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20-0507 Thursday ” Daily Bugle “

20-0507 Thursday “Daily Bugle”

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Wednesday, 7 May 2020

  1. USTR Announces GSP Annual Product Review 
  2. DHS/CBP: “Product Exclusions: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” 
  1. Items Scheduled for Future Federal Register Edition 
  2. Commerce/BIS to Conduct Section 232 Investigation into Mobile Crane Imports
  3. State/DDTC: “ITAR — Temporary Reduction of Registration Fees”
  4. EU Commission Amends EU 2019/125 Concerning Trade in Certain Goods Could Be Used for Capital Punishment, Torture, or Other Degrading Treatment
  1. Reuters: “U.S. Lawmakers Warn Trump Against Harming U.S. Chipmakers Amid Coronavirus Crisis”
  1. EU Sanctions: “Germany Issues General Licence for Export of Franco-German Military Projects”
  2. Husch Blackwell: “CBP Issues Guidance Update on Section 232 and Section 301 Exclusion Refunds”
  3. Kirkland: “BIS Issues Rules Further Restricting Exports to China, Russia and Venezuela”
  4. Mayer Brown: “Commerce Announces Section 232 Investigation into Imports of Key Electrical Transformer Components”
  1. ECS Presents Webinar “ITAR/EAR Boot Camp: Achieving Compliance” on 7-8 Jul 
  2. FCC Academy Presents Webinar: “An Introduction to EU/Dutch Dual-use and Military Export Controls” on 12 May 
  3. FCC Academy Presents June Webinars: U.S. Export Controls: ITAR, EAR, and FMS 
  1. New Edition of Bartlett’s Annotated ITAR (“The BITAR”) Available 
  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 
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EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a11. USTR Announces GSP Annual Product Review

(Source: Federal Register, 7 May 2020) [Excerpts]
 
85 FR 27261: Notice
 
* AGENCY: Office of the United States Trade Representative.
* ACTION: Notice and request for comments.
* SUMMARY: The Office of the United States Trade Representative (USTR) has accepted petitions submitted in connection with the 2020 GSP Annual Product Review for further review. Due to COVID-19, the GSP Subcommittee of the Trade Policy Staff Committee will foster public participation via written submissions rather than an in-person hearing. This notice includes the schedule for submission of comments and responses to questions from the GSP Subcommittee, on all petitions that USTR accepted for the 2020 GSP Annual Product Review.
* DATES: May 27, 2020 at 11:59 p.m. EDT: Deadline for submission of written comments on petitions accepted for the 2020 GSP Annual Product Review.
June 16, 2020 at 11:59 p.m. EDT: Deadline for the GSP Subcommittee to pose questions on written comments.
June 30, 2020 at 11:59 p.m. EDT: Deadline for submission of commenters’ responses to questions from the GSP Subcommittee.
July 10, 2020 at 11:59 p.m. EDT: Deadline for replies from other interested parties to the written comments and responses to questions.
July 22, 2020 at 11:59 p.m. EDT: Deadline for the GSP Subcommittee to pose additional questions on written comments.
August 5, 2020 at 11:59 p.m. EDT: Deadline for submission of responses to any additional questions from the GSP Subcommittee.
* ADDRESSES: USTR strongly prefers electronic submissions made through the Federal eRulemaking portal: http://www.regulations.gov (Regulations.gov). Follow the instructions for submitting comments below. The docket number is USTR-2020-0019. For alternatives to online submissions, please contact Claudia Chlebek in advance of the relevant deadline at gsp@ustr.eop.gov or 202-395-2974.
 
FOR FURTHER INFORMATION CONTACT:
Claudia Chlebek at gsp@ustr.eop.gov or 202-395-2974

 
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EXIM_a22. DHS/CBP: “Product Exclusions: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation”

(Source:
Federal Register, 7 May 2020) [Excerpts]
 
85 FR 27233: Notice
 
* 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 technical errors in previously announced exclusions.
* 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.

