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19-0626 Wednesday “Daily Bugle'”

19-0626 Wednesday “Daily Bugle”

Wednesday, 26 June 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. DHS Requests Comments Concerning Sector Outreach and Programs Online Meeting Registration Tool 
  2. President Imposes Sanctions on Iran
  3. U.S.-China Economic and Security Review Commission Announces Public Hearings in Washington DC
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. State/DDTC: (No new postings.)
  4. Treasury/OFAC: “Issuance of Amended Venezuela-related General License; Temporary Extension of Ukraine-related General Licenses
  5. DGFT Opened Call Centre in Mumbai DGFT Office
  6. Japan METI: “The 2019 Report on Compliance by Major Trading Partners with Trade Agreements (WTO, FTA/EPA and IIA) and the METI Priorities Based on the 2019 Report Released”
  1. Deutsche Welle: “German Firms Sent Weapons-Grade Chemicals to Syria Despite Sanctions”
  2. Inquirer.net: “How Import and Export Restrictions Are Already Affecting US Businesses”
  3. Reuters: “Micron Resumes Some Chip Shipments to Huawei, Boosting Stock”
  4. The Globe and Mail: “Ottawa Denied Some Military Exports to China in 2018, Citing Foreign Policy”
  1. V. Efremov & A. Bychkov: “The Russian Government Temporarily Allows Imports Certain Ukrainian Goods on the Sanctions List”
  2. G. Membiela, E. Markus & N. San Juan: “OFAC Provides Further Guidance on Reporting, Procedures and Penalties”
  3. M. Volkov “Thank You, Thank You: DOJ and SEC Resolve Walmart FCPA Enforcement Action (Part I of III)”
  1. ECTI Presents Not Your Everyday Investigation: Authorizing, Managing and Conducting Internal Investigations into Potential Violations of U.S. Export Controls and Sanctions Laws: September 10, 2019
  2. FCC Presents “Designing an ICP for Export Controls & Sanctions”, 1 Oct in Bruchem, the Netherlands
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: DHS/Customs (5 Apr 2019), DOC/EAR (5 June 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 (5 June 2018), HTSUS (13 Jun 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11. DHS Requests Comments Concerning Sector Outreach and Programs Online Meeting Registration Tool

(Source:
Federal Register, 26 June 2019.) [Excerpts.]
 
84 FR 30213-30214: Agency Information Collection Activities; Proposals, Submissions, and Approvals: Sector Outreach and Programs Online Meeting Registration Tool
 
* AGENCY: Infrastructure Security Division (ISD), Cybersecurity and
Infrastructure Security Agency (CISA), Department of Homeland Security (DHS).
* ACTION: 60-Day notice and request for comments; revision, 1670-0019.
* SUMMARY: DHS CISA ISD will submit the following information collection request (ICR) to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995.
* DATES: Comments are due by August 26, 2019.
* ADDRESSES: You may submit comments, identified by docket number CISA-2019-0004, by one of the following methods:
– Federal eRulemaking Portal:
http://www.regulations.gov. Please follow the instructions for submitting comments.
– Email:
sopd_feedback@HQ.DHS.GOV. Please include docket number CISA-2019-0004 in the subject line of the message.
– Mail: Written comments and questions about this Information Collection Request should be forwarded to DHS/CISA/ISD, ATTN: 1670-0019, 245 Murray Lane SW, Mail Stop 0608, Washington, DC 20598-0608. Instructions: All submissions received must include the words “Department of Homeland Security” and the docket number for this action. Comments received will be posted without alteration at
http://www.regulations.gov, including any personal information provided.
– Docket: For access to the docket and comments received, please go to
www.regulations.gov and enter docket number CISA-2019-0004. …
* FOR FURTHER INFORMATION CONTACT: Auco Ho, 703-603-5205,
sopd_feedback@HQ.DHS.GOV. …

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EXIM_a22. President Imposes Sanctions on Iran

(Source:
Federal Register, 26 June 2019.) [Excerpts.]
 
