20-0317 Tuesday “Daily Bugle”

20-0317 Tuesday “Daily Bugle”

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Tuesday, 17 March 2020

[No items of interest today.]
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS Adds Suppliers of Iran’s and Pakistan’s WMD Programs to Entity List
  3. Justice: “Iranian National Extradited for Illegally Exporting Military Sensitive Items”
  4. State/DDTC: (No new postings.)
  5. EU Amends Restrictive Measures Concerning Central African Republic
  1. Law360: “When Coronavirus Hoarding Becomes Trade Policy”
  2. The Hill: “Time to Flip the Script on Congressional Arms Sales Powers” 
  1. N. Turner: “Sanctions Top-5 for the Week Ending 13 March 2020”
  2. Sidley: “International Trade Reactions to Corona Virus”
  3. Steptoe: “US Sanctions Second Rosneft Subsidiary for Venezuela Oil Trade”
  1. FD Associates ITAR/EAR Seminar on 24 March in Tysons Corner, is Cancelled  
  2. FCC Academy: “U.S. Export Controls: ITAR, EAR, and FMS on 7-9 April Online” 
  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 
  4. Submit Your Job Opening and View All Job Openings 
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[No items of interest today] 

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Items Scheduled for Future Federal Register Editions
(Source: Federal Register)   

* Commerce/BIS; NOTICES; Partial Remand and Final Denial Order: Nordic Maritime Pte. Ltd. and Morten Innhaug Respondents [Pub. Date: 18 Mar 2020]

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Commerce/BIS Adds Suppliers of Iran’s and Pakistan’s WMD Programs to Entity List

(Source: Commerce/BIS, 17 Mar 2020) [Excerpts]
The Commerce Dep’t Bureau of Industry and Security (BIS) announced today that it will add six individuals and eighteen corporations to the Entity List for enabling or assisting with Iran’s nuclear program, Pakistan’s unsafeguarded nuclear and missile programs, and Russian military modernization efforts. The Entity List additions include five Iranian nuclear officials, one company in Iran, two entities in China, nine in Pakistan, and five in the United Arab Emirates (UAE) involved in assisting weapons of mass destruction (WMD) activities in Iran and Pakistan. Today’s action also includes two companies in Russia for circumventing license requirements for a party previously added to the Entity List. …

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Justice: “Iranian National Extradited for Illegally Exporting Military Sensitive Items”

 17 Mar 2020) [Excerpts]
On Saturday, 38-year-old Merdad Ansari, who is an Iranian citizen and a resident of the United Arab Emirates, was extradited from Georgia and arrived Saturday evening in San Antonio to face federal charges in connection with a scheme to obtain military sensitive parts for Iran in violation of the Iranian Trade Embargo.
These parts had dual-use military and civilian capability and could be used in such systems as nuclear weapons, missile guidance and development, secure tactical radio communications, offensive electronic warfare, military electronic countermeasures (radio jamming), and radar warning and surveillance systems. …

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

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Amends Restrictive Measures Concerning Central African Republic 

On 31 January 2020, the United Nations Security Council adopted Resolution 2507 (2020), which extends the exemptions to the arms embargo. Decision 2013/798/CFSP should therefore be amended accordingly;
Point (g) of Article 2(1) of Decision 2013/798/CFSP is replaced by the following:
‘(g) the sale, supply, transfer or export of weapons with a calibre of 14,5 mm or less and ammunition and components specially designed for such weapons, and of unarmed ground military vehicles and ground military vehicles mounted with weapons with a calibre of 14,5 mm or less, to the CAR security forces, including state civilian law enforcement institutions, where such weapons, ammunition, components and vehicles are intended solely for support of, or use in, the CAR process of SSR, as notified in advance to the Committee;’.

