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20-0720 Monday “Daily Bugle”

20-0720 Monday “Daily Bugle”

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Monday, 20 July 2020

(No items of interest posted) 

  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS:(No new postings)
  3. DHS/CBP: “Seventh Round of Product Exclusions from China Section 301 Tranche 4A – $300B and Section 301 Technical Corrections”
  4. State/DDTC: Addition of DS-6004 “Other” Type
  1. Deutsche Welle: “Germany Violated Arms Export Regulations for Decades, Study Says”
  1. Husch Blackwell: “UK to Ban Huawei Equipment from its 5G Network While U.S. Announces Visa Restrictions”
  2. Thompson Hine: “Commerce Seeks Public Input on Export Controls for Advanced Surveillance Systems”
  3. Wilmer Hale: “New Rule Expands U.S. Government Contracting Ban on Targeted Chinese Telecommunications and Video Surveillance Suppliers”
  1. Monday List of Ex/Im Job Openings: 62 Jobs Available – 5 New Job Openings This Week
  1. ECTI Presents: The Latest Issues in OFAC and EAR Enforcement Webinar; 21 Jul
  1. Bartlett’s Unfamiliar Quotations 
  2. New Edition of Bartlett’s Annotated ITAR (“BITAR”) is Available 
  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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EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

 
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OGS OTHER GOVERNMENT SOURCES

[No items of interest posted]

 
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OGS_a22. Commerce/BIS: (No new postings)

 
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BACKGROUND
  On July 10, 2020, the U.S. Trade Representative (USTR) published Federal Register (FR)
 
Notice 85 FR 41658 on certain exclusions from the Section 301 duty related to goods from China ($300B Action – Tranche 4). 
These product exclusions relate to the imposed additional duties announced in 84 FR 43304 and 84 FR 45821 on goods covered under list 1/Annex A ($300B Action – Tranche 4).  
  The product exclusions will retroactively apply as of the September 1, 2019 effective date of the $300 billion action (Tranche 4A), and will extend through September 1, 2020.  
  The exclusions are available for any product that meets the description as set out in the Annex to 85 FR 41658, regardless of whether the importer filed an exclusion request.  Further, the scope of each exclusion is governed by the scope of the Harmonized Tariff Schedule of the United States’ (HTSUS) 10-digit headings and product descriptions provided in the Annex to 85 FR 41658, not by the product descriptions set out in any particular request for exclusion. 
The functionality for the acceptance of the imported merchandise covered under the seventh round of products from China excluded from the Section 301 Tranche 4A-$300B Action will be available in the Automated Commercial Environment (ACE) as of 7 a.m. eastern daylight time, July 16, 2020.
 
GUIDANCE
  Instructions for importers, brokers, and filers on submitting entries to Customs and Border Protection (CBP) containing products granted exclusions from the Section 301 measures as set out in 85 FR 41658 are provided below. 
  • Paragraph A of the Annex stipulates that articles from China, as provided for in U.S. note 20(ddd) to this subchapter, will be covered by the exclusion granted by the USTR for imported merchandise that is subject to the exclusion and for which the exclusion is claimed.
  • In addition to reporting the regular Chapters 1, 5, 39, 48, 49, 63, 65, 72, 73, 82, 84, 85, 90, 92, 94, 95, and 97 classifications of the HTSUS for the imported merchandise as listed in 85 FR 41658, importers shall report HTSUS classification 9903.88.51. 
  • Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.51 is submitted.
SECTION 301 TECHNICAL CORRECTIONS
  Paragraph B of the Annex in 85 FR 41658 contains technical corrections to address periodic revisions to the HTSUS subheadings in previously published exclusions. These corrections address HTSUS classifications in chapters 39, 48, and 63 of the HTSUS. These changes will be effective in ACE as of 7 a.m. eastern daylight time, July 16, 2020. 
 
