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18-1127 Tuesday “Daily Bugle”

18-1127 Tuesday “Daily Bugle”

Tuesday, 27 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. DoD/DSS VROC Updates DISS Provisioning Instructions and DISS Tips and Tricks
  4. State/DDTC Announces Transmittal Pages for Q2 and Q3 2018 DCS Congressional Notifications Are Taken Down
  5. UK/ECJU Updates Guidance on the Export of Medical Devices
  1. Expeditors News: “WCO Releases Annual Illicit Trade Report”
  2. Reuters: “European Politicians Call for New Sanctions on Russia over Ukraine”
  1. S. O’Shea: “Brexit – Potential Impact on Commercial Contracts”
  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 (2 Nov 2018), FACR/OFAC (15 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)

[No items of interest noted today.] 

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

(Source: 
Commerce/BIS)

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(Source:
DoD/DSS, 26 Nov 2018.)
 
To better assist Industry with the continued provisioning efforts the Vetting Risk Operations Center (VROC) is providing an update to the
DISS Provisioning Instructions and
Tips and Tricks.

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(Source:
State/DDTC, 27 Nov 2018.)
 
The transmittal pages for all DCS Congressional Notifications that were notified in Q2 and Q3 of 2018 have been taken down and will be reposted in the Federal Register section once published in the Federal Register.

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(Source:
UK ECJU, 27 Nov 2018.)
 
Check if you need a certificate of free sale to export medical devices outside the EU.  
You don’t need a certificate of free sale to move medical devices within the EU. 
Outside the
EU
, you may need a Certificate of Free Sale (CFS) to export medical devices.
 
Check with the destination country to find out if you need a certificate. You can also talk to your importer or get help researching your export market.
 
Before you apply
 
The manufacturer, legal manufacturer, or authorised representative must be based in the UK and the medical devices you’re exporting must be CE marked to show compliance with the Medical Device Regulations.
 
How to apply
 
Apply for an account. Once your account has been approved we will email you instructions on how to use the system to purchase certificates of free sale for the medical devices you intend to export.
 
Already have an account?
 
If your account was activated before 01 November 2018 please log in to apply for a CFS.
 
If your account was activated after 01 November 2018 please log in to apply for a CFS.
 
Fees
 
Certificates cost £75 per order for the first 10 certificates. Additional certificates on the same order cost £10 each.
 
How long will my order take?
 
We will try to post your order within 10 working days from date of receipt. During busy periods orders may take longer. Please order as far in advance as possible. All orders are posted by First Class Royal Mail.
 
Getting help
 
Contact the Medicines and Healthcare products Regulatory Agency (MHRA) if you need help.
 
MHRA CFS team

  – Email: device.cfs@mhra.gov.uk
  – Telephone: 020 3080 7171
  – Monday to Friday, 9am to 5pm

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NWSNEWS

NWS_a0
6. Expeditors News: “WCO Releases Annual Illicit Trade Report”
(Source: Expeditors News, 26 Nov 2018.)
 
On November 21, 2018, the World Customs Organization (WCO) released the 2017 Illicit Trade Report, which attempts to quantify and map the situation regarding illicit markets.
The report covers the following key areas:
 
  – Cultural Heritage;
  – Drugs;
  – Environment;
  – Intellectual Property Rights;
  – Health and Safety;
  – Revenue;
  – Security.
 
The information in the report comes from seizure data and case studies from WCO member customs administrations around the world.
 
The WCO press release may be found
here.
 
The WCO 2017 Illicit Trade Report may be found
here.

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(Source:
Reuters) [Excerpts.]
 
Several senior European politicians on Tuesday raised the possibility of new sanctions against Russia to punish it for capturing three Ukrainian vessels at sea, an incident the West fears could ignite a wider conflict.
 
A Russian minister said further sanctions would solve nothing and that the incident should not be used to derail the Minsk accord, which aims to end fighting in eastern Ukraine between Kiev’s forces and pro-Russian separatist rebels.
 
Russian assets have come under pressure on financial markets amid concerns that possible new sanctions could hurt the economy, though the rouble on Tuesday clawed back some earlier losses as investors bet any sanctions would not be swift. …

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COMMCOMMENTARY

(Source:
Beauchamps, 16 Nov 2018.)
 
* Author: Shaun O’Shea, Esq., Beauchamps,
s.oshea@beauchamps.ie, +353 (0) 1 418 0667.
 
Introduction
 
It is impossible to predict with any degree of certainty the impacts of Brexit. However, it is safe to say it has the potential to directly or indirectly affect most transactions between Irish and UK businesses or Irish businesses doing business in the UK (including Northern Ireland). Suppliers will need to consider not just events which may directly impact them but also anything which may affect their supply chain. Customers will need to consider not only possible impacts on their own ability to use goods or services purchased under an agreement (and whether the price they are paying will remain competitive) but also how the market for their own products may be affected. In this article we look at some of the potential effects of Brexit on commercial contracts.
 
Brexit as a cause for termination of contract
 
It is unlikely that Brexit will directly give rise to a lawful termination of a contract. Some have queried whether Brexit would constitute a
material adverse change (MAC) or could give rise to an
event of default. Depending on the circumstances of the transaction in question and the exact wording of the MAC, Brexit may not be sufficient to trigger a MAC clause, in particular because it is a foreseeable event. Neither should Brexit in itself lead directly to an event of default, however it could impact on ability to pay and thus give rise to an event of default.
Force majeure clauses are often found in commercial contracts, but whether a force majeure clause may be successfully triggered by Brexit will depend on the exact words that the parties have used – particularly the non-exhaustive list of events that the clause is stated to cover. Absent a suitable express reference to Brexit, force majeure clauses are unlikely to assist on Brexit.
 
