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19-0222 Friday “Daily Bugle”

19-0222 Friday “Daily Bugle”

Friday, 22 February 2019

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.

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  1. State Publishes Correction Concerning Information Collections Related to the USML Categories I, II, and III
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. Commerce/Census: “Tips on How to Resolve AES Fatal Errors”
  4. DHS/CBP Posts Latest Drawback Trade Issue Tracker Document
  5. State/DDTC: (No new postings.)
  6. Dutch Government Publishes Updated ICP Guidelines
  1. ADM: “Review Rejects Defence Push for Greater Export Control”
  2. The Epoch Times: “Chinese Physicist Who Won Major Science Prize Denied US Visa to Receive Award”
  3. ST&R Trade Report: “Tariff Hikes More Likely to Divert Trade Than Reshore Manufacturing, Report Says”
  4. Swissinfo.ch: “Switzerland Halts Arms Exports to Lebanon Due to Missing Weapons”
  5. The Telegraph: “German Arms Manufacturer Fined £3m for Illegal Gun Sales to Mexico”
  6. WorldECR: “UK government ‘On Wrong Side of the Law’ Re Saudi Arms Exports”
  1. J. Alison Lee, A. Smith, P. Doris: “2018 Year-End Sanctions Update: United Kingdom Development and Enforcement (Part IV of IV)”
  2. M.T. Gershberg & J.A. Schenck: “Recent OFAC Enforcement Actions Highlight Sanctions Risk in Cross-Border M&A Activity”
  3. S. Pelak, J. Prince & R. Tsai: “DOJ Settles with Honda Aircraft on Discrimination Claim Related to Export Controls”
  4. T. Murphy: “Section 232 Investigation on Autos/Auto Parts — Possible Retaliatory Measures on U.S. Goods”
  1. ECS Presents “ITAR/EAR Bootcamp: Achieving Compliance” on 8-9 Jul in Seattle, WA
  2. FCC Presents 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: 135 Events Posted This Week, Including 16 New Events
  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 (12 Feb 2019)
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1. 
State Publishes Correction Concerning Information Collections Related to the USML Categories I, II, and II 

(Source: 
Federal Register, 22 Feb 2019.) 
 
84 FR 5802: Notice of Information Collection Under OMB Emergency Review: Three Information Collections Related to the United States Munitions List, Categories I, II and III; Correction
 
* ACTION: Notice of request for emergency OMB approval and public comment; correction.
* SUMMARY: The Department of State published a Federal Register Notice on February 12, 2019, notifying the public of the Emergency processing and approval of this collection by April 1, 2019. The Notice using Docket Number: DOS-2018-0063 contained an incorrect date when all comments must be received. This document corrects the date to March 14, 2019.
* FOR FURTHER INFORMATION CONTACT: Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents to Andrea Battista who may be reached on 202-663-3136 or at 
battistaal@state.gov.
 
Correction
In the Federal Register, published on February 12, 2019, in FR Doc. 2019-01983, on page 3528, in the first column, the correct date when all comments must be received is March 14, 2019.
 
Anthony M. Dearth, Chief of Staff, Directorate of Defense Trade Controls, Department of State.

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OGSOTHER GOVERNMENT SOURCES

OGS_a12
. Items Scheduled for Publication in Future Federal Register Editions
 

(Source:
Federal Register)
 

* U.S. Customs and Border Protection; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: Protest [Pub. Date: 25 Feb 2019.]  

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OGS_a23
Commerce/BIS: (No new postings.)

(Source: 
Commerce/BIS)

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OGS_a03
4. Commerce/Census: “Tips on How to Resolve AES Fatal Errors”
(Source: census@subscriptions.census.gov, 21 Feb 2019.)
 
When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. However, if the shipment is rejected, a Fatal Error notification is received.
 
To help you resolve AES Fatal Errors, here are some tips on how to correct the most frequent errors that were generated in AES for this month.
 
Fatal Error Response Code: 138
 
  – Narrative: Port of Unlading Missing
  – Reason: The Port of Unlading Code is missing. All vessel shipments, and any air shipments between the United States and Puerto Rico must provide a Port of Unlading Code.
  – Resolution: The Port of Unlading Code is the foreign port where the exported merchandise is unloaded from the exporting carrier. Report a valid Port of Unlading Code for all vessel shipments, and any air shipments between the United States and Puerto Rico. Verify the Port of Unlading Code, correct the shipment and resubmit.
 
Fatal Error Response Code: 539
 
  – Narrative: Shipping Weight Must be Zero for MOT
  – Reason: The Mode of Transportation Code is not Vessel, Rail, Truck or Air and the Shipping Weight is not reported as zeros.
  – Resolution: When the Mode of Transportation is other than Vessel, Rail, Truck or Air and the Export Information Code is not HH for household goods, the Shipping Weight must be zero. Verify the Mode of Transportation and Shipping Weight, correct the shipment and resubmit.
 
For a complete list of Fatal Error Response Codes, their reasons, and resolutions, see Appendix A – Commodity Filing Response Messages.
 
It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations. These errors must be corrected prior to export for shipments filed predeparture and as soon as possible for shipments filed postdeparture but not later than five calendar days after departure.
 
For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.
 
Telephone: (800) 549-0595, select option 1 for AES
 
  – Email: askaes@census.gov
  – Online: www.census.gov/trade
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OGS_a4
5. DHS/CBP Posts Latest Drawback Trade Issue Tracker Document
(Source: CSMS #19-000083, 22 Feb 2019.)
 
