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20-0424 Friday “Daily Bugle”

20-0424 Friday “Daily Bugle”

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Friday, 24 April 2020

  1. USITC: “Petitions for Duty Suspensions and Reductions”
  2. USTR: “Notice of Products Exclusions — China’s Acts, Policies, and Practices”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/ITA Connects Smart City Technology Exporters to Southeast Asia
  3. State/DDTC: (No new postings.)
  4. EU Commission Publishes Report on the Impact of Coronavirus on EU Trade
  5. EU Commission’s Updates
  6. Netherlands TCA: “Corona Crisis: Customs Payment Deferral”
  7. UK ECJU Publishes After EC3 Form, the EC4 Continuation Sheet
  1. LexSage: “Canada: When CUSMA Enters into Effect, NAFTA Advance Rulings Are No Longer Valid”
  2. ST&R Trade Report: “More China Tariff Exclusions Announced; Retroactive Refunds Available”
  3. WORLDecr: “US: North Korean Cyberattacks Pose ‘Significant Threat’ to Global Financial System””
  1. Baker McKenzie: “Dutch Supreme Court — EU Blocking Regulation Does Not Prevent Extradition of Iranian National to the US”
  2. EU Sanctions: “OFAC Delists 12 from Kingpin Sanctions & Updates Libya Identifying Information”
  3. Husch Blackwell: “USTR Announces New Section 301 Product Exclusions for List 3”
  4. Kelley Drye: “Implications for Suppliers — Chevron Ordered to Wind Down Venezuela Business By 1st of Dec”
  5. Sildey: “U.S. Treasury Issues Guidance on COVID-19-Related Humanitarian Assistance”
  6. Steptoe: “U.S. Treasury Issues Guidance on COVID-19-Related Humanitarian Assistance”
  1. ECTI Presents: e-Seminar sale – 20% off all e-Seminar Training 
  2. ECTI Presents United States Export Control (ITAR/EAR/OFAC) Seminar in Singapore: 14-17 Sep 
  3. FCC Academy Presents Webinar: “An Introduction to EU/Dutch Dual-use and Military Export Controls”; 12 May 
  4. FCC Academy Presents June Webinars: U.S. Export Controls: ITAR, EAR, and FMS 
  5. Friday List of Approaching Events: 145 Events Posted This Week, Including 8 New Events 
  1. In Memoriam: John D. Lyons, 1953-2020
  2. Bartlett’s Unfamiliar Quotations
  3. Are Your Copies of Regulations Up to Date? Find the Latest Amendments Here.
  4. Weekly Highlights of the Daily Bugle Top Stories
  5. Submit Your Job Opening and View All Job Openings
  6. Submit Your Event and View All Approaching Events

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EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11
.
USITC: “Petitions for Duty Suspensions and Reductions”

(Source: Federal Register, 24 Apr 2020) [Excerpts]
 
85 FR 23059: Notice of acceptance of additional comments.
 
* AGENCY: United States International Trade Commission.
* ACTION: Notice that the Commission will accept additional comments from the public, during the period June 12 to June 22, 2020, on petitions for duty suspensions and reductions that the Commission places in Category VI in the preliminary report that it sends to the House Committee on Ways and Means and the Senate Committee on Finance on June 9, 2020.
 
* SUMMARY: The Commission will provide a limited opportunity for members of the public to submit additional comments on certain petitions for duty suspensions and reductions. Under the American Manufacturing Competitiveness Act of 2016 (the Act), the Commission must submit its preliminary report on the petitions for duty suspensions and reductions that have been filed with it to the House Committee on Ways and Means and the Senate Committee on Finance on June 9, 2020. …  


* DATES:
   June 12, 2020, 8:45 a.m. EST: Opening date and time for submission of additional comments on Category VI petitions.
   June 22, 2020, 5:15 p.m. EST: Closing date and time for submission of comments on Category VI petitions.

