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20-0526 Tuesday “Daily Bugle”

20-0526 Tuesday “Daily Bugle”

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(The Daily Bugle was not published yesterday, 25 May, a U.S. holiday.)
Tuesday, 26 May 2020

  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: Recission of Policy of Denial re BAE Systems Saudi Arabia Ltd
  4. EU Commission Updates
  1. India Today: “Accused of Mass Repression, Beijing Vows to Shield Firms from US Sanctions”
  1. Baker McKenzie: “New Bill Allowing Russian Government to Authorize Import of Sanctioned Goods”
  2. Miller Canfield: “BE-10 Benchmark Survey of U.S. Direct Investment Abroad Will Be Due Soon”
  3. N. Turner: “Sanctions Top-5 for the Week Ending 22 May 2020”
  4. Pillsbury: “CFIUS Proposes Mandatory Declaration Requirement Based on U.S. Export Control Criteria”
  1. Monday List of Ex/Im Job Openings: 72 Jobs Available -7 New Job Openings This Week
  1. ECS Presents Webinar “ITAR/EAR Boot Camp — Achieving Compliance”: 7-8 Jul
  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 
  4. Submit Your Job Opening and View All Job Openings 
  5. Submit Your Event and View All Approaching Events 

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OGS_a22. Commerce/BIS: (No new postings)

 
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The goods described in column (1) of the table set out in the Annex shall be classified within the Combined Nomenclature under the CN code indicated in column (2) of that table.
   Binding tariff information which does not conform to this Regulation may continue to be invoked in accordance with Article 34(9) of Regulation (EU) No 952/2013 for a period of three months from the date of entry into force of this Regulation.
   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. …
 
   -Until 31 August 2020 (included), the ESA States shall grant preferential tariff treatment to products originating in the EU upon submission of either a movement certificate EUR.1 or an invoice declaration, made out by approved exporters within the meaning of Article 24 or by any exporter for any consignment consisting of one or more packages containing originating products whose total value does not exceed EUR 6 000;
   -From 1 September 2020, the ESA States shall grant preferential tariff treatment to products originating in the EU exclusively upon submission of invoice declarations made out by exporters registered in the EU’s REX system or by any exporter for any consignment consisting of one or more packages containing originating products whose total value does not exceed EUR 6 000. …
 
* Council Decision (EU) 2020/678 of 18 May 2020 on the
position to be taken on behalf of the European Union in the CETA Joint Committee established under the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part
, as regards the adoption of a decision setting out the administrative and organisational matters regarding the functioning of the Appellate Tribunal.
   The position to be taken on behalf of the European Union in the CETA Joint Committee as regards the adoption of a decision setting out the administrative and organisational matters regarding the functioning of the Appellate Tribunal shall be based on the draft decision of the CETA Joint Committee (4).
This Decision shall enter into force on the date of entry into force of the Agreement. …

 
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COM NEWS

NWS_a15. India Today: “Accused of Mass Repression, Beijing Vows to Shield Firms from US Sanctions”
(Source:
India Today
, 25 May 2020) [Excerpts]
 
   Beijing on Monday vowed to shield a Chinese government institute and eight companies sanctioned by the US over alleged human rights violations in the restive Xinjiang region, where China is accused of mass repression of mostly Muslim minorities.
   The US Department of Commerce announced the sanctions on Friday, saying they were triggered by human rights abuses against Uighurs and other minority groups in Xinjiang in China’s far northwest.
   Beijing urged Washington to reverse the decision, saying the Commerce Department had “stretched the concept of national security” to “meddle in China’s affairs and harm China’s interests”. “China will take all necessary measures to protect the legal rights and interests of Chinese companies,” foreign ministry spokesman Zhao Lijian said at a regular press briefing.
   The Commerce Department said the nine parties were “complicit in human rights violations and abuses committed in China’s campaign of repression, mass arbitrary detention, forced labour and high-technology surveillance against Uighurs, ethnic Kazakhs” and other Muslim minority groups in Xinjiang.
All nine are now subject to restrictions on exports from the US, the department added. …
   Tensions are also growing between the world’s two largest economies after President Donald Trump accused China of misleading the world on the origins of the coronavirus, which first emerged in the Chinese city of Wuhan. Beijing has furiously denied the allegation, and its foreign minister Wang Yi said Sunday that Washington was pushing both sides to “the brink of a new Cold War”.