Here is the latest Drawback Trade Issue Tracker document. As a reminder, questions relating to policy for Drawback should be emailed to the OT Drawback inbox at OTDRAWBACK@cbp.dhs.gov.
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OGS_a5
6. State/DDTC: (No new postings.)
(Source: State/DDTC)
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OGS_a6
7. Dutch Government Publishes Updated ICP Guidelines
(Source: Rijksoverheid, 22 Feb 2019.)
 
The Dutch government has published on its website an updated version (1.1.) of its guidelines for compiling an Internal Compliance Program for strategic Goods, torture goods, technology, and sanctions.
 
  – Click here for the English version (PDF).
  – Click here for the Dutch version (PDF).
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NWSNEWS

 
The review of the Defence Trade Controls Act (DTCA) 2012 has been released.
 
Established in April 2018, the review was conducted by Dr Vivienne Thom, a former Inspector-General of Intelligence and Security. Dr Thom assessed whether the DTCA “provides appropriate levels of regulation and security for controlled technologies; aligns with international best practice for export controls; and is not unnecessarily restricting trade, research and international collaboration.”

The review found that whilst stakeholders were generally pleased with administration of the DTCA, an increase in processing times put collaboration and negotiations at risk. Dr Thom also highlighted the need for Defence to better raise awareness of the DCTA’s existence, particularly to SMEs and researchers.
 
Crucially, the review rejected the recommendations set out in Defence’s submission: “The review recognises that changes in the national security environment require that the legislation be amended in order for it to remain effective, but does not support the broad approach implied by the recommendations in the Defence submission.”
 
Dr Thom, however, “was also persuaded that Defence should be given appropriate powers to monitor compliance or to effectively investigate suspected non-compliance, to determine whether cases should be referred to the Australian Federal Police.”
 
Dr Thom’s findings were drawn from 75 written submissions and personal meetings with stakeholders from government, industry, universities, and peak bodies. Defence has expressed support for all nine recommendations.
 
The review was welcomed by universities and the scientific community.
 
Australian Academy of Science President Professor John Shine said that the review confirmed the original intent of the DCTA to balance Australia’s international trade and security obligations with the need for researchers to engage collaboratively with partners around the world.
 
  “The Academy of Science was very concerned at proposals put forward by defence officials in 2015 to introduce sweeping new powers to restrict the international exchange of knowledge and ideas,” Professor Shine said.
 
  “Further restrictions would effectively have limited Australian researchers’ ability to engage in international research collaboration and to benefit as a nation from the many international research collaborations and expertise on which a substantial proportion of our economy relies.
 
  “We’re very pleased that these concerns have been heard and believe that the recommendations in the review strike the right balance in Australia’s national interests.”
 
  “The Group of Eight Universities was dismayed and concerned with the Defence Department’s submissions for extended powers,” chief executive Vicki Thomson said.
 
  “It went against everything that made the Defence Trade Controls Act such a sensible and workable piece of legislation.”
 
  “Importantly, Defence Minister Christopher Pyne has supported Dr Thom’s considered views,” she said. “For the Go8 that is a win for common sense.”
 
  “The Coalition Government recognises the importance of strong protections against the transfer of critical military technology which can pose a pressing threat to the security and defence of Australia,” Minister for Defence Christopher Pyne said.
 
  “It is also important, as the review has highlighted, that any future amendments do not unnecessarily restrict trade, research and international collaboration and impede on the development of Australia’s defence capability.”
 
Dr Thom has now been engaged to lead a consultation phase to develop legislative proposals.
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(Source:
The Epoch Times
, 21 Feb 2019.) [Excerpts.]
 
Pan Jianwei, a Chinese quantum physicist who was part of a research team to win a top science prize, was denied a travel visa to attend the award ceremony held in the United States.
 
Chinese state-run broadcaster CGTN first reported on Feb. 16 that Pan’s U.S. visa application was under “administrative processing,” preventing Pan from receiving the Newcomb Cleveland Prize at a ceremony held in Washington on Feb. 14.
 
While it’s unclear why the U.S. authorities did not grant him the visa, Pan was recruited under Beijing’s “Thousand Talents Plan,” a state-run program designed to attract mostly ethnic Chinese scientists and engineers in the West to take up lucrative jobs in China. The program has been criticized by the U.S. administration as a project to encourage overseas Chinese to transfer technologies beneficial to China’s national interests. …
 
  “The Thousand Talents Program… [lures] both Chinese overseas talent and foreign experts alike to bring their knowledge and experience to China, even if that means stealing proprietary information or violating export controls to do so,” Bill Priesta, the assistant director of the FBI Counterintelligence Division, told U.S. lawmakers at a Congressional hearing on Dec. 12, 2018. …

 

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The increased tariffs the U.S. and China are imposing on each other’s products are not likely to be very effective in protecting domestic companies and instead will mostly divert trade to other countries, according to a new study from the United Nations Conference on Trade and Development.
 
The study estimates that of the $250 billion in Chinese exports currently subject to the U.S. Section 301 tariff increases, about 82 percent will be captured by firms in other countries and roughly 12 percent will be retained by Chinese firms, with only about 6 percent captured by U.S. firms. Similarly, of the approximately $110 billion in U.S. exports subject to China’s retaliatory tariffs, about 85 percent will be captured by firms in other countries and U.S. firms will retain less than 10 percent, with Chinese firms capturing only about 5 percent. According to the study, these results are consistent across different sectors, including machinery, wood products, furniture, communication equipment, chemicals, and precision instruments.
 
UNCTAD states that countries likely to benefit the most are those that are more competitive and have the economic capacity to replace U.S. and Chinese firms. European Union exports are likely to increase the most, capturing about $70 billion of U.S.-China trade ($50 billion of Chinese exports to the U.S. and $20 billion of U.S. exports to China), and Japan, Mexico, and Canada are projected to each capture more than $20 billion. Substantial effects relative to the size of their exports are also expected for Australia, Brazil, India, the Philippines, Pakistan, and Vietnam.
 
