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19-0807 Wednesday “Daily Bugle”

19-0807 Wednesday “Daily Bugle”

Wednesday, 7 August 2019

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The Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, DOE/NRC, Customs, NISPOM, EAR, FACR/OFAC, FAR/DFARS, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe here. Contact us for advertising 

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  1. President Blocks Property of the Government of Venezuela
  2. Treasury/OFAC Amends Iranian Financial Sanctions Regulations and Iranian Human Rights Abuse Sanctions Regulations
  3. USTR Announces Product Exclusions Regarding China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. State/DDTC: (No new postings.)
  4. Switzerland SECO Amends Sanctions: Ordinance on Measures against Venezuela
  5. UK ECJU Releases Guidance Documents on Trade Sanctions Relating to Multiple Countries
  1. Defense News: “Section 804 gives the U.S. an Advantage in Great Power Competition with China and Russia”
  2. ST&R Trade Report: “CBP Urged to Update Policies and Enhance Analysis of Commercial Vehicle Inspections”
  3. WHBL: “Area Man Faces Sentencing in International Arms Scheme”
  1. H. Seshasayee: “India and Venezuela Grow Distant Post U.S.-Sanctions”
  2. V. Efremov: “Russia Considers New Counter-Sanctions”
  1. ECTI Presents United States Export Control (ITAR/EAR/OFAC) Seminar in Amsterdam
  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 Jun 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 (6 Aug 2019), HTSUS (22 July 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11President Blocks Property of the Government of Venezuela

(Source:
Federal Register, 7 August 2019.) [Excerpts.]
 
I, DONALD J. TRUMP, President of the United States of America, in order to take additional steps with respect to the national emergency declared in Executive Order 13692 of March 8, 2015 (Blocking Property and Sus- pending Entry of Certain Persons Contributing to the Situation in Venezuela), as amended, as relied upon for additional steps taken in subsequent Executive Orders, and in light of the continued usurpation of power by Nicolas Maduro and persons affiliated with him, as well as human rights abuses, including arbitrary or unlawful arrest and detention of Venezuelan citizens, interference with freedom of expression, including for members of the media, and ongoing attempts to undermine Interim President Juan Guaido and the Venezuelan National Assembly’s exercise of legitimate authority in Venezuela, hereby order: …
Section 1.
  (a) All property and interests in property of the Government of Venezuela that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
  (b) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: …

   (c) The prohibitions in subsections (a)-(b) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.
 
Sec. 2. The unrestricted immigrant and nonimmigrant entry into the United States of aliens determined to meet one or more of the criteria in section 1(b) of this order would be detrimental to the interests of the United States, and entry of such persons into the United States, as immigrants or non- immigrants, is hereby suspended, except when the Secretary of State determines that the person’s entry would not be contrary to the interests of the United States, including when the Secretary so determines, based on a recommendation of the Attorney General, that the person’s entry would further important United States law enforcement objectives. In exercising this responsibility, the Secretary of State shall consult the Secretary of Homeland Security on matters related to admissibility or inadmissibility within the authority of the Secretary of Homeland Security. Such persons shall be treated in the same manner as persons covered by section 1 of Proclamation 8693 of July 24, 2011 (Suspension of Entry of Aliens Subject to United Nations Security Council Travel Bans and International Emergency Economic Powers Act Sanctions). The Secretary of State shall have the responsibility for implementing this section pursuant to such conditions and procedures as the Secretary has established or may establish pursuant to Proclamation 8693.
 
Sec. 3. The prohibitions in section 1 of this order include:

   (a) the making of any contribution or provision of funds, goods, or services
by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and
  (b) the receipt of any contribution or provision of funds, goods, or services from any such person.


Sec. 4.
  (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibi- tions set forth in this order is prohibited.
  (b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.


Sec. 5. Nothing in this order shall prohibit:
  (a) transactions for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof; or
  (b) transactions related to the provision of articles such as food, clothing, and medicine intended to be used to relieve human suffering.


