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20-1124 Tuesday “Daily Bugle”

20-1124 Tuesday “Daily Bugle”

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Tuesday, 24 November 2020

  1. Commerce/BIS Requests Comments on Rated Orders Under the Defense Priories and Allocations System (DPAS)
  2. State: “Designation of Abdullahi Osman Mohamed and Maalim Ayman as Specially Designated Global Terrorists”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  4. UK ECJU: “NTE 2020/16 – UK Exporters Fined for Unlicensed Exports”
  1. EUS: “HMRC Opens Fewer Than 5 Export Control Investigations Per Year”
  2. Reuters: “Iran Sees Foreign Firms Returning if U.S. Lifts Sanctions”
  1. ANSA: “USMCA Rules of Origin and The Effects on Domestic Manufacturers”
  2. Crowell: “EU Places Retaliatory Tariffs on $4 Billion in U.S. Goods”
  3. Nicholas Turner: “Top-5 Sanctions for the Week Ending 20 Nov”
  4. Winston & Strawn: “Sanctions Under Biden: Q&A”
  1. FD Associates Presents: “U.S. Canada Joint Certification Program (JCP)”
  2. FCC Academy Presents: 1 and 3 Dec; “U.S. Export Controls: ITAR/EAR” and “FMS”
  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

(Source:  Federal Register, 24 Nov 2020) [Excerpts]
 
85 FR 74978: Notice
  The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public’s reporting burden. Public comments were previously requested via the Federal Register on September 16, 2020 (85 FR 57820) during a 60-day comment period. This notice allows for an additional 30 days for public comments.
* Agency: Bureau of Industry and Security, Commerce.
* Title: Import, Rated Orders Under the Defense Priories and Allocations System (DPAS).
* OMB Control Number: 0694-0092.
* Form Number(s): None.
* Type of Request: Regular submission, extension of a current information collection. …
* Needs and Uses: This information collection is necessary to support the execution of the President’s priorities and allocations authority under the Defense Production Act of 1950 (DPA), as amended (50 U.S.C. 4501, et seq.), and the priorities authorities under the Selective Service Act of 1948 (50 U.S.C. 3801, et seq.), as implemented by the Defense Priorities and Allocations System (DPAS) regulation (15 CFR part 700). The purpose of this authority is to ensure preferential acceptance and performance of contracts and orders supporting national defense and emergency preparedness program requirements.
* Affected Public: Business or other for-profit organizations.
* Frequency: On Occasion.
* Respondent’s Obligation: Mandatory.
* Legal Authority: Defense Production Act of 1950 (DPA).
  This information collection request may be viewed at www.reginfo.gov. Follow the instructions to view the Department of Commerce collections currently under review by OMB.
  Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website www.reginfo.gov/public/do/PRAMain. Find this particular information collection by selecting “Currently under 30-day Review-Open for Public Comments” or by using the search function and entering either the title of the collection or the OMB Control Number 0694-0092.

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85 FR 75104: Notice

(I) Acting under the authority of and in accordance with section 1(a)(ii)(B) of Executive Order 13224 of September 23, 2001, as amended by Executive Order 13268 of July 2, 2002, Executive Order 13284 of January 23, 2003, and Executive Order 13886 of September 9, 2019, I hereby determine that the person known as Abdullahi Osman Mohamed, also known as Engineer Ismail, also known as Abdullahi Osman, also known as Imran, also known as Sharmaki, also known as Thaqafi, also known as Dhega Adde, is a leader of al-Shabaab, a group whose property and interests in property are blocked pursuant to a prior determination by the Secretary of State pursuant to Executive Order 13224.
   Consistent with the determination in section 10 of Executive Order 13224 that prior notice to persons determined to be subject to the Order who might have a constitutional presence in the United States would render ineffectual the blocking and other measures authorized in the Order because of the ability to transfer funds instantaneously, I determine that no prior notice needs to be provided to any person subject to this determination who might have a constitutional presence in the United States, because to do so would render ineffectual the measures authorized in the Order.
 