 
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OGS OTHER GOVERNMENT SOURCES

 

* State/DDTC; NOTICES; Meetings: Foreign Affairs Policy Board; [Pub. Date: 8 May 2020]
 
* USTR; NOTICES; Product Exclusions:
China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation; [Pub. Date: 8 May 2020]

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

(Source: Commerce/BIS, 6 May 2020)
 
U.S. Secretary of Commerce Wilbur Ross announced today that the Department will initiate an investigation into whether the quantities or circumstances of mobile crane imports into the United States threaten to impair the national security. This decision follows a petition filed by domestic producer, The Manitowoc Company, Inc. (Manitowoc), on December 19, 2019, requesting that the Department of Commerce launch an investigation into mobile crane imports under Section 232 of the Trade Expansion Act of 1962, as amended. The investigation, to be conducted by the Department’s Bureau of Industry and Security, will provide the opportunity for public comment once the rule is posted in the Federal Register.
 
“We will conduct this review thoroughly and expeditiously,” said Secretary Ross. “This investigation will help determine whether mobile cranes are being imported in such quantities or under such circumstances as to threaten to impair U.S. national security.”
 
Manitowoc alleges that increased imports of low-priced mobile cranes, particularly from Germany, Austria, and Japan, and intellectual property (IP) infringement by foreign competition, have harmed the domestic mobile crane manufacturing industry. The Department of Homeland Security has identified mobile cranes as a critical industry because of their extensive use in national defense applications, as well as in critical infrastructure sectors.  . . .  


Back to top

 
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OGS_a3
5. State/DDTC: “ITAR — Temporary Reduction of Registration Fees”

(Source: State/DDTC, 6 May 2020)
 

In conjunction with DDTC web notice of 5/1/2020 entitled “Update to DDTC Notice on COVID Measures”, the Department of State provides a Federal Register document to inform the public of registration fees reduction. Given the extraordinary impact of the COVID-19 pandemic on the national economy and Defense Industrial Base, DDTC is temporarily reducing registration fees for registrants in Tier I and Tier II to $500 for registrations whose original expiration date is between May 31, 2020 and April 30, 2021.  
 
Also, DDTC is reducing registration fees to $500 for new applicants who submit their registration application between May 1, 2020 and April 30, 2021. All new registrants are in Tier I in the first year. This temporary reduction in fees shall apply only through April 30, 2021, at which time fees for entities in Tiers I and II will return to the rates that were in effect on April 1, 2020 unless otherwise extended by a subsequent notice in the Federal Register.

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

 
THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union,
 
Having regard to Regulation (EU) 2019/125 of the European Parliament and of the Council of 16 January 2019 concerning trade in certain goods which could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment (1), and in particular the first paragraph of Article 24 thereof,
 
Whereas:
 
(1) The competent authorities of the Member States are listed in Annex I to Regulation (EU) 2019/125. Belgium, Ireland, France, Croatia, Italy, Hungary, the Netherlands, Austria, Poland, Romania, Slovakia and the United Kingdom have informed the Commission that the entries concerning their competent authorities should be amended. The address for notifications to the Commission also needs to be amended.
 
(2) Pursuant to Articles 16 and 19 of Regulation (EU) 2019/125 an authorisation is required for exporting certain goods that could be used for the purpose of capital punishment and for brokering services or technical assistance related to such goods, which are listed in Annex IV to that Regulation.
 
(3) A Union General Export Authorisation, set out in Annex V to Regulation (EU) 2019/125, applies to exports to countries that have abolished capital punishment for all crimes and confirmed that abolition through an international commitment (2), if they meet the conditions and requirements for using that authorisation. Part 2 of Annex V lists the relevant countries.
 
(4) As regards countries that are not members of the Council of Europe, the list in Part 2 of Annex V to Regulation (EU) 2019/125 comprises those countries that have not only abolished capital punishment for all crimes but also ratified the Second Optional Protocol to the International Covenant on Civil and Political Rights (3) without making a reservation.
 
(5) Following their ratifications of that Protocol without making a reservation, Gambia and Madagascar meet the conditions for inclusion in the list laid down in Annex V to Regulation (EU) 2019/125.
 
(6) As regards the entry ‘Former Yugoslav Republic of Macedonia’, on 15 February 2019 the European Union was formally notified about the entry into force of the Prespa Agreement (4), which establishes ‘Republic of North Macedonia’ as the full name and ‘North Macedonia’ as the short name of the country (Article 1.3.a.). It is appropriate to reflect this change of name and move the relevant entry to the appropriate place in the list.
 
