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19-0508 Wednesday “Daily Bugle'”

19-0508 Wednesday “Daily Bugle”

Wednesday, 8 May 2019

[No items of interest noted today.] 

  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. OMB/OIRA Reviews of Proposed Ex/Im Regulations: EAR Country Group Designation Review
  4. State/DDTC Launches New DECCS Commodity Jurisdiction Application, Publishes Public Comments Regarding Review of USML Categories IV and XV
  5. EU Publishes Update Concerning CN
  1. The Hill: “It’s Time to Lift the Arms Embargo on Cyprus”
  2. ST&R Trade Report: “CTPAT Minimum Security Criteria Updated”
  1. A. L. Riella & B. D. Schnapp: “Updated DOJ Guidance Provides Useful Roadmap for Implementing and Enhancing Corporate Compliance Programs” (Part I of II)
  2. M. Volkov: “DOJ’s New Corporate Compliance Guidance: Does Your Compliance Program Work? (Part V of V)”
  3. S.M. Flicker, K. J. Manley & T. Best: “Something Familiar, Something New: OFAC’s Compliance Program Framework” (Part II of II)
  1. ECTI Presents “International Distributor Agreements – Practical Advice for Outbound Distribution for U.S. Companies” Webinar on 5 June 2019
  2. FCC Presents “The ABC of Foreign Military Sales”, 28 November in Bruchem, the Netherlands
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: DHS/Customs (5 Apr 2019), DOC/EAR (11 Apr 2019), 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 Apr 2018), DOT/FACR/OFAC (29 Apr 2018), HTSUS (18 Apr 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1  

[No items of interest noted today.] 

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OGSOTHER GOVERNMENT SOURCES

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

 

* Commerce/BIS; MEETINGS:
  – Information Systems Technical Advisory Committee; and
  – Transportation and Related Equipment Technical Advisory Committee [Pub. Dates: 9 May 2019.]
 
* USTR; NOTICES; Modification of Section 301 Action:
China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation [Pub. Date: 9 May 2019.] 

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OGS_a33.
OMB/OIRA Reviews of Proposed Ex/Im Regulations: EAR Country Group Designation Review

(Source:
OMB/OIRA
, 6 May 2019.)     
 
* TITLE: Revision to a Country Group Designation to Better Protect U.S. National Security Interests and to Better Align with Other EAR National Security Provisions
– AGENCY: Commerce/BIS
– STAGE: Final Rule
– RECEIVED DATE: 6 May 2019
– RIN: 0694-AH78
– STATUS: Pending Review

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OGS_a44. S
tate/DDTC Launches New DECCS Commodity Jurisdiction Application, Publishes Public Comments Regarding Review of USML Categories IV and XV

(Source:
State/DDTC
, 6 May 2019.)
 
New DECCS Commodity Jurisdiction Application
 
DDTC’s latest Defense Export Control and Compliance System (DECCS) application, Commodity Jurisdiction, is now live!  The Commodity Jurisdiction application incorporates the existing web-based system for electronic CJ submission into the updated DECCS platform. The system now provides the capability to save CJ requests as drafts, removing the need to complete the entire form in one sitting.  Once finalized, users can also download a PDF version of the submitted form for record-keeping purposes.
Here are a few things you will need to know to use the new application:
 
– Type of Inquiries:
 The purpose of a commodity jurisdiction (CJ) request is to determine whether an item or service is covered by the U.S. Munitions List (USML) and therefore subject to export controls administered by the U.S. Department of State pursuant to the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR). If after reviewing the USML and other relevant parts of the ITAR, in particular ITAR §120.3, §120.4, and §121.1(b), you are unsure of the export jurisdiction of an item or service, you should request a CJ determination.
– Access:
 All current DTrade Super Users with valid email addresses have been automatically enrolled in DECCS and can currently access the application. If you are not a DTrade Super User, you will be able to enroll and create a new DECCS account to access the application. Learn more about DECCS here.
 
