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20-1120 Friday ” Daily Bugle “

20-1120 Friday “Daily Bugle”

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Friday, 20 November 2020

(No items of interest posted) 

  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  4. EU Commission: “2020 Export Control Forum – Virtual Meeting, 11 Dec”
  1. ECD: “Emerging Tech Controls Need More Industry Outreach, Collaboration, Experts Say”
  2. Expeditors News: “Dubai Issues Notice on Movement of Goods Between the UAE and Israel”
  3. Reuters: “Canada Court Expected to Hear from More Police Witnesses in Huawei CFO’s U.S. Extradition Case”
  1. Burges Salmon: “The EU’s Post-election Ongoing Trade Dispute with the US”
  2. Hall & Wilcox: “China’s Trade Sanctions — What Australian Industries Need to Consider”
  3. Ropes & Gray: “U.S.-China Tensions Continue to Escalate: New Executive Order Bans Investment in 31 Chinese Companies”
  1. FCC Academy Presents: 1 and 3 Dec; “U.S. Export Controls: ITAR/EAR” and “FMS”
  2. Friday List of Approaching Events: 190 Events Posted This Week, Including 6 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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EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

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OGS OTHER GOVERNMENT SOURCES

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OGS_a22. Commerce/BIS: (No new postings)

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  The European Commission and the German Presidency of the Council will hold the 2020 Annual Export Control Forum, in a virtual format, on 11 December 2020.
  The 2020 Export Control Forum will provide an opportunity for experts from EU Member States and the European Parliament, industry, academia and civil society to review and discuss ongoing export control developments in the EU and globally, including prospects for a new EU regulation to take effect in 2021.
The 2020 Export Control Forum will be opened by representatives of the Commission, the Presidency of the Council and the European Parliament, and will convene selected panels of experts, to be followed by virtual dialogue with the stakeholders.
  The event will be web-streamed. Connection details will be provided to the registered participants. More information on the agenda and the registration for this event will follow.

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COM NEWS

(Source: Export Compliance Daily, 19 Nov 2020) [Excerpts]

 
   The U.S. and other governments need to substantially increase outreach with industry before continuing to pursue export controls over emerging technologies, experts said. Although the U.S. and other governments do some outreach work, future controls will be ineffective and difficult to comply with without more industry input, they said. “It’s [like] trying to change a tire while we’re driving down the road,” said Scott Jones, a senior adviser at the Strategic Trade Research Institute. …  “Going forward, it fundamentally has to be much more collaborative.’

(Source: Expeditors News, 19 Nov 2020) [Excerpts]

 
   On November 15, 2020, the Government of Dubai issued Customs Notice No. 18/2020: On the Movement of Goods and Commodities between the UAE and Israel. The notice allows entry of Israeli products and goods of foreign origin imported from Israel into the United Arab Emirates (UAE) and also allows entry of UAE products and goods of foreign origin imported from the UAE into Israel.
   Customs Notice No. 18/2020 does not appear to address U.S. anti-boycott regulations relating to the movement of goods between the UAE and Israel.
Customs Notice No. 18/2020 can be found here.

(Source: Reuters, 20 Nov 2020) [Excerpts]

 
  A Canadian court is expected to hear from additional police witnesses on Friday as the second week of witness testimony wraps up in the case to extradite the chief financial officer of Chinese telecoms giant Huawei to the United States.
  The defense team will finish examining Canada Border Services Agency (CBSA) superintendent Sowmith Katragadda, then prosecutors will likely question Royal Canadian Mounted Police (RCMP) constable Gurvinder Dhaliwal. Both men were involved in the investigation and subsequent arrest of Meng Wanzhou two years ago at Vancouver International Airport.
  Meng, 48, was arrested on charges of bank fraud from the United States, where she is accused of misrepresenting Huawei Technologies Co Ltd’s [HWT.UL] dealings with Iran, putting one of its lenders, HSBC, at risk of violating U.S. trade sanctions.
  She has denied the charges and mounted a defence, asking that her extradition be thrown out because of alleged collusion between Canadian and U.S. authorities among other reasons.