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NWS_a16. Law360: “When Coronavirus Hoarding Becomes Trade Policy” 

Law360, 16 Mar 2020) [Excerpts]
The European Union became the latest to restrict its exports on Sunday, unveiling new rules that will require national governments to approve outbound sales of protective masks, googles, visors and garments as the trading bloc girds itself for the next phase of its COVID-19 response. …
Brussels made the move unilaterally after several of its individual member states, including France and Germany, began pushing export restrictions on their own. China, India, Russia and several other countries in the Eastern hemisphere that caught the first wave of the coronavirus also imposed export restraints, to varying degrees. …
Global output was already taxed by a kind of artificial export restraint in the wake of the outbreak. China, the origin point of the coronavirus, shuttered a number of its factories to contain the spread in the early part of the year and has only just begun to reopen them. …

NWS_a27. The Hill: “Time to Flip the Script on Congressional Arms Sales Powers”

The Hill,
15 Mar 2020) [Excerpts]
On March 3, the House Rules Committee held a rare 
bipartisan hearing
 on the erosion of congressional checks and balances on the executive branch’s ability to involve the country in war. The hearing was a welcome step in addressing executive overreach on national security and war powers, an issue that has garnered the concern of 
NGOs across the political spectrum
. As Congress rightly seeks ways to re-establish sensible checks on the ability of a president to involve the country’s armed forces in hostilities, it should not overlook the need for proactive oversight of the kinds of arms sales that tend to directly implicate the United States in foreign wars.  . . .
Today, blocking an arms sale under the Arms Export Control Act (
) requires a joint resolution of disapproval, which must be passed by a two-thirds majority in both chambers to overcome a likely presidential veto. House 
 also present a challenge: Under Senate rules, any senator favoring a disapproval resolution can move to discharge the resolution from the Foreign Relations Committee if the committee fails to report back to the Senate within 10 calendar days. The House, however, has no such rule, so representatives are not guaranteed a vote concerning arms sales.
Reestablishing congressional oversight will require adjusting AECA procedures to guarantee Congress an opportunity to block problematic arms sales without requiring a two-thirds majority. This is best achieved by “flipping the script” through an 
affirmative vote
, a concept 
 by then-Sen. 
Joe Biden
 in 1986. With an affirmative vote, or a joint resolution of approval, a sale would not go through until approved by both houses and signed by the president. Had such procedures been in place in 2019, Congress could have acted on its bipartisan consensus to block bomb sales to Saudi Arabia.  
Exercising oversight over arms sales with an affirmative vote is well within congressional authorities under the Constitution. When combined with the necessary and proper clause, congressional power to sell or regulate the sale of arms 
 from a number of congressional powers, such as the power to declare war (implying the power to prepare for war by selling arms to allies); the power to regulate commerce with foreign nations; the power to raise armies and provide and maintain a navy (perhaps implying arming foreign forces to support U.S. forces); the spending power to provide for the “common defense and general welfare” of the United States; and general powers over foreign affairs. 
On the other hand, selling arms is not specifically enumerated in the constitutional powers of the president. Congress delegated authority to the president via the AECA of 1976, and could just as easily revise that process.
An affirmative vote need not overburden Congress. Clearly, Congress delegated the regulation of arms sales to the executive branch for a reason, since it cannot and should not be involved in each of the thousands of annual arms transfers overseen by the State Department that neither have a direct bearing on America’s role in a conflict nor present any direct risk of facilitating human rights abuses. Congress does not need to be involved in all of the many sales involving close U.S. allies such as NATO, Japan and South Korea, where the risks are perhaps less acute. 
Instead, new procedures could filter arms sales based on type and volume to limit voting to those cases most likely to meaningfully implicate the U.S. in conflict in the spirit of congressional oversight of war powers. For example, a filter requiring a vote only for the categories and volume of sales currently requiring congressional notification under existing procedures, and excluding sales to NATO and other key allies such as South Korea, Japan and Australia – countries exempt from certain procedures under the AECA – would result in approximately 60 annual votes. Some sales could be packaged together for approval, and many likely would move forward without opposition. Arms sales not meeting these criteria could be blocked under existing procedures if Congress so desired.  . . .


