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19-0522 Wednesday “Daily Bugle'”

19-0522 Wednesday “Daily Bugle”

Wednesday, 22 May 2019

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The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, DOE/NRC, Customs, NISPOM, EAR, FACR/OFAC, FAR/DFARS, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe here. Contact us for advertising 

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  1. Commerce/BIS Announces RPTAC Meeting on 4 June 2019 in Washington DC
  2. Commerce/BIS Grants 90-Day Temporary General License to Sixty-Nine Entities
  3. State Imposes Nonproliferation Measures Against Foreign Entities and Persons, Including a Ban on U.S. Government Procurement
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. State/DDTC: (No new postings.)
  4. UK/OFSI Updates Multiple Sanctions Guidance Documents
  5. Australia/DEC Closed on 27 May, ACT Public Holiday
  1. The National Law Review: “Hua-Wait a Minute: Entity Designation Affects Non-U.S. Manufacturers’ Exports to China Tech Giant”
  2. The New York Times: “Trump Administration Could Blacklist China’s Hikvision, a Surveillance Firm”
  3. Reuters: “Special Report – Hobbling Huawei: Inside the U.S. War on China’s Tech Giant”
  4. Taiwan News: “Japan To Expand Trade Control on AI and Robotics Following US Restrictions on Advanced Technology Exports”
  5. The Economist: “Sanctions Create Business Risks – and Opportunities”
  6. Unian: “U.S. to Slap Sanctions on Russian Supplier of Missiles for S-300, S-400 Systems”
  1. Jatin Verma: “U.S – Iran Sanctions: Implications, Impact on India & Way Forward”
  2. M. Volkov: “What Happens When Managers Misbehave?”
  3. R.C. Thomsen II, A.D. Paytas & M.M. Shomali: “BIS Issues Temporary General License Authorizing Limited Activities with Huawei”
  4. S.F. Kjeldsen: “EU Cyber-Attack Sanctions Regime – a New Era for Sanctions?”
  5. S.M.C. Kovarovics: “Don’t be Caught Off Guard: Huawei Entities Added to US Entity List”
  1. FCC Presents “The ABC of FMS”, 28 Nov 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 (22 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 2018), DOS/ITAR (19 Apr 2018), DOT/FACR/OFAC (29 Apr 2018), HTSUS (21 May 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11
. Commerce/BIS Announces RPTAC Meeting on 4 June 2019 in Washington DC

(Source:
Federal Register, 22 May 2019.)
84 FR 23524-23525: Regulations and Procedures Technical Advisory Committee; Notice of Partially Closed Meeting
 
The Regulations and Procedures Technical Advisory Committee (RPTAC) will meet June 4, 2019, 9:00 a.m., Room 3884, in the Herbert C. Hoover Building, 14th Street between Constitution and Pennsylvania Avenues NW, Washington, DC. The Committee advises the Office of the Assistant Secretary for Export Administration on implementation of the Export Administration Regulations (EAR) and provides for continuing review to update the EAR as needed.
 
Agenda
 
Public Session
(2) Opening remarks by the Bureau of Industry and Security
(3) Presentation of papers or comments by the Public
(4) Export Enforcement update
(5) Regulations update
(6) Working group reports
(7) Automated Export System update
 
Closed Session
(8) Discussion of matters determined to be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 Sec. Sec. 10(a)(1) and 10(a)(3).
 
The open session will be accessible via teleconference to 25 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at Yvette.Springer@bis.doc.gov no later than May 29, 2019. A limited number of seats will be available for the public session. Reservations are not accepted. To the extent that time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate the distribution of public presentation materials to the Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email. For more information, call Yvette Springer at (202) 482-2813.
 
Yvette Springer, Committee Liaison Officer.

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

EXIM_a22
. Commerce/BIS Grants 90-Day Temporary General License to Sixty-Nine Entities

(Source:
Federal Register, 22 May 2019.) [Excerpts.]
 
84 FR 23468-23471: Temporary General License
 
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: This final rule creates a 90-day temporary general license that partially restores the licensing requirements and policies under the Export Administration Regulations (EAR) for exports, reexports, and transfers (in-country) to sixty-nine entities added to the Entity List on May 16, 2019.
* DATES: This rule is effective May 20, 2019, through August 19, 2019.
* FOR FURTHER INFORMATION CONTACT: Director, Office of Exporter Services, Bureau of Industry and Security, Department of Commerce, Phone: (949) 660-0144 or (408) 998-8806 or email your inquiry to: ECDOEXS@bis.doc.gov.
* SUPPLEMENTARY INFORMATION:
 
Background
 

The Entity List (Supplement No. 4 to Part 744) identifies entities and other persons reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States. 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 all decisions to remove or modify an entry by unanimous vote.
 
This final rule does not amend the Entity List, but modifies the license requirement for the sixty-nine entries added to the Entity List in the May 16, 2019, final rule entitled “Addition of Entities to the Entity List,” as described further below, by adding a temporary general license for the specified entities.
 
Addition of Huawei Technologies Co., Ltd. and Sixty-Eight Related Entities to the Entity List
 
BIS added Huawei Technologies Co., Ltd. (Huawei) and sixty-eight of its non-U.S. affiliates to the Entity List on May 16, 2019. Details regarding the scope of the listing are in the final rule titled “Addition to the Entity List,” effective May 16, 2019, and scheduled to publish in the May 21, 2019, issue of the Federal Register. The sixty-eight non-U.S. affiliates are also listed in Supplement No. 7 to part 744–Temporary General License.
 