 
* * * * * * * * * * * * * * * * * * * *  

EXIM_a22. USTR: “Notice of Products Exclusions — China’s Acts, Policies, and Practices” 

(Source:
Federal Register, 24 Apr 2020) [Excerpts]
 
85 FR 23122: Notice of product exclusions.
 
* AGENCY: Office of the United States Trade Representative.
* ACTION: Notice of product exclusions.
* SUMMARY: In September 2018, the U.S. Trade Representative imposed additional duties on goods of China with an annual trade value of approximately $200 billion as part of the action in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The U.S. Trade Representative initiated a product exclusion process in June 2019, and interested persons have submitted requests for the exclusion of specific products. This notice announces the U.S. Trade Representative’s determination to grant certain exclusion requests, as specified in the Annex to this notice, and corrects a technical error in a previously announced exclusion.
* DATES: The product exclusions announced in this notice will apply as of September 24, 2018, the effective date of the $200 billion action, and extend to August 7, 2020. The amendments announced in this notice are retroactive to the date that the original exclusions were published.
* FOR FURTHER INFORMATION CONTACT: …

 
* * * * * * * * * * * * * * * * * * * *  

OGSOTHER GOVERNMENT SOURCES

* Federal Trade Commission; NOTICES; Meetings: Public Workshop Related to Proposed Changes to the Safeguards Rule, Postponement; [Pub. Date: 27 Apr 2020]
 
* OFAC; NOTICES; Blocking or Unblocking of Persons and Properties; [Pub. Date: 27 Apr 2020]

 
* * * * * * * * * * * * * * * * * * * *  

OGS_a24. ITA Connects Smart City Technology Exporters to Southeast Asia

(Source:
Tradeology, 22 Apr 2020)
 
Today, nearly 300 million people living in the 10 countries comprising the Association of Southeast Asian Nations (ASEAN) reside in urban areas, and this number is set to increase to more than 500 million by 2050. Like cities in the United States and elsewhere, ASEAN cities are increasingly looking to use digital technologies as part of their smart city efforts to address a wide range of urbanization challenges.
 
The International Trade Administration (ITA) is spearheading programming that connects U.S. smart city technology providers and experts with ASEAN cities to promote U.S. exports, increase U.S.-ASEAN best practices exchanges, and assist ASEAN cities in their development needs.
 
ITA’s work is part of the U.S.-ASEAN Smart Cities Partnership announced by Vice President Mike Pence in 2018. This multi-year program is a whole-of-government effort to promote collaboration between the two regions. To date, ITA has organized a variety of events to advocate for trade-enabling policies to connect U.S. technology providers to ASEAN cities.
 
Best Practices in Smart Cities
In December 2019, the United States and Singapore co-hosted a five-day workshop on Smart Cities in Singapore featuring a range of sessions on smart city planning. Debra Lam, Managing Director for Smart Cities and Inclusive Innovation at the Georgia Institute of Technology, reinforced the idea among the 24 participants that “all cities can be smart because it is a continuous improvement process.” As the former Chief Innovation & Performance Officer for the city of Pittsburgh, she was able to draw on her real-world experience. She encouraged cities to harness the power of emerging technologies rather than prematurely banning them, as blocking new technology can limit opportunities for future growth.
With each participant focused on one priority project that they hoped to develop in their city, ITA and experts from the region led interactive sessions for participants on:
  • planning and tailoring their smart city build-outs;
  • developing strategies to finance and sustainably fund their priority smart city projects;
  • adopting standards and project procurement best practices; and
  • mitigating cybersecurity risk.
Throughout the week, ITA connected ASEAN participants with U.S. industry partners such as Cisco Autodesk, and New York based Xylem to learn about innovative technology solutions to real world problems.
 
Industry Engagement
This past January, ITA led a delegation of Indonesian municipal officials to DistribuTECH, a leading energy and utilities trade show in San Antonio, Texas. U.S. companies participating and exhibiting at DistribuTECH had an opportunity to meet with key decision makers in Indonesia’s power sector, opening market prospects for technology and solutions critically needed in that nation. During the show, officials from Sumatra and Java discussed best practices with U.S. public and private sector representatives to facilitate development of Indonesia’s smart cities and smart grid infrastructure.
In recent months, ITA has continued extensive industry outreach to raise awareness of Southeast Asian smart city business opportunities and to plan for future programming.
 
