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19-0531 Friday “Daily Bugle”

19-0531 Friday “Daily Bugle”

Friday, 31 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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[No items of interest noted today.]
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. State/DDTC: (No new postings.) 
  4. Hong Kong/TID Suspends E-Services Due to System Maintenance
  1. Bloomberg: “China Threatens Sweeping Blacklist of Firms After Huawei Ban”
  2. UAWire: “Russian Oligarch Deripaska Complains of Billions Lost Due to US Sanctions”
  3. VOA: “UN Renews South Sudan Arms Embargo”
  4. The Wall Street Journal: “U.S. Delays Petrochemical Sanctions on Iran”
  1. Baker McKenzie: “New Trade Control on Weapons of Mass Destruction Related Items Act to Become Effective on 1 January 2020”
  2. B. Karp, R. Gonzales & R. Fiorill: “Sanctions Compliance Programs and Flags ‘Root Causes'”
  3. D. Noah: “What Is a Reexport?”
  4. The Export Compliance Journal: “Four Reasons Sales Teams Should Embrace End Use Due Diligence for Export Compliance”
  5. H. Bucher: “ITAR and EAR Compliance and Modern Product Development” (Part III of III)
  1. ECS Presents “ITAR/EAR Bootcamp: Achieving Compliance” on 8-9 Jul in Seattle, WA 
  2. FCC Presents “U.S. Export Controls: The EAR from a non-U.S. Perspective”, 27 Nov in Bruchem, the Netherlands 
  3. List of Approaching Events: 155 Events Posted This Week, Including 9 New Events 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: DHS/Customs (5 Apr 2019), DOC/EAR (24 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 (21 May 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

  
[No items of interest noted today]
 
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OGSOTHER GOVERNMENT SOURCES

OGS_a11
. Items Scheduled
for Publication in Future Federal Register Editions

(Source:
Federal Register
)

 
* Commerce/BIS; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals [Pub. Date: 3 June 2019.]

 
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. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)

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OGS_a33.
State/DDTC: (No new postings.)

(Source:
State/DDTC
)

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OGS_a4
4.
Hong Kong/TID Suspends E-Services Due to System Maintenance
(Source: Hong Kong Trade and Industry Department, 31 May 2019.)
 
All e-services of our website will be suspended from 18:30 to 22:59 on 4 June 2019 (Tuesday) due to system maintenance.

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NWSNEWS

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Bloomberg: “China Threatens Sweeping Blacklist of Firms After Huawei Ban”
(Source: Bloomberg, 31 May 2019.) [Excerpts.]
 
China said it will establish a list of so-called “unreliable” entities it says damage the interests of domestic companies, a sweeping order that could potentially affect thousands of foreign firms as tensions escalate after the U.S. blacklisted Huawei Technologies Co.
 
China will set up a mechanism listing foreign enterprises, organizations and individuals that don’t obey market rules, violate contracts and block, cut off supply for non-commercial reasons or severely damage the legitimate interests of Chinese companies, Ministry of Commerce spokesman Gao Feng said. “Necessary measures will be taken” against those on the list, he said, adding that specifics would be released soon.
 

The U.S. government has moved to curb Huawei’s ability to sell equipment in the U.S. and buy parts from American suppliers, potentially crippling one of China’s most successful — but controversial — global companies. That step has helped broaden the tariff war into a wider confrontation between China and the U.S., at a time when negotiations between the two sides have broken down. …

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NWS_a26.
UAWire: “Russian Oligarch Deripaska Complains of Billions Lost Due to US Sanctions”
(Source: UAWire, 30 May 2019.) [Excerpts.]
 
The Russian oligarch Oleg Deripaska has lost billions as a result of US sanctions on himself and the companies he controls. The damage from these sanctions is in excess of $15 billion, Deripaska said in a statement.
 
These losses have been suffered by “investors, suppliers and clients of En+, Rusal and the GAZ Group” according the statement published on Deripaska’s website. The sanctions have “ruined a person’s life and business, and put hundreds of thousands of people at risk, including staff and investors in Russia and abroad,” the statement continues.
 
Deripaska claims that the sanctions were imposed based on an OFAC report* that was fraught with false assertions and factual inaccuracies. “This is more than professional incompetence, it is like a gross breach of a public service’s duty and raises serious questions about the integrity and true intentions of the investigation by the US Treasury Department’s Office of Foreign Assets Control (OFAC),” the statement reads. Deripaska remarked that the assertions that he has acted as a high-ranking Russian official and works in the Russian energy sector are particularly inaccurate. …

[*The heavily redacted OFAC memo is HERE.] 

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NWS_a37.
VOA: “UN Renews South Sudan Arms Embargo”
(Source: Voice of America, 30 May 2019.) [Excerpts.]
 
The U.N. Security Council renewed sanctions on South Sudan Thursday for another year, including an arms embargo. But none of the council’s three African members supported the measure.
 
Last year, after earlier failed attempts, the Security Council imposed sanctions, including an arms embargo, against South Sudan, where political violence has caused a massive humanitarian disaster, including deaths, displacement and widespread food insecurity.
 
Five of the 15 council members abstained on the vote – Russia, China, Ivory Coast, Equatorial Guinea and South Africa. The measure passed as it required only nine positive votes and no veto. …

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NWS_a48. 
The Wall Street Journal: “U.S. Delays Petrochemical Sanctions on Iran”
(Source: The Wall Street Journal, 31 May 2019.) [Excerpts.]
 
The Trump administration has delayed new, tougher sanctions on Iran’s petrochemical sector, said people familiar with the matter, as it seeks to dial back tensions that have threatened to spiral out of control.
 
The pivot came after heated rhetoric between Washington and Tehran over U.S. accusations that Iran became as soon as doubtless in the support of the sabotage of Saudi oil tankers, the of us talked about, including a warning final week from President Trump that a battle could per chance see the “legitimate stop of Iran.” …

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COMCOMMENTARY

COM_a09.
Baker McKenzie: “New Thailand Trade Control on Weapons of Mass Destruction Related Items Act to Become Effective on 1 January 2020”
(Source: Baker McKenzie, 29 May 2019.)
 
Pursuant to our client alert on Dual-Use Items last year, the Thai Ministry of Commerce (“MOC“) has shifted its focus from revising and updating the Notification Regulating the Dual-Use Items, dated 16 October 2015, previously issued under the existing Export and Import of Goods, Act B.E. 2522 (1979) to the enactment of the new Trade Control on Weapons of Mass Destruction Related Items Act (“WMD Act“). On 30 April 2019, the WMD Act was enacted and announced in the Royal Gazette, and its main provisions will become effective on 1 January 2020.
 
