20-0326 Thursday ” Daily Bugle”

20-0326 Thursday “Daily Bugle”

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Thursday, 26 March 2020

  1. DHS/CBP Postpones April’s 2020 Customs Broker’s License Examination  
  1. Items Scheduled for Future Federal Register Edition  
  2. Commerce/BIS: “Department of Commerce Extends Public Comment Period for Input on Huawei Temporary General License Extensions”
  3. State/DDTC Announces Changes to ITAR: Encryption Rule Takes Effect
  4. State/DDTC Announces Outage Notice for The Registration and Licensing Applications
  5. DHS/CBP: “Additional Information on April 2020 Customs Broker License Exam (CBLE)”
  6. GAO: “FAA Needs to Better Prevent, Detect, and Respond to Fraud and Abuse Risks in Aircraft Registration”
  7. Hong Kong TID Publishes List of Officers Authorized to Sign Licenses and Certificates
  8. UK Export Control Organization Updates Guidance Concerning Trade Sanctions on Somalia 
  1. Forbes: “Coronavirus Accelerates Techno-Nationalism and Piles New Constraints on Multinationals”
  2. The Washington Post: “Why China and the U.S. Can’t Cooperate to Fight Coronavirus”  
  1. Arent Fox: “COVID-19 Impact on Section 301 China Tariffs: USTR Excludes Some Healthcare Products, Solicits Requests to Exclude More”
  2. Baker McKenzie: “EU to Introduce Customs Duty and Import VAT Exemptions for Key Equipment to Tackle COVID-19”
  3. Kelley Drye: “USTR Considers Removal of 301 Duties on COVID-19-Related Medical Care Products”
  4. Lowenstein Sandler: “Two Weeks Into a Pandemic: A Fresh Look at Force Majeure”  
  1. ICPA’s “2021 ITAR Conference” 13-15 April in Fort Worth Has Been Postponed”
  2. FCC Academy: U.S Export Controls: ITAR, EAR, and FMS  
  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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EXIM_a11. DHS/CBP Postpones April’s 2020 Customs Broker’s License Examination

Federal Register, 26 Mar 2020)
85 FR 17091-17092: Postponement of the April 2020 Customs Broker’s License Examination
AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: General notice.
* SUMMARY: This document announces that U.S. Customs and Border Protection (CBP) has postponed the customs broker’s license examination scheduled for April 1, 2020. The examination is postponed due to the unprecedented situation related to the coronavirus (COVID-19), which is having a nationwide impact on CBP’s ability to conduct the examination.
* DATES: The customs broker’s license examination scheduled for April 1, 2020 is postponed.
* FOR FURTHER INFORMATION CONTACT: Randy Mitchell, Director, Commercial Operations, Revenue and Entry, Office of Trade, 1-202-325-6532, or

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Items Scheduled for Future Federal Register Editions 
(Source: Federal Register)
* Commerce/BIS; PROPOSED RULES; Future Extensions of Temporary General License; [Pub. Date: 27 Mar 2020]  

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Commerce/BIS, 25 Mar 2020)
Today, the Department of Commerce Bureau of Industry and Security (BIS) announced an extension of the public comment period on Huawei Temporary General License Extensions through April 22, 2020. BIS is seeking input on the continuing need for, and scope of, possible future extensions of the Temporary General License (TGL) for Huawei Technologies Co. Ltd. and its non-U.S. affiliates on the Entity List.
The Department has received requests from industry to allow for additional comments, and is granting this request in support of robust consideration of future extensions of the TGL.  
Earlier this month, the Department extended the TGL through May 15, 2020. That date remains in place.

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State/DDTC, 25 Mar 2020)
On March 25, 2020, the interim final rule, International Traffic in Arms Regulations: Creation of Definition of Activities That Are Not Exports, Reexports, Retransfers, or Temporary Imports; Creation of Definition of Access Information; Revisions to Definitions of Export, Reexport, Retransfer, Temporary Import, and Release 84 FR 70887 took effect. 

This rule, known as the Encryption Rule, clarifies and streamlines the International Traffic in Arms Regulations (ITAR) and creates new efficiencies for the exporting and importing communities by supporting the secure storage and transmission of technical data via the Internet and cloud networks. The rule accomplishes this by creating a new definition of activities that are not exports, reexports, retransfers, or temporary imports. It consolidates in one location several previously existing but disassociated activities that are not considered exports and adds a new entry for properly secured unclassified technical data in an encrypted state. 