Looking Towards the Future
During the next few years, ITA will continue to organize sector specific smart cities programs at trade shows focused on water, safety and security, transportation, cybersecurity, and waste management, among others. In addition, ITA will lead expert advisor delegations to ASEAN cities to engage with municipal governments on specific challenges they are facing and advocate for U.S. smart cities solutions that address those challenges.

 
* * * * * * * * * * * * * * * * * * * *  

 
* * * * * * * * * * * * * * * * * * * *  

 
The current world health crisis will result in a decline of 9.2% in EU exports and 8.8% in EU imports from third countries in 2020, according to the EU Chief Economist note, based on the estimated decline in GDP worldwide.
 
The increasing spread of the virus has prompted many governments to temporarily shut down businesses, and restrict travel and the movement of people. These measures will lead to sharp contractions in the level of economic output, household spending, investment and international trade.
 
While there is a wealth of forecasts on GDP growth in 2020, there is a limited range of work done on trade projections for 2020, in particular for EU trade.
 
The analysis outlined in this note is one of the few attempts at predicting the impact of the COVID19 outbreak on trade flows. In order to test the robustness of this analysis, results are also compared to the latest WTO trade forecasts published on 8 April.
 
Read the report here.

 
* * * * * * * * * * * * * * * * * * * *  

 
* EU Commission Makes the Exportation of Certain Products Subject to the Production of Export Authorization. See the relevant publication here.
 
* EU Commission Extends Myanmar/Burma Sanctions for a Year. See the relevant publication here.

 
* * * * * * * * * * * * * * * * * * * *  

 
In connection with the corona crisis, we are granting companies a payment deferral on request. This deferral will remain in effect until the 15th day of the month following the month in which the corona measures are ended at the latest. You can request a payment deferral by email.
 
No additional deferral is granted for freight forwarders paying by monthly credit
If you are filing a declaration as a direct representative and paying via your monthly credit, you have already been granted a payment deferral. You cannot apply for any further deferral. Only the formal debtor – your client – can request an additional payment deferral.
 
Application for payment deferral by the debtor
An additional deferral is possible if you have been affected by the corona crisis. You must furnish security for this. The collector may waive this requirement if it causes serious economic or social hardship. You must substantiate this in the request for deferral.
 
Deferral of excise duty and consumption tax
It is however necessary to file a declaration for excise duty and consumption tax. If you are unable to pay the due amount or pay it in full, wait until you receive the additional assessment before making the application for deferral.
 
Request for payment deferral.
To apply for a payment deferral, send an e-mail to the collector for Customs Amsterdam. 

 
* * * * * * * * * * * * * * * * * * * *  

OGS_a79. UK ECJU Publishes the EC4 Continuation Sheet

(Source: UK ECJU, 23 Apr 2020)
 
UK Export Control Joint Unit (ECJU) publishes EC4 form (continuation sheet of EC3) for the applicants of a Standard Individual Export Licence (SIEL) for firearms exports.
 
See both forms here.

 
* * * * * * * * * * * * * * * * * * * *  

COMNEWS

NWS_a110. LexSage: “Canada: When CUSMA Enters into Effect, NAFTA Advance Rulings Are No Longer Valid”

(Source: Mondaq, 24 Apr 2020) [Excerpts]
 
On April 3, 2020, the Canada Border Services Agency (“CBSA”) published Customs Notice 20-14 “Implementation of the Canada-United States-Mexico Agreement (CUSMA)” in which the CBSA makes it clear that NAFTA origin advance rulings will no longer be valid when CUSMA enters into effect. As a result, importers should take steps to obtain updated CUSMA origin advance rulings sooner rather than later.
 
