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19-0514 Tuesday “Daily Bugle”

19-0514 Tuesday “Daily Bugle”

Tuesday, 14 May 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. Contact us for advertising  

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  1. Commerce/BIS Amends EAR, Revises Entity List
  2. Commerce/BIS Seeks Comments Concerning Offsets in Military Exports
  3. DHS/CBP Announces COAC Meeting on 30 May in Laredo, Texas
  4. USTR Modifies Section 301, Imposes Additional Duties on Goods of China with an Annual Trade Value of Approximately $34 Billion
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. DHS/CBP Releases Harmonized System Update 1907
  4. State/DDTC Releases End-Use Monitoring Report for FY 2018
  5. EU Amends Restrictive Measures Concerning Central African Republic
  6. UK ECJU Fines UK Exporter with £10,000 for Brokering Goods Outside the UK Without A License
  7. Singapore Customs Updates of Interest: Electronic Submission of Voluntary Disclosure Program Applications
  8. Taiwan BOFT Revises Sensitive Commodities List for Iran, the Dual-Use Goods List, and Common Military List
  1. Clearance Job: “Defense Contracting Fraud Remains an Ongoing Issue”
  2. Defense News: “European Union’s Defense-Collab Push Could Fizzle, Report Warns”
  3. Expeditors News: “China Increases Tariff Rates on $60 Billion on Goods of U.S. Origin”
  4. KUTV: “Russian Jailed in Utah, Accused of Smuggling, Selling Fighter Jet Manuals”
  5. NPR: “Stopping Key Tech Exports to China Could Backfire, Researchers and Firms Say”
  1. A. E. Cotterill, S. J. Mullick & M. Mancuso: “OFAC Leans in on Sanctions Compliance: A Renewed Focus on Enforcement”
  2. M. Volkov: “OFAC Framework for Sanctions Compliance Programs – Risk Assessment and Internal Controls (Part II of IV)”
  3. W. Wysong: “U.S. Antiboycott Laws: They’re Not for Everyone (But They May Be for You)”
  1. FCC Presents “Designing an ICP for Export Controls & Sanctions”, 1 Oct 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 (14 May 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 2019), DOS/ITAR (19 Apr 2019), DOT/FACR/OFAC (29 Apr 2019), HTSUS (13 May 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

1
.
Commerce/BIS Amends EAR, Revises Entity List
(Source: Federal Register, 14 May 2019.) [Excerpts.]
 
84 FR 21233-21238: Addition of Certain Entities to the Entity List, Revision of an Entry on the Entity List, and Removal of an Entity From the Entity List
 
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: This final rule amends the Export Administration Regulations (EAR) by adding twelve entities, under a total of sixteen entries, to the Entity List. These twelve entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States and will be listed on the Entity List under the destinations of China, Hong Kong, Pakistan and the United Arab Emirates. This rule also modifies one existing entry on the Entity List under the destination of the United Arab Emirates. Finally, this rule removes one entity under the destination of the United Arab Emirates. The removal is made in connection with a request for removal that BIS received pursuant to sections of the EAR used for requesting removal or modification of an Entity List entry and a review of information provided in that request.
* DATES: This rule is effective May 14, 2019.
* FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Email: ERC@bis.doc.gov.
* SUPPLEMENTARY INFORMATION: … The Entity List (15 CFR, Subchapter C, part 744, Supplement No. 4)
identifies entities reasonably believed to be involved, or to pose asignificant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States. The Export Administration Regulations (EAR) (15 CFR, Subchapter C, parts 730-774) impose additional license requirements on, and limits the availability of most license exceptions for, exports, reexports, and transfers (in-country) to listed entities. The license review policy for each listed entity is identified in the “License review policy” column on the Entity List, and the impact on the availability of license exceptions is described in the relevant Federal Register notice adding entities to the Entity List. BIS places entities on the Entity List pursuant to part 744 (Control Policy: End-User and End-Use Based) and part 746 (Embargoes and Other Special Controls) of the EAR.
   The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote, and makes all decisions to remove or modify an entry by unanimous vote.
 
