18-1207 Friday “Daily Bugle”

18-1207 Friday “Daily Bugle”

Friday, 7 December 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

  1. Commerce/Census Seeks Comments on AES Information Collections 
  2. DoD, GSA, NASA Request Comments Concerning Use of Products and Services of Kaspersky Lab 
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Releases List of Periodic Monthly Statement Dates for 2019
  4. Justice: “Lebanese Businessman Tied by Treasury Department to Hezbollah Pleads Guilty to Money Laundering Conspiracy in Furtherance of Violations of U.S. Sanctions”
  5. State/DDTC: (No new postings.)
  6. EU Commission Launches 2018 Export Control Forum Event Page
  7. Dutch Foreign Trade & Development Cooperation Minister Answers Questions Concerning Transits of Military Goods
  1. Deutsche Welle: “When it Comes to Saudi Arabia, Germany ‘Turns A Blind Eye'”
  2. Foreign Policy: “Trump’s Push to Boost Lethal Drone Exports Reaps Few Rewards”
  3. Reuters: “Philippines to Buy U.S. Helicopters, Not Russian, Due to U.S. Sanctions: Official”
  4. ST&R Trade Report: “Dates and Deadlines: Japan and EU FTAs, CBP Forms, Export Regulations, Classification”
  1. M.A. Srere, J.K. Mammen & T. Broas: “Recent Voluntary Disclosure May Trigger Larger Government FCPA Review of Agribusiness Practices”
  2. M. Volkov: “Smart Compliance: Embracing Proactive Solutions”
  1. ECS Presents “Seminar Level I – Boot Camp
  2. FCC Presents “Designing an Internal Compliance Program for Export Controls & Sanctions”, 5 Feb 2019 in Bruchem, the Netherlands
  3. List of Approaching Events: 63 Events Posted This Week, Including 7 New Events
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: ATF (15 Jan 2016), Customs (29 Nov 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 



