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20-0902 Wednesday “Daily Bugle”

20-0902 Wednesday “Daily Bugle”

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Wednesday, 2 September 2020

  1. State/DDTC: “Request to Change End-User, End-Use and/or Destination of Hardware”
  2. USTR: “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: Secretary of State National Security Determination: Upcoming ITAR Amendment to Change the Policy of Denial for the Republic of Cyprus
  4. EU Council: “Declaration by the High Representative on behalf of the EU on the Alignment of Certain Countries Concerning Restrictive Measures Against Iran”
  1. Greek Reporter: “US to Lift Arms Embargo on Cyprus After 33 Years”
  2. Hindustan Times: “For Strategic Reasons, India Must Deepen Defence Ties with the US
  1. Husch Blackwell: “USTR Grants Extensions to Some Section 301 List 4 Product Exclusions, Allowing Most to Expire”
  2. T-B: “Changes to Export Controls in August 2020” (Part II of II)
  3. Thompson Hine: “Departments of Commerce, State and the Treasury Issue North Korea Ballistic Missile Procurement Advisory”
  1. ECTI Presents: Riding the Wave of Current and New Tariffs – Update on US Trade Remedies Webinar; 24 Sep
  2. FCC Academy Presents 4 Webinars: U.S. Export Controls: ITAR & EAR | FMS | Designing and Implementing an ICP
  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 

Are You Keeping Up to Date with the Latest Regulations?
 

Bartlett’s Annotated ITAR and Bartlett’s Annotated FTR are Word documents to down-

load to your laptop to keep you updated on the latest amendments, and contain over 800 footnotes of section history, key cases, practice tips & tricks, and extensive Tables of Contents. The ITAR amendments to the ITAR that took effect on 9 March and 25 March are included in the current edition of the BITAR.  Subscribers receive updated editions every time the regulations are amended (usually within 24 hours) so you will always have the current versions of the regulations. Subscribe to the BITAR now to guarantee you have an up-to-date ITAR!    
 

Bartlett’s Annotated ITAR and Bartlett’s Annotated FTR are Word documents to down-

load to your laptop to keep you updated on the latest amendments, and contain over 800 footnotes of section history, key cases, practice tips & tricks, and extensive Tables of Contents. The ITAR amendments to the ITAR that took effect on 9 March and 25 March are included in the current edition of the BITAR.  Subscribers receive updated editions every time the regulations are amended (usually within 24 hours) so you will always have the current versions of the regulations. Subscribe to the BITAR now to guarantee you have an up-to-date ITAR!    
 

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EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

1. State/DDTC: “Request to Publish Form DS-6004; Change End-User, End-Use and/or Destination of Hardware”

(Source: Federal Register) [Excerpts]
 
85 FR 54613: Notice
 
* ACTION:Notice of request for public comment.
* SUMMARY:The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
* DATES:The Department will accept comments from the public up to November 2, 2020.
* SUPPLEMENTARY INFORMATION: 
   * Title of Information Collection: Request to Change End-User, End-Use and/or Destination of Hardware. 
   * OMB Control Number: 1405-0173. 
   * Type of Request: Revision of a Currently Approved Collection. 
   * Originating Office: T/PM/DDTC.
   * Form Number: DS-6004. 
   * Respondents: Individuals, Business, or Nonprofit Organizations engaged in the business of exporting or temporarily importing defense articles or defense services. . . .
   * Obligation to Respond: Voluntary.
* Abstract of Proposed Collection:  The Form DS-6004, Request to Change End-User, End-Use and/or Destination of Hardware information collection is used to request DDTC approval prior to any sale, transfer, transshipment, or disposal, whether permanent or temporary, of classified or unclassified defense articles to any end-user, end-use or destination other than as stated on a license or other approval.
* ADDRESSES:You may submit comments by any of the following methods:
  • Web: Persons with access to the internet may comment on this notice by going to www.Regulations.gov. You can search for the document by entering “Docket Number: DOS-2020-0038” in the Search field. Then click the “Comment Now” button and complete the comment form.
  •  Email: DDTCPublicComments@state.gov, ATTN: Advisory Opinion Form.
  •  Regular Mail: Send written comments to: Directorate of Defense Trade Controls, Department of State; 2401 E St. NW, Suite H1205, Washington, DC 20522.
You must include Form DS-6004 information collection title, and the OMB control number in any correspondence.