Importers who have an existing NAFTA advance ruling might not be able to rely on the NAFTA advance ruling after the implementation of CUSMA. The CBSA is requiring NAFTA advance rulings to be updated. The CBSA wants to review the facts in the context of CUSMA and issue replacement CUSMA advance rulings. In Customs Notice 20-14, the CBSA writes:
“Advance rulings for origin issued under NAFTA, will only remain valid for goods imported under NAFTA’s preferential tariff treatment. Therefore, an applicant wishing to have an advance ruling for origin under CUSMA, will need to submit a new application to the Canada Border Services Agency. For more information, please consult Memorandum D11-4-16, Advance Rulings for Origin under Free Trade Agreements.”
What this means is that if the CBSA disagrees with a past NAFTA advance ruling during a CUSMA origin verification, the CBSA may issue a retroactive assessment and take the position that the NAFTA advance ruling is no longer valid. This could be very costly to an importer. The CBSA might refer to Customs Notice 20-14 and take the position that Canadian importers were notified that they should have applied for a new CUSMA advance ruling.

NWS_a211. ST&R Trade Report: “More China Tariff Exclusions Announced; Retroactive Refunds Available”

(Source: Sandler, Travis & Rosenberg Trade Report), 24 Apr 2020) [Excerpts]
 
Bags, hardware, engine parts, bicycles, and electronic items are among the latest exclusions from the Section 301 additional 25 percent tariff on List 3 goods from China announced by the Office of the U.S. Trade Representative. These exclusions (see attached for complete list) cover goods such as chemicals, wall panels, rubber cable protectors, textile bags, padfolios, tire chains, hardware, steel tubing, sign plates, engine parts, leaf blowers, scales, electric motors, computer power supplies, robotic vacuum cleaners, portable heaters, air fryers, video security systems, electronic items, wiring harnesses, ceramic insulators, steel vehicle hitches, bicycles, levels, kitchen timers, toddler beds, tables, work benches, bed rails, and lamps.
 
The exclusions are reflected in one 10-digit HTSUS subheading (8424.90.9080 – parts of mechanical appliances for projecting, dispersing, or spraying liquids or powders), which covers 20 separate exclusion requests, and 107 specially prepared products descriptions covering 157 separate exclusion requests. However, USTR notes that the scope of each exclusion is governed by the product description in its notice and not the descriptions found in any particular request.
 
These exclusions, which must be claimed using new HTSUS subheading 9903.88.45, will be retroactive to Sept. 24, 2018, and remain in place until Aug. 7, 2020. Importers should review the newly excluded products and apply for refunds of any tariffs paid on such goods since Sept. 24, 2018. Importers may utilize these exclusions for any product that meets the descriptions in the USTR notice, even if they did not request it.

NWS_a312. WORLDecr: “US: North Korean Cyberattacks Pose ‘Significant Threat’ to Global Financial System”

 


(Source: WORLDecr, 24 Apr 2020) [Excerpts]
 
The US government has issued an advisory warning that North Korea is engaged in an array of ‘malicious cyber activities’ that threaten the United States, the international community, and the global financial system.
 
The 15 April joint advisory by the US State Department, the Treasury, Homeland Security and the FBI accuses Pyongyang of using cyberattacks to circumvent US and UN sanctions. … 


 
‘It is vital for the international community, network defenders, and the public to stay vigilant and to work together to mitigate the cyber threat posed by North Korea,’ the advisory says.

COMCOMMENTARY

COM_a113. Baker McKenzie: “Dutch Supreme Court — EU Blocking Regulation Does Not Prevent Extradition of Iranian National to the US”

(Source: Baker McKenzie, 22 Apr 2020)
 
* Principal Author: Sunny Mann, Esq., Baker McKenzie
 
In a judgement of 7 April 2020, the Dutch Supreme Court confirmed that the EU Blocking Regulation (“EUBR”) does not prevent extradition of an Iranian national to the United States for their alleged involvement in US export controls and sanctions violations. With this judgement, the Supreme Court upheld the judgement of the District Court of Rotterdam of 5 July 2019.
 
