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19-0327 Wednesday “Daily Bugle'”

19-0327 Wednesday “Daily Bugle”

Wednesday, 27 March 2019

  1. DHS/CBP Seeks Comments on Country of Origin Marking Requirements for Containers or Holders 
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Posts Notice on Mandatory Change for ALL Trade EZVPN Users
  4. State/DDTC: (No new postings.)
  5. Treasury/OFAC Settles Alleged Iranian Sanctions Violations by Stanley Black & Decker, Inc. and its Foreign Subsidiary, Jiangsu Guoqiang Tools Co., Ltd. 
  6. France/DGDDI and SBDU Implement New Features Facilitating the Export of Dual-Use Goods
  7. EU Council Amends Union General Export Authorization No EU001 to include UK
  8. EU Amends for the 297th Time Restrictive Measures Concerning ISIL and Al-Qaida 
  9. UK DIT/ECJU Posts Notice on Brexit OGEL
  10. UK DIT/ECJU Updates Information Concerning the Arms Embargo on Argentina
  1. Bloomberg: “Treasury Looks to Clarify Export Deduction for Military Sales”
  2. Deutsche Welle: “German Government Split on Saudi Arms Ban”
  3. ST&R Trade Report: “Steel and Aluminum Tariffs Upheld as Court Affirms Constitutionality of Section 232”
  1. International Trade Compliance Update: “Swiss-UK Agreement on Customs Facilitation and Security”
  2. J.E. Smith, J. P. Carlin, & N. J. Spiliotes: “OFAC Sanctions Venezuela’s National Development Bank”
  3. M. Volkov: “DOJ ‘Tweaks’ FCPA Corporate Enforcement Policy”
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: DHS/Customs (12 Mar 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 (14 Mar 2018), DOS/ITAR (19 Mar 2018), DOT/FACR/OFAC (15 Mar 2018), HTSUS (25 Mar 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1
1. DHS/CBP Seeks Comments on Country of Origin Marking Requirements for Containers or Holders

(Source: Federal Register, 27 Mar 2019.) [Excerpts.]
 
84 FR 11550-11551: Agency Information Collection Activities: Country of Origin Marking Requirements for Containers or Holders
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security.
* ACTION: 60-Day notice and request for comments; extension of an existing collection of information. …
* FOR FURTHER INFORMATION CONTACT: Requests for additional PRA information should be directed to Seth Renkema, Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection, Office of Trade, Regulations and Rulings, 90 K Street NE, 10th Floor, Washington, DC 20229-1177, Telephone number 202-325-0056 or via email CBP_PRA@cbp.dhs.gov. Please note that the contact information provided here is solely for questions regarding this notice. Individuals seeking information about other CBP programs should contact the CBP National Customer Service Center at 877-227-5511, (TTY) 1-800-877-8339, or CBP website.
* SUPPLEMENTARY INFORMATION: …
  – Title: Country of Origin Marking Requirements for Containers or Holders.
  – OMB Number: 1651-0057.
  – Abstract: Section 304 of the Tariff Act of 1930, as amended, 19 U.S.C. 1304, requires each imported article of foreign origin, or its container, to be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article or container permits, with the English name of the country of origin. The marking informs the ultimate purchaser in the United States the name of the country in which the article was manufactured or produced. The marking requirements for containers are provided for by 19 CFR 134.22(b). …
 
  Dated: March 22, 2019.
Seth D Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection.

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OGSOTHER GOVERNMENT SOURCES

OGS_a12. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

 

* President; ADMINISTRATIVE ORDERS; Defense and National Security: Cyber-Enabled Malicious Activities; Continuation of National Emergency (Notice of March 26, 2019) [Pub. Date: 28 Mar 2019.]  

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(Source:
CSMS #19-000163, 27 Mar 2019.)
 
All trade partners using IBM MQ Client are being requested to check their MQ version and install a currently supported version. IBM MQ v9 is preferred.
 
CBP is implementing a modernized solution for Trade MQ Client Connectivity. The current Cisco Easy VPN Client (EzVPN) solution has been retired, is no longer supported and must be replaced as soon as possible.
 
A new Infrastructure has being deployed to support the new connectivity option. CBP will provide a package to replace the EzVPN software that will contain the configuration options to be installed.
 
The current connectivity software will be replaced with a Certificate based connection methodology using IBM MQ Internet Pass-Thru (MQIPT). The MQIPT conversion mandate is not applicable to trade partners currently using the LAN to LAN connectivity option.
 
