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18-1221 Friday “Daily Bugle”

18-1221 Friday “Daily Bugle”

Friday, 21 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
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  1. DoD Amends DFARS to Implement Sections of NDAA, Seeks Comments on Satellite Restrictions
  2. DHS/CBP Announces Meeting Concerning 21st Century Customs Framework, 1 Mar in Washington DC
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP: “Change in Effective Date of Duty Increase of Goods Subject to Section 301 Duties”
  4. DoD/DSS Presents Updated Website
  5. Justice: “California Man Sentenced to Nearly 4 Years in Federal Prison for Scheme to Smuggle Rifle Scopes and Tactical Equipment to Syria”
  6. State/DDTC: (No new postings.)
  7. EU Council Prolongs Economic Sanctions Against Russia by Six Months
  8. EU Publishes Recommendations Concerning EU General Licenses for Defense-Related Products
  1. European Sanctions: “EU Court Rejects Iran Sanctions Damages Claims”
  2. Expeditors News: “U.S. Government Closure for 24 December Holiday”
  3. Reuters: “Germany to Bar Iran’s U.S.-Sanctioned Mahan Air: Bild”
  4. Reuters: “U.S. Extends Sanctions Waiver for Iraq to Import Iranian Gas, Power”
  5. The Verge: “Slack is Banning Some Users with Links to Iran Even If They’ve Left the Country”
  6. VNO NCW: “Dutch Government Tightens Arms Export Policy Due to Yemen Conflict”
  1. A. Mielken: “2018 EU Export Control Forum: What You Need to Know!” (Part II of II)
  2. D. Salvey: “BIS/CBP Message to Santa Claus”
  3. WorldECR Publishes “A World of Change: Special Report”
  1. ECS Presents “Seminar Level I – Boot Camp: Achieving ITAR/EAR Compliance” in Orlando, FL on 11-12 Feb 2019
  2. FCC Presents Renewed U.S. Export Controls Awareness Course: “ITAR & EAR from a non-U.S. Perspective”, 9 April in Bruchem, the Netherlands
  3. List of Approaching Events: 62 Events Posted This Week, Including 4 New Events
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: ATF (15 Jan 2016), Customs (18 Dec 2018), DOD/NISPOM (18 May 2016), EAR (20 Dec 2018), FACR/OFAC (15 Nov 2018), FTR (24 Apr 2018), HTSUS (19 Dec 2018), ITAR (4 Oct 2018) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. 
DoD Amends DFARS to Implement Sections of NDAA, Seeks Comments on Satellite Restrictions

(Source: 
Federal Register, 21 Dec 2018.) [Excerpts.] 
 
83 FR 66066-66075: Defense Federal Acquisition Regulation Supplement: Foreign Commercial Satellite Services and Certain Items on the Commerce Control List (DFARS Case 2018-D020)
 
* AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).
* ACTION: Interim rule.
* SUMMARY: DoD is amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections of the National Defense Authorization Act for Fiscal Years 2017 and 2018. One section imposes additional prohibitions with regard to acquisition of certain foreign commercial satellite services, such as cybersecurity risk and source of satellites and launch vehicles used to provide the foreign commercial satellite services, and expands the definition of “covered foreign country” to include Russia. Another section prohibits purchase of items from a Communist Chinese military company that meet the definition of goods and services controlled as munitions items when moved to the Commerce Control List of the Export Administration Regulations of the Department of Commerce.
* DATES: 
  – Effective Date: December 21, 2018.
  – Comment Date: Comments on the interim rule should be submitted in writing to the address shown below on or before February 19, 2019, to be considered in the formation of a final rule. … 
* ADDRESSES: … 
* FOR FURTHER INFORMATION: … 
* SUPPLEMENTARY INFORMATION: 
 
I. Background
  DoD is amending the DFARS to implement sections of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-91) and the NDAA for FY 2017 (Pub. L. 114-328) as follows:
 
A. Section 1603 of the NDAA for FY 2018
  Section 1603 amends 10 U.S.C. 2279 to impose additional prohibitions with regard to acquisition of certain foreign commercial satellite services. It addresses cybersecurity risks and the source of satellites and launch vehicles used to provide the foreign satellite services. The definition of “covered foreign country” is expanded to include Russia, in addition to any country described in section 1261(c)(2) of the NDAA for FY 2013 (Pub. L. 112-239), which specifies the People’s Republic of China, North Korea, and any country that is a state sponsor of terrorism (currently Iran, North Korea, Sudan, and Syria). 10 U.S.C. 2327, entitled “Contracts: consideration of national security objectives,” is the underlying statute that prohibits DoD from entering into contracts with a firm or subsidiary of a firm, that is owned or controlled by the government of a foreign country that has been identified by the Secretary of State as a state sponsor of terrorism under section 6(j)(1)(A) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)(A)). 50 U.S.C. App. 2405 was subsequently reclassified and renumbered as 50 U.S.C. 4605, which has now been repealed by section 1766(a) of the Export Control Reform Act of 2018 (Title XVII, Subtitle B, of the NDAA for FY 2019, Pub. L. 115-232). 50 U.S.C. 4605(j) has been replaced by section 1754(c) of the Export Control Reform Act of 2018 (to be eventually codified at 50 U.S.C. 4813(c)).
 
B. Section 1296 of the NDAA for FY 2017
  Section 1211 of the NDAA for FY 2006 (Pub. L. 109-163) established the prohibition against purchase of items on the United States Munitions List (USML) from a Communist Chinese military company. Section 1296 of the NDAA for FY 2017 amends section 1211 to prohibit purchase from any Communist Chinese military company, through a contract or subcontract (at any tier), of goods and services controlled as munitions items on the 600 series of the Commerce Control List (CCL) of the Export Administration Regulations of the Department of Commerce. Under the Export Control Reform Initiative, the International Traffic in Arms Regulations (ITAR) and the USML have been amended so that they control only those items that provide the United States with a critical military or intelligence advantage or otherwise warrant such controls. In parallel, the Export Administration Regulations (EAR) were amended to transition some items from the USML to a series of new export control classification numbers (the 600 series) on the CCL, providing control for military items that do not warrant USML controls, because they provide less than a critical military or intelligence capability, but are not in normal commercial use. The 600 series is so identified when the third character in the 5-character export control classification number is the number “6”.
   
However, an unintended consequence of this transition of some munitions from the USML to the 600 series of the CCL was that the items were no longer covered by the prohibition of section 1211 of the NDAA for FY 2006, prohibiting purchase from Communist Chinese military companies. Therefore, section 1296 of the NDAA for FY 2017 has extended the prohibition to cover items listed in the 600 series of the CCL.
 
