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19-0115 Tuesday “Daily Bugle'”

19-0115 Tuesday “Daily Bugle”

Tuesday, 15 January 2019

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The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, DOE/NRC, Customs, NISPOM, EAR, FACR/OFAC, FAR/DFARS, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
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[No items of interest noted today.] 

  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. State/DDTC: (No new postings.)
  4. UK/ECJU Posts Strategic Export Controls Licensing Statistics for Jul-Sep 2018
  1. American Shipper: “Exclusions for $200 Billion in China Tariffs on Hold” 
  2. ST&R Trade Report: “ICYMI: First Section 301 Product Exclusions Announced; CBP Not Yet Accepting” 
  1. A. Nicholls: “Five Global Trade Policy Developments to Watch – 2019”
  1. ECTI Presents “Hot Topics in US Sanctions – Recent Enforcement, Compliance Best Practices” Webinar, 21 Feb
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: DHS/Customs (14 Jan 2019), DOC/EAR (20 Dec 2018), DOC/FTR (24 Apr 2018), DOD/NISPOM (18 May 2016), DOE/AFAEC (23 Feb 2015), DOE/EINEM (20 Nov 2018), DOJ/ATF (26 Dec 2018), DOS/ITAR (4 Oct 2018), DOT/FACR/OFAC (15 Nov 2018), HTSUS (19 Dec 2018) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1
[No items of interest noted today.]

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OGSOTHER GOVERNMENT SOURCES

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

 

[No items of interest noted today.]  

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

(Source: 
Commerce/BIS)

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(Source:
UK/ECJU, 15 Jan 2019.)
 
The UK Export Control Joint Unit (“ECJU”) has added strategic export controls licensing statistics data for
July to September 2018.
 
Each quarterly report published since ‘Strategic export controls: licensing statistics, 1 January to 31 March 2015’ (published in July 2015) provides users with:
 
* a set of data tables presenting data on licensing decisions and processing times for all licence applications
  – for each quarterly report data is provided annually and quarterly from 2008 to the latest available quarter as excel sheets.
  – each set of tables is fully updated where they have been changes to data since the last publication (back to the start of 2008) so users should refer to the latest release for the most up to date data
* the same data presented in csv spread sheets for easier data manipulation
* a statistical commentary report that aims to summarise the key data trends and provide context and explaination for trends
* a country level data report giving data per country published as a PDF
 
Country level data reports are available for each quarter and year from January to March 2008 onwards.The information available in these reports is provided in each quarterly report from January to March 2015.
 
Users can also dowload data relating to specific licence types, destinations and goods by generating a ‘new report’ from the
strategic export controls: reports and statistics website.
 
Contact eco.statistics@trade.gov.uk if you have any queries.

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NWSNEWS

NWS_a15. American Shipper: “Exclusions for $200 Billion in China Tariffs on Hold”
(Source: American Shipper, 15 Jan 2019.)
 
U.S. Trade Representative Robert Lighthizer indicated in a letter that ongoing trade talks will play a role in whether the Trump administration eventually will establish an exclusion process.  
“If the duty rate on the $200 billion tariff action is raised to 25 percent, USTR will initiate an appropriate exclusion process,” Lighthizer said.
 
The letter responded to an Oct. 18 letter led by Kaine and signed by 10 other Democrat senators urging Lighthizer to establish an exclusion process for the $200 billion tranche, with the tariffs at that point set to increase on Jan. 1.
 
Trump and Chinese President Xi Jinping on Dec. 1 agreed to hold off on imposing further tariffs for 90 days as their governments engage in talks to promote more harmonious trade relations.
 
USTR has granted nearly 1,000 requests for exclusions from a first tranche of tariffs that took effect July 6 covering $34 billion worth of goods from China in 2017 import value, but has not announced any granted exclusions for a second tranche of tariffs across $16 billion worth of goods from China in 2017 import value. More than 2,500 exclusion requests have been submitted for goods included in the $16 billion tranche.
 
The U.S. is engaging China to address structural economic issues, such as forced technology transfer, intellectual property theft and “other actions impeding American economic growth and innovation,” Lighthizer’s letter states.
 
Lighthizer also indicated that USTR doesn’t intend to exempt U.S. importers who use foreign-trade zones (FTZs) from additional duties on goods from China when those duties apply to all other U.S. importers.
 
   “Understandably, every importer, including importers who make use of FTZs, would prefer a special exemption from the additional tariffs,” Lighthizer wrote. “As of this time, we have not found a basis for exempting U.S. importers who use FTZs from the additional duties, when those duties apply to all other U.S. importers.”
 