Commerce/Census Seeks Comments on AES Information Collections

Commerce/Census, 7 Dec 2018.)
83 FR 63152-63154: Submission for OMB Review; Comment Request
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
  – Agency: U.S. Census Bureau.
  – Title: Automated Export System (AES).
  – OMB Control Number: 0607-0152.
  – Form Number(s): Automated Commercial Environment (ACE) AESDirect Record Formats and related documents, including the AES Letter of Intent, ACE Exporter Account Application and Quick Reference Guide, AES Certification Statements, and the ACE AESDirect User Guide.
  – Type of Request: Revision of a currently approved collection. … 
  – Needs and Uses: The Census Bureau requires mandatory filing of all export information via the AES. This requirement is mandated through Public Law 107-228 of the Foreign Trade Relations Act of 2003. This law authorizes the Secretary of Commerce with the concurrences of the Secretary of State and the Secretary of Homeland Security to require all persons who file export information according to Title 13, United States Code (U.S.C.), Chapter 9, to file such information through the AES.
  The AES is the primary instrument used for collecting export trade data, which are used by the Census Bureau for statistical purposes. The AES record provides the means for collecting data on U.S. exports. Title 13, U.S.C., Chapter 9, Sections 301-307, mandates the collection of these data. The regulatory provisions for the collection of these data are contained in the Foreign Trade Regulations (FTR), Title 15, Code of Federal Regulations (CFR), Part 30. The official export statistics collected from these tools provide the basic component for the compilation of the U.S. position on merchandise trade. These data are an essential component of the monthly totals provided in the U.S. International Trade in Goods and Services Press Release, a principal economic indicator and a primary component of the Gross Domestic Product. Traditionally, other federal agencies use the Electronic Export Information (EEI) for export control purposes to detect and prevent the export of certain items by unauthorized parties or to unauthorized destinations or end users. This information is noted in the ACE AESDirect User Guide. 
  Since 2016, the Census Bureau and the U.S. Customs and Border Protection (CBP) have implemented the following enhancements to the AES, in accordance with revisions to the FTR: (1) Added the Original Internal Transaction Number (ITN) to the AES. The Original ITN field is an optional data element and is utilized if the filer creates an additional AES record for a shipment that was previously filed; (2) added the Ultimate Consignee Type data field, which requires the filer to identify the ultimate consignee as a Direct Consumer, Government Entity, Reseller, or Other.
  In addition, the Census Bureau and CBP implemented the following changes to the AES: (1) Added Bureau of Industry and Security (BIS) Export Control Classification Numbers (ECCNs) and increased edits and validations between License Codes and ECCNs, including the addition of the 600 series ECCNs; (2) renamed the country Swaziland to Eswatini in the AES; and (3) removed the BIS license codes C32, C49, C55, and C56.
  The Census Bureau also revised the FTR to clarify the split shipment requirements (82 FR 18383) and the collection of the Kimberley Process Certificates (83 FR 17749). Additionally, the Census Bureau revised language in the FTR to reflect the implementation of the International Trade Data System, in accordance with the Executive Order 13659, Streamlining the Export/Import Process for America’s Businesses.
  These revisions made should not affect the average three-minute response time for the completion of the AES record: The Original ITN is an optional data element and filers will only report it when they choose to provide CBP with additional information about the export shipment; The Ultimate Consignee Type was added for the BIS for export enforcement purposes and is information that filers should know based on BIS’s “Know Your Customer” guidance; The revision to the ECCNs and License Codes modified selections for fields that already exist.
  Currently, the Census Bureau is drafting a Notice of Proposed Rulemaking (NPRM) to clarify the responsibilities of parties participating in routed and standard export transactions. The Census Bureau published an Advance Notice of Proposed Rulemaking (ANPRM) on October 6, 2017 (82 FR 46739) soliciting comments on the clarity, usability, and any other matters of interest to the trade community and the public related to the regulatory requirements for routed transactions. The Census Bureau considered all comments received in response to the ANPRM in drafting the NPRM. The NPRM potentially would propose revisions and add several key terms used in the regulatory provision of these transactions, including authorized agent, forwarding agent, standard export transaction and written release. While revisions to the FTR are necessary to improve clarity to the filing requirements for the routed export transaction, it is critical for the Census Bureau to ensure that any revisions made to the FTR will allow for the continued collection and compilation of accurate trade statistics. Additionally, it is important that the responsibilities of the U.S. Principal Party in Interest (USPPI) and the U.S. authorized agent are clearly defined to ensure that the Electronic Export Information is filed by the appropriate party to prevent receiving duplicate filings or in some cases, no filings. The changes proposed in the NPRM will not have an impact on the reporting burden of the export trade community.
  The information collected via the AES conveys what is being exported (description and commodity classification number), how much is exported (quantity, shipping weight, and value), how it is exported (mode of transport, exporting carrier, and whether containerized), from where (state of origin and port of export), to where (port of unloading and country of ultimate destination), and when a commodity is exported (date of exportation). The identification of the USPPI shows who is exporting goods. The USPPI and/or the forwarding or other agent information provides a contact for verification of the information.
  The U.S. Federal Government uses every data element on the AES record. The Census Bureau published the Final Rule “Foreign Trade Regulations (FTR): Clarification on Filing Requirements” on April 19, 2017 (82 FR 18383) to update the language in the Foreign Trade Regulations to reflect the implementation of the International Trade Data System (ITDS). The ITDS was established to eliminate the redundant information collection requirements, efficiently regulate the flow of commerce, and effectively enforce laws and regulations relating to international trade. ITDS establishes a single portal system for the collection and distribution of standard electronic import and export data required by all participating federal agencies. In addition, this Rule allows federal agencies with appropriate authority to access export data in the AES and ensure consistency with the Executive Order 13659, Streamlining the Export/Import Process for America’s Businesses, issued on February 19, 2014.
  The data collected from the AES serves as the official record of export transactions. The mandatory use of the AES enables the Federal Government to produce more accurate export statistics. The Census Bureau delegated the authority to enforce the FTR to the BIS’s Office of Export Enforcement and the Department of Homeland Security’s CBP and Immigrations and Customs Enforcement. The mandatory use of the AES also facilitates the enforcement of the Export Administration Regulations for the detection and prevention of exports of high technology commodities to unauthorized destinations by the BIS and the CBP; the International Traffic in Arms Regulations by the U.S. Department of State for the exports of munitions; and the validation of the Kimberly Process Certificate for the exports of rough diamonds.
  Other Federal agencies use these data to develop the components of the merchandise trade figures used to calculate the balance of payments and Gross Domestic Product accounts; to enforce U.S. export laws and regulations; to plan and examine export promotion programs and agricultural development and assistance programs; and to prepare for and assist in trade negotiations under the General Agreement on Tariffs and Trade. Collection of these data also eliminates the need for conducting additional surveys for the collection of information, as the AES shows the relationship of the parties to the export transaction (as required by the Bureau of Economic Analysis). These AES data are also used by the Bureau of Labor Statistics as a source for developing the export price index and by the U.S. Department of Transportation for administering the negotiation of reciprocal arrangements for transportation facilities between the United States and other countries.
  Export statistics collected from the AES aid state governments, 
private sector companies, financial institutions, and transportation entities in conducting market analysis and market penetration studies for the development of new markets and market-share strategies. A collaborative effort among the Census Bureau, the National Governors’ Association and other data users resulted in the development of export statistics using the state of origin reported on the AES. This information enables state governments to focus activities and resources on fostering the exports of goods that originate in their states. Port authorities, steamship lines, airlines, aircraft manufacturers, and air transport associations use these data for measuring the volume and effect of air or vessel shipments and the need for additional or new types of facilities. … 
 – This information collection request may be viewed at 
www.reginfo.gov. Follow the instructions to view Department of Commerce collections currently under review by OMB.
 – Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to 
OIRA_Submission@omb.eop.gov or fax to (202) 395-5806.
Sheleen Dumas, Departmental Lead PRA Officer, Office of the Chief Information Officer, Commerce Department.