The new implementation will allow trade partners with VPN Client connections to securely connect to CBP MQ gateways via encryption public key certificates. The CBP supplied sample program “CBPPTGT” has been enhanced to utilize a Certificate based connection.
 
The existing settings utilized by this program will continue to work with the updated program. The new MQIPT solution requires a minimum of IBM MQ v8.0. IBM MQ v9.0 is preferred.
 
This modernized solution has been tested in all applicable CBP environments and is currently in the Production ‘roll-out phase’ to multiple trade partners.
 
Please answer (to the best of your ability) the following Questionnaire and return to MQ STAFF OPS GML MQSTAFFOPS@cbp.dhs.gov as soon as possible. Additional details are also available via documents from the CBP Middleware MQ Team.
 
 

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(Source:
Treasury/OFAC, 27 Mar 2019.)  
 
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $1,869,144 settlement with Stanley Black & Decker, Inc. (“Stanley Black & Decker”) and its foreign subsidiary, Jiangsu Guoqiang Tools Co., Ltd. (“GQ”).  Stanley Black & Decker, a company based in New Britain, Connecticut, on behalf of itself and its subsidiary located in China, GQ, has agreed to settle its potential civil liability for 23 apparent violations of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR).  Specifically, between on or about June 29, 2013 and on or about December 30, 2014, GQ exported and attempted to export 23 shipments of power tools and spare parts, with a total value of $3,201,647.73, to Iran or to a third country with knowledge that such goods were intended specifically for supply, transshipment, or reexportation, directly or indirectly, to Iran, which would have been prohibited if engaged in by a U.S. person, under §§ 560.203 and 560.204 of the ITSR.  These transactions appear to have violated § 560.215 of the ITSR.  OFAC determined that Stanley Black & Decker voluntarily self-disclosed the apparent violations on behalf of GQ, and that the apparent violations constitute an egregious case. 
 
For more information, please visit the following web notice

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The French Directorate-General of Customs and Indirect Taxes (DGDDI) and the French Dual-Use Goods Service (SBDU) announced a new version of the Guichet Unique National du Dédouanement (“GUN”), which allows for the export of dual-use goods authorized under global export licenses.
 
Read more about the update (in French) here.

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The European Parliament and the European Council amended Council Regulation (EC) No 428/2009 by granting a Union general export authorization for the export of certain dual-use items from the Union to the United Kingdom.
 

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Regulations:
* Commission Implementing Regulation (EU) 2019/507 of 26 March 2019 amending for the 297th time Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with the ISIL (Da’esh) and Al-Qaida organisations

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As we have previously notified, if the UK leaves the EU without a deal, dual-use items from the UK to the EU will need a license. An Open General Export License (OGEL) has been created for this purpose.
 
This license will come into force at 11pm on 12 April 2019 if the UK leaves the EU without a deal. 
 
For general export control queries please contact our Helpline on 020 7215 4594 or exportcontrol.help@trade.gov.uk

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(Source:
UK DIT/ECJU
, 27 Mar 2019) [Excerpts.]
 
The Export Control Joint Unit (ECJU) has updated its information about the arms embargo on Argentina:
 
Argentina (exports to Argentina, ECOWAS countries, India and Pakistan)
 
On 27 June 2018, Minister of State for Foreign and Commonwealth Affairs announced a revised policy on exports to, and trade (trafficking and brokering) in, controlled goods and technology for the Argentina military, revising the previous 2012 policy. Find out more in the written ministerial statement.
 
Our general position is that we will continue to refuse licenses for export and trade of goods judged to enhance Argentine military capability.
 
However, where like-for-like equipment is no longer available, we may grant licenses where we judge they are not detrimental to the UK’s defense and security interests.
 
License applications for equipment and defense technology which meet the above criteria will still be assessed on a case by case basis against the consolidated EU and national arms export licensing criteria.
 
Argentina is subject to transit control for military goods.
License applications must be made to the Export Control Joint Unit (ECJU).
 
The complete information about current arms embargoes and other restrictions that the UK government has in place can be found here.

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NWSNEWS

NWS_a1
12. Bloomberg: “Treasury Looks to Clarify Export Deduction for Military Sales”
(Source: Bloomberg, 27 Mar 2019.) [Excerpts, subscription required.]
 
Treasury is asking for comments on how it can clarify an export deduction in the 2017 tax overhaul-specifically, for examples of military sales the deduction might apply to, a department official said.
 