He added, “We will continue to talk with our Chinese counterparts in hopes of resolving unfair trade practices on the part of the government of China.”
 
The Trump administration will host a Chinese delegation led by Chinese Vice Premier Liu He in Washington later this month for further trade talks.

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NWS_a26. ST&R Trade Report: “ICYMI: First Section 301 Product Exclusions Announced; CBP Not Yet Accepting”
 
The Office of the U.S. Trade Representative has announced the first batch of products that will be excluded from the additional 25 percent duty imposed under Section 301 on some $34 billion worth of imports from China. These product exclusions will be retroactive to July 6, 2018, and remain in place through Dec. 27, 2019. USTR notes that it will continue to issue decisions on pending exclusion requests on a periodic basis.
 
The following are covered by the first batch of product exclusions (see link to full list at the bottom of this article):
 
  – seven existing 10-digit HTSUS subheadings: 8412.21.0075, 8418.69.0120, 8480.71.8045, 8482.10.5044, 8482.10.5048, 8482.10.5052, and 8525.60.1010
  – 24 specially prepared product descriptions, covering such items as certain spark-ignition engines for marine propulsion, stainless steel stretchers, roller machines with dies for embossing paper, plastic salad spinners, water filtration apparatus, winches, elevators, belt conveyors, work stands, radiation therapy systems, thermostats, stainless steel guards, stainless steel scrapers, and stainless steel suction boxes
 
According to USTR, the exclusions are available for any product that meets the specific product description, regardless of whether the importer filed an exclusion request. The scope of each exclusion is governed by the scope of the 10-digit headings and the specific product descriptions and not by the product descriptions set out in any particular request for exclusion.
 
USTR states that Section 301 product exclusions must be claimed using new HTSUS subheading 9903.88.05, but U.S. Customs and Border Protection has said it is not yet accepting such claims. CBP states that updates to the Automated Commercial Environment to reflect the exclusions will not be implemented until ten business days after the ongoing federal government shutdown has concluded. Until then (a) importers will have to continue paying the additional tariff on affected goods and (b) entries and entry summaries of such goods must be submitted without the HTSUS Chapter 99 product exclusion numbers referenced in the Federal Register notice of the product exclusions and will be rejected by ACE if those numbers are transmitted.
 
CBP has said that once it issues guidance and implements ACE enhancements to reflect the exclusions filers may submit post-summary corrections or protests to obtain refunds.
 
Requests for exclusions from the Section 301 25 percent tariff on another $16 billion worth of goods from China (List 2 items) were due by Dec. 18 and no such exclusions have yet been announced. The government has not yet established an exclusion process for the Section 301 tariff on $200 billion worth of Chinese goods (List 3 items) that is currently at 10 percent and is scheduled to increase to 25 percent on March 1.
 
View Document(s):
exclusion list

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COMMCOMMENTARY

(Source:
LinkedIN, 11 Jan 2019.)
 
* Author: Alicia Nicholls, International Trade and Development Consultant, Caribbean Trade Law. Contact here.
 
Happy New Year to all! 2018 was without doubt a nail-biting year for global trade policy developments. In our first article for the year, we take a look back at some of the key trade policy developments in 2018 and what to watch for 2019! 
 
1. US-China Trade Tensions and Truce?
 
Without doubt, the election of President Donald Trump in the US in 2016 has led to a more nationalistic, protectionist and unilateral turn in US trade and foreign policy. Under his ‘America First’ ideology, President Trump issued proclamations hiking tariffs on imported steel and aluminum under the guise of national security, with only a small handful of countries being spared.
 
Tensions between the US and its other key trading partners, such as Canada and the EU, were inflamed, but China was the main target of US trade action. According to the BBC, the US has imposed tariffs on over $250 billion dollars of Chinese goods and had threatened an additional $260 billion, while China has imposed tariffs on $50 billion dollars of US goods and threatened tariffs on an additional $60 billion. Both countries agreed to a truce in December to suspend any further tariff impositions for a 90-day period while talks resume.
Trade talks held between the US and China this week have been hailed as positive by both sides, but the two economic behemoths are still a long way from resolving long-simmering tensions.
 
The WTO has warned that the uncertainty around the escalating trade tensions was beginning to adversely impact business and investment confidence, with potential implications for continued global trade growth. Moreover, in its Global Economic Prospects – January 2019 report, the World Bank has warned of darkening clouds over the global economy and softening global trade and investment flows.
 
2. WTO Reform
 
On the multilateral scene, the crisis in the WTO’s Appellate Body due to the US’ blockage of appointments appears to have given new political will and urgency to the need to reform the WTO and safeguard the rules-based multilateral trading system.
 
