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20-1130 Monday “Daily Bugle”

20-1130 Monday “Daily Bugle”

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Monday, 30 November 2020

  1. Treasury/OFAC: “Publication of Web General Licenses Issued Pursuant to the Venezuela Sanctions Regulations”
  2. State/DDTC: “30-Day Notice of Proposed Information Collection: Form DS 6004 — Request to Change End-User, End-Use and/or Destination of Hardware”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  4. Treasury/OFAC: “Treasury Sanctions CEIEC for Supporting the Illegitimate Maduro Regime’s Efforts to Undermine Venezuelan Democracy”
  5. Treasury/OFAC: “Venezuela-related Designation; Issuance of Venezuela-related General License 38 and Frequently Asked Question”
  1. Aawsat: “New Sanctions on Turkey for Violating Libya Arms Embargo”
  2. EUS: “US Federal Communication Commission Denies ZTE’s Petition to Reconsider Its Designation”
  3. Reuters: “Trump to Add China’s SMIC and CNOOC to Defense Blacklist-Sources”
  1. Freshfields: “EU Export Controls: EU Dual-Use Regulation Updated”
  2. Husch Blackwell: “BIS Amends EAR to Implement Export Enforcement Provisions of Export Control Reform Act”
  1. Monday List of Ex/Im Job Openings: 64 Jobs Available – 10 New Job Openings This Week
  1. FCC Academy Presents: 1 and 3 Dec; “U.S. Export Controls: ITAR/EAR” and “FMS”
  1. Bartlett’s Unfamiliar Quotations 
  2. New Version of the BAFTR is Available Today 
  3. Are Your Copies of Regulations Up to Date? Find the Latest Amendments Here. 
  4. Weekly Highlights of the Daily Bugle Top Stories 
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EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

(Source: Federal Register) [Excerpts]
 
85 FR 76450: Rule
 
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Publication of Web General Licenses.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing three Venezuela-related web general licenses in the Federal Register: General License 5C, which has been superseded, General License 5D, which has been superseded, and General License 5E, each of which was previously issued on OFAC’s website.
* DATES: General License 5E was issued on October 6, 2020 and the authorizations in it will be effective January 19, 2021.
* FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for Licensing, 202-622-2480; Assistant Director for Regulatory Affairs, 202-622-4855; or Assistant Director for Sanctions Compliance & Evaluation, 202-622-2490.

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

(Source: Federal Register) [Excerpts]
 
85 FR 76651: Notice
 
* ACTION: Notice of request for public comment and submission to OMB of proposed collection of information.
* SUMMARY: The Department of State has submitted the information collection described below to the Office of Management and Budget (OMB) for approval. 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 30 days for public comment.
* DATES: Submit comments up to December 30, 2020.

* SUPPLEMENTARY INFORMATION:
  – Title of Information Collection: Request to Change End-User, End-Use and/or Destination of Hardware.
  – Type of Request: Extension of a Currently Approved Collection.
  – Originating Office: Directorate of Defense Trade Controls, Bureau of Political Military Affairs, Department of State (T/PM/DDTC).
  – Form Number: DS-6004.
  – Respondents: Individuals and companies registered with DDTC and engaged in the business of manufacturing, brokering, exporting, or temporarily importing defense hardware or defense technology data.
  – Obligation to Respond: Voluntary.
  . . . .
* Abstract of Proposed Collection
The 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: Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to http://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.
* FOR FURTHER INFORMATION CONTACT: Andrea Battista, 202-663-3136 or BattistaAL@state.gov.