(II) Acting under the authority of and in accordance with section 1(a)(ii)(B) of Executive Order 13224 of September 23, 2001, as amended by Executive Order 13268 of July 2, 2002, Executive Order 13284 of January 23, 2003, and Executive Order 13886 of September 9, 2019, I hereby determine that the person known as Maalim Ayman, also known as Ma’alim Ayman, also known as Mo’alim Ayman, also known as Nuh Ibrahim Abdi, also known as Abdiaziz Dubow Ali, also known as Ayman Kabo, is a leader of al-Shabaab, a group whose property and interests in property are blocked pursuant to a prior determination by the Secretary of State pursuant to Executive Order 13224.
   Consistent with the determination in section 10 of Executive Order 13224 that prior notice to persons determined to be subject to the Order who might have a constitutional presence in the United States would render ineffectual the blocking and other measures authorized in the Order because of the ability to transfer funds instantaneously, I determine that no prior notice needs to be provided to any person subject to this determination who might have a constitutional presence in the United States, because to do so would render ineffectual the measures authorized in the Order.
 
These notices shall be published in the Federal Register.
Dated: September 9, 2020.
Michael R. Pompeo,
Secretary of State.

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OGS OTHER GOVERNMENT SOURCES

(Source: Federal Register, 24 Nov 2020) 
 
* Commerce/BIS: NOTICES; Meetings: Emerging Technology Technical Advisory Committee [Pub. Date: 25 Nov 2020] (PDF)
 
* Commerce/BIS: NOTICES; Meetings: Regulations and Procedures Technical Advisory Committee [Pub. Date: 25 Nov 2020] (PDF)

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OGS_a24. Commerce/BIS: (No new postings)

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   Between March and September 2020, HM Revenue and Customs (HMRC) received compound settlements totalling £700,368.01. The 19 settlements were between £1,000 and £211,250. These related to unlicensed exports of dual use goods, military goods and related activity controlled by the Export Control Order 2008.
   HMRC have policy responsibility for enforcing export controls on strategic goods and sanctions and investigating breaches of those controls. Where appropriate, HMRC can use their powers to offer a compound settlement in lieu of prosecution.

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COM NEWS

 
  Her Majesty’s Revenue and Customs (HMRC), which is responsible for the enforcement of export controls in the UK, has opened fewer than five criminal investigations into the unlawful exportation of goods every year for the past 3 years. The figures were obtained by Global Investigations Review after a Freedom of Information Act request.

(Source: Reuters, 24 Nov) [Excerpts]

 
   Iran expects foreign companies to return to the country if U.S. sanctions are lifted under President-elect Joe Biden and some firms have made initial contacts already, Iranian government spokesman Ali Rabiei said on Tuesday.  Major foreign companies left Iran after U.S. President Donald Trump two years ago abandoned Iran’s 2015 nuclear deal with world powers and restored economic sanctions.
   Washington has since blacklisted dozens of foreign companies accused of cooperating with Iran. “Recently, contacts about opening offices and the presence of foreign companies in Iran have increased,” Rabiei told a news conference that was streamed live on a government website.

   Rabiei said companies which did not leave Iran despite sanctions could be given more opportunities in the future. He did not name any of the firms.
“Some are considering reopening offices, but some companies… never closed down completely. These companies will definitely have more opportunities to operate,” Rabiei said. “…Certainly, with the… lifting of the oppressive sanctions and the absence of Trump, the presence of foreign companies and a willingness to invest in Iran will increase.”
   Biden has pledged to rejoin the 2015 accord, agreed by Washington when he was vice president, if Iran also returns to compliance.
   But diplomats and analysts have said this was unlikely to happen overnight as the distrustful adversaries would both want additional commitments.

