional ACE Development and Deployment Schedule
  5. Justice: “California Resident Sentenced to 9 Years in Prison and $1 Million Fine for His Scheme to Illegally Export Components for Production of Night Vision and Thermal Devices and Money Laundering”
  6. State/DDTC: (No new postings.)
  7. Treasury/OFAC Amends Democratic Republic of the Congo Sanctions Regulations
  8. Hong Kong TID Announces e-Services System Maintenance on 15 Nov
  1. The Epoch Times: “US Measure to Urge Possible China Sanctions Over Crackdown on Muslims in Xinjiang”
  2. Expeditors News: “India Delays Tariffs on Goods of US Origin”
  3. Reuters: “EU Arms Fueling Yemen Conflict, Tougher Checks Needed: Parliament”
  1. G.R. Tuttle III: “More CBP Guidance for Filing Absolute Quota Steel and Aluminum Product Relief”
  1. ECS Presents “Seminar Level III: Mastering ITAR/EAR Challenges” in Nashville, TN on 30 Apr – 1 May 2019
  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 (1 Nov 2018), FACR/OFAC (5 Nov 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

EXIM_a1

[No items of interest noted today.]
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OGSOTHER GOVERNMENT SOURCES

OGS_a11. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

 

* Office of the United States Trade Representative; NOTICES  [Publication Date: 15 November 2018.]:
  – Negotiating Objectives for a U.S.-European Union Trade Agreement
  – Results of the 2017/2018 Annual Generalized System of Preferences Review
 
* State; NOTICES; Updating the State Department’s List of Entities and Subentities Associated with Cuba  [Publication Date: 15 November 2018.]
 
* Treasury; Foreign Assets Control Office; RULES; Democratic Republic of the Congo Sanctions Regulations [Publication Date: 15 November 2018.]
 
* Treasury; Foreign Assets Control Office; NOTICES; Blocking or Unblocking of Persons and Properties [Publication Date: 15 November 2018.]

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OGS_a2
2. 
Commerce/BIS: (No new postings.)

(Source: 
Commerce/BIS)

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(Source:
CSMS #18-000675, 14 Nov 2018.)
 
There will be ACE CERTIFICATION Scheduled Maintenance this evening, Wednesday, November 14, 2018 from 1700 ET to 2000 ET for ACE Infrastructure maintenance.

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(Source:
CSMS# 18-000672, 13 Nov 2018.)
 
An updated Notional ACE Development and Deployment Schedule has been posted to CBP.gov/ACE. The new schedule includes a change log for tracking schedule updates and changes.
 
Direct Link: here.

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(Source:
Justice, 13 Nov 2018.) [Excerpts.]
 
Naum Morgovsky, 69, of Hillsborough, California, was sentenced to 108 months in prison and three years of supervised release for conspiring to illegally export components for the production of night-vision and thermal devices to Russia in violation of the Arms Export Control Act, and for laundering the proceeds of the scheme. …
 
According to their guilty pleas, which occurred during the second day of jury selection on June 12, Naum Morgovsky and Irina Morgovsky admitted that from at least April 2012 until Aug. 25, 2016, they conspired to export without the necessary license to a company called Infratech in Moscow, Russia, numerous night and thermal vision components, including image intensifier tubes and lenses. The couple used their U.S. business, Hitek International, to purchase these components and misrepresented to the sellers that the products would not be exported. The couple then shipped the products to Russia using a variety of front companies and shipment methods. Further, defendants knew the night and thermal vision components they exported were on the U.S. Munitions List and that they therefore were not permitted to export the items without a license from the Department of State, Directorate of Defense Trade Controls, which they never sought.
 
In addition to exporting the components, Judge Chhabria found that Naum Morgovsky, a naturalized U.S. citizen originally of Ukraine, had taken steps to conceal his crimes so that the couple could continue to operate the illegal export business undetected, and that Naum Morgovsky laundered the proceeds of the export crimes. As the government alleged, Naum Morgovksy used numerous front companies and the identity of at least one deceased person in furtherance of the scheme. In handing down the sentence, Judge Chhabria noted that this was a “very serious crime” and that “people who export night vision . . . need to know that there is a penalty.”
 
On April 27, 2017, a federal grand jury issued a superseding indictment charging the Morgovskys for their respective roles in the illegal export scheme. As to Naum Morgovsky, the grand jury charged him for the illegal export scheme with conspiracy to violate the Armed Export Control Act, and with two counts of money laundering. He pleaded guilty to all these export-related charges without a written plea agreement.
 
For her part in the scheme, the grand jury charged Irina Morgovsky with conspiracy to violate the Armed Export Control Act and with misuse of a passport. She pleaded guilty to the charges and on Oct. 31, Judge Chhabria sentenced her to 18 months in prison for her role in the scheme.
 