This rule is compatible with, but not identical to, the analogous provision in the Export Administration Regulations (EAR) 15 CFR parts 730 through 774. It also provides the regulatory framework for the control of properly secured encrypted technical data and its means of decryption.
You can find a summary of changes here.

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State/DDTC, 26 Mar 2020)
The Registration and Licensing applications within the Defense Export Control and Compliance (DECCS) environment will be unavailable to industry starting at 6:00 PM (EST) on Thursday, March 26 through 8:00 AM (EST) Friday, March 27 for scheduled system maintenance. Please ensure work in progress is saved prior to the scheduled downtime.

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: “Additional Information on April 2020 Customs Broker License Exam (CBLE)”

DHS/CBP, 25 Mar 2020)

Due to the coronavirus (COVID-19) emergency, Customs and Border Protection (CBP) has canceled the April 1, 2020 Customs Broker Licensing Exam (CBLE). Individuals that registered for the April 1, 2020 CBLE will receive refunds for their application fee of $390.00. These refunds will be provided to all registrants automatically. CBP will continue to provide additional information concerning the CBLE in future CSMS messages. Please watch your CSMS messages and the broker website on CBP.gov for future information. If you have questions or comments, you may email the broker management branch via brokermanagement@cbp.dhs.gov.

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GAO: “FAA Needs to Better Prevent, Detect, and Respond to Fraud and Abuse Risks in Aircraft Registration

, 25 Mar 2020) 

The Federal Aviation Administration manages the U.S. aircraft registry, which maintains information on about 300,000 civil aircraft. Accurate registry information can help investigators combat illegal activities such as drug trafficking or purchasing an aircraft as part of a money laundering scheme.
We found FAA generally relies on self-certification and doesn’t verify key information such as applicant identity or aircraft ownership. Shell company or limited liability company ownership can also make it difficult to determine who ultimately owns an aircraft.
We made 15 recommendations, including that FAA verify key owner information.

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Hong Kong TID Publishes List of Officers Authorized to Sign Licenses and Certificates

Hong Kong Trade and Industry Department
, 26 Mar 2020)

you can find the list of specimen signatures of officers in Trade and Industry Department who are authorized to sign on and issue Delivery Verification Certificates and import and export licenses covering strategic commodities under the Import and Export Ordinance.

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OGS_a89. UK Export Control Organization Updates Guidance Concerning Trade Sanctions on Somalia

, 25 Mar 2020)
Page summary:
Somalia is subject to an arms embargo, transit control and other restrictions.
Change made:
Guidance updated to include components for improvised explosive devices.

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NWS_a110. Forbes: “Coronavirus Accelerates Techno-Nationalism and Piles New Constraints on Multinationals”

Forbes, 25 Mar 2020) [Excerpts]
For decades, multinational enterprises (MNEs) have leveraged global value chains to operate as “stateless” entities, often beyond the reach of the tax collector and the regulator.
COVID-19, however, is changing how MNEs can do business. The pandemic is accelerating nationalist forces that have become catalysts for de-globalization and localization. …
Huawei has responded to U.S. technology export controls by “de-Americanizing” its supply chains. Consequently, Huawei claims to have replaced all U.S. technology from its P30 Mate smart phone, as well from its next generation 5G base stations.
U.S. export controls have been bad for MNEs. Huawei, alone, purchased approximately $11 billion worth of semiconductors from U.S. firms in 2018, and its move to de-couple from American suppliers revealed an even bigger problem for American MNEs: more than 60% of Qualcomm’s revenue came from China in the first 4 months of 2018; for Micron, over 50%; for Broadcom about 45%. …

NWS_a211. The Washington Post: Why China and the U.S. Can’t Cooperate to Fight Coronavirus

The Washington Post, 26 Mar 2020) [Excerpts]

As the U.S. struggles to contain the spread of the coronavirus, China this week announced plans to reopen Wuhan, the city in central China where it first emerged. …
The U.S. may seek to further disengage from the Chinese economy
The Trump administration came into office strongly determined to reconfigure the bilateral relationship, arguing that China’s state-directed economy has long undercut U.S. competitiveness.
With its steep tariffs on Chinese goods – which remain at an average level of 19.3 percent even after the “phase one” trade deal – myriad efforts to thwart further inroads by Chinese telecom giant Huawei and use of export controls to prevent China from becoming a global leader in frontier technologies, the administration had already made considerable headway in unwinding U.S.-China interdependence well before the coronavirus broke out in Wuhan. …
Even as U.S.-China strategic distrust intensified between the onset of the global financial crisis and the end of the Obama administration, the two countries still engaged in fruitful collaboration. …


