;

19-0627 Thursday “Daily Bugle'”

19-0627 Thursday “Daily Bugle”

Thursday, 27 June 2019

TOP
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 

inquiries and rates
.

  1. Commerce/BIS Amends Unverified List, Correcting One Entry and Removing Eight Entries
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP: “Changes to CSMS Messaging”
  4. DHS/CBP Releases Harmonized System Update (HSU)
  5. State/DDTC: (No new postings.)
  6. U.S. Senate Committee on Foreign Relations: “Saudi Arabia False Emergencies Act Approved by Senate Foreign Relations Committee”
  7. Canada TID: “Arms Trade Treaty Regulatory Implementation Package”
  8. EU Council Prolongs Economic Sanctions on Russia by Six Months
  9. UK ECJU Updates Guidance Concerning Licences and Special Rules for Exporting Chemicals
  1. Deutsche Welle: “German-Iranian Trade Dwindles to a Trickle”
  2. Military & Aerospace Electronics: “Meeting DFARS and NIST Regulations for Military Applications, not just a Check Box for Trusted Computing”
  3. Reuters: “China Opposes U.S. Abuse of Export Control, Urges Cooperation”
  4. ST&R Trade Report: “Export Controls, Enforcement Among New Items on DOC Regulatory Schedule”
  1. P. Ditté: “Smart With Sanctions Lists”
  2. Export Compliance Journal: “Expedia’s Voluntary Self Disclosure of OFAC Sanctions Violations Leads to Reduced Penalties”
  3. E. Geranmayeh & M. Lafont Rapnouil: “Meeting the Challenge of Secondary Sanctions”
  4. M. Volkov: “Walmart’s Recipe for Corruption Disaster: Rapid International Growth without a Compliance Program Foundation (Part II of III)”
  5. E. Wernick & M. Howell: “DOJ Employs Aggressive Tactics to Win 5th Straight Trial Victory, Highlighting the Risks for Executives in FCPA Cases”
  1. ECTI Presents Not Your Everyday Investigation: Authorizing, Managing and Conducting Internal Investigations into Potential Violations of U.S. Export Controls and Sanctions
  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 (27 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 (26 Jun 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11. Commerce/BIS Amends Unverified List, Correcting One Entry and Removing Eight Entries

(Source:
Federal Register, 27 June 2019.) [Excerpts.]
 
84 FR 30593-30595: Revisions to the Unverified List
 
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by removing eight (8) persons from the Unverified List (“UVL”) and correcting the name for one (1) person currently listed on the UVL. The eight persons are removed from the UVL on the basis that BIS was able to verify their bona fides because of an end-use check.
* DATES: This rule is effective: June 27, 2019.
* FOR FURTHER INFORMATION CONTACT: Kevin Kurland, Director, Office of Enforcement Analysis, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-4255 or by email at
UVLRequest@bis.doc.gov.
* SUPPLEMENTARY INFORMATION: …

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

OGSOTHER GOVERNMENT SOURCES

OGS_a12. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register, 27 June 2019.)

   
* Treasury/OFAC; NOTICES; Blocking or Unblocking of Persons and Properties
[Pub. Date, 28 June 2019.]
 
* USTR; NOTICES; Annual Review of Country Eligibility for Benefits under the African Growth and Opportunity Act
[Pub. Date, 28 June 2019.]

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

OGS_a23
.
Commerce/BIS (No new postings.)

(Source: Commerce/BIS)

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

OGS_a34. DHS/CBP: “Changes to CSMS Messaging”

(Source:
DHS/CBP, 26 June 2019.)
 
Created in the 1990s, the Cargo Systems Messaging Service, or CSMS, was developed by CBP to provide timely service messages to automated cargo systems users as well as courtesy messages on related trade processing information.  Recently, due to the aging technology currently in use, the CSMS messaging service has become increasingly unstable and poses a risk to CBP’s ability to send timely messaging on issues affecting the systems users.  After looking into several options for modernizing the technology, CBP’s Trade Transformation Office identified a solution that will ensure dependable service. The new technology platform will provide additional benefits, such as the elimination of duplicative messages, improved messaging formats, the ability to embed hyperlinks into messages, etc. CBP will transition to this new technology for issuing CSMS messages on 
July 1, 2019. Overall impacts to end users will be minimal. Here’s what you need to know about the transition: 
 
Notice anything different?
 
One of the benefits of the transition is the improved formatting that will be applied to messages. In fact, this message was sent from the new CSMS platform and demonstrates some of the enhanced formatting capabilities that you can expect to see in future CSMS messages.  We anticipate these improvements, like bold text, hyperlinks, bulleting, etc., will help recipients find pertinent information more quickly than can be done with messages sent via the current technology. 
 
Do I need to re-subscribe and will I receive a message for each subscription group?
 
No. Current recipients of CSMS messages will not be required to re-subscribe as part of this transition; all existing subscriptions will be maintained.
As you know, under the current CSMS platform, subscribing to multiple groups means that users receive multiple messages. With the updated platform, 
users will only receive one version of the message, regardless of how many groups to which they may be subscribed.
 
Will CSMS messages still be available on CBP.gov?
 
Yes. To review CSMS messages following the transition, users will navigate to the 
new CSMS webpage. This page has been created in advance of the transition so that users may familiarize themselves with the new structure for viewing and searching posted messages. Users will find links to the previous 100 messages directly on the new CSMS webpage. To access older messages, users should:
1     Open the file located at bottom of the page;
2     Search (Ctrl+F) for messages by CSMS number, title, or date.
 
Please note that the 
legacy CSMS webpage will continue to be updated through June 30, 2019. After that time, all new messages will be found through the 
new CSMS webpage. The legacy CSMS webpage will remain available for reference until September 30, 2019. On October 1, 2019, the legacy CSMS webpage will be shut down and access to the CSMS archive will only be available through the new CSMS webpage.
More information regarding how to access the archives can be found in the attached New CSMS Page information sheet.
 
Will CSMS messages continue to be numbered?
 
Yes. Although the sequencing will be different under the new platform, CSMS messages will continue to be labeled with an associated number to assist with referencing and identification of messages.  
 
What if I’m current receiving SMS (text) messages?
As part of this transition, we will discontinue the use of SMS messaging to phone numbers. Please make sure you are signed up to receive all updates via email.

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

OGS_a45. DHS/CBP Releases Harmonized System Update (HSU)

(Source:
CSMS# 19-000328, 26 June 2019.)
 
