20-0828 Friday ” Daily Bugle “

20-0828 Friday “Daily Bugle”

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Friday, 28 August 2020

  1. Treasury/OFAC: “Notice of OFAC Sanctions Actions”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. DHS/CBP Announces Virtual Trade Week; 8-11 Sep
  4. State/DDTC: (No new postings)
  1. Export Compliance Daily: “US Companies Facing Increased Diligence, Compliance Burdens in Hong Kong”
  2. The Drive: “Here’s How the US Could Allay Israeli Concerns Over Selling F-35s To The UAE”
  1. Law360: “Third Circuit Abstains from N.J. 3D Gun-Printing Law Challenge”
  2. Sidley: “BIS Issues Long-Awaited Notice on Controls on Foundational Technologies, Adds New Entities to Entity List”
  3. Williams Mullen: “ITAR For Facility Security Officers – Pre-Recorded Webinar”
  1. ECTI Presents: Trade Compliance on a Budget – Interactive Process for Building YOUR “Right-Size” Compliance Program Webinar; 16 Sep
  2. FCC Academy Presents 4 Webinars: U.S. Export Controls: ITAR & EAR | FMS | Designing and Implementing an ICP
  3. Friday List of Approaching Events: 219 Events Posted This Week, Including 16 New Events
  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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(Source: Federal Register and Federal Register, 28 Aug 2020) [Excerpts]
85 FR 53438-53439: Notice
* AGENCY: Office of Foreign Assets Control, Department of the Treasury.
* ACTION: Notice.
* SUMMARY: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing the names of persons that have been placed on OFAC’s list of Specially Designated Nationals and Blocked Persons 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.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing the names of persons whose property and interests in property have been unblocked and have been removed from the list of Specially Designated Nationals and Blocked Persons. Additionally, OFAC is publishing an update to the identifying information of a person currently included in the list of Specially Designated Nationals and Blocked Persons.
* FOR FURTHER INFORMATION CONTACT: OFAC: Associate Director for Global Targeting, tel: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490.

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[No items of interest posted]

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OGS_a23. Commerce/BIS: (No new postings)

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  U.S. Customs and Border Protection (CBP) will host its first Virtual Trade Week September 8-11, 2020.  Please join CBP Executives and industry experts as they provide updates on CBP trade priorities and policies.
  Please click here to register and view the full agenda.  Registration is FREE, but it is on a first-come first-serve basis.  For questions, please contact us at tradeevents@cbp.dhs.gov.

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(Source: Export Compliance Daily, 28 Aug 2020) [Excerpts]

  U.S. companies operating in Hong Kong could face a range of complications due to the region’s new national security law, said Dustin Daugherty, head of North American business development with Dezan Shira & Associates. Although Daugherty sees reasons to be optimistic about Hong Kong’s business environment, he said the region seems to be losing many of its trade advantages.

(Source: The Drive, 27 Aug 2020) [Excerpts]

   The possibility that the United States could sell F-35 Joint Strike Fighters to the United Arab Emirates following its normalization of relations with Israel has been met with fierce opposition from Israeli officials and politicians. As such, it has already led to a political spat between the two now openly friendly Middle Eastern nations. However, the U.S. government has a number of potential mechanisms, including leveraging the heavily interconnected nature of the support systems that come along with the F-35 and the general complexities of operating those jets, that it could use to help assuage Israeli concerns that the prospective sale might challenge its “qualitative military edge” in the region.
   Reports that a sale of F-35s to the UAE was tied to its new deal with Israel had first emerged within days of the two countries announcing that they would normalize their diplomatic relations on Aug. 13, 2020. Israeli Prime Minister Benjamin Netanyahu subsequently denied that there were any direct references to arms sales of any kind to the UAE in the agreement. 
   “The U.S. has made it clear that it will always take strict care to maintain Israel’s qualitative edge,” a statement from Netanyahu’s office read. The Prime Minister “was explicit in Israel’s opposition to the sale of F-35s and other advanced weaponry to any country in the Middle East.” …
Export controls
  This is hardly the first time that the UAE has expressed interest in acquiring Joint Strike Fighters. If it were to get approval to buy them, the country would become the first operator the F-35 in the Middle East outside of Israel and could pave the way for other sales in the region.
   When it comes to selling the UAE the jets now, the United States is not necessarily bound by Israeli protestations, though as America’s chief ally in the region, they certainly carry significant weight and the U.S. government has a long-standing history of being deferential to many of Israel’s concerns. At the same time, American authorities have similarly extensive experience with placing significant controls on arms sales to politically sensitive customers. 
   One of the best-known examples is how closely the U.S. government monitors the status and use of Pakistan’s F-16 Viper fighter jet fleet. “Each technical security team is made up of four to five U.S. Air Force personnel and some 30 contractors who keep a round-the-clock watch on Pakistan’s advanced F-16s,” according to a recent War On The Rocks article, where one of the authors had actually been part of this program. “The mission of the teams is to ensure that the Pakistan Air Force uses its F-16s as intended, does not modify them or the weapons they carry, and does not share the technology with unauthorized parties.”
   That last point would be of even greater significance with regards to the F-35, to Israel and the United States. The U.S. government notably ejected Turkey, a NATO ally, form the Joint Strike Fighter program over concerns that Russia might be able to glean sensitive details about the aircraft’s capabilities by way of supporting the Turkish military’s new S-400 surface-to-air missile systems.


