 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 |
| | | [No items of interest today.]
| | | - Items Scheduled for Publication in Future Federal Register Editions
- Commerce/BIS: (No new postings.)
- GAO Ex/Im Reports and Testimonies of Interest: “Status of End-Use Monitoring of Dual-Use Exports as of August 2019”
- State/DDTC: (No new postings.)
- Hong Kong TID Suspends All E-services from 06:30pm to 11:59pm on 16 August 2019 (Friday)
| | | - ST&R Trade Report: “Export Compliance Programs Can Help Mitigate Seizures Under Updated CBP Guidelines”
| | | - S.H. Reisinger, S.M. McNabb & K.H. Caine: “US Imposes Second Round of CBW Act Sanctions on Russia; Overall Impact to Remain Minimal”
| | | - Jim Bartlett Joins Alpha Omega Consulting Group
- Monday List of Ex/Im Job Openings: 142 Openings Posted This Week; 9 New Openings
| | | - ECTI Presents United States Export Control (ITAR/EAR/OFAC) Seminar Series in Austin, TX
- FCC Presents “U.S. Export Controls: ITAR from a non-U.S. Perspective”, 26 Nov in Bruchem, the Netherlands
| | | - Bartlett’s Unfamiliar Quotations
- 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 2019), DOT/FACR/OFAC (6 Aug 2018), HTSUS (22 Jul 2019)
- Weekly Highlights of the Daily Bugle Top Stories
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ITEMS FROM TODAY’S FEDERAL REGISTER |
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OTHER GOVERNMENT SOURCES |
1. Items Scheduled for Publication in Future Federal Register Editions * Commerce/BIS; NOTICES; Order Denying Export Privileges: Juan Jesus De La Rosa; Michael Shapovalov; a.k.a. Mikhail Shapovalov; and Si Chen; a.k.a. Cathy Chen; a.k.a. Celia Chen; a.k.a. Cecelia Chen; a.k.a. Chunping Ji [Pub. Date: 13 August 2019.] * DHS/CBP; NOTICES; Test Concerning Entry of Section 321 Low-valued Shipments Through Automated Commercial Environment [Pub. Date: 13 August 2019.] * * * * * * * * * * * * * * * * * * * * |
2 . Commerce/BIS: (No new postings.) * * * * * * * * * * * * * * * * * * * *
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3 . GAO Ex/Im Reports and Testimonies of Interest: “Status of End-Use Monitoring of Dual-Use Exports as of August 2019” (Source: GAO , 12 August 2019.) The mission of the Export-Import Bank of the United States is to support U.S. jobs by facilitating the export of U.S. goods and services. It does this through loans, loan guarantees, and insurance. The bank’s charter generally prohibits supporting sales of weapons and other defense items. However, it may facilitate export of “dual-use” items that have commercial and military application-construction equipment for a foreign military, for example. We monitored fiscal year 2017 dual-use projects and looked for new projects in 2018. We found 3 projects in 2017 that were monitored as required or completed. We found no new projects in 2018. * * * * * * * * * * * * * * * * * * * *
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4 . State/DDTC: (No new postings.) * * * * * * * * * * * * * * * * * * * *
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5. Hong Kong TID Suspends All E-services from 06:30pm to 11:59pm on 16 August 2019 (Friday) The Trade and Industry Department (TID) of Hong Kong has released the following information on its website: Suspension of All E-services All e-services of our website will be suspended from 06:30pm to 11:59pm on 16 August 2019 (Friday) due to system maintenance. * * * * * * * * * * * * * * * * * * * * |
NEWS |
6 . ST&R Trade Report: “Export Compliance Programs Can Help Mitigate Seizures Under Updated CBP Guidelines” Recently updated guidelines from U.S. Customs and Border Protection will make it more expensive to secure a return of goods seized for violations of U.S. export laws or regulations. However, export compliance programs and other factors can help lower that cost. CBP may seize goods that are being exported, or have been exported, in violation of U.S. export control laws, including those of the Directorate of Defense Trade Controls, the Bureau of Industry and Security, the Office of Foreign Assets Control, and the Drug Enforcement Agency. CBP may also seize imported goods when the importation has a nexus to an exportation; e.g., goods temporarily imported or temporarily exported when the shipment does not have the required license, permit, or other authorization. CBP may also seize goods for failure to obtain a required Form 6 from the Bureau of Alcohol, Tobacco, Firearms, and Explosives for permanent importation of licensable goods. When such seizures occur, parties with an interest in the goods can submit an administrative petition to request remission of the forfeiture and return of the goods. CBP reviews the facts and circumstances of each case and decides whether to grant relief and, if so, what type and under what conditions. CBP may reference these guidelines when making such decisions. CBP states that previous versions of these guidelines distinguished between technical violations and substantive violations but that these terms are no longer being used because they were often confusing and misleading and are not used by licensing agencies. Instead, CBP is now distinguishing between license violations and non-license violations. License violations include exports of goods without the required license or other authorization, exports of goods in excess of the authorized amount, and failure to timely or properly file electronic export information for licensable goods. Non-license violations