II. Discussion and Analysis
  This rule amends the DFARS as follows:
 
A. Section 1603 of the NDAA for FY 2018
  1. Definitions.This rule expands the definition of “covered foreign country” to include Russia, as specified in the statute, and adds the statutory definitions of “cybersecurity risk” and “launch vehicle” at DFARS 225.772-1 and in the associated provision at DFARS 252.224-7049, Prohibition on Acquisition of Certain Foreign Commercial Satellite Services-Representations, and the clause at DFARS 252.225-7051, Prohibition on Acquisition of Certain Foreign Commercial Satellite Services, as appropriate.
  In addition, the statutory references to the Export Administration Act of 1979 in the definitions of “state sponsor of terrorism” at DFARS 225.772-1 and in the clauses at 252.225-7051 and 252.225-7050, Disclosure of Ownership or Control by the Government of a Country that is a State Sponsor of Terrorism, have been revised to refer to “section 1754(c)(1)(A)(i) of the Export Control Reform Act of 2018 (Title XVII, Subtitle B, of the National Defense Authorization Act for Fiscal Year 2019, Pub. L. 115-232)”.
  2. Cybersecurity Risk. The prohibitions at DFARS 225.772-2 and the provision at DFARS 252.225-7049, Prohibition on Acquisition of Certain Foreign Commercial Satellite Services-Representation, are expanded to include prohibition on award of a contract for commercial satellite services to a foreign entity if entering into such contract would create an unacceptable cybersecurity risk for DoD. The procedures at DFARS 225.772-3 further specify that unacceptable cybersecurity risk is to be determined by the Under Secretary of Defense for Acquisition and Sustainment or the Under Secretary of Defense for Policy, the two officials to whom the statute permits delegation of the authority to enter into a contract, subject to the prohibitions in paragraphs (a) and (b) of the statute.
  3. Satellites and Launch Vehicles. Restrictions are added at DFARS 225.772-2 and the provision at DFARS 252.225-7049 for contracts for commercial services awarded to any entity (whether or not foreign) with regard to the design or manufacture of the satellite to be used to provide the services, or the launch vehicle that will be used to launch the satellite outside the United States. These restrictions do not apply to a launch that occurs prior to December 31, 2022, or to a satellite service provider that has a contract or other agreement relating to launch service that, prior to June 10, 2018, was either fully paid for by the satellite service provider, or covered by a legally binding commitment of the satellite service provider to pay for such services.
  4. Representations and Disclosures. The representations are expanded to cover the new restrictions on satellites and launch vehicles, but these new restrictions will only be applicable with regard to commercial satellite services that will use satellites launched or after December 31, 2022. The restriction on launch vehicles does not apply to Start Printed Page 66068launches within the United States. For added clarity, the disclosures that relate to the representations are integrated into the representations.
5. Clause. This rule creates a new clause to require compliance during contract performance with the representations in their offer with regard to the origin of the satellite services, satellites, and launch vehicles.
 
B. Section 1296 of the NDAA for FY 2017
  1. Definitions. This rule provides a definition of “600 series of the Commerce Control List” and adds the definition of “item” with cross-references to the EAR at 15 CFR 772.1 and ITAR at 22 CFR 120.6 and 22 CFR 120.9. The definitions already contain cross-references to the USML at 22 CFR part 121. For increased ease of reading, the definitions of Communist Chinese military company and “United States Munitions List” are now repeated at DFARS 225.003, rather than just providing a cross-reference at 225.770-1 to the definitions in the clause at DFARS 252.225-7007.
  2. 600 series. This rule amends DFARS 225.770 and the clause at DFARS 252.225-7007 to extend the prohibition on acquisition of USML items from Communist Chinese military companies to apply to items in the 600 series of the CCL.
 
III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Off-the-Shelf Items
This rule amends the applicability of existing DFARS solicitation provisions and contract clauses and adds a new clause as follows:
  – To implement section 1603 of the NDAA for FY 2018, this rule amends the provision at DFARS 252.225-7049, Prohibition on Acquisition of Commercial Satellite Services from Certain Foreign Entities-Representation, and adds a clause to enforce compliance with the representations in the associated provisions. This provision and clause will apply to acquisitions not greater than the Simplified Acquisition Threshold (SAT) and acquisitions of commercial items.
  – To implement section 1296 of the NDAA for FY 2017, this rule modifies the clause at DFARS 252.225-7007, Prohibition on Acquisition of United States Munitions List Items from Communist Chinese Military Companies, to prohibit contractors or subcontractors from acquiring items listed on the 600 series of the CCL that are to be delivered under the contract from any Communist Chinese military company. As a result of the Export Control Reform Initiative, certain items were transferred from the USML to a series of new export control classification numbers (the 600 series) in the CCL. In order to ensure continued prohibition against purchase of items listed in the 600 series of the CCL from a Communist Chinese military company, this rule requires use of the clause in solicitations and contracts involving the delivery of items listed in the 600 series of the CCL, but does not otherwise change the clause prescription. The rule continues to prescribe the use of this clause for use in solicitations and contracts for items valued at or below the SAT. The clause will also apply to the acquisition of commercial items, including Commercially Available Off-the-Shelf (COTS) items, if the items are 600 series items on the CCL, or USML items. Although most 600 series items are not commercial items, and USML items are even less likely to be commercial items, it is possible that some of these covered items will be commercial items and must not be purchased from a Communist Chinese military company.
 
A. Applicability to Contracts at or Below the SAT
  41 U.S.C. 1905 governs the applicability of laws to contracts or subcontracts in amounts not greater than the SAT. It is intended to limit the applicability of laws to such contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision of law contains criminal or civil penalties, or if the Federal Acquisition Regulation (FAR) Council makes a written determination that it is not in the best interest of the Federal Government to exempt contracts or subcontracts at or below the SAT, the law will apply to them. The Principal Director, Defense Pricing and Contracting (DPC), is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations.
 
B. Applicability to Contracts for the Acquisition of Commercial Items, Including COTS Items
  41 U.S.C. 1906 governs the applicability of laws to contracts for the acquisition of commercial items and is intended to limit the applicability of laws to contracts for the acquisition of commercial items. 41 U.S.C. 1906 provides that if a provision of law contains criminal or civil penalties, or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt commercial item contracts, the provision of law will apply to contracts for the acquisition of commercial items. Likewise, 41 U.S.C. 1907 governs the applicability of laws to COTS items, with the Administrator for Federal Procurement Policy the decision authority to determine that it is in the best interest of the Government to apply a provision of law to acquisitions of COTS items in the FAR. The Principal Director, DPC, is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations.
 
C. Determinations
  – Section 1603 of the NDAA for FY 2018. A determination and finding was signed by the Director, Defense Procurement and Acquisition Policy, on June 23, 2014, that due to potential risk to national security it would not be in the best interest of the United States to exempt acquisitions not greater than the SAT and acquisitions of commercial items from the applicability of 10 U.S.C. 2279. Therefore, a separate determination under 41 U.S.C. 1905-1907 is not required.
  – Section 1296 of the NDAA for FY 2017. A determination under 41 U.S.C. 1905 is not required to prescribe DFARS 252.225-7012 for use in solicitations and contracts valued at or below the SAT, because this is consistent with the current applicability of the clause DFARS 252.225-7007, which prohibits acquisitions of items on the USML from Communist Chinese Military companies. Modifying the clause to also cover items listed in the 600 series of the CCL is reinstating the prohibition that applied to those items before the items were moved off the USML and into the 600 series of the CCL. However, in accordance with 41 U.S.C. 1906 and 1907, the Principal Director, DPC, has determined that it is in the best interest of the Government to apply the requirements of section 1296 of the NDAA for FY 2017 to contracts for the acquisition of commercial items, including COTS. This rule prescribes the use of the clause at DFARS 252.225-7007 in contracts for the acquisition of commercial items, if they involve the acquisition of 600 series or USML items. These items are export-controlled, irrespective of the contracting vehicle, including commercial contracts. The broad prohibition would be consistent with the intent of the law, DoD policy, and our National Defense Strategy with respect to China. The concern is with the integrity of the DoD supply chain and to prevent insertion of malicious items from China into U.S. weapons platforms, information technology systems and other areas, presenting a threat to our warfighters and their ability to defend U.S. national security. Further, because the meaning of the term “commercial” is not aligned between contracting and export control regulations, the disconnect could be used as a loophole for suppliers to violate the prohibition. Therefore, exempting contracts for the acquisition of commercial items (including COTS items) from the statutory prohibition on the acquisition of 600 series and USML items would severely decrease the intended effect of the statutes and could jeopardize the integrity of the DoD supply chain. … 
 
VIII. Determination To Issue an Interim Rule
  A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. It is critical that the DFARS is immediately revised to include the requirements of the law.
 
