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20-0715 Wednesday “Daily Bugle”

20-0715 Wednesday “Daily Bugle”

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Wednesday, 15 July 2020

  1. Treasury/OFAC: “Notice of OFAC Sanctions Actions”
  2. USTR: “Product Exclusions Amendments”
  3. USTR: “Retroactive Product Exclusions”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: “Hong Kong Executive Order: Licensing Policy Change for Hong Kong”
  4. Treasury/OFAC: “Issuance of Venezuela-related General License 5D and Amended Frequently Asked Question”
  5. UK OFSI: “Financial Sanctions, Libya”
  6. White House: The President’s Executive Order on Hong Kong Normalization
  1. EU Sanctions: “EU Prepares Turkey Sanctions Measures”
  2. Reuters: “China Vows Retaliation after Trump Ends Preferential Status for Hong Kong”
  1. Arent Fox: “French Fashion and Retail Goods Face 25% Duties Starting January 2021”
  2. ST&R Trade Report: “Import Alerts on Foods, Drugs, and Medical Devices”
  3. Wiggin: “U.S. Government Issues Section 889 Part B Interim Rule”
  1. ECTI Presents: The Latest Issues in OFAC and EAR Enforcement Webinar; 21 Jul
  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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EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

 
85 FR 42981: Notice
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Notice.
* SUMMARY: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC’s Specially Designated Nationals and Blocked Persons List based on OFAC’s determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
* DATES: See SUPPLEMENTARY INFORMATION section for applicable date(s).

* FOR FURTHER INFORMATION CONTACT: OFAC: Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490; Assistant Director for Licensing, tel.: 202-622-2480.

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

 
85 FR 42968: Notice
* AGENCY: Office of the United States Trade Representative.
* ACTION: Notice of product exclusion amendments.
* 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 make technical amendments to previously announced exclusions.
* DATES: The amendments announced in this notice are retroactive to the date of publication of the original exclusions.
* FOR FURTHER INFORMATION CONTACT: For general questions about this notice, contact Associate General Counsel Philip Butler, Assistant General Counsel Megan Grimball, or Director of Industrial Goods Justin Hoffmann at (202) 395-5725. For specific questions on customs classification or implementation of the product exclusions identified in the Annex to this notice, contact traderemedy@cbp.dhs.gov.

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

 
85 FR 42970: Notice
* AGENCY: Office of the United States Trade Representative.
* ACTION: Notice.
* SUMMARY: Effective July 6, 2018, the U.S. Trade Representative imposed additional duties on goods of China with an annual trade value of approximately $34 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’s determination included a decision to establish a product exclusion process, which was initiated in July 2018. Stakeholders submitted requests for the exclusion of specific products and the U.S. Trade Representative has issued determinations to grant exclusion requests. This notice announces the U.S. Trade Representative’s determination to make a technical amendment to a previously granted exclusion.
* DATES: This technical amendment is retroactive to the date of publication of the original exclusion and does not extend the period for the original exclusion. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.
* FOR FURTHER INFORMATION CONTACT: For general questions about this notice, contact Associate General Counsel Philip Butler or Director of Industrial Goods Justin Hoffmann at (202) 395-5725. For specific questions on customs classification or implementation of the product exclusions identified in the Annex to this notice, contact traderemedy@cbp.dhs.gov.

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

OGS OTHER GOVERNMENT SOURCES

(Source:
Federal Register
)
 
* USTR: NOTICES; Action: Section 301 Investigation of France’s Digital Services Tax [Pub. Date: 16 Jul 2020] (PDF)
 
* USTR: NOTICES; Product Exclusion: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation [Pub. Date: 16 Jul 2020] (PDF)

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

OGS_a25. Commerce/BIS: (No new postings)

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

OGS_a26. State/DDTC: “Hong Kong Executive Order: Licensing Policy Change for Hong Kong”

(Source:
State/DDTC
), 15 Jul 2020)
   
  On July 14, 2020, the President signed an Executive Order that requires, among other actions, Hong Kong to be treated as the People’s Republic of China (PRC) for the purposes of the Arms Export Control Act (AECA), with a specific carve-out to support Hong Kong persons residing outside the Hong Kong Special Administrative Region or the PRC who were previously authorized access to defense articles subject to the ITAR.  Hong Kong is now considered to be included in the entry for China under section 126.1(d)(1) of the ITAR and therefore subject to a policy of denial for all transfers subject to the ITAR.  The U.S. government is taking this action because the Chinese Communist Party has fundamentally undermined Hong Kong’s autonomy and thereby increased the risk that sensitive U.S. items will be illegally diverted to the PRC.
 