84 FR 30571: Executive Order 13876; Imposing Sanctions With Respect to Iran
 
… I, DONALD J. TRUMP, President of the United States of America, in order to take additional steps with respect to the national emergency declared in Executive Order 12957 of March 15, 1995, in light of the actions of the Government of Iran and Iranian-backed proxies, particularly those taken to destabilize the Middle East, promote international terrorism, and advance Iran’s ballistic missile program, and Iran’s irresponsible and provocative actions in and over
international waters, including the targeting of United States military assets and civilian vessels, hereby order:
 
Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:
 
(i) the Supreme Leader of the Islamic Republic of Iran and the Iranian Supreme Leader’s Office (SLO); or
 
(ii) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: …
 
(Presidential Sig.)

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EXIM_a33U.S.-China Economic and Security Review Commission Announces Public Hearings in Washington DC

(Source: Federal Register, 26 June 2019.) [Excerpts.]
 
* AGENCY: U.S.-China Economic and Security Review Commission.
* ACTION: Notice of open public meetings.
* SUMMARY: Notice is hereby given of meetings of the U.S.-China Economic and Security Review Commission to review and edit drafts of the 2019 Annual Report to Congress. The Commission is mandated by Congress to investigate, assess, and report to Congress annually on the “the national security implications of the economic relationship between the United States and the People’s Republic of China.” Pursuant to this mandate, the Commission will hold public meetings to review and edit drafts of the 2019 Annual Report to Congress.
* DATES: The meetings are scheduled for Thursday, July 11, 2019, from 9:00 a.m. to 5:00 p.m.; Thursday, August 1, 2019, from 9:00 a.m. to 5:00 p.m.; Thursday, September 5, 2019, from 9:00 a.m. to 5:00 p.m.; and Tuesday, October 1, 2019, from 9:00 a.m. to 5:00 p.m.
* ADDRESSES: 444 North Capitol Street NW, Room 231, Washington, DC 20001. Public seating is limited and will be available on a “first-come, first-served” basis. Reservations are not required to attend the meetings.
* FOR FURTHER INFORMATION CONTACT: Any member of the public seeking further information concerning these meetings should contact Kerry Sutherland, 444 North Capitol Street NW, Suite 602, Washington, DC 20001; telephone:202-624-1454, or via email at ksutherland@uscc.gov. Reservations are not required to attend the meetings.
 
* SUPPLEMENTARY INFORMATION: Purpose of Meeting: Pursuant to the Commission’s mandate, members of the Commission will meet to review and edit drafts of the 2019 Annual Report to Congress. The Commission is subject to the Federal Advisory Committee Act (FACA) with the enactment of the Science, State, Justice, Commerce and Related Agencies Appropriations Act, 2006 that was signed into law on November 22, 2005 (Pub. L. 109-108). In accordance with FACA, the Commission’s meetings to make decisions concerning the substance and recommendations of its 2019 Annual Report to Congress are open to the public.
   Topics To Be Discussed: Editing and review sessions will cover material prepared for the 2019 Annual Report, including: A review of economics, trade, security and foreign affairs developments in 2019; China’s internal and external challenges; artificial intelligence, new materials, and new energy; U.S. companies in China and Chinese companies in the U.S.; health and pharmaceuticals; China’s ambitions to build a world class military; China-Russia relations; China’s ambitions in space; Taiwan; Hong Kong; and changing regional dynamics. …

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OGSOTHER GOVERNMENT SOURCES

OGS_a14. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register, 26 June 2019.)

   
* Commerce/BIS; FINAL RULE; Revisions to the Unverified List
[Pub. Date: 27 June 2019.]
 
* Treasury/OFAC; RULES; North Korea Sanctions
[Pub. Date: 28 June 2019.]

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OGS_a25
.
Commerce/BIS (No new postings.)

(Source: Commerce/BIS)

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OGS_a47. Treasury/OFAC: “Issuance of Amended Venezuela-related General License; Temporary Extension of Ukraine-related General Licenses”

(Source:
Treasury/OFAC, 26 June 2019.)
 
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending Venezuela-related 
General License 13A, “Authorizing Certain Activities Involving Nynas AB” to extend its expiration date to October 25, 2019.
 
