19-0702 Tuesday “Daily Bugle'”

19-0702 Tuesday “Daily Bugle”

Tuesday, 2 July 2019

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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[No items of interest today.] 

  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. Commerce/Census Announces Availability of AESDirect Resources in Spanish
  4. State/DDTC: (No new postings.)
  5. Treasury/OFAC Updates Specially Designated Nationals (SDN) and Blocked Persons List
  1. Bloomberg: “How U.S. Chip Makers Pressed Trump to Ease Huawei Export Controls”
  2. France 24: “Iraq Sets Up ‘Loophole’ in US Sanctions to Buy Iranian Power”
  3. NYT: “To Evade Sanctions on Iran, Ships Vanish in Plain Sight”
  4. Reuters: “USTR Proposes $4 Billion in Potential Additional Tariffs Over EU Aircraft Subsidies”
  5. ST&R Trade Report: “Shipments from Third Countries Seeing More Scrutiny Amid Efforts to Avoid China Tariffs”
  1. M. Kanetake: “The EU’s Dual-Use Export Control and Human Rights Risks: The Case of Cyber Surveillance Technology”
  2. M. O’Kane: “US House Foreign Affairs Committee Endorses Nord Stream 2 Sanctions”
  3. N Dahlvang “DOD Acronym Scramble: DSCA, meet DCSA”
  4. Thomsen & Burke Alert: “Changes to Export Controls in June 2019”
  1. Christine McGinn forms Alpha Omega Consulting Group
  2. Vincent Goossen Moves from FCC to TNO
  1. ECTI Presents Preparing Voluntary Self-Disclosures: Requirements, Best Practices, and Pitfalls to Avoid: 18 July 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 (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 


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OGS_a11. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register, 2 July 2019.)

* Treasury/OFAC; NOTICE; Blocking or Unblocking of Persons and Properties
[Pub. Date: 3 July 2019.]

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Commerce/BIS (No new postings.)

(Source: Commerce/BIS)

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. Commerce/Census Announces Availability of AESDirect Resources in Spanish

Commerce/Census, 27 June 2019.)
Available now! New ACE AESDirect walkthrough videos in English and Spanish are now available on our
ACE AESDirect Resources page. These videos contain the most current information on how to file your Electronic Export Information using the ACE AESDirect application. All of the videos have been divided into chapters to help you easily navigate to the topics you are searching for.
You can easily access the English version
You can easily access the Spanish version

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OGS_a55. Treasury/OFAC Updates Specially Designated Nationals (SDN) and Blocked Persons List

Treasury/OFAC, 2 July 2019.)
The SDN list has recently been updated. Please visit this page to access the latest version of the SDN list. Check this page periodically as it may also be updated if a new list-related format or product is offered.
For more information on today’s action, please follow
this link.

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Bloomberg: “How U.S. Chip Makers Pressed Trump to Ease Huawei Export Controls”
(Source: Bloomberg, 2 July 2019.) [Excerpts.]
President Donald Trump’s decision to allow U.S. companies to continue selling to Huawei followed an extensive lobbying campaign by the U.S. semiconductor industry that argued the ban could hurt America’s economic and national security.
In multiple high-level meetings and a letter to the Commerce Department, the companies argued for targeted action against Huawei Technologies Co. instead of the blanket ban the Trump administration imposed in May. That includes identifying specific technologies that the Chinese company shouldn’t be given access to, while allowing U.S. firms to supply the rest. …

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France 24: “Iraq Sets Up ‘Loophole’ in US Sanctions to Buy Iranian Power”
(Source: France 24, 2 July 2019.) [Excerpts.]
Iraq is establishing a financial “loophole” to continue buying vital gas and electricity from Iran despite US sanctions, AFP has learned, mirroring a European mechanism that came into effect Friday.
The “special purpose vehicle” (SPV) would allow Iraq to pay for imported Iranian energy in Iraqi dinars, which Iran could use to exclusively buy humanitarian goods, three senior Iraqi officials said.
The workaround would allow Baghdad to keep the lights on and avoid shortage-driven protests without triggering US sanctions, as it treads an increasingly precarious tightrope between its two main allies Tehran and Washington.
One senior government official told AFP it was the product of months of talks between Iraqi, Iranian and US officials.
“The Iraqi government will continue to pay Iran for gas by depositing money into a special bank account inside Iraq, in Iraqi dinars,” the official said. …