Harmonized System Update (HSU) 1912 was created on June 26, 2019 and contains 994 ABI records and 239 harmonized tariff records.

Staged rate duty reductions as a result of Presidential Proclamation 9466, To Implement the World Trade Organization Declaration on the Expansion of Trade in Information Technology Products and For Other 

Purposes are incorporated. The Proclamation can be accessed using the link below.

https://www.gpo.gov/fdsys/pkg/FR-2016-07-06/pdf/2016-16174.pdf

Modifications also include those mandated by the 484 F Committee, the Committee for Statistical Annotation of Tariff Schedules. These changes are effective on July 1, 2019.  

Adjustments required by the verification of the 2019 Harmonized Tariff Schedule (HTS)are included as well.

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

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

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

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

OGS_a67. U.S. Senate Committee on Foreign Relations: “Saudi Arabia False Emergencies Act Approved by Senate Foreign Relations Committee”

 
WASHINGTON – U.S. Senators Bob Menendez (D-N.J.), Ranking Member of the Senate Foreign Relations Committee, Lindsey Graham (R-S.C.), Patrick Leahy (D-Vt.), Rand Paul (R-Ky.), and Chris Murphy (D-Conn.) issued the following statement after the Senate Foreign Relations Committee approved their bipartisan legislation limiting the ability of the President to skip Congressional approval of proposed arms sales by invoking an “emergency.”
 
The Saudi Arabia False Emergencies (SAFE) Act restricts the circumstances under which the existing emergency authorities in the Arms Export Control Act (AECA) can be used to waive the requirement of Congressional review and possible disapproval before export licenses and authorizations can be issued by the State Department.  Secretary of State Pompeo recently abused these authorities to enable 22 arms sales to Saudi Arabia and the United Arab Emirates (UAE) by claiming a generic emergency threat from Iran. Today’s approval comes after the Senate in response 
passed 22 separate joint resolutions of disapproval last week, blocking the Trump Administration from moving forward with any of those proposed sales.
 
“As the Senate already confirmed on a bipartisan basis, the Administration’s ’emergency’ argument to jam through eight billion dollars’ worth of arms sales to Saudi Arabia and the United Arab Emirates without Congressional approval simply does not pass muster. In approving this legislation, the Committee is taking another leap forward in creating further accountability against any abuses of this nature and standing up for congressional oversight,” said Senator Menendez. “The emergency provisions in the Arms Export Control Act should be used only for real emergencies and as rare exceptions for our closest allies for whom we can vouch for. Congress is a co-equal branch of government and I am proud to be joined by my colleagues in once again asserting our institutional prerogative.”
 
“This bill is a prudent and timely response to Secretary Pompeo’s flagrant misuse of the emergency exception in order to circumvent congressional review of arms sales to Saudi Arabia,” said Senator Leahy. “If the State Department cannot be trusted to apply the law as intended and that previous administrations respected, we have no choice but to take action to reaffirm the balance between the legislative and executive branches of government on such a critical issue as this.”
 
“Manufacturing emergencies to bypass Congress is the president’s tool du jour to achieve his policy goals without oversight,” said Senator Murphy. “We saw him do it when he went to build his border wall and we saw him do it with the recent arms sale to Saudi Arabia. Congress needs to reassert our constitutional authority by preventing this administration from bypassing Congress to sell weapons to partners that act contrary to our values and interests. Chopping up U.S. residents and torturing others should not be rewarded. What the president is doing runs contrary to our Founding Fathers’ vision and we must exercise congressional oversight to ensure our actions abroad align with values at home-full stop.”

The SAFE Act restricts the existing emergency authorities in the Arms Export Control Act (AECA) to be available only for our closest security treaty allies and security partner countries – NATO countries and Australia, Israel, Japan, South Korea and New Zealand (“NATO+5”).  Further, such authorities will only be available for arms and services that directly respond to or counter a physical threat, and three-quarter’s of which can be delivered within 2 months. The legislation also requires the President to issue an individual determination and detailed justification for each arms sale involved, which is already implicit in the AECA.
 
A copy of the legislation can be found 
here
.

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

OGS_a78Canada TID: “Arms Trade Treaty Regulatory Implementation Package”

(Source:
Canada TID, 27 June 2019.)
 
The Canada Trade Controls Bureau (TID) has published the following update on its website:
 
The Government of Canada has finalized the legislative and regulatory process to enable Canada to join the Arms Trade Treaty (ATT). 
Canada deposited its instrument of accession to the ATT on June 19, 2019, and will formally become a State Party on September 17, 2019.
 
The required legislative amendments to the 
Export and Import Permits Act, to establish controls over the brokering of military items and to incorporate the assessment criteria set out in the ATT, were adopted when Bill C-47 was granted Royal Assent on December 13, 2018.
 
Global Affairs Canada subsequently consulted Canadians on an accompanying regulatory framework and drafted a package of six regulations to fully implement Canada’s obligations under the ATT and Bill C-47. These regulations were pre-published in the 
Canada Gazette, Part I, for 30 days from March 16 to April 15, 2019. Global Affairs Canada carefully reviewed all submissions received during this public consultation period and amended the regulations accordingly.
 
On June 26, 2019, the package of final regulations was published in the 
Canada Gazette, Part II. These regulations, along with their corresponding Regulatory Impact Analysis Statements, can be viewed through the links provided below: 

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

OGS_a89EU Council Prolongs Economic Sanctions on Russia by Six Months

 
On 27 June 2019, the Council prolonged economic sanctions targeting specific sectors of the Russian economy until 31 January 2020.
 
This decision follows an update from Chancellor Merkel and President Macron to the European Council of 20-21 June 2019 on the state of implementation of the Minsk Agreements, to which the decision as to maintain the sanctions is linked.
 
Following this update, the European Council called for an urgent resumption of negotiating efforts with a view to the implementation of the Minsk Agreements and for measures aimed at rebuilding confidence among the parties. In this context, EU leaders unanimously agreed to maintain the economic sanctions on Russia. The Council formalised this decision today by written procedure.  
 
The measures target the financial, energy and defence sectors, and the area of dual-use goods. They were originally introduced on 31 July 2014 for one year in response to Russia’s actions destabilising the situation in Ukraine and strengthened in September 2014.
 