Addition of Temporary General License
 
This final rule amends the EAR by adding Supplement No. 7 to Part 744 to create a Temporary General License that returns in part the prior requirements through August 14, 2019. In this final rule, pursuant to Supplement No. 5 to part 744 of the Export Administration Regulations (EAR), BIS is modifying the effect of the sixty-nine entries on the Entity List by adding a temporary general license to temporarily authorize, as specified below, engagement in transactions, involving the export, reexport, and transfer (in-country) of items subject to the EAR to Huawei and its sixty-eight non-U.S. affiliates subject to the conditions described below.
 
a. This temporary general license is effective from the date of this Authorization, May 20, 2019, through August 19, 2019.
 
b. This temporary general license does not relieve persons of other obligations under the EAR, including but not limited to licensing requirements to the People’s Republic of China (PRC or China) or elsewhere and/or the requirements of part 744 of the EAR. This authorization does not authorize any activities or transactions involving Country Group E countries (i.e., Cuba, Iran, North Korea, Sudan, and Syria) or persons.
 
c. With the exception of the transactions explicitly authorized by this temporary general license, exports, reexports, and transfers (in-country) continue to require a license pursuant to the license requirement set forth in Supplement No. 4 to part 744 for Huawei and the sixty-eight non-U.S. affiliates and will be reviewed under the license review policy for those entities.  
 
This temporary general license allows, from May 20, 2019, through August 19, 2019, the following:
 
(1) Continued Operation of Existing Networks and Equipment: BIS authorizes engagement in transactions, subject to other provisions of the EAR, necessary to maintain and support existing and currently fully operational networks and equipment, including software updates and patches, subject to legally binding contracts and agreements executed between Huawei and third parties or the sixty-eight non-U.S. Huawei affiliates and third parties on or before May 16, 2019.
 
(2) Support to Existing Handsets: BIS authorizes engagement in transactions, subject to other provisions of the EAR, necessary to provide service and support, including software updates or patches, to existing Huawei handsets that were available to the public on or before May 16, 2019.
 
(3) Cybersecurity Research and Vulnerability Disclosure: BIS authorizes, subject to other provisions of the EAR, the disclosure to Huawei and/or the sixty-eight non-U.S. affiliates of information regarding security vulnerabilities in items owned, possessed, or controlled by Huawei or any of the sixty-eight non-U.S. affiliates when related to the process of providing ongoing security research critical to maintaining the integrity and reliability of existing and currently fully operational networks and equipment, as well as handsets.
 
(4) Engagement as Necessary for Development of 5G Standards by a Duly Recognized Standards Body: BIS authorizes, subject to other provisions of the EAR, engagement with Huawei and/or the sixty-eight non-U.S. affiliates as necessary for the development of 5G standards as part of a duly recognized international standards body (e.g., IEEE–Institute of Electrical and Electronics Engineers; IETF–internet Engineering Task Force; ISO–International Organization for Standards; ITU–International Telecommunications Union; ETSI- European Telecommunications Standards Institute; 3GPP–3rd Generation Partnership Project; TIA–Telecommunications Industry Association; and GSMA, a.k.a., GSM Association, Global System for Mobile Communications).  
 
The licensing and other policies of the EAR regarding exports, reexports, and transfers (in-country) to Huawei and sixty-eight of its non-U.S. affiliates that were in effect prior to their addition to the Entity List on May 16, 2019, are available for exports, reexports, and transfers (in-country) for transactions eligible for the temporary general license established by this final rule. For example, the authority of NLR or alicense exception that was available on or before May 16, 2019, may be used pursuant to this temporary general license if the underlying export, reexport, or transfer (in-country) meets the temporary general license conditions and is limited in scope to the support of one or more of activities described in clauses 1-4 above.
 
This temporary general license does not relieve persons of other obligations under the EAR, including but not limited to licensing requirements to the PRC or elsewhere and/or the requirements of the part 744 of the EAR, such as those specified in Sec. Sec. [thinsp]744.2, 744.3 and 744.4 of the EAR. This temporary general license does not authorize any activities or transactions involving Country Group E countries or persons. For example, this temporary general license does not relieve persons of their obligations under General Prohibition 5 in Sec. [thinsp]736.2(b)(5) of the EAR which provides that, “you may not, without a license, knowingly export or reexport any item subject to the EAR to an end-user or end-use that is prohibited by part 744 of the EAR.” BIS strongly urges the use of Supplement No. 3 to part 732 of the EAR, BIS’s `Know Your Customer’ Guidance and Red Flags,” when persons are involved in transactions that are subject to the EAR.
 
Required Certification Statement and Change to EAR Recordkeeping Requirement …
 
Dated: May 20, 2019.
 
Nazak Nikakhtar, Assistant Secretary for Industry and Analysis, Performing the Nonexclusive Functions and Duties of the Under Secretary for Industry and Security.

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EXIM_a33
. State Imposes Nonproliferation Measures Against Foreign Entities and Persons, Including a Ban on U.S. Government Procurement

(Source:
Federal Register, 22 May 2019.)
 