Today OFAC extended the expiration date of two general licenses related to GAZ Group by issuing 
General License No. 13L – Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in Certain Blocked Persons, and 
General License No. 15F – Authorizing Certain Activities Necessary to Maintenance or Wind Down of Operations or Existing Contracts with GAZ Group, or Certain Automotive Safety Activities.

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

OGS_a58DGFT Opened Call Centre in Mumbai DGFT Office

(Source:
Press Information Bureau, 25 June 2019.) [Excerpts.]
 
Mumbai: A call center has been set up by the Mumbai office of the Director General of Foreign Trade (DGFT) to address doubts/queries/questions of exporters and importers. General information about foreign trade policy and international trade may also be asked. A specially trained dedicated staff is in charge at the call center. Public may reach the call center on 022-20820961, 022-20820962, 022-20820963 and 022-20820927 from 10:00 am to 5:30 pm on all working days. …

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OGS_a69. Japan METI: “The 2019 Report on Compliance by Major Trading Partners with Trade Agreements (WTO, FTA/EPA and IIA) and the METI Priorities Based on the 2019 Report Released”

(Source:
METI, 26 June 2019.) [Excerpts.]
 
On June 26, 2019, the Subcommittee on Unfair Trade Policies and Measures of the Trade Committee under the Industrial Structure Council compiled the 2019 Report on Compliance by Major Trading Partners with Trade Agreements (WTO, FTA/EPA and IIA). In response, the Ministry of Economy, Trade and Industry (METI) decided to adopt the METI Priorities Based on the 2019 Report. …
 
The full report can be found
here.

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NWSNEWS

NWS_a110
. Deutsche Welle: “German Firms Sent Weapons-Grade Chemicals to Syria Despite Sanctions”

(Source:
Deutsche Welle, 25 June 2019.) [Excerpts.]
 
Despite EU restrictions, German companies were involved in exporting chemicals to Syria, a report has uncovered. The ingredients can be used to make sarin gas – a nerve agent repeatedly used in Syria’s devastating war.
 
Despite European Union sanctions, German companies were involved in exporting 
weapons-grade chemicals to Syria in the midst of the war, according to a report published on Tuesday.
 
The deals were uncovered by the 
Süddeutsche Zeitung, public broadcaster Bayerischer Rundfunk, and Switzerland’s Tamedia media group.
 
According to the report, German chemical wholesaler Brenntag AG sold the chemicals isopropanol and diethylamine to Syria in 2014 using a subsidiary in Switzerland. The recipient was a Syrian pharmaceutical company that had ties to the regime of 
President Bashar Assad. 
 
Reporters revealed that the diethylamine was produced by German chemicals giant BASF at a plant in the Belgian city of Antwerp. The isopropanol was made by Sasol Solvents Germany GmbH, located in Hamburg. …

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NWS_a211
Inquirer.net: “How Import and Export Restrictions Are Already Affecting US Businesses”

(Source:
Inquirer.net, 26 June 2019.) [Excerpts.]


 
The announcement of the lawsuit comes as Beijing and Washington face off in a trade war that has seen both sides exchange steep tariffs on hundreds of billions in exports. The US has also sought to bar Chinese telecom giant Huawei from the American market and limit its ability to purchase US technology.
 
A statement by the delivery firm said the restrictions placed “an unreasonable burden on FedEx to police the millions of shipments that transit our network every day” or face heavy fines.
 
The company said it was impossible for employees to determine “the origin and technological make-up of contents of all the shipments it handles and whether they comply with” US laws.
 
The statement was released hours after China called on FedEx to explain why a parcel from Huawei to the US went undelivered, in the second spat between the two companies in less than a month. …


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NWS_a312
Reuters: “Micron Resumes Some Chip Shipments to Huawei, Boosting Stock

(Source:
Reuters, 26 June 2019.) [Excerpts.]


 
Memory-chip maker Micron Technology Inc said it had resumed some shipments to China’s Huawei Technologies Co Ltd and still expected demand for its chips to recover later this year, sending its shares 10% late on Tuesday.
 
Micron Chief Executive Sanjay Mehrotra said the Idaho-based maker of chips for smartphones and other devices resumed shipping some chips in the past two weeks after it reviewed the U.S. ban on selling products to the China-based telecommunications company. 
 