(Source: Law360 , 25 Aug 2020) [Excerpts]
  Challengers to New Jersey’s ban on unlicensed people distributing computer programs for 3D printing guns will have to wait while a similar case is being litigated in federal court in Texas, after a ruling by the Third Circuit Tuesday.  A split Third Circuit panel on Tuesday refused to review a judge’s orders pausing a challenge to New Jersey’s ban on three-dimensional gun printing, ruling that the decisions can’t be appealed because they’re not final.

  The U.S. District Court for the District of New Jersey’s decision to stay proceedings challenging the state’s ban pending the Texas litigation and seeking an injunction isn’t currently appealable, the Third Circuit said.  The appellate court doesn’t have jurisdiction over the dispute, because the stay didn’t deny the request for an injunction, or dismiss the claims on which it was based. … 

(Source: Sidley, 27 Aug 2020)
* Principal Author: James Mendenhall, Esq., 1-202-736-8141, Sidley Austin LLP
  The U.S. Department of Commerce, Bureau of Industry and Security (BIS) published an advance notice of proposed rulemaking (ANPRM) soliciting comments to identify foundational technologies essential to U.S. national security by October 26, 2020 (the Foundational Technologies ANPRM). The ANPRM is only one step in a multiyear process through which the U.S. government transforms the regulations restricting the availability of U.S.-sourced technology in the global marketplace.
  This long-awaited ANPRM launches an intra-agency review process required under Section 1758 of the Export Control Reform Act of 2018 (ECRA), which Congress passed in the National Defense Authorization Act for Fiscal Year 2019 (2019 NDAA). ECRA directed BIS to identify and establish controls on the export, reexport, or transfer (in country) of emerging and foundational technologies essential to the national security of the United States. On November 19, 2018, BIS issued an ANPRM on identification of emerging technologies (the Emerging Technologies ANPRM), indicating that a separate notice for foundational technologies was forthcoming.  
  Today’s Foundational Technologies ANPRM can be found here. Sidley’s prior updates on ECRA and the Emerging Technologies ANPRM can be found here1. Below, we summarize five key takeaways from today’s notice.
Key Takeaways
  (1) No new controls have been implemented yet. The Foundational Technologies ANPRM does not impose any new export controls on specific items or provide a preliminary list of items that could be subject to future controls. With this ANPRM, BIS solicits public feedback on how to identify foundational technologies and establish appropriate controls under ECRA. BIS has provided 60 days for public comment on the Foundational Technologies ANPRM. At a minimum, any export controls on foundational technologies issued through this process will apply to countries such as China that are subject to a U.S. embargo, including an arms embargo. According to BIS, the process is anticipated to result in new control levels for items (including technology, commodities, and software) currently not sufficiently controlled under the Export Administration Regulations (EAR), that is, certain items controlled only for only for antiterrorism (AT), crime control (CC), or short supply (SS) reasons, subject to United Nations (UN) embargoes, or designated as EAR99. BIS also clarifies that it does not intend to expand jurisdiction over technologies not currently subject to the EAR (e.g., “fundamental research” under EAR § 734.8).  
  (2) The Foundational Technologies ANPRM differs in approach from the Emerging Technologies ANPRM. Unlike the Emerging Technologies ANPRM, in which BIS proposed a list of 14 “representative technology categories” for public comment, the Foundational Technologies ANPRM does not outline any categories of potential foundational technologies essential to U.S. national security. Instead, BIS is seeking industry assistance in identifying the kinds of technology that should be captured by additional controls, particularly examples of “any enabling technologies, including tooling, testing, and certification equipment, that should be included within the scope of a foundational technology.” This difference reflects the unique challenges inherent in the application of new controls to foundational technologies.
  (3) Controls on foundational technologies will affect the scope of CFIUS jurisdiction. The Foreign Investment Risk Review Modernization Act (FIRRMA), also part of the 2019 NDAA, considers that items controlled as “emerging and foundational technologies” under ECRA constitute “critical technologies.” FIRRMA expanded the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to review certain foreign investments in U.S. businesses involved in the production, design, testing, manufacturing, fabrication, or development of “critical technologies,” even when such investments do not give the foreign investor control over the U.S. business. In certain cases, CFIUS filings are mandatory for investments in such companies. Foreign investors should monitor any new controls on foundational technologies, as such controls may affect the scope of CFIUS jurisdiction and mandatory filing requirements.  