COM_a112Arent Fox: “COVID-19 Impact on Section 301 China Tariffs: USTR Excludes Some Healthcare Products, Solicits Requests to Exclude More”

(Source: Arent Fox, 25 Mar 2020)
* Principal Author: David R. Hamill, Esq., 1-202-857-8940, Arent Fox LLP
On Wednesday, March 25, 2020, the U.S. Trade Representative (USTR) published a Federal Register notice requesting comments on the removal of Section 301 tariffs from Chinese medical-care products-including those that have been previously denied an exclusion-needed to respond to the COVID-19 outbreak.
We have previously reported that Section 301 of the Trade Act of 1974, 19 U.S.C. § 2411, authorizes the president to take retaliatory action if it is determined that a trade act, policy, or practice of a foreign government is unreasonable or discriminatory and that it burdens or restricts US commerce. In retaliation for certain acts, policies, and practices of the Chinese Government related to technology transfer, intellectual property, and innovation, President Trump has used this authority to impose additional tariffs ranging between 7.5% and 25% on four lists of imported Chinese goods valued at nearly $370 billion annually.
As the novel coronavirus spreads across the United States, the Administration is navigating how to reconcile these measures with its response to the growing pandemic. Even while President Trump has so far publicly resisted calls for broad tariff relief, USTR is considering the removal of targeted products from the scope of the Section 301 tariffs.
New Section 301 Exclusions Granted
Each Section 301 action regarding a new list of covered products has been accompanied by a process whereby interested parties could request that a particular product be excluded from the tariffs based on certain criteria, namely that the product is available only from China, that the imposition of additional duties on the product would cause severe economic harm to the requester or other US interests, and that the particular product is not strategically important or related to “Made in China 2025” or other Chinese industrial programs.
USTR is currently undergoing review on requests for product exclusions from Lists 3 and 4A, and has prioritized the review of exclusion requests addressed to medical-care products related to the U.S. response to COVID-19. In the past two weeks, this has resulted in new exclusions for certain personal protective equipment (PPE) that has been in short supply such as gloves, surgical masks, and N95 respirators. See 85 FR 13970 (Mar. 10, 2020), 85 FR 15015 (Mar. 16, 2020), and 85 FR 15244 (Mar. 17, 2020). USTR notes that certain other essential health care products, including ventilators, were never subject to the tariff or were previously excluded.
Proposal to Exclude COVID-19-Related Products
USTR is now separately inviting public comments on whether to remove additional products, covered by any list, that are “needed to address the COVID-19 outbreak.” Similar to the list-based exclusion request processes, the party “must identify the particular product of concern” by including “the ten-digit HTSUS subheading applicable to the product, and the identity of the particular product in terms of its functionality and physical characteristics (e.g., dimensions, material composition, or other characteristics).” But instead of satisfying the above three criteria, each comment must “explain precisely how the product relates to the response to the COVID-19 outbreak.” As the criteria are different, a product is eligible for removal even if an exclusion request for the product is pending or has been denied. We note that USTR will review not just products “directly used to treat COVID-19 or to limit the outbreak,” but also products “used in the production of needed medical-care products.”
Although comments will be accepted through at least June 25, 2020, USTR advises that interested parties “should submit comments as promptly as possible” and as has been seen with past exclusion processes will review the comments on a rolling basis. USTR recommends that any response to a comment be submitted within three days. Whereas the product exclusion request process for Lists 3 and 4A utilized the USTR Exclusion Portal, this process resembles the processes for Lists 1 and 2, for which USTR accepted submissions via regulations.gov. The docket number for this comment submission is USTR-2020-0014.
As manufacturers of medical-care products ramp up production and unrelated supply chains shift to the global fight against COVID-19, consider whether Section 301 tariffs are impeding your company’s ability to contribute to the cause.

