19-0709 Tuesday “Daily Bugle'”

19-0709 Tuesday “Daily Bugle”

Tuesday, 9 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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  1. USTR Announces Exclusions Granted on Additional Duties on Chinese Goods 
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. State/DDTC: (No new postings.)
  4. Hong Kong Seeks Reports on Anticipated Activities Involving Scheduled Chemicals in 2020
  1. Bloomberg: “Vessels Change Names or Go Dark to Ship Venezuelan Crude to Cuba”
  1. J. Ford, J. Hungerford & P. Whitfield-Jones: “UK Government Must Reconsider Arms Export Licenses to Saudi Arabia”
  2. J.P. Barker, J.B. Bellinger III & B. Weiss: “OFAC Now Requires U.S. Persons to Report Any Transaction They Reject Due to Sanctions”
  3. M Miller, B. Murphy & S. Murray: “New Product Exclusions – China Section 301 List 1”
  1. ECTI Presents The New “Framework for OFAC Compliance Commitments”: What You Need to Know: 24 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 


EXIM_a11. USTR Announces Exclusions Granted on Additional Duties on Chinese Goods

(Source: Federal Register, 9 Jul 2019.) [Excerpts.]
84 FR 32821-32826: Notice of Product Exclusions: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation
* AGENCY: Office of the United States Trade Representative.
* ACTION: Notice of product exclusions.
* SUMMARY: Effective July 6, 2018, the U.S. Trade Representative (Trade Representative) imposed additional duties on goods of China with an annual trade value of approximately $34 billion (the $34 billion action) as part of the action in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
The Trade Representative’s determination included a decision to establish a product exclusion process. The Trade Representative initiated the exclusion process in July 2018, and stakeholders have submitted requests for the exclusion of specific products. In December 2018, March 2019, April 2019, May 2019, and June 2019, the Trade Representative granted exclusion requests. This notice announces the Trade Representative’s determination to grant additional exclusion requests, as specified in the Annex to this notice. The Trade Representative will continue to issue decisions on pending requests on a periodic basis.
* DATES: The product exclusions announced in this notice will apply as of the July 6, 2018 effective date of the $34 billion action, and will extend for one year after the publication of this notice. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.
* FOR FURTHER INFORMATION CONTACT: For general questions about this notice, contact Assistant General Counsels Philip Butler or Megan Grimball, or Director of Industrial Goods Justin Hoffmann at (202) 395-5725. For specific questions on customs classification or implementation of the product exclusions identified in the Annex to this notice, contact traderemedy@cbp.dhs.gov.
Effective July 6, 2018, the Trade Representative imposed additional 25 percent duties on goods of China classified in 818 8-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS), with an approximate annual trade value of $34 billion. See 83 FR 28710. The Trade Representative’s determination included a decision to establish a process by which U.S. stakeholders may request exclusion of particular products classified within an 8-digit HTSUS subheading covered by the $34 billion action from the additional duties. The Trade Representative issued a notice setting out the process for the product exclusions, and opened a public docket. See 83 FR 32181 (the July 11 notice). …
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OGS_a12. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register, 9 July 2019.)

[No items of interest noted today.]

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Commerce/BIS (No new postings.)

(Source: Commerce/BIS)

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Hong Kong Seeks Reports on Anticipated Activities Involving Scheduled Chemicals in 2020
This circular invites facilities which foresee that they would be engaged in specified activities involving Scheduled Chemicals controlled by the Chemical Weapons (Convention) Ordinance (“the Ordinance”) in 2020 to report details of their anticipated activities to the Director-General of Trade and Industry (“the Director”) by completing and returning the reply slip at Annex A on or before 23 July 2019.

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Bloomberg: “Vessels Change Names or Go Dark to Ship Venezuelan Crude to Cuba”
(Source: Bloomberg, 9 Jul 2019.) [Excerpts.]
Stopping the flow of Venezuelan oil to its ally Cuba might prove harder than the U.S. expected.
Tankers are being renamed and vessels are switching off their transponders to sail under the radar of the U.S. government. The vessel Ocean Elegance, an oil tanker that has been delivering Venezuelan crude to Cuba for the past three years, was renamed Oceano after being sanctioned in May. The ship S-Trotter, another one that’s on the sanctions list, is now known as Tropic Sea, according to data compiled by Bloomberg.
The oil tanker Nedas, after being sanctioned in April, made a delivery to Cuba incognito because it turned off its satellite tracking system. It went unaccounted for 42 days, but shipping reports show that it delivered oil to Cuba. After the ghost delivery, it discreetly changed its name to Esperanza. The Nedas/Esperanza has delivered 2 million barrels of crude to Cuba this year, according to shipping reports. …

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J. Ford, J. Hungerford & P. Whitfield-Jones: “UK Government Must Reconsider Arms Export Licenses to Saudi Arabia”