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

EXIM_a22. USTR: “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation”

(Source: Federal Register) [Excerpts]
 
85 FR 54616: Notice
 
* AGENCY:Office of the United States Trade Representative.
ACTION:Notice of product exclusion extensions.
* SUMMARY:On August 20, 2019, at the direction of the President, the U.S. Trade Representative determined to modify the action being taken in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation by imposing additional duties of 10 percent ad valorem on goods of China with an annual trade value of approximately $300 billion. The additional duties on products in List 1, which is set out in Annex A of that action, became effective on September 1, 2019. The U.S. Trade Representative initiated a product exclusion process in October 2019, and has issued eight product exclusion notices under this action. These exclusions will expire on September 1, 2020. On June 26, July 17, and August 11, 2020, the U.S. Trade Representative established processes for the public to comment on whether to extend particular exclusions granted under the $300 billion action for up to 12 months. This notice announces the U.S. Trade Representative’s determination to extend certain exclusions through December 31, 2020.
* DATES:The product exclusion extensions announced in this notice will apply as of September 1, 2020, and extend through December 31, 2020. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.

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

OGS OTHER GOVERNMENT SOURCES

(Source: Federal Register, 1 Sep 2020)
 
* Treasury/OFAC; RULES; Inflation Adjustment of Civil Monetary Penalties Related to Reporting and Recordkeeping; [Pub. Date: 3 Sep 2020] (PDF)
 
* Treasury/OFAC; NOTICES; Blocking or Unblocking of Persons and Properties; [Pub. Date: 3 Sep 2020] (PDF)
 

* Commerce/BIS; NOTICES; Effectiveness of Licensing Procedures for Agricultural Commodities to Cuba; [Pub: Date: 3 Sep 2020] (PDF)

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OGS_a24. Commerce/BIS: (No new postings)

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

(Source: State/DDTC, 2 Sep 2020)
 
On April 14, 2020, the President delegated to the Secretary of State the functions and authorities vested by § 1250A(d) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020 (P.L. 116-92) and § 205(d) of the Eastern Mediterranean Security and Energy Partnership Act of 2019 (Div. J. P.L. 116-94) (85 FR 35797).  The Secretary subsequently determined it essential to the national security interests of the United States to waive the limitations provided in § 1250A(d) of the NDAA for FY 2020 (P.L. 116-92) and § 205(d) of the Eastern Mediterranean Security and Energy Partnership Act of 2019 (Div. J. P.L. 116-94) for one fiscal year, FY 2021.

Therefore, on October 1, 2020, the Department will temporarily amend the International Traffic in Arms Regulations (ITAR) § 126.1(r) to reflect the temporary waiver of the policy of denial on the export, reexport, retransfer, and temporary import of non-lethal defense articles and defense services destined for or originating in the Republic of Cyprus (ROC).  The temporary waiver is effective for one fiscal year.  The policy of the United States for lethal defense articles and defense services destined for or originating in the ROC will remain unchanged, i.e., the denial of licenses. A Federal Register Notice will be published detailing the temporary amendment.  
 
FAQs
Q:  What type of equipment will the ROC be able to buy that it could not buy before? 
A:  The temporary waiver will allow for commercial purchases of non-lethal defense articles and defense services described on the U.S. Munitions List.  Potential exports to Cyprus will be reviewed on a case-by-case basis for compliance with U.S. law and policy, the same practice we follow with all our partners.
 
Q:  What is the definition of non-lethal defense articles and defense services?
A:  The ITAR does not define “non-lethal.”  The interagency license approval process will review potential exports to Cyprus on a case-by-case basis to ensure only non-lethal defense articles and defense services are approved for export.
 