The economic sanctions prolonged by this decision include:
– limiting access to EU primary and secondary capital markets for 5 major Russian majority state-owned financial institutions and their majority-owned subsidiaries established outside of the EU, as well as three major Russian energy and three defence companies
– imposing an export and import ban on trade in arms
– establishing an export ban for dual-use goods for military use or military end users in Russia
– curtailing Russian access to certain sensitive technologies and services that can be used for oil production and exploration
 
In addition to these economic sanctions, several EU measures are also in place in response to the crisis in Ukraine including:  
– targeted individual restrictive measures, namely a visa ban and an asset freeze currently against 170 individuals and 44 entities, in force until 15 September 2019;
– restrictive measures in response to the illegal annexation of Crimea and Sevastopol, limited to the territory of Crimea and Sevastopol, in force until 23 June 2020.
 
The duration of the economic sanctions was linked by the European Council on 19 March 2015 to the complete implementation of the Minsk Agreements, which was foreseen to take place by 31 December 2015. Since this did not happen, the sanctions have remained in place.
 

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

OGS_a910UK ECJU Updates Guidance Concerning Licences and Special Rules for Exporting Chemicals  

(Source:
UK ECJU, 26 June 2019.)
 
The UK Export Control Joint Unit (ECJU) within the Department of International Trade (TID) has published the following update on its website concerning Licences and Special Rules for exporting chemicals.
 
The updated guidance document can be found
here.

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

NWSNEWS

NWS_a111
. Deutsche Welle: “German-Iranian Trade Dwindles to a Trickle”

(Source:
Deutsche Welle, 27 June 2019.) [Excerpts.]
 
Business ties between Germany and Iran have suffered a major setback in recent months. US sanctions against Tehran are ratcheting up pressure on German companies, which have found it hard to stand their ground in Iran.
 
The United States’ clampdown on Iran has had a major impact on trade relations between Germany and the Middle East country.
 
According to the Association of German Chambers of Industry and Commerce (DIHK), German exports to Iran plummeted by 50% in the first quarter of this year, compared with the same period in 2018. Shipments to Iran amounted to €339 million ($385 million) in the first three months of this year.
 
In 2018, the main German export items were machinery, mechanical devices as well as pharmaceutical and electrical products, 
but trade flows have been crippled. …

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

NWS_a212
Military & Aerospace Electronics: “Meeting DFARS and NIST Regulations for Military Applications, not just a Check-Box for Trusted Computing”

(Source:
Military and Aerospace Electronics, 26 June 2019.)
 
Clicking the “COMPLY” check box on the list of government requirement flow-downs may seem like a necessary evil of being a supplier to the defense market, but some regulations around information and cybersecurity provide the critical foundations of a 
trusted computing supply chain.
 
Cyber and information warfare are the hottest and possibly most contested battlefields in the race for military dominance. Case in point, the U.S. Navy recently changed the name of Space and Naval Warfare Systems Command (SPAWAR) to the Naval Information Warfare Systems Command (NAVWAR), in recognition of how important information warfare to defense strategy.
 
Similarly, earlier this year, the U.S. Army, announced the evolution of its Cyber Command into the Information Warfare Command, and the U.S. Air Force announced the merger of the 24th Air Force (Air Forces Cyber) and the 25th Air Force, to create a new information warfare focused command.
 
By all indicators, information currently sits near the top of the food chain of assets requiring protection. To that end, the U.S. Department of Defense (DOD) upped the ante on 
regulations around what types of information need protection and how much suppliers must protect that information.
 
The Defense Federal Acquisition Regulation Supplement (DFARS) 252.204-7012, published in October 2016, and the National Institute of Standards and Technology Special Publication (NIST SP) 800-171 Revision 1, originally published December 2016 and updated in February 2018, are two such regulations.
 
DFARS 252.204-712, “Safeguarding Covered Defense Information and Cyber Incident Reporting,” was designed to protect controlled unclassified information, such as information marked as ITAR (International Traffic in Arms Regulations), EAR (Export Administration Regulations) and FOUO (For Official Use Only).
 
It covers information technology (IT) cybersecurity from company-owned assets to cloud computing, but possibly more importantly it mandates 
compliance with NIST 800-171, “Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations.”
 
NIST 800-171 contains 110 unique requirements across 14 categories of information control, which contractors must be compliant with to ensure sufficient safeguards are in place to protect controlled unclassified information against cyberattacks. To emphasize the importance of these regulations, the DOD put a deadline for implementation of 31 Dec. 2017.
 
Of course, 31 Dec. 2017 has come and gone, so all government contractors comply by now, right? Well, not exactly, but to answer that question accurately, we first must understand what “compliance” really means.
 
Contractors would be considered compliant if able to demonstrate how they met all 110 controls within NIST SP 800-171 in a documented “system security plan,” OR that they had a “plan of action and milestones” in place to meet all control requirements at some moment in the future.
 
Moreover, “complete” was defined as having followed their plan and satisfactorily demonstrated compliance with all controls. Also of note, adherence to requirements would be based on self-assessment. As we approach the three-year mark since issuance of the original DFARS clause, it appears defense contractors are still struggling to meet these standards.
 
A report issued last month by Sera-Brynn, a cybersecurity compliance firm and certified auditor, noted that on average, companies assessed had only implemented 39 percent of required security controls. Perhaps even more concerning, the report refers to a survey conducted by the National Defense Industrial Association, which found that less than 60 percent of respondents had even read the cybersecurity clause.
 
Clearly the industry has found these regulations challenging to understand, assuming they bothered to read them, and even more challenging to successfully implement. So if the implementation deadline has come and gone and everyone is in the same boat, what’s the sense of urgency for completely implementing all NIST SP 800-171 controls?
 
Well first and foremost, we are clearly under attack and per the 2018 MITRE study, “Deliver Uncompromised,” supply chain, cyber-IT, cyber-physical and human domain are the four primary attack vectors. The controls outlined in NIST are an essential component of the DOD’s strategy to address these threats and protect critical information, protect warfighters and ultimately protect the U.S. and their allies.
 
Secondly, weak controls throughout the supply chain, already have led to a multitude of security breaches with varying degrees of consequences, so there is a growing sense of urgency, as evidenced in a memorandum from the Secretary of the Navy, Richard V. Spencer, calling for a cybersecurity review.
 
Spencer writes “Securing the Navy’s Cyberspace domain is one of my highest priorities…” and indicates “Complacency and an unwillingness to confront this challenge are not an option.” And as if that weren’t enough, when implemented effectively, these controls not only protect sensitive defense information, they protect precious corporate information and intellectual property.
 