Defense companies had been asking whether they could take the deduction when they made sales under the Arms Export Control Act, in which the U.S. government acts as an intermediary between the companies and foreign governments in certain military deals. …

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NWS_a2
13. Deutsche Welle: “German Government Split on Saudi Arms Ban”

(Source: Deutsche Welle, 27 Mar 2019.) [Excerpts]
 
The German government cannot decide whether to continue its arms embargo against Saudi Arabia. The ban on exports is due to expire this week, and Paris is pressuring Berlin to lift it.
 
Germany’s government coalition is split on whether to maintain the ban on arms sales to Saudi Arabia in the face of increasing pressure on France.
 
The temporary embargo, imposed in November, is due to expire at the end of this week, but a meeting of the national security council (Chancellor Angela Merkel and her senior ministers) ended inconclusively on Wednesday, according to the DPA news agency.
 
The government parties, the Christian Democratic Union (CDU) and the Social Democratic Party (SPD), are to discuss the issue further. The SPD want to extend the ban: foreign policy spokesman Rolf Mützenich told the Bonn-based General Anzeiger that his party was insisting on the coalition contract, “which mean no more weapons exports to Saudi Arabia if they’re being used in the war in Yemen.”
 
During Wednesday’s regular government press conference, spokesman Steffen Seibert did not confirm DPA’s account and did not offer any details on the morning’s cabinet meeting, which was attended by French Foreign Minister Jean-Yves Le Drian as part of a new program of closer cooperation between the two countries. …

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NWS_a3
14. ST&R Trade Report: “Steel and Aluminum Tariffs Upheld as Court Affirms Constitutionality of Section 232
 
The Court of International Trade has rejected a constitutional challenge to the Section 232 tariffs on imports of steel and aluminum products. This decision (a) highlights the importance for importers of affected goods to use the existing process for seeking exclusions from these tariffs, which to date has yielded a high percentage of approvals, and (b) could increase the likelihood of additional Section 232 tariffs on automobiles and auto parts and other products. The American Institute for International Steel, which brought the case, said it would immediately appeal the CIT’s ruling.
 
Court Upholds Section 232
. Additional tariffs of 25 percent on steel and 10 percent on aluminum have been in place since June 1, 2018, for almost all countries following a Section 232 determination that imports of these products pose a threat to U.S. national security. The AIIS filed suit against the tariffs, challenging the constitutionality of Section 232’s delegation to the president of Congress’ authority to impose tariffs and regulate foreign commerce. Among other things, the AIIS expressed concern about the “essentially unlimited definition of national security” in this statute and its “limitless grant of discretionary remedial powers.”
 
However, the CIT said it is bound by a 1976 Supreme Court decision that section 232 is a valid delegation of authority. The court added that actions taken pursuant to the discretion afforded to the president by this law (e.g., determining whether to concur with a Department of Commerce finding that imports are threating national security and what, if any, measures to take in response) are not subject to judicial review for rationality, findings of fact, or abuse of discretion.
 
The CIT acknowledged that section 232 gives the president substantial flexibility and seems to invite the president to “regulate commerce by way of means reserved for Congress, leaving very few tools beyond his reach.” However, the court said that “identifying the line between regulation of trade in furtherance of national security and an impermissible encroachment into the role of Congress could be elusive in some cases because judicial review would allow neither an inquiry into the president’s motives nor a review of his fact-finding.”
 
On the other hand, a separate opinion by one of the three CIT judges hearing the case expressed “grave doubts” about the majority’s conclusion. Given the “virtually unbridled discretion” section 232 gives the president and the way that authority has been used in the steel and aluminum cases, the opinion said, it is perhaps time for the courts to “revisit assumptions” and consider anew what would constitute excessive delegation of congressional authority.
 
More 232 Tariffs?
The DOC recently submitted to President Trump a report on whether imports of automobiles and auto parts are jeopardizing U.S. national security. The contents and recommendations of that report remain unknown, but the president has until mid-May to decide whether and what action to take. Reports indicate that possible measures include new tariffs or quotas. While there has been substantial opposition to any such measures from lawmakers and the auto industry, the CIT’s decision could embolden the president to impose them. There are also ongoing Section 232 investigations of uranium and titanium sponge.
 
Exclusion Process Working
. In the meantime, the DOC is actively managing a process whereby importers can request exclusions from the Section 232 tariffs for specific steel and aluminum products. At last report the DOC had received more than 45,000 such requests for steel and more than 6,000 for aluminum. About 75 percent of the DOC’s nearly 20,000 decisions on steel to date have been approvals, as have more than 80 percent of the more than 3,000 decisions on aluminum. Exclusions are retroactive to the date the request was submitted, meaning importers can obtain refunds of tariffs paid on excluded products.

