20-0129 Wednesday “Daily Bugle”

20-0129 Wednesday “Daily Bugle”

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Wednesday, 29 January 2020

  1. Commerce/BIS Requests Comments on Licensing Responsibilities and Enforcement 
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new items.)
  3. Justice: “Harvard University Professor and Two Chinese Nationals Charged in Three Separate China Related Cases”
  4. State/DDTC Publishes DTAG’s September 2019 Plenary Meeting Materials
  5. UK ECJU Publishes Notice to Exporters 2020/03: “Exporting and Trading Items Subject to Strategic Controls During the Transition Period” 
  1. Compliance Week: “Airbus Announces Resolution of Global Corruption Case”
  1. Ankura: “‘Firrmed’ Up at Last – Treasury Publishes Final Regulations to Implement FIRRMA”
  2. Miller & Co: “Reminder-China Section 301 Product Exclusion/Extension Deadlines”
  3. Sidley Austin: “USMCA is (Almost) Here to Stay”
  1. MITA Presents “Trade Compliance 2020: Trade Compliance Hits the Big Time” in Madison, WI
  2. Full Circle Compliance Presents: Export Compliance Training Seminars 
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Find the Latest Amendments Here.
  3. Weekly Highlights of the Daily Bugle Top Stories 
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Commerce/BIS Requests Comments on Licensing Responsibilities and Enforcement
(Source: Federal Register, 29 Jan 2020.)
85 FR 5191-5192: Submission for OMB Review; Comment Request
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
* Agency: Bureau of Industry and Security.
* Title: Licensing Responsibilities and Enforcement.
* Form Number(s): N/A.
* OMB Control Number: 0694-0122.
* Type of Review: Regular submission.
* Estimated Total Annual Burden Hours: 97,456.
* Estimated Number of Respondents: 2,224,151.
* Estimated Time per Response: 5 seconds to 2 hours.
* Needs and Uses: This collection of information involves ten miscellaneous activities described in Sections 744.15(b), part 744 Supplement No. 7, paragraph (d), Sec. 748.4 and part 758 of the EAR
that are associated with the export of items controlled by the Department of Commerce. Most of these activities do not involve submission of documents to the BIS but instead involve exchange of documents among parties in the export transaction to ensure that each party understands its obligations under U.S. law. Others involve writing certain export control statements on shipping documents or reporting unforeseen changes in shipping and disposition of exported commodities. These activities are needed by the Office of Export Enforcement and the U.S. Customs Service to document export transactions, enforce the EAR and protect the National Security of the United States
* Affected Public: Business or other for-profit organizations.
* Frequency: On Occasion.
* Respondent’s Obligation: Voluntary.
This information collection request may be viewed at reginfo.govhttp://www.reginfo.gov/public/. Follow the instructions to view Department of Commerce collections currently under review by OMB. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to OIRA_Submission@omb.eop.gov.

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. Items Scheduled
for Publication in Future Federal Register Editions
[No items of interest today.] 
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 Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)

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OGS_a4. Justice: “Harvard University Professor and Two Chinese Nationals Charged in Three Separate China Related Cases”

(Source: Justice, 29 Jan 2020.) [Excerpts.]
The Department of Justice announced today that the Chair of Harvard University’s Chemistry and Chemical Biology Department and two Chinese nationals have been charged in connection with aiding the People’s Republic of China.  
Dr. Charles Lieber, 60, Chair of the Department of Chemistry and Chemical Biology at Harvard University, was arrested this morning and charged by criminal complaint with one count of making a materially false, fictitious, and fraudulent statement.  Lieber will appear this afternoon before Magistrate Judge Marianne B. Bowler in federal court in Boston, Massachusetts.
Yanqing Ye, 29, a Chinese national, was charged in an indictment today with one count each of visa fraud, making false statements, acting as an agent of a foreign government and conspiracy. Ye is currently in China. 
Zaosong Zheng, 30, a Chinese national, was arrested on Dec. 10, 2019, at Boston’s Logan International Airport and charged by criminal complaint with attempting to smuggle 21 vials of biological research to China.  On Jan. 21, 2020, Zheng was indicted on one count of smuggling goods from the United States and one count of making false, fictitious or fraudulent statements.  He has been detained since Dec. 30, 2019. . . .