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DoD, GSA, NASA Request Comments Concerning Use of Products and Services of Kaspersky Lab

Federal Register, 7 Dec 2018.) [Excerpts.] 
83 FR 63163-63164: Submission for OMB Review; Use of Products and Services of Kaspersky Lab
* AGENCY: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
* ACTION: Notice.
* SUMMARY: Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division will be submitting to the Office of Management and Budget (OMB) a request to review and approve an extension of an existing OMB emergency clearance notice regarding the use of products and services of Kaspersky Labs.
* DATES: Submit comments on or before January 7, 2019.
* ADDRESSES: Submit comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for GSA, Room 10236, NEOB, Washington, DC 20503. Additionally submit a copy to GSA by any of the following methods:
http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for the OMB Control number 9000-0197. Select the link “Comment Now” that corresponds with “Information Collection 9000-0197; Use of Products and Services of Kaspersky Lab”. Follow the instructions on the screen. Please include your name, company name (if any), and “Information Collection 9000-0197; Use of Products and Services of Kaspersky Lab.
  – Mail: General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405-0001. ATTN: Ms. Mandell/IC 9000-0197; Use of Products and Services of Kaspersky Lab.
  – Instructions: Please submit comments only and cite Information Collection 9000-0197; Use of Products and Services of Kaspersky Lab, in all correspondence related to this collection. Comments received generally will be posted without change to 
http://www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check 
www.regulations.gov, approximately two-to-three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).
* FOR FURTHER INFORMATION CONTACT: Ms. Camara Francis, Procurement Analyst, at telephone 202-550-0935, or email 
* SUPPLEMENTARY INFORMATION: … This information collection requirement supports implementation of Section 1634 of Division A of the National Defense Authorization Act 
(NDAA) for Fiscal Year 2018 (Pub. L. 115-91). This section of the NDAA prohibits Government use of any hardware, software, or services developed or provided, in whole or in part, by Kaspersky Lab or its related entities. This requirement is implemented in the Federal Acquisition Regulation (FAR) through the clause at FAR 52.204-23, Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab and Other Covered Entities.
  This clearance covers the information contractors must submit to comply with the requirements of FAR 52.204-23, which requires contractors to report covered products identified during performance of a contract.
  DoD, GSA, and NASA request approval of this information collection in order to implement the law. The information will be used by agency personnel to identify and remove prohibited hardware, software, or services from Government use. … 
  A 60-day notice was published in the Federal Register at 83 FR 29116 on June 22, 2018. No comments were received.
  Obtaining Copies of Proposals: Requesters may obtain a copy of the information collection documents from the General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405, telephone 202-501-4755. Please cite OMB Control No. 9000-0197, Use of Products and Services of Kaspersky Lab, in all correspondence.
  Dated: November 30, 2018.
Janet Fry, Director, Federal Acquisition Policy Division, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.

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. Items Scheduled for Publication in Future Federal Register Editions

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

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DHS/CBP Releases List of Periodic Monthly Statement Dates for 2019

CSMS# 18-000715, 6 Dec 2018.) 
Filers who are signed up for Periodic Monthly Statements (PMS) have the ability to pay for shipments entered or released during the previous calendar month by the fifteenth business day of the following month. For 2019, those dates are available for reference in 
this file

For more information on PMS, please download a copy of the Periodic Monthly Statement User Guide here.

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Justice: “Lebanese Businessman Tied by Treasury Department to Hezbollah Pleads Guilty to Money Laundering Conspiracy in Furtherance of Violations of U.S. Sanctions”