(7) Annexes I and V to Regulation (EU) 2019/125 should therefore be amended accordingly,
 
HAS ADOPTED THIS REGULATION:
 
Article 1
 
Annexes I and V to Regulation (EU) 2019/125 are amended in accordance with the Annex to this Regulation
 
Article 2
 
This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
 
This Regulation shall be binding in its entirety and directly applicable in all Member States.
 
Done at Brussels, 18 February 2020.

 
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COM NEWS

NWS_a17. Reuters: “U.S. Lawmakers Warn Trump Against Harming U.S. Chipmakers Amid Coronavirus Crisis”

(Source: Reuters, 6 May 2020) [Excerpts] 
 
A group of Senate Republicans is urging U.S. President Donald Trump to avoid hurting American chipmakers, which they see as essential to the coronavirus response and the U.S. economy, as the administration cracks down on chip exports to China.
 
In a letter dated Wednesday, six senators, including Susan Collins, John Cornyn and Todd Young, expressed concern over rules released by the U.S. Commerce Department last week that could curb exports of chips and other technology to China in a bid to keep them from its military.  
 
One of the rules expands the definition of a military buyer, potentially allowing the U.S. government to block semiconductor production equipment and other sales to China. That rule and another, which does away with civilian license exceptions, are slated to go into effect in June without allowing industry to comment on the final versions.
 
“We are concerned that the Department of Commerce issued several new regulations related to semiconductors in final form, avoiding consultation with industry and without full consideration of the impact on the economy,” the senators wrote. “At this time of economic crisis and uncertainty, we urge the department to proceed cautiously, solicit feedback from industry, and ensure that well-intentioned proposals do not have unforeseen, damaging effects on the U.S. economy, U.S. technological leadership, and vital supply chains for our nation’s COVID-19 response.”


 
The White House declined to comment and the Commerce Department did not respond to a request for comment. The letter comes after a national lockdown to reduce the spread of the coronavirus shuttered businesses and forced millions of Americans to seek unemployment benefits. Some states have begun to reopen despite lingering fears of a rise in cases, which have already exceeded 1 million in the United States alone.  . . . 

 

The senators are not alone in raising concerns over the rules. The Semiconductor Industry Association, a trade group, urged the administration last week to implement them in a manner that protects national security and the industry. . . . SEMI, a group representing the semiconductor and electronics manufacturing supply chain, said on Wednesday it shared senators’ concerns.
 
[Editor’s Notes: Text of the letter]:
 
May 6, 2020
President Donald J. Trump
The White House
1600 Pennsylvania Avenue NW
Washington, D.C. 20500
 
Dear Mr. President:
 
We write to strongly encourage the administration to follow a transparent and deliberate process, consistent with congressional intent, regarding changes to U.S. export control regulations that could disrupt the semiconductor manufacturing supply chain. The U.S. is the global leader in semiconductor technology, employing more than 300,000 American workers in high-skilled, well-paying jobs. Moreover, semiconductors are the foundation that enable both the medical equipment and remote working capabilities that have proven essential during the COVID-19 pandemic. As we continue our robust response to the pandemic, we must ensure that the U.S. retains its economic leadership position and avoids potential disruption to this critical semiconductor supply chain.
 
Congress reauthorized the U.S. dual-use export control regime in the 2018 Export Control Reform Act (ECRA). ECRA stated that it is the policy of the United States to “use export controls only after full consideration of the impact on the economy of the United States” while noting that “export controls applied unilaterally to items widely available from foreign sources generally are less effective in preventing end-users from acquiring those items.” The Act also called for transparency, including requiring a notice and comment period for newly authorized emerging and foundational controls.
 
American tech manufacturing is a central part of the U.S. economy and American companies that domestically produce semiconductors play a vital role in the continued development of the internet of things. This technological innovation will change our way of life in the years to come. Your administration’s tireless support of American made products and your effort to restore American manufacturing aligns well with ECRA’s requirement to maintain U.S. leadership in areas essential to innovation.
 