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UK ECJU Publishes Notice to Exporters 2020/03: “Exporting and Trading Items Subject to Strategic Controls During the Transition Period”
, 29 Jan 2020.)
The UK Export Control Joint Unit (ECJU) within the Department of International Trade (TID) has published the following update on its website:
The UK leaves the EU on 31 January 2020. Current export licensing arrangements will continue to apply until the end of the transition period on 31 December 2020.
Strategic items are regulated through a system of export and trade controls. The following items are subject to strategic control:
  – military items
  – firearms
  – dual-use items (items with both civil and military uses)
  – items that can be used for torture or capital punishment
  – radioactive sources
  – other items controlled under international sanctions
The Export Control Joint Unit (ECJU) is responsible for the control and licensing of the trade of these items.
The current export licensing arrangements will continue to apply during the transition period. This includes the arrangements for exporting all strategic items.
The open general export licence (export of dual-use items to EU member states) is not required to export dual-use items to the EU during the transition period.
For more information on the current regulations and requirements, see:

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Compliance Week: “Airbus Announces Resolution of Global Corruption Case”
(Source: Compliance Week, 28 Jan 2020.) [Excerpts.]

Airbus confirmed Tuesday it has reached a deal with authorities in the United States, the United Kingdom, and France to resolve allegations of bribery, corruption, and compliance with the U.S. International Traffic in Arms Regulations (ITAR) that have plagued the European aircraft maker for nearly four years.
Airbus said it “reached an agreement in principle” with U.S. authorities, the U.K. Serious Fraud Office (SFO), and France’s financial prosecutor, Parquet National Financier (PNF).  . . . 
The agreement remains subject to approval by courts and authorities in the three countries. Airbus said for legal reasons it “cannot make any comments on the details of its discussions with the investigating authorities.” However, the San Francisco Chronicle, citing people familiar with the matter, reports the deal is “in the range of $3 billion.”  The SFO later confirmed its end of the agreement, noting a public hearing related to the case will be held Friday.
In its 2016 annual report, Airbus disclosed it was facing a series of investigations over bribery allegations in Austria, Greece, Germany, Indonesia, Pakistan, Romania, Thailand, Turkey, and the United Kingdom. Additionally, the SFO launched an investigation into Airbus subsidiary GPT concerning a service contract in Saudi Arabia that pre-dated the acquisition by Airbus in 2007.
Airbus further disclosed in 2016 it was under coordinated investigations by the SFO and PNF into allegations of fraud, bribery, and corruption in its civil aviation business relating to self-reported misstatements and omissions concerning third-party consultants. The Department of Justice in 2018 also launched an investigation.
Airbus’ compliance response
In response to these regulatory investigations and commercial disputes, Airbus in its 2016 annual report announced the establishment of an independent review panel to help improve its compliance controls and culture. It also began a complete overhaul of its policies, procedures, and practices, including its ethics and compliance program.
Among the changes, Airbus said it was in the process of revising and implementing improved procedures, including its engagement of third parties, particularly with respect to sales-support activities. Airbus also said at the time it was “conducting enhanced due diligence as a pre-condition for future or continued engagement and to inform decisions on corresponding payments.” … 