However, the study adds, there could be negative effects as well. One concern is that more countries may take similar measures, escalating protectionist policies to a global level. In addition, upstream suppliers of the products caught up in the U.S.-China trade war could see significant reductions in business as buyers source elsewhere.  

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(Source:
Swissinfo.ch, 21 Feb 2019.)
 
Inability to account for a Swiss shipment of weapons exported to Lebanon has resulted in a freeze of arms exports, authorities have announced.
 
On Wednesday, the head of the Economics Ministry informed the government that exports of war materiel to Lebanon would no longer be allowed until further notice.
 
This decision is linked to post-shipment verification last year of 10 assault rifles and 30 sub-machine guns that were exported to Lebanon in 2016. Swiss inspectors were only able to verify and inspect nine of the 40 small arms.
 
It is not known whether the missing weapons were handed over to another recipient or whether access was denied to the Swiss authorities for other reasons. It was agreed that that the risk of the weapons ending up in undesirable hands is high and justifies a halt in licensing exports under the provisions of the Ordinance on War Materiel.
 
Switzerland already has restrictions on the export of arms to Lebanon: they can only be sold to those units in charge of protecting political figures (such as the presidential guard). Previous post-shipment verification in 2013 and 2015 did not present any problems.
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(Source:
The Telegraph, 21 Feb 2019.) [Excerpts.]
 
One of Germany’s best-known arms manufacturers was fined €3.7m (£3.2m) by the country’s courts on Thursday for illegal weapons sales to Mexico.
 
The fine was imposed after employees at Heckler and Koch were found guilty of shipping around 5,000 G36 assault rifles and smaller weapons to Mexico between 2006 and 2009 in contravention of German export restrictions.
 
Two former employees of the company were handed suspended jail sentences by a Stuttgart court, while two former directors and a sales manager were acquitted of involvement.
 
The scandal centers on shipments of arms to areas of Mexico affected by drug trade violence and kidnappings.
 
Germany is one of the biggest arms manufacturers in the world but operates strict export controls, and bans weapons sales to the regions in question. …
 
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NWS_a613. WorldECR: “UK government ‘On Wrong Side of the Law’ Re Saudi Arms Exports”
(Source: WorldECR, 22 Feb 2019.) [Excerpts.]
 
UK arms exports “are highly likely to be the cause of significant civilian casualties in Yemen”.  
The UK government’s policy of licensing arms sales to the Kingdom of Saudi Arabia is ‘narrowly on the wrong side of the law’, according to a House of Lords Select Committee on International Relations.
 
In its report, ‘Yemen: giving peace a chance’, the Committee members say that they “recognize that there are legitimate reasons for UK arms exports overseas. Export licensing decisions for the sale of arms always require fine judgements, balancing legitimate security concerns against human rights implications, and each situation must be assessed individually. The Government asserts that, in its licensing of arms sales to Saudi Arabia, it is narrowly on the right side of international humanitarian law.” …
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COMCOMMENTARY

COM_a114. 
J. Alison Lee, A. Smith, P. Doris: “2018 Year-End Sanctions Update: United Kingdom Development and Enforcement (Part IV of IV)”

(Source: 
Gibson Dunn, 11 Feb 2019.)
 
* Authors: Judith Alison Lee, Co-Chair, International Trade Practice, 
jalee@gibsondunn.com; Adam Smith, Esq., 
asmith@gibsondunn.com; and Patrick Doris, Esq., 
pdoris@gibsondunn.com. All of Gibson Dunn.
 
[Part III was published in yesterday’s Daily Bugle.]
 
(IV) United Kingdom Developments and Enforcement
 
A key focus of attention of sanctions professionals in the United Kingdom this year has been the likely treatment of EU sanctions post-Brexit.
 
On October 12, 2018, the UK’s Office for Financial Sanctions Implementation, which is part of HM Treasury, circulated a technical notice issued by another UK Ministry, the Department for Exiting the European Union (“DEXEU”), considering the implications for sanctions law in the UK in the event of a “no-deal Brexit.”  A no-deal Brexit is a scenario in which the UK does not reach an agreement with the European Union in connection with the future trading relationship between them by 11pm March 29, 2019 (midnight on March 30, 2019 CET), the date on which the UK is currently due to exit the EU.
 
Whilst the UK does introduce its own sanctions legislation from time to time (and can be expected to do so following Brexit), the majority of UK sanctions instruments are introduced in implementation of EU sanctions.  EU sanctions regimes are brought into effect by legislative instruments passed at EU level, typically Decisions and Regulations of the Council of the EU.  EU Decisions are binding only on the persons to whom they are addressed; EU Regulations are binding on all persons and are automatically applicable in the domestic courts of the EU member states.
 
However, the EU Member States have not given the EU competence to create criminal offences; only the Member States themselves can do that.  As such, EU sanctions instruments do not, by themselves, create criminal offences in the domestic legal orders of the EU Member States.  In order to create such criminal offences, domestic implementing legislation is generally required.  EU Member States take a variety of different approaches to such implementing legislation.  Some Member States have a standing implementing law which creates a criminal offence of violation of EU sanctions in force, so that as soon as a new EU Regulation implementing sanctions is brought into force, breach thereof will be an offence in the domestic legal order.  The UK does not take this approach.  Instead, in the UK, new delegated legislation (in the form of implementing regulations) is adopted each time the EU introduces (and sometimes when it amends) a sanctions regime, and it is those new implementing regulations that create the criminal offences in question.
 