A. Foreign Commercial Satellite Services
  DoD uses commercial satellite services to increase the availability and flexibility of military communications. Commercial satellite services may provide access to bandwidth and services that are unavailable through other means to support a variety of missions. Although these are commercial services, they are still being used to carry out military missions. Use of certain foreign commercial satellite services and foreign launches can pose an unacceptable risk to national security.
  Section 1603 of the NDAA for FY 2018 amends 10 U.S.C. 2279 to impose additional prohibitions with regard to acquisition of certain foreign commercial satellite services, especially from certain “covered foreign countries.” Section 1603 expands the definition of “covered foreign country” from China, North Korea, and any country that is a state sponsor of terrorism (10 U.S.C. 2279) to include the Russian Federation. Section 1603 also defines “cybersecurity risk” and provides that DoD shall not enter into a contract for satellite services with a foreign entity if the Secretary of Defense reasonably believes that entering into such a contract would create an unacceptable cybersecurity risk for DoD.
  Congress enacted section 1603 in order to provide DoD, when contracting for commercial satellite services, with tools to reduce the perceived risk related to dealing with the Russian Federation. Indicating increasing distrust of Russia, there have been several other sections of the NDAAs in FY 2018 and FY 2019 placing prohibitions on buying critical items from Russia, such as rare earth magnets, tungsten, or telecommunications equipment or services to be used in the DoD nuclear deterrence mission or homeland defense mission. This rule also requires DoD not to enter into a contract for commercial satellite services with any foreign entity if the Secretary of Defense reasonably believes that such contract will present an unacceptable cybersecurity risk.
  Currently, there is no regulatory prohibition against contracting with a foreign entity in which the Government of Russia has an ownership interest that enables the government of Russia to affect satellite operations, or a foreign entity that plans to provide satellite services from Russia. There is also no mechanism in place that allows the Secretary of Defense to decide not to enter into a contract with a foreign entity based on the level or cybersecurity risk it would create; in such instances, DoD must either accept the risk and award the contract or cancel the solicitation.
  According to data available in the Federal Procurement Data System for fiscal year 2017, DoD awarded 3,715 contracts and orders for commercial supplies or services under the product service code D304, IT and Telecom-Telecommunications and Transmission, to 256 unique entities. It is expected that a subset of these awards were for commercial satellite services. While the universe of contracts and entities affected by this rule is relatively small, a single contract award to one of the foreign entities excluded by this rule could damage our national security.
  Without this rule to implement the prohibitions and limitations provided by section 1603, there is no way for DoD contracting officers to exclude the Russian-controlled entities, or the other foreign entities that present and unacceptable cybersecurity risk, from competing for or being awarded contracts for covered commercial satellite services. This creates an opportunity for Russian interference with DoD satellite communications and increases the risk of cyberattacks by other foreign entities, which could jeopardize our military communications, the lives of our warfighters, and our national security.
 
B. Certain Items on the Commerce Control List
  Section 1211 of the NDAA for FY 2006, prohibited purchase of items on the United States Munitions List (USML) from a Communist Chinese military company, in order to protect the integrity of the supply chain for military items. Section 1296 of the NDAA for FY 2017 extends that prohibition to cover items moved from the USML to the Commerce Control List (CCL) of the Export Administration Regulations of the Department of Commerce. As a result of the Export Control Reform Initiative, beginning in 2013, certain items specially designed for military applications have been transferred from the USML to a new category on the CCL (the 600 series). The 600 series includes such items as F-16 wings, fins, panels, fuselages, cockpit structures, and landing gear, and analogous items from other categories on the USML.
  While helpful in facilitating cooperation with our allies and Start Printed Page 66071partners, an unintended consequence of this export reform was that the prohibition imposed by section 1211 of the NDAA for FY 2006 no longer covered these items, since they were no longer on the USML. The Under Secretary of Defense for Policy, including the Defense Technology Security Administration, as well as the offices in the purview of the previous Under Secretary of Defense for Acquisition, Technology, and Logistics, the National Security staff, and others were very concerned about potential acquisition of military components from a Communist Chinese military company, due to potential adverse impact on the integrity of the supply chain for major U.S. weapons systems. These organizations, along with export control stakeholders in the Departments of Commerce and State, were also in favor of continuing the prohibition against purchase of military items, now controlled as 600 series items, from Communist Chinese military companies. After consultation with the DoD Office of General Counsel, DoD determined that the only solution was to seek legislative correction to this problem, resulting in enactment of section 1296 of the NDAA for FY 2017.
  600 series items are frequently used in DoD’s weapon systems and it is imperative that DoD ensure that the integrity of those weapon systems is maintained by immediately restricting the purchase of these items from Communist Chinese military companies. Until this rule is in effect, there is no basis on which to refuse to buy items with military applications listed in the 600 series of the CCL from a Communist Chinese military company. Purchase of such items from a Communist Chinese military company poses a serious risk to U.S. national security, the safety of military personnel, and the integrity of the U.S. defense supply chain, because according to DoD information, China is the top source of counterfeit U.S. military electronics. … 
 
  Jennifer Lee Hawes, Regulatory Control Officer, Defense Acquisition Regulations System … 

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

EXIM_a2

2
DHS/CBP Announces Public Meeting Concerning “The 21st Century Customs Framework,” 1 Mar in Washington DC

(Source: 
Federal Register, 21 Dec 2018.) [Excerpts.] 
 