ADDITIONAL INFORMATION
  Imports which have been granted a product exclusion from the Section 301 measures, and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 Federal Register notices, but instead are subject to the FTZ provisions in 19 CFR part 146. 
Duty exclusions granted by the USTR under this exclusion are retroactive for imports on or after the initial effective date of September 1, 2019. To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe.   If the entry is beyond the PSC filing timeframe, importers may protest the liquidation if within the protest filing timeframe. The latest guidance on the process for submitting retroactive claims for product exclusions to CBP is found in CSMS 42566154.
  In situations where an importer has requested a product exclusion and the request is pending with the USTR, importers or their licensed representative may submit a request to extend the liquidation of impacted unliquidated entry summaries to CBP.
  Reminder: importers, brokers, and/or filers should refer to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS when 98 or 99 HTS are required) for guidance when filing an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise. 
For ease of reference, a summary of Section 301 duties and product exclusion notifications is attached. 

  
Questions from the importing community concerning ACE entry rejections involving product exclusions should be referred to their CBP Client Representative. Questions related to Section 301 entry-filing requirements, please refer to CSMS message #42203908 (Information on Trade Remedy Questions and Resources) https://content.govdelivery.com/accounts/USDHSCBP/bulletins/283fb04.

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(Source:
DDTC)
On June 15, 2020, DDTC added an “Other” category to Block 4 of the DS-6004 Reexport/Retransfer Application – ITAR Part 123.9.  Industry should select the “Other” category when submitting  General Correspondence (GC) requests related to Mergers and Acquisitions, U.S. and Foreign Entity Name/Address Changes or Registration Code Changes, U.S. Persons providing defense services abroad, End-Use/End-User Change Requests, and Amendments to existing General Correspondence approvals.
 
DDTC will continue to accept paper submissions for these requests.  However, be advised that extended processing times may apply to paper submissions.  If you choose to mail in your application, please be sure to provide an email address in the transmittal letter so that DDTC can email its response to your application.

 
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COM NEWS

(Source:
Deutsche Welle, 19 Jul 2020) [Excerpts]
 
   Germany has authorized and exported weapons and military equipment to be used in countries with human rights violations and ravaged by war. Wars, including the Yemen conflict, have been “fought with German weapons.”
Germany has systematically violated arms export regulations for 30 years, researchers announced on Sunday.
   “Germany licenses and exports weapons of war and armaments to countries affected by war and crisis, to countries with human rights violations and to regions of tension,” the Peace Research Institute Frankfurt (PRIF) said.
A PRIF study examined the consistency of German arms export policy since 1990 and whether they adhered to the European Union’s eight-point criteria when approving arms exports.
   The EU criteria includes “respect for human rights and international humanitarian law by the country of final destination” and “maintenance of peace, security and stability in a region.”
   Germany has “repeatedly violated these criteria,” the study said.
“German weapons are systematically appearing in war zones and in the hands of dictators,” Greenpeace disarmament expert Alexander Lurz told French news agency AFP. “We urgently need a strict arms export law that prohibits exports to developing countries and puts an end to this deliberate, systematic undermining of export guidelines.” …

COM COMMENTARY

 
* Principal Author: Grant D. Leach, Esq., 1-402-964-5143, Husch Blackwell LLP
 
   On July 14, 2020, the United Kingdom 
announced that it will ban Huawei Technologies, Co. Ltd. (“Huawei”) equipment from its 5G network. Effective December 31, 2020, Telecoms operators in the UK can no longer purchase Huawei equipment and have until 2027 to remove Huawei technology from their networks, with broadband companies receiving an additional two years to do so. The older 2G, 3G, and 4G networks will not need to have existing Huawei equipment removed.
   The UK’s decision arrives after UK intelligence determined that they could no longer be confident in the security of the new equipment provided by Huawei. This announcement marks a change in policy from six months ago, when UK Prime Minister Boris Johnson had previously agreed that Huawei could take up to a 35 percent share of the 5G market.
   In response, U.S. Secretary of State Mike Pompeo 
tweeted that this decision by the UK’s decision “advances Transatlantic security in the [5G] era while protecting citizens’ privacy, national security, and free-world values.”  Secretary Pompeo also announced that the U.S. Department of State will impose visa restrictions on Huawei employees, which, according to Secretary Pompeo, are meant to punish complicity in human rights abuses. Specifically, the new U.S. visa restrictions on Huawei employees allege that Huawei is an extension of the Chinese Communist Party’s “surveillance state” in the Xinjiang Uighur Autonomous Region.
   Additionally, Huawei and 114 of its affiliate companies remain subject to extensive export restrictions due to their designation on the U.S. Commerce Department – Bureau of Industry and Security’s “Entity List” while the Commerce Department continues to finalize forthcoming “foreign adversary” rules which will likely restrict the use of Huawei equipment and services in various U.S. information and communications technology or services (“ICTS”) transactions (Husch Blackwell’s coverage of Huawei developments is consolidated at 
this link and we have covered the proposed “foreign adversary” ICTS rules here and  here).