The UK’s future relationship with EU law in its national legal orders following Brexit will depend on the final terms of the Withdrawal Agreement that the UK is currently seeking to negotiate with the EU and any subsequent trade agreements regarding the future trading relationship.  There remains some uncertainty as to what these agreements will contain-and there is a possibility that no agreement will be reached.  In the event of a “no deal” Brexit, the UK will not be obliged automatically to adopt EU sanctions following Brexit.
 
The question also arises as to the legal basis of EU sanctions in effect at the point the UK leaves the EU, given that the underlying EU legal basis for those sanctions will no longer apply to the UK.  In order to avoid legal lacunae resulting from Brexit, the UK passed in 2018 the European Union (Withdrawal) Act 2018, which enacts certain savings for EU-derived legislation, direct EU legislation and EU law-derived rights.  This Act provides, in broad summary, that all of these will be deemed to have effect as domestic law in the UK (i.e., English law, Scots law and the law of Northern Ireland) on and after Brexit day, save to the extent that Parliament enacts regulations modifying or negating the relevant law.
 
The technical notice sets out the policy of the UK Government regarding sanctions in the event of a “no deal” Brexit.  The relevant section of the technical notice reads as follows:
 
As international law requires, we will implement UN sanctions in UK domestic law after the UK leaves the EU.
 
If the UK leaves the EU without a deal, we will look to carry over all EU sanctions at the time of our departure. We will implement sanctions regimes through new legislation, in the form of regulations, made under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). The Act will provide the legal basis for the UK to impose, update and lift sanctions after leaving the EU.
 
We propose to put much of this legislation before Parliament before March 2019, to prepare for the possibility of the UK leaving the EU without a deal. Any sanctions regimes that we did not address, through regulations under the Sanctions Act by March 2019, would continue as retained EU law under the EU (Withdrawal) Act 2018. This means there will be no gaps in implementing existing sanctions regimes.
 
We expect that the UK’s sanctions regulations will include:
 
– the purposes of the sanctions regime (what the UK hopes will be achieved through imposing sanctions)
          – the criteria to be met before sanctions can be imposed on a person or group
  – details of sanctions, such as trade and financial sanctions
  – details of exemptions that may apply, such as exemptions which allow people to trade with a certain country that would otherwise be prohibited by the regulations
          – how we will enforce the sanctions measures
  – other areas, such as circumstances in which information about sanctions may be shared
 
We would publish the names of sanctioned persons or organizations. Regulations would be published as normal.
 
After the UK leaves the EU, in addition to implementing UN sanctions, and looking to carry over existing EU sanctions, we will also have the powers to adopt other sanctions under the Sanctions Act. We will work with the EU and other international partners on sanctions where this is in our mutual interest.
 
It is also noted that, in its December 2018 Mutual Evaluation Report on the United Kingdom, the Financial Action Task Force (an independent inter-governmental body which promotes policies to protect the global financial system against, inter alia, money laundering) criticized the UK’s recent lack of public-enforcement actions in relation to sanctions breaches, and recommended that the U.K. Office of Financial Sanctions Implementation and other UK enforcement authorities “ensure” that they pursue such actions.

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COM_a215. 
M.T. Gershberg & J.A. Schenck: “Recent OFAC Enforcement Actions Highlight Sanctions Risk in Cross-Border M&A Activity”

 
* Authors: Michael T. Gershberg, Esq., 
michael.gershberg@friedfrank.com, 202-639-7085; and Justin A. Schenck, Esq., 
justin.schenck@friedfrank.com, 202-639-7021, both of Fried, Frank, Harris, Shriver & Jacobson LLP.
 
In the last two weeks, OFAC issued two enforcement actions for activities conducted by foreign subsidiaries that violated U.S. sanctions laws. On February 14, 2019, OFAC announced a $5.5 million civil penalty against AppliChem GmbH, a Germany company, for deliberately and surreptitiously continuing business with Cuba after being acquired by a U.S. company. On February 7, 2019, OFAC announced a settlement with Kollmorgen Corporation, a U.S. company, because its Turkish subsidiary continued conducting business in and with Iran after it was acquired by Kollmorgen.
 
These settlements highlight the importance of U.S. companies conducting enhanced sanctions due diligence on foreign targets during the M&A process, and implementing sanctions compliance policies at the new foreign subsidiaries. It is equally important to monitor the foreign subsidiaries’ compliance with U.S. sanctions laws and internal policies. Failure by foreign subsidiaries to comply with OFAC regulations could result in significant penalties for both the parent and subsidiaries.
 
AppliChem
 
In 2012, Illinois Tool Works, Inc. (ITW), a U.S. company, acquired AppliChem, a Germany company. While conducting due diligence during the acquisition process, ITW found that AppliChem transacted with Cuba, and instructed AppliChem to cease such transactions post-closing. Foreign subsidiaries of U.S. companies are directly subject to the U.S. sanctions against Cuba. The former owners of AppliChem stayed on as managers, and despite the original notice and a subsequent warning, AppliChem continued its Cuban business. After ITW discovered this, it sent a third warning and submitted a voluntary selfdisclosure to OFAC in January 2013. In that disclosure, ITW stated that AppliChem had ceased all Cubarelated transactions.
 
Three years later, ITW received an anonymous tip on its ethics hotline that AppliChem had still been conducting business in Cuba. ITW began an investigation and found that the former AppliChem owners had used various methods to conceal the Cuba business from ITW, including using an external logistics company and an independent consultant to prepare the necessary transaction documents. AppliChem had created policies to remove references to Cuba in documents relating to the Cuban business, and AppliChem senior management had even conducted trainings for staff to carry out these policies and to conceal the Cuba business from ITW. ITW voluntarily self-disclosed these violations to OFAC. Additionally, the former owners of AppliChem are no longer ITW employees.
 