Access the new Commodity Jurisdiction Application on the DECCS Industry Service Portal here
 
Additional information and learning resources, including application user guides and overview videos, are available on the DECCS Industry Service Portal under the “Learning Tools” dropdown menu.  Also see the CJ section on our web site, under “Conduct Business”.
 
For questions about the CJ process, please contact the Response Team at 202-663-1282 or DDTCResponseTeam@state.gov.  For technical issues please contact the DTAS Help Desk at 202-663-2838 or DTradeHelpDesk@state.gov.
 
As you begin to use the new application, please continue to use the blue ‘Submit Feedback’ button on the right hand side of the Industry Portal screen to share any issues or improvement ideas you have. We appreciate your ongoing feedback as we work to refine the application with each new iteration. Thank you!
 
Public Comments Regarding Review of United States Munitions List Categories IV and XV
 
The public comments are available here.

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OGS_a55
.
EU Publishes Update Concerning CN

(Source:
Official Journal of the European Union
, 8 May 2019.)
 
Regulations
*
Commission Implementing Regulation (EU) 2019/705
of 2 May 2019 concerning the classification of certain goods in the Combined Nomenclature (CN).

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NWSNEWS

NWS_a16
.
The Hill: “It’s Time to Lift the Arms Embargo on Cyprus”
(Source: The Hill, 8 May 2019. [Excerpts.]
 
The United States has a prime opportunity to thwart the designs of Russia, China, and Turkey in the Middle East. At the same time, it can strengthen a bilateral relationship with a democratic, European ally and enhance our defense supply base, as well. This can all be accomplished by taking one relatively simple step: Lift the arms embargo on the Republic of Cyprus.
 
That Cyprus is under embargo is a head-scratcher in the first place. The country is a member of the European Union (EU). It has enjoyed good relations with the United States and is eager to strengthen them further. …
 
Cyprus has not had much of a choice of weapons. U.S. law prohibits arms transfers to the country. The International Traffic in Arms Regulations (ITAR) restrictions imposed by Washington stem from a fear of stoking further tensions with Turkey’s occupation forces in Northern Cyprus. …

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NWS_a2
7.
ST&R Trade Report: “CTPAT Minimum Security Criteria Updated
 
The first major update to the minimum security criteria for the Customs Trade Partnership Against Terrorism was released May 3. Booklets for each of the 12 types of entities eligible for CTPAT, which delineate the MSC for each entity along with new eligibility requirements and other programmatic information, have been uploaded to the CTPAT portal. Eligible entities include importers, exporters, manufacturers in Canada and Mexico, Mexican long-haul highway carriers, air carriers, rail carriers, sea carriers, U.S. highway carriers, third-party logistics providers, consolidators, customs brokers, and U.S. marine port authority and terminal operators.
 
Changes
 
U.S. Customs and Border Protection states that it has added to the MSC requirements to help address the most prevalent and evolving security threats. There are new and updated criteria relating to cybersecurity, protection against agricultural contaminants and pests, prevention of trade-based money laundering and terrorism financing, and using security technology to fortify existing physical security requirements. CBP has also added a recommendation that addresses social compliance programs.
 
CBP has created three focus areas that encompass 12 MSC categories, including three new ones, that apply across the supply chain to each eligible entity group.
 
– Corporate security: security vision and responsibility (new), risk assessment, business partner requirements, cybersecurity (new)
– Transportation security: conveyance and instruments of international traffic security, seal security, procedural security, agricultural security (new)
– People and physical security: physical access controls; physical security; personnel security; education, training, and awareness
 
Implementation
 
CTPAT members will have the rest of 2019 to implement the new MSC internally, and CBP recommends that they do so under the following phased approach.
 
* Phase 1 – cybersecurity, conveyance and IIT security, and seal
security
* Phase 2 – education, training, and awareness; business partner security; risk assessment
* Phase 3 – security vision and responsibility, physical security, physical access controls
* Phase 4 – agricultural security, personnel security, procedural security
 
All CTPAT members are expected to comply with the updated MSC by 2020, regardless of whether or not they are scheduled for a validation that year. CBP notes that while validations under the updated MSC will commence in early 2020, most members will not undergo a validation that year because they are on a four-year validation cycle.
 