COM_a28. N. Turner: “Sanctions Top-5 for the Week Ending 13 March 2020”

, 17 Mar 2020)
* Author: Nicholas Turner, Esq., 852-5998-7559, Steptoe & Johnson HK LLP.
Here are five things that happened this week in the world of economic sanctions that you should know about.
(1) The US Office of Foreign Assets Control (OFAC) named a Switzerland-based Rosneft subsidiary, TNK Trading International SA, as a Specially Designated National (SDN) pursuant to Executive Order 13850 for operating in the oil sector of Venezuela. Last month, OFAC designated another Rosneft subsidiary, Rosneft Trading SA, also for its Venezuela oil activity.
(2) OFAC designated four companies under the Foreign Narcotics Kingpin Designation Act for their connections to two sanctioned Mexican drug cartels. The targets include a gas station and two restaurant management companies associated with a bakery and a sushi joint that OFAC sanctioned in September 2017.
(3) OFAC named the former commander of the Zimbabwean National Army’s Presidential Guard Brigade and Zimbabwe’s Minister of National Security as SDNs under Executive Order 13469 for their roles in human rights abuses against protesters and opposition figures. The US State Department previously issued visa bans against the men in August 2019 and October 2019, respectively. Meanwhile, OFAC lifted sanctions on four Zimbabwean politicians (three of whom are deceased).
(4) The European Union extended its sanctions against persons threatening the territorial integrity, sovereignty and independence of Ukraine for an additional six months, until 15 September 2020. In related news, on 6 March 2020, the European Union lifted sanctions against former Ukrainian Prime Minister Mykola Azarov and former Energy Minister Edward Stavytskyi, following various court challenges.
(5) A federal judge for the US District Court for the Southern District of Florida dismissed a complaint against an online retailer and a wholesaler under Title III of the Helms-Burton Act. The plaintiff alleged the defendants trafficked in property covered by Title III by selling Cuban-origin charcoal produced on a farm seized from the plaintiff’s grandfather by the Cuban government in 1964.
Is Switzerland Europe’s sanctions hot spot? Since last month, OFAC has designated two Switzerland-based oil trading companies (both Rosneft subsidiaries) in connection with Venezuela, announced a USD 7,829,640 settlement with a Swiss technology firm for violations of the Global Terrorism Sanctions Regulations, and unveiled the US-Swiss Humanitarian Trade Arrangement (SHTA) for payments related to exports of agricultural commodities, food, medicine, and medical devices to Iran. It’s a compliance fondue.

Bonus item: OFAC
terminated its Terrorism Sanctions Regulations found at 31 CFR Part 595 f
ollowing the adoption of 
Executive Order 13886 on 9 September 2019
The September 2019 order upgraded various terrorism-related US sanctions authorizations and terminated the national emergency in 
Executive Order 12947 of 23 January 1995,
which provided the legal basis for Part 595. OFAC still has four other sets of terrorism-related regulations at 31 CFR Parts 
596, and

COM_a39. Sidley: “International Trade Reactions to Corona Virus”  

(Source: Author) [Excerpts]