“We determined that we could lawfully resume shipping a subset of current products because they are not subject to export administration regulations and entity list restrictions,” Mehrotra said on a conference call with investors. 
 
“However, there is considerable ongoing uncertainty surrounding the Huawei situation, and we are unable to predict the volumes or time periods over which we will be able to ship products to Huawei,” he added. …

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NWS_a413
The Globe and Mail: “Ottawa Denied Some Military Exports to China in 2018, Citing Foreign Policy”

(Source:
The Globe and Mail, 25 June 2019.) [Excerpts.]
 
For a second year running, Canada has blocked some exports of military goods to China – in almost every case, records show, because the government felt allowing them would be contrary to this country’s “foreign and defence policy.”
 
The recently released Exports of Military Goods report for 2018, published by the Department of Global Affairs, shows 5,466 permits were approved to ship military goods and technology to foreign countries. Only four export permits were outright denied, three of which were shipments destined for China. The fourth was for an export to the United Arab Emirates.
 
Similarly, in 2017, the export record for that year shows more than 5,560 export permits were approved. Only four permits were denied, three of which were for goods headed to China. The fourth permit was for exports to Iran.
 
Former Canadian ambassador to China Guy Saint-Jacques said the government has usually been vigilant in monitoring military goods and dual-use technology to China because of concerns some of the exports could be weaponized by Beijing’s military or intelligence agencies. …

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COMMCOMMENTARY

COM_a114.
V. Efremov & A. Bychkov: “Russian Government Temporarily Allows Imports of Certain Ukrainian Goods on the Sanctions List”

(Source:
BakerMcKenzie, 24 June 2019.)
 
* Authors: Vladimir Efremov, Esq.,
vladimir.efremov@bakermckenzie.com, + 7 495 787 0715, Alexander Bychkov, Esq.,
alexander.bychkov@bakermckenzie.com, + 7 495 787 2715, both of Baker McKenzie.
 
On June 20, 2019, the Russian Prime Minister signed Resolution No. 787-31, introducing changes to Governmental Decree No. 1716-83 dated December 29, 2018 that implemented an import ban with respect to Ukrainian goods (please refer to our previous blog posts of 
January 18, 2019 and 
April 23, 2019).
 
Per the changes adopted by Resolution No. 787-31:
 
1) The import ban does not apply to goods imported to complete customs procedures for processing outside the customs territory and temporary export.
 
2) The list of certain products and applicable HS codes subject to the import ban is modified.
 
3) The import ban is temporarily lifted with respect to the following products:
  
− Up to July 1, 2019: transmission shafts (HS code 8483 10 950 0), transformers with a liquid dielectric, having a power handling capacity exceeding 650 kVA but not exceeding 1600 kVA (HS code 8504 22 100 0).
  − Up to October 1, 2019: transformers with a liquid dielectric, having a power handling capacity exceeding 10 000 kVA (HS code 8504 23 000 9).
  − Up to January 1, 2020: electric motors and generators of an output exceeding 375 kW (HS code 8501 34 000 0), alternators of an output not exceeding 75 kVA (HS code 8501 61), alternators of an output exceeding 750 kVA (HS code 8501 64 000 0), transformers with a liquid dielectric, having a power handling capacity exceeding 1600 kVA but not exceeding 10 000 kVA (HS code 8504 22 900 0).
  − Up to October 1, 2021: certain types of pipe products made of steel (HS codes 7304 41 000, 7304 59).
 
Resolution No. 787-31 entered into force on June 21, 2019.

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COM_a2
15

G. Membiela, E. Markus & N. San Juan: “OFAC Provides Further Guidance on Reporting, Procedures, and Penalties” 

 
* Authors: Gustavo J. Membiela, Esq.,
gmembiela@HuntonAK.com,
+1 305 536 2688, Eric R. Markus, Esq.,
ericmarkus@HuntonAK.com, +1 202 662 2780, Natalia San Juan, Esq.,
nsanjuan@HuntonAK.com, +1 305 810 2532, all of Hunton Andrews Kurth.
 
