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19-1030 Wednesday “Daily Bugle”

19-1030 Wednesday “Daily Bugle”

Wednesday, 30 October 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 of interest today.]
  1. Items Scheduled for Publication in Future Federal Register Editions
  2. Commerce/BIS: (No new postings.)
  3. State/DDTC: (No new postings.)
  1. ACN: “Cargo Bosses Fear Reputational Risk from Trade Sanctions as US Imposes $1.3bn in Penalties for 2019
  2. Miami Herald: “The Trump Administration Will End Commercial Flights to Nine Destinations in Cuba”
  3. Reuters: “U.S. Telecoms Supply Chain Rules, Seen Hitting Huawei, Under Review: Official”
  1. D. Vergun: “Chinese Set Sights on High-Tech Production”
  2. TCG: “Transiting Third Countries with an Export License”
  1. ECS Presents “ITAR/EAR Boot Camp: Achieving Compliance” on 11-12 Feb in Tampa, FL
  2. FCC Presents “The ABC of FMS”, 28 Nov 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 Oct 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

 

 [No items of interest today.] 

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OGSOTHER GOVERNMENT SOURCES

OGS_a11. Items Scheduled for Publication in Future Federal Register Editions

(Source: Federal Register)
 


* Treasury/OFAC; NOTICES; Blocking or Unblocking of Persons and Properties [Pub. Date: 31 Oct 2019.]
 
* USTR; NOTICES; Particular Exclusions Granted Under the December 2018 Product Exclusion Notice from the $34 Billion Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation [Pub. Date: 31 Oct 2019.]

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

(Source: Commerce/BIS)

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OGS_a33.
State/DDTC: (No new postings.)
(Source: State/DDTC)

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NWSNEWS

NWS_a14.
ACN: “Cargo Bosses Fear Reputational Risk from Trade Sanctions as US Imposes $1.3bn in Penalties for 2019

(Source: Air Cargo News, 30 Oct 2019.) [Excerpts.]
 
Around 80% of cargo businesses named reputational risk as driving their trade sanctions and export risk compliance programmes as the US authorities have already imposed a record $1.3bn in penalties this year.
 
Accuity, the provider of financial crime screening and payments solutions, said that its survey made it clear that “the cargo sector cannot afford to be a weak link in the supply chain”.
 
The penalties by the US Treasury Department’s Office of Foreign Assets Control (OFAC) have spanned a range of industries.
 
The survey also found that 73% of organisations still use at least some paper-based systems to deal with air waybills and house waybills.
 
In addition, while 72% find challenging the changing regulatory paradigms in the regions they do business. However, 78% list automation as a high priority when considering a screening solution.
 
According to Accuity, the vast majority of cargo firms are concerned about protecting their brand and reputation when it comes to trade sanctions and export risk. …

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NWS_a2
5.
Miami Herald: “The Trump Administration Will End Commercial Flights to Nine Destinations in Cuba”

(Source: Miami Herald, 25 Oct 2019.) [Excerpts.]
 
The United States will suspend scheduled flights to nine destinations in Cuba in another attempt to limit cash flows going to the Cuban government, a senior administration official told the Miami Herald.
 
The airlines will have the authorization to fly only to Havana. They will not be able to fly to other destinations such as Santiago de Cuba, Camagüey, and Varadero, among others. The affected airlines, including American, Delta and JetBlue, will have 45 days to wrap up their operations to those destinations, the official added.
 
The measure will be effective on December 10, 2019.
 
The nine destinations impacted are: Ignacio Agramonte International Airport in Camagüey; the Jardines del Rey Airport in Cayo Coco; the Vilo Acuña Airport in Cayo Largo; the Jaime González Airport in Cienfuegos; the Frank País Airport in Holguín; the Sierra Maestra Airport in Manzanillo; the Juan Gualberto Gómez Airport in Matanzas; the Abel Santamaría Airport in Santa Clara; and the Antonio Maceo Airport in Santiago de Cuba. …

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NWS_a3
6.
Reuters: “U.S. Telecoms Supply Chain Rules, Seen Hitting Huawei, Under Review: Official”

(Source: Reuters, 30 Oct 2019.) [Excerpts.]
 
Rules to implement a White House executive order that is expected to pave the way for China’s Huawei to be banned from the U.S. telecoms supply chain are “under consideration and review,” a Commerce Department official said on Tuesday.
 
The rules, which were due earlier this month, would implement an earlier declaration of a national emergency in the telecoms supply chain, and are likely to be used by Washington to tighten the squeeze on the telecoms equipment giant. …
 
Although top officials have encouraged U.S. companies to apply for licenses, promising to permit sales of products to Huawei that are readily replaceable and do not compromise U.S. national security, the Commerce Department has yet to issue responses to more than 200 license requests it has received….

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COMMCOMMENTARY

COM_a17.
D. Vergun: “Chinese Set Sights on High-Tech Production”
(Source: Department of Defense, 29 Oct 2019.)
 
* Author: David Vergun, Associate Editor/Writer, Department of Defense.
 
China aims to transition from producing inexpensive items to high-tech products, the director of the Defense Innovation Unit said.
 
During a panel discussion today at the Center for Strategic and International Studies in Washington titled “Managing the Risk of Tech Transfer to China,” Michael Brown said China’s plan has implications for U.S. defense because national security and economic security are inextricably linked. He noted that DIU’s mission is to get commercial technology into the hands of the military to maintain overmatch on the battlefield. …
 
Export control reform and cooperation with allies are also necessary to ensure technology isn’t transferred to nations such as China, Brown said. …
 
In the commercial sector, research and development investment tax credits and other incentives should be applied so manufacturing doesn’t migrate overseas, he said.
 