Sec. 6. For the purposes of this order:
  (a) the term ”person” means an individual or entity;
  (b) the term ”entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
  (c) the term ”United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States; and
  (d) the term ”Government of Venezuela” includes the state and Government of Venezuela, any political subdivision, agency, or instrumentality thereof, including the Central Bank of Venezuela and Petroleos de Venezuela, S.A. (PdVSA), any person owned or controlled, directly or indirectly, by the foregoing, and any person who has acted or purported to act directly or indirectly for or on behalf of, any of the foregoing, including as a member of the Maduro regime. For the purposes of section 2 of this order, the term ”Government of Venezuela” shall not include any United States citizen, any permanent resident alien of the United States, any alien lawfully admitted to the United States, or any alien holding a valid United States visa.


Sec. 7. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 13692, there need be no prior notice of a listing or determination made pursuant to section 1 of this order.
 
Sec. 8. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including promulgating rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to implement this order. The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions within the Department of the Treasury. All agencies of the United States Government shall take all appropriate measures within their authority to carry out the provisions of this order.
 
Sec. 9.
  (a) Nothing in this order shall be construed to impair or otherwise affect: …
  (b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
  (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
 
Sec. 10. This order is effective at 9:00 a.m. eastern daylight time on August 5, 2019.

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EXIM_a22Treasury/OFAC Amends Iranian Financial Sanctions Regulations and Iranian Human Rights Abuse Sanctions Regulations

(Source:
Federal Register, 7 August 2019.) [Excerpts.]
 
84 FR 38545: Final Rule; Iranian Financial Sanctions Regulations and Iranian Human Rights Abuses Sanctions Regulations
 
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Final Rule.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Iranian Financial Sanctions Regulations, changing the heading of the Iranian Human Rights Abuses Sanctions Regulations to the Iranian Sector and Human Rights Abuses Sanctions Regulations, and amending the renamed Iranian Sector and Human Rights Abuses Sanctions Regulations to implement Executive Order 13871 of May 8, 2019 (”Imposing Sanctions With Respect to the Iron, Steel, Aluminum and Copper Sectors of Iran”).
* DATES: Effective Date: August 7, 2019.
* SUPPLEMENTARY INFORMATION: … Amendments to the IFSR
OFAC is redesignating the existing § 561.205 as § 561.220 and adding a new § 561.205 to subpart B of the IFSR to implement the correspondent account or payable-through account sanctions in section 2 of E.O. 13871. Additionally, in subpart C, which defines key terms used throughout the IFSR, OFAC is adding new §§ 561.331 through 561.339 to provide definitions of aluminum, aluminum products, aluminum sector of Iran, copper, copper products, copper sector of Iran, iron, iron products, steel, steel products, iron sector of Iran, and steel sector of Iran. OFAC also is making conforming edits to § 561.301, relating to the effective date of applicable prohibitions, § 561.403, relating to facilitation, § 561.404, relating to determinations of significance, § 561.504, relating to an authorization for transactions related to closing a correspondent or payable-through account, and § 561.802, relating to the delegation of authority by the Secretary of the Treasury. …

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EXIM_a33. USTR Announces Product Exclusions Regarding China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation

(Source:
Federal Register, 7 August 2019.) [Excerpts.]
 
* AGENCY:Office of the United States Trade Representative.
* ACTION:Notice of product exclusions.
* SUMMARY:Effective September 24, 2018, the U.S. Trade Representative (Trade Representative) imposed additional duties on goods of China with an annual trade value of approximately $200 billion (the $200 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 subsequent modification in May 2019 included a decision to establish a product exclusion process. The Trade Representative initiated the exclusion process in June 2019, and stakeholders have submitted requests for the exclusion of specific products. This notice announces the Trade Representative’s determination to grant certain 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 September 24, 2018 effective date of the $200 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.
* SUPPLEMENTARY INFORMATION: …

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OGSOTHER GOVERNMENT SOURCES

OGS_a14. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register, 7 August 2019.)

 

[No items of interest noted today.]

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OGS_a25
.
Commerce/BIS (No new postings.)

(Source: Commerce/BIS)

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OGS_a36. 
State/DDTC: (No new postings.)
(Source: State/DDTC)

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OGS_a47. Switzerland SECO Amends Sanctions: Ordinance on Measures against Venezuela

(Source:
SECO, 7 August 2019.)
 
The Federal Department of Economic Affairs, Education and Research EAER has amended Annex 1 to the Ordinance. The entries concerning 18 individuals have been modified. The measures come into force at 6pm on 7 August 2019.
 
