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20-0601 Monday “Daily Bugle”

20-05601 Monday “Daily Bugle”

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Monday, 1 June 2020

No Items of Interest Noted Today

  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC to provide DECCS Tips & Tricks Webinar on 10 Jun 2020
  1. The Street: “Trump Ends Hong Kong’s Special Trade Status”
  2. EU Sanctions: “US Charges 33 with Violating N Korea & WMD Sanctions”
  3. ST&R Trade Report: “Export Violations Net Defense Trade Ban for 23 Individuals”
  1. Thomsen and Burke: Changes to Export Controls in May 2020
  2. Steptoe: “US to Take Staeps to Revoke Hong Kong’s Separate Status, Impose Sanctions, Enhance Export Controls”
  3. Covington: “Implications of Secretary Pompeo’s Certification that Hong Kong No Longer Warrants Separate Treatment Under U.S. Law
  1. Monday List of Ex/Im Job Openings: 73 Jobs Available – 15 New Job Listings This Week 
  2. Kevin Delli-Colli Joins Alpha Omega Consulting Group 
  1. ECTI Presents: How to Mitigate Risk with Export Compliance Technologies in a Covid-19 World FREE Webinar; 2 Jun
  2. FCC Academy Presents June Webinars: “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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OGS OTHER GOVERNMENT SOURCES


 
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OGS_a22. Commerce/BIS: (No new postings)

 
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COM NEWS

NWS_a14. The Street: “Trump Ends Hong Kong’s Special Trade Status” 

(Source:
The Street
, 29 May 2020) [Excerpts]
 
President Trump said in a speech Friday that China’s intervention in Hong Kong represents a clear violation of its legal obligations to guarantee the island’s autonomy.  As a result, the U.S. will end its special treatment for Hong Kong that allows for easier travel and trade between the U.S. and Hong Kong, he said in a brief appearance at the White House rose garden.
 
“China has plainly violated its treaty obligations,” Trump said. It has imposed a new national security law on Hong Kong in recent days to assert its control over the former British colony. “Hong Kong no longer is sufficiently autonomous to warrant special treatment,” Trump said. “I’m eliminating the policy that gives Hong Kong special treatment, including the extradition treaty and export controls.”
 
In addition, Trump said Hong Kong and Chinese officials “who are smothering Hong Kong’s freedom” may be subject to U.S. sanctions. The U.S. will suspend entry of foreign nationals “who we’ve identified as potential risks,” Trump said. …

NWS_a25. EU Sanctions: “US charges 33 with Violating N Korea & WMD Sanctions”


(Source: EU Sanctions, 29 May 2020) [Excerpts] 


 
An indictment has been unsealed in a Washington DC federal court charging 28 North Korean and 5 Chinese nationals with conspiring to violate North Korea and proliferation sanctions. This is said to be the largest N Korea sanctions case ever brought in the US.
 
The defendants, several of whom are already US-designated, include former Presidents, Vice-Presidents and employees of North Korea’s state-owned Foreign Trade Bank (FTB), which was listed in 2013 for providing support to N Korea’s proliferation network. They are alleged to have participated in a money-laundering scheme, devised to circumvent US sanctions, under which at least $2.5bn was transferred through the US financial system. The defendants are said to have set up and operated a covert network of FTB branches in countries including Austria, Kuwait, China, Libya, and Russia, from which approximately 250 front companies were established to procure commodities and facilitate payments in USD on behalf of N Korea parties. All defendants are currently at large.

NWS_a36. ST&R Trade Report: “Export Violations Net Defense Trade Ban for 23 Individuals” 

 
On May 20, the Department of State imposed statutory debarment under the International Traffic in Arms Regulations on 23 persons convicted of violating or conspiring to violate Section 38 of the Arms Export Control Act. As a result, these individuals are prohibited from participating directly or indirectly in activities regulated by the ITAR, including any brokering activities and any export from or temporary import into the U.S. of defense articles, technical data, or defense services in all situations covered by the ITAR.
 
Exceptions to this debarment determination may be made on a case-by-case basis. However, any such exception would be granted only after a full review of all circumstances, with particular attention to whether an exception is warranted by overriding U.S. foreign policy or national security interests, whether an exception would further law enforcement concerns that are consistent with U.S. foreign policy or national security interests, or whether other compelling circumstances exist that are consistent with U.S. foreign policy or national security interests and that do not conflict with law enforcement concerns. Even if exceptions are granted, the debarment will continue until subsequent reinstatement.
 