COM_a213Baker McKenzie: “EU to Introduce Customs Duty and Import VAT Exemptions for Key Equipment to Tackle COVID-19”

(Source: Sanctions & Export Controls Update, 24 Mar 2020)
* Principal Author: Jennifer F. Revis, 44-20-7919-1381, Baker McKenzie
On 20 March 2020, the European Commission announced that it intends to introduce exemptions from customs duty and import VAT for “protective equipment, other relevant medical devices or equipment in the context of the COVID-19 outbreak”, following a request from the Italian government.
Relief is to be granted under provisions of the EU’s customs and import VAT legislation granting relief for items “for the benefit of disaster victims,” where they are to be made available for free to disaster victims or used by disaster relief agencies. Relief will be available to state-run organisations, and other approved charitable or philanthropic organisations.
The relief is subject to a formal Decision of the Commission, which is currently being prepared. Pending the Decision, Member States that are affected by the disaster are able to authorise the suspension of duty and VAT for items in scope provided that importers give assurances that they will pay duty and VAT if relief is not granted.

We expect the Commission to issue its formal Decision in the coming days.

COM_a314. Kelley Drye: “USTR Considers Removal of 301 Duties on COVID-19-Related Medical Care Products”

(Source: Kelley Drye & Warren LLP, 25 Mar 2020)
* Author: Jennifer McCadney, Esq., 1-202-342-8416, Kelley Drye & Warren LLP
In response to the COVID-19 outbreak, USTR issued a Federal Register Notice requesting public comments on the possibility of removing the application of China Section 301 duties from medical care products, including inputs used to produce such needed medical care products.
The comment period will remain open until at least June 25, 2020, however, USTR indicated the deadline may be extended. Interested parties are encouraged to submit comments as promptly as possible. Responses to comments should be submitted within three business days after a comment is posted on the docket. USTR will review requests and comments on a rolling basis.

The announcement further indicates that comments may be submitted regarding any product covered by Section 301 duties, even if the product is subject to a pending or denied exclusion request. Commenters must identify the product of concern and explain how it relates to the COVID-19 outbreak, including whether a product is directly used to treat COVID-19 or limit the outbreak, or whether the product is used in the production of needed medical-care products. 

COM_a415. Lowenstein Sandler: “Two Weeks Into a Pandemic: A Fresh Look at Force Majeure”