84 FR 23627-23628: Imposition of Nonproliferation Measures Against Foreign Persons, Including a Ban on U.S. Government Procurement
 
* AGENCY: Bureau of International Security and Nonproliferation, Department of State.
* ACTION: Notice.
* SUMMARY: A determination has been made that a number of foreign persons have engaged in activities that warrant the imposition of measures pursuant to Section 3 of the Iran, North Korea, and Syria Nonproliferation Act.
* DATES: The imposition of measures pursuant to Section 3 of the Iran, North Korea, and Syria Nonproliferation Act described in this notice went into effect May 14, 2019.
* FOR FURTHER INFORMATION CONTACT: On general issues: Pam Durham, Office of Missile, Biological, and Chemical Nonproliferation, Bureau of International Security and Nonproliferation, Department of State, Telephone (202) 647-4930. For U.S. Government procurement ban issues: Eric Moore, Office of the Procurement Executive, Department of State, Telephone: (703) 875-4079.
* SUPPLEMENTARY INFORMATION: On May 14, 2019, the U.S. Government applied the measures authorized in Section 3 of the Iran, North Korea, and Syria Nonproliferation Act (Pub. L. 109-353) against the following foreign persons identified in the report submitted pursuant to Section 2(a) of the Act:
 
– Abascience Tech Co., Ltd. (China) and any successor, sub-unit, or subsidiary thereof;
– Emily Liu [a.k.a. Emily Lau, Liu Baoxia] (Chinese individual);
– Hope Wish Technologies Incorporated (China) and any successor, sub-unit, or subsidiary thereof;
– Jiangsu Tianyuan Metal Powder Co Ltd (China) and any successor, sub-unit, or subsidiary thereof;
– Li Fangwei [a.k.a. Karl Lee] (Chinese individual);
– Raybeam Optronics Co., Ltd (China) and any successor, sub-unit, or subsidiary thereof;
– Ruan Runling [a.k.a. Ricky Runling, Ricky Ruan] (Chinese individual);
– Shanghai North Begins (China) and any successor, sub-unit, or subsidiary thereof;
– Sinotech (Dalian) Carbon and Graphite Corporation (SCGC) (China) and any successor, sub-unit, or subsidiary thereof;
– Sun Creative Zhejiang Technologies Inc (China) and any successor, sub-unit, or subsidiary thereof;
– T-Rubber Co. Ltd (China) and any successor, sub-unit, or subsidiary thereof;
– Wuhan Sanjiang Import and Export Co Ltd (China) and any successor, sub-unit, or subsidiary thereof;
– Yenben Yansong Zaojiu Co Ltd (China) and any successor, sub-unit, or subsidiary thereof;
– Defense Industries Organization (Iran) and any successor, sub-unit, or subsidiary thereof;
– Gatchina Surface-to-Air Missile (SAM) Training Center (Russia) and any successor, sub-unit, or subsidiary thereof;
I – nstrument Design Bureau (KBP) Tula (Russia) and any successor, sub-unit, or subsidiary thereof;
– Moscow Machine Building Plant Avangard (MMZ Avangard) (Russia) and any successor, sub-unit, or subsidiary thereof;
– Army Supply Bureau (ASB) (Syria) and any successor, sub-unit, or subsidiary thereof;
L – ebanese Hizballah (Syria) and any successor, sub-unit, or subsidiary thereof;
– Megatrade (Syria) and any successor, sub-unit, or subsidiary thereof;
– Syrian Air Force (Syria) and any successor, sub-unit, or subsidiary thereof; and
– Syrian Scientific Studies and Research Center (SSCR) (Syria) and any successor, sub-unit, or subsidiary thereof.
 
The Act provides for penalties on foreign entities and individuals for the transfer to or acquisition from Iran since January 1, 1999; the transfer to or acquisition from Syria since January 1, 2005; or the transfer to or acquisition from North Korea since January 1, 2006, of goods, services, or technology controlled under multilateral control lists (Missile Technology Control Regime, Australia Group, Chemical Weapons Convention, Nuclear Suppliers Group, Wassenaar Arrangement) or otherwise having the potential to make a material contribution to the development of weapons of mass destruction (WMD) or cruise or ballistic missile systems. The latter category includes (a) items of the same kind as those on multilateral lists but falling below the control list parameters when it is determined that such items have the potential of making a material contribution to WMD or cruise or ballistic missile systems, (b) items on U.S. national control lists for WMD/missile reasons that are not on multilateral lists, and (c) other items with the potential of making such a material contribution when added through case-by-case decisions. Accordingly, pursuant to Section 3 of the Act, the following measures are imposed on these persons:
 
(1) No department or agency of the United States Government may procure or enter into any contract for the procurement of any goods, technology, or services from these foreign persons, except to the extent that the Secretary of State otherwise may determine;
(2) No department or agency of the United States Government may provide any assistance to these foreign persons, and these persons shall not be eligible to participate in any assistance program of the United States Government, except to the extent that the Secretary of State otherwise may determine;
(3) No United States Government sales to these foreign persons of any item on the United States Munitions List are permitted, and all sales to these persons of any defense articles, defense services, or design and construction services under the Arms Export Control Act are terminated; and
(4) No new individual licenses shall be granted for the transfer to these foreign persons of items the export of which is controlled under the Export Administration Act of 1979 or the Export Administration Regulations, and any existing such licenses are suspended.
 
These measures shall be implemented by the responsible departments and agencies of the United States Government and will remain in place for two years from the effective date, except to the extent that the Secretary of State may subsequently determine otherwise.
 

Christopher A. Ford, Assistant Secretary of State for International Security and Nonproliferation.

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

OGSOTHER GOVERNMENT SOURCES

OGS_a14. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

 

* President; PROCLAMATIONS; Trade [Pub. Date: 23 May 2019.]
   – Aluminum; Adjustment of Imports into the U.S. (Proc. 9893)
   – Steel; Adjustment of Imports into the U.S. (Proc. 9894)
 
* Commerce/BIS; RULES; Implementation of Certain New Controls on Emerging Technologies Agreed at Wassenaar Arrangement 2018 Plenary [Pub. Date: 23 May 2019.]