The period for debarment is generally three years from the date of conviction. Export privileges may be reinstated only at the request of the debarred person, which may be submitted no earlier than one year after the date of debarment.

COM COMMENTARY

COM_a17. Thomsen and Burke: Changes to Export Controls in May 2020 

(Source: Thomsen and Burke LLP, 30 May 2020) [Excerpts]
 
This memo summarizes the regulatory, personnel and enforcement developments with respect to U.S. and multilateral export controls during the month of May 2020. Changes to the regulations published in the Federal Register are explained at greater length in the Regulatory Summary, as is our custom.
 
Regulatory Updates.  Huawei, Entity List and Foreign Direct Product Rule
 
The Commerce Department issued a press release on May 14, 2020, and on May 19, 2020 it published an interim final rule with request for comments in the Federal Register, amending the Entity List and the Foreign Direct Product Rule (FDPR) of the Export Administration Regulations (EAR). The rule is effective May 19, 2020. Its impact:   
 
You may not export without a license any foreign-produced item if:
  • You “know” that the item is destined for Huawei entity List party;
  • A Huawei Entity List party developed or produced the item; and
  • The item is either:
    • A direct product of “technology” or “software” subject to the EAR, where such “technology” or “software” is specified in certain listed Export Control Classification Numbers (ECCNs), or
    • The direct product of a plant or major component of a plant (including testing equipment) located outside the United States, when the plant or major component of the plant itself is a direct product of U.S.-origin technology or software specified in a listed ECCN.
The listed ECCNs are 3E001, 3E002, 3E003, 4E001, 5E001, 3D001, 4D001, and 5D001, as well as 3E991, 4E992, 4E993, 5E991, 3D991, 4D993, 4D994, and 5D991.
 
The new FDPR provides the following examples in the preamble: …
 
Commerce is accepting public comments on the interim final rule until July 14, 2020. There is a savings clause for items already in production as of May 15, until September 14, 2020.
 
While the above change only currently impacts Huawei Entity List parties, it could be applied in the future to other parties on the Entity List.
 
Related Developments:
 
The Commerce Department announced that it was planning to extend the Temporary General License for Huawei until August 13, 2020. It also indicated that this likely would be the last such extension. The final rule was published in the Federal Register on May 18, 2020.
 
Commerce Department to Add New Entities to BIS Entity List

 
The Commerce Department issued two press releases this month announcing that it will add new entities to the BIS Entity List:
   (1) Commerce Department to Add Two Dozen Chinese Companies with Ties to WMD and Military Activities to the Entity List. BIS announced it will add 24 governmental and commercial organizations to the Entity List for engaging in activities contrary to the national security or foreign policy interests of the United States. The entities, based in China, Hong Kong, and the Cayman Islands, represent a significant risk of supporting procurement of items for military end-use in China. The 24 entities to be added to the Entity List are: …
   (2) Commerce Department to Add Nine Chinese Entities Related to Human Rights Abuses in the Xinjiang Uighur Autonomous Region to the Entity List …
 
Enforcement Actions:  Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and BIOMIN America, Inc. …

(Source: Steptoe Law Advisory, 1 Jun 2020) [Excerpts]   
 
* Principal Author: Ali Burney, Esq, Steptoe & Johnson LLP
 
On May 29, President Trump announced in a White House news conference the US government would “begin the process” to revoke the “full range of agreements” providing the Hong Kong Special Administrative Region of China separate treatment from mainland China under US law on topics including “export controls on dual use technologies,” among others, “with few exceptions.” The United States also plans to sanction Chinese and Hong Kong officials “directly or indirectly involved in eroding” Hong Kong’s autonomy.
 