* Author:
Ted Murphy
, Esq., 1-202-736-8016, 
Sidley Austin LLP

While much of the nation is hunkered down in an effort to ‘flatten the curve’ related to COVID-19 infections, there is still a lot going on with international trade.  Here are a few examples from just the past couple of days:
* Thus far, ocean cargo shipments have not been adversely impacted by U.S. government restrictions on travelers due to COVID-19.  According to a U.S. Customs and Border Protection (CBP) Trade Update call last Friday, cargo is not (currently) viewed as a pathway for the virus.  That said, there has been a drop in containers arriving at U.S. ports, which means that there are fewer empty containers available to use for U.S. exports.  There has been a drop in air cargo shipments, as commercial airlines reduce flights due to governmental restrictions on travelers.  We expect that once the worst of the virus is behind us (and it will eventually be behind us) and trade patterns return to normal, there will likely be a sharp increase in import activity and possibly congestion at the border.  CBP has indicated that C-TPAT members will be given priority.
* The administration is not (currently) considering reducing or eliminating the Section 301 or Section 232 tariffs as part of the economic response to COVID-19.  Ambassador Lighthizer and Secretary Mnuchin each separately dismissed the idea in recent days.  That said, it is possible that the USTR will apply a different filter to pending Section 301 product exclusion requests (including extension requests), particularly with regard to whether the tariffs are causing severe economic harm to requestors.
* The Canadian parliament ratified the U.S.-Mexico-Canada Trade Agreement (USMCA) last Friday before adjourning for 5 weeks due to COVID-19.  While there are still numerous issues that need to be addressed before the agreement can go into effect (e.g., adoption of uniform regulations, etc.), the Trump administration is pushing to have those things completed as soon as possible. Recent reports suggest that the administration is targeting a June 1, 2020 effective date (which is aggressive).
* White House trade advisor Peter Navarro said today that he is working on an executive order to address the United States’ dependence on global supply chains for medicines, medical supplies and medical equipment.  He hopes to have an executive order completed this week that will require/incentivize/encourage [?] companies to bring production of such articles back to the United States.  He cited in support the fact that 70% of active pharmaceutical ingredients are produced abroad.  The approach will include ensuring that large government purchasers, such as the Department of Veterans Affairs, the Department of Health and Human Services and the Department of Defense, buy “from American producers on American soil[.]” It will also include government efforts to encourage innovation and to speed up deregulation. … 

COM_a410. Steptoe: “US Sanctions Second Rosneft Subsidiary for Venezuela Oil Trade”

* Authors: Nicholas Turner, Esq., 852-5998-7559; Peter Jeydel, Esq., 1-202 429-6291; Brian Egan, Esq., 1-202-429-8009, Steptoe & Johnson LLP
On 12 March 2020, OFAC designated Switzerland-based oil broker and Rosneft subsidiary TNK Trading International SA (“TNK Trading”) as a Specially Designated National (“SDN”) pursuant to Executive Order 13850 for operating in the oil sector of the Venezuelan economy. The action follows OFAC’s February 18, 2020 designation of another Rosneft subsidiary, Rosneft Trading SA (“Rosneft Trading”), and its president, who also were targeted for operating in Venezuela’s oil sector. Concurrently, OFAC issued an updated General License 36A authorizing U.S. persons to engage in certain transactions ordinarily incident and necessary to the wind down of transactions involving TNK Trading or Rosneft Trading, or any entity in which they own a 50% or greater interest, through May 20, 2020.
For more on this issue, see our February 18, 2020 IRC Blog post on the implications of OFAC’s designation of Rosneft Trading.


FD Associates ITAR/EAR Seminar on 
24 March 
in Tysons Corner, VA, has been cancelled.

Please call 1-703-847-5801 or email 
 concerning rescheduling. 

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TE_a212. FCC Academy: U.S. Export Controls: ITAR, EAR, and FMS

U.S. Export Controls: ITAR

Tuesday, 7 April 2020, Online
More Info

U.S. Export Controls: EAR

Wednesday, 8 April 2020, Online
More Info

The ABC of Foreign Military Sales (FMS)

Tuesday, 9 April 2020, Online
More Info


EN_a113. Bartlett’s Unfamiliar Quotations

(Source: Editor)


Alfred Newman
(17 Mar 1900 – 17 Feb 1970; was an American composer, arranger, and conductor of film music. From his start at age 8 as a performing piano prodigy, he came to be regarded as a respected figure in the history of film music. He was nominated for Academy Awards 45 times, and won nine times, contributing to the Newman family being the most nominated Academy Award extended family, with a collective 92 nominations in various music categories.)
  – “Crime does not pay as well as politics.”
  – “We are living in a world today where lemonade is made from artificial flavors and furniture polish is made from real lemons.”

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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 2019:84 FR 13499-13513: Civil Monetary Penalty Adjustments for Inflation.


24 Feb 2020:
85 FR 10274-10278
: Amendments to Country Groups for Russia and Yemen Under the Export Administration Regulations


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. 

15 Nov 2017, 82 FR 52823: miscellaneous corrections include correcting references, an address and a misspelling


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). Next change: 25 March 2020.
DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

13 Mar 2020:
85 FR 14572-14573:
General Licenses Issued Pursuant to Venezuela-Related Executive Order 13835


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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