The WMD Act regulates all items that are related to the spread of weapons of mass destruction (“WMDs“). The regulated items include, WMDs themselves, armaments and dual-use items (“DUI“) as well as tangible and intangible items that could have commercial interest, technology or even software. Controlled activities under the WMD Act not only include export, but also re-export, transshipment, transit, being a brokerage and other actions with the purpose of spreading WMDs.
 
The MOC is the responsible authority under the WMD Act and has the power to issue subsequent rules and regulations under the WMD Act, including a list of specific items that will be regulated under the WMD Act, controlled activities of each items, and requirements in order to engage in the controlled activities.
 
It is expected the MOC will subsequently issue a list of goods that are considered DUI, which will be based on the latest EU Dual-Use Item List of 2018. Any person who wishes to engage in the controlled activities for the goods falling under this list will require a license from the MOC (e.g. an export license for export of DUI). In addition, the MOC will issue a second list of goods that require certifications that they are not related in any way to the spread of WMDs, which is based on the latest Harmonized System Codes (“HS Codes“). In the case that the goods fall under this second list, no license (e.g. export license) is required. However, a person will have to make a self-certification to the MOC that their goods under the said HS Code are not DUI – before they can engage in the restricted activities (e.g. export them out of Thailand).  
 
Failure to obtain relevant licenses to engage in the controlled activities may subject the offender to a maximum imprisonment of two years and/or a fine of up to THB 200,000. Additionally, if such offense is committed for the purpose of utilizing items related to the spread of WMDs to cause harm to others or to design, develop, manufacture, use, modify, store, transport WMDs, or utilize such items in any way for the purpose of obtaining WMDs, the maximum imprisonment shall be increased to ten years and a fine of up to THB 1 million. All items relating to such offense will also be confiscated.
 
Relevant regulations and notifications under the WMD Act are also currently being drafted to ensure that the most important regulations and notifications, especially the rules and regulations regarding steps, procedures and requirements for licenses and self-certification (including an Internal Compliance Program conditions and requirements and their relevant benefits), are issued before its effective date of 1 January 2020.
 

It is also expected that the MOC will subsequently cancel the Notification Regulating the Dual-Use Items, issued on 16 October 2015 under the existing Export and Import of Goods Act, B.E. 2522 (1979).

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(Source: Harvard Law School, 29 May 2019.)
 
* Authors: Brad Karp, Esq., bkarp@paulweiss.com, +1-212-373-3316; Roberto Gonzalez, Esq., gonzalez@paulweiss.com, +1-202-223-7316; and Rachel Fiorill, Esq., rfiorill@paulweiss.com, +1-202-223-7346. All of Paul Weiss, Rifkind, Wharton & Garrison LLP.
 
On May 2, 2019, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued guidance entitled “A Framework for OFAC Compliance Commitments” (the “Framework”), that strongly encourages companies to “develop, implement, and routinely update” a risk-based sanctions compliance programs (“SCPs”). OFAC made clear that the guidance was intended for U.S. companies as well as non-U.S. companies that conduct business in or with the United States, with U.S. persons, or using U.S. origin goods or services. The guidance describes five “essential components” of an effective sanctions compliance program: (i) management commitment, (ii) risk assessment, (iii) internal controls, (iv) testing and audit, and (v) training.
 
In December of last year, Under Secretary of the Treasury for Terrorism and Financial Intelligence Sigal Mandelker previewed that OFAC would be issuing this guidance on the “hallmarks of an effective compliance program,” marking a new effort by Treasury to more clearly and comprehensively communicate its compliance expectations. OFAC Director Andrea Gacki explained that it was developed as part of OFAC’s continuing effort to strengthen sanctions compliance practices “across the board,” and “underlines [OFAC’s] commitment to engage with the private sector to further promote understanding of, and compliance with, sanctions requirements.” Consistent with OFAC’s Enforcement Guidelines, the Framework emphasizes that in the event of an OFAC enforcement action, the agency will consider favorably that a company had an effective SCP at the time of the apparent violation; it will also consider the Framework in evaluating a company’s remedial actions. The Framework also states that, in appropriate cases, it will consider the effectiveness of a company’s SCP at the time of the apparent violations in determining whether the apparent violations were “egregious” under OFAC’s Enforcement Guidelines.
 
Consistent with the Framework, OFAC has already incorporated 23 compliance commitments into over half a dozen public settlement agreements since December 2018; these public settlements have involved both financial institutions and non-financial institutions. Notably, OFAC has already imposed in these settlements a requirement that the settling party annually certify its compliance with the commitments over a five-year period. Complying with the commitments and the annual certification obligation will likely require settling parties to invest additional resources in their SCPs and increase the costs associated with OFAC settlements.
 
As an appendix to the Framework, OFAC also describes some of the common “root causes” of the apparent violations that were the subject of its prior enforcement actions. This appendix is meant to assist companies in “designing, updating and amending” their compliance programs.
 
Five Essential Components of Sanctions Compliance
 
The Framework outlines five components of an effective SCP, described below.
 
Management Commitment
.
 
OFAC notes that “Senior Management’s commitment to, and support of, an organization’s risk-based SCP is one of the most important factors in determining its success. This support is essential in ensuring the SCP receives adequate resources and is fully integrated into the organization’s daily operations, and also helps legitimize the program, empower its personnel, and foster a culture of compliance throughout the organization.” The key elements of management commitment include the following undertakings by Senior Management:
 
   – Review and approval of the organization’s SCP.
 
   – Ensure compliance units have sufficient authority and autonomy to deploy policies and procedures to effectively control OFAC risk.
 
   – Ensure that compliance units receive adequate resources (including human capital, expertise, information technology) relative to breadth of operations, target and secondary markets, and risk profile. OFAC states that these efforts could generally be measured by whether the company has appointed a “dedicated OFAC sanctions compliance officer” (which may be dual-hatted with another compliance function), the “quality and experience of the personnel” dedicated to the SCP (including their knowledge of OFAC regulations and risk and their ability to understand complex financial and commercial activities, and the existence of a sufficient control function).
 
   – Promote “culture of compliance,” measured by the ability of personnel to report sanctions related misconduct without fear of reprisal, senior management messages and actions that discourage misconduct and prohibited activities, and ability of the SCP to have oversight over actions of the entire organization.
 
   – Demonstrate recognition of the seriousness of apparent violations of laws and regulations, deficiencies/failures to comply with the SCP’s policies and procedures, and implement necessary measures to reduce the occurrence of apparent violations in the future by addressing root causes and system solutions.
 