In the meantime, members may reach out to their supply chain security specialists beginning in July 2019 if they need assistance implementing a specific requirement. CBP will also provide additional guidance later this year.

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COMMCOMMENTARY

COM_a1
8. A. L. Riella & B. D. Schnapp: “Updated DOJ Guidance Provides Useful Roadmap for Implementing and Enhancing Corporate Compliance Programs” (Part I of II)

(Source:
Vinson & Elkins, 2 May 2019.)
 
* Authors: Amy Lamoureux Riella,
ariella@velaw.com, +1-202-639-6760; and Brian D. Schnapp,
bschnapp@velaw.com, +1-202-639-6619. Both from Vinson & Elkins.
 
On Tuesday, the U.S. Department of Justice released perhaps the most comprehensive guidance to date on how prosecutors evaluate the design, implementation, and effectiveness of corporate compliance programs in making charging decisions, framing sentencing recommendations, and determining whether on-going corporate compliance obligations, such as the imposition of a monitor, may be necessary as part of any enforcement resolution. In announcing the release of the Criminal Division’s
Evaluation of Corporate Compliance Programs guidance document (“Guidance”), DOJ Criminal Division, Assistant Attorney General Brian A. Benczkowski explained that the updated guidance is intended to align the Fraud Section’s 2017 guidance with other Department instructions and legal standards, and to provide greater transparency into prosecutors’ assessments. As
reported previously, in October 2018, Benczkowski indicated that line prosecutors would have a greater role in evaluating companies’ compliance efforts in connection with determinations of whether to impose a compliance monitor, a change that coincided with the Department’s decision not to continue the role of a full-time compliance counsel. While the newly issued guidance serves largely to aggregate and update earlier guidance and lessons derived from enforcement settlements, and may not represent a true shift in Department’s practice, the 18-page document provides additional detail around the questions prosecutors consider when evaluating corporate compliance programs, and serves as a useful guide for all companies, whether currently under DOJ scrutiny or implementing a compliance program for the first time, as companies can now expect prosecutors to be trained on this more harmonized guidance.
 
The Guidance states at the outset that the Department recognizes that each company’s risk profile is unique, and as a result, there can be no formulaic approach to assessing compliance programs. Despite this, the Justice Manual has long contained three “fundamental questions” that a prosecutor should consider when evaluating a program that serve as the framework for the updated Guidance: (1) Is the program well designed; (2) is the program being applied earnestly and in good faith (is it more than a “paper program”); and (3) does the corporation’s compliance program work in practice? JM § 9-28.800. Below we provide highlights from the Guidance in each of these three fundamental areas of evaluation.
 
Design
 
In asking first whether a program is well-designed, the Guidance instructs prosecutors to consider whether the compliance program is comprehensive. Does the program contain clear communication, policies, procedures, training, incentives, and discipline, that will ensure that the program is fully embedded in the company’s operations, rather than relegating compliance responsibilities to a stand-alone unit?
 