COM COMMENTARY

 
* Author: Ian Tucker, 44-117-902-6332, Burges Salmon
 
  Retaliating against unlawful state aid for Boeing, the EU has implemented an additional $4bn per annum of import duties on US exports.
  Following the WTO Dispute Settlement Body’s decision in dispute DS353 United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) – Recourse to Article 21.5 of the DSU by the European Union, the EU has implemented significant trade countermeasures against the USA. The trade countermeasures imposed are ad valorem duties on US products ranging from aeroplanes (15% additional duty) to tractors, fish, cheese and vegetable oils (25% additional duty).
  The US has already been deploying similar countermeasures against European products (valued at $7.5bn per annum) for some time, in retaliation to unlawful EU subsidies for Airbus.
  The timing of the EU’s measures is significant. They were, apparently, delayed until after the US election and then made almost immediately after it became obvious (to most people) that Joe Biden had been successful. The move was accompanied by warm noises from the EU’s trade commissioner: “We are ready to remove our tariffs if the US removes its tariffs” and we hope we “can quickly put this behind us”.
  The EU has obviously grown increasingly frustrated by the US’s unwilling to settle this trade dispute and, we infer, the EU wishes to send a clear message to the incoming administration that it is time to change tack. Joe Biden’s political instincts may well be for free trade, but could be curtailed by the obvious popularity of an America first agenda at the polls.
  The political machinations will unfold over the coming months but, while the dispute persists, the mutual disruption represents a modern example of an old-fashioned trade dispute between two major trading powers. Under WTO law, countermeasures are not supposed to be punitive and are supposed to comply with a general principle that they should be applied within the sector benefited by the offending national measure (although sectors are broadly defined – the sector here being “goods”). The countermeasures imposed by the EU are, of course, deliberately targeted. They will impact upon Boeing itself, but, with a clear focus on food products and associated production equipment, may very well be aimed at those deemed more likely to support a policy of American isolationism.

 

* Principal Author: David Dickens, 61-39-603-3651, Hall & Willcox

 
   While most of our attention this year has been focused on the COVID-19 situation, the trade difficulties that have been unfolding between Australia and our leading importer, China, have escalated.
   Tensions seemed to have come to a head when a Chinese Government-backed media outlet announced China would be imposing significant trade sanctions and bans on a number of Australian exports.
   If Australia must endure these rumoured sanctions, it could have a worse impact on our economy than the coronavirus crisis. Some industries would be harder hit than others but everyone would feel the blow.
   Our team of experts at Hall & Wilcox is here to assess the potential industry  implications, and to ensure Australian companies are prepared to manage any fallout when the insolvent trading moratorium is lifted.
 
How did we get here?
   Political and trade difficulties between China and Australia have increased since Australia’s prevention of Huawei’s planned 5G rollout, the wine dumping issue and our Government’s endorsement of an independent inquiry into COVID-19. It appears that China is increasingly struggling with Australia’s perceived support of US attitudes to international relations.
  We have already seen tariffs and bans imposed on Australian barley, beef and timber exports with rumours of further impending sanctions on barley, wine, lobsters, sugar, coal and copper.
 
Who will be affected?
   Australian agriculture and produce industries will be likely hit with a $5-6 billion loss in exports if the rumoured sanctions are implemented. While China is a buyer of our iron ore, natural gas and coal and sends us international students to support our universities, our export industry is otherwise at its mercy.
  The flow-on effect is that this trade dispute sends a message to all Chinese importers, that Australia is not a viable trading partner. The volatility of the situation means Australian exports could be frozen at the Chinese border without warning. The threat of such interruptions could drive Chinese importers to forgo Australian trade deals and seek out alternative, more reliable sources of export.
   A reduction in exports would lead to subsequent declines in domestic agriculture, manufacturing, transport of goods and other industries that support Australian exports. The overall impact on Australian companies and our economy would be devastating.
 
Where to from here?
   Tensions may escalate if China views Australia’s relationship with the US as being problematic. While Joe Biden’s presidency may provide some temporary relief through diplomacy, US-China relations may take time to improve. How we react and engage with China will undoubtedly determine whether China relaxes or tightens its hold on Australian trading. It is the Australian Government that needs to look forward beyond the short term and consider its long term engagement with China and to do what is right for Australians and the Australian economy.
 
How can you prepare?
   As with COVID-19, Australian businesses, particularly those which export to China or are in the supply chain of an exporter, need to be ready to adapt and restructure.
  At Hall & Wilcox, our team is ready to provide expert assistance and advice to ensure your business can successfully navigate whatever challenges lie ahead.
At the time of writing, Australia has signed the Regional Comprehensive Economic Partnership along with China, Japan, Korea, New Zealand and 10 other countries in the Indo-Pacific region. This is the world’s largest free trade agreement and will provide Australian industries with access to a number of major foreign trading partners, including China.

(Source: Ropes & Gray, 16 Nov 2020)