This case was triggered by an extradition request for an Iranian national (the “Individual”) following an indictment of a federal grand jury in the District of Columbia, in the United States. The Individual was alleged to have facilitated unlicensed transfers of US-origin dual-use items (A/D converters) from the US to Iran between November 2011 and September 2018, among others resulting in violations of US export controls and sanctions, as well as fraud and forgery.
The Individual argued that the EUBR would prevent execution of the extradition request. In particular, Article 4 provides, in short, that no judgement of a court or tribunal outside the EU giving effect to a blocked measure shall be recognized or be enforceable within the European Union. Moreover, although the Individual is not an EU resident or national, they would be eligible to benefit from the EUBR as they acted in a professional capacity within the European Union. 
In first instance, the District Court of Rotterdam considered, among others, that the EUBR (i) seeks to provide protection against extraterritorial application of US sanctions for acts that are not punishable within the European Union; and (ii) does not provide protection against individuals and companies whose trade activities may contribute to Iran’s military capabilities, as such activities had also been made illegal within the European Union. In particular, the District Court found that the unlicensed exports of the relevant dual-use items would also have been a criminal offence under EU/Dutch sanction laws, if these were made from the Netherlands at the relevant time. Therefore, it rejected the related arguments of the Individual. By effect, it did not have to consider whether the Individual would indeed be within the scope of the EUBR. 
On appeal, the Supreme Court found that the District Court did not err in law and, hence, confirmed the judgement of the District Court in first instance. As the Supreme Court is the highest competent court for relevant proceedings, the judgement cannot be appealed in the Netherlands. However, the competent Minister may decide to nullify the extradition request based on non-legal grounds (e.g., potential human rights concerns).

(Source: 
EU Sanctions, 23 Apr 2020)
 
* Principal Author: Maya Lester, QC, 44-20-7379-3550, EU Sanctions
 
Kingpin Delistings
OFAC has removed five Guatemalan and Colombian nationals, and seven entities, originating from Colombia, Honduras, the US and the Virgin Islands, from its 
US Kingpin Act 
sanctions list, which targets foreign narcotics traffickers. These people/entities will no longer be subject to asset freezing measures.
 
Libya
OFAC has also updated the identifying information for five Libyans and one vessel designated pursuant to 
E.O. 13566 
(blocking property of / suspending entry into the US for the Qadafi family and their associates), and 
E.O. 13726 (
blocking property of / suspending entry into the US for those contributing to ongoing violence in Libya). Notice 
here.

(Source:
Husch Blackwell
, 23 Apr 2020)
 
* Principal Author: 
Beau Jackson, Esq., 1-816-983-8202, Husch Blackwell LLP
 
On April 22, 2020, the United States Trade Representative (“USTR”) issued new product exclusions pertaining to the 25% Section 301 List 3 Tariffs.  The new list of exclusions includes one 10-digit HTSUS subheading (8424.90.9080 covering parts of certain projecting, dispersing or spraying devices) and 107 specially prepared product descriptions corresponding to a particular HTSUS subheading. The products affected are a wide variety of goods including various chemicals, duffel bags, electric motors of a certain output range, bicycles, and parts and accessories for meteorological equipment.
To view the full list of excluded products, click 
here
The product exclusions apply retroactively to entries going back to September 24, 2018 and remain in effect until August 7, 2020.  We encourage clients and companies to review the listed exclusions and contact Husch Blackwell’s 
International Trade and Supply Chain 
Team with any questions or concerns.

(Source:
Kelley Drye, 22 Apr 2020)
 
 
On 22 April 2020, President Trump ordered Chevron to “wind down” its business in Venezuela by 1 Dec 2020. This will have a significant impact on companies that supply Chevron with equipment used for oil and gas projects in Venezuela that were previously licensed.
 
Effective 21 April 2020, the Department of Treasury’s Office of Foreign Assets Control (OFAC) issued General License (GL) 8F, which, significantly limits the activities in which Chevron and other covered entities are authorized to engage while winding down their operations through 1 Dec 2020.
 
Chevron is the only covered entity significantly impacted by the new GL 8F as it is the last major U.S. oil company permitted under an OFAC general license to do business in Venezuela. Companies that supply or otherwise do business with Chevron related to Venezuela should immediately review this significantly limited GL 8F carefully to determine whether their existing and planned business would be authorized pursuant to the new GL or whether they may need to alter their plans, review force majeure clauses, apply for a specific OFAC license or other authorization from OFAC, or take other steps.
 