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

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

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

OGS_a47.
UK/OFSI Updates Multiple Sanctions Guidance Documents

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

OGS_a58.
Australia/DEC Closed on 27 May, ACT Public Holiday

(Source: 
Australia DoD/DEC, 22 May 2019.)
 
Defence Export Controls will be closed Monday, 27th of May 2019 for an Australian Capital Territory (ATC) Public Holiday. Please note that applications cannot be processed during this time. Defence Export Controls will re-open on Tuesday, 28th of May 2019.

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

NWSNEWS

NWS_a19
. The National Law Review: “Hua-Wait a Minute: Entity Designation Affects Non-U.S. Manufacturers’ Exports to China Tech Giant”

(Source: The National Law Review, 21 May 2019.) [Excerpts.]
 
On May 16, 2019, a sweeping U.S. export control rule went into effect that will impact the U.S. tech industry, but may also create an outsized risk for non-U.S. manufacturers. The rule, issued by the U.S. Department of Commerce, Bureau of Industry and Security (BIS) adds Huawei Technologies Co., Ltd. (Huawei) and 68 of its affiliates to the Entity List. That designation effectively prohibits the export, reexport, and retransfer of all U.S.-origin “items subject to the Export Administration Regulations (EAR)” to those entities. The designation arises from a U.S. government finding that the restrictions are warranted on U.S. national security and foreign policy grounds.
 
The De Minimis Rule
 
For companies in the United States, the effect of the rule is straightforward: virtually all items manufactured in the United States are “subject to the EAR.” (The biggest exception is military items, which are already subject to a total export prohibition for China under the International Traffic in Arms Regulations.) But the seemingly straightforward Entity List prohibition becomes a little more complicated for manufacturers outside the United States. The source of that complication is the de minimis rule. 

Effects on Non-U.S. Manufacturers

Under the 
de minimis rule, U.S. export controls are applied to certain foreign-made products. The 
de minimis rule provides that a foreign-made commodity is subject to the EAR if that foreign-made commodity contains more than 25% controlled U.S.-origin content by value. The rule does not count so-called EAR99 items or other items that do not require a license (NLR items) to the final destination. That means that some low-level U.S.-origin software, technology, or commodities do not count in the 25% 
de minimis threshold.
We won’t delve into the details here, but if you make a product outside the United States that incorporates U.S. parts, components, or technology, or bundles U.S.-origin software, U.S. export controls may apply to the export of your product from 
outside the United States to Huawei in China. If the relevant controls apply, the foreign manufacturer (and any other person wherever located) is prohibited from exporting the item to Huawei.

Turning the Screws

For now, the application of the 
de minimis rule is straightforward: foreign made product with 25% or less controlled U.S.-origin content – no EAR, no worry.
Currently, the 25% de minimis threshold does not count U.S.-origin content that does not require a license to the item’s final destination. Consider, however, what would happen if, for exports to Huawei, BIS took into account that all U.S.-origin content would require a license 
to Huawei. That would mean counting EAR99 and NLR items in the 25%. That would restrict an enormous number of foreign-made goods that use commercial, off-the-shelf U.S. parts and technology, from being sold to Huawei.
BIS has not published guidance or clarification on how the Entity List additions will intersect with the de minimis rule. However, we understand that, in the past, BIS and the Office of Export Enforcement have considered regulations interpretations that would prevent companies from exploiting the de minimis to “laundering” U.S.-origin input items in non-U.S. end-products.

The Takeaway

At this point, non-U.S. manufacturers that sell to Huawei or other designated entities would do well to assess the amount of U.S.-origin content they use in their products. If the value of that content, including U.S.-origin technology and software, approaches 25%, those companies would be well advised to carefully account and record the U.S.-origin value in that product.  . . . 

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

NWS_a210
.
The New York Times: “Trump Administration Could Blacklist China’s Hikvision, a Surveillance Firm”

(Source: The New York Times, 22 May 2019.) [Excerpts.]
 
The Trump administration is considering limits to a Chinese video surveillance giant’s ability to buy American technology, people familiar with the matter said, the latest attempt to counter Beijing’s global economic ambitions.
 
The move would effectively place the company, Hikvision, on a United States blacklist. It also would mark the first time the Trump administration punished a Chinese company for its role in the surveillance and mass detention of Uighurs, a mostly Muslim ethnic minority.
 
The move is also likely to inflame the tensions that have escalated in President Trump’s renewed trade war with Chinese leaders. The president, in the span of two weeks, has raised tariffs on $200 billion worth of Chinese goods, threatened to tax all imports and taken steps to cripple the Chinese telecom equipment giant Huawei. China has promised to retaliate against American industries. …

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NWS_a311
. Reuters: “Special Report – Hobbling Huawei: Inside the U.S. War on China’s Tech Giant”

(Source: Reuters, 21 May 2019.) [Excerpts.]
 
In early 2018, in a complex of low-rise buildings in the Australian capital, a team of government hackers was engaging in a destructive digital war game.
 