Risk Assessment
 
As is consistent with OFAC’s past practice, the Framework recommends that SCPs be designed and updated pursuant to a “risk-based approach . . . [o]ne of the central tenets of [such an] approach is for organizations to conduct a routine, and if appropriate, ongoing ‘risk assessment’ for the purposes of identifying potential OFAC issues they are likely to encounter.” OFAC identifies two core elements of a commitment to meet this compliance component:
 
   – The organization conducts, or will conduct, an OFAC risk assessment in a manner, and with a frequency, that adequately accounts for the potential risks. Such risks may be posed by its clients and customers, products, services, supply chain, intermediaries, counter-parties, transactions, and geographic locations, depending on the nature of the organization. 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. OFAC notes that the result of this assessment will “generally inform the extent of the due diligence efforts at various points in a relationship or in a transaction,” including with respect to onboarding (by leveraging information provided by the customer (g., through a Know Your Customer or Customer Due Diligence process) and independent research conducted by the organization at the initiation of the customer relationship) and mergers and acquisitions (the Framework states that an organization should engage in appropriate due diligence to ensure that sanctions-related issues are identified, escalated to the relevant senior levels, addressed prior to the conclusion of any transaction).
 
   – 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 apparent violations or systemic deficiencies identified by the organization during the routine course of business, for example, through a testing or audit function onboarding.
 
Internal Controls
.
 
The Framework states that effective OFAC compliance programs generally include internal controls, including policies and procedures, in order to identify, interdict, escalate, report, and keep records pertaining to prohibited activity. Key elements include:
   – Written policies and procedures tailored to the organization’s operations and risk profile and that are enforced through internal and/or external audits.
 
   – Internal controls that adequately address the results of a company’s OFAC risk assessment. These controls should enable the company to “clearly and effectively identify, interdict, escalate, and report” potentially prohibited activity. Information technology solutions should be “selected and calibrated” in a manner that is appropriate for the company’s risk profile, and the company should routinely test the solutions to ensure effectiveness.
 
   – Immediate and effective remedial actions, to the extent possible, to identify and implement compensating controls until the root cause of any weakness in internal controls can be determined and remediated.
 
 – Clear communication of policies and procedures to all relevant staff, including relevant gatekeepers and business units operating in high-risk areas (g., customer acquisition, payments, sales, etc.) and to any external parties performing compliance responsibilities on behalf of the organization.
 
   – Identification of designated personnel responsible for integrating policies and procedures into daily operations.
 
Testing and Auditing
 
The Framework provides that a comprehensive and objective SCP audit function ensures the identification of program weaknesses and deficiencies, and notes that it is the organization’s responsibility to enhance its program, including all program-related software, systems, and other technology, to remediate any identified compliance gaps. Core commitments include:
 
   – Ensuring that the testing or audit function is accountable to senior management, is independent of the audited activities and functions, and has sufficient authority, skills, expertise, resources, and authority within the organization.
 
   – Employ audit procedures appropriate to the company’s level and sophistication of its SCP and that this function, whether deployed internally or by an external party, reflects a comprehensive and objective assessment of the organization’s OFAC-related risk assessment and internal controls.
 
   – Upon learning of a deficiency, taking 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.
 
Training
 
The Framework describes training as “integral,” and outlines OFAC’s expectation that training programs “be provided to all appropriate employees and personnel on a periodic basis (and at a minimum, annually) and generally should accomplish the following: (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.” Specifically, OFAC highlighted the following commitments:
 
   – Ensuring that the OFAC training program provides adequate information and instruction to employees and, as appropriate, stakeholders (for example, clients, suppliers, business partners, and counterparties) in order to support OFAC compliance efforts. Such training should be further tailored to high-risk employees within the organization.
 
   – Provide OFAC-related training with a scope that is appropriate for the products and services offered; the customers, clients, and partner relationships maintained; and the geographic regions served.
 
   – Providing OFAC-related training appropriately often.
 
   – As part of remediation efforts, taking immediate and effective action to provide training to or other corrective action with respect to relevant personnel.
 
   – Making training resources and materials easily accessible to all applicable personnel.
 
Root Causes of OFAC Sanctions Compliance Program Breakdowns or Deficiencies
 
The Framework enumerates a number of causes of SCP breakdowns or deficiencies identified in prior OFAC enforcement actions, including:
 
– Lack of a formal OFAC SCP;
– Misinterpreting, or failing to understand the applicability of, OFAC’s regulations;
– Facilitating transactions by non-U.S. persons (including through or by non-U.S. subsidiaries or affiliates of U.S. persons);
– Exporting or re-exporting U.S.-origin goods, technology, or services to OFAC-sanctioned persons or countries;
– Utilizing the U.S. financial system, or processing payments to or through U.S. financial institutions, for commercial transactions involving OFAC-sanctioned persons or countries;
– Sanctions screening software or filter faults;
– Improper due diligence on customers/clients (g., ownership, business dealings, etc.)
– De-centralized compliance functions and inconsistent application of an SCP; and
– Utilizing non-standard payment or commercial practices.
 
OFAC also highlighted individual liability, highlighting that “individual employees-particularly in supervisory, managerial, or executive-level positions-have played integral roles in causing or facilitating” sanctions violations, even in instances where “the U.S. entity had a fulsome sanctions compliance program in place” and in some cases these non-U.S. employees “made efforts to obfuscate and conceal their activities from others within the corporate organization, including compliance personnel, as well as from regulators or law enforcement.” The Framework states that in such instances, OFAC will consider enforcement actions not only against the entities, but against the individuals as well. OFAC has previously brought enforcement actions against individuals only in rare instances.
 
Outside of the civil enforcement context, OFAC earlier this year took the unprecedented step of concurrently designating a foreign sanctions evader and announcing a related settlement with a U.S. company. OFAC designated the former managing director of a non-U.S. subsidiary whom OFAC determined to be primarily responsible for directing the apparent violations at issue and seeking to conceal them. This action highlights increased personal risk for non-U.S. personnel that violate U.S. sanctions.
 
Implications
 
The Framework, and the related “compliance commitments” in recent OFAC settlements, represent a new effort by OFAC to more clearly and comprehensively communicate its expectations about appropriate sanctions compliance practices. S. and non-U.S. companies would be well advised to study the Framework and the compliance commitments carefully.
 
The Framework describes numerous sanctions compliance best practices and largely aligns with the compliance expectations of the federal banking regulators as described in the Federal Financial Institutions Examination Council (“FFIEC”) Bank Secrecy Act/Anti-Money Laundering Examination Manual. Accordingly, many banks operating in the United States likely already incorporate the sanctions compliance elements described in the Framework. Many large, sophisticated companies outside the financial sector probably do as well.
 