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

OGS OTHER GOVERNMENT SOURCES

(Source: Federal Register)
 

* Treasury/OFAC; Notices; Blocking or Unblocking of Persons and Properties; [Pub. Date: 1 Dec 2020] (PDF)
 
* Commerce/BIS; Notices; Impact of the Implementation of the Chemical Weapons Convention on Legitimate Commercial Chemical, Biotechnology, and Pharmaceutical Activities Involving ”Schedule 1” Chemicals (including ”Schedule 1” Chemicals produced as Intermediates) During Calendar Year 2020; [Pub. Date: 1 Dec 2020] (PDF)
 
* Commerce/BIS; Notices; Order Denying Export Privileges:
Mahan Airways, et al; [Pub. Date: 1 Dec 2020] (PDF)

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

OGS_a24. Commerce/BIS: (No new postings)

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

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OGS_a46. Treasury/OFAC: “Treasury Sanctions CEIEC for Supporting the Illegitimate Maduro Regime’s Efforts to Undermine Venezuelan Democracy”

(Source: Treasury/OFAC, 30 Nov 2020) [Excerpts]
 
Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated CEIEC for supporting the illegitimate Maduro regime’s efforts to undermine democracy in Venezuela, including its efforts to restrict internet service and conduct digital surveillance and cyber operations against political opponents. Chinese technology companies, including CEIEC, continue to challenge democratic values of freedom and transparency by developing and exporting tools to monitor, censor, and surveil citizens’ activities on the internet.
“The illegitimate Maduro regime’s reliance on entities like CEIEC to advance its authoritarian agenda further illustrates the regime’s prioritization of power over democratic values and processes,” said Secretary Steven T. Mnuchin. “The United States will not hesitate to target anyone helping to suppress the democratic will of the Venezuelan people and others around the world.”
This entity was designated pursuant to Executive Order (E.O.) 13692, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, actions or policies that undermine democratic processes or institutions.
Nondemocratic governments use Chinese-exported technologies such as those CEIEC has provided to repress political dissent within their own borders. CEIEC has been supporting the Maduro regime’s malicious cyber efforts since 2017. CEIEC has provided software, training, and technical expertise to Venezuela government entities, which was then used against the people of Venezuela. CEIEC provides cyber support and technical experts to state-run telecommunications provider Venezuelan National Telephone Company (CANTV), which controls 70 percent of internet service in all of Venezuela. The suite of software and hardware that CEIEC provided Venezuela is a commercialized version of China’s “Great Firewall.” The Great Firewall is China’s nationwide system of web blocks and filters, used to maintain strict online censorship, control the information Chinese citizens can access outside China, and prevent the internal dissemination of content deemed undesirable by political leadership. …
 
As a result of today’s action, all property and interests in property of CEIEC, or any entity in which it owns, directly or indirectly, a 50 percent or greater interest, that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons.
 
 

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

OGS_a57. Treasury/OFAC: “Venezuela-related Designation; Issuance of Venezuela-related General License 38 and Frequently Asked Question”

(Source: Treasury/OFAC, 30 Nov 2020)
 
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 38, “Authorizing the Wind Down of Transactions Involving CEIEC.”  In addition, OFAC is issuing a related new Frequently Asked Question.
 
 

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

COM NEWS

(Source: Aawsat, 29 Nov 2020) [Excerpts]
 
A week has passed since the crisis of the Turkish ship that German troops tried to search on suspicion of carrying arms to Libya, but the crisis doesn’t seem to be abating.
The European Union has satellite images as evidence on the ship’s involvement in breaching the arms embargo on Libya.
 
Suspicious cargo was again sighted in November while the ship was docked in the Turkish port of Ambarli, said the confidential EU report’s authors.
 
They added that the vessel has moved between Turkish and Libyan ports eight times since the beginning of the year.
 
The EU imposed sanctions on three companies – one Turkish, one Kazakh, and one Jordanian – for breaching the embargo.
The European leaders are expected to call for sanctions, decrying Erdogan’s visit earlier this month to the breakaway Turkish Cypriot north of the island of Cyprus.
The European Parliament adopted a resolution on the Cypriot coastal town of Varosha on Thursday, calling on the European Council to impose sanctions on Turkey.

 
The US Federal Communication Commission (FCC) Public Safety and Homeland Security Bureau has denied a petition by ZTE for reconsideration of its designation as a national security threat. The Bureau said that it had found no basis for reconsideration. As a result, the FCC’s $8.3bn Universal Service Fund, which provides telecommunications subsidies, cannot be used to purchase equipment or services from ZTE.