ERC Entity List Decisions
 
Additions to the Entity List
 
This rule implements the decision of the ERC to add twelve entities, under a total of sixteen entries, to the Entity List; four of the entities being added are located in two destinations. The twelve entities are being added based on Sec. 744.11 (License requirements that apply to entities acting contrary to the national security or foreign policy interests of the United States) of the EAR. The sixteen entries consist of six entries located in China, four entries located in Hong Kong, one entry located Pakistan and five entries in the United Arab Emirates (U.A.E.).
   The ERC reviewed Sec. 744.11(b) (Criteria for revising the Entity List) in making the determination to add these twelve entities to the Entity List. Under that paragraph, persons for whom there is reasonable cause to believe, based on specific and articulable facts, that they have been involved, are involved, or pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States, along with those acting on behalf of such persons, may be added to the Entity List. Paragraphs (b)(1) through (5) of Sec. 744.11 provide an illustrative list of activities that could be contrary to the national security or foreign policy interests of the United States. For each of the twelve entities described below, the ERC made the requisite determination under the standard set forth in Sec. 744.11(b).
   Pursuant to Sec. 744.11(b) of the EAR, the ERC determined to add Longkui Qu and Taizhou CBM-Future New Material Science and Technology Co., Ltd., both located in China, to the Entity List for engaging in activities contrary to the national security interests of the United States. Specifically, these entities participated in the prohibited export of controlled technology concerning the manufacture of syntactic foam and supplying syntactic foam to PRC state-owned enterprises, PRC defense industrial corporations, and PRC military-related academic institutions.
   The ERC also determined to add four companies–Avin Electronics Technology Co., Ltd. (AETC); Multi-Mart Electronics Technology Co, Ltd.; Tenco Technology Company Ltd.; and Yutron Technology Co. Ltd.–to the Entity List under the destinations of China and Hong Kong for actions contrary to the national security or foreign policy interests of the United States. Specifically, these entities have been attempting to procure U.S.-origin commodities that would ultimately provide material support to Iran’s weapons of mass destruction and military programs, in violation of U.S. export controls.
In addition, the ERC determined to add Impex Trade & Services, located in the destination of Pakistan, to the Entity List for actions contrary to the national security or foreign policy interests of the United States. Specifically, Impex Trade & Services has been involved in proliferation to unsafeguarded nuclear activities.
   Under the destination of the United Arab Emirates (U.A.E.), the ERC determined that German Sky International Trading Company LLC has been involved in activities that
are contrary to the national security and foreign policy interests of the United States. Specifically, in accordance with Sec. 744.11(b)(4), German Sky International Trading Company LLC is being added to the Entity List because it has prevented the accomplishment of end-user checks conducted by the Department of Commerce. Also under the destination of the U.A.E., the ERC has determined to add to the Entity List Emirates Hermes General Trading; Presto Freight International, LLC; Basha Asmath Shaikh; and Manohar Nair. These four entities have been involved in activities that are contrary to the national security and foreign policy interests of the United States as set forth in Sec. 744.11(b). Emirates Hermes General Trading and Presto Freight International, LLC, operated by Basha Asmath Shaikh and Manohar Nair, procured U.S.-origin items for Complete Freight Solutions, a listed entity on the Entity List, and for Mahan Air, an Iranian airline that is subject to a BIS temporary denial order and has been designated a Specially Designated Global Terrorist by the U.S. Department of Treasury’s Office of Foreign Assets Control.
   Pursuant to Sec. 744.11(b) of the EAR, the ERC determined that the conduct of these twelve entities raises sufficient concern that prior review of exports, reexports, or transfers (in-country) of all items subject to the EAR involving these entities, and the possible imposition of license conditions or license denials on shipments to the persons, will enhance BIS’s ability to prevent violations of the EAR.
   For the twelve entities, under a total of sixteen entries, being added to the Entity List, BIS imposes a license requirement for all items subject to the EAR and a license review policy of presumption of denial. The license requirements apply to any transaction in which items are to be exported, reexported, or transferred (in-country) to any of the entities or in which such entities act as purchaser, intermediate consignee, ultimate consignee, or end-user. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to the entities being added to the Entity List in this rule. The acronym “a.k.a.” (also known as) is used in entries on the Entity List to identify aliases, thereby assisting exporters, reexporters, and transferors in identifying entities on the Entity List. …
 
Removal From the Entity List
 
This rule implements a decision of the ERC to remove DGL Clearing and Forwarding LLC, an entity located in the U.A.E., from the Entity List on the basis of a removal request. The entry for DGL Clearing and Forwarding LLC was added to the Entity List on January 26, 2018 (83 FR 3580). The ERC decided to remove this entry based on information BIS received pursuant to Sec. 744.16 of the EAR and the review the ERC conducted in accordance with procedures described in Supplement No. 5 to part 744. …
 
Savings Clause
 
Shipments of items removed from eligibility for a License Exception or for export or reexport without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export or reexport, on May 14, 2019, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or NLR. …
 
   Dated: May 9, 2019.
Richard E. Ashooh, Assistant Secretary for Export Administration.

 
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(Source:
Federal Register, 14 May 2019.) [Excerpts.]
 
84 FR 21327: Submission for OMB Review; Comment Request; Offsets in Military Exports
 
…  
  – Agency: Bureau of Industry and Security.
  – Title: Offsets in Military Exports. …
  – Needs and Uses: This collection of information is required by the Defense Production Act (DPA). The DPA requires U.S. firms to furnish information to the Department of Commerce regarding offset agreements exceeding $5,000,000 in value associated with sales of weapon systems or defense-related items to foreign countries or foreign firms. Offsets are industrial or commercial compensation practices required as a condition of purchase in either government-to-government or commercial sales of defense articles and/or defense services as defined by the Arms Export Control Act and the International Traffic in Arms Regulations. Such offsets are required by most major trading partners when purchasing U.S. military equipment or defense related items.
  – Affected Public: Business or other for-profit organizations. …
 
This information collection request may be viewed here. Follow the instructions to view Department of Commerce collections currently under review by OMB. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to this address or fax to (202) 395-5806.
 

Sheleen Dumas, Departmental Lead PRA Officer, Office of the Chief Information Officer, Commerce Department. 

 
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EXIM_a3
3
. DHS/CBP Announces COAC Meeting on 30 May in Laredo, Texas
(Source: Federal Register, 14 May 2019.) [Excerpts.]
 
84 FR 21350-21351: Commercial Customs Operations Advisory Committee (COAC)
 
* AGENCY: U.S. Customs and Border Protection (CBP), Department of Homeland Security (DHS).
* ACTION: Committee Management; Notice of Federal Advisory Committee Meeting.
* SUMMARY: The Commercial Customs Operations Advisory Committee (COAC) will hold its quarterly meeting on Thursday, May 30, 2019, in Laredo, Texas. The meeting will be open to the public to attend either in person or via webinar.
* DATES: The COAC will meet on Thursday, May 30, 2019, from 1:00 p.m. to 4:00 p.m. CDT (2:00 p.m.-5:00 p.m. EDT). Please note that the meeting may close early if the committee has completed its business.
* ADDRESSES: The meeting will be held at the Laredo College, Falcon Bank Executive Conference Room, 1 West End Washington Street, Laredo, Texas 78040. For information on facilities or services for individuals with disabilities or to request special assistance at the meeting, contact Ms. Florence Constant-Gibson, Office of Trade Relations, U.S. Customs & Border Protection, at (202) 344-1440 as soon as possible. …
* SUPPLEMENTARY INFORMATION: Notice of this meeting is given under the Federal Advisory Committee Act, 5 U.S.C. Appendix. The Commercial Customs Operations Advisory Committee (COAC) provides advice to the Secretary of Homeland Security, the Secretary of the Treasury, and the Commissioner of U.S. Customs and Border Protection (CBP) on matters pertaining to the commercial operations of CBP and related functions within the Department of Homeland Security and the Department of the Treasury.
 
