20-0522 Friday “Daily Bugle”

20-0522 Friday “Daily Bugle”

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Friday, 22 May 2020

  1. Treasury/OFAC: “Zimbabwe Sanctions Regulations”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  4. Treasury/OFAC Sanctions Senior Nicaraguan Government Officials, Increasing Pressure on President Ortega’s Regime
  1. WORLDecr: “European Commission — Sanctions Should Not Stand in The Way of Humanitarian Aid”
  1. Covington: “CFIUS Proposes New Rules Governing Mandatory Filing Requirements for Critical Technology Businesses”
  2. Crowell & Moring: “Treasury and CBP Must Allow Drawback Refunds of Excise Taxes Pending Government Appeal”
  3. ECS: “Commerce Expands Direct Product Rule to Target Huawei”
  4. Steptoe: “European Commission’s Guidance on Humanitarian Aid to Fight COVID-19 in Countries Subject to EU Sanctions”
  1. ECTI Presents: e-Seminar sale – 20% off all e-Seminar Training
  2. ECTI Presents: Foods, Supplements, Cosmetics, Devices…Oh My: How the FDA Regulates More Than You May Think! Webinar; 24 Jun
  3. FCC Academy Presents June Webinars: “U.S. Export Controls: ITAR, EAR, and FMS”
  4. Friday List of Approaching Events: 234 Events Posted This Week, Including 24 New Events
  1. International Company Needs Trade Compliance Manager 
  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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The ITAR amendments to the ITAR that took effect on 9 March and 25 March are included in the current edition of the BITAR.  Subscribers receive updated editions every time the regulations are amended (usually within 24 hours) so you will always have the current versions of the regulations. Subscribe to the BITAR now to guarantee you have an up-to-date ITAR!    

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* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Final rule.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Zimbabwe Sanctions Regulations to remove a general license that authorizes all transactions involving Agricultural Development Bank of Zimbabwe and Infrastructure Development Bank of Zimbabwe as a result of these entities being removed from OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List).

* DATES: This rule is effective May 22, 2020.

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OGS_a23. Commerce/BIS: (No new postings)

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4. State/DDTC: (No new postings)

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Treasury/OFAC, 22 May 2020) [Excerpts]
Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two senior Nicaraguan government officials, Julio Cesar Aviles Castillo and Ivan Adolfo Acosta Montalvan for supporting the corrupt Ortega regime. Since April 2018, the Ortega regime has cracked down on political opposition, leading to more than 300 deaths, 2,000 injuries, hundreds of political and civil society actors imprisoned, and over 100,000 refugees fleeing the country.
“The Ortega regime’s continued violations of basic human rights, blatant corruption, and widespread violence against the Nicaraguan people are unacceptable,” said Treasury Secretary Steven T. Mnuchin. “The United States will target those who prop up the Ortega regime and perpetuate the oppression of the Nicaraguan people.”
Julio Cesar Aviles Castillo and Ivan Adolfo Acosta Montalvan are being designated pursuant to Executive Order (E.O.) 13851 “Blocking Property of Certain Persons Contributing to the Situation in Nicaragua.” …
As a result of today’s action, all property and interests in property of these individuals that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by such individuals are also blocked. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

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NWS_a16. WORLDecr: “European Commission — Sanctions Should Not Stand in The Way of Humanitarian Aid”

(Source: WORLDecr, 21 May 2020)
   The European Commission has published a guidance note on providing humanitarian aid to fight the Covid-19 pandemic to countries subject to EU sanctions. The first iteration of the note pertains to the Syria sanctions regime, but the Commission says updates are forthcoming.
   The preamble to the note says: ‘EU sanctions are not meant to stand in the way nor impede the supply of humanitarian aid. Any action not explicitly prohibited under EU sanctions is considered permitted, unless otherwise stated by a national competent authority (NCA). Over-compliance should not lead to undermining the provision of humanitarian aid.’
   The guidance is expressed in Q&A format. For example, in answer to the question:
   ‘Can the provision of medical assistance amount to “making economic resources available” to designated persons?’, it gives the following:
   ‘In principle, the provision of medical assistance to persons infected by, or suspected of having contracted Covid-19, is not itself considered to have an intrinsic economic value, or be exchangeable for funds or economic resources. Consequently, it does not amount to an economic resource, and thus the involvement of a designated person in the provision of such medical assistance will not breach the Syria Regulation.’
Inter alia, it describes:
  • The circumstances in which ‘Humanitarian Operators [can] purchase fuel in Syria for transporting, into or within Syria, medical equipment to fight the Covid-19 pandemic;
  • Whether, where permitted imports of medical material into Syria are subject to taxes, those can be paid to the Syrian government; and
  • Whether humanitarian operators [can] provide humanitarian aid if the only way is to provide aid through designated persons.