The US’ continued blockage of appointments/re-appointments to the organisation’s seven-member Appellate Body has now resulted in only three sitting Appellate Body members – the minimum for the Body to function.
 
Several WTO members have tabled proposals for reforms on discrete issues, such as transparency/notification, while the European Union (EU) and Canada have both placed more comprehensive reform proposals on the table, including reform of the dispute settlement system.
 
However, WTO members are still a long way from deciding on how deep and wide-ranging the reform agenda should be. The US, which has for a long time expressed grave reservations about the Appellate Body, has so far not been convinced by any of the proposals tabled.
 
This year will be critical for deciding on the way forward for WTO reform, especially since the loss of yet another Appellate Body member will result in the Appellate Body being unable to operate, with grave implications for the prompt settlement of disputes and the rules-based multilateral trading system, on a whole.
 
3. Regional Trade Agreements – AfCTA, USMCA, CPTPP, EU-Japan 
 
On the regional trade agreement scene, there were several positive and major developments in 2018. One of the most exciting was in March, 2018 when forty-four African states signed the Africa Continental Free Trade Agreement (AfCFTA) in Kigali, Rwanda. Since then, five other States have signed the agreement. Thirteen African States have ratified the agreement thus far and further ratifications will be needed before it comes into effect.
 
President Donald Trump made good on one of his major trade policy promises – the renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico to make it ‘fit for purpose’ for the 21st century. In November 2018, the three countries announced they had agreed an agreement under a new name – the United States, Mexico and Canada (USMCA) Agreement. Some of the major changes include more stringent rules of origin (RoO), extension of terms of copyright protection, a sunset clause and provision for a 6-year review. Ratification by the three countries will be needed.
 
After the US’ withdrawal from the Trans-Pacific Partnership (TPP) under President Trump, the remaining eleven TPP parties signed a successor agreement termed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018. The Agreement came into effect on December 30, 2018, and its parties account for an estimated 14% of global GDP.
 
Five years after negotiations began in 2013, the EU and Japan signed the Economic Partnership Agreement and the EU-Japan Strategic Partnership Agreement. The Agreement, which is on track to come in effect in February 2019, is the first free trade agreement to make explicit reference to the Paris Climate Change Agreement which was signed in 2015.
 
4. Bolsonaro’s Brazil
 
South America’s largest country, Brazil, elected Jair Bolsonaro who took office as president at the beginning of 2019. Riding the wave of right-wing populism, Mr. Bolsonaro has expressed support for the unilateral foreign policy espoused by his US counterpart and has expressed apathy about Mercosur. Brazil is one of the most influential emerging economies, both hemispherically and internationally. The implications of the South American nation’s shifting foreign and trade policy will, therefore, be key to watch.
 
5. Brexit Uncertainty
 
Of course, one of the biggest trade policy developments to watch in 2019 will be the UK’s impending withdrawal from the EU – Brexit – which, as it stands, is to take place on March 29, 2019. 
 
After nearly two years of intense negotiations, the EU-27 and the UK finally arrived at a Draft Agreement on the UK’s Withdrawal from the EU and a Political Declaration Setting out the Framework for the Future Relationship between the EU and the UK in November 2018. The EU-27 leaders endorsed the two texts at a special emergency meeting of the European Council.
However, in the face of strong opposition to the deal, particularly the ‘backstop’ provisions regarding the Northern Ireland/Ireland Border, UK Prime Minister Theresa May cancelled a crucial House of Commons vote on the deal which she likely would have lost. Mrs. May has sought to obtain further binding concessions from the EU, but without success thus far.
 
This week, the British House of Commons MPs voted in favour of an amendment requiring the Prime Minister to present to Parliament a Brexit Plan B within three days, in the event that MPs reject the current Draft Withdrawal Agreement in their vote rescheduled for next week Tuesday. Meanwhile, Labour Leader Jeremy Corbyn is calling for a general election to break the Brexit deadlock.
 
The Brexit deadline looms, but the May Government has ruled out requesting an extension under Article 50. With the timeline for the UK’s withdrawal ticking and the real threat of a potentially economically disastrous ‘no-deal’ exit, this will be one of the major trade policy issues to watch in 2019.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a18. ECTI Presents “Hot Topics in US Sanctions – Recent Enforcement, Compliance Best Practices” Webinar, 21 Feb
(Source: Danielle Hatch, danielle@learnexportcompliance.com)
 
* What: Hot Topics in US Sanctions – Recent Enforcement, Compliance Best Practices
* When: February 21, 2019 1:00 p.m. (EST)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Thaddeus R. McBride
* Register: Here or Danielle Hatch, 540-433-3977, danielle@learnexportcompliance.com.