occur when the shipment has the required authorization (or none is required) but there is another violation; e.g., a violation of the Foreign Trade Regulations. Under the revised guidelines, CBP will generally remit a forfeiture and release goods seized for export violations only if the following conditions are met: all costs of seizure (storage and appraisal) are paid, an executed hold harmless agreement is submitted, the goods are brought into compliance or exported under CBP supervision (if required), all export requirements are met if the goods are released for export, and a forfeiture remission amount is paid. The ranges below should serve as guidance when determining the remission amount. First offense – if no aggravating factors are present, 10-30 percent of the export value of the seized goods but not less than $500; if aggravating factors are present, 30-50 percent of the export value but not less than $1,000 Second offense – if no aggravating factors are present, 30-50 percent of the export value but not less than $1,000; if aggravating factors are present, 50-80 percent of the export value but not less than $2,500 Third or subsequent offense – 50-80 percent of the export value but not less than $1,500 Remission amounts will generally be at the higher end of these ranges for license violations and at the lower end or middle for non-license violations, although egregious violations may justify deviation from this approach in either case. The guidelines list a number of mitigating and aggravating factors that CBP may consider in determining a remission amount. Mitigating factors may include prior seizure history, inexperience, voluntary disclosures, third-party error, exceptional cooperation, remedial measures, and the existence of an active systematic export compliance program. Aggravating factors may include related criminal convictions, intentional violations, a pattern of violations showing disregard for U.S. laws and regulations, multiple violations in the same transaction, and the lack of an active systematic export compliance effort. * * * * * * * * * * * * * * * * * * * * |  |
COMMENTARY |
7. S.H. Reisinger, S.M. McNabb & K.H. Caine: “US Imposes Second Round of CBW Act Sanctions on Russia; Overall Impact to Remain Minimal” * Authors: Stefan H. Reisinger, Esq., stefan.reisinger@nortonrosefulbright.com, 1-202-662-4512; Stephen M. McNabb, Esq., stephen.mcnabb@nortonrosefulbright.com, 1-202-662-4528; and Kimberly Hope Caine, Esq., kim.caine@nortonrosefulbright.com, 1-202-662-0394, all of Norton Rose Fulbright US LLP. In a long-awaited decision, the US has announced that it will impose a second round of sanctions on Russia as required under the Chemical and Biological Weapons and Warfare Elimination Act of 1991 (22 USC. 5601 et seq.) (the CBW Act). The sanctions, which will not become effective until the publication of a notice in the Federal Register on or around August 19, 2019, relate to Russia’s alleged attempt in 2018 to assassinate Sergei Skripal and his daughter using a banned nerve agent. In summary, the sanctions will: – Prohibit “US banks” from, after August 26, 2019, participating in the primary market for non-ruble denominated Russian sovereign bonds or lending non-ruble denominated funds to the Russian sovereign; – Impose a presumption of denial, subject to certain exceptions discussed below, on applications for licenses to export dual-use goods that are controlled by the US Department of Commerce for chemical and biological weapons proliferation (CB) reasons; and – Require the United States to oppose the extension of any loan or financial or technical assistance to Russia by international financial institutions, such as the World Bank or International Monetary Fund. As discussed in more detail below, the impact of these sanctions, as with the first round of sanctions issued in August, 2018, is expected to be minimal, particularly in comparison to the menu of potential sanctions that could have been imposed. For example, the CBW Act authorizes a prohibition on: (i) the export to Russia of all goods and technologies (excluding agricultural products); (ii) importation into the United States of any Russian-origin goods; or (iii) the issuance or provision of any loan or credit to Russia, excluding agricultural related transactions. Rather than imposing these broad sanctions, the State Department elected, as it did with the first round of sanctions, to utilize its broad waiver authority to significantly narrow their scope. This second round of sanctions was required under the CBW Act because, following the first round of sanctions, Russia did not sufficiently establish within ninety days that it had met the required conditions, including that it would allow on-site inspections to verify it had stopped using chemical or biological weapons. The second round of sanctions could have been imposed as early as November 2018, but the administration delayed the process until recent Congressional pressure necessitated a response. The sanctions must remain in place for at least 12 months and can only be lifted if the President determines and certifies to the Congress that Russia has met several conditions described in the CBW Act, including providing reliable assurances that (1) it is not making preparations to use chemical weapons; (2) it has provided assurances it will not use chemical weapons in the future; (3) it has allowed international inspectors to verify those assurances; and (4) it has paid restitution to the victims of the nerve agent attack. I