Agenda
 
The COAC will hear from the current subcommittees on the topics listed below and then will review, deliberate, provide observations, and formulate recommendations on how to proceed:
 
  (1) The Next Generation Facilitation Subcommittee will provide an update on the status of the Emerging Technologies Working Group’s use of blockchain to address challenges faced by both the government and the trade in today’s complex commercial environment. The discussion will highlight the Intellectual Property Rights Blockchain Proof of Concept Project as well as discuss other upcoming projects, including a day-long event that will solicit additional ideas for blockchain concepts that could be tested in the future. Finally, the subcommittee will provide recommendations regarding blockchain proofs of concept.
  (2) The Secure Trade Lanes Subcommittee will present a summary of the activities of the Trusted Trader Working Group including results of the May 8th and 9th face-to-face meeting with Trusted Trader Pilot participants. The subcommittee will deliver an update on the progress of the In-Bond Working Group’s recommendation for the enhancement of the CBP In-bond program, the development of in-bond regulations, and enhancements to existing in-bond guidelines. The subcommittee will deliver an update on the launch of the new Export Modernization Working Group which will be developing recommendations for CBP’s expansion of current export pilots, regulatory changes that will mandate the use of electronic export manifest, and the expansion of post departure filing to new participants.
  (
3) The Intelligent Enforcement Subcommittee will report on the work that has been conducted by the Intellectual Property Rights, Anti-Dumping and Countervailing Duty, and Bond Working Groups.
  (4) The Rapid Response Subcomittee will provide an update on its collaboration with CBP on furthering the strategic approach to the 21st Century Customs Framework. Meeting materials will be available by May 28, 2019, at: http://www.cbp.gov/trade/stakeholder-engagement/coac/coac-public-meetings.
 
  Dated: May 9, 2019.  
Bradley F. Hayes, Executive Director, Office of Trade Relations.
 
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EXIM_a44. USTR Modifies Section 301, Imposes Additional Duties on Goods of China with an Annual Trade Value of Approximately $34 Billion

(Source: Federal Register, 14 May 2019.) [Excerpts.]
 
FR 84 21389-21391: Notice of Product Exclusions: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation
 
* AGENCY: Office of the United States Trade Representative.
* ACTION: Notice of product exclusions.
* SUMMARY: Effective July 6, 2018, the U.S. Trade Representative (Trade Representative) imposed additional duties on goods of China with an annual trade value of approximately $34 billion (the $34 billion action) as part of the action in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The Trade Representative’s determination included a decision to establish a product exclusion process. The Trade Representative initiated the exclusion process in July 2018, and stakeholders have submitted requests for the exclusion of specific products. The Trade Representative granted exclusion requests in December 2018, March 2019, and April 2019. This notice announces the Trade Representative’s determination to grant additional exclusion requests, as specified in the Annex to this notice. The Trade Representative will continue to issue decisions on pending requests on a periodic basis.
* DATES: The product exclusions announced in this notice will apply as of the July 6, 2018 effective date of the $34 billion action, and will extend for one year after the publication of this notice. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.
* FOR FURTHER INFORMATION CONTACT: For general questions about this notice, contact Assistant General Counsels Philip Butler or Megan Grimball, or Director of Industrial Goods Justin Hoffmann at (202) 395-5725. For specific questions on customs classification or implementation of the product exclusions identified in the Annex to this notice, contact traderemedy@cbp.dhs.gov.
* SUPPLEMENTARY INFORMATION:  
 
A. Background
 
For background on the proceedings in this investigation, please see the prior notices issued in the investigation, including 82 FR 40213 (August 24, 2017), 83 FR 14906 (April 6, 2018), 83 FR 28710 (June 20, 2018), 83 FR 33608 (July 17, 2018), 83 FR 38760 (August 7, 2018), 83 FR 40823 (August 16, 2018), 83 FR 47974 (September 21, 2018), 83 FR 65198 (December 19, 2018), 83 FR 67463 (December28, 2018), 84 FR 7966 (March 5, 2019), 84 FR 11152 (March 25, 2019), and 84 FR 16310 (April 18, 2019). Effective July 6, 2018, the Trade Representative imposed additional
25 percent duties on goods of China classified in 818 8-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS), with an approximate annual trade value of $34 billion. See 83 FR 28710. The Trade Representative’s determination included a decision to establish a process by which U.S. stakeholders may request exclusion of particular products classified within an 8-digit HTSUS subheading covered by the $34 billion action from the additional duties. The Trade Representative issued a notice setting out the process for the product exclusions, and opened a public docket. See 83 FR 32181 (the July 11 notice). Under the July 11 notice, requests for exclusion had to identify the product subject to the request in terms of the physical characteristics that distinguish the product from other products within the relevant 8-digit subheading covered by the $34 billion action. Requestors also had to provide the 10-digit subheading of the HTSUS most applicable to the particular product requested for exclusion, and could submit information on the ability of U.S. Customs and Border Protection to administer the requested exclusion. Requestors were asked to provide the quantity and value of the Chinese-origin product that the requestor purchased in the last three years. With regard to the rationale for the requested exclusion, requests had to address the following factors:
  – Whether the particular product is available only from China and specifically whether the particular product and/or a comparable product is available from sources in the United States and/
or third countries.
  – Whether the imposition of additional duties on the particular product would cause severe economic harm to the requestor or other U.S. interests. Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs. The July 11 notice stated that the Trade Representative would take into account whether an exclusion would undermine the objective of the Section 301 investigation. The July 11 notice required submission of requests for exclusion from the $34 billion action no later than October 9, 2018, and noted that the Trade Representative would periodically announce decisions. In December 2018, the Trade Representative granted an initial set of exclusion requests. See 83 FR 67463. The Trade Representative granted a second and third set of exclusions in March 2019 and April 2019. See 84 FR 11152 and 84 FR 16310. The Office of the United States Trade Representative regularly updates the status of each pending request here.
 