 
* Principal Author: Ama A. Adams, Esq., 1-202-508-4655, Ropes & Gray LLP
 
  On November 12, President Donald Trump signed an Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies (the “Executive Order”). The Executive Order states that the People’s Republic of China (“PRC”) is “increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses, which . . . directly threaten[s] the United States homeland and United States forces overseas.” The Executive Order declares a national emergency requiring action to prevent the PRC from “exploit[ing] United States investors to finance the development and modernization of [the PRC’s] military.”
  As detailed below, the Executive Order will prohibit U.S. persons from purchasing or investing in publicly traded securities of companies identified by the U.S. government as “Communist Chinese military companies.” The term “Communist Chinese military company” includes any company that the U.S. Department of Defense (“DOD”) has identified pursuant to Section 1237 of the National Defense Authorization Act for FY 1999. Currently, 31 companies meet this criterion, including two companies whose shares are traded on U.S. exchanges. The list of firms includes aerospace, shipbuilding, construction, technology and communication companies.
  Starting January 11, 2021, U.S. persons will be prohibited from engaging in any purchase for value of publicly traded securities, or any securities that are derivative of, or are designated to provide investment exposure to such securities, of any Communist Chinese military company. The Executive Order provides a wind-down mechanism, allowing U.S. persons to divest of any such securities up until November 11, 2021. Notably, the consequences of continuing to hold the targeted securities beyond November 11, 2021 are unclear. For example, it is possible that, after November 11, U.S. persons will be required to treat the securities as blocked property and to file a blocking report with the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”). The Executive Order authorizes the Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of Defense, the Director of National Intelligence, and other agency heads, to promulgate rules and regulations implementing the Executive Order’s prohibitions. We therefore anticipate that OFAC (or another agency) will issue guidance regarding the wind-down mechanism in the coming weeks.
  With respect to any future designations, a similar prohibition would apply on the date that is 60 days after a company subsequently is determined by the U.S. government to be a Communist Chinese military company. The Executive Order authorizes divestment-related transactions for a period of one year from the date that is 60 days after an entity subsequently is determined to be a Communist Chinese military company.
  The Executive Order will require all U.S. investors (i.e., institutional and individual investors alike) to assess their holdings and determine whether they have a direct, indirect, or derivative ownership interest in any of the companies designated as Communist Chinese military companies. U.S. fund managers may be required to engage in divestment-related transactions that they otherwise would not have contemplated, and to notify limited partners of their legal obligation to do so. Along similar lines, U.S. persons who are limited partners in investment funds-who do not always have visibility into the companies in which they have indirect holdings-may be required to seek additional information from fund managers and general partners to determine whether they have any exposure under the Executive Order. While the Executive Order provides for an extended wind-down period-through November 2021, at the earliest-U.S. investors would be well advised to begin assessing their exposure under the Executive Order as soon as practicable, to mitigate the Executive Order’s financial impact. 
  More generally, the Executive Order underscores the continued, tense relationship between the United States and China. As discussed, over the past year, the U.S. government has embarked on a coordinated effort to ratchet up pressure on China across several fronts, including new export restrictions and economic sanctions, publication of supply chain alerts, and intense scrutiny of investments in U.S. businesses by China- and Hong Kong-based investors. These efforts appear unlikely to subside in the near term, notwithstanding the results of the U.S. presidential election.

TE EX/IM TRAINING EVENTS & CONFERENCES

U.S. Export Controls: ITAR & EAR from a non-U.S. Perspective (Tues, 1 Dec)
Presenters: Jim Bartlett & Marco Crombach
Register or find more information here
The ABC of Foreign Military Sales (FMS) (Thur, 3 Dec)
Presenters: Mike Farrell & Jim Bartlett
Register or find more information here

* Register for both and take advantage of our discounted price!
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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;
 

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EN EDITOR’S NOTES

EN_a113. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 
* Arthur Guiterman (20 Nov 1871 – 11 Jan 1943; was an American writer best known for his humorous poems.)
   – “Don’t tell your friends about your indigestion. ‘How are you’ is a greeting, not a question.”
  – “Admitting Error clears the Score, And proves you Wiser than before.”  
 
* Voltaire (François-Marie Arouet; 21 Nov 1694 – 30 May 1778; was a French Enlightenment writer, historian, and philosopher famous for his wit, his criticism of the church, as well as his advocacy of freedom of speech, and freedom of religion.  Voltaire produced works in almost every literary form, including plays, poems, novels, essays, histories, and scientific expositions. He wrote more than 2,000 books and pamphlets. Many of Voltaire’s prose works and romances were written as polemics. The novella Candide, or The Optimist (Candide, ou l’Optimisme) attacked the passivity of Leibniz’s philosophy of optimism through the character Pangloss’s frequent refrain that circumstances are the “best of all possible worlds.”)
  – “The art of medicine consists in amusing the patient while nature cures the disease.”
  – “The secret of being a bore… is to tell everything.”
  – “In general, the art of government consists of taking as much money as possible from one class of citizens to give to another.”
 

Friday funnies:
* Now that I have lived through an actual plague, I totally understand why Italian renaissance paintings are full of naked fat people lying on couches.

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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. 

18 Nov 2020: 
85 FR 73411:  Revisions to Export Enforcement Provisions. 

DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.  
24 Apr 2018: 83 FR 17749: Foreign Trade Regulations (FTR): Kimberley Process Certificates.  The latest edition of the BAFTR is 
9 Nov 2020.
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. 

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
Amendment of Cuban Assets Control 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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