83 FR 65703-65705: Public Meeting: 21st Century Customs Framework
 
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security (DHS).
* ACTION: Notice of public meeting and request for public comments.
SUMMARY: U.S. Customs and Border Protection (CBP) is cognizant of the need to stay modern in order to meet the challenges of an evolving trade landscape. New actors, industries, and modes of conducting business have emerged, disrupting the traditional global supply chain. To continue to effectively fulfill CBP’s mission, CBP is pursuing an initiative titled “The 21st Century Customs Framework.” “The 21st Century Customs Framework” will seek to address and enhance numerous aspects of CBP’s trade mission to better position CBP to operate in the 21st century trade environment. Through preliminary efforts, CBP has identified key themes for which CBP seeks public input: Emerging Roles in the Global Supply Chain, Intelligent Enforcement, Cutting-Edge Technology, Data Access and Sharing, 21st Century Processes, and Self-Funded Customs Infrastructure. To that end, CBP is announcing a public meeting to discuss these themes. CBP will use the public comments received in response to this notice to initiate discussion at the public meeting for CBP to consider possible policy, regulatory, and statutory improvements to further the trade mission. CBP is already pursuing related efforts through the Border Interagency Executive Council and the Commercial Customs Operations Advisory Committee and is ensuring coordination among these initiatives.
* DATES:
  – Meeting: The meeting to discuss “The 21st Century Customs Framework” will be held on Friday, March 1, 2019, from 9:00 a.m. to 5:00 p.m. EST.
  – Pre-registration: Members of the public wishing to attend the meeting whether in-person or via teleconference must register as indicated in the Addresses section by 5:00 p.m. EST, February 4, 2019.
  – Cancellation of pre-registration: Members of the public who are pre-registered to attend in-person or via teleconference and later need to cancel, please do so by 5:00 p.m. EST, February 22, 2019.
  – Submission of comments: Members of the public wishing to submit comments must do so by 5:00 p.m. EST, February 4, 2019 by the methods described in the Addresses section.
* ADDRESSES: … 
* FOR FURTHER INFORMATION CONTACT: … 
* SUPPLEMENTARY INFORMATION: … Members of the public who wish to provide a public statement should follow the instructions under the Addresses section. Due to time and content considerations, it is possible that not all persons who express an interest in making a public statement will be able to do so. Speakers will be selected based on time considerations and to ensure the panel receives diverse, individual perspectives. CBP will begin selecting and contacting individuals to deliver public statements starting no earlier than February 11, 2019. Members of the public may submit as many written comments as they wish; however, any commenter who is selected to provide a public statement will be limited to one timeslot addressing one theme.
 
Agenda– 21st Century Customs Framework Public Meeting
 
9:00 a.m.-5:00 p.m.-Public Statements and Open Public Comment on Themes
 
As described above, members of the public may submit as many written comments as they wish; however, any one individual will be selected for only one public statement theme and timeslot.
 
(1) Emerging Roles in the Global Supply Chain
  Due to technological advances and new modes of conducting business, the modern international trade environment is marked by emerging actors and dynamic supply chains. CBP’s traditional legal frameworks were developed to primarily reflect containerized shipments and the supply chain to support such shipments, as opposed to small packages and business models built around e-commerce. CBP is seeking to ensure that all parties in the modern supply chain are aware of their responsibilities to promote safety and compliance, while still enabling legitimate trade and economic prosperity.
 
Public Comment Questions
  – What new roles in the global supply chain are unaccounted for in CBP’s current legal framework? How should the agency account for these roles?
  – How can CBP work with e-commerce platforms and carriers to identify and deter illicit shipments?
  – How can new actors in the global supply chain work with CBP to improve trade security?
 
(2) Intelligent Enforcement
  CBP’s efforts on intelligent enforcement are anchored on further improving risk management and the impact of efforts to detect high-risk activity, deter non-compliance and disrupt fraudulent behavior-all in the interest of enforcing U.S. trade laws to protect America’s economic security. CBP’s intelligent enforcement efforts include exploring how to better utilize technology, big data, and predictive analytics to drive decision-making.
 
Public Comment Questions
  – What technologies are useful in predicting violative activities and an entity’s potential for violations?
  – What tools or sources of information regarding CBP’s compliance requirements have you found the most useful? What other resources can CBP provide to ensure that trade stakeholders understand CBP requirements?
  – How can CBP improve violation referral systems and allegation processing?
 
(3) Cutting-Edge Technology
  One of the defining features of the modern trade environment is the rapid emergence of new technology. CBP is exploring the use of new technologies to improve trade facilitation and trade enforcement activities.
 
Public Comment Questions
  – What emerging technologies are most important for CBP to monitor or adopt?
  – What technologies are being adopted by the private sector that are incompatible with CBP’s current legal or policy frameworks?
  – What technologies on the horizon have the potential to be a disruptive force (enabling or challenging) within the trade ecosystem?
 
(4) Data Access and Sharing
  The volume and types of data and the speed at which the data can be transmitted create a valuable opportunity for CBP and trade stakeholders. CBP is examining how more efficient data sharing can improve trade facilitation and trade enforcement. At the same time, CBP is looking at ways to reduce the duplication or unnecessary capture of data.
 
Public Comment Questions
  – What data would you like CBP to share with importers, and vice versa, to improve trade facilitation and enforcement?
  – How can CBP’s overall data sharing with trade stakeholders be improved?
 
(5) 21st Century Trade Processes
  CBP will be refining certain import processes to reflect the modern trade environment, improve the experience of importers, brokers, and other important actors in the supply chain, and increase overall efficiency. CBP is placing a focus on processes that may be overly burdensome or outdated.
 
Public Comment Questions
 – What specific import procedures or requirements can be improved or refined, and how?
  – What are some international best practices (i.e., processes used by other customs agencies) that CBP should examine?
 
(6) Self-Funded Customs Infrastructure
*
  *There will be no in-person statements related to this theme.
  New requirements affecting CBP, Partner Government Agencies (PGA), and trade industry will necessitate updates to the Automated Commercial Environment (ACE) outside of reoccurring maintenance. CBP is examining avenues to ensure that the ACE has a consistent stream of funding for enhancements and new functionalities.
 
Public Comment Questions
  – Outside of the annual Congressional appropriations cycle, what mechanisms should CBP explore for consistent and timely funding for ACE enhancements?
  – How could the fee collection process be streamlined, improved, or redesigned to more directly fund ACE enhancements?
 
  Dated: December 18, 2018.
 
Brenda B. Smith, Executive Assistant Commissioner, Office of Trade.

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

OGSOTHER GOVERNMENT SOURCES

OGS_a13
. Items Scheduled for Publication in Future Federal Register Editions
 

(Source:
Federal Register)
* DHS/CBP; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Entry and Manifest of Merchandise Free of Duty, Carrier’s Certificate and Release [Pub. Date: 26 Dec 2018.]
 
* Justice/ATF; RULES; Bump-Stock-Type Devices [Pub. Date: 26 Dec 2018.]
 
* State; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Request to Change End User, End Use and/or Destination of Hardware [Pub. Date: 26 Dec 2018.]
[The next Federal Register will be published on Wednesday, 26 December.]

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

OGS_a24
Commerce/BIS: (No new postings.)

(Source: 
Commerce/BIS)

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OGS_a03
5
DHS/CBP: “Change in Effective Date of Duty Increase of Goods Subject to Section 301 Duties”

(Source: 
CSMS# 18-000752, 20 Dec 2018.) 
 
BACKGROUND: On September 21, 2018, the U.S. Trade Representative’s Office published a Notice of Modification of Action in the Section 301 investigation providing for the imposition of additional import duties on over 5,700 full and partial eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) on goods imported from the People’s Republic of China (China). See Federal Register 83 FR 47974. The September 21, 2018 list of products can be found in Annex A to the USTR’s September 21, 2018 Notice, and was amended on September 28, 2018 (83 FR 49153).
  
The rate of additional duties was initially 10 percent. Those additional duties were effective starting on September 24, 2018, and are currently in effect. Under Annex B of the September 21 notice, the rate of additional duty was set to increase to 25 percent on January 1, 2019. 
  
On December 19, 2018, USTR published a Federal Register notice changing the effective date of the duty increase to March 2, 2019. See Federal Register 83 FR 65198, December 19, 2018.
 
GUIDANCE: The increase in additional import duties for Chinese goods covered by the September 21, 2018 Federal Register notice, as amended, is now effective on March 2, 2019. Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on March 2, 2019, the rate of additional duties on imported articles classified in a subheading covered by the September 21, 2018 Federal Register notice, as amended, will be 25% ad valorem.
  