You can find the ordinance
here.

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OGS_a58. UK ECJU Releases Guidance Documents on Trade Sanctions Relating to Multiple Countries

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NWSNEWS

NWS_a19
Defense News: “Section 804 gives the U.S. an Advantage in Great Power Competition with China and Russia”

(Source:
Defense News, 7 August 2019.)
 
Military weapons procurement probably doesn’t pop up in casual conversation at your dinner table. Rules governing it are as complicated as the modern war-fighting systems we build, making it a field that literally requires its own university at Fort Belvoir, Virginia. Should you choose to slog through the 5,000-page “how-to” manual for military purchasing, you’d get a close-up look at the sclerotic process used to build supersonic fighters and stealth bombers. It would seem more suited to a Monty Python skit than as a recipe for building a world-class military.
 
In previous job assignments, the two of us met frequently around a small Senate conference table filled with people devoted to fixing our crippled acquisition process. One of us on staff in a reform-focused Senate Armed Services Committee and the other running the Pentagon’s premier prototyping office, we brought unique perspectives to a team that ultimately gave birth to a new acquisition fast lane called Section 804. It’s been a pleasant surprise to find ourselves now responsible for implementing it as senior leaders in the Air Force.
 
The beauty of Section 804 is that you could describe it on a bar napkin. It establishes a series of common-sense reforms: Begin prototyping earlier, nearly a year and half earlier than under the old system; give engineers more time for testing and troubleshooting; and keep flawed concepts from entering production and operations – a whopping 70 percent of any program’s total cost. 
 
But aside from this fiscal common sense, “flying before buying” is accelerating weapons delivery for the men and women who fight our wars. The old slow-lane buying process demanded a mountain of Pentagon paperwork before the first dollar was spent and the first piece of metal bent. The Section 804 fast lane requires the same paperwork but phases it alongside early design and testing. Hanging up business suits in favor of lab coats and hard hats marks a return to an earlier age when the Air Force streamlined weapons development during the height of the Cold War. And Section 804 is producing results that would make our founders smile.
 
They’d also smile because we’ve delegated unprecedented decision authority over these programs to our officers and their civilian counterparts in the field, putting power at the edge where real work happens. We challenged them to find and trim 100 years of schedule “fat” induced by overthinking processes, unnecessary paperwork and risk aversion to sometimes necessary incremental failures. The schedule fat has been cut in less than a year. According to Air Force Chief of Staff Gen. David Goldfein, running an Air Force program might be the best job in government right now.
 
In certain quarters of the Pentagon and Congress, resistance persists. “Too much, too fast or too soon” are concerns easily voiced in government. From where we sit, however, there’s an unmistakable culture shift – centered on speed with discipline – that is accelerating aircraft, satellites, weapons and software development. The airmen leading them should be applauded, not harangued. Less than one and a half years into implementation, it is far too early to abandon a successful experiment, as some are now proposing. Radical change is precisely what the acquisition slow lane needed.
 
With the nation’s new focus on great power competition with China and Russia, the 804 reforms are more necessary than ever. China and Russia are not going to wait around for our laborious acquisition process as they quickly develop new capabilities. We need to field our cutting-edge technology when it is still cutting-edge.
 
When the two of us sat around those congressional conference tables debating how to fix our glacial weapons-buying practices, neither of us could have envisioned the incredible improvements that these common-sense reforms have ushered in.
 
The Air Force is returning to its roots of designing, building and fielding cutting-edge systems using the same old-school mindset that put the Apollo astronauts on the moon. We know defense acquisition will probably never capture the public’s imagination like the space race, but we hope that “smart” fighters, networked swarming weapons, hypersonic glide vehicles and “transformer helo-jets” now under development make you proud of the Air Force that’s soon to come. Now – thanks to Section 804 – it is coming to a base near you. Soon. …

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NWS_a210. ST&R Trade Report: “CBP Urged to Update Policies and Enhance Analysis of Commercial Vehicle Inspections”

(Source:
Sandler, Travis & Rosenberg Trade Report, 7 August 2019.)
 
U.S. Customs and Border Protection should review and update its policies for inspecting commercial vehicles at land border ports of entry and analyze noncompliance at individual POEs to better identify and address deficiencies, according to a new report from the Government Accountability Office. The Department of Homeland Security said it agreed with the recommendations and has initiated procedures to implement them.
 