COM_a17. Covington: “CFIUS Proposes New Rules Governing Mandatory Filing Requirements for Critical Technology Businesses”

(Source: Covington & Burling, 21 May 2020) [Excerpts]
* Principal Author: Mark Plotkin, Esq., 1-202-662-5656, Covington & Burling, LLP
  On May 21, 2020, the Department of the Treasury, as chair of the Committee on Foreign Investment in the United States (“CFIUS”), published in the Federal Register a proposed rule (the “Proposed Rule”) that would amend the requirements to file with CFIUS certain transactions involving U.S. businesses that produce, design, test, manufacture, fabricate, or develop one or more “critical technologies.” The Proposed Rule modifies requirements that originally were imposed in October 2018 through temporary regulations known as the critical technology pilot program (the “Pilot Program”), and which were incorporated this past February into the final regulations implementing the Foreign Investment Risk Review Modernization Act (“FIRRMA”). The Proposed Rule also modifies the scope of an existing carve-out from the mandatory filing requirements for certain encryption technologies, and makes certain clarifying edits to the definition of “substantial interest,” which is relevant for determining whether transactions involving foreign government interests are subject to mandatory filing requirements. …

   On May 19, 2020, the Department of Commerce, Bureau of Industry and Security (BIS), published an interim final rule (85 FR 29849) amending the Export Administration Regulations (EAR) to expand the Direct Product Rule to apply to specific members of the Entity List-at this time China’s Huawei Technologies and 114 non-U.S. affiliates.  The rule was effective May 15, 2020, the date on which it was made available for public inspection.
   Huawei Technologies and 114 of its overseas affiliates were added to the Entity List in 2019. However, Huawei has continued to use U.S. software and technology to design semiconductors, undermining the national security and foreign policy purposes of the Entity List by commissioning their production in overseas foundries using U.S. equipment.
   The rule amends the Direct Product Rule (General Prohibition Three) at EAR §736.2(b)(3) to bar the transfer of items specified in a footnote to the Entity List
Criteria for prohibition relating to parties on Entity List
. You may not reexport, export from abroad, or transfer (in-country) without a license or license exception any foreign-produced item controlled under footnote 1 of Supplement No. 4 to part 744 (“Entity List”) when there is “knowledge” that the foreign-produced item is destined to any entity with a footnote 1 designation in the license requirement column of the Entity List.
   The interim rule is intended to block global chip supplies to Huawei by specifying direct products of U.S. origin technology in Export Control Classification Numbers (ECCNs) 3E001, 3E002, 3E003, 3E991, 4E001, 4E992, 4E993, 5E001, or 5E991 as well as U.S. origin software specified in ECCNs 3D001, 3D991, 4D001, 4D993, 4D994, 5D001 or 5D991.
   U.S. manufacturers must comply with the interim rule by:
(1) Due diligence ”
denied parties screening” of all parties to an overseas transaction.

(2) Obtaining signed End User Statements acknowledging that the goods (technology, software and articles) are controlled by the U.S. Department of Commerce, Export Administration Regulations, and any in-country retransfer or reexport of these goods to another party requires prior authorization by the U.S. Department of Commerce, Bureau of Industry Security.

   Comments on the interim final rule may be submitted through July 14, 2020.  Review the
Federal Register Notice
for the full rule and how to submit comments.  The Commerce Department also
issued a press release
on this action.
Related Actions Related to China and Huawei
   This action follow
three notices published in April
expanding restrictions on exports to military end-users, the elimination of the License Exception Civil End Users (CIV), and modification of the License Exception Additional permissive Reexports (APR).
   BIS also extended the Temporary General License for Huawei and its listed affiliates on March 18, 2020 (85 FR 29610).  The General License, which authorizes activities “including those necessary for the continued operations of existing networks and equipment as well as the support of existing mobile services, including cybersecurity research critical to maintaining the integrity and reliability of existing and fully operational networks and equipment,” is now valid through August 13, 2020. 

Steptoe, 20 May 2020)
* Principal Author: Stefan Tsakanakis, 32-2-626-0517, Steptoe & Johnson LLP

   The European Commission has published a
Guidance Note
on how humanitarian aid related to COVID-19 can be provided to countries and areas that are subject to EU sanctions. The Note provides practical help, in the form of questions and answers (Q&As), on how to comply with EU sanctions when providing humanitarian aid, such as medical assistance and supplies, to fight the COVID-19 pandemic. The first version of the Guidance Note covers Syria. The Commission will update it with further information on other countries subject to EU sanctions, including Yemen, Somalia and North Korea.