Ankura: “‘Firrmed’ Up at Last – Treasury Publishes Final Regulations to Implement FIRRMA”
Ankura Alerts, 28 Jan 2020) [Excerpts.]  
* Principal Author: Randal H. Cook, Senior Managing Director, randy.cook@ankura.com, Ankura Consulting Group, LLC.
On January 17, 2020, the US Department of the Treasury published two rules to finalize and implement FIRRMA’s expansion of CFIUS jurisdiction over certain non-controlling investments and certain real estate transactions. The two rules take effect on February 13, 2020. 
The final rules are largely the same as the proposed rules issued in September 2019 focusing on noncontrolling investments in Technology, Infrastructure, and Data (TID) US businesses and real estate transactions involving sensitive locations, with some notable changes: 
   – Inclusion of an interim rule adding a definition for ‘principal place of business’ (primarily to provide clarity regarding CFIUS’s jurisdiction over transactions by investment funds) that is effective February 13, 2020, and open to public comment until February 18, 2020. 
   – Addition of examples to multiple provisions to provide more clarity for how CFIUS expects parties to apply the regulations.
   – Incorporation of many provisions of the ‘Pilot Program’ on critical technologies (31 CFR part 801), to include the mandatory filing requirement for certain covered transactions involving certain US businesses engaged in critical technologies.
   – Adjustment of the Pilot Program’s applicability such that it applies only to transactions for which specified actions were taken prior to the effective date of this rule.
To implement FIRRMA’s requirement for CFIUS to limit the application of its expanded jurisdiction with respect to certain categories of foreign persons, CFIUS has identified Australia, Canada, and the United Kingdom as excepted foreign states, thus limiting the application of the ‘excepted investor’ concept to foreign persons with ties to those three foreign states.
The final rules do not change CFIUS’s existing jurisdiction over transactions that could result in foreign control of a US business.

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Miller & Co: “Reminder-China Section 301 Product Exclusion/Extension Deadlines”
(Source: Miller & Company P.C., millercompanypc@millerco.com, 1-816-561-4999)
Clients should be aware of two upcoming China Section 301 product exclusion deadlines.
China Section 301 List 4A Product Exclusions
January 31, 2020 is the deadline for filing China Section 301 List 4A product exclusion requests.  On October 24, 2019, the U.S. Trade Representative (USTR) outlined the product exclusion process for merchandise subject to China Section 301 List 4A duties.  84 Fed. Reg. 57144 (Oct. 24, 2019).   The required data elements for China Section 301 List 4A product exclusions is similar to the List 3 data.
China Section 301 List 1 Product Exclusion Extensions
February 15, 2020 is the deadline for submitting extension requests for the thirty-three (33) China Section 301 List 1 product exclusions granted on March 25, 2019.  The USTR outlined the extension process on December 30, 2019.  84 Fed. Reg. 72102 (Dec. 30, 2019).  The extension process uses more detailed forms than were originally required for China Section 301 List 1 product exclusion requests and are like the forms used for China Section 301 List 3 product exclusion requests.  In a previous review, the USTR only extended six (6) of the first round of thirty-one (31) China Section 301 product exclusions which expired on December 28, 2019.  84Fed. Reg. 70616 (Dec. 23, 2019).
China Section 301 product exclusions are available for all merchandise meeting the product exclusion description, whether a company requested a product exclusion or not.  Accordingly, extension requests are not limited to the party who originally requested the exclusions.  We encourage clients that are using an exclusion secured by another company to request an extension to preserve the exclusion.

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Sidley Austin: “USMCA is (Almost) Here to Stay”
(Source: Author)
* Author:  Ted Murphy, Esq., ted.murphy@sidley.comSidley Austin, LLP.
President Trump signed the United States-Mexico-Canada Agreement (“USMCA”) implementing legislation into law earlier today.  The USMCA contains new provisions that were not in NAFTA (e.g., digital trade, data storage location requirements, etc.) and makes changes to others (e.g., agriculture; financial services; de minimis; certain rules of origin, such as for autos; investor protections; trade remedies, etc.).  There are also side letters on how products of Canada and of Mexico will be treated, if the United States proceeds to impose additional duties on autos and auto parts (or other products) under Section 232 (which seems to be back on the table). 
The USMCA is scheduled to take effect 90 days after the last country notifies the others that it has completed its domestic procedures for ratification.  Mexico completed its process in December, and the United States did so today.  Canada has just begun its domestic process and, while the prospects for ratification may be less than they once were in Canada, it is still widely-expected to be concluded sometime this spring.  As result, it appears that USMCA could go into effect on or about July 1, 2020.
There is a great deal in the revised agreement that all companies with meaningful NAFTA (or now, USMCA) activity should be reviewing to determine how it impacts their operations.   For example, companies should be confirming whether the applicable rules of origin have changed (particularly if you are in the auto industry), how the transition from being an “exporter-based agreement” (NAFTA) to an “importer-based agreement” (USMCA) will impact NAFTA/USMCA solicitation/certification efforts in the future, what happens if the NAFTA Marking Rules no longer apply to imports from Canada or Mexico and instead the traditional substantial transformation test applies (as we have seen under Section 301, the ST and NMR do not always produce the same result), how a possible mid-year implementation impacts regional value content calculations on imports from IMMEX/maquila companies, etc.  

