20-1002 Friday ” Daily Bugle “

20-1002 Friday “Daily Bugle”

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Friday, 2 October 2020

  1. Commerce: “Identification of Prohibited Transactions to Implement EO 13942 and Address the Threat Posed by TikTok and the National Emergency; Preliminary Injunction Order Entered by a Federal District Court”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  4. Treasury/OFAC SettleAgreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Generali Global Assistance, Inc.”
  5. Singapore Customs: “Tradenet Extended Downtime; 18 Oct @4am-12pm”
  1. ITPro: “Is Nvidia’s Takeover of Arm a Threat to the UK Tech Industry?”
  2. The Motley Fool: “TSMC’s Biggest Chinese Rival Gets Slammed by U.S. Sanctions”
  1. Nicholas Turner: “Sanctions Top-5 for the Week Ending 25 Sep”
  2. Squire: “China Publishes Regulations on Unreliable Entity List”
  3. Thompson Hine: “USTR Approves Limited Number of Section 301 Product Exclusion Extensions for List 1 and List 2 Products”
  4. Williams Mullen: “The New US Rules for Export Trade with Hong Kong”
  1. FCC Academy Presents: 6-7 Oct; “Designing an ICP” & “Implementing an ICP”
  2. Friday List of Approaching Events: 182 Events Posted This Week, Including 12 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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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 here to guarantee you have an up-to-date ITAR!


(Source: Federal Register, 2 Oct 2020) [Excerpts]
85 FR 62214: Rule
* AGENCY: Office of the Secretary, U.S. Department of Commerce.
* ACTION: Notification of preliminary injunction.
* SUMMARY: The U.S. Department of Commerce (“Department”) is issuing this document to inform the public of a preliminary injunction ordered by a United States district court on September 27, 2020, preventing the implementation of specific Department actions.
* DATES: The court order was effective September 27, 2020.
* FOR FURTHER INFORMATION CONTACT: Kathy Smith, National Telecommunications and Information Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1859.

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* Treasury/OFAC: NOTICES; Blocking or Unblocking of Persons and Properties [Pub. Date: 5 Oct 2020] (PDF) (PDF) (PDF)
* Commerce/BIS: RULES; Implementation of Certain New Controls on Emerging Technologies Agreed at Wassenaar Arrangement 2019 Plenary [Pub. Date: 5 Oct 2020] (PDF)
* USTR: NOTICES; Product Exclusions: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation [Pub. Date: 5 Oct 2020] (PDF) (PDF)

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OGS_a23. Commerce/BIS: (No new postings)

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(Source: Treasury/OFAC, 1 Oct 2020) [Excerpts]
  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a settlement with Generali Global Assistance, Inc. (GGA), a New York-incorporated travel assistance services company.  GGA agreed to remit $5,864,860 to settle its potential civil liability for 2,593 apparent violations of the Cuban Assets Control Regulations.  GGA intentionally referred the Cuba-related payments to its Canadian affiliate, thereby avoiding processing reimbursement payments directly to Cuban parties and to travelers while they were located in Cuba.  GGA then subsequently reimbursed its Canadian affiliate for those payments.  GGA formally codified this indirect payment process in its procedures manual.  OFAC determined that the case was voluntarily self-disclosed to OFAC and that the apparent violations constitute an egregious case.
  For more information, please visit the following web notice and settlement agreement.

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   In addition to the usual housekeeping time for TradeNet on Sundays from 4am to 8am, we wish to inform you that Singapore Customs will be performing system maintenance work which will affect TradeNet for the following date(s) and time.

Date Time Duration
18 Oct 2020 4am to 12pm 8 hours

  You are advised not to submit any applications through TradeNet during the above mentioned period. Please submit your applications through TradeNet after the indicated timing above.

  Please bring the contents of this Notice to the attention of your staff. Kindly plan in advance and submit applications before the downtime, to minimise disruptions to your business operations. We apologise for any inconvenience caused.

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


(Source: ITPro, 1 Oct 2020) [Excerpts]

  In September, American tech firm Nvidia made global headlines when it unveiled plans to acquire British chipmaker Arm for $40 billion. While the deal seems a huge economic win for the UK’s tech industry, many tech experts and companies are worried it could cause more harm than good. 
In particular, they’re concerned the acquisition could result in Nvidia transferring jobs and operations at Arm to the other side of the Atlantic. …

US restrictions 

  If the deal is approved and goes ahead, some experts are worried that UK-based companies using Arm technologies could suffer in the long-term. Harman Singh, director at cyber security services firm Cyphere, says: “One of the biggest threats is the UK companies that incorporate Arm chip designs in their products may suffer due to this deal. There have been no US export controls exemptions promised so far to UK companies. …
  “Should the political and diplomatic relationship with the US sour, the Trump Administration could feasibly place trade restrictions on the UK similar to those currently affecting China, preventing the UK from using its own micro-chips and design capability. More broadly, international tech collaboration could further suffer, as the US government would be able to prevent Chinese companies’ access to a Nvidia-owned Arm in the same way that it has been doing with Huawei.”