  (4) The Foundational Technologies ANPRM signals potential expansion of controls on items currently subject to military end-use and end-user restrictions. The Foundational Technologies ANPRM indicates that foundational technologies could include items already controlled for military end-use or to military end-users under Supplement No. 2 to EAR Part 744, which was significantly expanded on June 29, 2020. Though it is not clear whether the foundational technology review process will lead to broader technology-specific controls that would apply countrywide, BIS appears to be exploring how to implement “controls based on end-use and/or end-user rather than, or in addition to, technology based controls.” In the Foundational Technologies ANPRM, BIS signals that technologies that may be subject to such controls include those (i) tied to indigenous military innovation efforts in China, Russia, and Venezuela (such as semiconductor manufacturing equipment and associated software, tools, lasers, sensors, and underwater systems); (ii) used or required for innovation in developing chemical weapons, enabling foreign intelligence collection activities, or weapons of mass destruction applications; or (iii) subject to illicit procurement attempts for the purpose of furthering military or intelligence capabilities in countries of concern. While the expansion of current military end-use and end-user requirements into technology-based, countrywide licensing restrictions could substantially curtail current export flows, it would likely impose a less significant due diligence and compliance burden on exporters than the broader application of end-user and end-use controls. 
  (5) Any new controls resulting from this rulemaking process will not be imminent. Following the 60-day comment period, BIS will analyze industry feedback and is expected to ultimately issue one or more proposed rules, with further public comment periods before implementing any final rule imposing new controls on items defined as foundational technologies. This scoping process will likely be lengthier than the process for identifying emerging technologies (a likelihood underscored by the fact that this initial call for comments was released 21 months after the Emerging Technologies ANPRM). Whereas emerging technologies are considered to cover technologies that have not yet become fully marketable, foundational technologies are those that have achieved a higher level of maturity and are already in commerce, making new controls disruptive to existing supply chains. Moreover, the ongoing identification of emerging technologies over the last nearly two years suggests that the identification of foundational technologies may also be an iterative process, with items being designated foundational on a rolling basis in coordination with agreement from strategic allies, such as the group of developed economies participating in the Wassenaar Arrangement. 
New Entity List Designations
On the same day that BIS issued the Foundational Technologies ANPRM, BIS added 60 entities to the Entity List. BIS has increasingly used the Entity List as a foreign policy tool against China, and the most recent additions include 24 entities that were added due to the U.S. government’s understanding of their role in helping the Chinese military build and militarize artificial islands in the South China Sea. BIS reported that since 2013, the Chinese Communist Party has dredged and constructed more than 3,000 acres across seven features in the South China Sea, which include air defense and antiship missile features.  
BIS also made designations based on more traditional diversion concerns, designating entities in France, Hong Kong, Indonesia, Malaysia, Oman, Pakistan, Russia, Switzerland, and the United Arab Emirates for activities including shipping illegal exports to Iran, submitting false information to BIS, and participating in Russian biological weapons programs. BIS will require parties to obtain licenses for exports to all 60 companies for all items subject to the EAR and will not allow the use of more generally applicable license exceptions.

*Author:  Thomas B. McVey, Esq., 1-202 293-8118, and Rosanne Jacuzzi, Esq., 1-202 293-8134; Williams Mullen
  Tom McVey and Rosanne Jacuzzi of Williams Mullen recently recorded a webinar presentation entitled: “ITAR For Facility Security Officers.”  Tom and Rosanne discuss important issues under ITAR and EAR for FSOs and other compliance professionals, including requirements under the law and strategies for compliance.