FAQs

 

Q: The EO provides that the President is terminating export licensing suspensions for exports of defense articles to certain Hong Kong persons.  Are exports of defense services to those Hong Kong persons permitted? 
A:
 
Section 902(a)(3) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (Public Law 101-246, 22 U.S.C. 2151 note) prohibits “[t]he issuance of licenses under section 38 of the Arms Export Control Act for the export to the People’s Republic of China of any defense article on the United States Munitions List….”  As a result, the President is not required to make a determination under section 902(b)(2) of that Act in order for DDTC to authorize exports of defense services to Hong Kong persons.  DDTC will review on a case-by-case basis license applications to export defense services to Hong Kong persons who (1) are physically located outside of Hong Kong or the PRC and (2) were authorized to receive defense articles prior to July 14, 2020.  Exporters may continue to rely on available exemptions consistent with the provisions of ITAR § 126.1(a).
  We refer you to the U.S. Department of Commerce for additional information on exports to Hong Kong controlled under the Commerce Control List.
 
Q: I have a previously approved export authorization which names Hong Kong as a transfer territory.  Is this authorization still valid?
A:
 
Yes.  Current, valid, non-exhausted authorizations naming Hong Kong as a transfer territory are not affected by the Executive Order.  At this time the Department is not taking steps to revoke or rescind previously approved authorizations to export defense articles or services to Hong Kong.
 
Q: Does this action apply to all end-users in Hong Kong, or just government entities?
A:
 
In accordance with the Executive Order, Hong Kong is now treated as China under section 126.1(d)(1) of the ITAR and there is a presumption of denial for license requests where a Hong Kong person is named as an end-user, licensee (signatory) or sublicensee, or where Hong Kong appears as a marketing, transfer, re-transfer, re-export, sales, or distribution territory.

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

OGS_a4
7.
Treasury/OFAC: “Issuance of Venezuela-related General License 5D and Amended Frequently Asked Question”
(Source:
Treasury/OFAC, 15 Jul 2020)

 
  The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing amended 
Venezuela-related General License 5D, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After October 20, 2020.”  OFAC is also amending a
 
related Frequently Asked Question.

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

 
   EU sanctions will continue to apply in the UK until 11pm on 31 December 2020.
   Libya is currently subject to financial sanctions put in place by the EU and the UN. The UN introduced
 
Resolution 1970 (2011)
 
which was adopted by the EU. The EU then put in place additional, autonomous financial sanctions.
Implementation date
   Financial sanctions were imposed on Libya in 2011 under UN Resolution
 
UNSCR 1970 (2011)
 
and
 
Council Regulation (EU) No 204/2011.
In 2016, the EU adopted
 
Council Regulation (EU) No 2016/44
 
which combined existing and new restrictive measures.
Context
   The Libya regime imposes asset freeze financial sanctions on those involved or complicit in serious human rights abuses against Libyan civilians and facilities. Abuses include planning, commanding, ordering or conducting attacks that violate international laws.
   Asset freezing activity also helps protect Libyan state funds (misappropriated during the former regime of Muammar Qadhafi) which could be used to threaten the peace, stability or political transition of Libya.