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COMMCOMMENTARY

COM_a1
15. International Trade Compliance Update: “Swiss-UK Agreement on Customs Facilitation and Security”

(Source:
International Trade Compliance Update
, 22 Mar 2019.)
 
On 20 March 2019, the Swiss Federal Customs Administration (FCA) issued the following Information: 
 
Agreement on Customs Facilitation and Security: Bilateral traffic between Switzerland and United Kingdom of Great Britain and Northern Ireland
 
It is currently unclear what status the United Kingdom of Great Britain and Northern Ireland (UK) will have following its withdrawal from the European Union (EU) on 29 March 2019. If there is a disorderly withdrawal, additional security data must be entered in the customs declaration for goods traffic between Switzerland and the UK.
 
Relations between Switzerland and the UK are currently largely based on bilateral agreements with the EU which will no longer be applicable to the UK after withdrawal from the EU (or after the end of a transitional phase).
 
Should the UK’s departure be disorderly (no deal or hard Brexit), the bilateral trade agreement between Switzerland and the UK will be applied provisionally from the date of departure. [FN/1] Goods traffic between Switzerland and the UK will be subject to prior notification.
 
Further information:
More security for the supply chain
[FN/2]
 
Should the EU and the UK agree on a withdrawal agreement within this period, the Customs Facilitation and Security Agreement between Switzerland and the EU would continue to apply in the relationship between Switzerland and the UK during a transitional phase until at least 31 December 2020.
 
———-
  [FN/1] The leaving date is planned for 29.03.2019. However, it cannot be excluded that the date will be postponed. In this case, the date of provisional application of the trade agreement changes, but the information contained in this document remains valid.
 

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(Source:
Morrison Foerster
, 25 Mar 2019.)
 
* Authors: John E. Smith, Esq.,
johnsmith@mofo.com, (202) 887-1514; John P. Carlin, Esq., jcarlin@mofo.com, (212) 336-8600; Nicholas J. Spiliotes,
Esq.,
nspiliotes@mofo.com, (202) 887-1579. All of Morrison Foerster.
 
On a bizarre day for sanctions that saw President Trump seemingly take action related to North Korea via tweet – revoke recent measures? scuttle pending ones? – the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) added Venezuela’s national development bank, Banco de Desarrollo Economico y Social de Venezuela (“Bandes”), to OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”). OFAC “designated” Bandes pursuant to Executive Order (E.O.) 13850 (“Blocking Property of Additional Persons Contributing to the Situation in Venezuela”), the new favorite authority for headline-grabbing Venezuela sanctions.
 
The move comes just days after OFAC added Venezuelan state gold-mining company CVG Compania General de Mineria de Venezuela CA (“Minerven”) to the SDN List, and roughly two months after it did the same to national oil company Petróleos de Venezuela, S.A. (PDVSA). The Venezuelan gold, energy, and now financial sectors are therefore all economic areas in which parties face potential sanctions for operating. OFAC also recently demonstrated its willingness to sanction parties that provide material support to designated Venezuelan entities when it added Evrofinance Mosnarbank, a Moscow-based financial institution with Venezuelan and Russian stakeholders, to the SDN List for actions involving PDVSA.  
 
In addition to Bandes itself, OFAC also designated four banks that Bandes owns or controls: Banco Bandes Uruguay S.A. (“Bandes Uruguay”); Banco Bicentenario del Pueblo, de la Clase Obrera, Mujer y Comunias, Banco Universal C.A. (“Banco Bicentenario”); Banco de Venezuela, S.A. Banco Universal (“Banco de Venezuela”); and Banco Prodem S.A. (“Banco Prodem”). In keeping with OFAC’s 50 Percent Rule, the sanctions against Bandes and the other banks extend to any entity in which one or more of them owns an interest of 50% or more.
 
Of course, this wouldn’t be a Venezuela-related sanctions action without some new general licenses to pore over
. This time OFAC gave us four, and they are mercifully vanilla.
 
The first,
General License 15
, authorizes all transactions that are prohibited under E.O. 13850 but ordinarily incident and necessary to Mastercard Incorporated, Visa Inc., American Express Company, Western Union Company, MoneyGram International, and their subsidiaries engaging in activities involving Banco Bicentenario and Banco de Venezuela. The general license does not authorize dealings with Bandes or Bandes Uruguay, the unblocking of blocked property, or any other transaction prohibited by an applicable sanctions authority. General License 15 expires on March 22, 2020.
 