  – In order to design an effective program, it is necessary to first conduct a risk assessment, and the Guidance encourages prosecutors to consider whether the company has analyzed risk across operations, within the relevant market, among the customer and partner base, and particular activities such as use of third parties and travel and entertainment. Prosecutors are to consider whether the company tailored its program and assigned resources to higher risk activities, transactions, and partners, and whether the company periodically updates its risk assessment process to ensure continued and appropriate allocation of resources.
  – Prosecutors will also look to determine whether a company’s policies and procedures are regularly updated to address new risks, whether they are accessible to the organization, whether policy instructions are reinforced, and whether those responsible within the organization for driving compliance and detecting issues (“gatekeepers”) received dedicated training. Training will be scrutinized, with consideration given to whether periodic training is offered to officers, directors, employees, and if appropriate, agents and business partners. Companies are encouraged to tailor training, recognizing that not all audiences will present with the same level of sophistication or understanding of the compliance topics. Prosecutors are also asked to consider whether training covers prior incidents or breaches, meaning, that companies should consider including some form of instruction and communication on prior breaches, however anonymized the facts may need to be.
  – While anonymous reporting has long been a recommended component of a corporate compliance program (and indeed is legally required for some), the Guidance encourages prosecutors to consider whether the company acts proactively to create an atmosphere where employees feel comfortable reporting issues without fear or retaliation. Prosecutors will also look to metrics and other reports to determine whether a company’s reporting mechanisms are being used and how quickly the company reacts and responds to significant reports.
  – Due diligence of third parties remains an important piece of any robust compliance program, and the Guidance encourages prosecutors to consider not only the diligence steps taken, but whether the company fully understands the business rationale for engaging a particular third party. Prosecutors also are instructed to consider the mechanisms in place to monitor third parties post-engagement, including asking whether the company has exercised audit rights, and whether a company tracks any red flags identified during the diligence process and any third parties who fail to pass scrutiny under the diligence program. Diligence is not limited to third party engagements, and the Guidance includes criteria for evaluating diligence procedures in connection with mergers and acquisitions, including asking whether the company relies on a defined process for ensuring effective implementation of its compliance program post-acquisition.

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COM_a2
9.
M. Volkov: “DOJ’s New Corporate Compliance Guidance: Does Your Compliance Program Work? (Part V of V)”

(Source:
Volkov Law Group Blog, 8 May 2019. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group,
mvolkov@volkovlaw.com, 240-505-1992.
 
The final issue (included in the Daily Bugle of Monday, 6 May, ed.) discussed in the new DOJ Corporate Compliance Guidance is the assessment of whether a company’s compliance program is working –
at the time of the offense and at the time of the resolution of an enforcement matter.
 
Interestingly, DOJ conceded that the existence of misconduct, by definition, does not mean that a compliance program did not work or was ineffective.  No compliance program can prevent all criminal activity in an organization. 
 
In examining the effectiveness of a compliance program at the time of the offense, prosecutors will have to determine whether and how the misconduct was detected, what investigation resource were in place to investigate suspected misconduct and the nature of the company’s remedial efforts.
 
The determination of the effectiveness of a company’s compliance program at the time of a charging decision or resolution, prosecutors have to examine how the program has changed over time to address risks, whether the company undertook an adequate and honest  root cause analysis to understand what “contributed” to the misconduct and the extent of remediation needed to prevent similar violations in the future.
DOJ will consider whether the company made significant changes to and investments in its compliance program and internal controls systems and whether remedial improvements have been tested.
 
Under this section, DOJ’s Guidance is divided into three sections: (1) Continuous Improvement, Periodic Testing and Review; (2) Investigation of Misconduct; and (3) Analysis and Remediation of any Underlying Misconduct.
 
Continuous Improvement, Periodic Testing and Review
 
A compliance program has to improve and evolve in response to changes in risk that require program adjustment.  A company’s business changes over time, the community in which it operates, the nature of its customers, the law that applies to its activities and industry standards.  Companies have to review its compliance program and make sure it is not “stale.”
 
In this area, DOJ highlighted the importance of a company’s culture and testing of its culture and controls, including periodic audits to ensure that its controls are functioning well.  DOJ will examine whether a company has taken “reasonable steps” to “ensure that its compliance and ethics program is followed, including monitoring and auditing to detect criminal conduct and “evaluate periodically the effectiveness of the organization’s program.”
 
In examining these issues, DOJ has keyed onto the important role that internal audit plays in its audit function and in particular, the process by which internal audit determines where and how to conduct an audit.  In examining the audit function, DOJ will examine how audits are conducted, the types of audits conducted (and in relation to any potential misconduct), review of audit findings, reporting of audit findings to management and board and how such findings are addressed.  In particular, DOJ will examine how often internal audit conducts assessment in high-risk area.
 