For companies where security and trust are a core competency and a key differentiator, like all companies involved in delivering trusted computing solutions, not just understanding, but embracing NIST SP 800-171 should be a top priority. This has been the case for a vital few, such as Mercury Systems, which jumped on the DFARS/NIST train as soon as it hit the tracks.
 
To understand and address these requirements properly, Mercury assembled a cross-functional team with dedicated resources to assess their existing security controls against NIST regulations, put an architecture and plan in place which was aligned to the cyber kill chain, and executed that plan to achieve compliance by the mandated 31 December 2017 deadline and “completeness” by mid-2018. That said, success came at a steep price, with a host of new systems, processes, security protocols and training implemented over a nearly two-year period.
 
Meeting NIST may be tough, but so is the DOD
 
There are an elite set of suppliers who have completely implemented their compliance programs and an even smaller set that have had their compliance validated through an independent agency assessment. This will not be the case for much longer as the DOD is moving toward stricter enforcement of the standards and intends to begin scoring contractors on their compliance by 2020, according to a recent Navy report.
 
Many primes are taking heed and working with their key suppliers to achieve and certify compliance before these heavier mandates hit. These regulations may seem complex and arduous, but they are designed to address an increasingly complex and sophisticated threat and thus must be taken to heart to fulfill the promise of a trusted computing supplier.

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

NWS_a313
. Reuters: “China Opposes U.S. Abuse of Export Control, Urges Cooperation”

(Source:
Reuters, 27 June 2019.) [Excerpts.]


 
China opposes U.S. abuse of export controls and urges the United States to return to a track of cooperation, a commerce ministry spokesman said on Thursday, days before the two countries’ leaders are set to meet for talks on trade issues.
 
The United States must immediately cancel sanctions on Chinese telecoms equipment maker Huawei, said Gao Feng, the spokesman. 
 
On Wednesday, U.S. President Donald Trump said a trade deal with Chinese President Xi Jinping was possible this weekend when the two meet at a summit of leaders of Group of nations (G20) in Japan, but he was prepared to impose tariffs on virtually all remaining Chinese imports if disagreement persisted. 
 
Trump has suggested that Huawei could be part of a deal. …

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

NWS_a4
14
ST&R Trade Report: “Export Controls, Enforcement Among New Items on DOC Regulatory Schedule”

(Source: 
Sandler, Travis & Rosenberg Trade Report, 27 June 2019.)
 
Tighter controls on exports of specific products and to particular countries, as well as updated export enforcement provisions, are among the new items on the Department of Commerce’s most recent semiannual regulatory agenda. This document lists the following regulations affecting international trade that could be issued within the next year as well as rulemaking proceedings that have been in process for some time and are not as likely to see further progress in the near term. The expected timeframes for issuance of the rules are indicated in parentheses.
 
Upcoming Regulations
 
– an advance notice of proposed rulemaking on allowing for electronic service in antidumping and countervailing duty proceedings via the ACCESS system (June 2019; first time published)
– an ANPR on potential export controls on quantum computers (June 2019; first time published)
– a proposed rule to modify certain export license exceptions (June 2019; first time published)
– a proposed rule on the effects of adding to the Commerce Control List an export control on computer forensic systems, equipment, components, and related development, production, and use software (June 2019; first time published)
– a final rule eliminating the regulation describing how the DOC will issue licenses for the allocation of tariff-rate quotas on worsted wool fabric, as the underlying program has been transferred to the Department of Agriculture (June 2019; previously November 2018)
– a final rule to eliminate the regulation describing how the DOC will determine whether applicants are bona fide motor vehicle manufacturers under the Automotive Products Trade Act of 1965, as the authority for this regulation is no longer part of the U.S. tariff schedule (June 2019; previously November 2018)
– a final rule to establish a voluntary trusted trader program for seafood importers that aims to provide benefits such as reduced targeting and inspections and enhanced streamlined entry (June 2019, previously November 2018; 
proposed rule published January 2018)
– a proposed rule to require review of certain technology transfers that would not otherwise require licenses according to the Commerce Control List (June 2019; previously March)
– an ANPR on criteria for reviewing certain foundational technologies pursuant to applicable sections of the Export Control Reform Act of 2018 (July 2019; first time published)
– a proposed rule to remove the availability of license exceptions STA (strategic trade authorization) and TSR(technology and software restricted) for certain items (July 2019; first time published)
– a final rule establishing a general policy of denial for license applications for exports, reexports, or transfers (in-country) of items controlled for national security reasons to Russia, with certain exceptions (July 2019; first time published)
– a final rule providing that export or reexport license applications for items controlled for national security reasons may be reviewed for human rights concerns (July 2019; first time published)
– a final rule aligning the enforcement provisions of the Export Administration Regulations with the Export Control Reform Act of 2018, including revising penalty guidelines and enforcement authority (July 2019; first time published)
– a final rule clarifying the availability of license exception STA for exports, reexports, and transfers (in-country) of certain items under the EAR (July 2019; previously November 2018)
– a proposed rule on the definition of a routed export transaction and the responsibilities of parties in such transactions (July 2019, previously February; 
advance notice of proposed rulemaking issued in October 2017)
– a proposed rule to expand license requirements on exports, reexports, and transfers (in-country) of items intended for military end-use or military end-users in China, Russia, or Venezuela (July 2019; previously February)
– a proposed rule setting forth procedures to address covered merchandise referrals from U.S. Customs and Border Protection (September 2019; previously December 2018)
– a proposed rule on export controls for cybersecurity items (October 2019; previously November 2018)
– a proposed rule to clarify that for all entries subject to AD duties the importer must file its reimbursement certification in either proper electronic form or paper form in accordance with CBP requirements (December 2019; previously December 2018)
– a final rule specifying that where the exporting country does not constitute a viable market the DOC will normally calculate normal value based on constructed value (December 2019, previously December 2018; 
proposed rule published in August 2016)
– a proposed rule to eliminate references to (a) information provided by domestic interested parties regarding sales made below the cost of production in order to allege dumping and (b) allow the DOC’s use of voluntarily submitted information to calculate constructed value (December 2019; previously December 2018)
– a proposed rule that would align DOC regulations with the Trade Preferences Extension Act of 2015, which provides that the DOC shall not be required to corroborate any dumping margin or CV duty applied in a separate segment of the same proceeding (December 2019; previously December 2018)
– a proposed rule to amend certain 600 series ECCNs to clarify the controls on items related to military vehicles, vessels of war, submersible vessels, oceanographic equipment, and auxiliary and miscellaneous military equipment (December 2019; previously February)
 
Regulations in Process
– a final rule establishing time limits for the submission of requests for sampling in administrative reviews of AD duty orders (proposed rule issued November 2013)
– a proposed rule to adopt an export licensing amendment process and make other licensing process efficiencies
– a final rule that (a) clarifies the parties’ responsibilities under the EAR in a routed export transaction, including when the U.S. principal party in interest maintains its responsibility for license requirement determination and licensing, and (b) details when and how a U.S. PPI may delegate to the foreign PPI its responsibilities to determine license requirements and apply for a license (proposed rule issued February 2014)
– a proposed rule updating and clarifying certain license exception AVS provisions.
 