B. Determination To Grant Certain Exclusions
 
Based on the evaluation of the factors set out in the July 11 notice, which are summarized above, pursuant to sections 301(b), 301(c), and 307(a) of the Trade Act of 1974, as amended, and in accordance with the advice of the interagency Section 301 Committee, the Trade Representative has determined to grant the product exclusions set out in the Annex to this notice. The Trade Representative’s determination also takes into account advice from advisory committees and any public comments on the pertinent exclusion requests. As set out in the Annex to this notice, the exclusions are established in two different formats: (1) As an exclusion for an existing 10-digit subheading from within an 8-digit subheading covered by the $34 billion action, or (2) as an exclusion reflected in specially prepared product descriptions. In particular, the exclusions take the form of five 10-digit HTSUS subheadings, and 35 specially prepared product descriptions. In accordance with the July 11 notice, the exclusions are available for any product that meets the description in the Annex, regardless of whether the importer filed an exclusion request. Further, the scope of each exclusion is governed by the scope of the product descriptions in the Annex to this notice, and not by the product descriptions set out in any particular request for exclusion. The exclusions in the Annex cover approximately 515 separate exclusion requests: the excluded 10-digit subheadings cover 86 separate requests, and the 35 specially prepared product descriptions cover approximately 429 separate requests. Paragraph A, subparagraphs (3)-(5) are conforming amendments to the HTSUS reflecting the modification made by the Annex to this notice. As stated in the July 11 notice, the exclusions will apply as of the July 6, 2018 effective date of the $34 billion action, and extend for one year after the publication of this notice. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation. The Trade Representative will continue to issue determinations on pending requests on a periodic basis.
 
Joseph Barloon, General Counsel, Office of the U.S. Trade Representative.
ANNEX …  

 
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OGSOTHER GOVERNMENT SOURCES

OGS_a15
. Items Scheduled
for Publication in Future Federal Register Editions

(Source:
Federal Register
)

 
* President; ADMINISTRATIVE ORDERS; Yemen; Continuation of National Emergency (Notice of May 13, 2019)
[Pub. Date: 15 May 2019.]
 
* Commerce/BIS; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals
[Pub. Date: 15 May 2019.]
 
* Commerce/BIS; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals: International Import Certificate
[Pub. Date: 15 May 2019.]
 
* USTR; NOTICES; Implementing Modification to Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation
[Pub. Date: 15 May 2019.]
 
* U.S.-China Economic and Security Review Commission; NOTICES; Hearing
[Pub. Date: 15 May 2019.]
 
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OGS_a26
. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)

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(Source: CSMS# 19-000241, 13 May 2019.)


Harmonized System Update (HSU) 1907 was created on May 10, 2019 and contains 43 ABI records and 10 harmonized tariff records.

Modifications include those made as a result of the United States Trade Representative’s Notice of Modification to Section 301 Action: China’s Acts Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. This Notice can be found in the Federal Register dated May 9, 2019, Vol. 84 No. 90, page 20459 and can be retrieved going here.

Additional changes were made to support the USTR’s Notice of Product Exclusions to Section 301 Action: China’s Acts Policies, and Practices Related to Technology Transfer, Intellectual Property and Innovation, available here.

Finally, adjustments were made to support the USTR’s Implementing Modification to Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property,and Innovation Notice. This Notice can be accessed here.

Changes required by the verification of the 2019 Harmonized Tariff Schedule (HTS) are also included.

The modified records are currently available to all ABI participants and can be retrieved electronically via the procedures indicated in the CATAIR. For further information about the retrieval process, please contact your Client Representative.  

Questions related to Section 301 entry filing requirements should be emailed to traderemedy@cbp.dhs.gov. Questions from the importing community concerning ACE rejections should be referred to their Client Representative.

All other questions regarding this message, please contact Jennifer Keeling via email at Jennifer.L.Keeling@cbp.dhs.gov. 

 

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

(Source: State/DDTC, 14 May 2019.)
 
This report summarizes the Department of State’s administration of the Blue Lantern end-use monitoring program for fiscal year (FY) 2018. The Blue Lantern program fulfills requirements stipulated in section 40A of the Arms Export Control Act (AECA) (22 U.S.C. 2785) and delegated to the Department of State in Executive Order 13637 (March 8, 2013).  
 
The program monitors the end-use of defense articles, technical data, services, and brokering activities exported through commercial channels and subject to Department of State licenses or other approvals under section 38 of the AECA and the International Traffic in Arms Regulations (ITAR) (22 CFR Parts 120-130), which implement section 38 of the AECA. The Blue Lantern program is managed by the Country and End-Use Analysis Division (CEA), Office of Defense Trade Controls Policy, Directorate of Defense Trade Controls (DDTC), Bureau of Political-Military Affairs.

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OGS_a5
9
. EU Amends Restrictive Measures Concerning Central African Republic

(Source: Official Journal of the European Union, 14 May 2019.)
 
Regulations
* Council Implementing Regulation (EU) 2019/757 of 13 May 2019 implementing Article 17(3) of Regulation (EU) No 224/2014 concerning restrictive measures in view of the situation in the Central African Republic
 
Decisions
* Council Implementing Decision (CFSP) 2019/763 of 13 May 2019 implementing Decision 2013/798/CFSP concerning restrictive measures against the Central African Republic

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OGS_a6
10. UK HMRC Fines Exporter £10,000 for Brokering Goods Outside the UK Without A License

(Source: UK ECJU, 14 May 2019.)
 
Her Majesty’s Revenue & Customs (HMRC) recently issued a compound penalty of £10,234.26 to a UK exporter/trader.
 
The penalty was in relation to unlicensed trading of body armor. The goods were not exported from the UK, but the transaction involved a UK national. The Export Control Order 2008 requires a trade control license when certain goods are exported from a country other than the UK.
 
Exporters should be aware that trafficking and brokering military and dual use goods to and from non-EU countries outside the UK will need a trade control license, even if the goods do not pass through the UK.
 
See the following open general trade control licenses:
 

  Open general trade control license (maritime anti-piracy)

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OGS_a7
11. Singapore Customs Updates of Interest: Electronic Submission of Voluntary Disclosure Program Applications  

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OGS_a8
12. Taiwan BOFT Revises Sensitive Commodities List for Iran, the Dual-Use Goods List, and Common Military List

(Source: Taiwan Bureau of Foreign Trade, 14 May 2019.)
 