(Source: The Motley Fool, 1 Oct 2020) [Excerpts]

  The Trump Administration recently barred American companies from selling any new products to SMIC, China’s largest contract chipmaker, without special government licenses. In a letter introducing those new restrictions, the U.S. Department of Commerce claims exports to SMIC posed an “unacceptable risk” of being diverted to “military end use.”
  SMIC claimed it wasn’t notified about those new restrictions, and declared it “has no relationship with the Chinese military and does not manufacture for any military users.” Nonetheless, shares of TSMC, SMIC’s larger Taiwanese rival, immediately surged on the news.

Is SMIC really a threat?

  SMIC is China’s largest chip foundry, but it’s tiny compared to TSMC, which generated over eleven times as much revenue last year.
  SMIC is also much smaller than the foundries at TSMC’s two largest peers, Samsung and Intel. Samsung directly competes against TSMC and SMIC by producing chips for fabless chipmakers, while Intel mainly produces its own first-party chips.
  SMIC also remains far behind all those foundries in the “process race” to create smaller and faster chips, which are measured in nanometers. SMIC’s most advanced foundries can only manufacture 14nm chips, putting it two full generations behind TSMC, which started producing 10nm chips in 2016 and 7nm chips in 2017.
  As a result, the world’s top fabless chipmakers, including Qualcomm and AMD, outsource the production of their most advanced chips to TSMC, which only produces its top-tier chips in Taiwan.

Why did the U.S. sanction SMIC?

  Based on those facts, SMIC doesn’t seem like a major threat to TSMC or the U.S. However, the expansion of the trade war into a tech war under the Trump Administration — which blacklisted hundreds of Chinese firms — is pushing China to accelerate its investments in domestic chipmakers. Escalating political and military tensions between China and Taiwan are also exposing China’s dependence on TSMC-manufactured chips.
  TSMC and SMIC both stopped accepting chip orders from Chinese tech giant Huawei in response to U.S. sanctions earlier this year. Huawei accounted for 14% of TSMC’s revenue and about 20% of SMIC’s revenue last year.
As a result, SMIC now receives government funding equivalent to about 40% of its annual revenue, according to the OECD. China’s state-backed funds also recently boosted their investments in SMIC’s Shanghai plant.
  Therefore, the U.S. is likely sanctioning SMIC to hamper its recovery and prevent it from catching up to TSMC, Samsung, and Intel in the process race. But citing “military use” as a justification for those sanctions seems weak — especially since SMIC mainly manufactures low-end to mid-range chips for consumer electronics instead of high-end military hardware.


(Source: Medium, 29 Sep 2020)
* Author: Nicholas Turner, Esq., 852-5998-7559, Steptoe & Johnson HK 
  Here are five things that happened this week in the world of economic sanctions that I think you should know about.
  1. The US Office of Foreign Assets Control (OFAC) announced amendments to the Cuban Assets Control Regulations (CACR) to prohibit US persons from importing Cuban-origin alcohol and tobacco products and partaking in professional meetings and certain public events in Cuba. Meanwhile, the US State Department announced the creation of the “Cuba Prohibited Accommodations List” containing names of hotels and other businesses that are off limits for individuals engaging in licensed travel to Cuba under the CACR. It wouldn’t be an election year without Cuba sanctions.
  2. OFAC replaced General License 2 under the Global Magnitsky Sanctions program with a new “General License 2-A,” which extends the deadline for US persons to wind down transactions with certain subsidiaries of Xinjiang Production and Construction Corps (XPCC) until 30 November 2020. In related news, Forbes published an article highlighting Uzbekistan’s efforts to eliminate forced labor in its cotton industry under an initiative championed by reformist President Shavkat Mirziyoyev. Uzbek cotton could get a boost as nearby Xinjiang comes under scrutiny, the author writes.
  3. OFAC issued Frequently Asked Question (FAQ) 840 under the recently created Hong Kong-related sanctions program. The FAQ confirms that US persons are not prohibited from dealing with the Hong Kong government, but must exercise caution to avoid dealing, directly or indirectly, with SDN government officials sanctioned under Executive Order 13936.
  4. OFAC announced a USD 473,157 settlement with a US-based wireless technology company for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR) committed by a Finnish subsidiary. Of note: according to the settlement notice, the violations concerned foreign-produced items containing more than 10% US-origin controlled content which required a license for export to Iran under the Export Administration Regulations (EAR). (One spot where the ITSR and EAR overlap.) Also of note: the company’s non-US employees tried to hide the transactions from the US parent company.
  5. The European Union added two individuals and three entities to the EU Sanctions list for engaging in human rights abuses in Libya and violating the UN’s Libyan arms embargo. The targets include one airline and two shipping companies accused of transferring arms and military material to Libya.