The Section 301 duties currently only apply to products of China, and are based on the country of origin, not country of export. 
 
FOR FURTHER INFORMATION: For further information, please refer to USTR’s Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation (Federal Register 83 FR 65198, December 19, 2018).
  
Questions related to Section 301 entry filing requirements should be emailed to 
traderemedy@cbp.dhs.gov
. Questions from the importing community concerning ACE rejections should be referred to their Client Representative.
 
  – Related CSMS No. 18-000624, 18-000606, 18-000554

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

OGS_a04
6
DoD/DSS Presents Updated Website 

(Source: 
DoD/DSS, 20 Dec 2018.)
 
Effective 20 December, the 
DSS.mil website has a whole new look and underwent a major overhaul. The new platform allows for enhanced functionality. However, as a result of the redesign, many of the page URLs have changed which is causing issues for anyone that bookmarked a specific page. For those who work closely with DSS, we hope you will explore the site, update your bookmarks and accept our apologies for any inconveniences this may cause. We are excited about the new site, but with change comes growing pains. We are still tweaking the site and discovering broken links, a lack of links, etc. 
If you notice anything that needs to be fixed, please send an email to the DSS Webmaster, 
dss.quantico.dss-hq.mbx.webmaster@mail.mil.

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

OGS_a5
7
Justice: “California Man Sentenced to Nearly 4 Years in Federal Prison for Scheme to Smuggle Rifle Scopes and Tactical Equipment to Syria”

(Source: 
Justice, 20 Dec 2018.) [Excerpts.] 
 
Rasheed Al Jijakli, 57, a Syrian-born naturalized U.S. citizen who resides in Walnut, California, was sentenced today to 46 months in prison for his role in a scheme to smuggle rifle scopes and other tactical gear to Syria in violation of the International Emergency Economic Powers Act and sanctions imposed on Syria by the United States. … 
 
During today’s sentencing hearing, Judge Selna agreed with prosecutors that the goods Jijakli took to Syria were “instruments of death.”
 
Jijakli pleaded guilty to the felony offense on Aug. 13 and admitted he conspired with others to export tactical gear from the United States to Syria. That tactical gear included U.S.-origin laser boresighters, and day- and night-vision rifle scopes.
 
From June through July of 2012, Jijakli and a co-conspirator purchased the tactical gear. On July 17, 2012, Jijakli traveled with the tactical gear from Los Angeles to Istanbul with the intent that it would be provided to Syrian rebels training in Turkey and fighting in Syria.
 
Jijakli provided some of the tactical gear, specifically the laser boresighters, to a second co-conspirator, who Jijakli learned was a member of the militant group Ahrar Al-Sham. Jijakli also provided the goods to other armed Syrian insurgent groups in Syria and Turkey.
 
Jijakli and his co-conspirators knowingly provided at least 43 laser boresighters, 85 day rifle scopes, 30 night-vision rifle scopes, tactical flashlights, a digital monocular, five radios, and one bulletproof vest to Ahrar Al-Sham and other Syrian rebels in Syria, or with knowledge that the tactical gear was going to Syria.
 
Additionally, in August and September 2012, Jijakli directed co-conspirators to withdraw thousands of dollars from Palmyra Corporation, where Jijakli was the chief executive officer, to pay for tactical gear that would be provided to Syrian rebels. In his plea agreement, Jijakli specifically admitted directing that $17,000 from Palmyra be used to purchase tactical gear intended for Syrian rebels.

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

OGS_a6
8
State/DDTC: (No new postings.)

(Source: 
State/DDTC)

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

OGS_a7
9
EU Council Prolongs Economic Sanctions Against Russia by Six Months

(Source: 
Council of the European Union, 21 Dec 2018.) 
On 21 December 2018, the Council prolonged the economic sanctions targeting specific sectors of the Russian economy until 
31 July 2019.
 
This decision follows an update from President Macron and Chancellor Merkel to the European Council of 13-14 December 2018 on the state of implementation of the Minsk agreements, to which the sanctions are linked. Given that no progress has been made, the European Council took the political decision to roll-over the economic sanctions against Russia.
The Council adopted this decision today by written procedure and, in line with the rule for all such decisions, unanimously.
The measures target the financial, energy and defence sectors, and the area of dual-use goods. They were originally introduced on 31 July 2014 for one year in response to Russia’s actions destabilizing the situation in Ukraine and strengthened in September 2014.
 
The economic sanctions prolonged by this decision include:
  – limiting access to EU primary and secondary capital markets for 5 major Russian majority state-owned financial institutions and their majority-owned subsidiaries established outside of the EU, as well as three major Russian energy and three defense companies;
  – imposing an export and import ban on trade in arms;
  – establishing an export ban for dual-use goods for military use or military end users in Russia;
  – curtailing Russian access to certain sensitive technologies and services that can be used for oil production and exploration.
 
In addition to these economic sanctions, several EU measures are also in place in response to the crisis in Ukraine including:  
  – targeted individual restrictive measures, namely a visa ban and an asset freeze, currently against 164 people and 44 entities until 15 March 2019;
  – restrictive measures in response to the illegal annexation of Crimea and Sevastopol, limited to the territory of Crimea and Sevastopol, currently in place until 23 June 2019.
 
The duration of the sanctions was linked to the complete implementation of the Minsk agreements by the European Council on 19 March 2015, which was foreseen to take place by 31 December 2015. Since this did not happen, the sanctions have remained in place.
 

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

OGS_a8
10
EU Publishes Recommendations Concerning EU General Licenses for Defense-Related Products 

(Source: 
Official Journal of the European Union, 21 Dec 2018.) 
Recommendations
 

Commission Recommendation (EU) 2018/2050 of 19 December 2018 on aligning the scope of and conditions for general transfer licences for the purposes of demonstration and evaluation as referred to in point (c) of Article 5(2) of Directive 2009/43/EC of the European Parliament and of the Council (notified under document C(2018) 8598) (Text with EEA relevance.)
 

Commission Recommendation (EU) 2018/2051 of 19 December 2018 on aligning the scope of and conditions for general transfer licences for the purposes of repair and maintenance as referred to in point (d) of Article 5(2) of Directive 2009/43/EC of the European Parliament and of the Council (notified under document C(2018) 8610) (Text with EEA relevance.)
 

Commission Recommendation (EU) 2018/2052 of 19 December 2018 on aligning the scope of and conditions for general transfer licences for the purpose of exhibition as referred to in point (c) of Article 5(2) of Directive 2009/43/EC of the European Parliament and of the Council (notified under document C(2018) 8611) (Text with EEA relevance.)

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

NWSNEWS

NWS_a0111
European Sanctions: “EU Court Rejects Iran Sanctions Damages Claims”

(Source: 
European Sanctions, 21 Dec 2018.)
 
Iran Insurance Company and Post Bank Iran have had their damages claims dismissed in the EU General Court. They claimed damages for losses arising from their July 2010 to November 2013 EU Iran sanctions listings, which were annulled in September 2013 (see 
previous blog).
 
The court rejected the claims on the basis that the applicants had not sufficiently proved their losses. The judgments can be read here: 
T-558/15 and 
T-559/15.

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

NWS_a212
Expeditors News: “U.S. Government Closure for 24 December Holiday” 

(Source: 
Expeditors News, 20 Dec 2018.)
 