CBP’s Office of Field Operations is responsible for inspecting cargo at 110 land POEs that have a combined total of 173 crossings. The GAO acknowledges that OFO has implemented processes and deployed technology to identify higher-risk vehicles and cargo and examine them at these POEs but states that many of its directives, handbooks, and other official instructions for POE inspections have not been reviewed and updated every three years (as required by the office’s own policy management handbook) and in some cases have remained unchanged for nearly two decades. As a result, some current policies do not reflect changes in technology, operating conditions, or inspection processes.
 
According to the report, CBP officials said they have initiated a process to modernize related handbooks, policy memoranda, and directives. However, the officials noted that this process can be time-consuming and difficult, challenges that are exacerbated by a lack of authority and resources.
 
The GAO also reviewed the various mechanisms CBP uses at the port, field office, and national levels to monitor compliance with inspection policies at land border POEs, including the Self-Inspection Program. The GAO concluded that the summary reports of SIP results that CBP produces each year are designed to identify systemic compliance issues to target for remediation but have not positioned CBP to determine whether it may need to take additional or alternative actions to more effectively address recurring deficiencies at individual POEs.
 
According to the GAO, CBP officials said port management is responsible for addressing the compliance issues of individual POEs. However, the DHS said in a response to the GAO’s recommendations that CBP plans to begin training on how to conduct the recommended analysis so that it may be conducted for the 2021 SIP results.

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NWS_a311. 
WHBL: “Area Man Faces Sentencing in International Arms Scheme”

(Source:
WHBL, 6 August 2019.)
 
A 59-year-old Chilton man will be sentenced on November 4th for illegally exporting arms and components to Australia.  Online court documents report that Andy Huebschmann admitted to manufacturing numerous firearms and parts for an Australian criminal and gun enthusiast.  The kits would have enabled the finished guns to function as either semi- or fully-automatic weapons, and the shipments also included over 19-hundred firearms frames that could be completed as pistols.  The court documents revealed that Huebschmann didn’t get a required export license and that he shipped the guns in containers designed to conceal their presence. …  Huebschmann could spend up to 20 years in prison followed by 3 years of supervised release.

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COMMCOMMENTARY

COM_a112
H. Seshasayee: “India and Venezuela Grow Distant Post U.S.-Sanctions”

(Source: Wilson Center, 5 August 2019.)
 
* Author: Hari Seshasayee, harisesh@alumni.stanford.edu, M.A. in Latin American Studies from Stanford University, and has previously worked as a researcher with Gateway House and led the Latin America desk at the Confederation of Indian Industry.
 
The United States’ mounting sanctions against Venezuela, especially on the national oil company PDVSA, have had a profound effect on the Andean nation’s oil exports to far-flung India. However, despite numerous news reports apparently confirming the halting of Venezuela’s oil exports to India,[FN/1] oil continues to flow from Venezuela to India, albeit in smaller quantities. As per Reuters’ calculations, India’s imports dropped considerably following the imposition of U.S. oil sanctions in January 2019, going down to 200,000 barrels per day (bpd) in June 2019,[FN/2] just half the oil India imported on average from Venezuela in 2018.[FN/3]
 
This is more than just an inconvenience for Nicolás Maduro’s regime in Venezuela: India accounted for 28 percent of Venezuela’s crude oil exports in 2018, amounting to revenues of $7.39 billion.[FN/4] More importantly, Venezuela relied on India as a vital source of foreign exchange, given that a sizeable share of Venezuela’s exports to China goes towards repaying over $60 billion in loans.[FN/5]
 
While the imposition of sanctions against PDVSA remains the primary reason for this rapid reduction in imports, bilateral diplomacy conducted by the U.S. government has also helped persuade India. The U.S. Special Representative for Venezuela, Elliott Abrams, recently admitted at a press conference, “I would say that we have had contacts with Indian companies and with the Government of India and that we have found there to be a very considerable amount of cooperation, which we are very happy to see.”[FN/6]
 
The India-Venezuela Oil Trade
 
At the center of India-Venezuela trade is Reliance Industries Limited (RIL), accounting for 80 percent of India’s annual oil imports from Venezuela. Due to RIL’s sheer size and diversified portfolio-it is India’s largest company by market capitalization and revenue-the company is deeply integrated with the U.S. market, through joint ventures in shale gas blocks in Texas and Pennsylvania with Chevron and Pioneer Natural Resources and millions of dollars’ worth of exports from India to the United States.
 