For the large majority of U.S. and non-U.S. companies that engage in international trade, however, there may be gaps between their current practices and the elements described in the Framework. It is important for such companies to study the Framework in light of their own sanctions risk profiles (including factors such as the company’s size and sophistication, products and services offered, customers and counterparties, and geographic locations) to determine whether updating or enhancing their programs would be appropriate. In many ways, the Framework can be viewed as the “gold standard” for compliance, and companies with lower risk profiles may be able to implement lesser measures.
 
The Framework is also notable because it explains how OFAC may apply its guidance in evaluating apparent violations and resolving investigations resulting in settlements. Consistent with OFAC’s Enforcement Guidelines, the Framework emphasizes that in the event of an OFAC enforcement action, the agency will consider favorably that a company had an effective SCP at the time of the apparent violation; it will also consider the Framework in evaluating a company’s remedial actions. More notably, the Framework states that “OFAC may, in appropriate cases, consider the existence of an effective SCP at the time of an apparent violation as a factor in its analysis as to whether a case is deemed ‘egregious.'” While OFAC’s Enforcement Guidelines have always made clear that the agency’s egregious determination will be based on an analysis of the General Factors, historically, OFAC has focused this determination almost solely on Factors A (”willful or reckless violation of law”), B (”awareness of conduct at issue”), C (”harm to sanctions program objectives”) and D (”individual characteristics”), with, as prescribed by the Guidelines, “particular emphasis on General Factors A and B.” The Framework’s explicit recognition of compliance as a factor for consideration in OFAC’s egregiousness determination is novel and reflective of OFAC’s increased focus on compliance.
 
The complete publication, including footnotes, is available here.

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COM_a211.
D. Noah: “What Is a Reexport?”

(Source: Shipping Solutions, 29 May 2019.)
 
* Author: David Noah, Founder and President, Shipping Solutions, daven@shipsolutions.com.
 
Ask anyone on the street to define “export,” and you’ll almost certainly get an answer, and it will probably be accurate (but not complete). Read more at Surprise! You May Be an Exporter Without Even Knowing It.
 
Ask those same people to define “reexport,” and you’re bound to get some interesting (and confusing) answers. Really, go try it. It’s an interesting way to spend your lunch hour.
 
According to the U.S. Bureau of Industry and Security (BIS), a reexport is “the shipment or transmission of an item subject to the Export Administration Regulations (EAR) from one foreign country (i.e., a country other than the United States) to another foreign country. A reexport also occurs when there is ‘release’ of technology or software (source code) subject to the EAR in one foreign country to a national of another foreign country.”
 
Why is that important? If your item, technology or software requires a license before you can export it from the United States to a specific country (let’s call it Country C), that same item, technology or software requires a license to be reexported from it’s current non-U.S. country to that same Country C. And that’s true whether we’re talking about finished goods or parts that are used to make finished goods.
 
Important Reexport Facts
 
Your reexport is subject to the EAR if it is of U.S. origin wherever it’s located, unless:
 
– It is exclusively controlled for reexport by another U.S. government agency.
 
– It is publicly available technology or software, except encryption.
 
If you are a foreign company that incorporates U.S.-origin parts or components in a foreign commodity, you need to do the following:
 
– Classify the U.S.-origin parts or components exported to you according to the classification system set forth in the EAR. The U.S. exporter may be able to assist you in determining the Export Control Classification Number (ECCN).
 
– Determine if the U.S. parts or components are “controlled content.” Per the BIS, U.S. controlled content requires a U.S. license if it were to be reexported as separate parts or components to the country of ultimate destination.
 
– Determine if the U.S. controlled content is greater than 25% of the value of your finished foreign product. You’ll use the de minimis rule to make this determination.
 
De Minimis Rule for Export Control
 
De minimis is defined by the EAR as foreign-made items incorporating, commingled with, or drawn from controlled U.S. origin items exceeding:
 
– 10% for Cuba, North Korea, Sudan, Syria and Iran.
– 25% for all other destinations.
 
If the U.S. controlled content is 25% or less of the value of your finished product (or 10% or less for applicable countries), you qualify for the de minimis exception, and your product is not subject to the EAR.
 
If the controlled content is greater than 25% (or 10% for applicable countries), your product is subject to the EAR, which means you need to:
 
– Determine its ECCN and license requirements. You can use Shipping Solutions’ Product Classification Wizard to search for the correct ECCN classification for your product by entering either the first part of the ECCN number or a text description of your product.
– Determine license exception eligibility (if one exists). Check out our article, What You Need to Know about Export License Exceptions, for more information.
– Obtain any necessary authorization.
 
More Information about Reexport Regulations
 
Reexports and reexport controls can be confusing-and while this article is intended to give you a good summary of the topic, there is a lot to know that we can’t cover in just one article.
 
The BIS has several tools and publications that can help you better understand reexports starting with the Guidance on Reexports web page. If you need help with a reexport license or product classification, contact BIS or speak with someone at the U.S. Commercial Service Office nearest you.
 
And check out these BIS publications:
 

The De Minimis and Direct Product Rules webinar. 

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COM_a312.
The Export Compliance Journal: “Four Reasons Sales Teams Should Embrace End Use Due Diligence for Export Compliance”

(Source: The Export Compliance Journal, 29 May 2019.)
 
In past articles, we’ve talked about the important role end user documentation can play in the area of export and trade compliance.
 
In a nutshell, end user due diligence means procuring documentation confirming who the part, product or good will ultimately go to, and how it will be used. But one area of concern to many businesses is the friction it can create in the sales cycle.
 
Sales teams often view end user compliance as an unnecessary step that can delay or even abort a sale, thus affecting their commissions and ultimate personal bottom lines. However, there are very good reasons for organizations to take necessary end user due diligence steps as early in the sales process as possible.
 
Free up resources that could be better spent on transactions that are legal
 
Organizations are not absolved of how items are used once they have left the building. The Bureau of Industry and Security (BIS) has pretty comprehensive guidance on the matter, including a dedicated form to be filled out by both seller and buyer that confirms the end user and end use. One of the benefits to initiating the end user confirmation process at the beginning of the sales cycle is that it can help prevent headaches later on in the process-and allow sales reps to move on to more worthy prospects.
 
And depending on the nature of the business, such as those manufacturing made-to-order goods, for example, those on the production or manufacturing side can spend time working on projects that will ultimately, and legally, reach their destinations.
 
Remove the fear of potential fines and other penalties
 
In addition to halting a non-compliant sale in its tracks before further allocating any internal resources, failing to conduct end use and end user due diligence can lead to serious repercussions. Businesses risk potential fines, civil and criminal penalties, and bad press. No one sale is greater than the larger standing of any company. BIS itself warns: “the penalties of non-compliance-or making false statements-can be fairly serious, including ‘imprisonment or fine, or both and denial, in whole or in part, of participation in U.S. exports and reexports.'”
 
