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19-0917 Tuesday “Daily Bugle”

19-0917 Tuesday “Daily Bugle”

Tuesday, 17 September 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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[No items noted today.] 

  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. DHS/CBP: “Drawback: Limited Modification Application Approvals for Rulings Under 1313”
  4. State/DDTC Updates “Third Party” Functionality of the DECCS Application
  5. EU Amends Common Rules Governing Control of Exports of Military Technology and Equipment
  1. FT: “UK Apologises for Illegal Arms Sales to Saudi Arabia”
  2. JT: “WTO Discloses South Korea’s Complaint Against Japan”
  3. QZ: “China is Trying to Steal Military Space Tech. The US is Running Stings to Stop It”
  4. Washington Post: “Canadian and His Firm Plead Guilty to Transferring U.S. Navy Rescue-Sub Data to China”
  1. M. Lester: “HTTS – First ECJ Appeal Judgment on Test for EU Sanctions Damages”
  1. ECTI Presents U.S. Export Control (ITAR/EAR/OFAC) Seminar Series in Washington, DC: November 11-14, 2019 
  2. FCC Presents “Designing an ICP for Export Controls & Sanctions”, 1 Oct in Bruchem, the Netherlands 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: DHS/Customs (5 Apr 2019), DOC/EAR (21 Aug 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 (30 Aug 2019), DOT/FACR/OFAC (9 Sep 2019), HTSUS (3 Sep 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

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OGSOTHER GOVERNMENT SOURCES

OGS_a11. Items Scheduled for Publication in Future Federal Register Editions

(Source: Federal Register, 17 Sep 2019.)
 

* President; ADMINISTRATIVE ORDERS; Trading with the Enemy Act; Continuation of Certain Authorities (Presidential Determination No. 2019-23 of September 13, 2019) [Pub. Date: 18 Sep 2019.]

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OGS_a22. Commerce/BIS: (No new postings.)

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OGS_a33
.
DHS/CBP: “Drawback: Limited Modification Application Approvals for Rulings Under 1313”
(Source: CSMS #39826606, 17 Sep 2019.)
 
CBP will begin approving limited modification applications on file for rulings issued under 19USC1313(b). Applications must include the following information:
 
– Revised parallel columns and a bill of materials (BOM) or formula, both of which must be annotated with the applicable Harmonized Tariff Schedule of the United States (HTSUS) subheading numbers. If there are multiple BOM’s or formulas with identical HTSUS numbers within a ruling, claimants may submit one BOM with the limited modification request as a representation of the many BOMs covered by that ruling, and the filer may request that the submission cover all BOMs authorized by that ruling.
 
If a ruling covers multiple discrete BOM’s/Formulas (using different imported/substituted merchandise with different HTSUS codes) for various finished articles, then a representation of each discrete BOM/Formula would need to be provided for review. The processing Drawback Office shall have discretion as to whether a BOM/Formula is representative or discrete.
 
– A certification to confirm that all TFTEA Drawback claims made under the subject manufacturing ruling will be in conformity with all of the applicable statutory and future regulatory requirements. For rulings based upon T.D. 81-300 for Component Parts, claimants must make a declarative statement as to whether or not substitution is based upon individual part numbers in addition to the 8-digit HTSUS subheading number.
 
If this information was not included in the original application, drawback offices will request this information from the claimant via email and provide a 30-day response time.
 
It’s noted that the approval of a limited modification application does not represent a decision or determination by CBP with respect to the proper tariff classification of the imported merchandise, substituted merchandise, or to the exported articles, under the Harmonized Tariff Schedule of the United States. Accordingly, any HTSUS provisions referenced in a limited modification application and modified drawback manufacturing ruling issued under 19 CFR Part 190 are informational only.
 
Once a ruling has been approved, relevant claims on file with CBP must be perfected by the claimant. CBP will return the claims to trade control upon request by the claimant.
 
For questions regarding this issue please contact OTDRAWBACK@CBP.DHS.gov.