Naturally, due to these important business interests, RIL promptly decided to comply with U.S. sanctions against Venezuela, and has so far taken three steps to ensure compliance.  First, it immediately stopped exports of diluents such as alkylate and naphtha from its Houston-based subsidiary to Venezuela once sanctions were announced. Second, RIL has been gradually decreasing its imports from Venezuela, despite having signed long-term contracts with PDVSA that last until 2027. Finally, RIL resumed lobbying activities in the United States after a six-year hiatus, to ensure full compliance with the U.S. sanctions. Public documents filed by the company reveal that RIL contracted a lobbying firm, Eversheds Sutherland (US) LLP, on February 15, 2019, for assistance on the issue of “U.S. economic trade sanctions policies.”[FN/7]
 
Besides RIL, the only other Indian company that buys Venezuelan oil is Nayara Energy, previously Essar Oil, now owned by Russia’s Rosneft. These rather new owners, and the Maduro regime’s growing political alliance with Russia, bring a different angle to the India-Venezuela oil trade.
 
Today, Rosneft operates in each step of the oil sector’s value chain in Venezuela: from local production in Venezuelan oil fields to the export of crude oil. A portion of the oil co-produced by Rosneft and PDVSA in Venezuela is shipped to India’s Nayara Energy. In 2018, this amounted to 69,200 bpd of oil exported from Venezuela to the Vadinar port in Gujarat.[FN/8] But these numbers are declining fast, as millions of barrels of oil remain stranded off the coast of Venezuela, waiting for approvals and oil transfer payments.[FN/9]
 
While Nayara Energy, in its earlier incarnation as Essar Oil, used to pay cash for Venezuelan oil, the new Russian owners have altered this dynamic: Rosneft loaned over $6 billion to PDVSA over the past few years, the bulk of which has gradually been repaid in Venezuelan oil. Today, Nayara’s imports of Venezuelan crude come under the purview of Rosneft’s oil-for-loan deals, thus decreasing the amount of cash Venezuela receives from India for oil imports.
 
Apart from the effects of U.S. sanctions, Venezuela’s rapid decline in oil production itself has also contributed to a decrease in its exports. Most estimates put production levels at 720,000 bpd in May 2019, far below the 2.3 million bpd produced in 2015.[FN/10] The Indovenezolana joint venture between PDVSA and India’s ONGC Videsh Limited (OVL), which was expected to reach a capacity of 40,000 bpd, now produces only 9,900 bpd of oil.[FN/11] This is bound to cause more concern for OVL, to which PDVSA already owes $449 million worth of accrued dividends.[FN/12]
 
Looking Ahead
 
These commercial exchanges make up the entirety of India-Venezuela relations in the short term, as New Delhi has paid little attention to the geopolitics being played out in Caracas. As a result, the Maduro regime has grown more distant towards India and even more dependent on Russia and China.
 
While Venezuela exported more oil to India than to China in 2018, this equation has changed considerably in the aftermath of U.S. sanctions: in May 2019, oil exports to China stood at 450,000 bpd, more than double the exports to India.[FN/13] Russia’s Rosneft is today one of the largest recipients of Venezuelan oil and ships it to Europe and Asia, including India.
 
As the geopolitical scales tip, the domestic situation in Venezuela shows no signs of improvement. Recent economic figures released by the IMF, showing that GDP contracted by 25 percent in 2018,[FN/14] reconfirm the gravity of the crisis. According to the United Nations High Commissioner for Refugees, 4 million people have already fled the country as of June 2019, and this could reach up to 8 million, or one-quarter of the entire population.[FN/15] It is by no means an exaggeration that economists term Venezuela’s predicament as “the single largest economic collapse outside of war in at least 45 years.”[FN/16]
 