With respect to internal controls, DOJ will question whether the company reviewed and audited its compliance program in an area relating to misconduct, and generally, what testing of controls, collection and analysis of compliance data and interviews of employees and third parties does the company undertake and how are the results report, tracked and resolved.
With respect to updating its compliance functions and programs, DOJ intends to focus on how often a company updates its risk assessments and reviews its compliance policies and practices, including whether the company has conducted a gap analysis to ensure that its policies, controls and/or training address specific risk areas.
 
Finally, DOJ has added a new and important inquiry address concerning aa company’s culture of compliance.  Specifically, DOJ will inquire how often the company measures its culture, whether all levels of employees are asked about their perception of senior and middle management commitment to compliance and how did the company respond to the culture measurement.
 
Investigation of Misconduct
 
DOJ again focuses attention on a company’s internal investigation function to ensure that companies maintain an effective investigations structure including documentation of a company’s response to an investigation, including disciplinary or remediation measures taken.
 
In this important area, DOJ emphasizes the following points: (i) investigations have to be properly scoped, conducted by independent investigators who are objective and conduct a proper investigation that is documented; (ii) investigations have to identify root causes, system vulnerabilities and accountability lapses, including among supervisory manager and senior executives; and (iii) investigation findings have to reported and examined by senior management in appropriate cases.
 
Analysis and Remediation of Underlying Misconduct
 
Under this final subject area, companies are expected to conduct root cause analyses of misconduct and timely and appropriately remediate to address the root causes.  DOJ will weigh the company’s remedial actions in light of the nature, severity and frequency of the misconduct, as well as disciplinary measures taken and compliance program improvements adopted in response to any misconduct.
 
In examining this area, DOJ will focus on a company’s:
– Root cause analysis
– Identification of prior weaknesses, including specific controls and/or policies that were violated;
– Payment systems used to fund the misconduct (e.g. purchase orders, reimbursements, discounts, petty cash);
– Vendor selection process (if a vendor was involved);
– Prior indications of potential misconduct, such as audit reports identifying relevant control failures or allegations, complaints or investigations;
– Remediation to prevent recurrence, address the root cause and ensure no future missed opportunities to prevent or detect misconduct; and
 
Accountability for managers with supervisory responsibility considering the company’s overall disciplinary records relating to this type of misconduct.

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(Source:
Paul Hastings LLP, 6 May 2019.)
 
* Authors: Scott M. Flicker, Esq.,
scottflicker@paulhastings.com, +1 202-551-1726; Kwame J. Manley, Esq.,
kwamemanley@paulhastings.com, +1 202-551-1962; Tom Best, Esq.,
tombest@paulhastings.com, +1 202-551-1821; All of Paul Hastings LLP.
 
The Framework is very prescriptive in this section; OFAC provides that the training should not only be periodic, but at a minimum annually. In addition to providing these general aspects, OFAC also explains that the training should provide job-specific knowledge, communicate responsibilities to each employee, and hold employees accountable for knowledge of sanctions compliance through assessments. Training programs are now necessary under this Framework.
 
What is Not Found in the Five Components
 
For all the valuable granularity in the Framework, there are some common compliance program items which appear in guidance documents in other areas and which one might have expected OFAC to include-but evidently, deliberately did not. [FN/11] Those items include, among others, a confidential reporting process, an investigations process (as opposed to auditing of the SCP as in the Framework), disciplinary measures for employees which fail to follow the program, an emphasis on “message in the middle” (as opposed to “tone from the top”), and a number of other nuances.
 
It is not clear why OFAC chose to omit these nuances where many of the companies to which the Framework applies will also be subject to more general DOJ Criminal Division compliance guidance, but no doubt practitioners will seek further clarification from OFAC in the weeks and months to come.
 
The “Root Causes”
 
In what appears to be somewhat of an innovation in the cross-border compliance community, the Framework also includes an Appendix setting out ten different root causes OFAC states it often sees as the reasons for sanctions violations.[FN/12] We find this portion of the Framework helpful and believe it will be for companies as well, as they assess their own programs in the context of those basic issues that have led to enforcement actions over the last ten years.
 