We are concerned that the Department of Commerce issued several new regulations related to semiconductors in final form, avoiding consultation with industry and without full consideration of the impact on the economy. Reports indicate the department is also considering unilateral U.S. controls that impose unique license requirements on U.S. exports that do not apply to exports from major U.S. trading partners. At this time of economic crisis and uncertainty, we urge the department to proceed cautiously, solicit feedback from industry, and ensure that well- intentioned proposals do not have unforeseen, damaging effects on the U.S. economy, U.S. technological leadership, and vital supply chains for our nation’s COVID-19 response. This approach would be consistent with your strong emphasis in February that U.S. export control
regulations should allow U.S. companies to maintain their international sales, including in the semiconductor sector. Thank you for your attention to this matter.
 
SIGNATURES:
Marsha Blackburn, United States Senator
Susan Collins, United States Senator
John Cornyn, United States Senator
Ron Johnson, United States Senator
Jerry Moran, United States Senator
Todd Young, United States Senator

COM COMMENTARY

COM_a18. EU Sanctions: “Germany Issues General Licence for Export of Franco-German Military Projects”

(Source: EU Sanctions, 6 May 2020)
 

* Author: Maya Lester, Esq., 44-20-7379-3550, Brick Court
 
In October 2019, France and Germany made an agreement on defence export controls, in accordance with the Aachen Treaty. BAFA, Germany’s export control authority, has issued General Licence 28 to implement the agreement, effective from 1 April 2020. The licence facilitates the transfer of military items between France and Germany to be used for Franco-German military projects that may be exported to some non-EU member states, if the goods do not exceed 20% of the overall value of the end product. The licence does not apply to weapons of war (as listed in the German War Weapons Control Act). Details on this here.
 

COM_a29. Husch Blackwell: “CBP Issues Guidance Update on Section 232 and Section 301 Exclusion Refunds”

(Source: International Trade and Supply Chain, 6 May 2020)
 
* Principal Author: Robert D. Stang, Esq., 1-202-378-2334, Husch Blackwell LLP 
 
On May 1, 2020 U.S. Customs and Border Protection (CBP) published an update to their previous guidance on Section 232 product exclusions granted by the Department of Commerce (DOC) and Section 301 product exclusions granted by the United States Trade Representative (USTR). The CBP message stated that these exclusions may be retroactive for unliquidated entries and for entries that are liquidated but where the liquidation is not final and the protest period has not expired.
 
If a product exclusion has been granted, an importer of record (IOR) may request a refund by filing with CBP a Post Summary Correction (PSC) for unliquidated entries at least 15 days prior to the scheduled date of liquidation or by filing a protest for entries that have liquidated but where the protest period (180 days from the date of liquidation) has not expired. If the entry is unliquidated but within 15 days of the scheduled date of liquidation, the importer should wait until the entry liquidates and then file a timely protest.
 
Given the potential retroactive application of Section 232 and Section 301 product exclusions, in situations where the importer has requested a product exclusion and the request is pending with the DOC or USTR, the importer or their licensed representative may submit a request to extend the liquidation of impacted unliquidated entry summaries to CBP. Importers/filers may choose to submit an extension request via paper or electronic format to the appropriate Center of Excellence and Expertise. We are also aware of importers filing a protective protest in this instance.
 
STATUS OF TRADE REMEDY PRODUCT EXCLUSION REQUESTS
 
To check the status of a Trade Remedy Product Exclusion request:
 
(1) U.S. Department of Commerce Section 232, click here.
 
(2) USTR Section 301 website, click here.
 
(3) Section 232 exclusions, once approved by DOC, and activated by CBP in ACE, are posted here.

(Source: Kirkland Alert, 6 May 2020)
 
* Principal Author: Mario Mancuso, Esq., 1-202-389-5070, Kirkland & Ellis LLP
 
On April 28, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) published two rules and one proposed rule (collectively, the “Rules”) targeting China, Russia and Venezuela, amending the Export Administration Regulations (“EAR”) to expand licensing requirements and eliminate certain license exceptions regarding export of items in support of military end uses and end users. In a heightened enforcement environment, the Rules will necessitate that companies understand the nature of their counterparties and the purpose of transactions with them.
 