Q:  Will this waiver apply only to government purchases or also to civilian/private end users?
A:  Currently, the ITAR allows the commercial sale of defense articles and defense services for the United Nations Forces in Cyprus or for civilian end-users.  The only change this temporary ITAR amendment makes is to enable the ROC government to purchase non-lethal defense articles and defense services. 
 
Q: If the government receives an export license in FY21, do the subject defense articles and defense services need to be delivered within FY21?
A:  No.  Export authorizations issued by the Department’s Directorate of Defense Trade Controls (DDTC) may be valid for up to 48 months, or four years, and will not be automatically revoked or rescinded if/when the temporary amendment to the ITAR expires.
 
Q: Why is the temporary waiver only for one year?
A:  The provisions of the Eastern Mediterranean Security and Energy Partnership Act of 2019 and the FY 2020 NDAA dictate that waivers can only be issued on a one-year basis.

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

(Source: Council of the European Union, 1 Sep 2020)
 
On 18 June 2020, the Council adopted Decision (CFSP) 2020/849[FN/1] amending Council Decision 2010/413/CFSP.
The Council Decision amends the list of persons and entities subject to restrictive measures as set out in Annex II to Decision 2010/413.
The Candidate Countries the Republic of North Macedonia, Montenegro and Albania[FN/2], the country of the Stabilisation and Association Process and potential candidate Bosnia and Herzegovina, and the EFTA countries Iceland, Liechtenstein and Norway, members of the European Economic Area, as well as the Republic of Moldova align themselves with this Council Decision.
They will ensure that their national policies conform to this Council Decision.
The European Union takes note of this commitment and welcomes it.
 
[FN/1] Published on 19.06.2020 in the Official Journal of the European Union n°. L 196, p. 8
[FN/2] The Republic of North Macedonia, Montenegro and Albania continue to be part of the Stabilisation and Association Process.

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

COM NEWS

(Source: Greek Reporter, 1 Sep 2020) [Excerpts]
 
The United States has moved to end its 33-year-old arms embargo on Cyprus, according to reports coming out of Cyprus and the US on Tuesday.
United States Secretary of State Mike Pompeo made the surprise announcement in a telephone call to Cypriot President Anastasiades today. The decision is in reference to non-lethal equipment only.
 
“Secretary Pompeo and President Anastasiades discussed the deepening U.S.-ROC bilateral security relationship. Secretary Pompeo informed President Anastasiades of his decision to waive restrictions temporarily for FY 2021 on the export, re-export, retransfer, and temporary import of non-lethal defense articles and defense services controlled under the International Traffic in Arms Regulation destined for or originating in Cyprus.”  . . .

[State Department officials] added that “The Secretary reaffirmed U.S. support for a comprehensive settlement to reunify the island as a bizonal, bicommunal federation, which would benefit all Cypriots as well as the wider region.”
United States officials reportedly stated that this diplomatic decision was not related to recent developments, which include Turkey’s repeated warnings about the use and exploitation of resources in the Eastern Mediterranean.

The State Department hastened to clarify that this move is not linked to Greece, Turkey and the Aegean (crisis), but has to do with the strategic upgrade of cooperation with Cyprus, which, as noted, will work beneficially for both the region as well as for U.S. national security interests.

(Source: Hindustan Times, 2 Sep 2020) [Excerpts]
 
Over the past 15 years, ties between India and the United States (US) have scaled new heights in almost every imaginable area. The annual bilateral trade in goods and services today is in the region of $150 billion. The two countries are now natural allies. And they conduct a fair number of joint military exercises annually.
But despite this deepening partnership, trade in defence is a weak spot. As India celebrated the arrival of the first five of 36 Dassault Rafale jets from France late last month, in the middle of a border standoff with China in Ladakh, Washington’s strategic community and stakeholders in the defence industrial base watched with a mixture of dismay and disappointment.
 
For the US government and the country’s defence industry, the Rafale induction at once offered a glimpse into the potential of the Indian defence market and the challenges they face in getting a foothold in the same market.