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

(Source: White House, 14 Jul 2020) [Excerpts]
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the United States-Hong Kong Policy Act of 1992 (Public Law 102-393), the Hong Kong Human Rights and Democracy Act of 2019 (Public Law 116-76), the Hong Kong Autonomy Act of 2020, signed into law July 14, 2020, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), section 212(f) of the Immigration and Nationality Act of 1952 (8 U.S.C. 1182(f)), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, determine, pursuant to section 202 of the United States-Hong Kong Policy Act of 1992, that the Special Administrative Region of Hong Kong (Hong Kong) is no longer sufficiently autonomous to justify differential treatment in relation to the People’s Republic of China (PRC or China) under the particular United States laws and provisions thereof set out in this order.   . . .  
I therefore determine that the situation with respect to Hong Kong, including recent actions taken by the PRC to fundamentally undermine Hong Kong’s autonomy, constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States.  I hereby declare a national emergency with respect to that threat. In light of the foregoing, I hereby determine and order:

   
Sec.
 
1
.  It shall be the policy of the United States to suspend or eliminate different and preferential treatment for Hong Kong to the extent permitted by law and in the national security, foreign policy, and economic interest of the United States.

   
Sec

2
.  Pursuant to section 202 of the United States-Hong Kong Policy Act of 1992 (22 U.S.C. 5722), I hereby suspend the application of section 201(a) of the United States-Hong Kong Policy Act of 1992, as amended (22 U.S.C. 5721(a)), to the following statutes: . . .

   
Sec

3
.  Within 15 days of the date of this order, the heads of agencies shall commence all appropriate actions to further the purposes of this order, consistent with applicable law, including, to:

     (a)  amend any regulations implementing those provisions specified in section 2 of this order, and, consistent with applicable law and executive orders, under IEEPA, which provide different treatment for Hong Kong as compared to China;

     (b)  amend the regulation at 8 CFR 212.4(i) to eliminate the preference for Hong Kong passport holders as compared to PRC passport holders;

     (c)  revoke license exceptions for exports to Hong Kong, reexports to Hong Kong, and transfers (in-country) within Hong Kong of items subject to the Export Administration Regulations, 15 CFR Parts 730-774, that provide differential treatment compared to those license exceptions applicable to exports to China, reexports to China, and transfers (in-country) within China;

     (d)  consistent with section 902(b)(2) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (Public Law 101-246), terminate the export licensing suspensions under section 902(a)(3) of such Act insofar as such suspensions apply to exports of defense articles to Hong Kong persons who are physically located outside of Hong Kong and the PRC and who were authorized to receive defense articles prior to the date of this order;

     (e)  give notice of intent to suspend the Agreement Between the Government of the United States of America and the Government of Hong Kong for the Surrender of Fugitive Offenders (TIAS 98-121);

    (f)  give notice of intent to terminate the Agreement Between the Government of the United States of America and the Government of Hong Kong for the Transfer of Sentenced Persons (TIAS 99-418);

     (g)  take steps to end the provision of training to members of the Hong Kong Police Force or other Hong Kong security services at the Department of State’s International Law Enforcement Academies;

     (h)  suspend continued cooperation undertaken consistent with the now-expired Protocol Between the U.S. Geological Survey of the Department of the Interior of the United States of America and Institute of Space and Earth Information Science of the Chinese University of Hong Kong Concerning Scientific and Technical Cooperation in Earth Sciences (TIAS 09-1109);

     (i)  take steps to terminate the Fulbright exchange program with regard to China and Hong Kong with respect to future exchanges for participants traveling both from and to China or Hong Kong;

     (j)  give notice of intent to terminate the agreement for the reciprocal exemption with respect to taxes on income from the international operation of ships effected by the Exchange of Notes Between the Government of the United States of America and the Government of Hong Kong (TIAS 11892);

     (k)  reallocate admissions within the refugee ceiling set by the annual Presidential Determination to residents of Hong Kong based on humanitarian concerns, to the extent feasible and consistent with applicable law; and

     (l)  propose for my consideration any further actions deemed necessary and prudent to end special conditions and preferential treatment for Hong Kong.

Sec

4
.  All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: . . .

Sec
5.  I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to section 4 of this order would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations as provided by section 4 of this order.

Sec
6.  The prohibitions in section 4(a) of this order include: . . .