These root causes include:
 
(i) Failure to maintain an SCP at all;
(ii) Misinterpreting the applicability of sanctions;
(iii) Non-U.S. persons facilitating transactions with sanctioned parties;
(iv) Exporting or reexporting U.S.-origin goods, technology, or services to sanctioned persons or countries;
(v) Utilizing the U.S. financial system for transactions with sanctioned persons, including by conducting the transaction in U.S. dollars;
(vi) Relying on faulty or outdated sanctions screening software;
(vii) Conducting improper due diligence on third parties;
(viii) Inconsistent application of a compliance program;
(ix) Using non-standard commercial practices; and
(x) The actions of individuals who cause companies to be liable for sanctions violations.
 
Companies may use these root causes as a tool to identify what kinds of issues may be particularly applicable to them given their specific set of facts and circumstances such as commercial sophistication and international presence. While each of these root causes could be discussed at length in their own right, two root causes warrant particular emphasis: (i) the failure to maintain any formal SCP; and (ii) individual actions that lead to liability.
 
The Importance of Having an Effective SCP
 
Though sanctions violations are often caused by a confluence of events, the first root cause of sanctions violations OFAC lists is the lack of a formal OFAC SCP. Without an effective SCP, companies can engage in the regular course of business with the best of intentions but ultimately be unable to identify threats of sanctions violations because of a lack of policies or procedures designed to catch such risks. Companies without such a program therefore run the risk of unknowingly engaging in sanctioned business and forfeiting the opportunity to voluntarily disclose it to OFAC in a manner that would demonstrate a commitment of compliance with sanctions regulations.
 
OFAC indicates that in past enforcement actions, it has considered the lack of an SCP to be an aggravating factor that increases the civil monetary penalty. Now that OFAC has issued the Framework wherein it says it would consider “favorably” the existence of an SCP when a violation occurred, ineffective compliance policies that do not comport to OFAC’s stated guidance also run the risk of becoming an aggravating factor.
 
Having an effective SCP is the gateway to sanctions compliance, and many of the additional root causes identified by OFAC as causing sanctions violations may be eliminated by having such a compliance program in place.
 
The Risk of Individual Liability
 
OFAC’s inclusion of the “actions of individuals” as a root cause, and its explicit acknowledgement that it may seek to hold individuals and companies liable for sanctions violations, is a new development in OFAC’s public messaging.
 
It may be intended to reemphasize the DOJ’s 2016 guidance on voluntary self-disclosures, cooperation, and remediation in instances of sanctions and export control violations (“NSD Guidance”). The NSD Guidance, which paralleled similar guidance relating to the then-FCPA Pilot Program and incorporated the so-called Yates Memorandum, explained that in voluntarily disclosing violations to the DOJ, companies must disclose known relevant facts, including those pertaining to the specific individuals involved in the violations.
 
An effective SCP is not only important in protecting companies against aggressive OFAC enforcement, but also any such individual employees who may have played “integral roles in causing or facilitating” sanctions violations.
 
Bottom Line
 
While many of the five enumerated elements of the SCP are common elements of sophisticated compliance programs, they are now all but mandatory in OFAC’s opinion. In publishing not only specific elements of an SCP that OFAC deems “essential,” but also detailing the ten root causes of violations, OFAC may be signaling an era of increased enforcement actions. In 2019, OFAC has already issued 14 penalties or settlements. [FN/13] In 2018, OFAC only issued seven in the entire year; in 2017, OFAC issued 16 in total.
 