The Taiwanese Bureau of Foreign Trade (BOFT) has revised the following lists:
 


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NWSNEWS

NWS_a01
13. Clearance Job: “Defense Contracting Fraud Remains an Ongoing Issue” 


(Source: Clearance Job, 14 May 2019.) [Excerpts.]

 
In April Oben Cabalceta pleaded guilty to defrauding the U.S. Department of Defense (DoD) out of $1.8 million by providing the wrong or incorrect military equipment parts. The New Jersey resident also admitted to illegally accessing sensitive, technical information despite not even being an American citizen.
 
Cabalceta, who is a native and citizen of the Republic of Costa Rica and was not lawfully in the United States, pleaded guilty to one count of wire fraud and one count of conspiracy for violating the Arms Control Act. He reportedly owns two manufacturing companies in Berlin, and obtained DoD contracts whereby he would provide parts that would be exactly the same as those authorized by the manufacturers, and these included parts that were critical application items for military equipment.
 
This was hardly an isolated case. …

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NWS_a214.
Defense News: “European Union’s Defense-Collab Push Could Fizzle, Report Warns” 
 
(Source: Defense News, 14 May 2019.) [Excerpts.]
 
A collection of European Union initiatives for improving the bloc’s military prowess is at risk of failure unless member countries tighten the reins on how the projects are managed, a new think thank study has found.
 
The analysis by the London-based International Institute for Strategic Studies calls for reforms in the so-called PESCO framework, which is short for Permanent Structure Cooperation. European defense leaders have touted PESCO and its funding mechanisms, including the envisioned multibillion-dollar European Defense Fund, as a major breakthrough in consolidating military capabilities scattered across EU member states.
 
To date, participating member states have launched 34 projects, one batch in March 2018 and another in November. Their objectives target aspects across the spectrum of military capabilities, everything from software-defined radios to reconnaissance airships to maritime security, cyber operations and military logistics.
 
But the efforts “seem to face common challenges related to stakeholder coordination, funding, and importantly, an understanding of what the projects are actually meant to achieve,” IISS researchers write in an upcoming report. In addition, many of the projects examined by the analysts come without a clear understanding of how the results would “help in relation to EU missions.”
 
“These risks raise the real possibility that PESCO may become yet another missed opportunity on the long road to more integrated European defense cooperation,” states the report. …
 
Officials at the European Defense Agency, which oversees the PESCO framework, have defended the plans, arguing the initiatives are so new that more time is needed to judge their success. In addition, the argument goes, the projects shouldn’t be evaluated only by specific outcomes, but more broadly by the commitment of member states to collaborate on defense matters at all. …
 
Meanwhile, senior U.S. defense officials have lodged fresh complaints against the EU’s internal defense-cooperation policies, warning that excluding Washington would risk damaging transatlantic relations, Der Spiegel reported on its website on Tuesday.
 
The latest barrage of criticism comes from Pentagon acquisition chief Ellen Lord and Andrea Thompson, the under secretary of state for arms control and international security affairs, in a letter to Frederica Mogherini, the EU’s high representative for foreign affairs and security policy.
 

The two want unrestricted access by U.S. defense companies to all PESCO projects, plus the ability for Washington to decide on its own where to export any military gear developed under EU auspices, according to the Spiegel. …

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NWS_a315.
Expeditors News: “China Increases Tariff Rates on $60 Billion on Goods of U.S. Origin” 
 
(Source: Expeditors News, 13 May 2019.)
 
On May 13, 2019, the Government of China announced they will increase the duty rate on the $60 billion on goods imported into China with a U.S. country of origin.
 
China will increase the tariffs on over 5,000 HTS to 25%, 20%, 10%, and 5%, from previously imposed 4 product lists at 5% and 10%. The 4 product lists are the same lists as those implemented on September 24, 2018. The increases will go into effect on June 1, 2019.
 
The original Chinese announcement may be found here. A translated version may be found here. The four lists may be found here in their original Chinese:
 

– Annex 1: here

– Annex 2: here
– Annex 3: here
– Annex 4: here

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(Source: KUTV, 13 May 2019.) [Excerpts.]
 
A Russia citizen is accused of smuggling fighter jet manuals from the U.S. and is custody in Utah.
 
Oleg Tishchenko has been indicted on five counts, including attempted smuggling goods and conspiracy to commit an offense against the United States. It is not clear why he is jailed in Weber County, but jets related to the flight manuals are housed at Hill Air Force Base.
 
The indictment says Tishchenko asked for help shipping an item he purchased on eBay, on a digital combat simulator online forum. He told forum users he was bidding on a series of F-16 A/B air defense fighter manuals and needed help since international shipping was not allowed by the seller. …
 
The indictment says between June 29 and Oct. 25 that year, “Sullivan shipped the Air Force Technical Orders (flight manuals) to Tishchenko in Moscow,”
 

On June 29, 2011 Sullivan posted a comment stating that he has shipped the manuals and was concerned he had violated the law by forwarding them to Moscow, Russia. …

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

(Source:
NPR, 14 May 2019.) [Excerpts.]
 
For the last 15 years, Addgene has dedicated itself to accelerating medical research. The nonprofit in Watertown, Mass., does so by sharing research materials globally, like chromosomal DNA, used in the search for breakthrough medical cures.
 
That could soon change.
 
It is now one of thousands of research groups and companies caught up in a tech rivalry between the United States and China. This year, the Trump administration is expected to put new restrictions on the export of “emerging and foundational technology” – tools that are central to next-generation applications – to prevent it from falling into the wrong hands. …
 
So the U.S. is considering some of its broadest export controls yet to slow the flow of technology to China, which U.S. officials see as a threat to American tech supremacy and security.
 
But companies and universities are pushing back, arguing such controls would hurt their ability to innovate. Ultimately, they argue, broad restrictions could make it harder to fend off cyber threats and to cooperate globally in scientific advances. …

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COMCOMMENTARY

COM_a018
.
A. E. Cotterill, S. J. Mullick & M. Mancuso: “OFAC Leans in on Sanctions Compliance: A Renewed Focus on Enforcement”
(Source: Kirkland & Ellis, 13 May 2019.)
 