The Court has ordered Naum and Irina Morgovsky to self-surrender on Jan. 4, 2019, to begin serving their respective sentences. …

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(Source:
Treasury/OFAC, 14 Nov 2018.)  
 
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing an
amendment to the Democratic Republic of the Congo Sanctions Regulations, 31 C.F.R. part 547, to implement Executive Order 13671, as well to make other technical and conforming changes.  This regulatory amendment is currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on Thursday, November 15, 2018.

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(Source:
Hong Kong Trade and Industry Department, 14 Nov 2018.)
 
All e-services of our website will be suspended from 18:30 to 23:00 on 15 November 2018 (Friday) due to system maintenance.

We apologize for any inconvenience caused.

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NWSNEWS

NWS_a0
9. The Epoch Times: “US Measure to Urge Possible China Sanctions Over Crackdown on Muslims in Xinjiang”

(Source: The Epoch Times, 14 Nov 2018.)
 
U.S. lawmakers will introduce legislation on Nov. 14 urging a stronger response by the Trump administration to China’s crackdown on minority Muslims, including possible sanctions against a senior official.
 
The legislation will also ask President Donald Trump to condemn China’s actions in its western region of Xinjiang, call for a new “special coordinator” of U.S. policy on the issue and seek consideration of a ban on export of U.S. technology that Beijing could use in surveillance and mass detention of ethnic Uyghurs, according to a copy of the measure seen by Reuters.
 
Over the years, Xinjiang has been transformed into a vast security state, packed with police stations, street cameras, and security checkpoints at which electronic identity cards are scanned. …

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NWS_a1
10. Expeditors News: “India Delays Tariffs on Goods of US Origin”

(Source: Expeditors News, 13 November 2018.)
 
On November 1, 2018, the Government of India’s Ministry of Finance delayed the implementation of previously announced tariffs on goods of U.S. origin until December 17, 2018.
 
The list of tariffs that was originally sent to the World Trade Organization (WTO) in May contained additional rates of tariffs on a variety of agricultural, textile, steel and aluminum, and other goods. The list of tariffs are in response to U.S. tariffs on steel and aluminum products from India.
 
The notification published in the Gazette of India may be found
here.
 
The WTO notice from May may be found
here.

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NWS_a2
11. Reuters: “EU Arms Fueling Yemen Conflict, Tougher Checks Needed: Parliament”
(Source: Reuters, 14 Nov 2018.)
 
Tougher checks on European Union arms exports are needed and sanctions should be imposed on those countries that flout the bloc’s rules, the European Parliament said on Wednesday.
 
EU lawmakers said European arms were stoking the conflict in Yemen, where a Saudi Arabia-led coalition is battling Iran-backed Houthi rebels. Arms sales to Saudi Arabia by EU states undermined the European arms control effort, they said.
 
  “In Yemen, European weapons are fundamentally responsible for the war taking place,” said German EU lawmaker Sabine Losing, who is leading efforts to hold EU governments to account.
 
The European Parliament’s call to strengthen checks is non-binding but it the second time in less than a month that EU lawmakers have passed a resolution urging limits on arms sales following the killing of Saudi journalist Jamal Khashoggi.
 
The EU is the second largest arms supplier in the world – exporting more than a quarter of all global arms – after the United States, according to the EU’s annual report on weapons exports.
 
That has pitted its values of peace and support for human rights against business interests.
 
The European Union’s so-called Common Position on arms exports lists eight criteria governments must apply when taking a decision on an arms export license. Sales to Saudi Arabia violated six out of the eight, lawmakers said.
 
  “The Common Position on arms exports must be implemented effectively. That includes, among others, a sanctions mechanism,” Losing said.
 
French President Emmanuel Macron’s government has come under fire from rights groups and opposition lawmakers over sales of French arms to Saudi Arabia.
 
Paris has sought to increase its diplomatic weight in the Middle East through the sale of naval vessels, tanks, artillery and munitions to the United Arab Emirates, Saudi Arabia and Egypt.
 
French Foreign Minister Jean-Yves Le Drian said on Monday that the government adhered to strict rules that “stop us selling weapons that might impact civilians.”

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COMMCOMMENTARY

(Source: Tuttle Law Newsletter, 13 Nov 2018.)
 

 
In CSMS #18-000671, published 11/13/2018, CBP provides more guidance for the entry filing of imports of steel mill articles and aluminum products granted relief under Section 232 of the Trade Expansion Act of 1962 from the absolute quotas established by the Secretary of Commerce, and paragraphs (1) and (2) of Presidential Proclamation 9777.
 
According to Customs, before filing entries in ACE, importers or filers must submit a copy of the approved Department of Commerce (Commerce) quota product exclusion with the approved importer of record number to traderemedy@dhs.gov with a courtesy copy to the Quota and Agriculture Branch at HQQuota@cpb.dhs.gov.
 
