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20-0610 Wednesday “Daily Bugle”

20-0610 Wednesday “Daily Bugle”

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Wednesday, 10 June 2020

  1. State/DDTC: Requests Comments Regarding Temporary Suspensions, Modifications, and Exceptions to Provisions of the ITAR
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: “ITAR: Request for Comment Regarding the Temporary Suspension, Modification, or Exception to Regulations During SARS-COV2 Public Health Emergency”
  1. FT: “TSMC Falls into Line with US Export Controls on Huawei”
  2. Pulse: “COVID-19 Is Opportunity to Digitally Transform Supply Chains: Foxconn Vice Chair”
  3. The Standard: “Impact on US$500m Tech Imports Depends on US Measures, Edward Yau Says”
  1. Husch Blackwell: “USTR Announces New Section 301 Product Exclusions for List 4A”
  2. Sidley Austin: “Action on Section 301 List 4A Product Exclusion Requests”
  3. ST&R Trade Report: “ITAR Requirement Suspensions and Modifications are Focus of Comment Request”
  1. FCC Academy Presents June Webinars: “U.S. Export Controls:”Foreign Military Sales (FMS)”
  2. WEBINAR TODAY: State/DDTC to Hold DECCS Tips & Tricks Webinar Today
  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 
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EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

(Source:
Federal Register) [Excerpts]

 
85 FR 35376
: Request for comments
 
*
AGENCY:
Department of State.
*
ACTION:
Request for comments.
*
SUMMARY:
The Department of State, is requesting comment from the public regarding certain temporary suspensions, modifications, and exceptions to several provisions of the International Traffic in Arms Regulations (ITAR) recently issued in order to ensure continuity of operations within the Directorate of Defense Trade Controls (DDTC) and among entities registered with DDTC pursuant to the ITAR during the current SARS-COV2 public health emergency.
*
DATES:
Comments are due by June 25, 2020.

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

OGS OTHER GOVERNMENT SOURCES

(Source: Federal Register)
 
* Commerce/BIS;
NOTICES
;
National Security Investigation of Imports of Laminations for Stacked Cores for Incorporation into Transformers, Stacked Cores for Incorporation into Transformers, Wound Cores for Incorporation into Transformers, Electrical Transformers, and Transformer Regulators
; [Pub. Date: 12 Jun 2020]

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

OGS_a23. Commerce/BIS: (No new postings)

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

(Source:
State/DDTC, 10 Jun 2020)

 
The Directorate of Defense Trade Controls (DDTC) published in the Federal Register a request for comment from the public regarding certain temporary suspensions, modifications, and exceptions to several provisions of the International Traffic in Arms Regulations (ITAR), notice of which was issued May 1, 2020. The suspensions, modifications, and exceptions are to ensure continuity of operations within DDTC and among registered entities during the current SARS-COV2 public health emergency. As described more fully in the document, DDTC is limiting its consideration of comments to the efficacy and termination dates of the current suspensions, modifications, and exceptions, and whether additional measures should be considered in response to specific difficulties in operating conditions under the regulations that have arisen as a direct result of the crisis.
 

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

COM NEWS

NWS_a1
5. FT: “TSMC Falls into Line with US Export Controls on Huawei”

(Source: Financial Times, 9 Jun 2020) [Excerpts]
        
Taiwan Semiconductor Manufacturing Company has indicated it will not exploit apparent loopholes in the latest US restrictions on working with Chinese technology group Huawei and will comply with Washington’s intentions.
 
The remarks from Mark Liu, TSMC chairman, suggest the ban by the Department of Commerce on companies selling Huawei-designed chips back to Huawei if they have been made or designed using US equipment or software is almost certain to cripple the Chinese company’s technological progress. …
 
The US commerce department tightened restrictions on Huawei last month, accusing the company of having continued to use US technology in spite of export controls in place since May 2019. …

NWS_a2
6. Pulse: “COVID-19 Is Opportunity to Digitally Transform Supply Chains: Foxconn Vice Chair”

(Source: Pulsenews, 10 Jun 2020) [Excerpts]
 
Companies need to be more agile in digitalizing the global supply chain to turn the challenges imposed by the pandemic into business opportunities, Foxconn Technology Group’s vice chairman said.
 
“Changes in the supply chain and market demand have challenged the company to reluctantly face a ‘New Normal.’ Foxconn has been balancing its global operations so the company always operates with great agility to reconfigure its operations to minimize risk,” Jay Lee, vice chairman of the Taiwanese multinational electronics contract manufacturer, said in an email interview with Korea’s Maeil Business Newspaper.
 
Based in New Taipei City, Foxconn is the world’s largest contract manufacturer of electronics and the biggest supplier of Apple products including the iPhone.
 
The COVID-19 pandemic has proven disruptive to all companies as well as the global supply chain system, Lee said.

“(The pandemic) reset a new baseline with constraints for many businesses including cash flow, materials flow and people flow.

NWS_a3
7. The Standard: “Impact on US$500m Tech Imports Depends on US Measures, Edward Yau Says”

(Source: The Standard (Hong Kong), 10 Jun 2020)
 
The impact on mainly telecommunications and information security products and electronics imported by Hong Kong, will depend on export control measures eventually taken by the US government, the Secretary for Commerce and Economic Development, Edward Yau Tang-wah said today.
Citing data from the US Department of Commerce’s Bureau of Industry and Security, Yau said US exports which are subject to export control and shipped to Hong Kong under BIS Licence Exception were worth about US$400 to US$500 million a year in 2016, 2017, and 2018. They were mainly telecommunications and information security products and electronics.
 
“The impacts of these products in obtaining the US export authorisation will depend on the export control measures eventually taken by the US Government,” he said.
 