* Authors: Abigail E. Cotterill, Esq., abigail.cotterill@kirkland.com, +1 202-389-5029; Sanjay José Mullick, Esq., sanjay.mullick@kirkland.com, +1 202-389-5111; and Mario Mancuso, P.C., mario.mancuso@kirkland.com, +1 212-446-4670. All of Kirkland & Ellis.
 
On May 2, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took a significant step by issuing the framework for OFAC Compliance Commitments (framework), which formally puts companies on notice of OFAC’s expectations with respect to an effective economic sanctions compliance program (SCP). Importantly, OFAC indicates that it will take into account under its Economic Sanctions Enforcement Guidelines whether a company maintains an effective SCP in determining whether and what penalties to impose in the event of apparent violations, drawing a direct connection between compliance effort and enforcement exposure.
The framework specifies five “essential components” of an SCP and, in publishing this guidance, OFAC states that future OFAC settlement agreements may require companies to remedy program deficiencies to meet its newly-articulated standards for SCPs. Notably, OFAC issued the framework just days after the U.S. Department of Justice published its Evaluation of Corporate Compliance Programs guidance, reflective of a U.S. government focus on gauging whether a compliance program is effective to determine what enforcement measures to take in the event of violations.
 
Five Key Takeaways
 
The framework provides a reminder of the expansive reach of OFAC’s jurisdiction, necessitating that both U.S. and non-U.S. companies strongly consider implementing an SCP even if they have viewed their sanctions risk exposure as limited or attenuated.
Organizations must adapt internal controls to the dynamic nature of sanctions, and must regularly test the effectiveness of technology tools to conduct tasks such as restricted party screening.
Training of employees must be tailored to the functions of the relevant individuals involved, ongoing and continuously assessed, and a bona fide training program may extend beyond employees to certain counterparties.
 
The framework is indicative of OFAC’s endorsement of broader U.S. government expectations for effective regulatory compliance programs, and sends a clear message that OFAC intends to hold organizations responsible for ensuring that their SCPs support a living compliance program which responds to and effectively mitigates real-time risks specific to the organization’s operational profile.
The extent of mitigation credit available to organizations before OFAC for apparent sanctions violations, and OFAC’s determinations of whether and to what extent it will impose penalties, will increasingly turn on OFAC’s assessment of the effectiveness and quality of their risk-based SCPs.
 
Enforcement Risk Is Increasing
 
OFAC has taken a flurry of actions in 2019 which underscore its focus on compliance program enhancement. As of May 1, 2019, OFAC has issued 12 enforcement actions and settlement agreements totaling over $10 million in penalties, not including the nine-figure settlements for banks Standard Chartered and UniCredit. While OFAC has traditionally focused its enforcement efforts on financial institutions, the subjects of these recent enforcement actions and settlement agreements have notably included entities in the engineering, manufacturing, shipping, and software industries. OFAC’s focus beyond financial institutions makes it apparent that sanctions enforcement risk now extends to all players in the global economy. Significant fines have been imposed even when there were several mitigating factors.
In several of these settlement agreements, OFAC has identified compliance benchmarks and pointed out how companies fell short. For example:
 
In its January 2019 settlement agreement with e.l.f. Cosmetics, Inc. (ELF), OFAC criticized the company’s compliance program as “either non-existent or inadequate,” given that ELF did not timely discover that the vast majority of the eyelash kits it imported from China contained materials from North Korea.
In its March 2019 settlement with Stanley Black & Decker (SBD), though the company conducted pre-acquisition due diligence and training upon closing, OFAC still criticized SBD for thereafter not adequately following up “to take appropriate steps to audit, monitor, and verify newly acquired subsidiaries and affiliates for OFAC compliance.”
OFAC’s focus on compliance in enforcement actions and settlement agreements has been echoed in other agency statements. In December 2018, the Undersecretary for Terrorism and Financial Intelligence signaled OFAC’s strategic direction in important remarks, stating (1) “OFAC will be outlining the hallmarks of an effective sanctions compliance program;” (2) “these types of compliance commitments will become an essential element in settlement agreements;” and (3) “implementation of these commitments will ensure that companies are aware of their OFAC obligations and dedicating sufficient time and resources towards compliance.”
 
Five Essential Components of a SCP
 
The framework specifies that OFAC expects an SCP to “be predicated on and incorporate at least five essential components of compliance:  
(1) management commitment;  
(2) risk assessment;  
(3) internal controls;  
(4) testing and auditing; and  
(5) training.”  
 
OFAC emphasizes that an effective SCP needs to be risk-based, i.e., shaped to the size, scope and breadth of an organization and its risk factors, as well as dynamic, meaning not only developed and implemented but also constantly updated and recalibrated.
 
Management Commitment. OFAC states that the commitment and support of an organization’s senior management “is one of the most important factors in determining its success.” In evaluating the quality of management commitment, OFAC will consider several factors, including whether:
 
Senior management has reviewed and approved the SCP, and taken steps to ensure compliance units are delegated sufficient authority and autonomy, with direct reporting lines and routine and periodic meetings.
 
Compliance units receive adequate resources such as information technology software and systems, which will generally include appointment of “a dedicated OFAC sanctions compliance officer” with relevant sanctions expertise or expertise in subjects that are related, such as financial crimes or export controls.
Management fosters and promotes a “culture of compliance” providing oversight over the actions of the organization and enabling personnel to report sanctions misconduct without fear of reprisal.
 
In the case of apparent sanctions violations, senior management recognizes the seriousness of those apparent violations and implements remedial measures that represent systemic solutions to address their root causes.
 
Risk Assessment. OFAC recommends that organizations take a risk-based approach when designing an SCP, and it emphasizes the importance of regularly conducting risk assessments to identify threats or vulnerabilities and mitigate any risks identified through that exercise. This entails an overall review of the organization with a focus on an assessment of its touchpoints to the outside world. OFAC states:
 
For example, an organization’s SCP may conduct an assessment of the following: (i) customers, supply chain, intermediaries, and counter-parties; (ii) the products and services it offers, including how and where such items fit into other financial or commercial products, services, networks, or systems; and (iii) the geographic locations of the organization, as well as its customers, supply chain, intermediaries, and counter-parties.
 