   EU sanctions targeting Syria are set out in
Council Regulation (EU) No 36/2012
– as periodically amended – and consist of a number of sectoral restrictions, such as a prohibition on exporting goods or technology which might be used for internal repression, including chemicals used in chemical attacks, and a prohibition on the local purchase and import of petroleum products. The EU framework provides for a number of exceptions, notably for humanitarian purposes. It also includes individual designations entailing notably the freezing of funds or economic resources of certain persons, entities and bodies (“designated persons”).
   Since EU sanctions target specific persons and specific sectors of the Syrian economy, the majority of sectors are not targeted by EU sanctions at all. Applying principles of international law, EU sanctions do not impede the supply of humanitarian aid in the form of medicine, medical equipment and medical assistance provided to the population at large. Medical equipment, including oxygen, respirators, personal protective equipment (PPE) and ventilators as well as medicines and other medical items required to fight the COVID-19 pandemic are not subject to direct restrictions on export, supply, financing or use in Syria.
   Nevertheless, in specific cases, the export, supply, financing or use of these items may be indirectly impacted by other restrictions targeting designated persons, which happen to be involved in the relevant transactions.
The Q&As provide information on the prohibition of making funds and economic resources available to designated persons. EU sanctions generally allow for funds and economic resources to be made available to designated persons if they are necessary to provide humanitarian relief or assistance to the civilian population in Syria. Prior authorization from the competent Member States authorities may be necessary in certain cases (Section I of the Q&As).
   The Q&As further contain information on import and export restrictions of medical devices (in particular ventilators and powered respirators for medical purposes), medicines, disinfectants, detergents, chemicals, COVID-19 testing kits and PPE. The status of those items may be affected by their technical features. Therefore, they may be targeted by the EU sanctions and exports may be prohibited or subject to prior authorization.
   The Q&As also provide information on a series of exemptions and derogations allowing certain ancillary activities (e.g. transport of medicines and medical equipment), which may otherwise be affected by specific restrictions, (e.g. prohibition on the purchase of oil products in Syria) to proceed subject to national authorization, as applicable (Sections II and III of the Q&As).
The Guidance Note also provides information on and procedural questions, mainly with regard to applications, authorizations, derogations and exemptions (Section IV of the Q&As).
   By clarifying the responsibilities and processes for the provision of humanitarian aid, the Guidance Note facilitates the work of humanitarian operators and should speed up the channeling of equipment and assistance to fight the COVID-19 pandemic in Syria. It is addressed to various actors, including EU Member States authorities which are tasked with the implementation of EU sanctions, as well as public and private operators involved in humanitarian activities, such as international organizations, NGOs, donors, financial institutions and other actors.


*What: e-Seminar Training Sale – 20% off with code:
*When: Now through 31st May
*Where: Online training – delivered electronically on USB
*Sponsor: Export Compliance Training Institute (ECTI) 

or contact 1-540-433-3977

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* What: 
Foods, Supplements, Cosmetics, Devices…Oh My: How the FDA Regulates More Than You May Think!
* When: 24 Jun; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Shelly Garg, Attorney

* Register:
or contact
Ashleigh Foor
, 1-540-433-3977

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

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(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.] 


* 23 Jun: Importing 201; International Business Training
* 8 Jul:
Export to Mexico
; Global Training Center
* 9 Jul:
Export to Canada
; Global Training Center
* 8 Oct:
Export to Mexico
; Global Training Center
* 9 Oct:
Export to Canada
; Global Training Center
* 17 Dec:
Export to Mexico
; Global Training Center
* 18 Dec:
Export to Canada
; Global Training Center

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International Company Needs Trade Compliance Manager
(Source: Jim Bartlett, 1-202-802-0646)
A high-tech company with locations in Ohio, Colorado, Virginia, Aberdeen, Maryland, and other locations is looking for an International Trade Compliance Manager. Requires bachelor’s degree, 8 years of import/export trade experience with at least 5 in a senior management role or an equivalent combination of education and experience in ITAR, EAR, OFAC, NRC/DOE, FTR and other trade controls, as well as D-Trade, SNAP-R, ACE, etc. Relocation expenses may be available. Call me if you are interested in a referral.

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EN_a116. Bartlett’s Unfamiliar Quotations

(Source: Editor)

Arthur Conan Doyle (Sir Arthur Ignatius Conan Doyle; 22 May 1859 – 7 Jul 1930) was a British writer and medical doctor. He created the character Sherlock Holmes in 1887 when he published
A Study in Scarlet, the first of four novels and more than fifty short stories about Holmes and Dr. Watson. The Sherlock Holmes stories are generally considered milestones in the field of crime fiction.)
  – “It is an old maxim of mine that when you have excluded the impossible, whatever remains, however improbable, must be the truth.” 
Friday funnies:
* The software said it needed Windows 8 or better, so I bought a Mac.
* Two ducks were sitting in a pond, one of the ducks said: “Quack.” The other duck said: “I was going to say that!”
“The secret of life is honesty and fair dealing. If you can fake that, you’ve got it made.” — Groucho Marx
“As nature abhors a vacuum, government abhors unregulated activity.”  — Jim Bartlett
Write a wise saying, and your name will live forever.” — Anonymous

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The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.  The latest amendments are listed below.
Latest Update 
: 19 CFR, Ch. 1, Pts. 0-199.
5 Apr 2019:84 FR 13499: Civil Monetary Penalty Adjustments for Inflation.


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. 

18 May 2016: Change 2: Implement an insider threat program; reporting requirements for Cleared Defense Contractors; alignment with Federal standards for classified information systems; incorporated and cancelled Supp. 1 to the NISPOM (Summary here.)  

23 Feb 2015: 80 FR 9359, comprehensive updating of regulations, updates the activities and technologies subject to specific authorization and DOE reporting requirements. 

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


DOJ ATF ARMS IMPORT REGULATIONS: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War.

14 Mar 2019: 84 FR 9239: Bump-Stock-Type Devices.

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. 


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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