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

COMMCOMMENTARY

COM_a115.
P. Ditté: “Smart With Sanctions Lists”

(Source: 
WorldECR, June 2019. This article is reprinted with permission from the June 2019 issue of WorldECR, the journal of export controls and sanctions.)
* Author: Dr. Pascal Ditté, Founder and Owner, GCRD international, info@gcrd-international.com.
 
WorldECR
talks to Pascal Ditté about his new platform, sanctions-intelligence.com, which helps make sense of burgeoning sanctions lists and their implications.
Screening, we know, means very much more than mere ‘list- checking’. Beneficial ownership must be ascertained, ‘white lists’ created, entries double-checked, and decisions made as to which ‘list’ it’s necessary to check against, given the nuances of a specific transaction, whether a loan agreement, investment or sale.
 
As sanctions lists continue to multiply, so also do the number of associated tools designed with the object of helping organisations – banks, businesses, government departments, charities – navigate their way around the lists with the aim of ensuring that their business is compliant with relevant laws.
 
Typically, the first step is to enter the name of a person or entity into whichever your company has chosen to purchase/do business with and to proceed from there. Pascal Ditté’s sanctions-intelligence.com platform is rather different: its starting point is that the gathering of meta data – the list characteristics – is interesting of itself. What is available in terms of published sanctions lists? Where and how can they be accessed? What do the lists contain and how are the entries structured? When did the lists last change? Are there strategic trends in terms of listing? What are the available data formats? Which of the lists are online searchable? Which relevant tools or services are available to help?
 
Data-driven
 
Ditté is not new to digital resources. Between 2008 and 2011 he was responsible for the German Business Intelligence practice of Deloitte’s Forensic & Dispute Services team, a role, which, he says, entailed a lot of background research.
 
‘It is always a challenge working out beneficial ownership,’ he says, ‘but if you understood public registries it was much easier.’ This realisation led him to the idea of the Global Compliance Records Directory (‘GCRD’), which he describes as ‘a country-by-country overview on where to find relevant
information in the local public records or other open sources,’ containing data ‘from corporate register information to bankruptcy information and publicly available court records,’ – i.e., the kind of information essential in due diligence under compliance regulations.
 
‘sanctions-intelligence.com emerged out of that,’ he explains. ‘The idea was to provide an overview of the sanctions lists that are out there, their characteristics, accessibility and trends. And where to find help if needed. Of course, it sounds easy [to gather that information and keep it up to date] but it isn’t. For one thing, the content frequently changes. And for another, the characteristics are very different. Each list has its own structure, format and means of accessing the content…’
 
sanctions-intelligence.com includes all the ‘obvious’ lists: United Nations Consolidated, OFAC SDN, UK Office of Financial Sanctions Implementation (‘OFSI’), EU External Action Service, which are automatically analysed on a daily basis. At a glance, subscribers can see the number of entries each has, the focus of its programmes (e.g., what country it targets), whether there have been recent additions or removals, with breakdown on sanctions regime/ programme level.
 
But there are also other list profiles, such as that compiled by the Monetary Authority of Singapore, Canada’s Office of the Superintendent of Financial Institutions, Japan’s Ministry of Economy, Trade and Industry and others. Indeed, at the moment there are around 130 list profiles. Further lists, which are already included in the GCRD will be added in the future.
 
Ditté explains the thinking: ‘Imagine, for example, a company or bank that needs to make sure that all its sanctions lists are on focus and implemented internally. Have they got all the relevant lists covered? Are they up to date? Where can they access the remaining lists?
 
‘Or you need information on strategic trends in listing for your risk assessment. Or, you’re tracking a particular sanctions programme, and need to keep track of when it changes. Or perhaps you’ve introduced a new screening tool, but need a means by which you can differentiate between certain products. These are all scenarios where sanctions- intelligence.com can help.’
 
One of the most obviously noticeable aspects about sanctions- intelligence.com is that the site links to an A-Z of commercial list vendors, software solutions and advisory services. The competition, potentially? Not so, says Ditté: ‘Mine is a completely different business model. It is an additional tool that offers information about lists, changes and trends. And yes, it also enables users for example to search directly in the primary source/sanctions list for names. But it is not intended to be a “screening software” tool. Nor is sanctions- intelligence.com a list vendor. It delivers background info and the “how-to”, and shows where to find help in dealing with this complex issue if required .’
 
According to Ditté, the tool also provides a means by which you can
read the temperature of international compliance lists and spot trends. So, for example, in 2018, the volume of the OFAC SDN List grew by 1,405 entries, which is an increase of more than 23%. In comparison, the EU Consolidated List grew by 102 entries – a comparatively mere 5%.
 
‘Currently, the OFAC SDN List is three times the size of the EU list,’ says Ditté. ‘And in the last 18 months this has grown considerably. The OFAC list alone contains seven times more entries than the United Nations consolidated list…’
 
So, what’s next for the platform? Ditté says he has a lot of plans for the coming months, among them, the integration of further list profiles (many of which are already included in the ‘legacy format’, the GCRD database) and improvements in usability, for example for the mobile version of the website.
 
In an increasingly watchful space of trade compliance, it would seem only the intelligent thing to do.

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

(Source: Export Compliance Journal, 26 June 2019.)
 

On June 13, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with online travel services company, Expedia Group. 
 
Between April 2011 and October 2014, OFAC determined that Expedia enabled 2,221 people, including Cuban nationals, to travel within, or to and from, Cuba. The U.S. government under former President Barrack Obama did not relax its sanctions on Cuba until 2016, which means that Expedia was in violation of Cuban Assets Control Regulations (CACR) sanctions at multiple points throughout this time. 
 
Additionally, OFAC found that several of Expedia’s foreign subsidiaries failed to “exercise a minimal degree of caution” by violating the CACR multiple times over a three-plus year period. Deemed to be a “pattern… of conduct,” altogether OFAC found that Expedia’s repeated violations, and those of its subsidiaries, “harmed the sanctions program objectives of the Cuban Assets Control Regulations.” 
 