OFAC determined that these violations constituted an egregious case, which is relatively uncommon in OFAC enforcement actions. In particular, OFAC found that aggravating factors included the use of written procedures to engage in willful violation of sanctions laws, the volume of sales over the course of five yearswhich was significantly harmful to the objective of maintaining an embargo on Cubaand the sophistication of the company. OFAC found ITW’s cooperation, voluntary self-disclosure, and internal investigation to be mitigating factors. OFAC noted in the enforcement action that it was important for companies to ensure subsidiaries are complying with OFAC regulations, and to conduct follow-up due diligence on acquired foreign persons who have transacted with sanctioned persons and jurisdictions in the past. This includes conducting regular audits and remedial measures, as necessary, to address any negative sanctions compliance efforts.
 
Kollmorgen
 
Kollmorgen is a U.S. corporation with a Turkish affiliate, Elsim Elektroteknik Sistemler Sanayi ve Ticaret Anonim Sirketi (Elsim). Kollmorgen acquired Elsim in early 2013. During the due diligence process, Kollmorgen learned that Elsim conducted business with Iran. To prevent future business with Iran, Kollmorgen implemented various U.S. sanctions compliance measures. Under the Iran sanctions program, foreign subsidiaries of U.S. companies are directly subject to the U.S. sanctions against Iran, and the U.S. parent company is responsible for the subsidiary’s compliance. However, between July 2013 and July 2015, after the acquisition, Elsim willfully violated those compliance policies by sending employees to Iran to fulfill service agreements and then falsifying the travel records. If employees refused, Elsim threatened to fire them. Elsim also conducted other Iran-related transactions in that time.
 
Upon learning of these practices in late 2015, Kollmorgen began an investigation and reported the findings to OFAC. Elsim managers attempted to obstruct the investigation by deleting emails related to Iran, misleading Kollmorgen’s attorneys, and even directing employees to delete references to Iran in company records. After the violations became known, Kollmorgen took various remedial measures such as creating a training program to educate Elsim employees on compliance with U.S. trade laws and requiring Elsim to seek pre-approval from an officer based outside of Turkey for foreign service trips.
 
OFAC found the violations constituted a non-egregious case, and that Kollmorgen’s extensive preventative and remedial measures were mitigating factors. However, OFAC determined that a monetary penalty was appropriate because Elsim’s conduct had been egregious. The monetary penalty was fairly low because the transactions had been relatively low-value. As in AppliChem, OFAC noted that it was important to conduct and maintain heightened due diligence on related parties that have transacted with sanctioned parties or countries in the past, and to impose proactive controls after a U.S. company acquires such a business.
 
Additionally, in an apparent first, OFAC named an involved individual as a foreign sanctions evader. OFAC designated an Elsim manager primarily responsible for the conduct as a blocked person pursuant to Executive Order 13608.
 
Key Takeaways for Business
 
The AppliChem and Kollmorgen actions present important sanctions compliance lessons, especially for cross-border M&A activity. In order to mitigate the risk of successor liability for a target’s previous sanctions violations, acquirers should conduct thorough due diligence during the acquisition process to find any history of engagement with sanctioned entities or countries. The U.S. company should also implement clear U.S. sanctions compliance policies at the foreign subsidiary, particularly if the foreign company has conducted business with sanctioned parties in the past. After acquisition, U.S. companies should also conduct regular audits of foreign subsidiaries to ensure compliance with OFAC regulations, and impose proactive controls and conduct follow-up due diligence to confirm that sanctioned country business has in fact been terminated.

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COM_a316. 
S. Pelak, J. Prince & R. Tsai: “DOJ Settles with Honda Aircraft on Discrimination Claim Related to Export Controls”

(Source: 
Holland & Hart LLP, 21 Feb 2019.)
 
* Authors: Steven Pelak, Esq., 
swpelak@hollandhart.com, +1 202-654-6929; Jason Prince, Esq., 
jeprince@hollandhart.com, +1 202-654-6937; and Roger Tsai, Esq., 
RYTsai@hollandhart.com, +1 303-295-8171.  All of Holland & Hart LLP.
 
Earlier this month, 
the U.S. Department of Justice announced that it had reached 
a settlement with Honda Aircraft Company LLC in connection with allegations that Honda Aircraft engaged in unfair immigration-related discrimination against job applicants. Specifically, the DOJ alleged that Honda Aircraft, which manufactures and sells business jet aircrafts, violated the Immigration and Nationality Act’s anti-discrimination provision (8 U.S.C. § 1324b) by publishing job announcements which specified that only applicants who are U.S. citizens or lawful permanent residents would be considered for employment in roles involving technical data and technology subject to the International Traffic in Arms Regulations (“ITAR”) or the Export Administration Regulations (“EAR”).
 
Although the ITAR and the EAR restrict foreign persons’ access to certain export-controlled technical data and technology, the DOJ noted that those regulations do not authorize or require companies to hire only U.S. citizens and lawful permanent residents. As the DOJ further explained, even the ITAR’s definition of “U.S. Persons” extends beyond lawful permanent residents and U.S. citizens to also include U.S. nationals, refugees, and asylees. See ITAR § 120.15; 8 U.S.C. § 1101(a)(20); 8 U.S.C. § 1324b(a)(3). Pursuant to the settlement agreement, Honda Aircraft agreed to pay a civil penalty of $44,626 and to implement remedial measures, such as amending its internal hiring policies and ensuring that all its employees involved in hiring or recruiting receive non-discrimination training.
 