OFAC adds that such a risk assessment can then inform due diligence an organization undertakes, and specifically refers to the examples of counterparty onboarding and mergers and acquisitions. Regarding onboarding, the risk assessment may include developing a “sanctions risk rating” for counterparties at the time of onboarding, which in turn will guide the timing and scope of future due diligence. In mergers and acquisitions there should be due diligence as well, both to address issues prior to the conclusion of the transaction and to audit and test for additional sanctions-related issues after the transaction is completed.
 
Internal Controls. OFAC states that an effective SCP should include internal controls such as written, communicated, integrated and enforced policies and procedures, to “identify, interdict, escalate, report (as appropriate), and keep records pertaining to activity” that may be prohibited by OFAC sanctions. OFAC emphasizes that, given the “dynamic nature” of sanctions, an SCP has to be capable of adjusting rapidly to changes published by OFAC, e.g., with respect to the List of Specially Designated Nationals and Blocked Persons (SDN List); the Sectoral Sanctions Identification List (SSI List); updated sanctions programs; new regulations or guidance; and general licenses. When information technology solutions are used, such as for screening, OFAC stresses that it expects “the organization routinely tests the solutions to ensure effectiveness.”
Testing and Auditing. OFAC recommends testing and auditing of the SCP, to ensure that entities “are aware of where and how their programs are performing and should be updated, enhanced, or recalibrated to account for a changing risk assessment or sanctions environment.” OFAC stresses that it is the “organization’s responsibility” to remediate compliance gaps by taking immediate and effective action to identify and implement controls to address the root cause of weaknesses found.
 
Training. OFAC advises that “[a]n effective training program is an integral component of a successful SCP.” With respect to employees, such training should be provided once a year at a minimum and the training program as a whole should “(i) provide job-specific knowledge based on need; (ii) communicate the sanctions compliance responsibilities for each employee; and (iii) hold employees accountable for sanctions compliance training through assessments.” OFAC adds that training may also extend beyond employees to certain stakeholders such as business partners, clients and suppliers, and recommends that its scope be tailored to the nature of such counterparties, as well as the products and services the organization provides and the geographic regions in which it operates. If testing or auditing reveals a negative finding, there must also be related training or corrective action.
 
Root Causes of Breakdowns or Deficiencies
 
OFAC likewise identifies 10 “root causes associated with apparent violations of the regulations” to help companies in formulating and revising their SCP. Some of these factors concern a lack of understanding that OFAC sanctions can reach U.S. legal and individual persons or U.S.-owned or controlled subsidiaries, as well as those dealing in U.S.-origin goods and technology or using the U.S. financial system. OFAC also provides a reminder not to approve or refer sanctioned country business and thereby risk violating the prohibition on “facilitation.”
 
Other factors go to shortcomings in compliance practices, such as outdated or narrow counterparty screening procedures; incomplete counterparty due diligence procedures; and insufficient awareness that “non-traditional business methods” can be red flags for sanctions circumvention. OFAC also points out that decentralized compliance functions can lack key features such as proper oversight; an escalation process; and an audit function, as well as suffer from miscommunications regarding an organization’s sanctions policies and procedures.
 
The Road Ahead
 

By issuing the framework, OFAC has now heightened expectations of compliance and tethered an effective SCP to its enforcement outcomes. It important for industry to follow through on implementing these compliance commitments, as failure to do so may meaningfully increase exposure to fines and penalties in the event sanctions violations occur.

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

COM_a119
. M. Volkov: “OFAC Framework for Sanctions Compliance Programs – Risk Assessment and Internal Controls (Part II of IV)”

(Source: Volkov Law Group Blog, 9 May 2019. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
OFAC’s Framework for Sanctions Controls Program is a heightening of the importance of ethics and compliance program and reflects significant expectations for implementing effective compliance strategies.
 
Risk Assessment
 
In Risk Assessment, OFAC recommends that organizations conduct a routine, and if appropriate, ongoing risk assessment to inform its SCP policies, procedures, internal controls and training. In this respect, OFAC explained that such a risk assessment should consist of a “holistic review of the organization from top-to-bottom and asses its touchpoints to the outside world.”
 
As an example, an organization’s SCP should include assessment of: (i) customers, supply chain, intermediaries, and counter-parties; (ii) the products and services it offers, including how and where such items fit into other financial or commercial products, services, networks or systems; (iii) the geographic locations of the organization, as well as its customers, supply chain, intermediaries and counter-parties; and (iv) potential merger and acquisitions, especially those involving non-U.S. companies or corporations.
 
To meet the Risk Assessment requirement, OFAC’s framework notes two specific elements:
 
(1) The organization conducts, or will conduct, an OFAC risk assessment in a manner, and with a frequency, that adequately accounts for the potential risks. As appropriate, the risk assessment will be updated to account for the root causes of any apparent violations or systemic deficiencies identified by the organization during the routine course of business: (a) The risk assessment should leverage existing information to inform the process, and then guide due diligence efforts at various points in a relationship or in a transaction. This may include: (i) On-boarding: The organization develops a sanctions risk rating for customers, customer groups, or account relationships based on a due diligence process and independent research conducted by the organization at the initiation of the customer relationship. This information will guide the timing and scope of future due diligence efforts. Important elements to consider in determining the sanctions risk rating can be found in OFAC’s risk matrices.;(ii) Mergers and Acquisitions (M&A): OFAC noted the importance of M&A transactions (“which, in recent years, appears to have presented numerous challenges with respect to OFAC sanctions”). Compliance functions should also be integrated into the merger, acquisition, and integration process.
 
(2) The organization has developed a methodology to identify, analyze, and address the particular risks it identifies. As appropriate, the risk assessment will be updated to account for the conduct and root causes of any or systemic deficiencies identified by the organization during the routine course of business, for example, through a testing or audit function.
 