Sec
7.  The unrestricted immigrant and nonimmigrant entry into the United States of aliens determined to meet one or more of the criteria in section 4(a) of this order, as well as immediate family members of such aliens, or aliens determined by the Secretary of State to be employed by, or acting as an agent of, such aliens, would be detrimental to the interest of the United States, and the entry of such persons into the United States, as immigrants and nonimmigrants, is hereby suspended.  . . .

Sec
8.  (a)  Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited. . . .

Sec
9.  Nothing in this order shall prohibit transactions for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof.

Sec
10.  For the purposes of this order: [definitions] . . .

Sec
11.  For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to section 4 of this order would render those measures ineffectual.  I therefore determine that for these measures to be effective in addressing the national emergency declared in this order, there need be no prior notice of a listing or determination made pursuant to section 4 of this order.

Sec
12.  The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order.  The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions within the Department of the Treasury.  All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.

Sec
13.  The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to submit recurring and final reports to the Congress on the national emergency declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).

Sec
14.  (a)  Nothing in this order shall be construed to impair or otherwise affect: . . .

Sec
15.  If, based on consideration of the terms, obligations, and expectations expressed in the Joint Declaration, I determine that changes in China’s actions ensure that Hong Kong is sufficiently autonomous to justify differential treatment in relation to the PRC under United States law, I will reconsider the determinations made and actions taken and directed under this order.

DONALD J. TRUMP

THE WHITE HOUSE

July 14, 2020
 
                                                                                                 
Back to top
 

COM NEWS

(Source:
EU Sanctions, 14 Jul 2020) [Excerpts]
 
   The EU High Representative for Foreign Affairs Josep Borrell has said at a press conference that, on Cyprus’ request, the EU is preparing “additional listings” on Turkey within the EU’s existing sanctions framework in response to their drilling activities in the Eastern Mediterranean sea. The EU has so far imposed sanctions on 2 executives of the Turkish Petroleum Corporation who are said to be responsible for unauthorized hydrocarbon exploration in the Eastern Mediterranean.

  
Mr Borrell added that, alongside increased dialogue and negotiations, the EU is preparing “further appropriate measures that could be taken” in response to “challenges [the EU] is facing as a result of Turkish action”, including potential drilling activities in Greece’s territorial waters, and in relation to Libya. The EU has also called on Turkey “to contribute actively to a political solution in Libya and to respect the commitments it has taken in the framework of the Berlin process, including the United Nations arms embargo”. 

(Source:
Reuters, 14 Jul 2020) [Excerpts]
 
   President Donald Trump on Tuesday ordered an end to Hong Kong’s special status under U.S. law to punish China for what he called “oppressive actions” against the former British colony, prompting Beijing to warn of retaliatory sanctions.
   Citing China’s decision to enact a new national security law for Hong Kong, Trump signed an executive order that he said would end the preferential economic treatment for the city.
   “No special privileges, no special economic treatment and no export of sensitive technologies,” he told a news conference.
   Acting on a Tuesday deadline, he also signed a bill approved by the U.S. Congress to penalize banks doing business with Chinese officials who implement the new security law. …
   “Hong Kong will now be treated the same as mainland China,” he added.
Under the executive order, U.S. property would be blocked of any person determined to be responsible for or complicit in “actions or policies that undermine democratic processes or institutions in Hong Kong,” according to the text of the document released by the White House.
   It also directs officials to “revoke license exceptions for exports to Hong Kong,” and includes revoking special treatment for Hong Kong passport holders. …
   A U.S. official, speaking on condition of anonymity, said the administration was also preparing sanctions against Chinese officials and entities involved in the Hong Kong crackdown, including further U.S. travel bans and possible Treasury sanctions.
   The timing remained unclear. The White House has previously threatened such sanctions but so far has only imposed restrictions on visas for an unspecified number of unnamed Chinese officials.

COM COMMENTARY

(Source:
Arent Fox, 14 Jul 2020)
 
* Principal Author: Teresa M. Polino, Esq., 1-202-350-3745, Arent Fox LLP
 
   Certain products from France, including leather handbags, and certain beauty preparations and soaps, will soon become pricier.
   Following a disagreement over how to tax US tech companies in France, the US Trade Representative has imposed additional duties of 25 percent on French goods, effective January 6, 2021, a cost that importers and retailers will have to absorb or pass on to their customers.
  As forecast in our related alert published June 19, available here, the US’s withdrawal from participation in talks to agree on a multilateral taxation framework for the digitized economy has impacted the fragile truce between the US and France.
 