[FN/1] Nailia Bagirova, “Venezuela suspends oil exports to India – Azeri energy ministry,” Reuters, March 19, 2019. https://uk.reuters.com/article/venezuela-oil-india-russia/update-1-venezuela-suspends-oil-exports-to-india-azeri-energy-ministry-idUKL8N2161Q8.
[FN/2] Marianna Parraga, “Venezuela’s June oil exports recover to over 1 million bpd: data,” Reuters, July 2, 2019.  https://www.reuters.com/article/us-venezuela-oil-exports/venezuelas-june-oil-exports-recover-to-over-1-million-bpd-data-idUSKCN1TX1MH.
[FN/3] Calculations based on International Trade Centre (ITC), Trade Map, https://www.trademap.org.
[FN/
4] Calculations based on International Trade Centre (ITC), Trade Map, https://www.trademap.org.
[FN/5] Kevin P. Gallagher and Margaret Myers, “China-Latin America Finance Database,” Inter-American Dialogue, 2017, https://www.thedialogue.org/map_list/.
[FN/6] Press Trust of India, “Considerable amount of cooperation from India on Venezuela, says US,” Business Standard, March 30, 2019. https://www.business-standard.com/article/pti-stories/considerable-amount-of-cooperation-from-india-on-venezuela-us-119033000110_1.html.
[FN/7] Pro Publica Inc. “Lobbying for Reliance Industries Limited by Eversheds Sutherland (US) LLP,” ProPublica. Accessed on June 15,2019: https://projects.propublica.org/represent/lobbying/r/301021144.
[FN/8] Collin Eaton, Marianna Parraga, and Gleb Gorodyankin. “Venezuela turns to India for oil exports as U.S. sanctions bite,” Reuters, February 13, 2019 https://ca.reuters.com/article/businessNews/idUSKCN1Q12GI.
[FN/9] The ships are stranded for multiple reasons, including the fact that PDVSA is unable to pay for simple but mandatory port services (hull cleaning and the like) and that some shipping companies have seized or cancelled oil shipments due to PDVSA’s rising unpaid debt.
[
FN/10] Spencer Jakab, “Oil Sanctions Reach Limits as Venezuela Is Wrung Dry,” Wall Street Journal, June 11, 2019. https://www.wsj.com/articles/oil-sanctions-reach-limits-as-venezuela-is-wrung-dry-11560270628.
[FN/11] Jeff Mower, “Venezuela’s Orinoco Belt crude production falls to 169,800 b/d,” S&P Global Platts, May 14, 2019. https://www.spglobal.com/platts/en/market-insights/latest-news/oil/051419-venezuelas-orinoco-belt-crude-production-falls-to-169800-b-d.
[FN/12] PTI, “OVL declines Venezuela’s offer for additional stake in oilfield,” Financial Express, September 9, 2018, https://www.financialexpress.com/industry/ovl-declines-venezuelas-offer-for-additional-stake-inoilfield/1307239/.
[FN/13] Marianna Parraga, “Venezuela’s oil exports drop 17% in May as sanctions kick in: data,” Reuters, June 4, 2019.  https://www.reuters.com/article/us-venezuela-oil-exports/venezuelas-oil-exports-drop-17-in-may-as-sanctions-kick-in-data-idUSKCN1T521H.
[FN/14] Ryan Dube, “Venezuela’s Central Bank Releases Data on Dire Economy,” Wall Street Journal, May 28, 2019. https://www.wsj.com/articles/venezuelas-central-bank-releases-data-showing-dire-economy-11559098083.
[FN/15] Dany Bahar, “Chavismo is the worst of all sanctions: The evidence behind the humanitarian catastrophe in Venezuela,” The Brookings Institution, May 22, 2019. https://www.brookings.edu/blog/up-front/2019/05/22/chavismo-is-the-worst-of-all-sanctions-the-evidence-behind-the-humanitarian-catastrophe-in-venezuela/.
[FN/16] Kurmanaev, A. “Venezuela’s collapse is the worst outside of war in decades, economists say,” The New York Times, May 19,2019. https://www.nytimes.com/2019/05/17/world/americas/venezuela-economy.html.

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COM_a2
13
V. Efremov: “Russia Considers New Counter-Sanctions”

(Source:
Baker McKenzie, 29 July 2019.)
 
* Author: Vladimir Efremov, Esq.,
vladimir.efremov@bakermckenzie.com, + 7 495 787 0715, of Baker McKenzie.
 