What Happened: On June 20, 2019, the Department of Treasury’s Office of Foreign Assets Control (OFAC) issued an interim final rule to amend the Reporting, Procedures and Penalties Regulations, 31 CFR part 501 (the Regulations), which provide the standard reporting requirements, license application procedures and other procedures relevant to the economic sanctions programs administered by OFAC. This regulatory amendment took effect upon publication in the Federal Register on Friday, June 21, 2019.
 
The Bottom Line: OFAC is providing updated instructions and new requirements for parties filing reports on blocked property, unblocked property and rejected transactions; amending its licensing procedures; and clarifying the rules that govern the availability of information submitted to OFAC under federal law. Companies subject to US jurisdiction and engaging in activities related to the economic sanctions administered by OFAC should familiarize themselves with this regulatory amendment to ensure compliance with OFAC procedures, reduce the need for OFAC follow-up requests and diminish the burden imposed by the reporting requirements overall.
 
The Full Story
 
On June 20, 2019, OFAC issued an interim final rule amending the Regulations that set forth the standard reporting requirements, license application procedures and other procedures relevant to the economic sanctions programs it administers. With this rule, OFAC is revising the reporting instructions and requirements for blocked property, unblocked property and rejected transactions; updating its licensing procedures; and clarifying the rules governing the availability of information under the Freedom of Information Act (FOIA).
 
Through these amendments, OFAC has incorporated greater detail as to the information it requires in connection with initial blocking reports, annual reports and reports on property that is unblocked. According to OFAC, the purpose of this revision is to ensure that all submitters have a list of all required information, reducing the need to request follow-up information. Such required information includes the name and address of the person holding the blocked property; the associated sanctions target(s) whose property is blocked; the date the property was blocked or unblocked; a description of the property and its location; the value of the property in US dollars; and the legal authority under which the property is blocked. In addition to clarifying the information required in connection with these reports, OFAC’s revisions also allow for the submission of these reports by email, US mail or any other official reporting option, as specified on OFAC’s website, and explain that any information submitted to OFAC is subject to the FOIA and will be released upon a valid request.
 
The amended regulations also provide greater clarity as to the scope of the transactions to be reported and technical aspects of the reporting requirements. In regard to reports on rejected transactions, for example, the revisions clarify that OFAC’s reporting requirements apply to not only rejected fund transfers but also all rejected transactions including wire transfers, securities, foreign exchange and goods or services. Similarly, in regard to reports to be furnished on demand, the revisions add that any person providing documents to OFAC pursuant to this section must produce the documents in a usable format agreed upon by OFAC. As part of this revision, OFAC provides guidance regarding the definition of the term “document” for purposes of this section and references newly updated guidance on what it considers a usable format.
 
In addition to allowing the electronic submission of reports, the revisions include information concerning OFAC’s electronic license application procedures, requiring that applications for specific licenses to engage in otherwise prohibited transactions pursuant to OFAC’s sanctions programs or 31 CFR chapter V be filed through OFAC’s Reporting and License Application Forms page or by mail. Persons submitting applications for the unblocking of funds must also submit through one of these means.

Lastly, the amended regulations adjust the penalties for willful violations of the Trading with the Enemy Act, in accordance with Section 107(a)(4) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010.
 
Companies subject to US jurisdiction and engaging in activities related to the economic sanctions administered by OFAC should familiarize themselves with OFAC’s amended regulations in order to comply with and lessen the burden imposed by OFAC’s procedures and requirements.

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COM_a3
16
. M. Volkov “Thank You, Thank You: DOJ and SEC Resolve Walmart FCPA Enforcement Action (Part I of III)”

(Source:
Volkov Law Group Blog. Reprinted by permission.)


* Author: Michael Volkov, Esq., Volkov Law Group,
mvolkov@volkovlaw.com, 240-505-1992.
 

“Our long national nightmare is over.” – President Gerald Ford, August 9, 1974

So, $900 million and roughly 8 years later, DOJ and the SEC announced the end of the Walmart FCPA enforcement action.  (DOJ Here and SEC Here). The Walmart scandal, which was first reported in the New York Times, was a watershed moment in anti-corruption enforcement.  It marked a real turning point in public awareness, media focus and government attention to global corruption and the importance of FCPA enforcement and compliance.  For that, everyone should mark this down as a significant moment.