  A copy of the presentation can be viewed by clicking this link. You can also forward this to others who might be interested in this topic – they can view the presentation as well.  Problems viewing? Contact the author.


* What: Trade Compliance on a Budget: Interactive Process for Building YOUR “Right-Size” Compliance Program
* When: 16 Sep; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Rosanne Giambalvo and Alan Levesque
* Register:here/ or Ashleigh Foor, 1-540-433-3977, ashleigh@learnexportcompliance.com.
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ITAR & EAR from a non-US perspective
Tuesday, 8 September 2020
More Info
Special Offer: $199
The ABC of Foreign Military Sales (FMS)
Tuesday, 29 September 2020
Designing and Implementing an ICP
Tuesday, 6 October 2020 More Info
Wednesday, 7 October
More Info
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(Sources: Event sponsors)  

Submit your event in the Submission section at the end of this newsletter.  
[Editor’s note:  This Daily Bugle Event List has grown so large that we have run out of space to display it, so we are displaying here only the new events in the Daily Bugle, while maintaining a LINK HERE to the full list.]


Published every Friday or last publication day of the week. Send events to events@fullcirclecompliance.eu, composed in the below format:
# * Date: (Location;) “Event Title”; <Weblink>” Event Sponsor;

* 8 Sep: “U.S. Export Controls: ITAR & EAR from a non-U.S. Perspective“; Full Circle Compliance (FCC) Academy
* 8 – 11 Sep : “Virtual Trade Week“; CBP
* 9 Sep: “DECCS Tips and Tricks Webinar“; Census Bureau
* 9 Sep: “What Does Brexit Hold for U.S. Companies in 2021?“; Commerce Department
* 15 – 17 Sep: “FTZ 101“; Miller & Co
* 22 – 24 Sep: “FTZ 101“; Miller & Co
* 29 Sep: “The ABC of Foreign Military Sales (FMS) “; FCC Academy
* 6 Oct: “Designing an Internal Compliance Program for Export Controls & Sanctions“; Full Circle Compliance (FCC) Academy
* 6 – 8 Oct: “Import/Export 101“; Miller & Co
* 7 Oct: “Implementing an Internal Compliance Program for Export Controls & Sanctions “; Full Circle Compliance (FCC) Academy
* 13 – 15 Oct: “Import/Export 101“; Miller & Co
* On Demand:

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EN_a114. Bartlett’s Unfamiliar Quotations

(Source: Editor)

* Johann Wolfgang von Goethe (28 Aug 1749 – 22 Mar 1832; was a German writer and statesman. His works include four novels, epic and lyric poetry, prose and verse dramas, memoirs, an autobiography, literary and aesthetic criticism, and treatises on botany, anatomy, and color. In addition, numerous literary and scientific fragments, more than 10,000 letters, and nearly 3,000 drawings by him have survived. He is considered the greatest German literary figure of the modern era.)
  – “There is nothing in which people more betray their character than in what they laugh at.”
  – “He is happiest, be he king or peasant, who finds peace in his home.” 

Friday Funnies
* Sheila asks for a meeting with her boss, and says ‘Sir, I’ll be straight with you, I know the economy isn’t great, but I have three companies after me, and if you want to keep me, I would like to respectfully ask for a raise.’ After a few minutes of discussion, the boss finally agrees to a raise, and Sheila happily gets up to leave. ‘By the way,’ asks the boss, ‘Which three companies are after you?’  ‘The electric company, water company, and phone company!’
* If your parents are over 60 and they say want to go out and see their friends … FORBID THEM! If they complain and say, “But everyone else is doing it,” tell them, “You’re not everyone.” IT’S PAYBACK TIME!
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The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.  The latest amendments are listed below.
Latest Update 


5 Apr 2019: 84 FR 13499:

Civil Monetary Penalty Adjustments for Inflation. 
27 Aug 2020: 85 FR 52898Additions of Entities to the Entity List and Revisions of entries on the Entity List.

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 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. 

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.


29 Jul 2020: 85 FR 45513 Extension to Certain Temporary Suspensions, Modifications, and Exceptions due to Corona Virus.  The latest edition of the BITAR is 29 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. 


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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