The operatives – agents of the Australian Signals Directorate, the nation’s top-secret eavesdropping agency – had been given a challenge. With all the offensive cyber tools at their disposal, what harm could they inflict if they had access to equipment installed in the 5G network, the next-generation mobile communications technology, of a target nation? …
 
The anti-Huawei campaign intensified last week, when President Donald Trump signed an executive order that effectively banned the use of Huawei equipment in U.S. telecom networks on national security grounds and the Commerce Department put limits on the firm’s purchasing of U.S. technology. Google’s parent, Alphabet, suspended some of its business with Huawei, Reuters reported. …
 
The Americans are now campaigning aggressively to contain Huawei as part of a much broader effort to check Beijing’s growing military might under President Xi Jinping. Strengthening cyber operations is a key element in the sweeping military overhaul that Xi launched soon after taking power in 2012, according to official U.S. and Chinese military documents. The United States has accused China of widespread, state-sponsored hacking for strategic and commercial gain. …

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NWS_a412
.
Taiwan News: “Japan To Expand Trade Control on AI and Robotics Following US Restrictions on Advanced Technology Exports”
(Source:
Taiwan News, 22 May 2019.) [Excerpts.]
 
To protect its emerging technologies, the country says it will follow US lead to add more items to export control list.
 
After the U.S. blacklisted Huawei and its foreign entities in order to prevent them from compromising US national security and foreign policy interests, Japan is contemplating similar measures to safeguard emerging technologies.
 
The Nikkei Asia Review reported Monday (May 20) that this decision came after Washington’s decision to impose trade controls on emerging technologies that include AI (Artificial Intelligence), biotechnologies, robotics, quantum computing, 3D printing, and advanced materials.
 
The report said Japan will not single out China, and will also monitor other international academic research partnerships to prevent technologies from leaking out to third parties.
 

Japan’s existing restrictions on export control only target dual-use goods that can be used in the development of weapons of mass destruction (WMD).

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NWS_a513
. The Economist: “Sanctions Create Business Risks – and Opportunities”
(Source:
The Economist, 16 May 2019.) [Excerpts.]
 
An oil tanker entered the Persian Gulf in early February, supposedly heading to the Basra terminal, off the coast of Iraq. Then it turned off its transponders and went dark. Ten days later it resumed transmissions, sailed back through the Strait of Hormuz to Fujairah, in the United Arab Emirates, and emptied its tank. It then reversed towards Basra, went dark again, reappeared and delivered oil to Fujairah once more. In the past eight months, vessels followed this pattern more than 60 times.
 
Such manoeuvres near Iran are of interest to officials in America, which on May 2nd barred all exports of Iranian oil. In this instance, though, the information was gathered not by intelligence agencies but by a company, Windward. With headquarters in Israel and backed by investors including David Petraeus, a former director of the cia, and John Browne, a former boss of bp, Windward is helping companies navigate a maze of sanctions. …

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NWS_a614
. Unian: “U.S. to Slap Sanctions on Russian Supplier of Missiles for S-300, S-400 Systems”
(Source:
Unian, 21 May 2019.) [Excerpts.]
 
The United States has decided to impose sanctions on two Russian missile suppliers and a military training center.
 
The three entities are mentioned in an unpublished notice by the U.S. Department of State on imposition of nonproliferation measures against foreign persons, including a ban on U.S. government procurement, which is due to be published on May 22, according to the Ukrainian news outlet Hromadske.
 
Subject to the U.S. sanctions will be, among others, Gatchina Surface-to-Air Missile (SAM) Training Center (Russia); Instrument Design Bureau (KBP) Tula (Russia); Moscow Machine Building Plant Avangard (MMZ Avangard) (Russia) jointly with any of their successor, sub-unit, or subsidiary.
 
According to the notice, “a determination has been made that a number of foreign persons have engaged in activities that warrant the imposition of measures pursuant to Section 3 of the Iran, North Korea, and Syria Nonproliferation Act.” …


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COMMCOMMENTARY

COM_a115.
Jatin Verma: “U.S – Iran Sanctions: Implications, Impact on India & Way Forward”
(Source:
Jatin Verma, 20 May 2019.)
 
* Author: Admin
 
Since the US pulled out of Iran’s 2015 nuclear accord (JCPOA) last year and imposed crippling sanctions on Iran, tensions between the United States and Iran have been on the rise.
 
About
 
– Iran and the P5+1-the United States, the United Kingdom, France, Russia, China, and Germany-signed the Joint Comprehensive Plan of Action (JCPOA in 2015).
– Under the deal, Iran agreed to take steps to curb its nuclear program in return for a significant easing of US, UN, and EU sanctions.
– However, in 2018, U.S unilaterally decided to pull out from the agreement and reimpose sanctions on Iran.
– Except for the US, other partners, especially the EU and the three major European countries UK, Germany and France have expressed their commitments to go ahead with the JCPOA agreement.
– US has decided not to renew any of the oil waivers it had granted in 2108, which means that countries that do not stop buying Iranian oil by then could face American strictures.
Why Did U.S Pullout?
 
– Restrictions on Iran’s nuclear program would start to relax about 10 years after the deal was signed (though the agreement not to build a nuclear weapon is permanent).
– JCPOA didn’t cover other problematic things Iran was doing, including ballistic missile development and its support for violent militias around the Middle East (like Hezbollah in Lebanon).
 