COM COMMENTARY

COM_a16. Baker McKenzie: “New Bill Allowing Russian Government to Authorize Import of Sanctioned Goods”
(Source:
Baker McKenzie Blog
, 22 May 2020)
 
* Principal Author:
Vladimir Efremov
, 7-495-787-0715,
Baker McKenzie
 
On May 20, 2020 a draft bill on amendments to the Federal Law on Counter Sanctions was introduced to the Russian Parliament. The proposed amendments authorize the Government to allow importation of sanctioned goods to Russia if:
  • the goods constitute essential commodities that do not have analogues in Russia; and/or – 
  • the goods do have Russian analogues, but there is deficit of such goods due to particular circumstances (national emergency, high-alert regime, etc.) 
Sanctioned good essentially refers to any good, the importation of which into Russia is prohibited or otherwise restricted by Russian trade sanctions. 
To become a law this bill would need to pass 3 readings in the State Duma, be approved by the Federation Council, and then be signed by the Russian President.

(Source:
 Miller Canfield News
, May 2020) [Excerpts]

 


* Principal Author: Yanping Wang, Esq., 86-21-2221-2199 or 1-248-267-3232,


 


The BE-10 Benchmark Survey of U.S. Direct Investment Abroad is a mandatory survey conducted once every 5 years by the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce to obtain current economic data on direct foreign investments by U.S. persons or businesses (U.S. Reporters). The filing deadline for the 2019 BE-10 Benchmark Survey is rapidly approaching. We are providing the following Q&As to assist in determining whether a 2019 BE-10 Benchmark Survey is required and when.


  (1) Who is required to file as a U.S. Reporter?
  Any U.S. person who, at the end of its 2019 fiscal year, owned or controlled, directly or indirectly, 10% or more of the voting stock of an incorporated foreign business enterprise, or an equivalent interest in an unincorporated foreign business enterprise, including branches (foreign affiliate), is required to file 2019 Benchmark Survey forms. A U.S. person includes an individual, partnership, corporation, estate, trust, or non-profit organizations that is resident in the U.S. or otherwise subject to the jurisdiction of the U.S.  Certain private funds may be exempt from filing; see 
www.bea.gov/privatefunds
 
for further information.
  (2) Is the 2019 Benchmark Survey mandatory?  Yes, a U.S. Reporter required to submit required 2019 BE-10 Benchmark Survey forms must do so by the applicable deadline, whether or not contacted by the BEA. However, if notified by the BEA that the U.S. Reporter is required to make a filing but the U.S. Reporter believes it is not subject to the 2019 BE-10 Benchmark Survey requirements, the U.S. Reporter must file “BE-10 Claim for Not Filing.” If the U.S. Reporter is not notified by the BEA and the U.S. Reporter does not meet the 2019 BE-10 Benchmark Survey filing requirements, the U.S. Reporter need not take any action. Failure to submit a BE-10 survey may subject a U.S. Reporter to civil and injunctive relief and a willful failure to report may result in fines or imprisonment, or both. Officers, directors, employees, or agents of a U.S. Reporter who knowingly participate in a violation may also be subject to fines or imprisonment or both.  …
  (3) When is the deadline for filing BE-10 forms?
  The deadline for filing the 2019 BE-10 Benchmark Survey is May 29, 2020, and is extended to June 30, 2020, for U.S. Reporters with 50 or more affiliate reports. Reasonable requests for extension of the filing deadline will be considered by BEA but must be submitted before the applicable filing deadline. Extension requests should be filed electronically using eFile.
  (4) Which BE-10 forms are to be filed?  The 2019 BE-10 Benchmark Survey includes a BE-10A form for the U.S. Reporter and one of the following forms for each of the U.S. Reporter’s foreign affiliates: Form BE-10B, Form BE-10C or Form BE-10D. BEA has provided the following summary chart for U.S. Reporters to use in determining which BE-10 forms are to be submitted for foreign affiliates:  …
   (5) Can BE-10 Forms be filed electronically?  Yes, BE-10 forms may be filed online at 
www.bea.gov/efile
. They may also be filed by fax (301-278-9502), or by mail or courier. The BEA encourages filing by eFile or fax particularly now due to its temporary limited ability to receive physical copies of completed survey forms, extension requests or other documents that are mailed or couriered to the BEA.
   (6) How long should the U.S. Reporter keep copies of the filed BE-10 forms?
  BE-10 Forms must be retained by the U.S. Reporter for at least three years after the report’s original due date.  …

(Source: 
Medium, 26
 May 2020) [Excerpts]
 