This enforcement action is not novel and reflects the U.S. Government’s long-held view that export control laws do not give companies a blank check to exclude non-U.S. citizens or lawful permanent residents from open positions. Even the U.S. State Department’s “Guidelines for Preparing Agreements” under the ITAR acknowledge that, in some circumstances, Dual/Third Country Nationals from countries proscribed under ITAR Section 126.1, such as China or Iran, may be given access to ITAR-controlled materials. 
See, e.g., Guidelines for Preparing Agreements (Revision 4.4b) at Section 3.5.2.
 
Nevertheless, the Honda Aircraft settlement is an important reminder that companies subject to the ITAR or the EAR must undertake a careful analysis when posting job openings and making hiring decisions to ensure that they appropriately balance the duties and obligations imposed by competing laws and regulations. If a company is overly restrictive in its hiring practices while attempting to comply with the ITAR or the EAR, then it inadvertently may run afoul of anti-discrimination laws and regulations. Although the ITAR and the EAR ultimately may limit foreign person employees’ participation in certain business functions or otherwise may require employers to obtain U.S. export licenses for such employees, a company is now well advised-by the U.S. Government-not to follow a prohibition approach with regard to non-U.S. citizens or lawful permanent residents based on the ITAR or the EAR alone. Non-U.S. companies dealing with ITAR- or EAR-controlled technical data or technology similarly should be wary of adopting a prohibition approach and of contravening their own countries’ anti-discrimination laws while attempting to comply with those U.S. regulations.

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

COM_a417. T. Murphy: “Section 232 Investigation on Autos/Auto Parts — Possible Retaliatory Measures on U.S. Goods”
(Source: Author, 22 Feb 2019.)
 
* Author: Ted Murhpy, Esq., Baker & Mckenzie, 
 
We wanted to make sure you saw the recent reports that the EU is preparing a list of U.S. products to retaliate against (i.e., impose additional duties on), if the United States goes ahead and imposes restrictions on imported autos/auto parts pursuant to the Section 232 investigation.  
 
As you may know, the Secretary of Commerce delivered his report and recommendations to President Trump this past Sunday (the report is still confidential, but is rumored to (i) find that imports of autos/auto parts present a national security risk and (ii) recommend the imposition of import restrictions).  The president has 90 days to decide what to do next.  Recent reports suggest that the EU is preparing for the worst – by drawing up a list of ~$22.7 billion worth of U.S. products to retaliate against if the United States goes ahead and imposes import restrictions.  Those reports also suggest that articles produced by iconic U.S. companies are a prime target of the EU (in general, the goal in imposing these types of duties/retaliatory duties is to exert political pressure on the other side to get it to change its behavior; so, you want to choose political-sensitive articles (e.g., articles in produced in politically sensitive states/areas, articles produced by leading companies, etc.).  
 
This is something that all U.S. companies that export to the EU should keep an eye on.  If the United States imposes import restrictions on auto/auto parts, the retaliatory duties (by the EU and by other countries, presumably) will not be limited to imports of U.S. autos or auto parts. 

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

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a0
18. 
ECS Presents “ITAR/EAR Bootcamp: Achieving Compliance” on 8-9 Jul in Seattle, WA
(Source: S. Palmer, 
spalmer@exportcompliancesolutions.com.)
 
* What: ITAR/EAR Bootcamp:  Achieving Compliance; Seattle, WA
* When: July 8-9, 2019
* Where: 
Sheraton Grande
* Sponsor: Export Compliance Solutions & Consulting (ECS)
* ECS Speaker Panel:  Suzanne Palmer, Mal Zerden
* Register 
here or by calling 866-238-4018 or e-mail

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

TEC_a1
19. 
FCC Presents U.S. Export Controls Awareness Course: “ITAR & EAR from a non-U.S. Perspective”, 9 April in Bruchem, the Netherlands
(Source: Full Circle Compliance, 
events@fullcirclecompliance.eu.)
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: Drs. Ghislaine C.Y. Gillessen RA, Michael E. Farrell, and Drs. Alexander P. Bosch
* Information & Registration: 
HERE, or email 
events@fullcirclecompliance.eu.

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

TE_a320. 
List of Approaching Events: 135 Events Posted This Week, Including 16 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

 

*
 
Feb 25: Leeds, UK; “
How to complete Export Declarations
“; Chamber International
* 
Feb 26: Leeds, UK; “
Export Documentation & Import Procedures
; Chamber International
* Feb 26-27; Chicago, IL; “
CTPAT Training
“; SCS America

* Feb 26-27: Miami, FL; “
Complying with U.S. Export Controls
“; Commerce/BIS
* 
Feb 27: New York; “
Avoiding Trump’s Tariffs New York City Seminar
“; International Trade Law
*
 Feb 28; San Bruno CA; “
Introduction to Import and Export Compliance
“; Skyline College

* Feb 28; Liverpool, UK; “
You Can Export: How to Manage Agents & Distributors
“; UK/DIT


Mar 4-6: Savannah, GA; “
2019 Winter Back to Basics Conference
“; SIA
* 
Mar 5: Leeds, UK; “
Understanding Incoterms
“; Chamber International

* Mar 5-6: San Diego, CA; “
Complying with U.S. Export Controls
“; Commerce/BIS

*
Mar 5-7:  Orlando, FL; “
Partnering for Compliance’ Export/Import Control Training and Education Program
“; Partnering for Compliance
* 
Mar 6: McLean, VA; “
International Trade, Export Compliance & Customs Update
“; KPMG LLP; cdonahue@kpmg.com; +1 703-286-8131;

* Mar 6-7: San Diego, CA;

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

* Mar 7-8: Dallas, TX; “
CTPAT Training
“; SCS America

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

* Mar 11: Hoofddorp, NL; “
Export Control, Dual-use en Sancties
“; Fenex

* 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 12: Hasselt, Belgium; “
Wegwijs in exportcontrole, dual-use goederen & embargo
“; Vlams Netwerk van Ondernemingen