* Principal Author: Jamie Gottlieb Furia, Esq., 1-646-414-6887, Lowenstein Sandler LLP
While the new coronavirus disease (COVID-19) outbreak has already caused unprecedented and far-reaching negative consequences, foremost for many businesses is the difficulty or impossibility of carrying out contractual obligations. During a global crisis such as the COVID-19 pandemic,[FN/1] is a party excused from performance under a contract? The short answer: It depends.
Many contracts contain a force majeure clause that limits damages or excuses performance when an “act of God” or circumstances beyond the parties’ control prevent either party from fulling its obligations.[FN/2] However, courts typically construe force majeure clauses narrowly, and will only fully excuse performance if the contract expressly includes the particular event.[FN/3] In order for COVID-19 to more likely be considered an enforceable event excusing performance, a force majeure clause should explicitly contain a specific reference to a “pandemic,” “epidemic,” “virus,” “disease,” “quarantine,” “travel restriction,” or “state of emergency.”
When parties attempt to rely on catchall clauses as opposed to specifying triggering events, courts will not typically enforce force majeure if the parties could reasonably have foreseen the event at the time of contracting.[FN/4] Of particular importance to courts interpreting these force majeure clauses will be whether the parties entered into the contract (or relevant rider, statement of work, or subcontract) before the triggering event became foreseeable: here, the global spread of COVID-19. The timing and foreseeability of the pandemic will almost certainly be a hotly contested topic as these clauses are litigated.
Even without an enforceable force majeure clause, a party unable to perform its contractual obligations may be able to assert an impossibility or impracticability defense. Under New York law, for example, the doctrine of impossibility is also narrowly construed, and is only applicable when a party is objectively unable to perform.[FN/5] The various COVID-19 government regulations prohibiting the operation of nonessential businesses may provide valid impossibility defenses to performance.
Likewise, proving impracticability of performance is a high bar. A party must be able to demonstrate that the event preventing performance was truly unforeseeable and could not have been prevented by the obligated party. It is typically not enough to claim that performance is inconvenient or more expensive than anticipated at the time of contract.
Small and large businesses alike with contracts impacted by the COVID-19 crisis should promptly take the following steps:
(1) Analyze contractual rights and responsibilities to determine the potential impact of the global outbreak on performance.
(2) Determine contractual notice obligations, as many contracts require that a party seeking to rely on a force majeure clause provide prompt notice to its counterparty. In some cases, the failure to provide notice may constitute a waiver of rights.
(3) Assess alternatives to performance before invoking a force majeure clause.
(4) Document all decisions and actions, and maintain any corresponding documentation.
(5) Communicate with the counterparty as soon as possible to discuss the impact of COVID-19 on performance, potential delays, or alternatives to performance as written under the contract, and to hopefully craft a mutually agreeable solution.
While much remains unknown about the COVID-19 pandemic, it is essential for businesses to understand their own abilities to invoke and defend against force majeure arguments if contractual performance becomes impracticable or impossible.
[FN/1] The World Health Organization declared COVID-19 a pandemic on March 11, 2020.
[FN/2] See Beardslee v. Inflection Energy, LLC, 25 N.Y.3d 150, 154 (2015) (“Generally, a force majeure event is an event beyond the control of the parties that prevents performance under a contract and may excuse nonperformance”); see also Facto v. Pantagis, 390 N.J. Super. 227, 231 (App. Div. 2007) (“Even if a contract does not expressly provide that a party will be relieved of the duty to perform if an unforeseen condition arises that makes performance impracticable, ‘a court may relieve him of that duty if performance has unexpectedly become impracticable as a result of a supervening event.'” (quoting Restatement (Second) of Contracts § 261).
[FN/3] See In re Cablevision Consumer Litig., 864 F. Supp. 2d 258, 264 (E.D.N.Y. 2012) (stating that force majeure provisions are narrowly construed and “will generally only excuse a party’s nonperformance if the event that caused the party’s nonperformance is specifically identified”).
[FN/4] See Kel Kim Corp. v. Cent. Markets, Inc., 70 N.Y.2d 903 (1987) (“The principle of interpretation applicable to [catch-all] clauses is that the general words are not to be given expansive meaning; they are confined to things of the same kind or nature as the particular matters mentioned”); Seitz v. Mark-O-Lite Sign Contractors, Inc., 210 N.J. Super. 646, 650 (Law Div. 1986) (“Under this principle, the catch-all language of the force majeure clause relied upon by defendant is not to be construed to its widest extent; rather, such language is to be narrowly interpreted as contemplating only events or things of the same general nature or class as those specifically enumerated”).
[FN/5] See, e.g., Urban Archaeology Ltd. v. 207 E. 57th St. LLC, 34 Misc. 3d 1222(A), 951 N.Y.S.2d 84 (Sup. Ct.), aff’d, 68 A.D.3d 562, 891 N.Y.S.2d 63 (2009) (collecting New York cases interpreting impossibility doctrine).


ICPA’s “2021 ITAR Conference” 13-15 April in Fort Worth Has Been Postponed 

The ITAR Annual Conference previously scheduled for 13-15 in Fort Worth, Texas, has been postponed a year until April of 2021.  Persons who have already registered will be contacted by ICPA regarding refunds or credits for next year’s registration.  
* Sponsor: International Compliance Professionals Association (ICPA)

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TE_a217. 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_a118. Bartlett’s Unfamiliar Quotations

(Source: Editor)


* A.E. Housman (Alfred Edward Housman; 26 Mar 1859 – 30 Apr 1936; was an English classical scholar and poet. Lyrical and almost epigrammatic in form, the poems wistfully evoke the dooms and disappointments of youth in the English countryside.)
– “Malt does more than Milton can to justify God’s ways to man.”
* Robert Frost (Robert Lee Frost; 26 Mar 1874 – 29 Jan 1963; was an American poet. Frost frequently wrote about settings from rural life in New England in the early twentieth century, using them to examine complex social and philosophical themes. Frost is the only poet to receive four Pulitzer Prizes for Poetry.)
– “Don’t ever take a fence down until you know why it was put up.” 
– “The father is always a Republican toward his son, and his mother’s always a Democrat.” 

Thursday’s “Troubled Times” advice:
“A simple rule dictates my buying: Be fearful when others are greedy and be greedy when others are fearful.”
  – Warren Buffet
“The four most dangerous words in investing are: ‘This time it’s different.'”
  – Sir John Templeton

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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: Civil Monetary Penalty Adjustments for Inflation.


24 Feb 2020:
85 FR 10274
: 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: 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: Bump-Stock-Type Devices.

DOS INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130.  26 Dec 2019: 84 FR 70887; 23 Jan 2020: 85 FR 3819: Encryption rule and USML Categories I, II, III, and related sections regarding guns & ammo. 
DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

13 Mar 2020:
85 FR 14572:
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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