* Author: 
Nicholas Turner
, Esq., 852-5998-7559, 
Steptoe & Johnson HK
 
Here are five things that happened this week in the world of economic sanctions that I think you should know about.
   (1) US Senators Chris Van Hollen and Pat Toomey 
introduced a bill called the Hong Kong Autonomy Act
 
that would, among other things, authorize sanctions against individuals and entities that “materially contribute to the contravention” of Hong Kong’s Basic Law, including sanctions against financial institutions that engage in significant transactions with such persons. The proposed legislation follows reports that China’s National People’s Congress 
would pass a resolution in support of legislation
 
enhancing Beijing’s ability to respond to national-security threats in Hong Kong.
   (2) The US Office of Foreign Assets Control (OFAC) 
designated a China-based logistics company as a Specially Designated Global Terrorist
 
(SDGT) pursuant to Executive Order 13224 for acting as a general sales agent for Iran-based Mahan Air. In December 2019, OFAC 
designated three entities in Dubai and Hong Kong
 
for acting as Mahan Air agents, following 
several earlier designations
 against agents in Malaysia, Thailand, and elsewhere.
   (3) OFAC 
designated Iran’s Interior Minister, seven officials of Iran’s Law Enforcement Forces (LEF), the LEF-controlled LEF Cooperative Foundation, a local commander of the Islamic Revolutionary Guard Corps (IRGC), and two prisons, as Specially Designated Nationals
 
(SDNs) pursuant to Executive Order 13553 and the Countering America’s Adversaries Through Sanctions Act (CAATSA). The designations are based on allegations of serious human rights abuses against Iranians and Afghan refugees at LEF-operated detention centers and elsewhere in Iran.
   (4) The US Commerce Department’s Bureau of Industry and Security (BIS) 
announced it will add nine Chinese entities, including technology companies, to the Entity List 
for being “complicit in human rights violations and abuses” in the Xinjiang Uighur Autonomous Region (XUAR). In October 2019, BIS 
added 28 entities to the Entity List 
in connection with activities in the XUAR. Meanwhile, BIS 
announced it will add another 24 entities in China, Hong Kong, and the Cayman Islands to the Entity List 
for “engaging in activities contrary to the national security or foreign policy interests of the United States,” in connection with the procurement of items for military use in China.
   (5) OFAC 
designated the Commander-in-Chief of the Nicaraguan Army and Nicaragua’s Minister of Finance and Public Credit as SDNs
 

pursuant to Executive Order 13851 in connection with their roles as officials in the Nicaraguan government.  

 
Comments

 

Last week
, I mentioned that the Senate passed its version of the 
Uyghur Human Rights Policy Act of 2020
 
aimed at Chinese officials determined to be responsible for human rights abuses in the XUAR. Several new China-related bills are under consideration. It’s hard to say what is going to come of them. The President does not need Congress to create sanctions-the 
International Emergency Economic Powers Act
 
gives more than enough authority already. And, unlike in 2017 when CAATSA was passed, Congress and the White House seem more or less aligned politically on China at the moment. Why the flurry? It is an election year. With voters under home confinement in many states, campaigning lawmakers need media (of all kinds) more than ever. Anything China attracts headlines, clicks, and likes. It will be interesting to see what laws make it across the finish line by November. After all, the US-China trade deal still matters to the White House’s reelection strategy.

 
* Principal Author: 
Christopher R. Wall
, Esq., 1-202-663-9250,
Pillsbury Winthrop Shaw Pittman LLP
 
  On May 21, 2020, the U.S. Department of the Treasury published a proposed rule that would revise the mandatory declaration requirement for foreign investments involving a U.S. business that produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies.
 
 
Currently, a key element of the mandatory declaration requirement is whether the U.S. business engaged in the specified activities involving critical technologies uses that critical technology or designs the technology specifically for use in, one or more industries identified by North American Industry Classification (NAICS) codes.
 
 
Under the proposed rule, this industry test is removed. Instead, a declaration would be mandatory if a “U.S. regulatory authorization” would be required to export or reexport the critical technology to the foreign investor and certain foreign persons in its ownership chain.  The proposed rule defines “U.S. regulatory authorization” to include licenses or authorizations under the four main U.S. export control regimes:
   – A license or other approval (e.g., approved technical assistance agreements or manufacturing license agreements) issued by the Department of State under the International Traffic in Arms Regulations (ITAR);
   – A license from the Department of Commerce under the Export Administration Regulations (EAR);
   – A specific or general authorization required from the Department of Energy pursuant to 10 CFR Part 810, except the general authorization at 10 CFR 810.6(a) for the export of certain controlled nuclear technology to specified countries or entities; or
   – A specific license from the Nuclear Regulatory Commission pursuant to 10 CFR Part 110.
 