Internal Controls
 
An effective SCP should include internal controls, including policies and procedures, in order to identify, interdict, escalate, report (as appropriate), and document SCP compliance activity. The purpose of internal controls is to define procedures and processes pertaining to OFAC compliance (including reporting and escalation chains), and minimize the risks identified by the organization’s risk assessments.
 
Policies and procedures should be enforced, weaknesses should be identified (including through root cause analysis of any compliance breaches) and remediated, and internal and/or external audits and assessments of the program should be conducted on a periodic basis. OFAC sanctions program are dynamic and often change. As a result, a company’s SCP has to adjust rapidly to changes.
 
To implement effective internal controls for an SCP, the following seven requirements should be satisfied:
 
(1) The organization has designed and implemented written policies and procedures outlining the SCP. These policies and procedures are relevant to the organization, capture the organization’s day-to-day operations and procedures, and are easy to follow.
 
(2) The organization has implemented internal controls that adequately address the results of its OFAC risk assessment and profile. These internal controls should enable the organization to clearly and effectively identify, interdict, escalate, and report to appropriate personnel within the organization transactions and activity that may be prohibited by OFAC: (a) Under this element, to the extent information technology solutions factor into the organization’s internal controls, the organization has selected and calibrated the solutions in a manner that is appropriate to address the organization’s risk profile and compliance needs, and the organization routinely tests the solutions to ensure effectiveness.
 
(3) The organization enforces the policies and procedures it implements as part of its OFAC compliance internal controls through internal and/or external audits.
 
(4) The organization ensures that its OFAC-related record-keeping policies and procedures adequately document its SCP.
 
(5) The organization ensures that, upon learning of a weakness in its internal controls pertaining to OFAC compliance, it will take immediate and effective action, to the extent possible, to identify and implement compensating controls until the root cause of the weakness can be determined and remediated.
 
(6) The organization has clearly communicated the SCP’s policies and procedures to all relevant staff, including personnel within the SCP program, as well as relevant gatekeepers and business units operating in high-risk areas (e.g., customer acquisition, payments, sales, etc.) and to external parties performing SCP responsibilities on behalf of the organization.
 
(7) The organization has appointed personnel for integrating the SCP’s policies and procedures into the daily operations of the company or corporation. This process includes relevant business units and confirms that employees understand the policies and procedures.

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

COM_a220. W. Wysong: “U.S. Antiboycott Laws: They’re Not for Everyone (But They May Be for You)”

(Source: Clifford Chance U.S. LLP, 9 May 2018.) [Excerpts.]
 
* Author: Wendy Wysong, Esq., wendy.wysong@cliffordchance.com, Clifford Chance U.S. LLP
 
Honestly, it is understandable if companies may have missed that the recently-passed Export Control Reform Act (“ECRA”) included permanent statutory authority for the Antiboycott Regulations (“ABR”). These regulations, codified in Part II of ECRA as of 13 August 2018, prohibit US companies from complying with some aspects of other countries’ boycotts that the United States does not support.
 
However, aside from adding an unnecessary hyphen to “Antiboycott” in the title and raising the penalties for violations to USD 300,000, the Anti-Boycott Act of 2018, does nothing to expand, narrow, or clarify coverage of the ABR. Historically and to this day, the ABR have only been applied to the Arab League boycott of Israel, to US persons and entities, and transactions in US commerce.
 
And yet, despite this seemingly narrow scope, antiboycott restrictions can ensnare unsuspecting companies who do not understand their particular nuances and global reach. Every year, there are non-US branches of US companies, shipping companies, and banks that are charged with violating the ABR. Fortunately, the agency that enforces this law and regulations, the Office of Antiboycott Compliance (“OAC”), within the Department of Commerce Bureau of Industry and Security, continuously monitors its advice line to help companies deal with the 84-pages of complex regulations.
 
Continue Reading in the Downloadable Version.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_1
21
. 
FCC Presents “Designing an ICP for Export Controls & Sanctions”, 1 Oct in Bruchem, the Netherlands

 
* What: Designing an Internal Compliance Program (ICP) for Export Controls & Sanctions
* Date: Tuesday, 1 Oct 2019
* Location: Full Circle Compliance, Landgoed Groenhoven, Dorpsstraat 6, Bruchem, The Netherlands
* Times:
  – Registration and welcome: 9.00 am – 9.30 am
  – Training course hours: 9.30 am – 4.30 pm
* Level: Intermediate
* Target Audience:  the course provides valuable insights for both compliance professionals, employees and (senior / middle) management working in any industry subject to U.S. and/or EU (member state) export control laws and sanctions regulations.
* Instructors: Drs. Ghislaine C.Y. Gillessen RA and Marco M. Crombach MSc.
* Information & Registration: click
here or contact us at 
events@fullcirclecompliance.eu or 31 (0)23 – 844 – 9046.  

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ENEDITOR’S NOTES

EN_a122
. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 

*
Mark Zuckerberg (Mark Elliot Zuckerberg is an American technology entrepreneur and philanthropist. He is known for co-founding and leading Facebook as its chairman and chief executive officer. Zuckerberg attended Harvard University, where he launched Facebook from his dormitory room on February 4, 2004, at age 19, with college roommates.)
  
– “The biggest risk is not taking any risk… In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
  – “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.”
 
*
Robert Owen (14 May 1771 – 17 Nov 1858; was a Welsh textile manufacturer, philanthropic social reformer, and one of the founders of utopian socialism and the cooperative movement. Owen is best known for his efforts to improve the working conditions of his factory workers and his promotion of experimental socialistic communities.)
  
– “Never argue; repeat your assertion.”

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EN_a223. 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: 5 Apr 2019:
 
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: 14 May 2019:
84 FR 21233-21238: Addition of Certain Entities to the Entity List, Revision of an Entry on the Entity List, and Removal of an Entity From the Entity List

 
*
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: 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 is a 361-page Word document containing 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 download, 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:
13 May 2019: Harmonized System Update (HSU) 1907

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EN_a324
. Weekly Highlights of the Daily Bugle Top Stories
(Source: Editor)
 

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

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

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Vincent J.A. Goossen and Alex 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.

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

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

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