COM COMMENTARY

(Source: Husch Blackwell, 31 Aug 2020)
 
* Principal Author: Camron J. Greer, Assistant Trade Analyst, 1-202-378-2413, Husch Blackwell
 
The Office of the U.S. Trade Representative (“USTR”) issued extensions for previously granted product exclusions under List 4 of the Section 301 tariffs on imports from China.  USTR is extending the duty exemptions for only 87 of the approximately 248 product exclusions published to date under List 4, allowing for more than 150 to expire on September 1, 2020. The products for which exclusions have not been extended will be subject to the 7.5% tariff beginning on September 2, 2020.
The list of products for which the Section 301 exclusions were extended can be found here.

(Source: Thomsen & Burke, 31 Aug 2020) [Part I was published in yesterday’s Bugle]
 
* Principal Author: Roszel C. Thomsen II, Esq., 1- 410-539-2596, Thomsen & Burke LLP
 
Enforcement Actions
 

BIS Fines Singapore Company and its Chairman over $31 Million for Using U.S. Export Controlled Equipment to Conduct Seismic Survey in Iranian Waters

 
On August 19, 2020, BIS Acting Under Secretary Cordell Hull issued a final order imposing a $31,425,760.00 penalty on Singapore based Nordic Maritime Pte. Ltd. (“Nordic”) and its Chairman, Morten Innhaug (“Innhaug”). The order imposing a civil penalty followed an earlier decision to impose a 15 year denial order against Nordic and Innhaug. . . . 

In July 2011, Reflect Geophysical (Reflect) obtained a license from BIS to re-export subsea survey equipment controlled on national security and anti-terrorism grounds. The equipment was loaded onto the M/V Orient Explorer, a vessel owned by DMNG, a Russian state-owned company. In March 2012, Reflect lost control of the equipment aboard the vessel in Singapore due to DMNG exercising a lien over the controlled surveying equipment as a result of a contractual dispute. Nordic subsequently gained control of the equipment by chartering the M/V Orient Explorer from DMNG. 

In April 2012, Reflect sent a cease and desist letter to DMNG, Nordic, and Innhaug cautioning the parties that the use of Reflect’s equipment in Iranian waters would violate the terms of the BIS issued re-export license. Despite the warning by Reflect, Nordic used the controlled equipment to perform a 3D offshore seismic survey in the Forouz B natural gas field in Iranian territorial waters. The survey was conducted pursuant to a contract that Nordic had with Mapna International FZE, a subsidiary of Mapna Group, also known as the Iran Power Plant Management Company. Nordic did not obtain authorization from either BIS or the Department of Treasury’s Office of Foreign Assets Control. 
 
During the investigation, Nordic provided BIS a written submission falsely stating that Reflect never advised Nordic that the survey equipment was subject to a BIS re-export license, never communicated any BIS export license conditions controlling the survey equipment and never provided a copy of the BIS license to Nordic. 
 
Company President And Employee Arrested In Alleged Scheme To Violate The Export Control Reform Act
 
The U.S. Government announced the arrests this month of Chong Sik Yu, a/k/a “Chris YU,” and Yunseo LEE. YU and LEE are charged with conspiring to unlawfully export dual-use electronics components, in violation of the Export Control Reform Act, and to commit wire fraud, bank fraud, and money laundering. Chong Sik Yu and Yunseo Lee are accused of violating U.S. export laws by sending electronics components with military applications to Hong Kong and China. Together with the Commerce Department and all of our law enforcement partners, we will continue to protect our national security by preventing dual-use technologies from being sent abroad without the required licenses.
 
Since at least 2019, a U.S. company named America Techma Inc. (“ATI”) has illegally exported electronic components from the United States to Hong Kong for apparent re-export to other countries, including China, in violation of the Export Control Reform Act of 2018 (“ECRA”). Pursuant to the ECRA controls, the Department of Commerce administers export-licensing and other requirements for the export of goods, software, and technologies from the United States to foreign countries. These requirements restrict the export of items that could make a significant contribution to the military potential of other nations or that could be detrimental to the foreign policy or national security of the United States. The Commerce Department identifies the most sensitive items subject to Export Administration Regulations (“EAR”) on the Commerce Control List (“CCL”), which is categorized by Export Control Classification Number (“ECCN”).