The importance of self-disclosure, and cooperating with OFAC
 
 
Expedia received a fine of $325,406-a reduction from a base penalty of over $550,000. A reduction, in part, because Expedia voluntary self-disclosed their violations upon discovery, and cooperated with the investigation.  
 
Additionally, once they discovered the violations, Expedia “implemented significant remedial measures to strengthen its U.S. economic sanctions compliance program throughout the Expedia corporate family, including domestic and foreign direct and indirect subsidiaries.” 
 
Speaking of foreign subsidiaries
 
 
Export and OFAC violations arising from U.S. companies making acquisitions abroad are becoming increasingly common. In this specific case, Expedia failed to inform a new foreign subsidiary until approximately 15 months after the acquisitions that it was now subject to U.S. jurisdiction and law. 
 
With more and more U.S. companies looking to grow by way of acquisition, OFAC cautions that “U.S. companies can mitigate risk by conducting sanctions-related due diligence both prior and subsequent to mergers and acquisitions, and taking appropriate steps to audit, monitor, train, and verify newly acquired subsidiaries for OFAC compliance.” 
 
No organization is immune to the necessities of OFAC and export compliance
 
 
This case stands as a reminder, yet again, that OFAC is stepping up its enforcement efforts. It also highlights the importance of voluntary self-disclosure, as well as cooperation, should an organization ever find itself in violation of sanctions and OFAC compliance laws. Lastly, it underscores the importance of educating foreign subsidiaries about the dangers of non-compliance with OFAC, and Financial and export compliance regulations administered by additional U.S. and international regulatory bodies.  

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

COM_a317
E. Geranmayeh & M. Lafont Rapnouil: “Meeting the Challenge of Secondary Sanctions”

 
* Authors: Ellie Geranmayeh, ellie.geranmayeh@ecfr.eu, +44 207 227 6872, Manuel Lafont Rapnouil, both of ECFR.
 
Summary
 
– Secondary sanctions have become a critical challenge for Europe, due to the Trump administration’s maximalist policy on Iran and its aggressive economic statecraft.
– Europe’s vulnerabilities mostly result from asymmetric interdependence with the US economy, due to the size of US markets and the global role of the US dollar.
– In future, states will likely weaponise economic interdependence with the EU to target countries that are more important to the European economy than Iran, such as China and Russia.
– European countries should demonstrate that, despite their economic interdependence with the US, they control EU foreign policy.
– The EU and its member states should strengthen their sanctions policy, begin to build up their deterrence and resilience against secondary sanctions, and prepare to adopt asymmetric countermeasures against any country that harms European interests through secondary sanctions.
– They should also attempt to bolster the global role of the euro and lead a robust international dialogue on the role of sanctions. …
 
The essay in full can be found here.

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

COM_a4
18
.
M. Volkov: “Walmart’s Recipe for Corruption Disaster: Rapid International Growth without a Compliance Program Foundation (Part II of III)”

(Source: 
Volkov Law Group Blog
. 24 June 2019. Reprinted by permission.) 
 
* Author: Michael Volkov, Esq., Volkov Law Group, 
mvolkov@volkovlaw.com, 240-505-1992.
 
(Part I of III can be found in the Daily Bugle of 26 June 2019.)
 
The Walmart case, from a big picture standpoint, represents a serious warning to all global companies committed to rapid international growth.  In the absence of a significant and sustained commitment to compliance, rapid international growth is bound to end up in a compliance breakdown, thereby threatening the ultimate success of any international business strategy. 
 
Walmart is Exhibit A in the explanation of how a successful business strategy can lead to a compliance nightmare, and a fundamental breakdown in a business initiative.
 
Let’s look at the facts included in the government settlement papers.
 
From 2000 to 2011, Walmart personnel responsible for implementing and maintaining the company’s internal controls were aware of failures in its anti-corruption controls surrounding payments to government officials.  These deficiencies centered on due diligence of third-party intermediaries (“TPIs”), payments to TPIs; documentation of services provided by TPIs; existence of written contracts with TPIs that included anti-corruption compliance clauses; charitable donations made to foreign officials were not improperly designed for personal benefit of foreign officials; and that sufficient anti-corruption policies were implemented governing conduct that raised significant anti-corruption risks (e.g. gifts and hospitality).
 
For over eleven years, senior officials in Walmart and its foreign subsidiaries were aware of these deficiencies, and it was not until 2011 that Walmart made a concerted effort to comply with applicable anti-corruption laws.  During an eleven year period, Walmart acted with calculated indifference in order to foster continued growth of its international expansion without any serious concern about bribery payments, weaknesses in its internal controls and blatant disregard for significant red flags surrounding high-risk TPIs and bribery schemes.
 
In 2003, Walmart first considered adopting a global anti-corruption policy.  It was not adopted until two years later in 2005.  Three years later, Walmart issued an updated anti-corruption policy.  The updated policy included specific due diligence requirements for review and approval of TPIs.  The new policy was not fully implemented and eventually due diligence requirements were delegated to specific countries and tailored to local business needs.  
 
As a result of these deficiencies, Walmart’s foreign subsidiaries in Mexico, India, Brazil and China were able to hire TPIs without preventing the TPIs to be used to make illegal bribery payments for government officials in order to obtain store permits and licenses.  These illegal payment schemes were successful in securing expedited opening and operation of Walmart stores in these countries.
 
Mexico:  The initial New York Times reporting surrounding Walmart’s corruption controversy arose from Mexico.  This is also where DOJ’s initial investigation began.
 
From at least 1999 to 2004, Walmart Mexico obtained local licenses and permits needed to open and operate stores in Mexico through TPIs.  In 2005, an attorney for Walmart’s Mexico subsidiary reported to Walmart that he was responsible for a long-time scheme to use TPIs, in this case lawyers referred to as ”
gestores,” to funnel bribes to Mexican government officials in order to obtain permits and licenses for the subsidiary.  The attorney also claimed that Walmart executives knew of and approved the scheme.  
 
According to the Walmart Mexico attorney, approximately $6 million was paid through TPIs, some of which was used to pay government officials, and in some cases, the attorney himself directly made payments to government officials.  Most of the illegal payments were made using the gestores, local attorneys.
 
The TPIs submitted invoices using various codes known to the attorney and others at the Mexican subsidiary to indicate the purpose of the improper payment to the government official.
 