The Innovation and Technology Bureau has estimated that while any US policy changes may have certain impact on related industries in the short term, the impact on the long-term development of Hong Kong’s innovation and technology (I&T) would be relatively limited, Yau said.
 
“In recent years, various I&T stakeholders in Hong Kong have been sourcing equipment and technology products from around the world, or developing related products and technologies locally. Hence, any policies adopted by individual regions should not have material impact on Hong Kong’s I&T development,” he said.

COM COMMENTARY

(Source: International Trade Insights, 9 Jun 2020)
 
* Author: Camron J. Greer, Assistant Trade Analyst, 1-202-378-2413, Husch Blackwell
 
On June 8, 2020, the United States Trade Representative (“USTR”) issued new product exclusions pertaining to the 7.5% Section 301 List 4A tariffs. The new list of exclusions includes two 10-digit HTS subheadings and 32 specially prepared product descriptions that together cover 55 separate exclusion requests. The full list of excluded products is available here. According to the USTR, the product exclusions apply retroactively to September 1, 2019 and remain in effect until September 1, 2020. The exclusions cover various products, including certain types of gloves, watch components, and TV LCD main board assemblies.

(Source:
International Trade Updates
, 9 Jun 2020)
 
* Author: Ted Murphy, Esq., 1-202-736-8016, Sidley Austin
 
The USTR took meaningful action today on product exclusion requests filed for articles on List 4A.

First, the good news — the USTR issued 34 approvals (2 tariff classification only approvals and 32 specially prepared product descriptions; collectively, covering 55 separate exclusion requests) in the attached notice. The approvals cover a range of products from gloves to mop heads to parts of LCD TVs. The approvals date back to the date the duties went into effect and are valid for 1 year (i.e., September 1, 2019-September 1, 2020). Second, the not-so-good news — the USTR issued denials on 2,045 petitions this afternoon. 

The USTR has now acted on roughly a quarter of the 8,718 product exclusion petitions (with most of that done today). One reason why the USTR may be pushing forward might be because the approvals expire on September 1, 2020. If all of the List 4A approvals will expire on that date (again, one year from when the duties went into effect), and the USTR intends to provide the public the opportunity to comment on whether to extend the approvals or not (as has been their practice, thus far; but is not guaranteed), they are running out of time. The comment period for extensions would open around July 1, 2020. As a result, we could see decisions on the remaining product exclusions petitions this month.

Also, it is important to keep in mind that if your specific product exclusion petition was denied, you are not necessarily out of luck and stuck paying the additional duties. Product exclusion approvals are approval-specific – not company-specific – which means they can be utilized by any company that seeks to import an article that meets the terms of the approval. The USTR has to Granted exclusions are available for any product that meets the description in the published notice, regardless of whether you filed the exclusion request. When a number of companies file separate petitions covering similar articles, it is not uncommon for the USTR to deny all of the petitions but one. If the approval for that one covers what you are importing, you may utilize the exclusion. 

Remember, the scope of each exclusion is governed by the terms of the approval published in the Federal Register (i.e., the narrative description and 10-digit HTS subheading, generally) – not the product descriptions set out in any particular exclusion request.


 
* Contact: 
messages@strtrade.com, 1-305-894-1035
 
The State Department is accepting comments through June 25 on the following temporary suspensions, modifications, and exceptions to International Traffic in Arms Regulations provisions issued in response to the COVID-19 pandemic.
 
– temporary suspension of requirement to renew registration as a manufacturer, exporter, and/or broker and pay a fee on an annual basis by extending ITAR registrations expiring on Feb. 29, March 31, April 30, May 31, and June 30 for two months from the original date of expiration
 
– extension of any ITAR license that expired between March 13 and May 31 for six months from the original date of expiration so long as there is no change to the scope or value of the authorization and no name or address changes are required
 
– authorization for regular company employees to work at a remote work location so long as they are not located in Russia or a country listed in ITAR § 126.1 (this provision will terminate July 31 unless otherwise extended in writing)
 
– authorization for regular employees of licensed entities who are working remotely in a country not currently authorized by a TAA, MLA, or exemption to send, receive, or access any technical data authorized for export, reexport, or retransfer to their employer via a TAA, MLA, or exemption so long as the employee is not located in Russia or a country listed in ITAR § 126.1 (this provision will terminate July 31 unless otherwise extended in writing)
 
State is limiting its consideration of comments to the following areas.
 
– the efficacy of these actions on the operating environments of regulated community members during the COVID-19 emergency
 
– whether the original expiration dates are sufficient or should be considered for extension (and why)
 
– any additional temporary suspensions, modifications, or exceptions that should be considered in response to specific difficulties in operating conditions that have arisen for the regulated community as a direct result of the crisis (and why).

TE EX/IM TRAINING EVENTS & CONFERENCES

EN EDITOR’S NOTES

EN_a113. Bartlett’s Unfamiliar Quotations

(Source: Editor)
  

* Saul Bellow
(born Solomon Bellows; 10 June 1915 – 5 April 2005; was a Canadian-American writer. For his literary work, Bellow was awarded the Pulitzer Prize, the Nobel Prize for Literature, and the National Medal of Arts. His best-known works include The Adventures of Augie March, Henderson the Rain King, Herzog, Mr. Sammler’s Planet, Seize the Day, Humboldt’s Gift and Ravelstein. Bellow is widely regarded as one of the 20th century’s greatest authors.)
 – “California is like an artificial limb the rest of the country doesn’t really need. You can quote me on that.”
  – “When we ask for advice, we are usually looking for an accomplice.”

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

 

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.

5 June 2020: 85 FR 34495 and 85 FR 34503: Additions and Amendments of 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

5 Jun 2020:
85 FR 84510:

Syria 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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