Frustration arises where something occurs after the date of the contract, without the fault of either party that either transforms the obligations into something radically different or makes it physically or commercially impossible to fulfil the contract. Based on the principles of frustration enunciated by the courts, it is unlikely that contracts will be frustrated by Brexit save in very rare instances.
 
Express Brexit clauses
 
A ”
Brexit clause” is a contract clause that triggers some change in the parties’ rights and obligations as a result of a defined Brexit-related event occurring. Given that Brexit could affect almost every aspect of doing business, but its actual impact is still uncertain, the most a Brexit clause may offer is a binding requirement that the parties will attempt to renegotiate relevant aspects of the contract. It may be possible to specify consequences of certain events, but the risk here is that events occur for which the parties have not made provision.
 
The parties will need to consider:
 
  –
Definition of Brexit: Will the clause specifically refer to Brexit and, if so, how should Brexit be defined? Should there be reference to possible outcomes of the negotiations between the UK and the EU?
  –
Adverse consequences which trigger re-negotiation: These may be as broad as an increase in costs, or as narrow as a material change in the requirement for a specified licence. Should there be a specified time period after the triggering event in which the clause must be invoked?
  –
Specific events and specified consequences: Are there any specific events for which the parties feel confident about providing specified consequences, for example on an interest rates rise or certain currency fluctuation, the price of contracts goods will be adjusted by a specific amount or percentage.
  –
Renegotiation: Is it in a party’s interest to have a clause allowing for renegotiation and, if that fails, termination, on the occurrence of certain triggers? If so include specific provisions around the negotiations including negotiation in good faith, a specific procedure for conducting negotiations, information rights and a time frame.
  –
Termination rights: If a contract’s termination clause already gives a party a right to terminate on relatively short notice, then a Brexit clause may not be necessary; the prospect of termination can be raised as a means of encouraging negotiation.
 
Audit of existing contracts & negotiation of new contracts
 
Businesses should carry out an audit of contracts, in particular where there is a UK element to them (direct or through the supply chain) and assess the effect that Brexit may have on them. Similar points arise when negotiating new commercial contracts and the following should be considered:
 
  –
New tariffs, customs checks, non-tariff barriers or other increases in costs: A supplier should consider including clauses that seek to share the burden of increased costs in providing the goods or services. Agreements could include a number of Brexit-related assumptions on which the charges, or the price, are based eg the current tariffs that are in place, applicable corporation tax or VAT rates, the level of complexity of current customs checks, or paperwork. Where those assumptions change, a mechanism could be included for how the agreement will be impacted.
  –
Movement of persons: The freedom of UK nationals to work in the EU and for EU nationals to work in the UK seems likely to be curtailed. This should be of particular importance to businesses operating in the services industry.
  –
Freedom to provide services: New restrictions may apply to the provision of services from the UK or into the UK. Costs may be involved in complying with these restrictions, where compliance is possible.
  –
Monitoring currency fluctuations: Parties may wish to consider how to allocate the risk of future changes in the value of sterling/euro
. An agreement may not set out a fixed price but can include provisions to cater for where there has been an exchange rate shift between the order date and the payment date which exceeds an agreed “exchange rate tolerance”.
  –
Territorial scope of your agreements: does the agreement have the EU as its territorial scope? Depending on the nature of the UK’s new relationship with the EU, the question of whether the UK is carved in or out of such territory may now need to be carefully considered and then specifically catered for in the drafting.
  –
Parallel regulatory regimes: If existing or planned commercial agreements govern the introduction of new goods or services onto both the UK and EU markets, note that parallel regulatory regimes – under both UK and EU law – may emerge and contracting businesses will likely need to agree who should be responsible for achieving compliance.
  –
Change in law: Suppliers and customers who are contemplating entering into or are already subject to long-term commercial agreements (particularly service agreements) will need to be mindful of the contractual impact of changes in law arising out of Brexit. A agreements frequently expressly address what will happen if the law changes and who bears the resulting costs, for example by specifying that charges cannot be increased and requiring the supplier to consult with the customer before making any changes to the services.
  –
References to the EU: Some commercial contracts make reference to specific EU legislation, usually by way of an obligation on one party to comply with that legislation. Agreements may also contain references to EU regulatory bodies, or EU standards. Post-Brexit such references may no longer be relevant to the agreement or may impose an unnecessary level of regulation.
 
Measures to take
 
As a practical measure, organisations should:
 
  –
Conduct a business audit: Consider how Brexit could affect their business generally and their commercial arrangements with third parties.
  –
Contract assessment: Identify the key contracts governing those arrangements and assess if they provide sufficient protection against Brexit or are at least clear about the implications of Brexit.
  –
Contract renegotiation or termination: Consider whether to try to renegotiate or amend those contracts to deal more clearly with the implications of Brexit.

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ENEDITOR’S NOTES

* Bruce Lee (Lee Jun-fan; 27 Nov 1940 – 20 Jul 1973; was a Hong Kong and American actor, film director, martial artist, martial arts instructor, and philosopher. His films elevated the traditional martial arts film to a new level of popularity and acclaim, sparking a surge of interest in Chinese martial arts in the West in the 1970s. The direction and tone of his films dramatically changed and influenced martial arts and martial arts films.)
  – “A wise man can learn more from a foolish question than a fool can learn from a wise answer.”
  – “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”

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EN_a310
. 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: 15 Nov 2018: 83 FR 57308-57318: Democratic Republic of the Congo 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_a0311
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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