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NYT: “To Evade Sanctions on Iran, Ships Vanish in Plain Sight”
(Source: New York Times, 2 July 2019.) [Excerpts.]
A week ago, a small tanker ship approached the Persian Gulf after a 19-day voyage from China. The captain, as required by international rules, reported the ship’s position, course, speed and another key detail: It was riding high in the water, meaning it was probably empty.
Then the Chinese-owned ship, the Sino Energy 1, went silent and essentially vanished from the grid. …
As the Trump administration’s sanctions on Iranian oil and petrochemical products have taken hold, some of the world’s shipping fleets have defied the restrictions by “going dark” when they pick up cargo in Iranian ports, according to commercial analysts who track shipping data and intelligence from authorities in Israel, a country that backs the Trump crackdown. …

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Reuters: “USTR Proposes $4 Billion in Potential Additional Tariffs Over EU Aircraft Subsidies”
(Source: Reuters, 1 July 2019.) [Excerpts.]
Just days after reaching a truce in the U.S.-China trade war, the U.S. government on Monday ratcheted up pressure on Europe in a long-running dispute over aircraft subsidies, threatening tariffs on $4 billion of additional EU goods.
The U.S. Trade Representative’s office released a list of additional products – including olives, Italian cheese and Scotch whiskey – that could be hit with tariffs, on top of products worth $21 billion that were announced in April. 
USTR said it was adding 89 tariff sub-categories to its initial list, including a variety of metals, in response to public comments, but gave no further explanation. Over 40 individuals testified about products included on the initial list at a public hearing on May 15 and 16. …

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. ST&R Trade Report: “Shipments from Third Countries Seeing More Scrutiny Amid Efforts to Avoid China Tariffs”

(Source: Sandler, Travis & Rosenberg Trade Report, 2 July 2019.) [Excerpts.]
Shifting manufacturing operations to change a product’s country of origin is a longstanding and legitimate way to mitigate tariffs on goods imported into the U.S. While many U.S. companies are properly using this method to reduce their exposure to the 25 percent additional tariff the U.S. has imposed on hundreds of billions of dollars’ worth of goods from China, others are taking shortcuts by simply transshipping goods from China and labeling them as products of a third country. Importers should pay closer attention to their supply chains to avoid such illegal activity.
According to press reports, Vietnam has been a particular target of scrutiny by U.S. officials on the hunt for Chinese goods seeking to avoid the Section 301 tariffs. Trade data show that U.S. imports from Vietnam have surged as those from China have declined in the wake of the tariffs. Some of that increase is legitimate, an article in The Loadstar notes, as “there is a significant number of Chinese businesses setting up factories in Vietnam to legally produce and assemble goods” and foreign direct investment from China into Vietnam has hit “record levels.” This trend was already underway due to increasing labor and other costs in China but appears to have accelerated in light of the U.S. tariffs.

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* Author: Dr. Machiko Kanetake, Assistant Professor of Public International Law, University of Utrecht, M.Kanetake@uu.nl, + 31 30 253 3316.
Export of cyber technology can undermine human rights in countries of destination. In the aftermath of the Arab Spring, political controversies have arisen around EU-exported cyber surveillance technology, which allegedly helped autocratic states monitor and arrest dissidents. While cyber technology is indispensable to our lives, it can be used to suppress the right to privacy, the freedom of expression and the freedom of association, not only in the EU, but also in the countries it trades with. The EU has taken a proactive role in reforming the export of human rights-sensitive cyber technology. In September 2016 the European Commission proposed the integration of human rights due diligence in the process of export control. The Commission’s proposal, however, invited strong contestations both from industry and Member States. Essentially, dual-use export control has developed in order to mitigate military risks. Attempts to integrate human rights risks in export control have thus invited discomfort among stakeholders. This paper unpacks normative tensions arising from the EU’s attempts to integrate human rights risks in its export control regimes. By so doing, the paper highlights fundamental tensions embedded in the EU’s value-based Common Commercial Policy, of which dual-use export control forms an integral part. …

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M. O’Kane: “US House Foreign Affairs Committee Endorses Nord Stream 2 Sanctions”
EU Sanctions, 1 July 2019.)
* Author: Michael O’Kane, Esq., Peters & Peters, mokane@petersandpeters.com, +44 (0) 20 7822 7777.
The US House of Representatives Committee on Foreign Affairs have unanimously endorsed a bill, Protecting Europe’s Energy Security Act of 2019, which would impose sanctions on Nord Stream 2, a pipeline currently in construction which will transport natural gas from Russia to Germany across the Baltic Sea. The measures would include:
– A prohibition on transactions relating to vessels engaged in the pipeline’s construction;
– Asset freeze and travel ban on foreign persons facilitating construction;
– Prohibitions on providing related services (e.g. insurance); and
– Export bans on related goods or technology.
This is the first legislative step for the bill. It also needs to be endorsed by the House Judiciary Committee, and if approved, it will put to a vote before the House of Representatives before being moved to the Senate.