Implications of the Sanctions
 
(1) Rise in oil prices – With one of the major oil producers being apparently isolated, demand of oil would certainly overshoot its supply resulting inflated oil prices.
(2) Unravelling of JCPOA – Iran has already announced the suspension of some of the restrictions in the deal and has given 60 days to other signatories to find solutions.
(3) Fear of nuclear escalation – The big threat is that Iran will resume higher levels of enrichment to build weapons unless its grievances are addressed.
(4) Risk of regional instability – Iran’s government if really collapses, the outcome could be catastrophic, and could include civil war or a total or partial takeover by radicals similar to what happened in Syria or Iraq and a massive new refugee crisis for Europe.
(5) Escalation of proxy wars – With armed proxies across the region, Iran is well placed to launch an asymmetric war against the US and its allies especially in Yemen, Syria and Iraq.
(6) Threat to strategic trade routes – Iran has already threatened to close the Straits of Hormuz that moves oil from inside the Gulf to the rest of the world if its own oil sales remain blocked.
(7) Spillover effects – Such unilateral unsubstantiated sanctions would certainly erode the trust over capability and capacity of international agreements and the countries involved. North Korea probably could learn and reciprocate accordingly in future.
 
Reasons for America’s Economic Leverage
 
– One of several reasons for America’s economic leverage is that it sits at the epicenter of the global financial system. The dollar is a reserve currency. Global trade is preponderantly carried out in dollars. Oil is priced in dollars.
– The US treasury is the favored haven for risk averse investors.  And, it controls the financial messaging system (SWIFT).
– Banks, financial intermediaries and corporates would not be able to function if they did not have access to this system.
– Clearly, this threat would lose its edge if there were an alternative messaging system that enabled non-dollar transactions without SWIFT.
– The European signatories of JCPOA (Germany, France and the UK) have created such a system. They announced in January the establishment of a SPV “Instrument in support of Trade Exchange” (INSTEX) to enable companies to trade with Iran without having to deal with dollar-based US banks.
– It remains to be seen whether companies will avail of this mechanism.
 
A practical alternative would be for Iran to end this brinkmanship and deepen cooperation with other signatories instead of breaking the deal. Europe, on its part, should stand firmly up to the U.S.’s unilateral threats and pressure, and come up with ways to help Iran. A collapse of the deal would not only exacerbate the Iran nuclear crisis but also set a bad precedent in international diplomacy.
 
India – Iran: Related to Sanctions
 
Iran’s Foreign Minister Mohammad met Indian External Affairs Minister in New Delhi in May,2019, the visit took place amid rising tensions between the US and Iran.
 
India’s Stand- India has conveyed to Iran that it would like all parties to the JCPOA agreement to continue to fulfil their commitments and that all parties should engage “constructively” and resolve all issues “peacefully and through dialogue”.
 
India’s Concerns
 
– Diaspora – Over 8 million Indian migrant workers live and work in the West Asian region.
– Scarcity of smooth transaction – Iran is India’s third-largest oil supplier behind Iraq and Saudi Arabia with convenient transport, high credit period and insurance guaranteed.
– Balancing delicate ties- While Delhi has played the chessboard in the region tactically so far, hardening of the battle lines will make it increasingly difficult for India, especially with Saudi Arabia and Israel.
– Ethical Dilemma – India had earlier maintained that it follows the UN sanctions, and not unilateral sanctions. Following the listing of Azhar, the US expects reciprocity in dismantling Iran’s terror network, leaving India with few choices.
– Strategic autonomy at stake – Inability of India to secure its right to have free trade under unilateral sanctions and pressure definitely erodes its right to decide it bilateral ties and foreign policy.
– Adverse impact on economy – The global cost of crude oil determines Indian retail prices of petrol and diesel, an escalation of which could fuel inflation and throw India’s macroeconomic numbers out of balance.
 
In a relief to India, US has not put sanctions on Chabahar port development, since both Delhi and Washington’s objectives on accessing Afghanistan remain the same.
 
Way forward
 
– Promote regional reconciliation between Iran and the Gulf Arabs through gulf peace initiative.
– Leverage improved relations with Saudi Arabia and the UAE to negotiate long-term alternatives to energy dependence on Iran.
– Strategic oil reserves & diversification of sources must be proactively pursued in order to reduce India’s dependency on limited and unstable regional sources.
– Non-dollar-based trading regime – Countries must find ways of creating a non-dollar-based trading system, particularly regards petroleum and thereby weakening America’s stranglehold over the global financial system (SWIFT).
– Complement JCPOA – Amending JCPOA to include larger concerns like Iran’s ballistic missile program and its regional activities in places such as Syria.
 

India’s mantra of “commercial consideration, energy security and economic interests” should guide its options in oil imports. It cannot afford to forsake Iran, with which it has had close civilizational and historical links.

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(Source: Volkov Law Group Blog, 20 May 2019. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
Company managers are the lynchpin of a corporate compliance program. Without belaboring the Tinkers to Evers to Chance baseball analogy, a corporate culture of compliance requires an important information and accountability flow (or cascade) from leadership to senior managers to on-the-ground managers. It is at this level that the compliance message requires effective communications and conduct by managers directly to employees. This is where the rubber meets the road.
 
More companies are coming to this realization and affirmatively enhancing managers;’ ability to communicate important ethics and compliance messages and demonstrate by day-to-day examples, how to implement such ethical principles in their supervisory and work responsibilities. Managers are an important reflection of a company’s culture.
 
A company places an extraordinary amount of trust in its managers. They carry an important message and have direct responsibilities over their employees. It is no accident that employees, when surveyed, prefer to report their concerns to their immediate supervisor. In fact, many companies explicitly encourage such reporting in their compliance program policies and code of conduct. This reporting preference reflects a basic human desire – seeking approval from their immediate supervisor.
 