In late 2004, Walmart Mexico’s audit team drafted a report identifying the gestores payments as “unusual,” and questioning the payments to various TPIs and the absence of any justification for such payments.  The final version of the report removed the language surrounding the “unusual” payments.
 
After an initial investigation of the allegations in 2005, and despite recommendations by outside counsel and other Walmart officials to conduct an externally-managed investigation, Walmart decided to have internal audit and security employees investigate the allegations.  They identified several violations and recommended a further investigation.  Walmart rejected the recommendations and instead assigned the internal investigation to a senior Mexico executive, who was allegedly aware of and approved the bribery scheme, to conduct the investigation.  In other words, Walmart assigned the investigation to a senior executive allegedly implicated in the specific scheme under investigation.  In 2006, the investigation was closed.
 
India:  In 2005, Walmart planned to expand into India.  Before doing so, it was aware of significant corruption risks in securing licenses and permits.  In addition, its joint venture partner was cited for corruption risks.
 
From 2009 to 2011, Walmart’s operations retained TPIs to make improper payments to government officials to obtain operating permits and licenses.  These payments were falsely recorded in the joint venture’s books using terms such as “misc fees,” “miscellaneous,” “professional fees,” “incidental,” and “government fee.”
 
Between 2008 and 2011, Walmart India’s audit team identified weaknesses in its anti-corruption controls on at least six separate occasions.  Despite these reports and review by Walmart US officials, no attempts were made to address these weaknesses.
 
In 2011, Walmart India officials received an anonymous whistleblower tip concerning ongoing bribery payments to obtain licenses and permits.  Walmart received two additional whistleblower messages on the same subject.  Walmart never investigated the allegations.
 
Brazil:  Walmart Brazil engaged in bribery involving hiring with construction contractors, one of whom was a government official.  Improper payments were made to two contractors involved in the construction of two stores in Brazil in 2009.
 
As early as 2008, Walmart Brazil internal audit identified weaknesses in Walmart Brazil’s anti-corruption internal controls.  None of the deficiencies were ever addressed.
 
Between 2008 and 2012, Walmart retained a construction company to build eleven new stores and paid it $52 million.  Walmart never conducted a due diligence review of the construction company.  In fact, in 2009 and later in 2012, the construction company failed to meet Walmart vendor due diligence requirements.  Despite being told in 2009 not to make any more payments or execute any additional contracts with the construction company, Walmart Brazil continued to do so.
 
Walmart Brazil hired a TPI through the construction company by amending the contract with the construction company to include the TPI.  Walmart Brazil sought to use the TPI to make bribery payments to Brazil government officials.  The TPI was described as having an uncanny ability to secure licenses and permits relatively quickly, which earned her the nickname “sorceress” or “genie.”  Walmart knew that it could not hire the intermediary because she would not satisfy due diligence requirements, so Walmart hired her through the construction company in order to “distance” the company from her illegal activities.  In 2009, the TPI made improper payments to government inspectors in connection with the construction of one of Walmart’s stores.
 
China:  Between 2003 and 2011, internal audit regularly flagged weaknesses in Walmart’s internal controls relating to anti-corruption protections.  Between 2007 to 2011, Walmart’s China subsidiary virtually ignored all of internal audit’s findings.
 
In all of the countries, DOJ and the SEC recounted instances when Walmart intended to implement proper accounting controls and training programs, only to put them on hold or otherwise allow cited and known weaknesses to continue without remediation.
(Part III of III will be included in the Daily Bugle of 28 June 2019.)

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

COM_a5
19
E. Wernick & M. Howell: “DOJ Employs Aggressive Tactics to Win 5th Straight Trial Victory, Highlighting the Risks for Executives in FCPA Cases”

(Source:
Vinson & Elkins, 25 June 2019.)
 
* Authors: Ephraim Wernick, Esq.,
ewernick@velaw.com, +1 202 639 6730, Misty M. Howell, Esq.,
mhowell@velaw.com, +1 202 639 6637, both of Vinson & Elkins.
 
On June 20, 2019, a federal jury in Boston returned guilty verdicts against two high-level executives for their role in a conspiracy to bribe foreign government officials in Haiti, in violation of the Foreign Corrupt Practices Act (FCPA) and related money laundering and Travel Act offenses.[FN/1]After a two-week trial in the U.S. District Court for the District of Massachusetts, the jury found that Richard Boncy, the Chairman and CEO of an investment firm focused on development projects in Haiti, and Joseph Baptiste, a director on the investment firm’s board, solicited bribes from undercover FBI agents posing as potential investors for a port project in Haiti, while also promising to use that money to bribe various officials throughout the Haitian government. This marks the fifth straight trial victory for the Department of Justice’s (DOJ’s) FCPA Unit, placing executives and companies on notice that compliance with the FCPA is more critical than ever.
 
The Evidence and Issues at Trial
 
DOJ employed significant investigative resources and aggressive tactics to build its criminal case and present the case at trial. Among other things, the government deployed undercover FBI agents to engage in covert recordings of both Boncy and Baptiste, and the recordings documented both men saying that they would use Baptiste’s non-profit organization to direct payments to Haitian officials in exchange for government approval of a port project in Haiti. The defendants also discussed offering a job to a high-level official’s aide in exchange for that aide’s help in obtaining the official’s authorization for the project. The government’s case was not without flaws, however, as the government apparently lost evidence and failed to preserve at least two phone calls with the defendants. Boncy first sought dismissal of the case, and later argued to the jury that the content of the recordings, were they to have been available for the jury to review, would have established reasonable doubt and shown that the money at issue were not bribes, but rather were intended to help fund certain charitable social programs. The defense also argued that the agents were biased and had “sought to manufacture a crime.”[FN/2] In the end, the jury took only a few hours to return guilty verdicts against both men.
 
DOJ’s Increased Emphasis on Enforcement of the FCPA
 
Only five years ago, DOJ suffered a series of stinging defeats in FCPA trials, and the common refrain among observers and practitioners was that FCPA cases were too hard to build and try because they lacked jury appeal. American jurors, it was argued, simply did not care about cases involving bribes to foreign officials, often on foreign land. However, with its fifth consecutive trial victory, DOJ has adapted its tactics and proven to be fully capable at building and trying FCPA cases. Since 2016, DOJ now has also secured trial victories in 
United States v. Ho
United States v. Ng,[FN/3]
 
United States v. Chi,[FN/4] and 
United States v. Thiam.[FN/5] The most recent trial victory also shows that DOJ continues to 
prosecute executives and companies for violations of white collar crimes, including the FCPA. Last year, the DOJ FCPA Section charged 31 individuals,[FN/6] a significant increase from the 24 individuals charged in 2017,[FN/7] which itself represented the highest number of people charged since 2013. If current trends hold, this year DOJ will break all previous records and prosecute even more individuals, including senior executives and in-house counsel, for violations of the FCPA and related offenses like money laundering and wire fraud.
 