On December 18, 2018, U.S. President Donald Trump signed an Executive Order declaring December 24, 2018 a Federal Holiday. U.S. Customs and Border Protection (CBP) stated in Cargo Systems Messaging Service (CSMS) #18-000751 that they will operate as a holiday and “[s]elf-filers and brokers should plan CBP-related business accordingly.”
 
CBP stated that filers can present or pay on Wednesday, December 26, 2018 without penalty. 
The CSMS may be found 
here
.

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

NWS_a313
Reuters: “Germany to Bar Iran’s U.S.-Sanctioned Mahan Air: Bild”

(Source: 
Reuters, 21 Dec 2018.) [Excerpts.] 
 
Germany is to ban flights in and out of the country by Iran’s Mahan Air, which is under U.S. sanctions over allegations it ferries troops and supplies into Syria in support of President Bashar al-Assad, a newspaper reported on Friday.
 
Bild said the German government had taken the decision to stop Mahan Air from operating its flights to Dusseldorf and Munich after intensive deliberations on U.S. demands.
 
A German government spokesman said he could not comment on the report in Bild, which said Mahan Air would be banned in January.
 
The U.S. government has sanctioned several companies for their links to Mahan Air, including a Thai aviation company and a Malaysia-based sales agent.
 
The U.S. embassy in Berlin has criticized Germany for allowing the airline to fly to the two major cities. Mahan Air says on its website that it also operates flights to Paris, Barcelona, Milan and Athens.
 
Germany and its European Union partners are at odds with the United States over policy toward Iran. … 

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

NWS_a414
Reuters: “U.S. Extends Sanctions Waiver for Iraq to Import Iranian Gas, Power”

(Source: 
Reuters, 21 Dec 2018.) [Excerpts.] 
 
he United States has extended for 90 days a waiver granted to Iraq from sanctions against Iran, a State Department spokesman said on Friday, allowing Baghdad to keep importing Iranian gas that is critical for Iraqi power production. 
 
The extension was reached on Thursday, when a previous 45-day waiver was due to expire, during a visit to Washington by an Iraqi delegation, according to two Iraqi officials with direct knowledge of the negotiations.
 
  “A 90-day waiver was granted to allow Iraq to continue to pay for electricity imports from Iran,” a State Department spokesman said, adding that the waiver will apply to both electricity and gas.
 
The Trump administration reimposed sanctions on Iran’s energy exports in November, citing its nuclear program and meddling in the Middle East, but has granted waivers to several buyers to meet consumer energy needs.
 
Washington gave Iraq a 45-day waiver for imports of gas from Iran when it reimposed sanctions on Iran’s oil sector on Nov. 5. Iraqi officials have said they need around two years to find an alternative source. …

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

NWS_a515
The Verge: “Slack is Banning Some Users with Links to Iran Even If They’ve Left the Country”

(Source: 
The Verge, 20 Dec 2018.) [Excerpts.] 

“They are either incompetent at OFAC interpretation or racist”
 
This morning, many Slack users with ties to Iran discovered their accounts had been abruptly deactivated. The bans affected users living as far as Finland, Canada and the United States, many with few remaining ties to Iran in either citizenship or physical presence.
 
  “In order to comply with export control and economic sanctions laws…Slack prohibits unauthorized use of its products and services in certain sanctioned countries,” the notice from Slack read. “We’ve identified your team/account as originating from one of these countries and are closing the account effective immediately.” Users received no warning, and had no time to create archives or otherwise back up data.
 
It was an abrupt reminder of the broad reach of US tech sanctions, and a sign of how haphazard companies are when enforcing them. … 
 
Many Iranian ex-pats see the company’s interpretation of sanctions as overly broad, going far beyond the actual restrictions put in place by the US government. “They are either incompetent at OFAC interpretation or racist,” said Oxford researcher Mahsa Alimardani, who specializes in communication tools in Iran. … 

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

NWS_a616. 
VNO NCW: “Dutch Government Tightens Arms Export Policy Due to Yemen Conflict”

(Source: 
VNO NCW, 4 Dec 2018.) [Excerpts. Unofficial translation by Sven Goor of Full Circle Compliance.]   
 
Dutch minister Kaag of Foreign Trade and Development Cooperation has announced a further tightening of the Dutch arms export policy concerning Yemen.  The announcement was made on 27 November during a Parliamentary session. 
 
The Dutch arms export policy concerning Saudi-Arabia was already highly restrictive due to the involvement of Saudi armed forced in the Yemen conflict.  The export of military goods to Saudi-Arabia is only allowed when an irrefutable proof can be presented that these goods will not be used in Yemen. This policy is based on a “presumption of denial” and will now also concern the United Arab Emirates (UAE) and Egypt, including all military branches of these countries. The Dutch Foreign Ministry will treat requests on a case-by-case basis, and in line with the new restrictions, and EU 
Council Common Position 944/2008.
 
[Editor’s Note: VNO NCW is the Confederation of Netherlands Industry and Employers.]

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

COMMCOMMENTARY

COM_1
17. 
A. Mielken: “2018 EU Export Control Forum: What You Need to Know!” (Part II of II)

(Source: 
Amber Road Blog, 18 Dec 2018.) 
 
[Part I was published in the Daily Bugle of 20 Dec.]
 
* Author: Arne Mielken, Trade Content Manager, Amber Road.
 
EU Export Controls in 2018: The State of Play
 
The second session to be held during the 2018 Export Control Forum focused heavily on recent updates for export controls in the EU. This panel consisted of Mr. Stéphane Chardon, the Coordinator for Export Control, DG TRADE in the European Commission, Mr. Bruno Leboullenger, the Chef du Service des Biens à Double Usage (SBDU), Ministère de l’Economie of France, Mr. Spencer Chilvers of the Export Control Committee and the Aerospace and Defense Industries Association of Europe (ASD), and was moderated by Mr. Antonio Mesa Fortun, the Head of the Dual-Use Sector, Secretariat of State for Trade, and Spanish Ministry of Industry, Trade and Tourism.
 
The Implementation of Controls in the EU: Latest Developments
 
Mr. Stéphane Chardon summarized the latest policy developments within the EU. The annual updates to the EU dual-use export control list in Annex I to Regulation (EC) No. 428/2009 is expected to be published any time now. The changes to the EU list are the result from amendments that were agreed to at the 2017 Plenary of the Wassenaar Arrangement. This includes changes, deletions, new entries and new decontrols. There are expected to be about 250 changes, many of which are editorial and technical in nature. Chardon shared some impressive statistics from the EU annual dual-use report:
 
  – There were over 40,000 applications for licenses, which resulted in about 25,000 global licenses being issued. This does not take into account general export licenses.
  – Controlled exports volume exceeded 45 billion euros in 2016 according to the data available.
  – The value of intra-EU dual-use trade is 
even higher. There were only 690 denials in 2016! 2.6.% of all EU exports are controlled exports and the percentage of denied exports were so small they are negligible.
  – USA, China and Russia are the top 3 countries to which the EU sends dual use items. The EU Commission also noted an increase in licenses to import cyber-surveillance items. There were only 17 denials.
 
The EU Commission will update their new national measures notice (e.g. with the new Italian changes) in early 2019. As a final note, Chardon noted that the EU is implementing a trail on electronic licensing which will potentially evolve to a single licensing system in the future. The first trial results are promising.
 