US Investigation of French Digital Services Tax Resulted in Agreement with France
   In January 2020, the United States and France announced a détente under which France would delay collection of taxes under its digital service law until the end of 2020 to allow the broader talks before the Organisation for Economic Co-operation and Development (OECD) to continue. The US agreed to withhold imposition on pre-announced tariffs on $2.4 billion of French products. This agreement followed the USTR’s determination in December 2019 that France’s DST was unreasonable or discriminatory against US companies and burdens or restricts US commerce. Under US law, the President is authorized to take action against such restrictions.
 
Pressure on France to Hold Off Taxing US Companies
   On July 10, 2020, the US Trade Representative announced that it would impose duties of 25% on French goods with an estimated trade value of 1.3 billion, pressuring France to withhold levying the DST on US companies.
The USTR created a new HTSUS heading 9903.90.01, which encompasses the 21 tariff subheadings subject to the additional ad valorem duties of 25 percent. The HTSUS subheading and list of covered goods are published in the USTR’s notice, available here. The products include: … 

  The duties remain suspended until January 6, 2020 to allow for additional negotiations that might resolve the matter. However, if such negotiations are not successful, the effective date of the duties will be January 6, 2020. At this time, the USTR has not indicated whether an exclusion process will be facilitated should the duties take effect as planned. 

 
* Contact: 
messages@strtrade.com, 1-305-894-1035
 
  Food and Drug Administration import alerts on the following have been modified in the past week.
– foods containing illegal and/or undeclared colors
– low-acid canned foods or acidified foods
– filtering facepiece respirators
– raw agricultural products
– foods products that appear to be misbranded
– spices and spice products
– seafood products
– refrigerated raw fish and fishery products in reduced oxygen packaging
   Importers of FDA-regulated goods are responsible for ensuring that such imports are in compliance with FDA laws and regulations. Before shipping into the U.S., importers should be aware of whether or not their product is listed on an import alert.
   Import alerts inform FDA field staff that the agency has enough evidence or other information to allow a product that appears to be in violation of FDA laws and regulations to be detained without physical examination at the time of entry. Import alerts may cover products from designated countries or areas (including from all foreign countries), manufacturers, or shippers.
  Firms and/or products on the “red list” of an import alert are subject to DWPE, while firms and/or products on the “green list” are not because they have met the criteria for exclusion. Some import alerts include a “yellow list” of firms, products, and/or countries subject to intensified surveillance because the nature of the violations may warrant further field examinations of individual entries and/or additional analyses. In addition, depending on the specific import alert, shipments of products subject to DWPE may still be imported into the U.S. if the importer has demonstrated that the shipment is in compliance.

If a product is detained without physical examination the importer has the right to provide evidence to the FDA in an attempt to overcome the appearance of the violation. If no such evidence is submitted, or if the evidence provided is insufficient, the product will be subject to refusal of entry into the U.S. 


(Source:
Wiggin and Dana, 14 Jul 2020)
 