On the other side of the scale, 8 years and $900 million in investigative and remediation expenses is not a testament to good government, good governance or proper public policy considerations.  Frankly, there is no excuse for the length of time this investigation and settlement took.  At some point, delay means denial of justice and it is unfair to participants, stakeholders, and ultimately the public interest.  Some explanation is required.  

At least one thing was accomplished, all the FCPA prognosticators can take the Wal-Mart case off their respective prediction lists starting in 2014 to 2019 predictions.

For Walmart, the end is bittersweet.  Walmart demonstrated perhaps one of the finest remediation efforts by a global company in building and enhancing its ethics and compliance program.  The professionals dedicated to this effort should be proud of their achievements, especially in turning around such a large ship as Walmart.

Notwithstanding this extraordinary remediation effort, however, Walmart was stuck with a two-year monitor – an interesting last twist to the story – somehow, DOJ did not fully credit this program for future operation and insisted on a two-year monitor.

The final settlement contains a number of surprising factors and considerations that raise some real issues as to whether Walmart’s cooperation may have been less than exemplary.  There must be an interesting back story behind this issue.

As Warner Wolf, the great sportscaster from our youth would say, “Let’s go to the numbers.”  In total, Walmart agreed to pay approximately $282 million, divided as follows: (1) $138 combined criminal penalty under the terms of a three-year non-prosecution agreement; and (2) $144 million disgorgement pursuant to an agreement with the SEC.  Walmart’s Brazil subsidiary entered a guilty plea to one count of violating books and records in the Eastern District of Virginia.

Under the FCPA Corporate Enforcement Policy, Walm did not receive voluntary disclosure credit because it did not timely and voluntarily disclose to DOJ the Mexico conduct, and although Walm disclosed the conduct related to Brazil, China and India prior to DOJ learning of that conduct, such disclosure was after DOJ had launched the Mexico investigation.

Walmart received full credit for its cooperation with DOJ in Brazil, China and India, but only partial credit for its cooperation in Mexico because Walmart did not timely provide documents and information to DOJ in response to certain requests, and Walmart interviewed a specific witness despite DOJ’s request that it interview the witness prior to Walmart doing so.  

Walmart was credited for its “significant remedial measures,” including: (1) hiring a Global Chief Ethics & Compliance Officer (“CECO”) who holds an Executive Vice President position, an International Chief Ethics & Compliance Officer (“International CECO”), and a dedicated Global Anti-Corruption Officer, with separate reporting lines to the Audit Committee of the Board of Directors; (2) adding dedicated regional and market Chief Ethics & Compliance Officers, foreign market anti-corruption directors and anti-corruption compliance personnel at the Company’s home office and in the Company’s foreign markets, with separate reporting lines to the Audit Committee of the Board of Directors; (3) conducting, across each of the Company’s markets, enhanced monthly and quarterly anti-corruption monitoring by dedicated Company Financial Controls and Continuous Improvement Teams (who monitor at the store-level), with results tracked in a centralized, real-time automated monitoring system; (4) enhancing annual anti-corruption risk assessments across all international markets; (5) enhancing on-site global anti-corruption audits to test adherence to enhanced anti-corruption related internal accounting controls and procedures; (6) enhancing anti-corruption related internal accounting controls on the selection and use of third parties, including building a custom third party automated portal to evaluate, manage and identify third party intermediaries and conducting third party audits and risk-based anti-corruption training of third parties; (7) enhancing global anti-corruption training and awareness program, including enhanced onboarding and annual in-person and computer-based anti-corruption training for directors, senior management, and employees most likely to interact directly or indirectly with government officials; (8) implementing an automated global license management system for obtaining and renewing licenses and permits and a global donation management system, which enhances controls relating to charitable donations; and (9) terminating business relationships with third parties involved in the conduct at issue.

Despite these enhancements, as noted above DOJ determined that a monitor should be appointed for two years to ensure the effectiveness of Walmart’s enhanced ethics and compliance program.