Justice, 6 Dec 2018.) [Excerpts.] 
Kassim Tajideen, the operator of a network of businesses in Lebanon and Africa whom the U.S. Department of the Treasury designated as an important financial supporter to the Hezbollah terror organization, pleaded guilty today to charges associated with evading U.S. sanctions imposed on him. …
Tajideen, 63, of Beirut, Lebanon, pleaded guilty before U.S. District Court Judge Reggie B. Walton in the U.S. District Court for the District of Columbia, to conspiracy to launder monetary instruments, in furtherance of violating the International Emergency Economic Powers Act (IEEPA).  Tajideen was designated by the U.S. Department of the Treasury as a Specially Designated Global Terrorist in May 2009 as a result of his provision of significant financial support to Hezbollah, which was named a Foreign Terrorist Organization by the U.S. Department of State.  This designation prohibited Tajideen from being involved in, or benefiting from transactions, involving U.S. persons or companies without a license from the Department of the Treasury. … 
According to the statement of facts signed by Tajideen in conjunction with his plea, after his designation, Tajideen conspired with at least five other persons to conduct over $50 million in transactions with U.S. businesses that violated these prohibitions. In addition, Tajideen and his co-conspirators knowingly engaged in transactions outside of the United States, which involved transmissions of as much as $1 billion through the United States financial system from places outside the United States.
The plea, which is contingent upon the Court’s approval, calls for an agreed-upon sentence of 60 months in prison. The plea agreement also calls for Tajideen to pay $50 million as a criminal forfeiture in advance of his sentencing.  Tajideen has been detained since extradition to the United States in March 2017 after his arrest overseas.  Sentencing is scheduled to occur on Jan. 18, 2019. … 

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State/DDTC: (No new postings.)


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EU Commission Launches 2018 Export Control Forum Event Page

European Commission, 7 Dec 2018.)
The European Commission and the Austrian Presidency of the Council are inviting representatives from EU Member States and the European Parliament, industry and civil society to participate in the 2018 Export Control Forum.
The 2018 Export Control Forum will provide an opportunity to make a review of the export control system in EU and to exchange information about its ongoing implementation.

We will also review the state of play of the legislative process regarding the proposal for a modernization of EU export controls.

The 2018 Export Control Forum will be opened by representatives of the Commission, the Presidency and the European Parliament, and will convene selected panels of experts, to be followed by open dialogue with the stakeholders.

Practical information

  • Date: 13 December 2018
  • Time: 10:00 – 17:30. Registration will be open at 9:30.
  • Venue: Albert Borschette Conference Centre (CCAB) Room 0A. Rue Froissart 36, Brussels
  • Language: The conference will be held in English.
  • Travel/accommodations/lunch: Participants are responsible for their own travel and accommodation arrangements. Refreshments during the conference and a sandwich lunch will be provided.
  • Registration: At present we have reached the maximum number of participants. If you register now, you will be on the waiting list. You will be notified by a confirmation mail if a seat becomes available. A participation confirmation will be sent to the email address provided.
  • Agendaread or download the agenda
  • Web streaming: The entire event will be web streamed.
  • Poster announcing the event

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Dutch Foreign Trade & Development Cooperation Minister Answers Questions Concerning Transits of Military Goods

Rijksoverheid, 7 Dec 2018.) 
Dutch Minister for Foreign Trade & Development Cooperation Minister Kaag has answered questions from 
Groenlinks Member of Parliament Van Ojik concerning the transit of military goods via Amsterdam Schiphol Airport and other Dutch transit points. 

The answers (in Dutch) are available here.

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Deutsche Welle: “When it Comes to Saudi Arabia, Germany ‘Turns A Blind Eye'”

Deutsche Welle, 12 Dec 2018.) [Excerpts.]
Saudi Arabia is one of the world’s top customers for international arms companies, even though some of the weapons end up with terrorist groups. DW’s Matthias von Hein asked Andrew Feinstein [founding director of Corruption Watch] why that is. … 
Andrew Feinstein: 
Germany has restrictive arms exports only when it suits Germany. When it suits it politically, it turns a blind eye to arms exports that it shouldn’t be allowing through its own laws and international obligations – including sales to Saudi Arabia. So to take one example: Rheinmetall exports certain ordinance to Saudi Arabia and probably the United Arab Emirates as well. In order to do so, they set up a factory in Sardinia in Italy. The ordinance is exported to Saudi Arabia and is used in the air war in Yemen, which clearly violates all of Germany’s exports regulations. So, when German authorities are confronted with this, they say they don’t control those exports, but that they are rather controlled by the Italian authorities, who, in turn, say they have nothing to do with the exports, because it’s a German company. This, in essence, is a way for the governments of Germany and Italy to ensure that their companies can export pretty much what they want to whomever they want. … 
[Editor’s Note: To read the entire interview, click on the source link below the item title.]

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Foreign Policy: “Trump’s Push to Boost Lethal Drone Exports Reaps Few Rewards”

Foreign Policy, 6 Dec 2018.) [Excerpts.] 
Sources say the U.S. Defense Department is stubbornly resisting the new rules.
More than six months after the Trump administration rolled out a new set of regulations promising to make it easier to sell American-made military drones abroad, no new sales have been made, and drone-makers are frustrated by the lack of concrete results.