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Prohibition on US banks engaging in certain transactions involving Russian sovereign debt The most significant of the three sanctions is the prohibition on “US banks” from “participation in the primary market for non-ruble denominated bonds issued by the Russian sovereign” and “lending non-ruble denominated funds to the Russian sovereign.” While the CBW Act refers to “US Banks,” the related Directive issued by the US Department of Treasury’s Office of Foreign Assets Control (OFAC) specifies that the term should be construed to apply to a broader universe of US financial institutions, including: “depository institutions, banks, savings banks, trust companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, and US holding companies, US affiliates, or US subsidiaries of any of the foregoing.” The term “Russian sovereign” is defined to include any ministry, agency, or sovereign fund of the Russian Federation, including the Central Bank of Russia, the National Wealth Fund, and the Ministry of Finance of the Russian Federation. Explicitly excluded from the prohibitions, however, are transactions involving: (1) the non-primary (i.e., secondary) market for Russian sovereign debt; (2) ruble denominated debt; or (3) state-owned enterprises in Russia (which are excluded from the definition of Russian sovereign). Russian sovereign debt has frequently been discussed as a potential target for US sanctions so many US financial institutions had previously largely withdrawn from participating in transactions involving such debt, outside of certain transactions involving Russian Eurobonds. Because ruble denominated debt is excluded from the scope of the new sanctions, transactions involving Russian ruble denominated Federal Loan Obligations (OFZs) will likely remain permissible. More problematic for US financial institutions, however, will be transactions involving Russian Eurobonds, which are, by definition, denominated in non-Russian currencies (primarily US dollars). It is unclear, for example, whether US financial institutions will be permitted to continue clearing US-dollar transactions associated with such bonds. II
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Restriction on exports of CB controlled US-origin items According to the US Department of State, the sanctions will include a presumption of denial for all applications for licenses to export dual-use goods that are controlled by the US Department of Commerce for chemical and biological weapons proliferation reasons (CB). The US Department of Commerce has not yet issued any regulations or guidance specifying how it will implement these restrictions but, according to the State Department guidance, the restrictions, like those imposed on national security controlled items under the first round of sanctions, will include multiple exceptions that will significantly reduce their impact. For example, there will be an exception for US firms fulfilling existing contracts with Russian customers. In addition, license applications for exports of CB controlled items involving the following activities will be treated on a case by case basis, and not be subject to a policy of denial: – Exports needed for space flight activities, including those involving government space cooperation and commercial space launch; – Exports needed to ensure the safe operation of commercial passenger aviation; – Exports to commercial end-users in Russia for civil end-uses; – Exports to wholly owned-subsidiaries of US and other foreign companies in Russia; and – Deemed export licenses for Russian nationals working in the United States. It is not certain whether exports of CB controlled items will, like NS items in the first round of sanctions, remain eligible for export under various license exceptions. Based on these broad exceptions, and because all CB controlled items already required a license for export to Russia, the main impact of the new prohibitions will largely be limited to a formal presumption of denial for CB controlled products to Russian government owned and funded entities that are unrelated to space cooperation. III
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Opposition to international financial institution assistance to Russia Under the new sanctions, the United States is required to oppose the provision of any loan, or financial or technical assistance, to Russia by international financial institutions such as the World Bank or International Monetary Fund unless such assistance “is directed specifically to programs which serve the basic human needs of the citizens of such country.” Russian reliance on these institutions for assistance is minimal (for example, according to IMF data Russia currently has zero IMF-issued loans), so the impact of this policy is also likely to be minimal. * * * * * * * * * * * * * * * * * * * * | |
EX/IM MOVERS & SHAKERS |
| 8. Jim Bartlett Joins Alpha Omega Consulting Group (Source: Editor) Attorney James E. Bartlett III, principal of Full Circle Trade Law, PLLC, of Washington, DC, partner in the Dutch export compliance advisory, Full Circle Compliance, BV, of Bruchem, Netherlands, author of Bartlett’s Annotated ITAR (“The BITAR”) and Bartlett’s Annotated FTR (“The BAFTR”), and editor of the Daily Bugle, will join the Alpha Omega Consulting Group, https://alphaocg.com, 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. Contact Jim at JEBartlett@JEBartlett.com or 1-202-802-0646. * * * * * * * * * * * * * * * * * * * * |