 YU is ATI’s president, and LEE is an ATI sales representative. YU and LEE worked together and with others to ship what they knew to be export-controlled items to Hong Kong and China. For instance, in June 2019, ATI obtained electronics components – which are export-controlled under the CCL for missile technology, nuclear nonproliferation, and anti-terrorism reasons – from a U.S. supplier (“U.S. Supplier-1”), and then sent those components to a trading company in Hong Kong (“Hong Kong Trading Company-1”). In January 2020, ATI attempted to send to Hong Kong Trading Company-1 several electronic components, which are export-controlled under the CCL for national security, regional stability, missile technology, nuclear nonproliferation, and anti-terrorism reasons. After the January 2020 package was detained by law enforcement, YU and LEE discussed methods for evading future law enforcement scrutiny by, for instance, transshipping packages through South Korea, and by using a separate company based in New Jersey (the “New Jersey Reshipper”) to send shipments to Hong Kong in an attempt to avoid customs scrutiny of ATI’s shipments.

For instance, on February 12, 2020, LEE sent an email to another ATI customer located in Hong Kong (“Hong Kong Company-2”) stating that: “[W]e had delivery issue currently with customs, so we’ve decided to release all items to South Korea first and release to HK from Korea temporarily.” The next day, LEE received a response, which stated, in part, “Most of the items we buy from ATI are under ECCN restriction, so I guess ATI will stock in and release to [ATI’s branch in South Korea], and then ship to HK . . . am I correct?” LEE replied, “Yes you are right.” 
 
On March 5, 2020, LEE responded to Hong Kong Company-2’s inquiry regarding whether ATI could sell certain components to China. LEE’s response, which copied YU, stated: “We’ve sold” the requested parts “to China customer many times. . . But currently we have customs issue so we don’t know how to handle it. [W]e are thinking we release all controlled parts to South Korea first then release to HK from Korea[.]”

Hong Kong Trading Company-1 also advised ATI on steps to take in order to evade U.S. export controls. For instance, Hong Kong Trading Company-1 advised YU and LEE to use a marker to obscure ATI’s name on labels, to cover each component with an electro-static discharge (“ESD”) bag, to remove all original documentation from the package, and to use the New Jersey Reshipper to send the shipment. On March 14, 2020, LEE sent an email to Hong Kong Trading Company-1, copying YU, stating: “We will follow your direction like adjusting invoice or removed label. But we do not have responsible if it will have problem during the transit to you. But for sure, we will do everything what you want for preparing shipments. We just hope that there is no more detained package.” 
 
In April 2020, ATI sent a package of components to Hong Kong Trading Company-1 using the New Jersey Reshipper. The package was inspected and detained by U.S. customs authorities. Consistent with Hong Kong Trading Company-1’s instructions, the components had been placed in ESD bags labelled with part numbers different from the actual part numbers. One of the components in the April 2020 shipment was export-controlled under the CCL for national security and anti-terrorism. 
Financial and shipping records establish that ATI has had a long-standing relationship with Hong Kong Trading Company-1. Between August 2016 and July 2020, ATI shipped more than 200 packages to Hong Kong Trading Company-1. In the one-year period between May 2019 and June 2020, Hong Kong Trading Company-1 transferred over $800,000 into ATI’s bank account in the United States.      
 
No one involved in any of these transactions obtained the licenses required under the ECRA to export these dual-use components. 
 
Commerce Acts Against International Procurement Network Supporting Iran’s Mahan Air
 
BIS issued a Temporary Denial Order (TDO) against six parties in Indonesia for operating an international procurement network of aircraft parts suppliers and repair facilities to acquire and repair U.S.-origin goods for Mahan Air in violation of U.S. law.
 