Experts agree the administration has a genuine desire to ease the restrictions as part of a broader initiative to boost the competitiveness of U.S. products in a booming international market increasingly dominated by the Chinese. The challenge, according to observers and industry sources, is enforcing the new policy across a government bureaucracy that is both spread thin and stubbornly averse to change. … 

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Reuters: “Philippines to Buy U.S. Helicopters, Not Russian, Due to U.S. Sanctions: Official”

Reuters, 7 Dec 2018.) [Excerpts.] 
The Philippines will buy 16 Black Hawk helicopters from the Sikorsky Aircraft Corp for $240 million, shunning cheaper Russian equipment due to U.S. sanctions on Russian military exports, the Philippine defense chief said on Friday.
The Philippines had initially agreed to buy 16 Bell 412 helicopters from Canada but the deal was scrapped in February after Canada expressed concern they could be used to fight rebels.
The Philippines then considered several other helicopters including Sikorsky Aircraft’s S-70 Black Hawk, Russia’s Mi-171, South Korea’s Surion and Agusta Westland’s AW139.
Defense Secretary Delfin Lorenzana said the air force would sign a contract early next year for the 16 Black Hawks, even though the Russians offered the second lowest price.
  “But it is very difficult to pay them because of the U.S. sanctions,” Lorenzana told reporters at a security forum.
U.S. President Donald Trump signed a law last year punishing Russia for its 2014 annexation of Crimea from Ukraine, its support for Syria’s government and its suspected meddling in the 2016 U.S. presidential election, an accusation the Kremlin has denied.
U.S. allies, like the Philippines, buying weapons and equipment from Russia, the world’s second largest arms exporter, would also be penalized and could see the transfer of those arms disrupted.… 

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ST&R Trade Report: “Dates and Deadlines: Japan and EU FTAs, CBP Forms, Export Regulations, Classification” 

Sandler, Travis & Rosenberg Trade Report, 7 Dec 2018.)
Following are highlights of regulatory effective dates and deadlines, federal agency meetings, and other trade-related events coming up in the next week.
  – Dec. 10 – USTR hearing on 
Japan FTA negotiating objectives
  – Dec. 10 – deadline for comments to FTZ Board on request for 
production authority at Minnesota facility
  – Dec. 10 – deadline for comments to CBP on 
cargo transfer form
  – Dec. 10 – deadline for comments to USTR on 
U.S.-EU trade agreement objectives
  – Dec. 11 – meeting of BIS 
Regulations and Procedures Technical Advisory Committee
  – Dec. 12 – deadline for comments to FTZ Board on requests from 
auto parts, solar panel facilities
  – Dec. 13 – deadline for comments to ITC on 
U.S.-Japan Trade Agreement
  – Dec. 14 – USTR hearing on 
U.S.-EU trade agreement objectives
  – Dec. 14 – deadline for comments to CBP on proposed 
revocation or modification of classification rulings

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M.A. Srere, J.K. Mammen & T. Broas: “Recent Voluntary Disclosure May Trigger Larger Government FCPA Review of Agribusiness Practices”
Bryan Cave, 6 Dec 2018.) 
* Authors: Mark Srere, Esq., 
mark.srere@bclplaw.com; Jennifer Kies Mammen, Esq., 
jennifer.mammen@bclplaw.com; and Timothy Broas, 
timothy.broas@bclplaw.com.  All of Bryan Cave. 

In its most recent 10-K, CHS, Inc., a global agribusiness dealing in energy, grains and food, revealed that it had self-disclosed to the Department of Justice and the SEC: 

potential violations of the FCPA in connection with a small number of reimbursements the Company made to Mexican customs agents in the 2014-2015 time period for payments the customs agents made to Mexican customs officials in connection with inspections of grain crossing the U.S.-Mexican border by railcar.
Although seemingly insignificant when compared to the three quarters of a billion dollars of net income for the company last year, these potential violations could trigger something much more costly to the agribusiness sector in general.  When it comes to enforcing the FCPA, both the DOJ and the SEC are known to conduct industry “sweeps” after finding that one or more industry players have paid bribes to accomplish certain things. These sweeps can put other companies in the affected industry behind the eight ball and facing potential government investigations.
This announcement gives other agribusiness companies a head-start in reviewing their own anti-corruption compliance programs.  Any effective compliance program should be reviewed and audited in the normal course, taking into account the latest industry standards as well as recent enforcement activity.  CHS Inc.’s disclosure is a reminder for companies to ensure that their compliance programs address this kind of specific risk that occurs when transporting grains and goods across borders.  As part of such a review, companies should consider asking:
  • Do we have in place procedures to ensure that we conduct appropriate due diligence on any customs broker or agent that helps us clear customs?
  • Have we sufficiently documented the due diligence that we have conducted on our brokers and agents?
  • Has our accounting and/or auditing departments looked for any unusual payments or activities associated with transportation across borders?
  • Have we reviewed our petty cash and expense reimbursements for our offices that are assigned to handle customs issues?
  • Depending on your answers, you may wish to conduct a more thorough review of the potential issues.