The View From Washington
 
The Rules help effectuate the Trump administration’s December 2017 National Security Strategy, which stated that the U.S. would “respond to the growing political, economic, and military” challenges being posed by China and Russia, as well as to their support of Venezuela. The Rules continue the trend of the Trump administration’s use of trade policy to address concerns regarding China, Russia and Venezuela, and they complement the export restrictions related to Russia that BIS imposed in February 2020. In particular, the Rules reflect the Administration’s concern about “civil-military integration,” especially in China, as well as about China’s influence over Hong Kong. Once the Rules come into effect, their impacts likely will fall most heavily on transactions with China that were previously authorized.
 
The Rules
 
The Rules expand the definition of military end uses and add new restrictions on military end users, remove license exceptions for civil end users for civil end uses and propose to remove authorizations for certain reexports. As a result of new export licensing requirements coupled with a policy of denial, many transactions with China, Russia and Venezuela that were previously authorized for practical purposes could now be banned.
 
Military End Uses and Military End Users
In the first final rule, BIS expanded licensing requirements related to exports of items in support of “military end uses” and “military end users” in China, Russia and Venezuela and added new filing requirements related to virtually all physical exports to those countries.
 
Under the rule previously in effect, the EAR required a license for exports of certain items intended for military end use in China, Russia and Venezuela and for military end users in Russia and Venezuela. The new rule, which is effective June 29, 2020: (1) expands the definition of “military end use”; (2) adds a new restriction on exports of certain items to “military end users” in China; and (3) expands the list of items that are subject to these restrictions.
 
Military End Use
: First, the rule significantly expands the definition of “military end use” beyond the former rule, which confined it to capture certain items for the “use,” “development” and “production” of “military items.”
 
(1) The new rule extends to certain items that support or contribute to the operation, installation, maintenance, repair, overhaul, refurbishing, “development” or “production” of military items, any one of which alone is sufficient to confer “military end use” status. The rule covers the less direct “supporting or contributing to” and replaces the term “use” with all of its defined constituent parts in the disjunctive. Thus, items that only indirectly support the development, production, operation, etc., of military items could now be considered as intended for “military end use.”
 
(2) Also, exporters need only to have reason to know that the product could be intended “entirely or in part” for the above-listed uses or by persons or entities whose actions or functions are intended to support such uses (i.e., the definition of “military end user”). Without additional clarification of the scope of activities that may fall within these definitions, even a small indication that the recipient has some business with the Chinese, Russian or Venezuelan military (as the case may be) may be enough of an indicator that a license is required for the transaction.
 
(3) Furthermore, the rule significantly expands the list of Export Control Classification Numbers (“ECCNs”) subject to the military end use license requirement, and it includes non-sensitive and widely available items such as basic electronics and consumer communications devices. Of particular note, items classified as 5A992 and 5D992, which cover “mass market” encryption items such as consumer communications devices, will now be included in the list of ECCNs subject to potential license requirements.
 
Military End Users:
Moreover, significantly, the rule expands license requirements to cover Chinese military end users, in addition to military end uses. “Military end user” is defined to include the army, navy, marines, air force, coast guard, national guard, national police and government intelligence or reconnaissance organizations. Given the potential overlap between civilian and military entities in China as noted by BIS, this expansion could create license requirements for exports to a much broader group of Chinese end users, making it important to conduct rigorous due diligence when exporting covered items to China.
 
Electronic Export Information:
Finally, the rule revises the Electronic Export Information (“EEI”) filing requirements to require filing for exports to China, Russia and Venezuela regardless of the value of the shipment, and also requires identification of ECCNs in the filings regardless of the reason for control. These modifications to the filing process have the effect of requiring a filing for virtually all physical exports to these countries, subject to narrow exceptions. Exporters will need to determine the appropriate export classification for all products exported to these countries, whereas previously, exporters did not need to include the ECCN in many of the EEI filings.
 
Civil End Users for Civil End Uses
The second final rule eliminates License Exception Civil End Users (“CIV”)
, which had been in place for decades, authorized the export, reexport and transfer (in-country) of items on the Commerce Control List (“CCL”) that are controlled for national security reasons to civil end users for civil end uses in countries listed in Country Group D:1 (which includes China, Russia and Venezuela, among others). Without License Exception CIV, many sales to the private sector in countries in Group D:1 will now require a license. Similar to the first rule described above, this rule will have a particular impact on exports to China. The elimination of this exception reflects BIS’s stated concern with the integration between military and civilian entities in China.
 