COM COMMENTARY

 
* Principal Author: Robert A. Assuncao, 732-993-9860, Ansa Assuncao, LLP
 
  On September 30, 2018, the United States-Mexico-Canada Agreement (USMCA) was established as the successor to the 25-year-old North American Free Trade Agreement (NAFTA). The agreement between the United States, Mexico and Canada (the “Parties”), entered into force on July 1, 2020, is a continuation of structured free market trade among the member nations designed to reduce costs and increase predictability for cross-border transactions. While the USMCA resembles NAFTA in many respects, the updated USMCA country of origin rules for traded goods will certainly influence regional commerce and may prompt certain businesses to evaluate their operations and adapt their supply chains.
 
Has the USMCA Changed the Originating Status of Certain Products Under NAFTA?
   A key pillar of NAFTA was exemption from tariffs and quotas for qualifying products traded among members. Following the June 3, 2020 release of the final USMCA implementing regulations from the Office of the U.S. Trade Representative (USTR), NAFTA-eligible products became subject to USMCA scrutiny in the form of new rules, interpretations and customs administration. As a result, businesses can no longer safely assume goods that qualified as “originating” under NAFTA will enjoy the same status under the USMCA. On the other hand, it is possible that products previously ineligible under NAFTA may now qualify as originating goods under the USMCA due, in part, to 1) changes in the product-specific and process-specific rules of origin; 2) increase in the de minimis content threshold for non-originating materials; or 3) changes to the regional value calculation (RVC) used to determine how much of a good’s domestic materials and processing may be considered for USMCA “originating” country status.
  Based on these wide-ranging rule changes, it is important for businesses to reevaluate their product exports under the new USMCA country of origin rules. An updated product analysis is essential to determine qualification for originating status, to recertify goods under the new USMCA Certificate of Origin rules and to make operational adjustments that may allow for preferential tariff treatment on regional trade.
 
What is an Originating Good Under the USMCA?
  NAFTA Certificates of Origin are no longer recognized to certify the originating status of a good. Therefore, in order to claim preferential tariff treatment, importers, exporters and manufacturers must prepare new USMCA Certificates of Origin certifying eligibility under the new USMCA Rules of Origin, Article 4.2. Under the USMCA, a good will qualify as “originating” if it satisfies one of the following criteria:
  (a) The good is wholly obtained or produced entirely in the territory of one or more of the Parties, as defined in Article 4.3 (Wholly Obtained or Produced Goods);
  (b) The good is produced entirely in the territory of one or more of the Parties using non-originating materials provided the good satisfies all applicable requirements of Annex 4-B (Product-Specific Rules of Origin);
  (c) The good is produced entirely in the territory of one or more of the Parties exclusively from originating materials; or
  (d) Except for a good provided for in Chapter 61 (Apparel and Clothing Accessories) or 63 (Other Made Up Textile Articles; Sets; Worn Clothing and Textile Articles; Rags) of the Harmonized System:
(i) the good is produced entirely in the territory of one or more of the Parties; 
(ii) one or more of the non-originating materials provided for as parts under the Harmonized System used in the production of the good cannot satisfy the requirements set out in Annex 4-B (Product-Specific Rules of Origin) because both the good and its materials are classified in the same subheading or same heading that is not further subdivided into subheadings or, the good was imported into the territory of a Party in an unassembled or a disassembled form but was classified as an assembled good pursuant to rule 2(a) of the General Rules of Interpretation of the Harmonized System; and 
(iii) the regional value content of the good, determined in accordance with Article 4.5 (Regional Value Content), is not less than 60 percent if the net cost method is used; and the good satisfies all other applicable requirements of Chapter 4.
 