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M. Volkov: “Smart Compliance: Embracing Proactive Solutions”

Volkov Law Group Blog, 6 Dec 2018. Reprinted by permission.) 

* Author: Michael Volkov, Esq., Volkov Law Group, 
mvolkov@volkovlaw.com, 240-505-1992. 
Over the last twenty years, we have seen a fundamental re-orientation in compliance.  I would argue that as the compliance profession has expanded and taken on greater space and responsibility in the corporate governance world, a fresh perspective has developed.
In my view, compliance is devoting more attention, and properly so, to the idea of “proactive” compliance.  This is in contrast to “reactive” compliance.  What do I mean?
A proactive compliance perspective is dedicated to “preventing” misconduct and problems rather than “detecting” misconduct and then remediating the problem.
Let’s make this more practical.
Assume that a CCO learns (or happens to learn) that a specific business office or function is suffering from a rash of HR complaints, most of which may be focused on one or more supervisors.  This phenomenon has also resulted in an increase in complaints of employee misconduct. Such a picture presents some important issues – even just the HR aspect of the issue.
The organization’s office or function has a culture that is deteriorating.  In the proactive mode, I would challenge the CCO to define the problem, identify potential remediation and then intervene to address the problem before it manifests itself into more serious misconduct.  This is the perspective of “proactive” compliance.
The reactive model is much different.  A CCO is committed to enterprise-wide ethics and compliance and implementing such a program across the organization.  In doing so, by definition, the compliance team will not react unless and until it learns of a “problem,” meaning a hotline report resulting in a “substantiated” allegation.  Only then will the CCO begin to remediate the problem – usually by understanding the nature and extent of the misconduct and then imposing discipline against the bad actor.
The problem with this perspective is that it forecloses a broader consideration of the culture in that part of the company’s operations – i.e. the office or the function – and what other troubles may lay ahead.  A CCO often will then respond to the situation by developing a remediation plan.
From my perspective, the CCO may have ignored or downplayed earlier warning signs.  I am not arguing that the process is full-proof but a proactive perspective may have caught the potential misconduct at an earlier point, and avoided the impact of the misconduct and reduced the cost of remediation. I would bet that the overall cost of a proactive intervention is probably much lower than the cost of specific misconduct and post-misconduct remediation.
CCOs have to broaden their perspective to help identify proactive opportunities to address specific issues.  I am not naïve to think that CCOs have resources and time to broaden their perspective but it is an approach, especially in high-risk areas, that can be successful and prevent serious misconduct that can result in costly scandals and reputational damage to companies.
A proactive approach is what I would call smart compliance by using your resources to prevent more than remediate problems.  A proactive approach is usually more consistent with a company’s risk appetite and commitment.

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ECS Presents “Web Meeting Series – Managing Foreign Nationals in the Workplace: Be Confident, Competent, and Compliant” on 11 Dec
(Source: S. Palmer, spalmer@exportcompliancesolutions.com.)
* What: Web Meeting Series – Managing Foreign Nationals in the Workplace: Be Confident, Competent, and Compliant
* When: December 11, 2018; 1:00-2:30 p.m. EST
* Where: Online
* Sponsor:  Export Compliance Solutions & Consulting (ECS)
* ECS Instructors: Suzanne Palmer, Melva Exner
* Register here or by calling 866-238-4018 or by emailing 

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FCC Presents “Designing an Internal Compliance Program for Export Controls & Sanctions”, 5 Feb 2019 in Bruchem, the Netherlands
(Source: Full Circle Compliance, events@fullcirclecompliance.eu.)
The next Full Circle Compliance (FCC) academy course is specifically designed for beginning compliance professionals who aim to enhance their organization’s compliance efforts.  The course will cover multiple topics and tackle various questions, including but not limited to:
  – Setting the Scene: ensuring compliance in the export control and sanctions arena
  – What is expected from your organization? A closer look at the frameworks and guidelines from U.S. and European government agencies (incl. State/DDTC, Commerce/BIS, Treasury/OFAC, European Union, The Netherlands, and Germany) 
  – Key elements of an Internal Compliance Program
  – Strategic benefits of an Internal Compliance Program
  – Best practice tips for enhancing your 
compliance activities
  – Compliance Toolkit: internal controls samples (policies, procedures, instructions, checklists)
* What: Designing an Internal Compliance Program for Export Controls & Sanctions 
* When: Tuesday, 5 Feb 2019, 9.30 am – 4.30 pm 
* Where: Landgoed Groenhoven, Bruchem, the Netherlands
* Sponsor: Full Circle Compliance (FCC)

* Instructors: Drs. Ghislaine C.Y. Gillessen RA, Marco F.N. Crombach MSc

* Information & Registration: via the event page, via
events@fullcirclecompliance.eu or call +31 (0)23 – 844 – 9046.