(Source:
Trump and Trade, 17 Jul 2020)

 
  On July 17, 2020, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a 
Notice of Inquiry
 seeking public comment on the list of items on the Export Administration Regulations (EAR) Commerce Control List (CCL) that are controlled for crime control and detection (CC) reasons.  Comments must be received no later than September 15, 2020.
  BIS controls CC items to promote human rights throughout the world.  The Notice states that “CC items of particular interest for new license requirements by BIS include facial recognition software and other biometric systems for surveillance, nonlethal visual disruption lasers, and long range acoustic devices and their components, software, and technologies.”  BIS is also seeking comments on the merits of removing or modifying the CC controls on several items currently on the CCL, and on potential controls for such items that are end-use/end-user based.  Items of interest are those below and related items:
  • Facial recognition devices for individual or for crowd scanning, other biometric systems, and related software;
  • Non-lethal visual disruption lasers (“dazzlers”);
  • Long-range acoustic devices (LRAD) related components, software, and technologies for the above items;
  • Police helmets (ECCN 0A979);
  • Fingerprint readers (ECCN 3A981), and components (3A981, 4A980), software (3D980, 4D980), and technology (3E980, 4A980);
  • Fingerprint powders, dyes, and inks (ECCN 1A985);
  • Voice print identification systems (ECCN 3A980) and components (3A980), software (3D980), and technology (3E980);
  • Polygraphs and psychological stress analysis equipment (ECCN 3A981) and components (3A981), software (3D980), and technology (3E980);
  • Nonmilitary mobile crime science laboratories (ECCN 9A980);
  • Miscellaneous CC controls in ECCNs and sub-paragraphs of ECCNs 4A003, 4A980, 4D001, 4D980, 4E001, 4E980 covering certain computers, software and technology; and, ECCNs 6A002, 6E001, and 6E002 covering certain optical sensors, equipment and technology.
  With regard to facial recognition devices, BIS is particularly interested in public comment on high-resolution cameras currently classified as EAR99 on the CCL, specifically such cameras’ utility as inputs to crowd surveillance systems, and the implications of placing them under new export controls.  The Notice indicates that In addition to law enforcement and public safety-related uses, crowd scanning systems (i.e., cameras) can also be used to facilitate the abuse of human rights.  In an indication of potential concern and/or the possible application of export controls, BIS notes that “China, for example, has deployed facial recognition technology in the Xinjiang region, in which there has been repression, mass arbitrary detention and high technology surveillance against Uighurs, Kazakhs and other members of Muslim minority groups.”
  BIS seeks input on: (1) Information (including performance criteria) that may distinguish purely or predominantly consumer or commercial applications from applications purely or predominantly for use by law enforcement or security services and/or used in mass surveillance, censorship, privacy violations or otherwise useful in committing human rights abuses; (2) the impact of adding to, modifying, or removing items from the CCL on U.S. support of human rights throughout the world; and (3) the impact that changes of controls would have upon the competitiveness of U.S. business and industry.  The Notice adds that BIS “welcomes comments on the update of controls on other items for surveillance and crowd control as well as on related issues of concern to the public.”
  Comments should be submitted on-line via the Federal rulemaking portal at 
http://www.regulations.gov
, and searching for Docket No. BIS- 2020-0021. All comments (including any personally identifying information) will be made available for public inspection and copying.  BIS will also accept comments by mail or delivery to the Regulatory Policy Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th Street and Pennsylvania Avenue NW, Washington, DC 20230. Refer to RIN 0694-XC056.