General License 16
also expires on March 22, 2020, and authorizes all transactions that are prohibited under E.O. 13850 but ordinarily incident and necessary to (1) maintaining, operating, or closing accounts of U.S. persons in Banco de Venezuela or Banco Bicentenario, and (2) processing noncommercial personal remittances. General License 16 explicitly states that authorized remittances do not include charitable donations to or for the benefit of any entity, nor do they include funds transfers to support or operate businesses. The license further states that a U.S. financial institution may rely on a remittance’s originator for compliance purposes unless the financial institution knows or has reason to know that a transfer doesn’t comply with the authorization’s terms. Like General License 15, General License 16 does not authorize dealings with Bandes or Bandes Uruguay, the unblocking of blocked property, or any other transaction prohibited by an applicable sanctions authority.
 
General License 17
is a traditional “wind-down” license, authorizing all transactions that are prohibited under E.O. 13850 but ordinarily incident and necessary to winding down operations, contracts, or other agreements involving Banco de Venezuela, Banco Bicentenario, or Banco Prodem that were in effect prior to March 22, 2019. Continuing the trend, General License 17 does not authorize dealings with Bandes or Bandes Uruguay (despite Prodem’s inclusion in this authorization), the unblocking of blocked property, or any other transaction prohibited by an applicable sanctions authority. The license expires on May 21, 2019.
 
Last but not least is
General License 18
, which might be the most interesting of the new authorizations because it deals with prohibitions under both E.O. 13850 and E.O. 13808, the legal authority that first introduced real complexity into the Venezuela sanctions program. General License 18 authorizes all transactions that are prohibited under E.O. 13850 and section 1(b) of E.O. 13808 but ordinarily incident and necessary to maintaining or operating Integración Administradora de Fondos de Ahorro Previsional, S.A. (“Integración”), a pension fund administrator in which (according to OFAC) Bandes Uruguay has a stake of 50% or greater. Section 1(b) of E.O. 13808 prohibits U.S. persons from directly or indirectly purchasing most securities from the Government of Venezuela. General License 18 speaks directly to this prohibition by authorizing U.S. persons to purchase securities from Integración, sell securities to Integración, and serve as a custodian for securities held by Integración. As with the other general licenses, General License 18 does not authorize anyone to unblock blocked property or engage in any other transaction prohibited by an applicable sanctions authority. Notably, however, the license does authorize dealings with Bandes and Bandes Uruguay that are ordinarily incident and necessary to maintaining or operating Integración. General License 18 has no expiration date.
 
In addition to the four new general licenses, OFAC issued an amended
General License 4A
to authorize transactions with Banco de Venezuela and Banco Bicentenario that are ordinarily incident and necessary to exporting or re-exporting agricultural commodities, medicine, medical devices, and replacement parts and components for medical devices to Venezuela. As in General Licenses 15, 16, and 17, dealings with Bandes and Bandes Uruguay remain prohibited.
 
Per new
FAQ 664
, U.S. financial institutions and registered money transmitters can process transactions and debit and credit Banco de Venezuela, Banco Bicentenario, Banco Prodem, and Integración correspondent accounts in accord with the general licenses applicable to them.
 
With six executive orders, 18 protean general licenses, and dozens of FAQs, the Venezuela sanctions program has arguably nudged past Iran and Russia for the dubious distinction of being the most complicated program OFAC administers. (It has certainly outpaced all the others in public actions so far this year.) Two questions that OFAC must be struggling with are: (1) What is the return on all this complexity? and (2) Would a Syria-style comprehensive program have any significant adverse consequences that aren’t already playing out under the current sanctions framework? Sanctions fatigue around the program is sky high, and with Venezuelan oil and debt now being squeezed out of the U.S. economy, and increasingly risky elsewhere, it is hard to identify more meaningful directions in which the program might expand while still maintaining broad support in the region and beyond. Whack-A-Mole actions like this one aimed at crimping regime revenues and evasion opportunities are likely to continue, as are occasional corruption network designations that make Maduro regime insiders feel the pain personally. Wherever Venezuela sanctions go, we at Morrison & Foerster will continue to keep you updated and help you respond to the shifting landscape.