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

List of Approaching Events: 63 Events Posted This Week, Including 7 New Events
(Sources: Editor and Event Sponsors)

Published every Friday or last publication day of the week, o
ur overview of Approaching Events is organized to list c
ontinuously available training, training events, s
eminars & conferences, and 
Please, submit your event announcement to Alexander Witt, Events & Jobs Editor (email: 
), composed in the below format:

#” = New or updated listing  

Continuously Available Training
* E-Seminars: “US Export Controls” / “Defense Trade Controls“; Export Compliance Training Institute; danielle@learnexportcompliance.com 

* Webinar: ”
Company-Wide US Export Controls Awareness Program“; Export Compliance Training Institute;

* E-Seminars: “ITAR/EAR Awareness“; Export Compliance Solutions;
* Online: “Simplified Network Application Process Redesign (SNAP-R)“; Commerce/BIS; 202-482-2227
* E-Seminars: “Webinars On-Demand Library“; Sandler, Travis & Rosenberg, P.A.
* Online: “International Trade Webinars“; Global Training Center
Online: “On-Demand Webinars“; “General Training“; Center for Development of Security Excellence; Defense Security Service (DSS)
* Online: “ACE Reports Training and User Guide“; DHS/CBP

* Online: ”
Increase Your International Sales – Webinar Archive“; U.S. Commercial Service

* Web Form: “Compliance Snapshot Assessment“; Commonwealth Trading Partners (CTP)
* Online: “
Customs Broker Exam Prep Course
“; The Exam Center
Seminars and Conferences


Dec 10-12: Salt Lake City; “
Discover Global Markets: Indo-Pacific
“; U.S. Department of Commerce

Dec 11: York, PA; 
International Traffic in Arms Regulations Seminar
; World Trade Center Harrisburg

* Dec 13: Brussels, Belgium; “
2018 Export Control Forum
“; European Commission

Dec 13: Washington, D.C.; “
Other Transaction Authority Agreements: Accelerators, Consortia, and Recent Developments
“; Public Contracting Institute

* Dec 14: Philadelphia, PA; “Incoterms 2010: Terms of Sale Seminar“; International Business Training

* Jan 6-7: Long Beach, CA; ”
Fundamentals of FTZ Seminar“; NAFTZ 

Jan 15: Arlington, VA; “
Voluntary Disclosure/Voluntary Self-Disclosure Seminar
“; SIA

Jan 21-24: San Diego, CA; “ITAR Defense Trade Controls / EAR Export Controls Seminar”; ECTI; 540-433-3977

Jan 29: Rotterdam, The Netherlands; “
Awareness training Export Control, Dual-use en Sancties

* Jan 30-31: Washington, DC; “
5th National Forum on CFIUS
;” American Conference Institute (ACI)

Feb 5; Bruchem, the Netherlands; “Designing an Internal Compliance Program for Export Controls & Sanctions“; Full Circle Compliance 

* Feb 6-7: Scottsdale, AZ;

Complying with U.S. Export Controls
“; Commerce/BIS

Feb 6-7: Washington , D.C.; “International Technology Transfers, Cloud Computing & Deemed Export Compliance“; American Conference Institute

 Feb 7-8: Orlando, FL; “
Boot Camp: Achieving ITAR/EAR Compliance
“; Export Compliance Solutions (ECS)

* Feb 12-13: Washington, D.C.; “
2019 Legislative Summit
“; National Association of Foreign Trade Zones (NAFTZ)

* Feb 18-21: Orlando, FL; “
ITAR Defense Trade Controls / EAR Export Controls Seminar

Mar 4-6: Savannah, GA; “
2019 Winter Back to Basics Conference
“; SIA

Mar 5-7:  Orlando, FL; “
‘Partnering for Compliance’ Export/Import Control Training and Education Program
“; Partnering for Compliance

* Mar 6-7: San Diego, CA;

Complying with U.S. Export Controls
“; Commerce/BIS

 Mar 9: Orlando, FL; “
Customs/Import Boot Camp
;” Partnering for Compliance

* Mar 12-14: Dallas, TX;

