19-0813 Tuesday “Daily Bugle'”

19-0813 Tuesday “Daily Bugle”

Tuesday, 13 August 2019

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

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[No items of interest today.]
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. DHS/CBP Announces ACE PRODUCTION Maintenance scheduled for Saturday evening, August 17, 2019
  4. State/DDTC: (No new postings.)
  5. UK ECJU updates 2 Open General Export Licences (OGELs)
  1. ST&R Trade Report: “HS 2017 Implementation, Classification Issues Among Topics of Brussels HSC Meeting”
  2. Taipei Times: “US Lets Advanced Combat Tech Come to Taipei Expo”
  1. B. Dekker & M. Okano-Heijmans: “The US-China Trade-Tech Stand-Off and the Need for EU Action on Export Control
  2. M. Volkov: “OFAC Announces $1.7 Million Settlement with Truck Manufacturer for Violations of Iran Sanctions Program”
  1. ECS Presents “ITAR/EAR Boot Camp: Achieving Compliance” on 8-9 Oct in Savannah, GA
  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 2019), DOT/FACR/OFAC (6 Aug 2019), HTSUS (22 Jul 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 


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OGS_a11. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register, 13 August 2019.)


* Commerce/BIS; RULES; Entry Lists: Additions, Revisions and Removals [Pub. Date: 14 August 2019.]
* Commerce/BIS; NOTICE; Impact of Proposed Additions to the ”Annex on Chemicals” to the Chemical Weapons Convention on Legitimate Commercial Chemical, Biotechnology, and Pharmaceutical Activities Involving ”Schedule 1” Chemicals (including Schedule 1 Chemicals Produced as Intermediates) [Pub. Date: 14 August 2019.]
* U.S.-China Economic and Security Review Commission; NOTICES; Hearing [Pub. Date: 14 August 2019.]

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Commerce/BIS: (No new postings.)
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DHS/CBP Announces ACE PRODUCTION Maintenance scheduled for Saturday evening, August 17, 2019
DHS/CBP, 13 August 2019.)
The ACE PRODUCTION Maintenance scheduled for Saturday evening, August 17, 2019, will start one hour early from 2100 ET to 0400 ET Sunday, August 18, 2019 for ACE Infrastructure maintenance.
Due to the nature of the maintenance work being performed there is a possibility that the ACE Portal login/banner page will NOT be rendered when trying to access ACE during the maintenance window.

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UK ECJU updates 2 Open General Export Licences (OGELs)
, 13 August 2019.)
The UK Export Control Joint Unit (ECJU) within the Department of International Trade (TID) has published the following update on its website:
The open general export licence (historic military vehicles and artillery pieces) has been updated to remove the requirement for exporters to register for this licence.
The open general export licence (military goods: for demonstration) has been updated to include an option for the goods to remain under the control of the exporter’s agent.
The updated OGELs come into force on Tuesday 13 August 2019.

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STR Trade Report: “HS 2017 Implementation, Classification Issues Among Topics of Brussels HSC Meeting”
(Source: Sandler, Travis & Rosenberg Trade Report, 12 Aug 2019)
U.S. Customs and Border Protection has issued the draft agenda for the 64th session of the World Customs Organization’s Harmonized System Committee, which will be held in Brussels Sept. 18-27. The HSC’s responsibilities include issuing classification decisions on the interpretation of the Harmonized Commodity Description and Coding System, which can take the form of published tariff classification opinions or amendments to the Explanatory Notes. The committee also considers amendments to the legal text of the Harmonized System. …
The HSC is slated to consider a number of issues at its upcoming meeting, including the status of and challenges associated with the implementation of the 2017 edition of the HS. Also up for consideration is the classification of numerous goods [listed in the Source article].

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Taipei Times: “US Lets Advanced Combat Tech Come to Taipei Expo”

(Source: Taipei Times, 11 August 2019.) [Excerpts.]
The US government has approved an export license for an advanced targeting tool, used to identify targets and guide bombs, so that a live demonstration can be given at the Taipei Aerospace and Defense Technology Exhibition, a government source said yesterday.
The Ministry of National Defense had sent many requests to Washington for it to sell a state-of-the-art forward-looking infrared (FLIR) targeting pod – the FLIR Star SAFIRE 380-HD – but has been turned down every time, the source said on condition of anonymity.
The granting of the license by the US government came as a complete surprise, the source said, adding that targeting pod maker FLIR Systems is to stage a live demonstration at the Taipei Aerospace and Defense Technology Exhibition, which opens on Thursday. …

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B. Dekker & M. Okano-Heijmans: “The US-China Trade-Tech Stand-Off and the Need for EU Action on Export Control
(Source: Clingendael, 12 August, 2019.)
* Author: Brigitte Dekker, Research Assistant, bdekker@clingendael.org; and Maaike Okano-Heijmans, Senior Research Fellow, mokano-heijmans@clingendael.org, both of Clingendael.
As the great power rivalry and (technological) trade conflict between the United States (US) and China intensifies, calls for an export control regime tailored to so-called emerging technologies are growing. In August 2018 the US government announced the Export Control Reform Act (ECRA), seeking to limit the release of emerging technologies to end uses, end users and destinations of concern.
The contest is on for the leader in the development and use of emerging technologies, but also for shaping norms and writing the rules for their use. This requires the Netherlands and other EU member states – in coordination with key stakeholders from business and academia – also to redouble their efforts to recraft their own approach to export controls of so-called ‘omni-use’ emerging technologies.
This Clingendael Report outlines four levels of action in the field of export control for the Dutch government to pursue in parallel: bilaterally with the US; European Union cooperation; ‘Wassenaar’ and beyond; and trusted communities.