The Russian State Duma is considering amendments to Federal Law “On Measures (Countermeasures) in Response to Unfriendly Actions of the USA and (or) other Foreign States” (”
Law on Countersanctions“) dated June 4, 2018.
 
On July 24, 2019, Draft Bill proposing additional Russian countersanctions (”
Draft“) was approved by the Russian State Duma in the first reading.  The amendments to the Draft will be presented till August 22, 2019.  The second reading of the Draft has not been scheduled yet.
 
The Draft proposes the following principal provisions as regards to the settlement of disputes between sanctioned Russian persons and their foreign counterparties:
 
(1) Unless the parties entered into an arbitration agreement subjecting contractual disputes to the jurisdiction of courts, arbitral tribunals or international organizations outside Russia, such disputes shall be settled by Russian courts.
(2) Claims against a sanctioned Russian person shall be filed with a competent court in Russia.
(3) Sanctioned Russian persons are entitled to claim termination of court proceedings outside Russia in a competent Russian court.  Non-compliance of foreign persons with the decision of Russian court on termination of such court proceedings will result in a court fine in the amount of the claim and legal costs incurred by a sanctioned Russian person in the proceedings.
(4) If a sanctioned Russian person can not appear before a court, international organization or arbitral tribunal located outside Russia due to the sanctions imposed, such sanctioned Russian person can unilaterally amend a valid arbitration agreement subjecting settlement of disputes in foreign states in favor of courts or arbitral tribunals located in Russia.  Non-compliance of a foreign counterparty with such unilateral amendment grants a Russian sanctioned person the right to claim penalty in the amount of the claim.
 
The Draft also proposes a broad definition of the term “restrictive measures” to be introduced in the Law on Countersanctions, which includes the measures that limit:
 
(1) the rights of Russian persons to possess, use, or dispose of the property located in foreign states, to use or dispose of the property rights in foreign states, to make financial transactions in funds in a currency of foreign states;
(2) an ability of any person to enter into transactions, execute or accept execution under transactions involving a sanctioned Russian person, property (property rights) of such person, or securities issued by such person.
 
The Draft is purported to regulate certain issues that are not within the scope of Russian jurisdiction, that is why its practical application is questionable.  As of today, there are strong doubts regarding the approval of the Draft in its current wording.  The Draft in our view will likely be amended prior to its approval, if any.  We will be closely monitoring status of this Draft.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a114. ECTI Presents United States Export Control (ITAR/EAR/OFAC) Seminar Series in Austin, TX

(Source: Jill Kincaid;
jill@learnexportcompliance.com
)
 
* What: United States Export Control (ITAR/EAR/OFAC) Seminar Series in Austin, TX
* When: ITAR Seminar: September 16-17, 2019; EAR/OFAC Seminar: Sept 18-19, 2019
* Where: Austin, TX: Hilton Garden Inn Austin Downtown
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker Panel: Scott Gearity and Melissa Proctor
* Register
here
, or email
Jessica Lemon
, 540-433-3977.

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TE_a215. FCC Presents “Designing an ICP for Export Controls & Sanctions”, 1 Oct in Bruchem, the Netherlands

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

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ENEDITOR’S NOTES

 

*
Tryon Edwards: (7 Aug 1809 – 4 Jan 1894; was an American theologian, best known for compiling
 
A Dictionary of Thoughts,
 a book of quotations.)
  – “Any act often repeated soon forms a habit; and habit allowed, steady gains in strength, At first it may be but as a spider’s web, easily broken through, but if not resisted it soon binds us with chains of steel.”
  – “Right actions in the future are the best apologies for bad actions in the past.”

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EN_a317
. 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 (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.   

 

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: 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: 6 August 2019: 84 FR 38545August 2019 Amendments to Iranian Financial Sanctions Regulations and Iranian Human Rights Abuses Sanctions Regulations [amendment of 31 CFR Parts 561 and 562
.] 

  

* 
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: 22 July 2019: Harmonized System Update (HSU) 1913  
  – HTS codes for AES are available here.
  – HTS codes that are not valid for AES are available here.

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EN_a0318
Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor) 

Review last week’s top Ex/Im stories in “Weekly Highlights of the Daily Bugle Top Stories” published  
here

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EPEDITORIAL POLICY

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

* 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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