Consider end user documentation as a litmus test
 
One of the perceived barriers to conducting the end use exercise at the earlier stages of the sales cycle-or forgoing it altogether-is the potential pushback from the prospect or potential client. There’s a perception that a request for end use documentation won’t go down well, with the purchaser pushing back. While this does have the potential to lead to delays or escalated tensions before the sale is even closed, buyers on the up-and-up are likely to be very cooperative. In the event of push back, or even refusal to comply, organizations would do well to see this as a huge export compliance violation red flag, and would be best served to halt the sale until such documentation is received. Or even cancel the sale altogether to be on the safe side.
 
Everyone wins when the sales team is on board with the process
 
While sales representatives’ pushback against the need for end use and end user compliance ahead of closing most sales is understandable, the more they understand the importance, the greater the buy-in. Conducting internal awareness training and seminars, as well as clearly communicating management support, can go a long way towards achieving said buy-in.
 
Having clearly defined and communicated procedures in place, and what is ultimately at stake in the event of an export violation, can also play an important role. Even better is to have an export compliance solution in place that can manage multiple export and trade compliance activities, including the ability to record and store end user/use compliance documentation in one centralized repository.
 

Whatever the steps taken by an organization, in the end, it’s always advisable to have all bases covered when it comes to export and trade compliance due diligence. And when it comes to end user/use compliance, erring on the side of caution is never a bad idea.

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

COM_a413. 
H. Bucher: “ITAR and EAR Compliance and Modern Product Development” (Part III of III)
(Source: Arena Solutions, May 2019.) [Excerpts.]
 
* Author: Heatherly Bucher, Director of Product Marketing, Arena Solutions, sales@arenasolutions.com, +1 866 937 1438
 
In Part I of this series, we concluded that a secure government-grade Cloud PLM provides a better shared responsibility model as well as an enabling platform for doing the work of product development. In Part II, we reviewed the intricacies of International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) as they apply to how you manage export-controlled technical data. Meeting these regulations while enabling your teams with the flexibility and transparency needed to make great on-time products is critical to company success. We reviewed primary considerations for any tool you use to manage regulated product data. …
 
Now, we want to look at the business of making product, particularly if you service both commercial and defense markets or are expanding from commercial into defense. While the steps to design and deliver a product are the same-concept, design, test, release, sustain-for both markets, companies find that the emphasis and cadence differ.
 
The full list of products under ITAR and EAR ranges from fabrics, tactical uniform gear, and mechanical components to RF arrays, rugged hardware, avionics systems, and all things aerospace. If your products fall into the regulated space, you will need to ensure your processes, people, and systems support regulatory compliance regardless of your industry space, product volumes, timelines, and product complexity. However, for the rest of this discussion, we will focus on manufacturers of complex (electro-mechanical) products, whether finished goods or assembly level, as this is where certain unique aspects of defense can impact your priorities.
 
For this focus, I sat down with Mark Andres, Senior Solutions Architect at Arena Solutions. Mark spent 12 years at Ball Aerospace, working with the defense product development teams to ensure product data, processes, and systems supported team needs. He also helped further Ball Aerospace’s delivery of mission-critical defense products of the highest quality and compliance.
 
How defense product development differs
 
Product development for commercial markets and defense markets share much in common. Teams take an idea from concept through design and test to realization with new product introduction, and then into
 
production and support. Your business concerns include costs, quality, time to market, supply chain logistics, and more-irrespective of the markets you are in. However, if you are marketing to defense, you need to consider the differences and how they impact your product development decisions.
 
Accountability
 
The defense industry brings additional accountability burdens. The obvious are the compliance program, export controls, and policies necessary to meet ITAR or EAR regulations. But accountability doesn’t stop with the regulations. “Certainly, internal audits are a discipline all companies want to practice,” Mark confirmed when we discussed accountability. “As a defense product company, you are often spending against government money. This means you should expect customer audits that include not only product, processes and systems, but also financial aspects and your suppliers.” For many manufacturers, ISO 9001 and AS9100 certifications are competitive advantages or implicitly required to gain customer contracts. These standards require additional audits, most often on a yearly schedule. Finally, this environment is not static. As a defense product contractor, you can be impacted by changes in the federal landscape, whether regulatory, financial, or strategic initiatives. As the landscape shifts, you will need to adjust your programs, contracts, and processes to ensure compliance.
 
Product Lifecycle Timing
 
While the speed of product development and the length of production life vary to suit what your product is, for many manufacturers in defense the overall product lifecycle is longer than in commercial. Why? The products themselves can be bigger and/or more complex; the testing burden can be higher given the product’s functions; and the product may fit into a much larger system or platform (e.g., airplane, ship, satellite station, launch platform). Negotiations and design review approvals with the customer can be slower. For export-controlled product, supplier approvals require additional attention. “Designing this year’s drone for the Christmas season can be considered a bit of a ‘mosquito’ product lifecycle; delivery of leave-behind subassembly equipment for a space telescope is, perhaps, a dog-aged lifecycle; building an actual satellite can be likened to an ‘elephant’ lifecycle,” explained Mark. And, the length of product development, testing, and production use plays into product design decisions regarding obsolescence and serviceability. Teams should plan from the beginning on natural obsolescence of components over the longer life of the product, building in flexibility and tactics to address serviceability.
 
Product Priorities
 
With many defense products being in service far longer than commercial products, teams may need to weight product design priorities differently than in commercial. Specifically, quality and serviceability become more critical and should then inform actions from design and supplier qualification to test scope and execution. Additionally, if you are providing subsystems, integration is a product priority, as it is with commercial. However, in the defense space, with controlled technical data, expect more design review boards and more back and forth with not only your customer and supply chain, but also with other subassembly providers and potentially your customer’s customer (the end customer-often a prime or an agency).
 
Supplier Qualification and Management
 
As we’ve discussed accountability and product priorities, we can understand that supply chain becomes a critical business aspect. With the need to design for long serviceability as well as planned part obsolescence, coupled with the export-control requirements of any identified controlled technical data, supplier qualification requires attention. Additionally, flow down of regulated requirements to supply chain partners who may not be regulated necessitates closed-loop quality and change processes with security. Mark states, “Every time designs or parts change hands, you have potential supply chain vulnerabilities-you have to plan for this in your SOPs and then ensure your systems and tools support compliance to the SOPs.” And, as we mentioned earlier, all players in the defense industry must stay abreast of changes in the federal initiatives. One of the most recent, Deliver Uncompromised, is the Department of Defense’s focus on cradle-to-grave security in the supply chain, making security equal to cost, schedule, and performance in defense acquisitions. The program is currently in pilot and will likely entail agencies and primes adding supply chain security frameworks as a significant evaluation area in contracts. To learn more about Deliver Uncompromised, watch William Stephens, Director of Counterintelligence, Defense Security Services, discuss supply chain security threats and this new initiative.
 