The president’s announcement contained few specifics on the proposed measures or a timeline for their implementation. Similarly, no Executive Order has been issued by the president identifying any specific changes to be made. We anticipate additional guidance and actions from the White House and relevant agencies, including the US Departments of State, Treasury, and Commerce, in the coming days and weeks. … 

(Source:
Covington Alerts, 29 May 2020) [Excerpts]

* Principal Author:
Christopher Adams, Sr. Advisor, Covington & Burling LLP

On May 27, Secretary of State Michael Pompeo certified to Congress pursuant to the Hong Kong Human Rights and Democracy Act of 2019 that “Hong Kong does not continue to warrant treatment under United States laws in the same manner as U.S. laws were applied to Hong Kong before July 1997.” In a statement, Secretary Pompeo attributed this action to the announced intention of China’s legislature, the National People’s Congress (NPC), to unilaterally impose national security legislation on Hong Kong, adding that this was “only the latest in a series of actions that fundamentally undermine Hong Kong’s autonomy and freedoms and China’s own promises to the Hong Kong people under the Sino-British Joint Declaration, a UN-filed international treaty.”
On May 28, as anticipated by Secretary Pompeo’s statement, the NPC authorized its Standing Committee to draft and adopt the national security legislation and attach it to an annex of Hong Kong’s Basic Law that lists China’s national laws that are to be applied in Hong Kong. The NPC’s decision also authorized China’s national security organs to establish a presence in Hong Kong and stipulated that the “administrative, legislative and judicial organs of the Hong Kong Special Administrative Region shall, in accordance with relevant laws and regulations, effectively prevent, stop, and punish conduct endangering national security.”
Secretary Pompeo’s certification has no immediate impact on the existing relationship between the United States and Hong Kong, but signifies that potentially dramatic changes are now in prospect. Those changes could extend across a number of legal and political spheres, from tariff treatment and export controls to immigration and consular matters.
This client alert begins with an overview of the current legal context, describes what may happen next, and then discusses the potential ramifications, including with respect to trade between the United States and Hong Kong, the application of U.S. export controls to Hong Kong, and CFIUS review of investments in the United States by Hong Kong-based entities. …

TE EX/IM MOVERS & SHAKERS

MS_a1
10. Monday List of Ex/Im Job Openings: 73 Jobs Available;15 New Job Openings This Week

(Source: Events & Jobs Editor)
 
NEW JOBS:
 
* ABB; Singapore, Singapore; Trade Compliance Officer; Requisition ID: SG68886237_E15
 
* AVEVA; Cambridge, UK; Senior Compliance Officer
 
* Boeing; Huntsville, AL; Procurement Agent; Requisition ID: 00000196676
 
* Cargill; Coral Gables, FL; Senior Trade Execution Coordinator; Requisition ID: COR00626
 
* Department of Commerce; Washington, DC; Export Compliance Specialist
 
* Epam; Warsaw, Poland; Customs and Trade Compliance Specialist; Requisition ID: 49358
 
* GE Healthcare; Tokyo, Japan; Japan Customs Leader; Requisition ID: 3453574
 
* JLC Solutions; Birmingham, UK; Ocean Freight Export Clerk
 
* L3Harris; Arlington, VA; Principal, Trade Compliance; Requisiton ID: CHQ20202205-45843
 
* MBDA; Stevenage, UK; Export Control Officer; Requisition ID: P7855S
 
* Rockwell; Milwaukee, WI; Director, North American Logistics; Requisition ID: 92281BR
 
* SAP; Manila, Philippines; Senior Export Control Specialist;
Requisition ID: 249144
 
All Job Openings:  Click here to see the complete list of job openings. 

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MS_a2
11. Kevin Delli-Colli Joins Alpha Omega Consulting Group

(Source: Christine McGinn, 
christine.mcginn@alphaocg.com
)
   
Kevin Delli-Colli has announced that he has joined Alpha Omega Consulting Group LLC, 
https://alphaocg.com/
 as Director, Enforcement.  Kevin can be reached at 
kevin.delli-colli@alphaocg.com
.

 

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TE EX/IM TRAINING EVENTS & CONFERENCES

TE_a1
12.
ECTI Presents: How to Mitigate
Risk with
Export Compliance Technologies in a COVID-19 World FREE Webinar
;
2 Jun

(Source: Ashleigh Foor)
 

* What:
 How to Mitigate the Export Compliance Technologies in a COVID-19 World 
* When:
2 Ju
n; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Jackson Wood
* Register
:
here or
contact
Ashleigh Foor,
1-540-433-3977

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EN EDITOR’S NOTES

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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.

19 May 2020: 85 FR 29849: Amendments to General Prohibition Three (Foreign-Produced Direct Product Rule) and the Entity List.   
 
 
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. 
6 May 2020: 85 FR 26847, Notice (not an amendment) temporarily reducing the registration fee schedule in ITAR 122.3 until April 30, 2021. 

 

 
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), Revision 8.

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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