Complying with U.S. Export Controls
“; Commerce/BIS
* Mar 12-14: Dallas, TX;

How to Build an Export Compliance Program
“; Commerce/BIS

* Mar 18-21: Las Vegas, NV; “
ITAR Defense Trade Controls / EAR Export Controls Seminar

* Mar 26-27: Scottsdale, AZ; “
Seminar Level II: Managing ITAR/EAR Complexities
“; Export Compliance Solutions

* Apr 1-4: Washington, DC;ITAR Defense Trade Controls / EAR Export Controls Seminar“; ECTI

* Apr 3-4: Denver, CO;

Complying with U.S. Export Controls
“; Commerce/BIS

Apr 9; Bruchem, The Netherlands; “Awareness Course U.S. Export Controls: ITAR & EAR from a Non-U.S. Perspective“; Full Circle Compliance

* Apr 23-24: Portsmouth, NH;

Complying with U.S. Export Controls
“; Commerce/BIS
Apr 25: Portsmouth, NH;

Technology Controls
“; Commerce/BIS

 Apr 30-May 1: Nashville, TN: “Seminar Level III-Mastering ITAR/EAR Challenges“; Export Compliance Solutions (ECS);

* May 5-7: Savannah, GA; “2019 Spring Seminar“; National Association of Foreign Trade Zones (NAFTZ)

May 6-7: Atlanta, GA; “
2019 Spring Conference
“; SIA

May 7; Bruchem, The Netherlands; “An Introduction to EU / Dutch Dual-Use and Military Export Controls“; Full Circle Compliance

Jul 10-11: Seattle, WA: “Seminar Level I-Boot Camp: Achieving ITAR/EAR Compliance“; Export Compliance Solutions (ECS);

* Aug 20-21: Cincinnati, OH;

Complying with U.S. Export Controls
“; Commerce/BIS

* Sep 8-11: Chicago, IL; “2019 Annual Conference and Exposition“; National Association of Foreign Trade Zones (NAFTZ)

Sep 17-19: Annapolis, MD; “
The ECS 2nd Annual ITAR/EAR Symposium
“; ECS

Oct 1; Bruchem, The Netherlands; “The Export Administration Regulations (EAR) from a non-U.S. Perspective“; Full Circle Compliance

Oct 28 – 29: Washington D.C.; “
2019 Fall Advanced Conference
“; SIA

Nov 26; Bruchem, The Netherlands; “The International Traffic in Arms Regulations (EAR) from a non-U.S. Perspective“; Full Circle Compliance



* Dec 11: Webinar; “
Incoterms 2010: Terms of Sale
“; International Business Training 

Dec 13: Webinar; “
Other Transaction Authority Agreements: Accelerators, Consortia, and Recent Developments
“; Public Contracting Institute

Dec 13-14: Webinar; “
Coping with U.S. Export Controls and Sanctions 2019
“; Practicing Law Insititute

Dec 19: Webinar; “
2018: The Export Control Year in Review
“; ECTI;

* Dec 20: Webinar; “International Logistics
“; International Business Training

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


. Bartlett’s Unfamiliar Quotations

(Source: Editor)

Joyce Cary (Arthur Joyce Lunel Cary; 7 Dec 1888 – 29 Mar 1957; was an Anglo-Irish novelist.)
– “The will is never free – it is always attached to an object, a purpose. It is simply the engine in the car – it can’t steer.”

James Thurber (James Grover Thurber; 8 Dec 1894 – 2 Nov 1961; was an American cartoonist, author, humorist, journalist, playwright, and celebrated wit. He was best known for his cartoons and short stories published mainly in The New Yorker magazine. His short story 
“The Secret Life of Walter Mitty” has been adapted for film twice, once in 1947 and again in 2013.)
  – “Nowadays men lead lives of noisy desperation.”

Friday funnies: 
* A guy in a t-shirt goes to a fancy club, but is stopped by the bouncer who says, “Sorry, sir, you have to have a tie on to get in here.” The guy walks back to his car, gets a set of jumper cables, and puts them around his neck like a tie. He goes back and says “How’s this?” The bouncer says, “Okay, I’ll let you in, but don’t try to start anything.”

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

EN_a220. 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: 29 Nov 2018: 83 FR 61318-61320: Technical Corrections to the Vessel Repair Unit Regulations

  – 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 


  – 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



  – 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 
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 
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 1809
containing 1,200 ABI records and 245 harmonized tariff records.

  – HTS codes for AES are available 
  – HTS codes that are not valid for AES are available here.


  – 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 
. BAFTR subscribers receive a $25 discount on subscriptions to the BITAR, please
contact us
to receive your discount code.

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

. 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.

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

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

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