This Framework and outline of root causes of sanctions violations provide a clear roadmap for OFAC to evaluate how ineffective compliance programs give rise to sanctions violations. In an environment with increasingly turbulent sanctions regime, assurance that a company’s SCP is in line with OFAC expects it must become the norm. If a company’s SCP does not meet these standards, the company may be at risk for penalties that are otherwise preventable.
———–
  [FN/11] See generally The Evaluation of Corporate Compliance Programs, supra note 2.
  [FN/12] Framework, supra note 1 at 9.
  [FN/13] See Civil Penalties and Enforcement Information, U.S. Department of the Treasury.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a111.
ECTI Presents “International Distributor Agreements – Practical Advice for Outbound Distribution for U.S. Companies” Webinar on 5 June 2019 

(Source: D. Hatch, 
danielle@learnexportcompliance.com.)
 
* What
International Distributor Agreements – Practical Advice for Outbound Distribution for U.S. Companies
* When: June 5, 2019 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Michael Patterson
* Register: 
here or contact Danielle Hatch, 540-433-3977, 
danielle@learnexportcompliance.com.

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TE_a212. FCC Presents “The ABC’s of Foreign Military Sales”, 28 November in Bruchem, the Netherlands

 
This training course is specifically designed for compliance professionals and those in a similar role working for government agencies or companies (temporarily) obtaining U.S. export-controlled articles and technology procured through government-to-government Foreign Military Sales (FMS), and authorized by the Arms Export Control Act (AECA) (22 U.S.C. 2751,
et. seq.).
 
The course will cover multiple topics relevant for organizations outside the U.S. working with U.S. export-controlled articles and technology procured through FMS, including: the U.S. regulatory framework, with a special focus on the AECA, key concepts and definitions, and practical compliance tips to ensure the proper handling of FMS-acquired articles and technology. Participants will receive a certification upon completion of the training.
 
Details
* What: The ABC’s of Foreign Military Sales
* When: Thursday, 28 Nov 2019
– Welcome and Registration: 9.00 am – 9.30 am
– Training hours: 9.30 am – 4.00 pm
* Where: Full Circle Compliance, Landgoed Groenhoven, Dorpsstraat 6, Bruchem, the Netherlands
* Information & Registration:
here or contact FCC at
events@fullcirclecompliance.eu or + 31 (0)23 – 844 – 9046

* This course can be followed in combination with “U.S. Export Controls: The International Traffic in Arms Regulations (ITAR) from a non-U.S. Perspective” (26 Nov 2019), and/or “U.S. Export Controls: The Export Administration Regulations (EAR) from a non-U.S. Perspective” (27 Nov 2019). Please, see the event page for our combo deals.

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ENEDITOR’S NOTES

* Francis Quarles (8 May 1592 – 8 Sep 1644; was an English poet most famous for his emblem book aptly entitled Emblems. An emblem book is a book collecting coats of arms and allegorical illustrations with accompanying explanatory text, typically morals or poems. This category of books was popular in Europe during the 16th and 17th centuries.)
  – “No cross no crown.”
 
* Friedrich August von Hayek (8 May 1899 – 23 Mar 1992; was an Anglo-Austrian economist and philosopher best known for his defense of classical liberalism. Hayek shared the 1974 Nobel Memorial Prize in Economic Sciences with Gunnar Myrdal for his “pioneering work in the theory of money and economic fluctuations and […] penetrating analysis of the interdependence of economic, social and institutional phenomena”.)
  – “If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion.”

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EN_a314
. 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: 5 Apr 2019:
84 FR 13499-13513: Civil Monetary Penalty Adjustments for Inflation
 

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: 11 Apr 2019: 84 FR 14608-14614: Revisions to the Unverified List (UVL) 
 
* 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 Apr 2019: 84 FR 16398-16402: International Traffic in Arms Regulations: Transfers Made by or for a Department or Agency of the U.S. Government   
  – The only available fully updated copy (latest edition: 19 Apr 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: 29 Apr 2019: 84 FR 17950-17958
: Foreign Interference in U.S. Elections Sanctions Regulations [amendment of 31 CFR Part 579 to implement EO 13848]   
 

* 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: 18 Apr 2019: Harmonized System Update (HSU) 1906

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

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EN_a0315
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, Vincent J.A. Goossen and Alexander Witt; and Events & Jobs Editor, Sven Goor. 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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