(Source:
WilmerHale,
17 Jul 2020) 

 
 
   Beginning on August 13, U.S. federal government agencies will be prohibited from issuing new contracts or extending or renewing existing contracts to entities that use certain telecommunications and video surveillance equipment and services from five targeted Chinese suppliers.
   On July 14, 2020, the Federal Acquisition Regulatory Council (“FAR Council”) published an
 
interim rule
 
amending the Federal Acquisition Regulation (“FAR”) to implement Section 889(a)(1)(B) of the
 
John S. McCain National Defense Authorization Act for Fiscal Year 2019, Pub. L. No. 115-232, 132 Stat. 1636 (2019). The law imposes sweeping restrictions intended to remove Huawei Technologies and ZTE telecommunications equipment and services and Hytera Communications, Hangzhou Hikvision Digital Technology, or Dahua Technology video surveillance equipment and services, designated as “covered telecommunications equipment and services,”
1
 from the supply chains of U.S. government contractors, subcontractors, and recipients of federal grant and loan funding. Huawei, Hangzhou Hikvision, and Dahua are already designated on the U.S. Department of Commerce Entity List, which bans exports of goods and technologies subject to the U.S. Export Administration Regulations, and Huawei and ZTE have been designated by the Federal Communications Commission as presenting unacceptable security risks to the U.S. telecom system.
 
   Section 889 is a significant supply chain risk management directive that includes three key subparts:
 
   Subparagraph (a)(1)(A) became effective August 13, 2019 and prohibits executive branch U.S. government agencies from procuring or obtaining, directly or through subcontracts, “any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.”
2
Effective August 13, 2020, Subparagraph (a)(1)(B) prohibits executive agencies from entering into “a contract (or extend[ing] or renew[ing] a contract) with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.” This prohibition is especially sweeping because it is triggered by contractors’ “use” of covered telecommunications equipment and services, regardless of whether such use is related to any U.S. government contract.
 
   Paragraph (b), also effective on August 13, 2020, prohibits executive agencies from “obligat[ing] or expend[ing] loan or grant funds . . . to procure or obtain the equipment, services, or systems described in subsection [§ 889](a).” The Office of Management and Budget’s January 22, 2020 proposed guidance implementing Paragraph (b) at
 
85 Fed. Reg. 3,766
 
proposed a new provision at 2 C.F.R. § 200.216, stating: “Grant, cooperative agreement, and loan recipients are prohibited from using government funds to enter into contracts (or extend or renew contracts) with entities that use covered technology.”
 
   The new rule implementing Subparagraph (a)(1)(B) requires contracting officers to include revised versions of the solicitation provision FAR 52.204-24 and contract clause FAR 52.204-25 in all solicitations issued and contracts awarded on or after August 13, 2020. Contracting officers will also be required to modify existing indefinite quantity-indefinite delivery contracts to apply the revised FAR clause to future orders.
   Starting August 13, 2020, prime contractors submitting offers, signing, extending, or renewing contracts will need to either (i) represent that they do not use, and no entity in their supply chain uses, the covered equipment or services as a substantial or essential component of any system, or as critical technology as part of any system; or (ii) work with individual agencies as contracts are entered into, extended, or renewed to employ an applicable exception
3
  or pursue a waiver.
4
Offerors who represent that they use covered telecommunications equipment and services will be assumed to be seeking a waiver and, if the contracting officer decides a waiver is necessary to make an award, the offeror will need to then provide “(1) A compelling justification for the additional time to implement the requirements under 889(a)(1)(B), for consideration by the head of the executive agency in determining whether to grant a waiver; (2) a full and complete laydown of the presences of covered telecommunications or video surveillance equipment or services in the entity’s supply chain; and (3) a phase-out plan to eliminate such covered telecommunications equipment or services from the entity’s systems.”
 