Systems engineering: an organizing structure
 
For some defense electronics manufacturers, systems engineering is a known discipline. However, if you are new to defense, you may not currently practice systems engineering. Systems engineering is interdisciplinary and provides a wholistic approach to managing complex systems over the entire lifecycle. Systems engineering ensures requirements and system validation considers the complete-use cases and problems, providing customer and stakeholder focus. If you do not already have systems engineering, consider adding this function to your team, states Mark during our discussion. “Systems engineering brings benefit to all the processes, from requirements management to testing, new technology insertion, end-of-life component bridge plans, and more.”
 
Next steps
 
If you need a review on how ITAR and EAR regulations apply to the tools and systems you use in product work, read our first blog. If you need a simple assessment tool to track how solutions do against your compliance requirements, go to the second blog and download the Excel assessment workbook.
 

Ready to investigate modern PLM that will meet your compliance needs and give you competitive advantage in all markets? Learn about our offering here and then schedule a call to tell us about your business needs.

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

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_1
14
.
ECS Presents “ITAR/EAR Bootcamp: Achieving Compliance” on 8-9 Jul in Seattle, WA

(Source: ECS)
 
* What: ITAR/EAR Bootcamp: Achieving Compliance; Seattle, WA
* When: July 8-9, 2019
* Where: 
Sheraton Grande
* Sponsor: Export Compliance Solutions & Consulting (ECS)
* ECS Speaker Panel: Suzanne Palmer, Mal Zerden
* Register 
here
 
or by calling 866-238-4018 or email

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

TE_2
15
.
FCC Presents “U.S. Export Controls: The EAR from a non-U.S. Perspective”, 27 Nov in Bruchem, the Netherlands 

(Source:
Full Circle Compliance

events@fullcirclecompliance.eu
.)

 
This intermediate-level training course is specifically designed for compliance professionals and those in a similar role who aim to stay up-to-date with the latest Export Administration Regulations (EAR) requirements that apply to non-U.S. transactions.
 
The course will cover multiple topics relevant for organizations outside the U.S. that are subject to the Export Administration Regulations, including but not limited to: the U.S. regulatory framework, key EAR concepts and definitions, tips regarding classification and licensing, essential steps to ensure an EAR compliant shipment, how to handle a (potential) non-compliance issue, recent enforcement trends, and the latest regulatory amendments, including the latest U.S. Export Control Reform developments. Participants will receive a certification upon completion of the training.
 
Details
* What: U.S. Export Controls: The Export Administration Regulations (EAR) from a non-U.S. Perspective
* When: Wednesday, 27 Nov 2019
  – Welcome and Registration: 9.00 am – 9.30 am
  – Training hours: 9.30 am – 4.30 pm
* Where: Full Circle Compliance, Landgoed Groenhoven, Dorpsstraat 6, Bruchem, the Netherlands
* Information & Registration: via
event page
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 “The ABC of Foreign Military Sales” (29 Nov 2019). Please, see the
event page
for our combo deals.

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

TE_List16. 
List of Approaching Events: 155 Events Posted This Week, Including 9 New Events
(Sources: Editor and Event Sponsors)

Published every Friday or last publication day of the week, o
ur overview of Approaching Events is organized to list c
ontinuously available training, training events, s
eminars & conferences, and 
webinars. 
   
If you wish to submit an event listing, please send it to
events@fullcirclecompliance.eu
, composed in the below format:
 
    
#
 * Date: Location; “Event Title”; <Weblink>”; EVENT SPONSOR
 
   ”
*” = New or updated listing  

 
Continuously Available Training
 

* E-Seminars:US Export Controls” / “Defense Trade Controls“; Export Compliance Training Institute; danielle@learnexportcompliance.com 

* Webinar: ”
Company-Wide US Export Controls Awareness Program“; Export Compliance Training Institute;
danielle@learnexportcompliance.com 

* E-Seminars: “ITAR/EAR Awareness“; Export Compliance Solutions;
spalmer@exportcompliancesolutions.com

* Webinar Series: “Complying with US Export Controls“; Commerce/BIS

* E-Seminars: “Webinars On-Demand Library“; Sandler, Travis & Rosenberg, P.A.
* Online: “International Trade Webinars“; Global Training Center
*
 
Online: “On-Demand Webinars“; “General Training“; Center for Development of Security Excellence; Defense Security Service (DSS)
* Online: “ACE Reports Training and User Guide“; DHS/CBP

* Online: ”
Increase Your International Sales – Webinar Archive“; U.S. Commercial Service

* Web Form: “Compliance Snapshot Assessment“; Commonwealth Trading Partners (CTP)
* Online: “
Customs Broker Exam Prep Course
“; The Exam Center
 
 
Seminars and Conferences

 

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

*
 
Jun 10: Cleveland, OH; “
Letters of Credit
“; Global Training Center
*
 
Jun 11: Cleveland, OH; “
Export Doc & Proc
“; Global Training Center

* Jun 11: Philadelphia, PA; “Automated Commercial Environment (ACE) Export Compliance Seminar“; U.S. Commercial Service

*
 
Jun 11: Sheffield, UK; “
Customs Procedures and Compliance in International Trade
“; Sheffield Chamber of Commerce

* Jun 11: Sydney, Australia; “Defence Export Controls Outreach“; DEC


Jun 11-12: Detroit, MI; “
Complying with U.S. Export Controls
“; Commerce/BIS

*
 
Jun 12: Cleveland, OH; “
Tariff Classificatio
n“; Global Training Center
*
 
Jun 12: Derby, UK; “
Strategic Export Control: Intermediate Practitioners course
“; UK/DIT

* Jun 12-13: Shanghai, China; “China Forum for Legal and Compliance Officers“; American Conference Institute

*
 
Jun 13: Cleveland, OH; “
NAFTA Rules of Origin
“; Global Training Center
*
 
Jun 13: Derby, UK; “
Strategic Export Control: Foundation Workshop
“; UK/DIT
*
 
Jun 13: Derby, UK; “
Strategic Export Control: Licenses Workshop
“; UK/DIT
*
 
Jun 13: Detroit, MI; “
How to Build an Export Compliance Program
“; Commerce/BIS

* Jun 13: Huntsville, AL; “STOPfakes.gov Intellectual Property Protection Seminar“; Alabama District Export Council, U.S. Department of Commerce & North Alabama International Trade Association (NAITA); naita@naita.org, 256-532-3505

* Jun 13: Leeds, UK; “
Understanding Exporting & Incoterms
“; Chamber International