Specifically, GL 8F authorizes Chevron, and other covered entities, to engage in certain transactions and activities, otherwise prohibited by the Venezuela Sanctions Regulations (VSR), that are ordinarily incident and necessary to the limited maintenance of essential operations, contracts, or other agreements. However, these wind-down transactions/activities must now be for the preservation of assets or safety in Venezuela, involve PdVSA or any entity in which they own 50% or greater interest, and have been in effect prior to July 26, 2019.
 
Additionally, regarding Chevron and the other covered entities, GL 8F no longer authorizes:
 
   (1) The drilling, lifting, or processing of, purchase or sale of, or transport, or shipping of any Venezuelan-origin petroleum or petroleum products;
   (2) The provision or receipt of insurance or reinsurance regarding the above activities;
   (3) The design, construction, installation, improvement, or repair of any wells, facilities, or other infrastructure in Venezuela or the purchasing or provision of any goods or services, except as required for safety;
   (4) Contracting for additional services or personnel, except as required for safety;
The payment of any dividend, including in kind, to PdVSA, or any entity in which PdVSA owns, directly or indirectly, a 50% or greater interest; or
   (5) Any loans to, accrual of additional debt by, or subsidization of PdVSA, or any entity in which PdVSA owns, directly or indirectly, a 50% or greater interest, including in kind, as prohibited by Venezuelan Sanctions Regulations.

(Source:
Sidley, 22 Apr 2020)
 
* Principal Author: Andrew Shoyer, Esq., 1-202-736-8326, Sidley Austin LLP
 
During the past week, the U.S. government has provided additional guidance on compliance with economic sanctions in view of the COVID-19 pandemic.
First, on 16 April, the Department of the Treasury Office of Foreign Assets Control (OFAC) published a 
10-page fact sheet of guidance
 
on the humanitarian assistance and trade authorized under U.S. sanctions programs concerning Iran, Venezuela, North Korea, Syria, Cuba and the Crimea region of Ukraine. The fact sheet also outlines specific guidance for OFAC-administered sanctions programs related to personal protective equipment (PPE) and other COVID-19-related humanitarian assistance and trade.
 
The fact sheet generally does not make substantive changes to U.S. sanctions programs but rather highlights and clarifies existing exemptions, exceptions and authorizations related to humanitarian assistance and trade. In particular:
  • OFAC emphasized that under certain circumstances, U.S. and non-U.S. persons are authorized to ship certain humanitarian goods, including medicines and medical devices, to sanctioned countries without OFAC approval. 
  • OFAC further confirmed that businesses in Iran manufacturing certain medical products for use in Iran would not be considered as operating in the manufacturing sector of the Iranian economy for purposes of secondary sanctions. [FN/1]
  • OFAC will prioritize and expedite its review of COVID-19-related license requests pertaining to such restricted equipment as oxygen generators, full-face mask respirators and certain decontamination equipment that requires additional OFAC approval.
  •  

Second, on 20 April OFAC issued a notice encouraging persons affected by the pandemic to contact OFAC if they believe they may experience delays in their ability to meet deadlines associated with regulatory requirements administered by OFAC. [FN/2]
 
Importantly, sanctions laws and regulations governing shipments of medicine, certain medical devices and other humanitarian assistance to sanctioned countries are fact-specific and vary widely depending on the sanctions program. Persons interested in engaging in humanitarian trade with sanctioned countries should ensure that they carefully review and comply with the relevant license terms and authorizations, including any recordkeeping and reporting requirements. More generally, they should ensure they have robust sanctions and export controls compliance policies and procedures. Interested persons should also review other applicable regulations governing trade in humanitarian goods, including any applicable export controls administered by the Department of Commerce Bureau of Industry and Security and export restrictions on exports of PPE administered by the Federal Emergency Management Agency.
 
[FN/1]
See Executive Order 13902, “Imposing Sanctions with Respect to Additional Sectors of Iran,” (10 Jan 2020).
[FN/2] See 
here
.
Such deadlines might include those related to filing blocking and rejected transaction reports, responses to administrative subpoenas issued by OFAC or reports required by general or specific licenses.