DOJ’s recent successes are the natural result of the Department’s concerted effort to put more time, money and resources into investigating and prosecuting international corruption and money laundering cases. Over the past five years, DOJ’s FCPA Unit has almost doubled in size, from 19 to 35 full-time prosecutors,[FN/8] and the Unit has recruited a number of prosecutors from other parts of the government into the Unit so that it can help present and win cases at trial. In fact, the lead prosecutor from the FCPA Unit on the 
Boncy/Baptiste trial team had recently joined the FCPA Unit after serving several years trying cases as an Assistant United States Attorney in Miami.[FN/9] These anti-corruption prosecutors also are now joined by a host of law enforcement agents, including four fully staffed FBI international corruption squads operating all over the country, and several other law enforcement agencies who receive substantial resources to investigate and fight corruption around the world.
 
What This Means for You
 
Given the current law enforcement landscape, it is critical that you and your company know and understand the FCPA, especially if you are operating or expanding your business operations in a foreign country. While it has always been helpful to have an effective and experienced advocate on your side, it is now more important than ever that you have counsel with the requisite investigative and trial experience, along with FCPA and compliance expertise, to conduct adequate risk assessments and develop well-tailored compliance systems on the front end, and advise how best to respond to a government investigation when needed. 
 
[FN/1] DOJ, 
Two Businessmen Convicted of International Bribery Offenses (June 20, 2019), 
https://www.justice.gov/opa/pr/two-businessmen-convicted-international-bribery-offenses-0.
[FN/2] Aaron Leibowitz, 
FBI ‘Engineered’ Bribery Case In Haiti, Jury Hears, Law360 (June 11, 2019), 
https://www.law360.com/articles/1167519
[FN/3] DOJ, 
Chairman of a Macau Real Estate Development Company Convicted on All Counts for Role in Scheme to Bribe United Nations Ambassadors to Build a Multi-Billion Dollar Conference Center (July 28, 2017), 
https://www.justice.gov/opa/pr/chairman-macau-real-estate-development-company-convicted-all-counts-role-scheme-bribe-united
[FN/4] DOJ, 
Director of South Korea’s Earthquake Research Center Convicted of Money Laundering in Million Dollar Bribe Scheme (July 18, 2017), 
https://www.justice.gov/opa/pr/director-south-koreas-earthquake-research-center-convicted-money-laundering-million-dollar.
[FN/5] DOJ, 
Former Guinean Minister of Mines Convicted of Receiving and Laundering $8.5 Million in Bribes from China International Fund and China Sonangol (May 4, 2017), 
https://www.justice.gov/opa/pr/former-guinean-minister-mines-convicted-receiving-and-laundering-85-million-bribes-china.
[FN/6] DOJ, Fraud Section Year in Review 5 (2018), 
https://www.justice.gov/criminal-fraud/file/1123566/download.
[FN/7] DOJ, Fraud Section Year in Review 4 (2017), 
https://www.justice.gov/criminal-fraud/file/1026996/download.
[FN/8] DOJ, Fraud Section Year in Review 5 (2018), 
https://www.justice.gov/criminal-fraud/file/1123566/download; DOJ, Fraud Section Year in Review 4 (2015), 
https://www.justice.gov/criminal-fraud/file/833301/download.
[FN/9] Global Investigations Review, Just Anti-Corruption, 
Meet the Foreign Corrupt Practice Act unit prosecutors (June 8, 2018), 
https://globalinvestigationsreview.com/editorial/jac/1170388/elina-rubin-smith.

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


TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a120. 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_a221. 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.  

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

ENEDITOR’S NOTES

 

*
Helen Keller (Helen Adams Keller; 27 Jun 1880 – 1 Jun 1968; was an American author, political activist, and lecturer. She was the first deaf-blind person to earn a Bachelor of Arts degree. The story of Keller and her teacher, Anne Sullivan, was made famous by Keller’s autobiography,
The Story of My Life, and its adaptations for film and stage, The Miracle Worker.)
  – ”
I long to accomplish a great and noble task, but it is my chief duty to accomplish small tasks as if they were great and noble.”
  – ”
Never bend your head. Always hold it high. Look the world straight in the eye.”
  – ”
The highest result of education is tolerance.”

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

EN_a323
. 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:27 June 2019: 84 FR 30593-30595: Revisions to the Unverified List


 
* DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.  Implemented by Dep’t of Commerce, U.S. Census Bureau.
  – Last Amendment: 24 Apr 2018: 83 FR 17749-17751: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates
  – HTS codes that are not valid for AES are available here.
  – The latest edition (1 Jan 2019) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and approximately 250 footnotes containing case annotations, practice tips, Census/AES guidance, and explanations of the numerous errors contained in the official text. Subscribers receive revised copies in Microsoft Word every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR. Government employees (including military) and employees of universities are eligible for a 50% discount on both publications at www.FullCircleCompiance.eu.   

 

DOD NATIONAL INDUSTRIAL SECURITY PROGRAM OPERATING MANUAL (NISPOM): DoD 5220.22-M. Implemented by Dep’t of Defense.
  – Last Amendment: 18 May 2016: Change 2: Implement an insider threat program; reporting requirements for Cleared Defense Contractors; alignment with Federal standards for classified information systems; incorporated and cancelled Supp. 1 to the NISPOM (Summary here.)
 
 
DOE ASSISTANCE TO FOREIGN ATOMIC ENERGY ACTIVITIES: 10 CFR Part 810; Implemented by Dep’t of Energy, National Nuclear Security Administration, under 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: 26 June 2019: 
Harmonized System Update 1912  


  – HTS codes for AES are available here.

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

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

EN_a0324
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

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

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.

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

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


* SUBSCRIPTIONS: Subscriptions are free.  Subscribe by completing the request form on the Full Circle Compliance website

* BACK ISSUES: An archive of Daily Bugle publications from 2005 to present is available HERE.

* TO UNSUBSCRIBE: Use the Safe Unsubscribe link below.

Scroll to Top