*
 
Jun 14: Cleveland, OH; “
Incoterms® 2010 Rules
“; Global Training 

* Jun 14: London, UK; “Sanctions & Embargoes” Financial Crime Limited

* Jun 17-20: San Diego, CA; “ITAR Defense Trade Controls / EAR Export Controls“; ECTI

* Jun 17-21: Los Angeles, CA; “Certified Classification Specialist (CCLS)“; Amber Road

* Jun 19-20: Washington DC;
 Export Controls & Technology Transfer Conference“; Squire Patton Boggs
* Jun 20: Kansas City, MO; “
Trade Compliance & Policy” C.H. Robinson

* Jun 25: London, UK; “Introduction to Export Licensing Controls“; The Institute of Export and International Trade

* Jun 25: Melbourne, Australia; “ITAR/EAR/AU Export Control Awareness“; Goal Group

* Jun 26: London, UK; “Making Better Licence Applications“; UK/DIT

* Jun 26-28: Washington D.C.; “American Association of Exporters and Importers (AAEI) Conference“; AAEI

*
 
Jul 3: Bristol, UK; “
Introduction to Export Procedures – Export Training
“; BusinessWest
*
 
Jul 3: Cambridge, UK;
Strategic Export Control: Intermediate Practitioners Course
“; UK/DIT

#
* Jul 3: Leeds, UK; “New-to-Exporting Workshop“; Chamber International

*
 
Jul 4: Cambridge, UK;
Strategic Export Control: Foundation Workshop
“; UK/DIT
*
 
Jul 4: Cambridge, UK; “
Strategic Export Control: Licenses Workshop
“; UK/DIT
*
 
Jul 4: Bristol, UK;
Using Documentary Letters of Credit, Drafts and Bills”; 
BusinessWest
*
 
Jul 4: Sheffield, UK; “
An Introduction to Export
“; Sheffield Chamber of Commerce
*
 
Jul 8-9: Seattle, WA: “
Boot Camp: Achieving ITAR/EAR Compliance
“; Export Compliance Solutions (ECS);

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

* Jul 9-11: Washington; “
BIS 2019 Annual Conference on Export Controls and Policy
“; Commerce/BIS

#
* Jul 10: New York, NY; “EU Financial Regulatory Round-Up: What U.S. Firms Should Know“; Akin Gump

*
 
July 10: Sheffield, UK; “
Export Documentation – How and Why?” 
; Sheffield Chamber of Commerce

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

* Jul 16: Atlanta, GA; “
Trade Compliance & Policy” C.H. Robinson

* Jul 16-19; Chicago, IL; “Export Boot Camp“; Amber Road

* Jul 23: Laredo, TX; “
Trade Compliance & Policy” C.H. Robinson

*
Jul 23-25; Washington D.C.; “Anti-Corruption Compliance for High Risk Markets“; American Conference Institute

*
Jul 24-25: St. Louis, MO; “
 Complying with U.S. Export Controls
“; Commerce/BIS
* Jul 25: Dallas, TX; “Trade Compliance & Policy” C.H. Robinson 

* Jul 29-30: New Orleans, LA; “Global Trade Educational Conference“; NCBFAA Educational Institute  

* Jul 31: Leeds, UK; “Export Documentation” Chamber International 
* Jul 31-Aug 1: Seattle WA; “11th Annual Pacific Northwest Export Control Conference: Export Risks and Threats in the Cyber Domain“; DoC/U.S. Commercial Service, DHS/Homeland Security Investigations, Seattle University, Dorsey & Whitney LLP

* Aug 1-2: Torrance, CA; “Customs Compliance for Import Personnel” Foreign Trade Association

* Aug 20-21: Cincinnati, OH;

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

* Aug 20-21: Milpitas, CA;

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

* Aug 22: Los Angeles, CA; “
Trade Compliance & Policy” C.H. Robinson

* Aug 22: Milpitas, CA:

Encryption Controls
“;
Commerce/BIS

* Sep 2: Edinburgh, UK; “
Strategic Export Control: Intermediate Practitioners course“; UK/DIT

* Sep 2, 9, 16: Rotterdam, the Netherlands; “Awareness training Export Control, Dual-use en Sancties“; FENEX  

* Sep 3: Edinburgh, UK; “
Strategic Export Control: Foundation Workshop“; UK/DIT
* Sep 3: Edinburgh, UK; “
Strategic Export Control: Licenses Workshop“; UK/DIT

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

* Sep 10: Minneapolis, MN; “
Trade Compliance & Policy” C.H. Robinson

* Sep 10-11: Portland, OR; “Complying with U.S. Export Controls“; Commerce/BIS

* Sep 16-18: Winchester, UK; “
From EAR to ITARnity: Ever-challenging US Export Controls Compliance
” Squire Patton Boggs

* Sep 16-19: Austin, TX; “
ITAR Controls / EAR & OFAC Export Controls (Sep 18-19) Seminar Series
“; ECTI
; 540-433-3977
*
 
Sep 17: Sheffield, UK; “
Customs Procedures and Compliance in International Trade
“; Sheffield Chamber of Commerce


Sep 17-19: Annapolis, MD; “
The ECS 2nd Annual ITAR/EAR Symposium
“; ECS

* Sep 18: Leeds, UK; “Export Documentation & Import Procedures“; Chamber International

 
* Sep 18-19: Los Angeles, CA; “Complying with U.S. Export Controls“; Commerce/BIS

*
 Sep 20: Las Vegas, NV; “
EAR and OFAC Fundamentals: Export Control Of Dual-Use Equipment
“; Barnes & Thornburg LLP

* Sep 24: Boston, MA; “
Trade Compliance & Policy” C.H. Robinson

* Sep 24-25: Minneapolis, MN; “Complying with U.S. Export Controls“; Commerce/BIS
* Sep 24-25: San Francisco, CA; “West Coast Conference on FCPA Enforcement and Compliance“; American Conference Institute

* Sep 24-26: Los Angeles, CA; “Export Controls Specialist – Certification“; Amber Road

*
 
Sep 25: Bristol, UK; “
Classification of Goods – Using Commodity and Tariff Codes”; 
BusinessWest
* 
Sep 25: Bristol, UK; “
Incoterms® Rules 2010
“; BusinessWest
*
 
Sep 25: London, UK; “
US & UK Export Controls: A Basic Understanding
; The Institute of Export and International Trade
*
 
Sep 25: Sheffield, UK; “
Essential Incoterms – Getting it Rights
“; Sheffield Chamber of Commerce

* Sep 25-26: Amsterdam, the Netherlands; “Defence Exports Annual Conference“; SMI

* Sep 26: Amsterdam, The Netherlands; “Global Trade Management: Turning trade challenges into opportunities” Amber Road