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ENEDITOR’S NOTES

*
  Moliere (Jean-Baptiste Poquelin, 15 Jan 1622 – 17 Feb 1673; was a French playwright, actor, and poet, widely regarded as one of the greatest writers in the French language and universal literature. His plays have been translated into every major living language and are performed at the Comédie-Française more often than those of any other playwright today.)
  – “The trees that are slow to grow bear the best fruit.”
  – “The greater the obstacle, the more glory in overcoming it.”
 
* Martin Luther King, Jr. (15 Jan 1929 – 4 Apr 1968; was an American Baptist minister and activist who became the most visible spokesperson and leader in the civil rights movement from 1954 until his death in 1968.  King is best known for advancing civil rights through nonviolence and civil disobedience, tactics his Christian beliefs and the nonviolent activism of Mahatma Gandhi helped inspire.)
  – “Hate cannot drive out hate; only love can do that.”
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EN_a310
. Are Your Copies of Regulations Up to Date?
(Source: Editor)

 
* DHS CUSTOMS REGULATIONS: 19 CFR, Ch. 1, Pts. 0-199.  Implemented by Dep’t of Homeland Security, U.S. Customs & Border Protection.
  – Last Amendment: 14 Jan 2019: 84 FR 112-116: Extension of Import Restrictions Imposed on Certain Archaeological and Ecclesiastical Ethnological Material from Bulgaria; and 84 FR 107-112: Extension of Import Restrictions Imposed on Certain Archaeological Material From China 
 

DOC EXPORT ADMINISTRATION REGULATIONS (EAR): 15 CFR Subtit. B, Ch. VII, Pts. 730-774. Implemented by Dep’t of Commerce, Bureau of Industry & Security.
  – 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.]
 
* DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.  Implemented by Dep’t of Commerce, U.S. Census Bureau.
  – 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 (1 Jan 2019) 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.   

 

DOD NATIONAL INDUSTRIAL SECURITY PROGRAM OPERATING MANUAL (NISPOM): DoD 5220.22-M. Implemented by Dep’t of Defense.
  – 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.)
 
 
DOE ASSISTANCE TO FOREIGN ATOMIC ENERGY ACTIVITIES: 10 CFR Part 810; Implemented by Dep’t of Energy, National Nuclear Security Administration, under Atomic Energy Act of 1954.
  – Last Amendment: 23 Feb 2015: 80 FR 9359, comprehensive updating of regulations, updates the activities and technologies subject to specific authorization and DOE reporting requirements. This rule also identifies destinations with respect to which most assistance would be generally authorized and destinations that would require a specific authorization by the Secretary of Energy.
 
DOE EXPORT AND IMPORT OF NUCLEAR EQUIPMENT AND MATERIAL; 10 CFR Part 110; Implemented by Dep’t of Energy, U.S. Nuclear Regulatory Commission, under Atomic Energy Act of 1954.
  – Last Amendment: 20 Nov 2018, 10 CFR 110.6, Re-transfers.
 

* DOJ ATF ARMS IMPORT REGULATIONS: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War.  Implemented by Dep’t of Justice, Bureau of Alcohol, Tobacco, Firearms & Explosives.
  – 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.  

 

DOS INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130. Implemented by Dep’t of State, Directorate of Defense Trade Controls.
  – 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: 1 Jan 2019) 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.
 
* DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders. 

Implemented by Dep’t of Treasury, Office of Foreign Assets Control.

  – Last Amendment: 15 Nov 2018: 83 FR 57308-57318: Democratic Republic of the Congo Sanctions Regulations
  
* USITC HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA), 1 Jan 2018: 19 USC 1202 Annex. Implemented by U.S. International Trade Commission. (“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.

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EN_a0311
Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor) 

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

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EPEDITORIAL POLICY

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Alexander P. Bosch and Vincent J.A. Goossen; and Events & Jobs Editor, Alex Witt. The Ex/Im Daily Update is emailed every business day to approximately 6,500 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

* RIGHTS & RESTRICTIONS: This email contains no proprietary, classified, or export-controlled information. All items are obtained from public sources or are published with permission of private contributors, and may be freely circulated without further permission, provided attribution is given to “The Export/Import Daily Bugle of (date)”. Any further use of contributors’ material, however, must comply with applicable copyright laws.  If you would to submit material for inclusion in the The Export/Import Daily Update (“Daily Bugle”), please find instructions here.

* CAVEAT: The contents of this newsletter cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.


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