Reexports
The proposed rule would modify License Exception Additional Permissive Reexports (“APR”) to restrict reexports of certain items to Country Group D:1.
With this rule, BIS proposes to amend License Exception APR by removing the authorization for reexports of items on the CCL that are controlled for national security purposes from countries listed in Country Group A:1 (which includes all 42 countries participating in the Wassenaar Arrangement) and Hong Kong to countries listed in Group D:1, and requiring a license from BIS even though the items are already outside of the U.S. BIS noted concern that partner countries, including those listed in Group A:1, maintain standards of review that lead to approval of licenses that the U.S. would not grant.
 
Though not explicit in the proposed amendment, it would appear to reflect BIS’s particular concern about transfers from Hong Kong to China. Unlike the other rules discussed above, this is not a final rule, and BIS requests comment on how the modification would affect those currently using or planning to use APR.
 
Key Takeaways
 
(i) Exporters increasingly will need to apply for licenses to export to China, Russia and Venezuela and, for those that are for a military end use or end user, they likely may be denied.
 
(ii) Exporters should be cautious in their review of potential counterparties in China, Russia and Venezuela and seek to ensure that they have procedures in place to verify both end users and end uses. This will be particularly important for exports to China, which is newly subject to some of these restrictions.
 
(iii) Exporters should be mindful that BIS appears to be using tools like the EEI to gather data on U.S. business in China, and may need to conduct additional export control classification analyses to meet the requirements.
 
(iv) Exporters should prepare for greater hurdles to doing business in China, Russia and Venezuela and implement compliance measures to navigate these elevated risks.

(Source: Mayer Brown Legal Update, 6 May 2020)
 
* Principal Author: Duane W. Layton, Esq., 1-202-263-3811, Mayer Brown LLP
 
On Monday, May 4, the U.S. Department of Commerce (“Commerce”) announced that it will initiate an investigation into imports of key electrical transformer components due to national security concerns. The investigation will be conducted under Section 232 of the Trade Expansion Act of 1962 (19 U.S. Code 1862) and will cover “laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators.” The Secretary of Commerce will notify the Secretary of Defense of the investigation by letter, as required by law.
 
If Commerce determines that these imports threaten to impair national security, Commerce will have 270 days from the initiation date of the investigation to submit its remedy recommendations, if any, to the President. The President will then have 90 days to decide whether to concur with the recommendations and take action-either those recommended by Commerce or an alternative approach, such as negotiations-to adjust imports to a level that will not threaten to impair the national security. Once the President has made this determination, he has 15 days to implement the action and 30 days to submit a written statement to Congress explaining the action. The President must also publish his findings in the Federal Register.
 
Potential Impact of Investigation
 
In its announcement, Commerce explained, “Laminations and cores made of grain-oriented electrical steel are critical transformer components. Electrical steel is necessary for power distribution transformers for all types of energy-including solar, nuclear, wind, coal, and natural gas-across the country.” Commerce further added, “An assured domestic supply of these products enables the United States to respond to large power disruptions affecting civilian populations, critical infrastructure, and U.S. defense industrial production capabilities.”
 
This Latest 232 Investigation, in Context
 
The investigation into key electrical transformer components will be the sixth investigation that the Trump administration has conducted under Section 232 and the fourth self-initiated. The administration’s first two investigations, both self-initiated, covered steel and aluminum and resulted in the President applying 25 percent and 10 percent tariffs, respectively, on certain steel and aluminum imports. These tariffs became effective on March 23, 2018. (See our 2018 Legal Update on tariffs on steel and aluminum imports.)
 
Following the steel and aluminum investigation, the administration conducted separate 232 investigations into imports of autos and auto parts (combined in a single investigation and self-initiated), uranium ore, and titanium sponge. In each case, Commerce determined in its final report that the imports threatened to impair national security.[FN/1] The President chose not to impose restrictions on imports of titanium sponge or uranium ore, opting instead to establish working groups to examine the state of domestic nuclear fuel and titanium sponge production. The Nuclear Fuel Working Group recently announced its Strategy to Restore American Nuclear Energy Leadership, but there have been no developments for the titanium sponge working group. The President chose to enter into negotiations with key auto trading partners to address the threat posed by auto and auto parts imports. To date, no other remedy pursuant to Section 232 has been imposed on autos and auto parts, although it is possible the President could take action in the future. In the past, the President has favored imposing tariffs over other 232 remedies. (See our prior Legal Updates related to autos and auto parts imports and titanium sponge.)
 