  Importantly, the proposed rule does not take into consideration any license exemptions available under the ITAR and only excludes from the definition of U.S. regulatory authorization the following license exceptions in the EAR:
   – License Exception TSU (15 CFR 740.13);
   – License Exception ENC, paragraph (b) (15 CFR 740.17(b)); and
   – License Exception STA, paragraph (c)(1) (15 CFR 740.20(c)(1)).
 
  The impact of this change will vary depending on the technology involved in the transaction and the home country of the foreign investor. For example, most encryption technology classified under Export Control Classification Number (ECCN) 5E002 cannot be exported to end users in China using subpart (b) of License Exception ENC. However, transactions involving foreign parties from allied nations, especially those that are in Country Group A:5 but are not “excepted foreign investors” (e.g., France, Germany, Italy, Japan, India, etc.) may not be subject to the mandatory filing requirement where the critical technology involved is eligible for export pursuant to License Exception STA.
 
 
In determining whether a particular transaction could trigger the mandatory declaration requirement, the proposed rule specifies which foreign persons in the ownership chain should be analyzed for export licenses and authorizations. The proposed rule establishes a threshold of a 25% direct or indirect voting interest, which it refers to as “voting interest for purposes of critical technology mandatory declarations.” For entities whose activities are primarily directed, controlled, or coordinated by or on behalf of a general partner, managing member, or equivalent, the applicable threshold is a 25% interest in the entity’s general partner, managing member, or equivalent.
 
 
CFIUS is accepting comments on the proposed rule until June 22, 2020. If issued in final form, the new mandatory declaration requirement based on U.S. export control criteria would apply as of the effective date of the final rule. In the meantime, the existing mandatory filing requirement based on NAICS codes remains in effect.

TE EX/IM MOVERS & SHAKERS

(Source: Events & Jobs Editor)

* AgustaWestland Philadelphia Corporation; Philadelphia, PA;
Import Specialist
; Contact Details:
stacy.lavin@leonardocompany.us 
 
* Bekaert; Marietta, GA;
Import-Export Specialist
; Requisition ID: 21908
 
* Caltech; Pasadena, CA;
Export Compliance Technical Specialist 
 
* Cargill; Coral Gables, FL;
Senior Trade Execution Coordinator
; COR00626
 
* Lineage Logistics; Watsonville, CA;
Export Coordinator 
 
* Thomas Jefferson University; Philadelphia, PA;
The Export Compliance Officer 
 
* Victaulic; Easton, PA; Trade Compliance Analyst
; Contact Details:
Cindy.Marsh@Victaulic.com  
 
*
International company with many U.S. locations needs International Trade Compliance Manager. Salary up to $150K. Contact Jim Bartlett, 202-802-0646. 

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TE EX/IM TRAINING EVENTS & CONFERENCES

 
*When: 7-8
July 2020 
*Where: 
Online
*Sponsor: Export Compliance Solutions & Consulting
*Presenter: Suzanne Palmer, Mal Zerden
*Register 

here
 or by calling 1-866-238-4018 or email 
liz@exportcompliancesolutions.com

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

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EN EDITOR’S NOTES

EN_a113. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 

Yesterday was Memorial Day, a U.S. national holiday. It was originally instituted in 1868 following the civil war as Decoration Day to decorate the graves of fallen soldiers.  After World War I, Memorial Day evolved into a day to commemorate all who have died in American wars. Regarding its founding, General Edward Lawrence Logan (for whom Boston’s Logan Airport is named) urged:
 
“Let no neglect, no ravages of time, testify to the present or to the coming generations that we have forgotten as a people the cost of a free and undivided republic.” 

The following is a portion of a prayer for Memorial Day by Rev. James Lively, Pastor, St. John’s Episcopal Church, Sturgis, Michigan.

“Gracious God, we give thanks for military men and women, both from the past and present, and for their courageous service and sacrifice to our country and its people to secure the blessings of life, liberty, and justice for all. May our remembrance be a timely reminder that our freedom was purchased at high cost, and should not be taken for granted. Give us resolve to labor in faithful service to You until all share the benefits of freedom, justice, and peace. … Amen.”

Monday was Pun Day, so there was no Daily Bugle yesterday, but we don’t want you to miss out on your puns:

* To write with a broken pencil is pointless.
* Acupuncture is a jab well done. That’s the point of it. 
* I didn’t like my beard at first. Then it grew on me. 
* Why don’t oysters share their pearls? Because they’re shellfish.
* What do you call a snowman in June? A puddle.

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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 reduced 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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