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M. Volkov: “OFAC Announces $1.7 Million Settlement with Truck Manufacturer PACCAR for Violations of Iran Sanctions Program”
(Source: Volkov Law Group Blog, 12 August, 2019. Reprinted by permission.)
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
In yet another enforcement action, OFAC announced a $1.709 million settlement with PACCAR, Inc., for 63 apparent violations of the Iran Sanctions Program by DAF Trucks, a wholly-owned subsidiary based in Eindhoven, Netherlands. (Here).
On three separate occasions, between October 2013 and February 2015, DAF sold or supplied 63 trucks to customers in Europe that it knew or had reason to know were ultimately intended for buyers in Iran. The total value of the transactions was approximately $5.4 million.
OFAC’s settlement agreement underscores the extent to which companies can be held liable for third party actions reselling products for ultimate customers in Iran. Applying the regulatory scienter requirement of knowing or reason to know, OFAC is aggressively holding companies accountable for multi-level distribution schemes in which products ultimately end up being sold to Iran customers.
PACCAR is primarily a manufacturer of trucks and related goods and services. DAF is one of its brands. DAF sells its trucks through a dealer network consisting of more than 300 independent dealers. The dealers, in turn, sell DAF trucks to ultimate customers/users. Most trucks are custom-built to customer/end-ser specifications.
In June and October 2014, a DAF dealer in Hamburg, Germany placed two orders with DAF for a total of 51 trucks. The paperwork associated with these orders identified the ultimate customer as an unnamed party in Russia. The DAF Hamburg dealer, however, knew that the trucks were actually intended for a buyer in Iran.
The DAF Germany manager had reason to know that the trucks were intended for Iran rather than for Russia. The DAF Hamburg dealer initially requested a price quotation from DAF German’s manager for an Iranian company located in Iran. The DAF German manager told the DAF Hamburg dealer that DAF German could not sell trucks destined for Iran. On the same day, the DAF Hamburg dealer submitted a pricing request for a new order of trucks purportedly destined for a customer or end-user in Russia with virtually identical specifications as the earlier submitted order for the prohibited Iranian customer. The DAF German manager then processed the DAF Hamburg dealer’s order without questioning the same day request.
In an earlier incident, in October 2013, DAF Trucks Frankfurt, a directly owned DAF dealer, received two trucks from DAF that were intended for resale to a company in Germany. The original buyer cancelled the order, and DAF Trucks Frankfurt sold the two trucks to a trade in the Netherlands, which in turn resold the trucks to two buyers in Iran. An employee at DAF Trucks Frankfurt knew or had reason to know that the two trucks sold to the Netherlands trader were intended for resale to buyers in Iran. Among other things, the Netherlands trader send draft invoices to the DAF Trucks Frankfurt employee which referenced the buyers in Iran.
In June 2014, DAF sold 10 trucks to an authorized DAF sales dealer in Sofia, Bulgaria, which subsequently sold and delivered the 10 trucks to an affiliated rental company, which in turn sold the 10 trucks to a buyer in Iran. The Bulgarian dealer’s parent company disclosed that a used truck sales manager employed by DAF introduced that dealer to the Iranian buyers of the 10 trucks and knew or should have known that the trucks were intended for Iran before introducing the parties to each other.
OFAC cited the fact that DAF personnel failed to exercise a minimal degree of caution or care when they ignored red flags regarding potential sales to OFAC-sanctioned countries and customers that they knew or had reason to know intended to resell the trucks to Iran.
On the mitigating side, OFAC cited the fact that PACCAR voluntarily disclosed the matter to OFAC and that PACCA had a trade sanctions compliance program in place at the time of the violations. Further, OFAC noted that, upon learning of the apparent violations, DAF took remedial action by conducting an internal investigation, terminated the employees involved, and cancelled delivery of 20 trucks, and enhanced its compliance program.

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TE_a110. ECS Presents “ITAR/EAR Boot Camp: Achieving Compliance” on 8-9 Oct in Savannah, GA

(Source: ECS)
* What:  ECS ITAR/EAR Boot Camp:  Achieving Compliance
* When:  October 8-9, 2019
* Sponsor:  Export Compliance Solutions & Consulting (ECS)
* ECS Instructors:  Suzanne Palmer, Mal Zerden
* Register 

 or by calling 866-238-4018 or email 

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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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* Felix Adler
(13 Aug 1851 – 24 Apr 1933; was a German American professor of political and social ethics, rationalist, influential lecturer on euthanasia, religious leader, and social reformer who founded the Ethical Culture movement.)
“The family is the school of duties – founded on love.”
* Ben Hogan
(William Ben Hogan; 13 Aug 1912 – 25 Jul 1997; was an American professional golfer who is generally considered to be one of the greatest players in the history of the game. Hogan is notable for his profound influence on golf swing theory and his legendary ball-striking ability.)
“There is no similarity between golf and putting; they are two different games, one played in the air, and the other on the ground.”

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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: 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.]  


, 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 1913

  – 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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