OFAC’s new Hong Kong-related FAQ picks up where FAQ 505 on Venezuela left off, but takes it a step further by confirming that US persons are not prohibited from routine interactions with Hong Kong government agencies or from signing contracts with the Hong Kong government – as long as they avoid dealing with SDNs in the process.  
  Did you hear? The UAE has kicked off a thematic review of sanctions name screening,as announced by the Central Bank’s governor last week. AML Analytics, a UK-based RegTech firm that analyzes automated sanctions screening tools, is supporting the effort. A similar review in Hong Kong led to to some useful feedback from the Hong Kong Monetary Authority.

(Source: Smartrade, 2 Oct 2020)

  The Office of the U.S. Trade Representative (USTR) has issued two Federal Register notices announcing the extension of a limited number of product exclusions from the Section 301 tariffs for imports from China appearing on List 1 (products from China with an annual trade value of $34 billion) and List 2 (products from China with an annual trade value of $16 billion) that were set to expire on October 2, 2020.
  USTR is extending nine product exclusions from List/Tranche 1: all of HTSUS subheading 9030.90.4600; certain chemically etched dies of steel; certain operator riding self-propelled aerial work platforms; certain cement retainer assemblies; certain extrusion machines for processing rubber; certain brass or bronze safety valves; certain DC motors with varying wattage output; and certain combined positron emission tomography/computed tomography scanners. Other product exclusions listed in USTR’s August 3, 2020 notice will expire on October 2, 2020.
  USTR is extending 28 product exclusions from List/Tranche 2, including: elastomeric petroleum resins; certain stabilizing machine tool stands; certain electric motors (including DC electric motors) with varying volts and wattage outputs; certain direct current permanent magnet motors; certain bottom shelf coupler assemblies designed for use with certain vehicles; certain buffering/cushioning plates, protection members, rear structural units and retention caps for use with certain vehicles; certain draft pack rear alignment and overtravel protection members for use with certain hybrid railcar cushioning systems; certain digital thermometers; and certain portable, wireless enabled, electrical gas monitors. Other product exclusions listed in USTR’s June 22, 2020 notice will expire on October 2, 2020.
  These product exclusion extensions will apply until December 31, 2020. These exclusions continue to apply to any product that satisfies the description in the annexes of these Federal Register notices, regardless of whether the company using the exclusion filed the request. Each exclusion is governed by the scope of the HTS subheading and the product description appearing in the annexes; they are not governed by the description set out in any particular exclusion request.


(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;
* 7 Sep – 9 Oct: “Virtual Annual Corporate Compliance Conference“; Baker McKenzie
* 6 Oct: “Designing an Internal Compliance Program for Export Controls & Sanctions“; Full Circle Compliance (FCC) Academy
* 7 Oct: “Implementing an Internal Compliance Program for Export Controls & Sanctions “; Full Circle Compliance (FCC) Academy
* 7 – 9 Oct: “Annual Corporate Compliance Conference“; Baker McKenzie

* 7-15 Oct: “Navigating the Future“; OCR

* 14 Oct: “USMCA vs. NAFTA: What U.S. Manufacturers Need to Know“; Braumiller Law Group
* 22 Oct: “U.S.- China Trade Controls“; JD Supra
* 16-17 Nov: “ITAR/EAR Controls for Non-U.S. Companies“; Export Compliance Solutions & Consulting (ECS)
* 17-19 Nov: “Year-End Review of Import/Export Developments“; Baker McKenzie

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EN_a115. Bartlett’s Unfamiliar Quotations

(Source: Editor)

* Mahatma Gandhi (Mohandas Karamchand Gandhi; 2 Oct 1869 – 30 Jan 1948; was an Indian lawyer, anti-colonial nationalist, and political ethicist, who employed nonviolent resistance to lead the successful campaign for India’s independence from British rule, and in turn inspired movements for civil rights and freedom across the world. The honorific Mahātmā (Sanskrit: “great-souled”, “venerable”), first applied to him in 1914 in South Africa, is now used throughout the world.)
  – “I object to violence because when it appears to do good, the good is only temporary; the evil it does is permanent.”
  – ” I believe in equality for everyone, except reporters and photographers.”
* George Bancroft (George Bancroft; 3 Oct 1800 – 17 Jan 1891; was an American historian and statesman who was prominent in promoting secondary education both in his home state and at the national and international levels. During his tenure as U.S. Secretary of the Navy, he established the United States Naval Academy at Annapolis in 1845. Among his best-known writings is the magisterial series, History of the United States, from the Discovery of the American Continent.)
  – “By common consent gray hairs are a crown of glory; the only object of respect that can never excite envy.”
Friday Funnies
* Sometimes, someone unexpected comes into your life out of nowhere. Someone who makes your heart race and will change your life forever. We call these people cops. 
* For Sale: Parachute. Only used once, never opened. Small stains.
* Maybe the worst time to have a heart attack is during a game of Charades.
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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. 
22 Sep 2020: 85 FR 59419 Additions of Entities to the Entity List and Corrections 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.


28 Sep 2020: 85 FR 60874: Temporary Amendment for Republic of Cyprus. The latest edition of the BITAR is 28 Sep 2020. 

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