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N. Dahlvang: “DOD Acronym Scramble: DSCA, meet DCSA”

Export Compliance Solutions & Consulting Blog:  ‘Our “EAR”…to the ITAR’, 1 July 2019. Reprinted by permission.) 
* Author: Niclas Dahlvang, Export Compliance Solutions & Consulting, 
nick@exportcompliancesolutions.com, 866 238 4018.
On June 24, 2019, the Department of Defense, Bureau of Industry and Security (BIS) 
announced the renaming of the Defense Security Service (DSS) to the Defense Counterintelligence and Security Agency (DCSA).
The name change was directed by 
Executive Order 13869 (April 24, 2019), which transferred the responsibility for background investigations from the Office of Personnel Management (OPM), National Background Investigations Bureau (NBIB) to the Department of Defense.
DCSA is now the primary entity for background investigations.  It continues to administer the National Industrial Security Program as well as responsibilities relating to continuous vetting and, insider threat programs.  While its website has been retitled, it currently remains at 
Notably, DCSA should not to be confused with 
DSCA (Defense Security Cooperation Agency) whose mission includes administering the Foreign Military Sales (FMS) and other security cooperation programs for the Department of Defense.  Both agencies have relevance and responsibilities under the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR).  Multiple ITAR sections related to classified technical data and other classified defense articles continue to refer to the Defense Security Service.  These sections should eventually be amended to reflect the new agency name, but there has not yet been a formal announcement.

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Thomsen & Burke Alert: “Changes to Export Controls in June 2019”
This memo summarizes the regulatory and enforcement developments with respect to U.S. and multilateral export controls during the month of June 2019. Changes to the regulations published in the Federal Register are explained at greater length in the Regulatory Summary. (The 
44-page Word document is available from Heather Green at heather@t-b.com. )

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MS_a115. Christine McGinn forms Alpha Omega Consulting Group

(Source: Christine McGinn, 
Christine McGinn has announced the formation of the Alpha Omega Consulting Group, combining the talents of subject matter experts to advise and assist clients in the fields of import/export compliance, security, information technology, and environmental health.  For more information see 
https://alphaocg.com/ or call Christine at (602) 699-4455.

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(Source: Vincent Goossen, vincent.goossen@tno.nl)

Vincent Goossen, previously Senior Associate at Full Circle Compliance and Assistant Editor of the Daily Bugle, has joined TNO as Export Compliance Associate as of 1 May 2019.  Contact Vincent at
 or + 31 6 15 42 05 35.   

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TE_a117. ECTI Presents Preparing Voluntary Self-Disclosures: Requirements, Best Practices, and Pitfalls to Avoid: 18 July 2019

(Source: Danielle Hatch, danielle@learnexportcompliance.com)
* What: Preparing Voluntary Self-Disclosures: Requirements, Best Practices, and Pitfalls to Avoid
* When: July 18, 2019; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Olga Torres
 Register here
or contact Danielle Hatch, 540-433-3977, 

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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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* Wislawa Szymborska (Maria Wisława Anna Szymborska; 2 Jul 1923 – 1 Feb 2012; was a Polish poet, essayist, translator, and recipient of the 1996 Nobel Prize in Literature “for poetry that with ironic precision allows the historical and biological context to come to light in fragments of human reality”. Her work has been translated into English and many European languages, as well as into Arabic, Hebrew, Japanese, Persian and Chinese.
  – “You have to remember all the time that there is a comical side to everything.”
* Richard Petty (Richard Lee Petty; born July 2, 1937; is a former NASCAR driver who raced from 1958 to 1992 in the former NASCAR Grand National and Winston Cup Series. He was the first driver to win the NASCAR Cup Championship seven times, winning a record 200 races during his career, winning the Daytona 500 a record seven times, and winning a record 27 races (10 of them consecutively) in the 1967 season alone. Statistically, he is the most accomplished driver in the history of the sport and is one of the most respected figures in motorsports as a whole.)
  – “There is no doubt about precisely when folks began racing each other in automobiles. It was the day they built the second automobile.”

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. 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

: 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.   


  – 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] 


, 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 (HSU) 1912

  – HTS codes for AES are available here.

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

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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  

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* 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.

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