CBP must receive and activate the product exclusion number before any quota exemption can be processed and goods subject to the quota exemption can be released.
 
Only products from the importer(s) designated in the product exclusion approved by Commerce are eligible for the exclusion from the Section 232 measures.
 
Entry Filing Instructions If Quota Amount Is Still Available
 
If quota amount is still available under the absolute quota category applicable under which the import is classified, use the filing procedures described below.
 
Classification
 
In addition to reporting the regular Chapters 72 and 73 HTS classifications for the imported merchandise, importers should report the following HTS classification for imported merchandise subject to the relief:
 
  – 9903.80.60 – Steel Mill or Aluminum Articles non-expedited quota approval, or
  – 9903.80.61 – Steel Mill Articles expedited quota approval.
 
Do NOT submit any other HTS, including any other Chapter 99 HTS.
 
Quota Entry Types should be used (i.e. entry types, 02, 06, 07, 23, 32 or 38).
 
Entered Value Information
 
The entered value of the imported merchandise should be reported on the appropriate Chapter 1-97 HTS classification. The exception to this is for Chapter 98 reporting provisions the may require the entered value to reported differently. Refer to the “HTS Sequence” instructions in CSMS # 18-000624. (See our previous newsletter on multiple HTS filing procedures.)
 
Product Exclusion Number Information
 
The filer must report the product exclusion number in the importer additional declaration field (54 record) of the entry summary data using the following format:
 
  – For excluded steel mill articles = STLXXXXXX
  – For excluded aluminum products = ALUXXXXXX
 
XXXXXX represents the last six digits of the Regulations.gov approval number. Do not include spaces or special characters such as hyphens.
 
Example: If a steel exclusion is granted under product exclusion docket number BIS-2018-009-9002, the importer/filer should submit the exclusion number STL099002 (i.e. STL plus the last six digits of the docket number).
 
Further guidance can be found under the Importer’s Additional Declaration Detail (Input 54-Record) of the CBP and Trade Automated Interfaces Requirements (CATAIR) Manual.
 
Entry Filing Instructions If the Quota Amount Has Filled
 
If the quota amount has filled under the absolute quota category under with the import is classified, the importer should use the procedures described below when filing.
 
In addition to reporting the regular Chapters 72 and 73 of the HTS classification for the imported merchandise, filers should report the following HTS classification for imported merchandise subject to the relief:
 
  – 9903.80.60 – Steel Mill or Aluminum Articles non-expedited quota approval, or
  – 9903.80.61 – Steel Mill Articles expedited quota approval.
 
Do NOT submit any other HTS, including any other Chapter 99 HTS.
 
Quota Entry Types should be used (i.e. entry types, 02, 06, 07, 23, 32 or 38).

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a113. ECS Presents “Seminar Level III: Mastering ITAR/EAR Challenges” in Nashville, TN on 30 Apr – 1 May 2019

(Source: Suzanne Palmer,
spalmer@exportcompliancesolutions.com)
 
* What: Seminar Level III:  Mastering ITAR/EAR Challenges; Nashville, TN
* When: April 30-May 1, 2019
* Sponsor: Export Compliance Solutions (ECS)
* ECS Speaker Panel:  Suzanne Palmer; Lisa Bencivenga; Mal Zerden; Commerce BIS TBD; Scott Jackson
* Register here or by calling  866-238-4018 or email spalmer@exportcompliancesolutions.com 

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ENEDITOR’S NOTES

* Charles Lyell (14 Nov 1797 – 22 Feb 1875; was a Scottish geologist best known as the author of Principles of Geology, which presented uniformitarianism – the idea that the Earth was shaped by the same scientific processes still in operation today – to the broad general public.) 
  – “Never call an accountant a credit to his profession; a good accountant is a debit to his profession.”
 
* Jawaharlal Nehru (14 Nov 1889 – 27 May 1964; was the first Prime Minister of India. He emerged as an eminent leader of the Indian independence movement under the tutelage of Mahatma Gandhi, and served India as Prime Minister from its establishment as an independent nation in 1947 until his death in 1964.)
  – “You don’t change the course of history by turning the faces of portraits to the wall.”

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EN_a315
. 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: 2 Nov 2018: 
83 FR 55099: Wassenaar Arrangement 2017 Plenary Agreements Implementation [Correction to 24 Oct EAR Amendment Concerning Supplement No. 1 to Part 774, Category 3.]

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

  – Last Amendment: 5 Nov 2018: 
83 FR 55269-55271: Iranian Transactions and 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: 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.

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EN_a0316
Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor) 

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

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EPEDITORIAL POLICY

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, 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 of this newsletter cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.


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