(Source:
Steptoe, 22 Apr 2020)
 
* Principal Author: Meredith Rathbone, Esq., 44-20-7367-8021, Steptoe & Johnson LLP
 
Sometimes it can be difficult for non- US companies to pinpoint exactly how US sanctions risks can affect their business activities. This is particularly true for companies operating in the technology industry, which can often be subject to OFAC’s jurisdiction when dealing with hardware, software, technology and services with some link to the United States. Managing that OFAC risk can be challenging in this fast- moving industry.
 
For example, Switzerland-based Société Internationale de Télécommunications Aéronautiques (‘SITA’) became subject to OFAC’s jurisdiction, according to its recent settlement with OFAC, because SITA was providing software and services that were either US-origin or depended on US- based servers or facilities.
 
In general, OFAC’s “primary sanctions” regulations apply to activity by “US persons” or activity “in the United States”. On its face, that sounds like a reasonably limited jurisdictional authority. But OFAC interprets this authority broadly, and its jurisdictional approach to non-US technology companies is not always intuitive.
 
Starting with digital services, in the SITA settlement, OFAC said the airline services provided by SITA “were subject to US jurisdiction because they were provided from, or transited through, the United States.” OFAC’s enforcement history suggests that the use of US-based servers or other infrastructure or facilities, or involvement of US entities or individuals located in the United States, in performing services involving a sanctioned party or territory can provide OFAC with a sufficient jurisdictional “hook” to pursue an enforcement action.
 
The issue of software jurisdiction can be equally complicated. Among OFAC’s charges against SITA was that it provided US-origin software to sanctioned airlines. OFAC’s enforcement notice did not mention any US person involvement in that activity. This could suggest that OFAC views dealings between non-US persons and sanctioned entities involving US-origin software as subject to US sanctions jurisdiction, regardless of US person involvement. This is in addition to US export controls jurisdiction and OFAC jurisdiction in the context of a country- based sanctions regime.
 
Because of the breadth and lack of clear delineation of the reach of OFAC’s jurisdictional authority, and because OFAC can in some circumstances impose “secondary sanctions” even where it has no “primary sanctions” enforcement jurisdiction, many non-US companies opt to apply OFAC compliance measures either globally or in higher-risk areas of their business.
 
What can a non-US technology company do to protect itself? At a minimum, for digital services and software providers, this often means name screening controls to try to identify sanctioned parties (including any ultimate or beneficial owners of parties to a transaction) and geographical (e.g., country code top-level domain or IP address) screening to try to identify users located in or otherwise affiliated with sanctioned territories (i.e., Crimea, Cuba, Iran, North Korea, and Syria). One of the clear lessons emerging from OFAC’s recent enforcement history is that this name and geographical screening should not be limited to immediate parties, but should often extend to intermediaries and ultimate end-users (e.g., your customer’s customer). Companies unsure of whether their activities are subject to OFAC’s jurisdiction also should consider whether any of the following are involved in their activities:
 
  1. US-incorporated entities or their foreign branch offices, or any entity with a presence in the United States;
  2. Entities owned or controlled by US persons;
  3. Individual US citizens or permanent residents, or individuals located or acting within the United States;
  4. US dollar-denominated transactions;
  5. US-origin goods, software or technology;
  6. Non-US products/technologies with US-origin content or that are commingled with or drawn from US- origin technology; and
  7. Servers, infrastructure or other facilities located in the United States.

If any of these factors are present in a transaction or business relationship, OFAC risk could apply, and in order to protect themselves companies should take steps to ensure that their compliance program adequately addresses those risks.

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a1
19. ECTI Presents: e-Seminar sale – 20% off all e-Seminar Trainings

* What:
e-Seminar Training Sale – 20% off with code: 
stayhome
* When:
Now through 15 of May
* Where:
Online training – delivered electronically on USB
* Sponsor: Export Compliance Training Institute (ECTI)
* Register:
here
, or contact 1-540-433-3977

* * * * * * * * * * * * * * * * * * * *

 
* What: United States Export Controls (ITAR/EAR/OFAC) Seminar Series in Singapore (for Asia-Pacific and other non-US based companies)
* When: ITAR Seminar: 14-15 September; EAR/OFAC Seminar: 16-17
September
* Where: Singapore, Orchard Hotel Singapore, 442 Orchard Road, Singapore
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker Panel: Scott Gearity, and Timothy O’Toole, Esq.
* Register
here
, or contact 
Jessica Lemon
, 1-540-433-3977.