In calculating the criminal penalty, DOJ only credited Walmart with a 20 percent reduction off the bottom of the Sentencing Guideline range for the portion of the penalty applicable to conduct in Mexico and 25 percent for the portion applicable to the conduct in Brazil, China and India.

 
back to top 

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a117. ECTI Presents “Not Your Everyday Investigation: Authorizing, Managing and Conducting Internal Investigations into Potential Violations of U.S. Export Controls and Sanctions Laws: September 10, 2019″

(Source: Danielle Hatch, 
danielle@learnexportcompliance.com
)
 
* WhatNot Your Everyday Investigation: Authorizing, Managing and Conducting Internal Investigations into Potential Violations of U.S. Export Controls and Sanctions Laws
* When: September 10, 2019 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Timothy O’Toole

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

TE_a218. FCC Presents “Designing an ICP for Export Controls & Sanctions”, 1 Oct in Bruchem, the Netherlands

 
This training course is designed for compliance officers, managers, and other professionals who aim to enhance their organization’s compliance efforts. The course will cover multiple topics and tackle various key questions, including but not limited to:
– Setting the Scene: ensuring compliance in the export control and sanctions arena
– What is expected from your organization? A closer look at the official frameworks and guidelines from U.S. and European government agencies
– Key elements of an ICP
– Best practice tips for enhancing your current compliance efforts  
– Internal controls samples (policies, procedures, instructions)
– Strategic benefits of having an ICP.
* What: Designing an Internal Compliance Program (ICP) for Export Controls & Sanctions
* Date: Tuesday, 1 Oct 2019
* Location: Full Circle Compliance, Landgoed Groenhoven, Dorpsstraat 6, Bruchem, The Netherlands
* Times:
  – Registration and welcome: 9.00 am – 9.30 am
  – Training course hours: 9.30 am – 4.30 pm
* Level: Intermediate
* Target Audience:  the course provides valuable insights for both compliance professionals, employees and (senior / middle) management working in any industry subject to U.S. and/or EU (member state) export control laws and sanctions regulations.
* Instructors: Drs. Ghislaine C.Y. Gillessen RA and Marco M. Crombach MSc.
* Information & Registration: click
here or contact us at 
events@fullcirclecompliance.eu or 31 (0)23 – 844 – 9046.  

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ENEDITOR’S NOTES

 
* Pearl S. Buck (Pearl Sydenstricker Buck; 26 Jun 1892 – 6 Mar 1973; was an American writer and novelist. As the daughter of missionaries, Buck spent most of her life before 1934 in Zhenjiang, China. Her novel The Good Earth was the best-selling fiction book in the United States in 1931 and 1932 and won the Pulitzer Prize in 1932. In 1938, she was awarded the Nobel Prize in Literature “for her rich and truly epic descriptions of peasant life in China and for her biographical masterpieces.”  She was the first American woman to win the Nobel Prize for Literature.”
 – “The secret of joy in work is contained in one word — excellence. To know how to do something well is to enjoy it.”

* Lord Kelvin (William Thomson, 1st Baron Kelvin; 26 Jun 1824 – 17 Dec 1907; was an Ulster Scots Irish mathematical physicist and engineer.  Absolute temperatures are stated in units of kelvin in his honor.  While the existence of a lower limit to temperature (absolute zero) was known prior to his work, Lord Kelvin is known for determining its correct value as approximately −273.15 degrees Celsius or −459.67 degrees Fahrenheit.)
  – “Large increases in cost with questionable increases in performance can be tolerated only in race horses and women.”
  – “In science there is only physics; all the rest is stamp collecting.”

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EN_a320
. 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: 5 June 2019: 
84 FR 25986-25989
: Restricting the Temporary Sojourn of Aircraft and Vessels to Cuba


 
* 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: 5 June 2019: 84 FR 25992 – June 2019 Amendments to the Cuban Assets Control Regulations [amendment of 31 CFR Part 515] 

  

* 
USITC HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA)
, 1 Jan 2019: 19 USC 1202 Annex. Implemented by U.S. International Trade Commission. (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment: 13 June 2019: 
Harmonized System Update (HSU) 1911 


  – HTS codes for AES are available here.

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

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EN_a0321
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; and Assistant Editors, Alexander 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 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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