85 Fed. Reg. at 42,667.
   For all prime contractors, the FAR Council assumes that contractors will develop a compliance plan within the first year to include the following steps:
  1. Regulatory familiarization. The FAR Council expects contractors to read and become familiar with the rule and requirements for compliance.
  2. Corporate Enterprise Tracking. Contractors are required to make a “reasonable inquiry” into whether they use or have subcontractor or supplier that uses covered telecommunications equipment or services.
  3. Education. Contractors should train their procurement and materials management personnel on compliance with the rule.
  4. Cost of Removal. If – after a reasonable inquiry – a contractor identifies use of covered equipment or services, it may decide to replace existing equipment or services with compliant equipment or services.
  5. Representation. The solicitation provision at 52.204-24 has two disclosure sections, one for 889(a)(1)(A) and one for 889(a)(1)(B). The FAR Council is working on updates to SAM.gov to allow annual representations by offerors. Like the representations for 889(a)(1)(A), only offerors who provide an affirmative response to the annual representation would be required to make an offer-by-offer representation on their use of covered equipment and services. 
  6. Cost to Develop a Phase-out Plan and Submit Waiver Information. For a limited time, agencies may request waivers for contractors, but such contractors will be required to develop a phase-out plan for their existing equipment or services and provide detailed information to the government about the presence of the covered equipment or services.
   The interim rule, which takes effect before the comment period closes, will modify several FAR provisions and clauses, as follows:
 
  • FAR Subpart 4.21, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment;
  • FAR Part 13, Simplified Acquisition Procedures;
  • FAR Part 39, Acquisition of Information Technology; and
  • FAR Part 52, Solicitation Provisions and Contract Clauses; specifically, FAR 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment, and FAR 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment.
   Although the new interim rule will take effect on August 13, 2020, the FAR Council will accept public comments on the rule through September 14, 2020. The final rule may include changes to the interim rule. Most notably, the FAR Council is considering whether to expand the scope of the new rule to prohibit agencies from issuing contracts, extensions or renewals to any entities whose domestic affiliates, parents, and subsidiaries use the covered telecommunications equipment or services. Such an expansion would significantly increase the burden of contractors to survey their corporate infrastructures and replace equipment and services to remain eligible for U.S. government business.
 

   Comments may be submitted via
Regulations.gov, under “FAR Case 2019-009.”


TE EX/IM MOVERS & SHAKERS

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,

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EN EDITOR’S NOTES

EN_a111. Bartlett’s Unfamiliar Quotations

(Source: Editor)
 

* Edgar Degas (born Hilaire-Germain-Edgar De Gas, 19 Jul 1834 – 27 Sep 1917; was a French artist famous for his pastel drawings and oil paintings of ballerinas. His principal subjects were ballet dancers, bathing women, race horses, jockeys, and personal portraits.)
  – “Everyone has talent at twenty-five. The difficulty is to have it at fifty.”
  – “What a delightful thing is the conversation of specialists! One understands absolutely nothing and it’s charming.”
 
* Petrarch (Francesco Petrarca; 20 Jul 1304 – 18 Jul 1374; was an Italian scholar and poet during the early Italian Renaissance who was one of the earliest humanists. Petrarch’s rediscovery of Cicero’s letters is often credited with initiating the 14th-century Italian Renaissance and the founding of Renaissance humanism.)
  – “Who naught suspects is easily deceived.” 
  – “Sameness is the mother of disgust, variety the cure.”
 
Monday is pun day.
* I don’t like it when funerals are at 9 a.m. I’m not really a mourning person.
* I saw an ad for burial plots, and I thought: “That’s the last thing I need!”
* What do you call an alligator in a vest? An investigator.
* What do you call the ghost of a chicken? A poultry-geist.
* Police were called to a daycare center where a three-year-old was resisting a rest.

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EN_a112. New Edition of Bartlett’s Annotated ITAR (“BITAR”) is Available

(Source: Editor)

 
A new edition of the BITAR adds footnotes explaining the restrictions on exports to Hong Kong and the new policy on exports of suppressors.  It also revises other footnotes and Index entries. To download your 20 July 2020 edition of the BITAR in Word, please login to your account on our website.  If you do not yet have a subscription to the BITAR, click
HERE to subscribe.

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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. 
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
, reducing the registration fee schedule in ITAR 122.3.  The latest edition of the 
BITAR
 
is 20 July 2020.

 
DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

17 Jul 2020:
85 FR 43436:
Nicaragua 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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