Key electrical transformer components were excluded from the scope of the original Section 232 steel tariffs. Since that time, there has been extensive lobbying to have the administration subsequently include these products within the scope of those tariffs.[FN/2] On January 24 of this year, the President expanded the scope of products covered by the steel and aluminum tariffs to include some “derivative” or downstream products such as nails and stranded wire, effective February 8. This action was taken in response to a surge of imports of derivative steel and aluminum products following the original 232 steel and aluminum tariffs. However, several companies challenged the inclusion of these derivative products before the U.S. Court of International Trade and obtained an injunction stopping U.S. Customs and Border Protection from collecting duties on those products. While these injunctions are company-specific, they may have persuaded the administration to pursue today’s new investigation rather than simply expand the scope of the Section 232 steel tariffs to include key electrical transformer components.
 
Commerce’s Bureau of Industry and Security (“BIS”) will conduct the investigation and will provide an opportunity for public comment. Commerce will publish a notice to the Federal Register regarding the investigation shortly.
 
 
[FN/1] The reports for the investigations into uranium ore and auto and auto parts have not been made public.
 

[FN/2] “Brown, Casey Release Statements on Commerce Decision Impacting AK Steel-Cleveland Cliffs,” (May 4, 2020), https://www.brown.senate.gov/newsroom/press/release/brown-casey-release-statements-on-commerce-decision-impacting-ak-steel-cleveland-cliffs;“Brown, Portman, Casey Ask President Trump to Prioritize Electrical Steel in Any 232 Trade Remedy,” (March 8, 2018), https://www.brown.senate.gov/newsroom/press/release/brown-portman-casey-ask-president-trump-to-prioritize-electrical-steel-in-any-232-trade-remedy.

TE EX/IM TRAINING EVENTS & CONFERENCES

TE_a1
12. ECS Presents Webinar “ITAR/EAR Boot Camp: Achieving Compliance” on 7-8 Jul

(Source: ECS)
 
*What:  ITAR/EAR Boot Camp: Achieving Compliance
*When: 7-8 Jul
*Where:  Online
*Sponsor: Export Compliance Solutions & Consulting
*Presenter: Suzanne Palmer, Mal Zerden
*Register 

here
 or by calling 866-238-4018 or email 
liz@exportcompliancesolutions.com

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

TE_a2
13. FCC Academy Presents Webinar: “An Introduction to EU/Dutch Dual-use and Military Export Controls” on 12 May

 
* What: Introduction to EU / Dutch Dual-Use and Military Export Controls
* When: 12 May 2020; 3-5 pm CET (9-noon Eastern) 
* Where:  Online
* Sponsor: FCC Academy 
* Presenter: Marco F.N. Crombach MSc (Director)
* Register: 

here
, and email
 events@fullcirclecompliance.eu

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EN EDITOR’S NOTES

EN_a115. Bartlett’s Unfamiliar Quotations

(Source: Editor)
 

* Robert Browning
(7 May 1812 – 12 Dec 1889; was an English poet and playwright whose mastery of the dramatic monologue made him one of the foremost Victorian poets. His poems are known for their irony, characterization, dark humor, social commentary, historical settings, and challenging vocabulary and syntax.)
– “A minute’s success pays the failure of years.”
– “Perhaps one has to be very old before one learns to be amused rather than shocked
.”
 
* Edwin Land
(Edwin Herbert Land; 7 May 1909 – 1 Mar 1991; was an American scientist and inventor, best known as the co-founder of the Polaroid Corporation. His Polaroid instant camera went on sale in late 1948 and made it possible for a picture to be taken and developed in 60 seconds or less.)
– “Don’t undertake a project unless it is manifestly important and nearly impossible.”
– “If you dream of something worth doing and then simply go to work on it and don’t think anything of personalities, or emotional conflicts, or of money, or of family distractions; it is amazing how quickly you get through those 5,000 steps.”

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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.

28 Apr 2020:
85 FR 23470
: Elimination of License Exception Civil End Users (CIV).
 

 

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,  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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