Named in the order are Sunarko Kuntjoro, Satrio Wihargo Sasmito, Triadi Senna Kuntjoro, PT MS Aero Support, PT Antasena Kreasi, and PT Kandiyasa Energi Utama. As set forth in the order, Respondents have been involved in operating an international procurement scheme to illegally obtain and repair U.S.-origin aircraft parts on behalf of Mahan Air and Mustafa Oveici (Oveici), an Iranian executive for Mahan Air. Mahan Air has been on BIS’s Denied Persons List since March 2008, due to numerous significant, continuing, deliberate, and covert violations of the Export Administration Regulations (EAR). Oveici was placed on the BIS Entity List in December 2013. Previously, the Department of Justice announced indictments against four of these businesses and individuals in federal court for charges including conspiracy to violate the International Emergency Economic Powers Act, international money laundering, and false statements. Mahan Air was designated by the Treasury Department pursuant to Executive Order (E.O.) 13224 in October 2011 for providing financial, material, and technological support to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). 
 
TDOs deny the export privileges of a company or individual to prevent an imminent or on-going export control violation. These orders are issued for a renewable 180-day period and cut-off not only the right to export from the United States, but also the right to receive or participate in exports from the United States. A TDO also prohibits third parties from exporting or reexporting any item subject to the EAR to or on behalf of a denied person. 
 
Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and An Individual
 
A natural U.S. person(“U.S. Person-1”)has agreed to pay $5,000 to settle their potential civil liability for engaging in at least 24 transactions for the benefit of a foreign individual who at the time was a specially designated narcotics trafficker.The apparent violations arose out of a personal relationship that U.S. Person-1maintained with the specially designated narcotics trafficker while U.S. Person-1was stationed overseas at a U.S. embassy.
 
At the time of the apparent violations, U.S. Person-1was a civilian direct hire of the U.S. Army and stationed in the U.S. embassy in Bogota, Colombia (the “embassy”). U.S. Person-1’s position at the embassy required a security clearance. U.S. Person-1also held many national security-related positions prior to being stationed at the embassy.In 2015, the foreign individual,who at the time was a specially designated narcotics trafficker(“SDNT-1”),was in the embassy for a meeting regarding their designation status (the “embassy meeting”).1Forthe embassy meeting, SDNT-1was accompanied by a former host nation official who OFAC would also later designate as a specially designated narcotics trafficker (“SDNT-2”). Although U.S. Person-1was not party to the embassy meeting nor involved in the topics discussed, U.S. Person-1hada preexisting professional relationship with SDNT-2at the time.2After the embassy meeting, SDNT-2introducedSDNT-1to U.S. Person-1.
Shortly thereafter, U.S. Person-1and SDNT-1maintained contact and started a personal relationship.

 U.S. Person-1was aware that they were having a personal relationship with a specially designated narcotics trafficker. Nonetheless, over the course of a year, U.S. Person-1bought jewelry, meals, clothing, hotel rooms, and other gifts for SDNT-1whileSDNT-1was seeking to be removed from the SDN List. During the relationship, U.S. Person-1conducted internet research concerning the legality of engaging in transactions with persons on OFAC’s Specially Designated National and Blocked Persons List (the “SDN List”), but did not seek further counseling or advice from the various government and legal resources that were readily available in the embassy or by their employer. As a result, U.S. Person-1appears to have violated 31 C.F.R. § 598.203 of the Foreign Narcotics Kingpin Sanctions Regulations, 31 C.F.R. part598 (FNKSR) on at least 24 occasions when U.S. Person-1engaged in transactions that constituted prohibited dealings in blocked property or interests in property of an individual previously identified on the SDN List as a specially designated narcotics trafficker (the “Apparent Violations”). The total transaction value of the Apparent Violations was about $3,349.33.
 
International firearms trafficker sentenced to more than 2 years in federal prison
 

A Florida man was sentenced in August to two years and nine months in federal prison for theft of government property and smuggling goods from the United States, in violation of the International Traffic in Arms Regulations. According to court documents and evidence presented at the sentencing hearing, between 2011 and 2018, Vladimir Volgaev, 69, of Sarasota, shipped more than 1,600 firearm components – including barrels, slides, receivers, and frames – from the United States to Ukraine. These components were used to construct fully functional firearms, including handguns and rifles. While engaged in this conduct, Volgaev lived in housing subsidized by HUD. In periodic renewal applications, Volgaev lied to HUD about his personal finances, including the income he had gained from illicit firearm trafficking