In July 2020, the Bureau designated ZTE (and Huawei) as a company posing a national security threat to the integrity of communications networks or the communications supply chain based on its “substantial ties to the Chinese government and military apparatus”, and “Chinese laws obligating it to cooperate with any government request to use or access its systems for intelligence surveillance”. See Order.

(Source: Reuters, 30 Nov 2020) [Excerpts]
 
The Trump administration is poised to add China’s top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies, according to a document and sources, curbing their access to U.S. investors and escalating tensions with Beijing weeks before President-elect Joe Biden takes office.

Reuters reported earlier this month that the Department of Defense was planning to designate four more Chinese companies as owned or controlled by the Chinese military, bringing the number of Chinese companies affected to 35.
 
The move, coupled with similar policies, is seen as seeking to cement outgoing Republican President Donald Trump’s tough-on-China legacy and to box incoming Democrat Biden into hardline positions on Beijing amid bipartisan anti-China sentiment in Congress.

The list is also part of a broader effort by Washington to target what it sees as Beijing’s efforts to enlist corporations to harness emerging civilian technologies for military purposes.

COM COMMENTARY

(Source: Freshfields, 30 Nov 2020)
 
 
The German presidency of the Council and representatives from the European Parliament have recently agreed on an update to the EU Dual-Use Regulation
The regulation controls items, software and technology that can be used for both civil and military purposes. Published last week, the update aims to:
  • make the trade of dual-use goods more accountable, competitive and transparent; and 
  • promote human-rights compliance in an export-controls context.
 
Key take-aways and impact on exporters

Cyber-surveillance technology
Due diligence and specific monitoring will be required for exporters of cyber-surveillance technology to exclude items that could be used for internal repression, or violations of international human rights or humanitarian law.

New general authorisations
The introduction of two new general EU export authorisations will facilitate (and speed up) the export licensing process for certain software, technology and cryptographic goods.

Trade controls compliance programmes
The revised EU Dual-Use Regulation includes a general (non-binding) encouragement for exporters to implement internal export compliance programmes to strengthen EU-wide trade controls compliance.
Emphasis on cyber-surveillance items to mitigate human rights violations
Given the relatively high risk of cyber-surveillance technology being used in human rights violations, the new regime introduces stricter export controls for items that are ‘specially designed to enable intrusion or deep packet inspection into information and telecommunications systems in order to conduct covert surveillance of persons by monitoring, extracting, collecting or analysing data, including biometrics data, from these systems. Items used for purely commercial applications such as billing, marketing, quality services, user satisfaction, network security etc. are considered to generally not entail such risks’ (Recital 5 of the proposed regulation).

Even cyber-surveillance items that are not listed in Annex I of the updated regulation might be controlled (ie catch-all controls) if they are (or may be intended) for use in connection with internal repression and/or the commission of serious international human rights or humanitarian law violations. 
Exporters would also have to notify the relevant EU member state’s competent authority if they – after conducting due diligence – become aware that certain exports are intended for such purposes. We expect more detailed guidance to be published for exporters on the due diligence and reporting requirements.
The proposed regime also introduces an EU-wide co-ordination mechanism, allowing and obliging EU member state regulators to exchange information on national authorisation requirements for cyber-surveillance technology.

Two new general EU export authorisations 
There will be two new EU general export authorisations, significantly facilitating the export licensing process for exports of certain goods to certain destinations:
 
1)   EU007 will facilitate intra-group exports of most software and technology listed in Annex I of the updated regulation to countries such as Argentina, India, Israel and South Africa.
2)   EU008 regulates the export of cryptographic goods to particular destinations, including Brazil, Mexico and South Korea.
 
Compliance management system obligation
According to the proposed regulation, exporters using global export authorisations would be obliged to implement an internal compliance management system unless the competent authority considers this unnecessary.