* Mar 13: Birmingham, UK; “
Strategic Export Control: Intermediate Practitioners course
“; UK/DIT
* Mar 14: Birmingham, UK; “
Strategic Export Control: Foundation Workshop
“; UK/DIT
* Mar 14: Birmingham, UK; “
Strategic Export Control: Licenses Workshop
“; UK/DIT
* 
Mar 15: Leeds, UK; “
How to Complete Export Declarations
“; Chamber International


May 15-17; London, UK; “ICPA European Conference“; ICPA

* Mar 18-21: Las Vegas, NV; “
ITAR Defense Trade Controls / EAR Export Controls Seminar
“; ECTI
*
 Mar 20: Miami, FL; “
CHINA TARIFFS/AD/CVD 101
“; Diaz Trade Consulting

#
Mar 24-27: Orlando, FL; “
2019 ICPA Annual Conference
; ICPA

* Mar 25-27: San Francisco; “
Global Encryption, Cloud and Cyber Trade Controls Conference
“; Thomsen & Burke LLP;
* 
Mar 26: Leeds, UK; “
Understanding Exporting
“; Chamber International

*
 Mar 26-27: Pittsburgh, PA; “
Complying with U.S. Export Controls
“; Commerce/BIS
*
 
Mar 26-27: Scottsdale, AZ; “
Managing ITAR/EAR Complexities
“; 
Export Compliance Solutions (ECS)

spalmer@exportcompliancesolutions.com
 or 
866-238-4018
* 
Mar 27: Bristol, UK; “
Classification of Goods – Using Commodity and Tariff Codes
“; BusinessWest
* 
Mar 27: Bristol, UK; “
Incoterms® Rules 2010
“; BusinessWest

* Mar 27-28: San Francisco, CA; “Global Encryption, Cloud & Cyber Trade Controls;” American Conference Institute
*
 
Mar 28: Bristol, UK; “
Introduction to Export Procedures
“; BusinessWest

* Apr 1: Eindhoven, NL; “
Export Control, Dual-use en Sancties
“; Fenex
*
 
Apr 2: Brussels, Belgium; “
Dual-Use, Military Research & Misuse
“; Vrije Universiteit Brussel

* 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 4-5; Miami, FL; “
CTPAT Training
“; SCS America

#
 
Apr 9: Bruchem, The Netherlands; “Awareness Course U.S. Export Controls: ITAR & EAR from a Non-U.S. Perspective“; Full Circle Compliance
* 
Apr 16: Leeds, UK; “
Export Documentation
“; Chamber International

Apr 17: Miami, FL; “
CBP COMPLIANCE & ENFORCEMENT
“; Diaz Trade Consulting
*
 Apr 17-18; Miramar, FL; “
11th Maritime Forwarding, Freight Logistics & Global Chain Supply Workshop
“; ABS Consulting;
* 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: Irvine, CA: “
Complying with U.S. Export Controls
“; Commerce /BIS

*
 Apr 30-May 1: Nashville, TN: “Mastering ITAR/EAR Challenges“; Export Compliance Solutions (ECS);
*
 
May 1: Leeds, UK; “
Understanding Exporting & Incoterms
“; Chamber International

* May 2-3: Washington DC; “Economic Sanctions Enforcement and Compliance;” American Conference Institute


May 5: Munich, Germany; “
European and German Export Controls
“; AWA;

* 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
*
 
May 15: Bristol, UK; “
A Foundation Course in Importing
“; BusinessWest


May 15-17; London, UK; “ICPA European Conference“; ICPA

* 
May 16: Bristol, UK; “
Export Controls and Licensing
; BusinessWest
*
 
May 16: Bristol, UK; “
Inward Processing Relief
“; BusinessWest
*
 May 16: Hamburg, Germany; “
U.S. Export Controls and Embargoes & Sanctions for European Companies
“; Hamburger Zollakademie


May 16-17; Toronto, Canada; “ICPA Canada Conference“; ICPA

*
 
May 21: London, UK; “
US & UK Export Controls: A Basic Understanding
“; The Institute of Export and International Trade

* Jun 5-6: Seattle, WA; “
Complying with U.S. Export Controls
“; Commerce/BIS
*
 
Jun 7: Upper Marlboro, MD; “
2019 Spring Golf Outing
“; SIA

*
 
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 13: Detroit, MI; “
How to Build an Export Compliance Program
“; Commerce/BIS

*
 
Jun 14: Cleveland, OH; “
Incoterms® 2010 Rules
“; Global Training 
* Jun 17-20: San Diego, CA; “ITAR Defense Trade Controls / EAR Export Controls“; ECTI
*
 
Jul 3: Bristol, UK; “
Introduction to Export Procedures – Export Training
“; BusinessWest
*
 
Jul 4: Bristol, UK; “
Using Documentary Letters of Credit, Drafts and Bills”; 
BusinessWest


Jul 8-9: Seattle, WA: “
Boot Camp: Achieving ITAR/EAR Compliance
“; Export Compliance Solutions (ECS);


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

*
 
Jul 11: Birmingham, UK; “
US & UK Export Controls: A Basic Understanding
“; The Institute of Export and International Trade

* Aug 20-21: Cincinnati, OH;

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

* Aug 20-21: Milpitas, CA;

Complying with U.S. Export Controls
“;
Commerce/BIS
* Aug 22: Milpitas, CA:

Encryption Controls
“;
Commerce/BIS

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

* Sep 16-19: Austin, TX; “
ITAR Controls / EAR & OFAC Export Controls (Sep 18-19) Seminar Series
“; ECTI
; 540-433-3977