Back to top

* * * * * * * * * * * * * * * * * * * *

TE_a3
21. FCC Academy Presents Webinar: “An Introduction to EU/Dutch Dual-use and Military Export Controls”; 12 May

 
* What: Introduction to EU / Dutch Dual-Use and Military Export Controls
* When: 12 May 
* Where:  Online
* Sponsor: FCC Academy 
* Presenter: Marco F.N. Crombach MSc (Director)
* Register: 

here
, and email
 events@fullcirclecompliance.eu

* * * * * * * * * * * * * * * * * * * *

* * * * * * * * * * * * * * * * * * * *

TE_a5
23. Friday List of Approaching Events: 145 Events Posted This Week, Including 8 New Events

(Sources: Event sponsors) 
 
Submit your event in the Submission section at the end of this newsletter.  
 
[Editor’s note:  This Daily Bugle Event List has grown so large that we have run out of space to display it!  This week we begin a new practice of displaying only the new events in the Daily Bugle, while maintaining a 
LINK HERE to the full list.] 
 
On-Line:
 
* 29 Apr:
Recent Trends in Sanctions
; Winston & Strawn
* 30 Apr:
COVID-19 Impact on International Trade;
Thompson Hine
* 27 May:
TECHNICAL DATA AND SERVICES EXPORT
; OCR
* 25 Jun:
Customs Declaration Service Seminar
; Chamber International
* 2 Jul: Incoterms 2020; Chamber International
* 30 Sep: Understanding Exporting; Chamber International

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ENEDITOR’S NOTES

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EN_a225. Bartlett’s Unfamiliar Quotations

(Source: Editor)

* Anthony Trollope (24 Apr 1815 – 6 Dec 1882; was an English novelist and civil servant of the Victorian era. Among his best-known works is a series of novels collectively known as the Chronicles of Barsetshire, that revolve around the imaginary county of Barsetshire. He also wrote novels on political, social, and gender issues, and other topical matters.)

  – “The habit of reading is the only enjoyment in which there is no alloy; it lasts when all other pleasures fade.”
  – “There is no royal road to learning; no shortcut to acquiring any art.”

  – “There is no human bliss equal to twelve hours of work with only six hours in which to do it.”

 

Friday Funnies:
 
* The location of your mailbox shows you how far away from your house you can go in a bathrobe before you start looking like a mental patient.
 
* Money can’t buy happiness, but it keeps the kids in touch.
 
* The reason Mayberry, NC, was so peaceful and quiet was because nobody was married. Sheriff Andy Taylor, Aunt Bea Taylor, Barney Fife, Helen Crump, Floyd Lawson, Howard Sprague, Goober Pyle, Gomer Pyle, Sam Jones, Earnest T Bass, Thelma Lou, Ellie Walker, Clara Edwards, and, of course, Opie Taylor were all single. The only married person was Otis Campbell and his brother Ralph Campbell, and they were both town drunks.
 
* Given a choice between two theories, take the one which is funnier.

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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.
 
Agency 
Regulations 
Latest Update 
DHS CUSTOMS REGULATIONS
: 19 CFR, Ch. 1, Pts. 0-199.
 
 
 
5 Apr 2019:84 FR 13499: Civil Monetary Penalty Adjustments for Inflation.

DOC EXPORT ADMINISTRATION REGULATIONS (EAR): 15 CFR Subtit. B, Ch. VII, Pts. 730-774.

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.

DOD NATIONAL INDUSTRIAL SECURITY PROGRAM OPERATING MANUAL (NISPOM): DoD 5220.22-M. Implemented by Dep’t of Defense.

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. 

23 Feb 2015: 80 FR 9359, comprehensive updating of regulations, updates the activities and technologies subject to specific authorization and DOE reporting requirements. 
DOE EXPORT AND IMPORT OF NUCLEAR EQUIPMENT AND MATERIAL; 10 CFR Part 110.

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

10 Apr 2020:
85 FR 20158:

North Korea Sanctions Regulations. 

 
 
 
 
USITC HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA),

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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