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(Source:
Volkov Law Group Blog, 26 Mar 2019. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
The Justice Department is wedded to its FCPA Corporate Enforcement Policy (excuse me for the use of “wedded,” we recently celebrated our son’s wedding). Nonetheless, DOJ has to adjust its Policy in response to experience and feedback. That is a good thing and one that helps to ensure that the Policy is predictable and consistent in its application.
 
I am convinced that the FCPA Corporate Enforcement Policy is settling into an effective statement and balancing of competing interests. It has been a fairly straightforward process over the last ten to fifteen years for the Justice Department to arrive at its current state.
 
My conclusions rests on several important indicators – the Policy was “expanded” to cover merger and acquisition situations, and has been cited as guidance for resolution of other corporate enforcement actions involving offenses outside the FCPA realm. So, for now, the FCPA policy guides criminal investigation and enforcement for money laundering, criminal sanctions and export control violations, corporate fraud and other criminal offenses within DOJ’s purview.
 
In a recent announcement, on March 8, 2019, DOJ announced several revisions to its Policy. The revisions include a number of changes – the most significant is the relaxation of its prohibition on ephemeral messaging systems. The revised Policy also clarifies DOJ’s handling of de-confliction and reinforces its earlier pronouncement that the Policy applies to companies involved in merger and acquisition transactions.
 
The FCPA Corporate Enforcement Policy, which was adopted in November 2017, and is set out in the Justice Manual, the internal document that sets forth policies and procedures applicable to federal prosecutions. The Policy provides companies with a presumption that it was receive a declination if the company voluntarily self-discloses, fully cooperates and timely and appropriately remediates (assuming that no aggravating factors are present, e.g. recidivist, senior official involvement).
 
As part of the required remediation, companies had to prohibit employees from “using software that generates but does not appropriately retain business records or communications.” In response to the burdensome nature of this requirement, DOJ prosecutors heard concerns about the application of this restriction. As a result, DOJ revised its Policy to require companies to “implement appropriate guidance and controls on the use of personal communications and ephemeral messaging platforms that undermine the company y’s ability to appropriately retain business records or communications or otherwise comply with the company’s document retention policies or legal obligations.”
 
DOJ’s original Policy prohibition ignored the real-world application of ephemeral messaging systems, such as WhatsApp, which are routinely used by business employees. The prohibition was unrealistic given the business reality of current communications systems. The new Policy provides greater flexibility to companies to account for their respective document retention policy and legal requirements.
 
DOJ also modified its requirement that a company seeking to fully cooperate must ensure that it de-conflicts any plan to interview or investigate persons with the Justice Department so that it does not conflict with or harm the Justice Department’s investigative actions. DOJ clarified that the “de-confliction” requirement had limited scope and was not intended to inject DOJ oversight or direction of a company’s internal investigation.
 
The revised Policy also incorporated prior announcements by DOJ that companies involved in merger and acquisition due diligence or post-acquisition integration efforts can avail themselves of the Policy in the event that they uncover misconduct. In other words, a company that discovers foreign bribery during the pre-closing due diligence or post-acquisition audit, can earn a declination if it voluntarily discloses the conduct, fully cooperates and implements a robust anti-corruption compliance program in the acquired company. DOJ emphasized that it wants to encourage companies with strong corporate cultures of compliance to move forward with an acquisition of a company that may have legacy FCPA compliance issues.

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ENEDITOR’S NOTES

* Charles Mackay (27 Mar 1814 – 24 Dec 1889; was a Scottish poet, journalist, author, anthologist, novelist, and songwriter, remembered mainly for his book, Extraordinary Popular Delusions and the Madness of Crowds.)
  – “He who has mingled in the fray of duty that the brave endure, must have made foes. If you have none, small is the work that you have done.”
  – “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”
  – “If happy I and wretched he, Perhaps the king would change with me.”
 

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EN_a319
. 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: 12 Mar 2019: 84 FR 8807-8809: Extension of Import Restrictions Imposed on Archaeological and Ecclesiastical Ethnological Material From Honduras
 

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: 14 Mar 2019: 84 FR 9239-9240: 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: 19 Mar 2019: 84 FR 9957-9959: Department of State 2019 Civil Monetary Penalties Inflationary Adjustment. 
  – The only available fully updated copy (latest edition: 19 Mar 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 Mar 2019: 84 FR: 9456-9458: List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (CAPTA List) 
  
* 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 Amendment:
25 Mar 2019: Harmonized System Update 1904, contains 1,015 ABI records and 194 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_a0320
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 7,000 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.

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