(Source: Mayer Brown LLP, 9 Jul 2019.) [Excerpts.]
* Authors: James Ford, Esq., jford@mayerbrown.com, +44 20 3130 3351; Jason Hungerford, Esq., jhungerford@mayerbrown.com, +44 20 3130 3084; and Paul Whitfield-Jones, Esq., pwhitfield-jones@mayerbrown.com, +44 20 3130 3204, all of Mayer Brown LLP.
On 20 June 2019, the Court of Appeal (CoA) upheld an appeal by the Campaign Against Arms Trade (CAAT) against the Secretary of State for International Trade (the Secretary) in connection with its claim for the judicial review of licensing decisions relating to military exports to Saudi Arabia which might be used in the conflict in Yemen. The judgment did not concern whether the licensing decisions themselves were right or wrong but rather whether the process used to reach those decisions was correct. Specifically, the CoA found that the Secretary had failed to determine whether there had been a historic pattern of breaches of international humanitarian law (IHL) by Saudi Arabia and its coalition partners. The Secretary has been directed to reconsider the licensing decisions in accordance with the correct legal approach.
The CoA’s decision does not automatically revoke or suspend any existing licences. Following the decision, the Secretary announced that new licences will not be granted for exports to Saudi Arabia and its coalition partners which might be used in the conflict in Yemen until the government has considered the implications of the decision. The Secretary also announced his intention to seek permission to appeal the decision of the CoA to the Supreme Court. On 8 July, it was reported that the Secretary had applied for a stay of the CoA’s judgment pending the appeal (meaning that its effect would be suspended for that period of time). …

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J.P. Barker, J.B. Bellinger III & B. Weiss: “OFAC Now Requires U.S. Persons to Report Any Transaction They Reject Due to Sanctions”
Arnold & Porter
, 1 Jul 2019.) [Excerpts.]
* Authors: John P. Barker, Esq., john.barker@arnoldporter.com, +1 202 942 5328; John B. Bellinger III,
Esq., john.bellinger@arnoldporter.com, +1 202 942 6599; and Baruch Weiss, Esq.,
baruch.weiss@arnoldporter.com, +1 212 836 8000, all of Arnold & Porter Kaye Scholer LLP.
In a surprising move, the Office of Foreign Assets Control (OFAC) has imposed a new reporting requirement on U.S. persons that is far more expansive than at first it may appear.
OFAC’s Reporting, Procedures and Penalties Regulations require U.S. persons, including financial institutions, to file reports when a transaction is “blocked” and when a transaction is “rejected.” On Friday, June 21, 2019, OFAC announced a variety of amendments to these Regulations. The most significant change is a revision of 31 C.F.R. § 501.604, which broadens the scope of the 10-day reporting requirement for “rejected” transactions. 

This reporting requirement has been expanded in two key ways. First, the amendment clarifies that the reporting requirement applies not only to “rejected funds transfers,” but also to any transaction rejected because it would violate sanctions, including transactions “related to wire transfers, trade finance, securities, checks, foreign exchange, and goods or services.” 

Second, whereas § 501.604 in the past applied only to U.S. financial institutions, the amendment now expands the reporting requirement to “any U.S. person”– not only U.S. financial institutions-but any U.S. citizen, green card holder, protected individual, or entity incorporated or registered in the U.S. (and foreign branches). …

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M. Miller, B. Murphy & S. Murray: “New Product Exclusions – China Section 301 List 1”
(Source: Miller & Company P.C., 8 Jul 2019.) [Excerpts.]
* Authors: Marshall Miller, Esq., mmiller@millerco.com; Brian Murphy, Esq., bmurphy@millerco.com; and Sean Murray, Esq., smurray@millerco.com, all of Miller & Company P.C..
On July 8, 2019, the United States Trade Representative (USTR) announced the sixth set of approved product exclusions from China Section 301 List 1. Since December2018, USTR has implemented six sets of product exclusions in response to product exclusion requests. The sixth set includes 110 new specially prepared product descriptions for merchandise such as certain pumps, pump parts, electric motors, compressors, fork-lift trucks, shovel loaders, molded buttons, and machine parts. The USTR is expected to approve additional product exclusions on an on-going basis.
Exclusions from China Section 301 List 1 duties are available for any importer for any product that is properly classified and falls within the specially prepared product description and ten-digit classification. This is true regardless whether the importer filed an exclusion request. All China Section 301 List 1 product exclusions are retroactive to July 6, 2018. …

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TE_a110. ECTI Presents The New “Framework for OFAC Compliance Commitments”: What You Need to Know: 24 July 2019

(Source: Danielle Hatch, 
* What: The New “Framework for OFAC Compliance Commitments”: What You Need to Know
* When: 24 July 2019 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Timothy O’Toole
* Register here.
or Danielle Hatch, 540-433-3977, 

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TE_a211. 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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* Don Herold (9 Jul 1889 – 1 Jun 1966; was an American humorist, writer, illustrator, and cartoonist who wrote and illustrated many books and was a contributor to national magazines.”
  – “It takes a lot of things to prove you are smart, but only one thing to prove you are ignorant.”

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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 (4 July 2019) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR is a 152-page Word document containing 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: 4 July 2019) of the ITAR with all amendments is contained in Bartlett’s Annotated ITAR (“BITAR”), by James E. Bartlett III. The BITAR is a 371-page Word document containing all ITAR amendments to date, plus a large Index, over 800 footnotes containing amendment histories, case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text. Subscribers receive updated copies of the BITAR in Word by 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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