But what happens when there is a breakdown in the manager’s own ethical commitment? Recent studies have shown that managers commit fraud and other misconduct at a high rate of almost 40 percent. To compound this problem, managers who engage in misconduct, often do so on more than one occasion. In other words, manager misconduct, when it occurs, does so on a repeated basis.
 
This reality presents serious challenges for a CCO seeking to rely on this important player in the compliance world. Managers carry an important burden – and they need to be monitored for risks and misconduct. If here is a breakdown among managers, such misconduct can have a disastrous impact on the surrounding employees, the culture of the company, and the risk of increased misconduct by employees.
 
It is beyond obvious that employees, who know or observe their managers engage in misconduct, are more likely themselves to engage in nefarious acts. A lawless community will experience higher rates of misconduct.
 
To counter instances of manager misconduct, companies hope (and pray) that employees will instead choose to report the manager rather than join the manager in any improper scheme. This is the real delicate balance – a culture of compliance may itself preserve its performance by reporting managers who engage in misconduct. Whether this will occur depends on the extent to which a company’s ethical culture has taken hold and whether employees have adopted the company’s culture as part of their own makeup.
 

Companies sometimes spend so much time focused on third-party risks that managers and employees are “taken for granted” or ignored on the risk scale. Hopefully, this attitude will mature into a healthy balance between managing third-party risks and internal manager/employee risks. An internal focus is important and can be very successful, especially in light of the direct control and influence that a compliance program can exert on its employees. A CCO can engage in a variety of strategies and mechanisms for monitoring managers and employees – in fact, such compliance activities can result in improvements to more difficult areas, such as monitoring third-party behaviors.

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COM_a3
17
. R.C. Thomsen II, A.D. Paytas & M.M. Shomali: “BIS Issues Temporary General License Authorizing Limited Activities with Huawei”

(Source: Thomsen and Burke LLP, 21 May 2019. Available by subscription via maher@t-b.com.)
 
* Authors: Roszel C. Thomsen II, Esq., +1 410-539-2596, roz@t-b.com; Antoinette D. Paytas, Esq., +1 410-539-2655, toni@t-b.com; and Maher M. Shomali, Esq., +1 410-539-6336, maher@t-b.com. All of Thomsen and Burke LLP. 
 
On May 16, 2019, the Commerce Department’s Bureau of Industry and Security (“BIS”) added Huawei Technologies Co., Ltd. (“Huawei”) and sixty-eight non-U.S. affiliates to the Entity List creating a licensing requirements for the export, reexport or transfer of all items subject to the Export Administration Regulations (“EAR”) to the affected entities.
 
On May 21, BIS posted a final rule that creates a temporary general license that allows, from May 20, 2019, through August 19, 2019, the following:
(1) Continued Operation of Existing Networks and Equipment: BIS authorizes engagement in transactions, subject to other provisions of the EAR, necessary to maintain and support existing and currently fully operational networks and equipment, including software updates and patches, subject to legally binding contracts and agreements executed between Huawei and third parties or the sixty-eight non-U.S. Huawei affiliates and third parties on or before May 16, 2019.
(2) Support to Existing Handsets: BIS authorizes engagement in transactions, subject to other provisions of the EAR, necessary to provide service and support, including software updates or patches, to existing Huawei handsets that were available to the public on or before May 16, 2019.
(3) Cybersecurity Research and Vulnerability Disclosure: BIS authorizes, subject to other provisions of the EAR, the disclosure to Huawei and/or the sixty-eight non-U.S. affiliates of information regarding security vulnerabilities in items owned, possessed, or controlled by Huawei or any of the sixty-eight non-U.S. affiliates when related to the process of providing ongoing security research critical to maintaining the integrity and reliability of existing and currently fully operational networks and equipment, as well as handsets.
(4) Engagement as Necessary for Development of 5G Standards by a Duly Recognized Standards Body: BIS authorizes, subject to other provisions of the EAR, engagement with Huawei and/or the sixty-eight non-U.S. affiliates as necessary for the development of 5G standards as part of a duly recognized international standards body (e.g., IEEE – Institute of Electrical and Electronics Engineers; IETF – Internet Engineering Task Force; ISO – International Organization for Standards; ITU – International Telecommunications Union; ETSI- European Telecommunications Standards Institute; 3GPP – 3rd Generation Partnership Project; TIA- Telecommunications Industry Association; and GSMA, a.k.a., GSM Association, Global System for Mobile Communications).
 
These are the only authorized activities under the new temporary general license.
 
Exporters, re-exporters, and/or transferors utilizing this Temporary General License are also required to make a certification statement specifying how the export, reexport, or transfer (in-country) meets the scope of the Temporary General License, and must retain the certification statement in accordance with the record retention requirements in Part 762 of the EAR.
 
This final rule does not amend the Entity List, and restrictions that are outside of the scope of this Temporary General License still require an export license from BIS, as further described in the May 16th order.
 
Additional online resources:
 

Temporary General License 

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COM_a4
18
. S.F. Kjeldsen: “EU Cyber-Attack Sanctions Regime – a New Era for Sanctions?”

(Source: LinkedIn, 20 May 2019.)
 
* Author: Simon Fasterkjær Kjeldsen, Legal Advisor at Ministry of Foreign Affairs of Denmark.
 
Yesterday, a new EU sanctions regime entered into force, cf. Council Regulation (EU) 2019/796 and Council Decision (CFSP) 2019/797. This new regime allows for targeted sanctions to “deter and respond to cyber-attacks which constitute a threat to EU member states, third States or international organisations”. The adoption of the new sanctions regime falls – quite remarkably – a week ahead of the elections for the European Parliament.
 