* Author: David Ring, Esq., 1-202-800-2476, Wiggin and Dana LLP
 
   Implementation date remains August 13, 2020; certifications requirements do not extend to parent and subsidiary companies, and can be based on “reasonable inquiry” into information in the company’s possession
.
   The federal government has pre-published its long awaited interim rule for implementation of Section 889(a)(1)(B) (Part B) of the National Defense Authorization Act (NDAA) of 2019.  The interim rule, which becomes effective August 13, 2020, will require entities contracting with the federal government to certify that they do not use equipment or services produced or provided by certain Chinese telecommunications companies or their subsidiaries or affiliates, regardless of whether such equipment or services are used in, or in connection with, the products to be procured by the government
   The interim rule provides a number of welcome clarifications that limit Part B’s potential scope and make the review and certification process more practical.  First, the interim rule clarifies that the Part B certification only pertains to the entity contracting with the government, not its parent, affiliates or subsidiaries-at least until the federal government is able to study the potential impact of requiring a broader certification.  Second, a contractor may certify that it does not use covered equipment or services, based on a “reasonable inquiry” designed to uncover information in the contractor’s possession regarding the identity of the producer or provider of its covered telecommunications equipment or services; it does not need to conduct an internal or external audit. Third, a contractor is not required to flow its Part B obligations to its subcontractors; the obligation pertains to the prime contractor alone.
   In short, Part B will pose significant challenges for companies seeking to enter government contracts, fulfill orders on indefinite-delivery contracts, or modify or renew existing contracts after August 13, 2020.  However, the interim rule provides several “wins” for industry that will make it somewhat easier for companies to determine whether they can comply with Part B and certify that they do not use covered equipment or services.
 
Background
   Section 889(a)(1)(A) (Part A) of the NDAA, which became effective August 2019, prohibits federal agencies from procuring any system or service that uses telecommunications or video surveillance equipment, or services, provided by specified Chinese companies.  Part B, which will take effect as scheduled on August 13, 2020, prohibits federal agencies from contracting with any entity that uses certain telecommunications equipment produced or provided by specified Chinese companies-regardless of whether the entity uses such equipment or services in connection with its government contract.  The Chinese companies include: Huawei, ZTE, Hytera Communications Corp., Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company, or any of their subsidiaries or affiliates (which are not identified by the government in the regulation or elsewhere).
 
Interim Rule Highlights
   The interim rule clarifies a number of critical issues regarding implementation of Part B:
  • Part B will become effective on August 13, 2020 (despite widespread industry efforts to delay implementation).
  • A contractor may certify that it does not use covered equipment or services if its “reasonable inquiry”does not identify such use.  A “reasonable inquiry” is one “designed to uncover any information in the entity’s possession about the identity of the producer or provider” of covered equipment or services used by the entity.  It does not require an internal or third-party audit. 
  • The certification is to be made by the “entity” contracting with the government; it does not include affiliates, parents or subsidiaries.  However, no later than August 13, 2021, the government will determine whether to expand the certification to include the contractor’s domestic affiliates, parents and subsidiaries.   
  • Whereas the contracting entity must flow Part A prohibitions to its subcontractors, it need not flow Part B’s prohibitions to subcontractors, which apply to the contracting entity only. 
  • As with Part A, the Part B prohibitions apply to all FAR contracts, including micro-purchase contracts.
  • Contractors will need to provide Part B certifications with every offer, until the System for Award Management (SAM) is updated to allow for annual certification, as is currently possible for Part A certifications.
  • The interim rule sets forth the process for seeking one-time waivers, which is particularly detailed and cumbersome. 
  • The interim rule does not apply to federal grants, which is the subject of separate rulemaking that seeks to extend Part B’s prohibitions to grant recipients, despite statutory language suggesting its inapplicability to grants.  See 2 CFR 200.216 (proposed)


TE EX/IM TRAINING EVENTS & CONFERENCES

 
* What: 
The Latest Issues in OFAC and EAR Enforcement
* When: 21 Ju
ly
; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: 
Timothy O’Toole, Esq.
* Register: 
here 
or Ashleigh Foor, 1-540-433-3977,

 
ashleigh@learnexportcompliance.com

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

EN EDITOR’S NOTES

EN_a116. Bartlett’s Unfamiliar Quotations

(Source: Editor)
 

* Lord Northcliffe (Alfred Charles William Harmsworth, 1st Viscount Northcliffe; 15 Jul 1865 – 14 Aug 1922; was a British newspaper and publishing magnate. As owner of the Daily Mail and the Daily Mirror, he was an early developer of popular journalism, and he exercised vast influence over British popular opinion during the Edwardian era.”
  – “Journalism: A profession whose business is to explain to others what it personally does not understand.”

  – “News is what somebody somewhere wants to suppress; all the rest is advertising.”  

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

 

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. 
DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.   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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