The number of science, technology, engineering and math graduates in the United States is declining, Brown said, while China has 10 times the number of engineering graduates, so more needs to be done in to attract STEM graduates.
 
About 25% of STEM graduates in U.S. universities are Chinese foreign nationals, Brown said. Policy should encourage these students to stay in the United States while increasing counterintelligence to help ensure that some of those students aren’t here solely to transfer their technical knowledge back to China, he said.

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(Source: Trade Compliance Geek, 30 Oct 2019.)
 
Export license, check. Packed your product, check. Invoiced your customer (including the Destination Control Statement – good for you), check. And your freight forwarder just picked it up. Now it’s Miller time.
 
Wait a minute? What’s the routing of your shipment?
 
When you export goods from the U.S., or re-export goods from a foreign country, under an export license, you need to watch out for prohibited routings via other countries. Your export license will usually allow transiting third countries, whether to stopover at an airport, or to be transferred from a ship to a truck or rail. But there are several countries through which such transit is not allowed, unless a license is not required to ship to those countries, or if transit is specifically allowed by your export license. Those countries are Armenia, Azerbaijan, Belarus, Cambodia, Cuba, Georgia, Kazakhstan, Kyrgyzstan, Laos, Mongolia, North Korea, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, and Vietnam, and transiting any of them might mean an export violation. See General Prohibition 8 (15 CFR 736.2(b)(8).
 
Also, you must be aware of the export control laws in the third country you are transiting. If that in-transit country requires an export license to your country of ultimate destination, you must obtain that license in addition to the one issued by the U.S. This applies to all in-transit countries, not just the ones listed above. Otherwise, you might be facing an export violation in that in-transit country.
 
Exporters: Be aware of potential routings by your freight forwarder, and obtain any export licenses from one or more in-transit countries. Then instruct your freight forwarder to adhere to that routing, and not switch to a different routing on a different carrier just to save a few dollars.
 
Freight forwarders: When your customer gives you a shipment under an export license, you must confirm with your customer that your proposed routing falls within the scope of any export licenses they have.
 
I think I’ll be an export violation for Halloween. Not THAT’S scary.
 
And NOW it’s Miller time. Or, since you’ve once again avoided export violation, make it a Guinness.

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a1

9.
ECS Presents “ITAR/EAR Boot Camp: Achieving Compliance” on 11-12 Feb in Tampa, FL 

(Source: ECS)
 
*What: ECS ITAR/EAR Boot Camp:  Achieving Compliance
*When: February 11-12, 2019
*Where: Tampa, FL
*Sponsor: Export Compliance Solutions & Consulting (ECS)
*ECS Speaker Panel: Suzanne Palmer, Mal Zerden
*Register 
here
 
or by calling 866-238-4018 or email 


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TE_a210. FCC Presents “The ABC of FMS”, 28 Nov in Bruchem, the Netherlands

 
This training course is specifically designed for compliance professionals and those in a similar role working for government agencies or companies (temporarily) obtaining U.S. export-controlled articles and technology procured through government-to-government Foreign Military Sales (FMS), and authorized by the Arms Export Control Act (AECA) (22 U.S.C. 2751, et. seq.).
 
The course will cover multiple topics relevant for organizations outside the U.S. working with U.S. export-controlled articles and technology procured through FMS, including: the U.S. regulatory framework, with a special focus on the AECA, key concepts and definitions, and practical compliance tips to ensure the proper handling of FMS-acquired articles and technology. Participants will receive a certification upon completion of the training.
 
Details
* What: The ABC of Foreign Military Sales (FMS)
* When: Thursday, 28 Nov 2019
– Welcome and Registration: 9.00 am – 9.30 am
– Training hours: 9.30 am – 4.00 pm
* Where: Full Circle Compliance, Landgoed Groenhoven, Dorpsstraat 6, Bruchem, the Netherlands
* Information & Registration:
here
or contact FCC at
events@fullcirclecompliance.eu
or + 31 (0)23 – 844 – 9046
* This course can be followed in combination with “U.S. Export Controls: The International Traffic in Arms Regulations (ITAR) from a non-U.S. Perspective” (26 Nov 2019), and/or “U.S. Export Controls: The Export Administration Regulations (EAR) from a non-U.S. Perspective” (27 Nov 2019). Please, see the
event page
for our combo deals.

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ENEDITOR’S NOTES

 


William Halsey
 (Fleet Admiral William Frederick Halsey Jr., KBE; 30 Oct 1882 – 16 Aug 1959; known as Bill or “Bull” Halsey, was an American admiral in the United States Navy during World War II. He is one of four individuals to have attained the rank of fleet admiral (5 stars) of the United States Navy, the others being Ernest King, William Leahy, and Chester W. Nimitz.
  – “
There are no extraordinary men… just extraordinary circumstances that ordinary men are forced to deal with.

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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: 21 October 2019: FR 56117-56121: Restricting Additional Exports and Reexports to Cuba

 

*
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 (22 Oct 2019) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR is a 154-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 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.
 

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 the 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 45652-45654, 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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Review last week’s top Ex/Im stories in “Weekly Highlights of Daily Bugle Top Stories” posted 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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