Scope of the Cyber-Attack Sanctions Regime
 
The adoption of such a sanctions regime was part of the EU “Cyber Diplomacy Toolbox” launched on 19 June 2017, where the Council stressed the growing need to protect the integrity and security of the EU, its Member States and their citizens against cyber threats and malicious cyber activities.
 
As a consequence of the recent adoption of the said legislation, EU can now impose restrictive measures such as travel bans and asset freezing measures on those “responsible for cyber-attacks or attempted cyber-attacks, who provide financial, technical or material support for such attacks or who are involved in other ways”.
 
Cyber-attacks falling within the scope of this new sanctions regime are those which have significant impact and which:
 
– originate or are carried out from outside the EU; or
– use infrastructure outside the EU; or
– are carried out by persons or entities established or operating outside the EU; or
– are carried out with the support of person or entities operating outside the EU.
 
Attempted cyber-attacks with a potentially significant effect are also covered by this sanctions regime. Sanctions may also be imposed on persons or entities associated with the responsible parties.
 
A New Era for Sanctions?
 
Traditionally, sanctions regimes have been imposed as a foreign policy tool by the EU on a country-specific level in order to change the behavior of a certain government/person/group in a given conflict/context. Currently, EU has more than 40 of such country-specific regimes.
 
The cyber-sanctions regime is different as it is a thematic regime with horizontal application. This means that it can be applied autonomously and globally. EU has formerly only had two of such thematic regimes; one to combat terrorism (adopted on 27 December 2001) and one against the proliferation and use of chemical weapons (adopted on 15 October 2018).
 
The new cyber-attack regime is a modern way to facilitate the use of sanctions in pursuance of the new threats and changing circumstances of the digital world. It remains to be seen how the sanctions regime will come into use, however, as with all sanctions regimes it is the obligation of persons and entities acting within the EU (and for citizens of the member states) to comply with the measures, cf. the territorial and personal applicability as stipulated in art. 18 of Council Regulation (EU) 2019/796.
 

See the press release from EU here.

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COM_a5
19
. S.M.C. Kovarovics: “Don’t be Caught Off Guard: Huawei Entities Added to US Entity List”
(Source: 
 
World Trade Controls
, 21 May 2019.) 
 
* Author: Susan M.C. Kovarovics, Esq., Bryan Cave LLP, susan.kovarovics@bryancave.com, 202-508-6132.
 
 
The Trump Administration announced last week that the US Government has added Huawei to the Commerce Department Entity List.  Here is a link to a copy of the Federal Register Notice pursuant to which that designation occurred.  This notice was formally published 21 May 2019, but the Commerce Department has noted that it became effective when a public inspection copy was published on the Federal Register site at 4:15 pm (presumably Eastern Daylight Time) on 16 May 2019.  It covers Huawei Technologies Co., Ltd. (“Huawei”) and 68 of its non-US affiliates. 
 
The restrictions associated with this Entity List designation impact all exports, reexports or in-country transfers of items (goods, technology or software) subject to the US Export Administration Regulations (“EAR”) to any of the Huawei entities named in the Federal Register Notice.  Keep in mind that items received from the United States or that are US origin continue to be subject to the EAR unless and until they have been incorporated into an item made outside the United States that contains only de minimis US content controlled to the country to which the item destined.  Items made outside the United States that do contain greater than de minimis controlled US content are themselves considered to be subject to the EAR and, thus, within the scope of this Entity List restriction. 
Be cognizant of aftermarket activities and software and technology transfers that may also trigger these EAR restrictions. 
 
The Commerce Department has issued a temporary general license effective 20 May 2019 to 19 August 2019 that authorizes the export, reexport or transfer in accordance with the license requirements and exceptions applicable as of 16 May 2019 for items destined to Huawei or one of its 68 affiliates subject to the Entity List designation if such items are for one of the four approved end uses:
 
  • Continued operation of existing networks and equipment
  • Support to existing handsets
  • Cybersecurity research and vulnerability disclosure
  • Engagement as necessary for development of 5G standards by a duly recognized standards body
 
Use of the temporary general license is predicated on creation of a certification in advance of the export identifying how the transaction meets the criteria for the temporary general license.  The certification must be maintained as part of the export records for the transaction in accordance with the EAR’s recordkeeping requirements. 
 

For all other exports, reexports, or transfers to Huawei and its affiliates, specific licenses can be sought.  However, there is a presumption of denial, so the case must be made to explain why any particular proposed transaction does not run contrary to the national security and foreign policy reasons behind the designations in the first instance.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a120. FCC Presents “The ABC of FMS”, 28 Nov 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 of Foreign Military Sales (FMS)
* 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

*
Arthur Conan Doyle (Sir Arthur Ignatius Conan Doyle; 22 May 1859 – 7 Jul 1930; was a British writer best known for his detective fiction featuring the character Sherlock Holmes. Originally a physician, in 1887 he published 
A Study in Scarlet, the first of four novels about Holmes and Dr. Watson. In addition, Doyle wrote over fifty short stories featuring the famous detective. The Sherlock Holmes stories are generally considered milestones in the field of crime fiction.)
  – 
“There is nothing more deceptive than an obvious fact.”
  – “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”

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EN_a322
. 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: 22 May 2019: 84 FR 23468-23471: Temporary General License   
 
* 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: 21 May 2019: Harmonized System Update (HSU) 1908 

  – HTS codes for AES are available here.

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

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EN_a0323
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

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

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


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