An Industry Perspective on Implementation of Dual-Use Controls and Related Matters in 2017-2018
 
Mr. Spencer Chilvers presented the perspectives and priorities of the technology industry. He explained that the electronic transfers of technology remain a huge issue for businesses, mainly due to the lack of clarity from the government about what is permissible and what is not. Any official guidance that is announced is often dated. Chilvers expressed the need for the EU to have a consistent approach. This will allow businesses to be efficient, but also compliant. Another key issue he spoke on was Cyber Security; the ability to keep ones’ own technology safe, while also sharing information with universities and shared centers. “How do you make sure there is no weak link?”, Chilvers asked.  The industry calls for an EU-wide combined electronic licensing system which is easy to use. All parties should be linked together and the optimal use of such a system should be used. It will help subject matter experts (SMEs) with record-keeping and act as a report for all exporters on transfers made, when such information is required. This combined licensing system should also integrate with existing ERP systems.
 
Chilvers also suggested that a certification program or a recognized qualification would be “explored at the EU Level”. He compared this to the Swedish Export Control Society which has developed a a similar program with much success. He mentioned that the UK is now in the early stage of developing a professional qualification with the UK’s Institute of Export & International Trade (IOE&IT). He ended his presentation by expressing concerns about how the EU’s GDPR (Article 10) conflicted directly with the US export control and sanctions provisions which oblige companies to screen employees, visitors, and partners for potential criminal convictions based on personal criminal records which are released in the public domain by US authorities. Currently, there is still no perceivable consensus among EU members on this difficult question.
 
The Development of the EU Industry Compliance Guidelines: After Public Consultation, What’s Next?
 
Presentations and discussions within this session focused primarily on the EU ICP guidelines. The speakers were Dr. Johan Evers, the Chair of the Technical Expert Group on the development of ICP Guidelines/Strategic Goods Control Unit of the Flemish Department of Foreign Affairs in Belgium,  Ms. Giovanna Maletta, a researcher of the SIPRI Dual-Use and Arms Trade Control Program, Dr. Bärbel Sachs the LL.M. Rechtsanwältin of Regulatory & Governmental Affairs, Noerr LLP, and was moderated by Dr. Christos Charatsis, a Project Officer at the Joint Research Centre of the European Commission. They presented a summary of the industry consultation and the state-of-play. They went on to present a variety of best practices, compliance guideline gaps, and the new Commission’s proposal.
 
In order to support companies in maintaining strict compliance with EU and national export laws and regulations, the EU has developed a draft guidance to provide a framework to identify and manage dual-use trade control impacts and mitigate associated risks. The guidance focused on the 7 core elements for an effective ICP.
 
Each core element is further detailed by the section ‘What is expected from dual-use companies?’ which describes the objective(s) of each core element, and the section “What are the steps involved?” that further specifies the actions and outlines possible solutions for developing or implementing compliance procedures. The guidance concludes with a set of helpful questions pertaining to a company’s ICP, a list of diversion risk indicators, and ‘red flag’ signs about suspicious inquiries or orders.
 
The Digitalization of Export Controls
 
The “e-licensing project” and the modernization of the IT infrastructure of the EU export control network was the subject of the next session.  Estonia presented its  e-licensing solution “Stratlink” – “a Baltic experience of digitalization and its benefits”.
 
Export Controls and Cyber-Surveillance Technology
 
“Cyber export controls” was next. A comprehensive update was presented by the Netherlands followed by an Information Security industry perspective on current and future EU export controls by the Symantec Corporation.
 
The Legislative Process: The Long March Towards a Modernized Export Control Regulation
 
The Council ‘s long-debated position on the modernization of EU export controls by Ms. Gabriela Ciupitu, Dual Use Division, Department for Export Controls-ANCEX, Ministry of Foreign Affairs, Romania, holder of the EU Presidency next year. This was followed by the presentation “Licensing simplifications for cryptography” from DIGITALEUROPE. Finally,  Amnesty International presented Civil society’s perspective on the modernization of EU export controls.
 
It is important to maintain consistent open dialogue regarding export control on a global scale. The 2018 Export Control Forum underlines this need and the need to digitize your companies’ supply chain in order to stay current with constantly evolving supply chain needs. As you can see in the topic of each of these sessions, government bodies are starting to see the importance of creating and maintaining a digital system that allows companies to modernize complex compliance regulations. Attendees agreed and thought that such a forum was essential to engage with various stakeholders and bring the issues of export control into the forefront. We are looking forward to next year’s forum.

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

COM_2
18. 
D. Salvey: “BIS/CBP Message to Santa Claus” 

(Source: Author, 15 Dec 2017.)
 
* Author: Dennis Salvey, Director of Logistics and Trade Compliance, VT iDirect Inc., dsalvey@idirect.net.
 
Joint Notice to Mr. S. Claus from “BIS” & “CBP” Enforcement:
 
We have reviewed your Voluntary Self Disclosure to OEE and your Prior Disclosure to CBP, but we regret to inform you that your annual USA imports and worldwide exports of toys and gifts from the North Pole via USA will not be permitted this year due to multiple trade compliance violations. Until the below listed alleged violations are resolved, your enterprise is suspended from its normal course of business.
 
  (a) You have consistently failed to file the proper customs declarations, export licenses, and documentation with CBP and BIS. The EAR includes in the definition of an export as being the movement of goods, services, toys, gifts, or technology from the U.S. to any other country by any means including reindeer powered sleds. There is no exception or waiver for movement by magic as claimed in your VSD and PD.
  (b) Incorrect application of Incoterm DDP and use of counterfeit carnets for fly-over countries has resulted in millions of gifts held by Customs agencies around the world as you are not a registered importer in any country in which you do business.  Although all of your recipients wanted to receive those gifts, not one of them was willing to act as the Importer of Record. The exception was little Billy Johnson of Des Moines, Iowa, who attempted to bribe a CBP officer with candy canes, and now faces multiple federal charges. The total fines for storage by the respective Customs agencies are 2.5 gazillion dollars, which must be paid before the gifts can be released. Be advised that Monopoly money is not acceptable currency. 
  (c) Regarding the North Pole as Country of Origin, you claim that all of the material used in the making of every gift as well as all of the labor is a direct product of the North Pole. The World Customs Organization cannot verify that the materials needed to make all of these gifts could conceivably come from the North Pole. The criteria of “Grown, Produced, or Manufactured in a specific country” used to determine origin does not recognize “magic” as part of these criteria.  
  (d) Charges of unfair labor practices have been filed against you with the World Court by a group known as the International Brotherhood of Elves.
  (e) TSA has declared you as an “unknown shipper.”
  (f) Other Related Non-OEE/CBP Issues:
  – We are astonished at the number of paternity suits being filed against you over the world. These suits all include evidence from witnesses stating, “I saw Mommy kissing Santa Clause underneath the mistletoe last night.” We cannot guarantee that Mrs. Clause will not become aware of them at some point.
  – Your passport expired December 24, 1611. The U.S. will require an I-129 for your brief employment within U.S. borders each year certifying that you do not require an export license for “Deemed Exports.”
  – The EPA and equivalent agencies around the world are investigating complaints of excessive reindeer emissions (droppings). The fact that some farmers welcome this will not be considered a mitigating factor when and if the case goes to court.
  – Your “naughty / nice” list has raised concerns. Servicing those on the nice list while refusing to do business with those on the naughty list is a direct violation of the U.S. Antiboycott and anti-discrimination laws.
  – Investigations into privacy laws have also been opened concerning the allegation that “you see them when their sleeping and know when their awake”. However, all of these investigations will be dropped if you surrender the Intellectual Property rights to these methods to the CIA, FBI, M5, Mossad, and the KGB.
  – The red blinking light on Rudolf’s nose interferes with air traffic control.
  – The World Health Organization will be rescinding your status as a role model due to your weight and poor diet of milk and cookies at every house. This is not the type of example they expect from a person that children look up to.
 