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MITA Presents “Trade Compliance 2020: Trade Compliance Hits the Big Time” in Madison, WI
(Source: Editor)
* What:  Half-Day trade conference (Agenda)
* When:  Tues, 11 Feb 2020
* Where:  Fluno Center, 601 University Ave., Madison, Wisconsin 
* Sponsor:  Madison International Trade Association (MITA)  
* Presenters:  Keynote Julie Pojar, Manager of International Trade Compliance at Kohler Co., followed by a post-lunch trade compliance “speed-dating” sessions, and a series of afternoon of “deeper dive” roundtables featuring trade compliance experts from Harley-Davidson, Husch Blackwell, M.E. Dey, LR International, International Customs Services Inc.,  the UW-Madison Export Control Office, and Jim Bartlett, Full Circle Trade Law, Wash DC.
* Register HERE or email anagaric@rocketmail.com.

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TE_a212. Full Circle Compliance Presents: Export Compliance Training Seminars
(Source: Full Circle Compliance)

U.S. Export Controls: ITAR

Tuesday, 7 April 2020 near Amsterdam
More Info

U.S. Export Controls: EAR

Wednesday, 8 April 2020 near Amsterdam
More Info

The ABC of Foreign Military Sales (FMS)

Tuesday, 9 April 2020 near Amsterdam


* Thomas Paine
(born Thomas Pain; 29 Jan 1736 – 8 Jun 1809; was an English-born American political activist, philosopher, political theorist, and revolutionary whose “Common Sense” and other writings influenced the American Revolution, and helped pave the way for the Declaration of Independence.)
– “What we obtain too cheap, we esteem too lightly; it is dearness only that gives everything its value.”
– “Arms discourage and keep the invader and plunderer in awe, and preserve order in the world as well as property. Horrid mischief would ensue were the law-abiding deprived of the use of them.”

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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 are listed below.
Latest Update 
: 19 CFR, Ch. 1, Pts. 0-199.
5 Apr 2019:5 Apr 2019, 84 FR 13499-13513: Civil Monetary Penalty Adjustments for Inflation.


23 Jan 2020: 85 FR 4136-4188: Control of Firearms, Guns, Ammunition and Related Articles the President Determines No Longer Warrant Control Under the United States Munitions List (USML) 
DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.   Last Amendment: 24 Apr 2018: 83 FR 17749-17751: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates


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.)  

23 Feb 2015: 80 FR 9359, comprehensive updating of regulations, updates the activities and technologies subject to specific authorization and DOE reporting requirements. 

25 Nov 2019: 84 FR 64740-64754: Rules of Practice in Explosives License and Permit Proceedings; Revisions Reflecting Changes Consistent With the Homeland Security Act of 2002
DOJ ATF ARMS IMPORT REGULATIONS: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War.

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.  23 Jan 2020: 85 FR 3819:

Department of State final rule amending § 121.1, USML Categories I, II, and III, and numerous related sections (effective Mar. 9, 2020).
DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders.
22 Nov 2019:

84 FR 64415-64417: Venezuela Sanctions Regulations


1 Jan 2019: 19 USC 1202 Annex.
  – HTS codes for AES are available here.
  – HTS codes that are not valid for AES are available here.

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