*
 
Sep 26: Bristol, UK; “
Understanding The Paperwork
“; BusinessWest

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

#
* Oct 2-3: Toronto, Canada; “Canadian Forum on Global Economic Sanctions Compliance & Enforcement“; The Canadian Institute

* Oct 3: Chicago, IL; “
Trade Compliance & Policy” C.H. Robinson

* Oct 3: Rotterdam, the Netherlands; “Trade Compliance Congres 2019“; Sdu

* Oct 3-4: London, UK; “The WorldECR Export Controls & Sanctions Forum 2019“; WorldECR

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

* Oct 8: New York, NY; “Trade Compliance & Policy” C.H. Robinson* Oct 14-17; Columbus, OH; “
University Export Controls Seminar
“; ECTI

*
Oct 15: Singapore; “
5th Asia Pacific Summit on Economic Sanctions Compliance and Enforcement
“; 
American Conference Institute

* Oct 15-16: Washington DC; “The WorldECR Export Controls & Sanctions Forum 2019“; WorldECR
* Oct 17: Leeds, UK; “
Strategic Export Control: Foundation Workshop“; UK/DIT
* Oct 17: Leeds, UK; “
Strategic Export Control: Licenses Workshop“; UK/DIT

*
Oct 17: Sheffield, UK; “
Export Documentation – How and Why?” 
; Sheffield Chamber of Commerce

* Oct 21-25: Chicago, IL; “Certified Classification Specialist (CCLS)“; Amber Road

* Oct 22: Indianapolis, IN; “
Trade Compliance & Policy” C.H. Robinson


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

* Oct 28-31; Phoenix, AZ; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI

* Oct 29: Montreal, Canada; “
Trade Compliance & Policy” C.H. Robinson

* Oct 29-30; Tysons Corner, VA; “Conducting an internal Import/Export Audit“; Amber Road
* Oct 31: Toronto, Canada; “Trade Compliance & Policy” C.H. Robinson 

* Nov 11-14; Washington, DC; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI

* Nov 19-21: Tysons Corner, VA; “Export Controls Specialist – Certification“; Amber Road

*
 
Nov 20: Bristol, UK; “
Introduction to Export Procedures – Export Training
“; BusinessWest
*
 
Nov 21: Bristol, UK; “
A Foundation Course in Importing
“; BusinessWest

*
 
Nov 26: Bruchem, The Netherlands; “The International Traffic in Arms Regulations (EAR) from a non-U.S. Perspective“; Full Circle Compliance
* 
Nov 27: Bruchem, The Netherlands; ” The Export Administration Regulations (EAR) from a non-U.S. Perspective“; Full Circle Compliance
 
*
 
Nov 27: Manchester, UK; “
US & UK Export Controls: A Basic Understanding
“; The Institute of Export and International Trade

* Dec 2-6: Tysons Corner, VA; “Certified Classification Specialist (CCLS)“; Amber Road

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

* Dec 9-12; Miami, FL; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI

* Dec 10-11: New York, NY; ” 
10th Annual New York Forum on Economic Sanctions“; American Conference Institute

*
 Dec 12-13; Washington D.C.; “
Coping with U.S. Export Controls and Sanctions 2019
“; Practicing Law Institute
 
2020

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

* Feb 5-6; Munich, Germany; “Export Compliance in Europe Conference“; NielsonSmith

* Feb 24-26; Las Vegas, NV; “Winter Back to Basics Conference“; Society for International Affairs

* Mar 3-5; Vienna, Austria; “Lehrgang Exportkontrolle & Export Compliance“; OPWZ

 
Webinars 



#
* Jun 5: Webinar: “ITAR Compliance: Navigating Complex Risks“; Volkov Law

* Jun 6: Webinar: “China Trade Update“; Massachusetts Export Center; 617-973-6610

#
* Jun 6: Webinar: “FTZs – Unlocking Strategic Inventory Value“; 3rdWave

* Jun 10: Webinar: “
Export Controls: Key Issues and Compliance Best Practices
“; Society of Corporate Compliance and Ethics
* Jun 12: Webinar: “OFAC Sanctions Update: What the Compliance Practitioner Needs to Know“; Society of Corporate Compliance and Ethics

*
Jun 12: Webinar: “EU Export Controls“; BDP
 


* Jun 13: Webinar: “Supply Chain & Global Trade Analytics“; Amber Road

* Jul 10: Webinar: “
EAR
“; Global Training Center

#
* Jun 11: Webinar: “Exporting Mechanisms II: Export Licenses“; NCBFAA

* Jul 11: Webinar: “
ITAR
“; Global Training Center

#
* Jun 12: Webinar: “E-2 Investor Visas: What Israeli Nationals Need to Know“; Steptoe

* Jun 12: Webinar: “
EU Export Controls
“; BDP

* Jun 12: Webinar: “
OFAC Sanctions Update: What the Compliance Practitioner Needs to Know
“; Society of Corporate Compliance and Ethics

#
* Jun 12: Webinar: “The Challenges of Implementing a Global Screening Program“; Sandler, Travis & Rosenberg

* Jul 19: Webinar: “Managing Export Operations and Compliance“; Massachusetts Export Center; 617-973-6610

* Sep 25: Webinar: “
EAR
“; Global Training Center
* Sep 26: Webinar: “
ITAR
“; Global Training Center

* Oct 29: Webinar: “Key updates on export controls and sanctions“; Baker McKenzie
* Dec 17: Webinar: “Managing Emerging Compliance Risks“; Baker McKenzie
 

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

ENEDITOR’S NOTES

EN_a117
. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 

* Walt Whitman (Walter Whitman; 31 May 1819 – 26 Mar 1892; was an American poet, essayist, and journalist. A humanist, he was a part of the transition between transcendentalism and realism, incorporating both views in his works. Whitman is among the most influential poets in the American canon, often called the father of free verse.)
 
– “There is no week nor day nor hour when tyranny may not enter upon this country, if the people lose their roughness and spirit of defiance.”

Friday funnies:
* I hate Russian dolls, they’re so full of themselves!
* Throwing acid is wrong, in some people’s eyes.
* I recently decided to sell my vacuum cleaner as all it was doing was gathering dust.

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

EN_a218. 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:
24 May 2019: 84 FR 24018-24021: Revisions to Country Group Designations for Venezuela and Conforming Changes for License Requirements; and 84 FR 24021: 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 [Correction to 14 May 2019 Entity List Amendment.]    

 
*
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: 
21 May 2019: Harmonized System Update (HSU) 1908

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EN_a319
. 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; and Assistant Editors, Alex Witt and Sven Goor. The Ex/Im Daily Update is emailed every business day to approximately 7,000 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

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* 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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