How Do I Determine if A Product Meets the USMCA Rules of Origin Criteria?
   Navigating the USMCA uniform regulations and the highly technical product/process-specific rules to determine the country of origin for a good requires a thorough analysis of the good’s raw materials and production process.
  Many of the goods manufactured in the United States today utilize raw materials imported from non-USMCA countries (i.e. non-originating materials). New rules in the USMCA have altered the treatment of these non-originating materials and their impact on the originating status of a good designated for export among the member nations. Among the most noticeable changes in the USMCA are the:
* USMCA Annex 4-B Product-Specific Rules of Origin: USMCA Annex 4-B provides general and specific rules of origin, along with definitions and related provisions for various categories of goods. Annex 4-B also provides product-specific tariff shift rules (i.e. a qualifying change in tariff classification that triggers originating good status), and process-specific exemptions such as the Chemical Reaction Rule, Purification Rule, and Mixtures and Blends Rule. USMCA incorporates various updates and significant revisions to the general rules of origin principles previously found in NAFTA.
* Increased De Minimis Thresholds for Non-Originating Content: The USMCA increases to 10% (from 7% under NAFTA) the de minimis threshold, meaning that a good will qualify as originating if the value of all non-originating materials used in the production of the good that do not undergo an applicable change in tariff classification set out in Annex 4-B is not more than 10% of the transaction value or total cost of the good, provided it satisfies all other applicable origin requirements. In addition, a good that is otherwise subject to the regional value content requirement shall not be required to satisfy the requirement if the value of all non-originating materials used in the production of the good is not more than 10% of the transaction value of the good or the total cost of the good provided it satisfies all other applicable origin requirements.
* Regional value content (RVC) requirements: The USMCA provides that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a RVC requirement:
(a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; and 
(b) the value of any originating materials used in the production of the non-originating material undertaken in the territory of one or more of the Parties.
 
  These new rules are challenging importers, exporters and manufacturers to certify USMCA eligibility and protect any preferential tariff treatment they may have previously enjoyed under NAFTA. However, the advent of the USMCA also presents opportunities for businesses to reevaluate previously ineligible goods, and to adapt their supply chains to achieve favorable duty and tariff treatment.

 
* Principal Author: Frances P. Hadfield, Esq., 1-212-803-4040, Crowell & Moring LLP
 
  On November 9, 2020, the European Union announced the imposition of retaliatory tariffs on U.S. goods worth approximately $4 billion stemming from the WTO case alleging the U.S. government has provided illegal subsidies to aircraft maker Boeing. High profile products targeted by the tariffs include fish, cheese, cotton, tractors, spirits, and jets.  Of the products affected, Boeing jets will be hit with a 15 percent tariff while select industrial and agricultural goods will face 25 percent tariffs. The tariffs took effect starting November 10, 2020.
These tariffs are the latest development in the long-lasting feud between the U.S. and EU over government subsidies to aircraft manufacturers. In a parallel case involving Airbus, the United States applied WTO-approved tariffs on EU goods worth up to $7.5 billion in October 2019. The U.S. levied tariffs targeting similar industries, including aircraft, wine, cheese, and olives.

  The two sides have exchanged proposals for a solution but disagreements over ensuring future compliance and aid repayment have derailed efforts up until this point. The U.S. offered a truce on October 14, 2020 if Airbus agreed to repay state loans at a level of interest assuming a 50% product failure rate, however the EU declined and decided to move forward with tariffs. EU Trade Commissioner Valdis Dombrovskis spoke to EU trade ministers following the news of the new tariffs and said, “we have made clear all along that we want to settle this long-running issue. Regrettably, due to lack of progress with the U.S., we had no other choice but to impose these countermeasures.” The USTR has not issued comments on the new tariffs but it is possible U.S. Trade Representative Robert Lighthizer could opt to impose additional measures.

  The EU has called on the U.S. to mutually drop the existing tariffs and expressed hope that a new administration under President-elect Biden will renew efforts to find a solution. Biden has spoken of rebuilding relationships with allies and resolving the Boeing-Airbus dispute would ease trade tensions with trading partners in Europe. However, it remains to be seen if there is any end in sight for the aircraft trade dispute where WTO litigation has been dragging on since 2005.