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OGS_a44
.
State/DDTC Updates “Third Party” Functionality of the DECCS Application
(Source: State/DDTC, 16 Sep 2019.)
 
In our efforts to continually improve the user experience and security level of the system, the DDTC IT Modernization team is updating the “Third Party” functionality of the DECCS application.
After September 20th, Third Party users will need to use a dedicated account to access a company’s information. If a user needs access to multiple companies as a Third Party, they may register multiple accounts using unique email addresses. Users will need to coordinate with Company Administrators to request and gain access to a company within DECCS. For further guidance, please reference the User Management Support page here.
 
If you have any questions concerning this update, please contact the DTAS Help Desk at dtradehelpdesk@state.gov or (202) 663-2838.

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OGS_a55
.
EU Amends Common Rules Governing Control of Exports of Military Technology and Equipment
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NWSNEWS

(Source: Financial Times, 16 Sep 2019.) [Excerpts.]
 
The UK government has been forced to apologise after breaking a court ruling banning it from granting licences to export weapons and other military equipment to Saudi Arabia.
 
Liz Truss, international trade secretary, said two “inadvertent” breaches had occurred of an undertaking given to the Court of Appeal in June that the government would not grant any new licences for the export of arms or military equipment to Saudi Arabia for possible use in the conflict in Yemen. …
 
One licence identified by the department as being in breach of the ruling included a £200 cooling fan for incorporation in an armoured vehicle.
 
The government also estimated that various radio spares worth more than £260,000 had been shipped to troops deployed in Yemen’s civil war. The licence for the original order of 260 items of radio spares, valued at £435,450, had been issued in July. In her letter, Ms Truss said the Department for International Trade was in the process of revoking the licence as “a matter of urgency”. …


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NWS_a27
.
JT: “WTO Discloses South Korea’s Complaint Against Japan”

(Source: The Japan Times, 17 Sep 2019.) [Excerpts.]
 
The World Trade Organization has disclosed Seoul’s recent complaint against Japan over its tighter controls on exports of three semiconductor materials to South Korea.
 
The complaint, dated last Wednesday, claims that the Japanese measure constitutes “politically motivated, disguised restrictions on trade.”
 
South Korea believes that the measure is based on “political considerations unrelated to any legitimate export control considerations,” according to the complaint disclosed Monday.
 
The measure causes “unnecessary delay and other serious restrictions to the exportation of these products and their related technologies” bound for South Korea, the complaint states.
 
Under WTO rules, the two countries will refer the issue to a dispute settlement panel if they fail to resolve it within 60 days. …

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NWS_a38
.
QZ: “China is Trying to Steal Military Space Tech. The US is Running Stings to Stop It”

(Source: Quartz, 16 Sep 2019.) [Excerpts.]
 
On Aug. 21, Pengyi Li walked to his gate at Honolulu International Airport, ready to board a flight to Hong Kong. Before he could get on the plane, federal agents arrested the 33-year-old Chinese national.
 
Authorities say Li thought the bag of export-controlled electronics he had in his possession had come from rogue US brokers. The transaction was instead part of an elaborate undercover sting operation.
 
Li’s arrest was the culmination of a two-year investigation into an effort to smuggle sensitive components used in spacecraft and missiles out of the US and into China, according to a sealed criminal complaint obtained by Quartz.
 
In 2017, Department of Homeland Security investigators offered radiation-hardened microchips and advanced aerospace sensors to an unnamed Hong Kong-based company in exchange for more than $150,000, according to the complaint. The parts in question require export licenses to ship abroad, and many are specifically banned from sale in China because they can be used in missiles and advanced satellites with military applications. …

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NWS_a49
.
Washington Post: “Canadian and His Firm Plead Guilty to Transferring U.S. Navy Rescue-Sub Data to China”

(Source: Washington Post, 16 Sep 2019.) [Excerpts.]
 