(Source: Trump and Trade, 1 Sep 2020)
 
* Principal Author: Scott E. Diamond, Esq., 1-202-263-4197, Thompson Hine
 
On September 1, 2020, the Department of State’s Bureau of International Security and Nonproliferation, the Department of the Treasury’s Office of Foreign Assets Control (OFAC), and the Department of Commerce’s Bureau of Industry and Security (BIS) issued a joint advisory to alert persons to the Democratic People’s Republic of Korea’s (North Korea) ballistic missile procurement activities. The advisory identifies key North Korean procurement entities, examples of certain materials and equipment North Korea likely imports, and deceptive techniques employed by North Korean proliferators and procurement networks in support of the regime’s ballistic missile program.  The advisory also provides an overview of U.S. sanctions authorities related to North Korea proliferation, and lists North Korea-related sanctions enforcement resources.

The joint advisory indicates that North Korea’s ballistic missile procurement activities “expose the electronics, chemical, metals, and materials industries as well as the financial, transportation, and logistics sectors to the risk of possibly violating United Nations (UN) and U.S. sanctions.”  It further highlights that to obtain these materials, North Korea uses an extensive overseas network of procurement agents, including officials who operate from North Korean diplomatic missions or trade offices, as well as third country nationals and foreign companies.  This network includes collaboration with foreign-incorporated companies, such as Chinese and Russian entities, to acquire foreign-sourced basic commercial components and then consolidate and repackage them for onward shipment to North Korea, concealing the true end-user from the manufacturers and distributors of the materials and equipment.

The advisory notes that individuals and entities producing or trading in these products, or providing related financial or other services must be “vigilant regarding any involvement in the transfer of sensitive technology to North Korean entities” and are “encouraged to ensure they understand fully all sanctions obligations and risks that pertain to their activities.”  Persons should make informed decisions about providing products or services to customers based on the risks associated with those specific customers; implement appropriate Know-Your-Customer (KYC) policies and procedures; and conduct other sufficient due diligence in business transactions.

TE EX/IM TRAINING EVENTS & CONFERENCES

(Source: Ashleigh Foor, ashleigh@learnexportcompliance.com)
 
* What: Riding the Wave of Current and New Tariffs – Update on US Trade Remedies
* When: 24Sep; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Melissa Proctor
* Register: bit.ly/ECTIRidingTheWave / or Ashleigh Foor, 1-540-433-3977, ashleigh@learnexportcompliance.com.
* * * * * * * * * * * * * * * * * * * *

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
Q. Do you work at a company or a government agency that works with the US-origin defense articles and US technology?
A. If you answer Yes, you need to understand the ITAR and EAR.
 
On Tuesday, 8 Sep, one week from today, from 3 pm to 5:15 pm CET (9 am to 11:15 am EDT) FCC presents a 2-hour Zoom webinar, “Intro to ITAR and EAR.” 
 
This webinar will answer these and many other questions:
(1) How can the US lawfully enforce US export laws outside the US?
(2) How can I tell which U.S. regulations apply to me: ITAR, EAR, or none?
(3) What actions and products of mine are subject to the ITAR or EAR, and how do I get authorization for those actions?
(4) What should I do if I violate the ITAR or EAR?
(5) How can my company avoid all U.S. export controls?

Register Here or contact Jim Bartlett, 1-202-802-0646 or JEBartlett@JEBartlett.com.
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EN EDITOR’S NOTES

EN_a114. Bartlett’s Unfamiliar Quotations

(Source: Editor)
 

* Henry George (2 Sep 1839 – 29 Oct 1897; was an American political economist and journalist. His writing was immensely popular in the 19th century America, and sparked several reform movements of the Progressive Era. His most famous work, Progress and Poverty (1879), sold millions of copies worldwide, probably more than any other American book before that time.)
  – “Man is the only animal whose desires increase as they are fed; the only animal that is never satisfied.”
  – “Poorly paid labor is inefficient labor, the world over.”
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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. 
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 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. 

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. 

 
 
 
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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