9. Monday List of Ex/Im Job Openings: 142 Openings Posted This Week, Including 9 New Openings (Source: Events & Jobs Editor) Published every Monday or first business day of the week. Please, send job openings in the following format to jobs@fullcirclecompliance.eu . * COMPANY; LOCATION; POSITION TITLE (WEBLINK); CONTACT INFORMATION; REQUISITION ID “
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” New or amended listing this week * Lockheed Martin Rotary and Mission Systems; Liverpool, NY, Moorestown, NJ, Owego, NY, Stratford, CT; Intl Licensing Analyst Stf ; Requisition ID: 483502BR * Saudi Aramco; Dhahran, Saudi Arabia; Paralegal ; Requisition ID: 17184BR * Solvay; Princeton, NJ and Alpharetta, GA; Customs Expert; Requisition ID: 9474 * * * * * * * * * * * * * * * * * * * * |
EX/IM TRAINING EVENTS & CONFERENCES |
| 10. ECTI Presents United States Export Control (ITAR/EAR/OFAC) Seminar Series in Austin, TX * 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 * * * * * * * * * * * * * * * * * * * * |
11. FCC Presents “U.S. Export Controls: The ITAR from a non-U.S. Perspective”, 26 Nov in Bruchem, the Netherlands
This intermediate-level training course is specifically designed for compliance professionals and those in a similar role who aim to stay up-to-date with the latest International Traffic in Arms Regulations (ITAR) requirements that apply to non-U.S. transactions. The course will cover multiple topics relevant for organizations outside the U.S. that are subject to the International Traffic in Arms Regulations, including but not limited to: the U.S. regulatory framework, key ITAR concepts and definitions, tips regarding classification and licensing, essential steps to ensure an ITAR compliant shipment, how to handle a (potential) non-compliance issue, recent enforcement trends, and the latest regulatory amendments, including the latest U.S. Export Control Reform developments. Participants will receive a certification upon completion of the training. Details * What: U.S. Export Controls: The International Traffic in Arms Regulations (ITAR) from a non-U.S. Perspective * When: Tuesday, 26 Nov 2019 – Welcome and Registration: 9.00 am – 9.30 am – Training hours: 9.30 am – 4.30 pm * Where: Full Circle Compliance, Landgoed Groenhoven, Dorpsstraat 6, Bruchem, the Netherlands * This course can be followed in combination with “U.S. Export Controls: The Export Administration Regulations (EAR) from a non-U.S. Perspective” (27 Nov 2019), and/or “The ABC of Foreign Military Sales” (29 Nov 2019). Please see the event page for our combo pricing deals. * * * * * * * * * * * * * * * * * * * * | |
| EDITOR’S NOTES |
| * Alex Haley
( Alexander Murray Palmer Haley; 11 Aug 1921 – 10 Feb 1992; was an American writer and the author of the 1976 book Roots: The Saga of an American Family. ABC adapted the book as a television miniseries of the same name and aired it in 1977 to a record-breaking audience of 130 million viewers. In the United States, the book and miniseries raised the public awareness of African American history and inspired a broad interest in genealogy and family history.) – “Nobody can do for little children what grandparents do. Grandparents sort of sprinkle stardust over the lives of little children.” * Robert Southey
(12 Aug 1774 – 21 Mar 1843; was an English poet of the Romantic school, one of the Lake Poets along with William Wordsworth and Samuel Taylor Coleridge, and England’s Poet Laureate for 30 years from 1813 until his death in 1843.) – “Live as long as you may, the first twenty years are the longest half of your life.” Monday is pun day. * My boss is going to fire the employee with the worst posture. I have a hunch — it might be me. * I can’t believe I got fired from the calendar factory. All I did was take a day off. * Don’t spell part backwards. It’s a trap! * * * * * * * * * * * * * * * * * * * *
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13 . Are Your Copies of Regulations Up to Date? (Source: Editor) The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register. The latest amendments to applicable regulations are listed below. * 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: 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: 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 Jul 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 . * DOE ASSISTANCE TO FOREIGN ATOMIC ENERGY ACTIVITIES : 10 CFR Part 810; Implemented by Dep’t of Energy, National Nuclear Security Administration, under the 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. * 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: 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 Jul 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 download, 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. Implemented by Dep’t of Treasury, Office of Foreign Assets Control. – Last Amendment: 6 August 2019: 84 FR 38545 – August 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”.) – HTS codes for AES are available here. – HTS codes that are not valid for AES are available here. * * * * * * * * * * * * * * * * * * * *
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14. 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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| * 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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