A Canadian businessman and his company have pleaded guilty to charges related to the transfer to China of technical details about a U.S. Navy undersea submarine rescue vehicle in an effort to sell versions to the Chinese navy, U.S. court records show. …
 
In plea papers, Viau acknowledged he and OceanWorks shared a technical drawing with its Beijing Co. parent firm related to the U.S. Navy’s Pressurized Rescue Module, a remotely operated rescue vehicle capable of docking with a sunken sub 2,000 feet underwater and carrying up to 18 people. …
 
Beijing Co., based in China, purchased OceanWorks and its intellectual property for $20 million in September 2016 and began trying to sell a version of its submarine rescue technology to the Chinese military, according to court filings. …

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COMMCOMMENTARY

COM_a1
10
.
M. Lester: “HTTS – First ECJ Appeal Judgment on Test for EU Sanctions Damages”

(Source: European Sanctions Blog, 16 Sep 2019.)
 
* Author: Maya Lester, Esq., Brick Court Chambers,
maya.lester@brickcourt.co.uk, +44 20 7379 3550.
 
The Grand Chamber of the European Court of Justice has sent the case (C-123/18, 10 September 2019) brought by Hanseatic Trade Trust & Shipping (HTTS) back to the General Court (GC) in HTTS’ claim for damages resulting from its 2010 designation.
 
The General Court rejected HTTS’ claim for €2.5m in December 2017, Case T-692/15. The ECJ has upheld HTTS’ appeal, finding that the existence of a “sufficiently serious breach” must be assessed based on the decision of the EU Council on the date the sanctions against HTTS were adopted. The lower court was wrong to say the Council could rely on information available to it not taken into account when listing HTTS in 2010.
 
Under Article 61 of the Statute of the Court of Justice, the case will be referred back to the GC for fresh consideration of whether there was a sufficiently serious breach of EU law, and if so, whether damage was suffered by HTTS and whether there is a link between that damage and the Council’s breach, in order to assess compensation.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a111.
ECTI Presents U.S. Export Control (ITAR/EAR/OFAC
)
 
Seminar Series in Washington, DC: November 11-14, 2019

(Source:
Jill Kincaid
)
 
* What: United States Export Control (ITAR/EAR/OFAC) Seminar Series in Washington, DC
* When: ITAR Seminar: November 11-12, 2019; EAR/OFAC Seminar: November 13-14, 2019
* Where: Embassy Suites Alexandria Old Town
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker Panel: Scott Gearity, Greg Creeser, Melissa Proctor, Marc Binder and Timothy O’Toole
* Register
here
, or 
Jessica Lemon
, 540-433-3977.

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TE_a212. 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

 

Today is the birthday of the U.S. Constitution, which was created on 17 Sep 1787 and became effective after ratification by the 13 original colonies on 4 Mar 1789.  It has been amended 27 times, including one amendment that repealed a previous one.  It is regarded as the oldest written and codified national constitution in force.
“We the people are the rightful masters of both Congress and the courts, not to overthrow the Constitution but to overthrow the men who pervert the Constitution.” — Abraham Lincoln
* “The Constitution preserves the advantage of being armed which Americans possess over the people of almost every other nation where the governments are afraid to trust the people with arms.
 — James Madison
“The strength of the Constitution lies in the will of the people to defend it.” — Thomas Edison 

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EN_a314
. 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: 21 August 2019: 
84 FR 43493-43501
: Addition of Certain Entities to the Entity List and Revision of Entries on the Entity List and 84 FR 43487-43493: Temporary General License: Extension of Validity, Clarifications to Authorized Transactions, and Changes to Certification Statement Requirements

 


* 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: 30 Aug 2019: 84 FR 45652, Adjustment of Controls for Lower Performing Radar and Continued Temporary Modification of Category XI of the United States Munitions List.  
  – The only available fully updated copy (latest edition: 30 August 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: 9 Sep 2019:
 84 FR 47121-47123 – Cuban Assets Control Regulations

  

* 
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: 4 Sep 2019: Harmonized System Update (HSU) 1915    

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

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EN_a0315
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 Editor, Alexander Witt. The Ex/Im Daily Update is emailed every business day to approximately 7,500 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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