Sep 17-19: Annapolis, MD; “
The ECS 2nd Annual ITAR/EAR Symposium
“; ECS
*
 Sep 20: Las Vegas; “
EAR and OFAC Fundamentals: Export Control Of Dual-Use Equipment
“; Barnes & Thornburg LLP
*
 
Sep 25: Bristol, UK; “
Classification of Goods – Using Commodity and Tariff Codes”; 
BusinessWest
* 
Sep 25: Bristol, UK; “
Incoterms® Rules 2010
“; BusinessWest
*
 
Sep 25: London, UK; “
US & UK Export Controls: A Basic Understanding
; The Institute of Export and International Trade
*
 
Sep 26: Bristol, UK; “
Understanding The Paperwork
“; BusinessWest

* Sep 30 – Oct 3; Amsterdam, NL; “
ITAR Controls / EAR/OFAC Commercial and Military Controls
“; ECTI
; 540-433-3977


Oct 7: Munich, Germany; “
European and German Export Controls
“; AWA

* Oct 14-17; Columbus, OH; “
University Export Controls Seminar
“; ECTI
; 540-433-3977


Oct 27: Singapore; “
5th Asia Pacific Summit on Economic Sanctions Compliance and Enforcement
“; 
American Conference Institute


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

* Oct 28-31; Phoenix, AZ; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI
; 540-433-3977
* Nov 11-14; Washington, DC; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI
; 540-433-3977
*
 
Nov 20: Bristol, UK; “
Introduction to Export Procedures – Export Training
“; BusinessWest
*
 
Nov 21: Bristol, UK; “
A Foundation Course in Importing
“; BusinessWest

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

#
 
Nov 27: Bruchem, The Netherlands; ” The Export Administration Regulations (EAR) from a non-U.S. Perspective“; Full Circle Compliance 

*
 
Nov 27: Manchester, UK; “
US & UK Export Controls: A Basic Understanding
“; The Institute of Export and International Trade
* Dec 4-5: New York, NY; “10th Annual New York Forum on Economic Sanctions;” American Conference Institute


Dec 4-5: Washington, DC; “
36th International Conference on the Foreign Corrupt Practices Act
“; American Conference Institute

* Dec 9-12; Miami, FL; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI
; 540-433-3977
*
 Dec 12-13; Washington D.C.; “
Coping with U.S. Export Controls and Sanctions 2019
“; Practicing Law Institute
 
2020

 

Jan 30-31: Houston, TX; “
14th Forum on the Foreign Corrupt Practices Act
“; 
American Conference Institute
 

 
Webinars 


 


Feb 27: Webinar: “
Trade in Turmoil [Monthly Update]
“; STR

*
 Feb 28: Webinar: “
Control Tower: timely response to your supply chain disruptions
“; Amber Road
*
 
Feb 28: Webinar: “
Economic Sanctions after Brexit with Maya Lester QC”; 
Brick Court Chambers
*
 Feb 28: Webinar: “
The Fundamentals of Product Classification
“; ECTI; 540-433-3977
*
 
Mar 8: Webinar: “
Managing Export Compliance and Export Controls Risk”; 
Online Compliance Panel
*
 Mar 12: Webinar;
 
DIY Encryption Classification 2019 Edition“;
 ECTI; 540-433-3977;
danielle@learnexportcompliance.com 
*
 Mar 13: Webinar: “
Cornerstones of ITAR Compliance: Licenses and Agreements
“; ECTI; 540-433-3977

* Mar 14: Webinar: “ITAR Training Basics – For Compliance Executives March“; CVG Strategy

*
 Mar 20: Webinar: “
Cornerstones of ITAR Compliance: Administration, Documentation and Shipping
“; ECTI; 540-433-3977

* Apr 23: Webinar: “ITAR Training Basics – For Compliance Executives April“; CVG Strategy

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

ENEDITOR’S NOTES

EN_a121
. Bartlett’s Unfamiliar Quotations

(Source: Editor)


George Washington (22 Feb 1732 – 14 Dec 1799; was an American political leader, military general, statesman, and Founding Father, who also served as the first president of the United States (1789-1797). Washington commanded Patriot forces in the new nation’s vital American Revolutionary War, and led them to victory over the British. Washington also presided at the Constitutional Convention of 1787, which established the new federal government. For his manifold leadership during the American Revolution, he has been called the “Father of His Country”.)
  – “To be prepared for war is one of the most effective means of preserving peace.”
  – “My observation is that whenever one person is found adequate to the discharge of a duty… it is worse executed by two persons, and scarcely done at all if three or more are employed therein.”
 
Friday Funnies:
 
* The mother-in-law stopped by her daughter’s house after shopping, to find her son-in-law boiling angry and cramming his belongings into his suitcases. “What’s the matter with you?  Where are you going?” she asked anxiously.  The son-in-law replied, “I’ll tell you what happened!  I sent an email to my wife — your daughter — telling her I was coming home a day early from my business trip.  I get home today, and you know what I found? … Your daughter in bed with a naked man!  This is unforgivable, the end of our marriage!  I’m leaving!”  “Calm down, calm down!” said his mother-in-law. “I know my daughter, and she would 
never do such a thing.  There must be a simple explanation.  I’ll go speak to her and find out what happened.”  A few minutes later, the mother-in-law came back with a big smile and said, “I 
told you there must be a simple explanation!  She didn’t get your email!”

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

EN_a222. 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.
 

*
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 the 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 the 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: 26 Dec 2018: 
83 FR 66514-66554
: Bump-Stock-Type Devices
 

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 2019: 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 Update: 12 Feb 2019: Harmonized System Update 1901 [contains 397 ABI records and 89 harmonized tariff records.] 

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

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

EN_a323
. 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.

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* 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.

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