Until each of the above issues is resolved you are hereby ordered to cease and desist your annual distribution or holiday cheer-spreading, as you refer to it.
 
PS: An exception will be made for gifts to DHS/HSI, OEE, and CBP.  Our wish lists are attached. ��

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

COM_a3
19. 
WorldECR Publishes “A World of Change: Special Report”

(Source: WorldECR, 19 Dec 2018.) 
 
WorldECR talks to the experts about the current state of play in sanctions and export controls as we approach 2019. Download this 40-page special report here.

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

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a1
20.
 
ECS Presents “Seminar Level I – Boot Camp: Achieving ITAR/EAR Compliance” in Orlando, FL on 11-12 Feb 2019

(Source: S. Palmer, spalmer@exportcompliancesolutions.com.)
 
* What: Seminar Level I – Boot Camp: Achieving ITAR/EAR Compliance; Orlando, FL
* When: 11-12 Feb 2019
* Sponsor: Export Compliance Solutions (ECS)
* ECS Speaker Panel:  Suzanne Palmer, Mal Zerden
* Register here or by calling 866-238-4018 or email 

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

TE_a2
21. 
FCC Presents Renewed U.S. Export Controls Awareness Course: “ITAR & EAR from a non-U.S. Perspective”, 9 April in Bruchem, the Netherlands

 
Our next academy course is specifically designed for beginning compliance professionals and those in a similar role who aim to stay up-to-date with the latest U.S. export control requirements that apply to non-U.S. transactions, and industry’s best practices.
 
The course will cover multiple topics relevant for organizations outside the U.S. that are subject to U.S. export controls, including: the U.S. regulatory framework, key concepts and definitions, tips regarding classification and licensing, essential steps to ensure a U.S. export control compliant shipment, how to handle a (potential) non-compliance issue, recent enforcement trends, and the latest and anticipated regulatory amendments.  Participants will receive a certification upon completion of the training.
 
* What: Awareness Course U.S. Export Controls: ITAR & EAR from a Non-U.S. Perspective 
* When: Tuesday, 9 Apr 2010, 9.30 am – 4.30 pm (CET)
* Where: Landgoed Groenhoven, Bruchem, the Netherlands
* Sponsor: 
Full Circle Compliance (FCC)
* Instructors: Michael E. Farrell and Alexander P. Bosch 
* Information & Registration: 
HERE, email 
events@fullcirclecompliance.eu, or call Mr. Vincent Goossen at +31 6 15 65 02 09.
 
Register before 18 February and get a 
10% Early Bird discount 

on the course fee!

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

TE_a322. 
List of Approaching Events: 62 Events Posted This Week, Including 4 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 
webinars. 
 
Please, submit your event announcement to Alexander Witt, Events & Jobs Editor (email: 
awitt@fullcirclecompliance.eu
), composed in the below format:
 
# DATE: LOCATION; “EVENT TITLE”; EVENT SPONSOR; WEBLINK; CONTACT DETAILS (email and/or phone number)
 

#” = 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;
danielle@learnexportcompliance.com 

* E-Seminars: “ITAR/EAR Awareness“; Export Compliance Solutions;
spalmer@exportcompliancesolutions.com
* 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

 
 
 


* 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
“; FENEX

* 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 11-12: 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 13: Southampton; “
UK Export Control Awareness Breakfast
“; Hampshire Chamber of Commerce, ECJU, and Trethowans LLP

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

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
“; ECTI

* 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

*
 
Jun 10: Cleveland, OH; “
Letters of Credit
“; Global Training Center
*
 
Jun 11: Cleveland, OH; “
Export Doc & Proc
“; Global Training Center
*
 
Jun 12: Cleveland, OH; “
Tariff Classificatio
n“; Global Training Center
*
 
Jun 13: Cleveland, OH; “
NAFTA Rules of Origin
“; Global Training Center
*
 
Jun 14: Cleveland, OH; “
Incoterms® 2010 Rules
“; Global Training 
* Jun 17-20: San Diego, CA; “ITAR Defense Trade Controls / EAR Export Controls“; ECTI

Jul 8 – 10: National Harbour, MD; “
2019 Summer Back to Basics Conference
“; SIA

*
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
 
Webinars 


ENEDITOR’S NOTES

EN_a123
. Bartlett’s Unfamiliar Quotations

(Source: Editor)
Benjamin Disraeli (21 Dec 1804 – 19 Apr 1881; was a British statesman who twice served as Prime Minister of the United Kingdom. He is the only British Prime Minister to have been Jewish by birth and the first person from an ethnic minority background to hold one of the Great Offices of State. He was also a novelist, publishing works of fiction even while Prime Minister.)
  – “The fool wonders, the wise man asks.”
  – “Little things affect little minds.” 
 
Friday funnies: 

* Just as the graveside service finished, there was a distant lightning bolt followed by a tremendous boom of thunder.  An elderly man by the coffin calmly said to the pastor, “Well, she’s there now, and it’s His problem.”

*
 “Commerce/BIS Extends Comment Period Concerning New Export Controls on Emerging Technologies”:


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

EN_a224. 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: 18 Dec 2018: 
83 FR 64942-65067
: Modernized Drawback

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: 20 Dec 2018: 
83 FR 65292-65294
: Control of Military Electronic Equipment and Other Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML); Correction [Concerning ECCN 7A005 and ECCN 7A105.]


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:
83 FR 17749-17751
: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates

  – HTS codes that are not valid for AES are available 
here.
  –
The latest edition (30 April 2018) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and approximately 250 footnotes containing case annotations, practice tips, Census/AES guidance, and explanations of the numerous errors contained in the official text. Subscribers receive revised copies in Microsoft Word every time the FTR is amended.  The BAFTR is available by annual subscription from the Full Circle Compliance 
website
BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR. Government employees (including military) and employees of universities are eligible for a 50% discount on both publications at www.FullCircleCompiance.eu
 
* HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA), 1 Jan 2018: 19 USC 1202 Annex. (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)

  – Last Amendment: 19 Dec 2018: Harmonized System Update (HSU) 1820, containing 19,061 ABI records and 3,393 harmonized tariff records.

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

 
INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130.
  

  – Last Amendment: 
4 Oct 2018: 
83 FR 50003-50007
: Regulatory Reform Revisions to the International Traffic in Arms Regulations
  – The only available fully updated copy (latest edition: 4 Oct 2018) of the ITAR with all amendments is contained in Bartlett’s Annotated ITAR (“BITAR”)
, by James E. Bartlett III. The BITAR contains all ITAR amendments to date, plus a large Index, over 800 footnotes containing amendment histories, case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text. Subscribers receive updated copies of the BITAR in Word by email, usually revised within 24 hours after every ITAR amendment.
The BITAR is available by annual subscription from the Full Circle Compliance 
website
. BAFTR subscribers receive a $25 discount on subscriptions to the BITAR, please
contact us
to receive your discount code.

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

EN_a325
. 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.

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

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