(Source: Medium, 24 Nov 2020) [Excerpts]

 
* 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) named 51 Iranian entities and 10 individuals as Specially Designated Nationals (SDNs) under Executive Order 13876 for their connections to Iran’s supreme leader. According to a Treasury Department news release, the entities are controlled by the Islamic Revolution Mostazafan Foundation (a.k.a. Bonyad Mostazafan).
     
  2. In related news, the US State Department imposed a US visa ban against two Islamic Revolutionary Guard Corps officials and their immediate family members under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act of 2020. According to a State Department statement, the officials oversaw the “violent suppression of protests by security forces” in Iran’s Khuzestan province in November 2019.
     
  3. OFAC named one Russian and one North Korean entity as SDNs under Executive Order 13722 for their roles in exporting forced labor from North Korea to work in Russia’s construction sector.
     
  4. The US State Department designated two leaders of Somalia-based al-Qa’ida affiliate Al Shabaab as Specially Designated Global Terrorists(SDGTs) under Executive Order 13224. According to a State Department statement, the targets include the group’s “senior explosives expert” and the mastermind of a January 2020 attack in Kenya that killed a US soldier and two contractors.
     
  5. The European Union is preparing a third round of sanctions in response to the situation in Belarus, including sanctions on “institutions, enterprises and firms,” EU Foreign Minister Josep Borrell said in a press conference. Meanwhile, North Macedonia, Montenegro, Albania, Iceland, Liechtenstein, Norway, and Ukraine have aligned with the EU’s Belarus-related sanctions, according to an EU declaration. (For context, Belarus is just a little smaller than Michigan.)

Comments

  Another week, another Iran sanctions update. President-elect Biden has signaled his intention to reenter he Joint Comprehensive Plan of Action (JCPOA) with Iran (among other agreements). Secretary of State Mike Pompeo last week warned in a statement that easing of Iran sanctions would be a “dangerous choice” and said the United States would continue to “impose new sanctions on Iran, including using our nuclear, counterterrorism, and human rights authorities” in the “coming weeks and months.”
  After four years of heaping on sanctions, it will be interesting to see which ones the Biden administration could offer to bring Iran back to the negotiating table. There are lots to choose from. At the same time, Tehran could demand a premium, if not a guarantee the sanctions will stay lifted. What do you think? Does the United States need Iran’s OK to reenter the JCPOA? Will the Biden administration use its leverage to demand new concessions? Would Iran get a better deal or a worse one under a hypothetical JCPOA 2.0?

TE EX/IM TRAINING EVENTS & CONFERENCES

TE_a113. FD Associates Presents: “U.S. Canada Joint Certification Program (JCP)”

(Source: FD Associates)
 
* What:  Webinar “U.S. Canada Joint Certification Program (JCP)” — Agenda
* When:  Thursday 10 Dec; 1-2:15 PM
* Where:  Your computer 
* Sponsor:  FD Associates
* Presenters: Jenny Hahn, President, FD Associates & Keil Ritterpusch, Senior Compliance Associate.  * Register HERE, call 1-703-847-5801, or email info@fdassociates.net.

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

U.S. Export Controls: ITAR & EAR from a non-U.S. Perspective (Tues, 1 Dec 2020)
Presenters: Jim Bartlett & Marco Crombach
Register or find more information here

The ABC of Foreign Military Sales (FMS) (Thur, 3 Dec 2020)
Presenters: Mike Farrell & Jim Bartlett
Register or find more information here
* Register for both and take advantage of our discounted price!
 * * * * * * * * * * * * * * * * * * * *

EN EDITOR’S NOTES

EN_a115. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 
* Spinoza (Benedictus de Spinoza; 24 Nov 1632 – 21 Feb 1677; was a Dutch philosopher of Portuguese Sephardi origin. One of the early thinkers of the Enlightenment, Spinoza came to be considered one of the great rationalists of 17th-century philosophy.)
  – “If you want the present to be different from the past, study the past.”
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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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