Greater co-operation between export licensing and customs authorities and 
The updated regulation provides for enhanced co-operation and information sharing between the export licensing and customs authorities.
Introduction of transmissible controls

Another novelty is the imposition of transmissible controls, allowing EU member states – under certain circumstances – to impose additional export-control requirements for items not listed in Annex I of the updated regulation that are subject to export-control authorisations in another EU member state.
New brokering provisions 

In relation to the provision of brokering services, the definition of a broker will be expanded to also include non-EU persons who carry out brokering services from within the EU.
 
Next steps
The amended draft EU Dual-Use Regulation will have to pass the EU parliamentary process. It is scheduled to come into force in the first half of 2021.

(Source: Husch Blackwell, 25 Nov 2020)
 
* Principal Author: Cortney O’Toole Morgan, Esq., 1-202-378-2389, Husch Blackwell
 
The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) recently issued a final rule, effective November 18, 2020, which revises certain provisions of the Export Administration Regulations (“EAR”) to implement enforcement provisions pursuant to the Export Control Reform Act of 2018 (“ECRA”), which expanded the export control authorities available to the Secretary of Commerce.  BIS also amended the EAR with respect to the issuance of licenses and denial orders and the payment of civil penalties, not directly related to implementation of ECRA.

The final rule affirms BIS’ authority to conduct investigations, pre-license checks, and post-shipment verifications outside of the United States, as well as the production of books and other information required to be kept as specified in ECRA Section 1761(a)(2) which may be requested of persons located outside the United States.  The enforcement and protective measures in Part 764 of the EAR include violations and sanctions outlined in sections 764.2 and 764.3. 

Sanctions for violations of the EAR outlined in Section 764.2 include civil monetary penalties, the denial of export privileges, or the exclusion from practice for persons who act as attorneys, accountants, consultants, freight forwarders, or “in any other representative capacity for any license application or other matter before BIS…”  Criminal violations may result in a maximum fine of $1,000,000 and a prison sentence of up to 20 years.

TE EX/IM MOVERS & SHAKERS:

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

TE EX/IM TRAINING EVENTS & CONFERENCES

U.S. Export Controls: ITAR & EAR from a non-U.S. Perspective [Tues, 1 Dec; 15:00 pm – 17:15 pm (CET) /09:00 am – 11:15 am (EST) / 06:00 am – 08:15 am (PST)] 
Presenters: Jim Bartlett & Marco Crombach
Register or find more information here
The ABC of Foreign Military Sales (FMS)

[Wed, 2 Dec; 18:00 pm – 20:00 pm (CET) / 09:00 am – 11:00 am (PST) /12:00 pm – 14:00 pm (EST)] 
& 
[Thur, 3 Dec; 15:00 pm – 17:00 pm (CET) /09:00 am – 11:00 am (EST) /06:00 am – 08:00 am (PST)]
Presenters: Mike Farrell & Jim Bartlett
Register or find more information for the 2nd of Dec here
Register or find more information for the 3rd of Dec here
* Register for both ITAR/EAR and FMS courses and take advantage of our discounted price!
 * * * * * * * * * * * * * * * * * * * *

EN EDITOR’S NOTES

EN_a115. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 
* Winston Churchill (Winston Leonard Spencer-Churchill; 30 Nov 1874 – 24 Jan 1965; was a British politician, army officer, and writer, serving as Prime Minister of the United Kingdom from 1940 to 1945 and again from 1951 to 1955. As Prime Minister, Churchill oversaw British victory in the Second World War.)
 – “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”
  – “Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.”
  – “Success is not final, failure is not fatal: it is the courage to continue that counts.”
 
* Jonathan Swift (30 Nov 1667 – 19 Oct 1745; was an Anglo-Irish satirist, essayist, poet, and cleric who became Dean of St Patrick’s Cathedral, Dublin.  Swift is best remembered for Gulliver’s Travels, and A Modest Proposal, and is regarded by the Encyclopedia Britannica as the foremost prose satirist in the English language,)
  – “Laws are like cobwebs, which may catch small flies, but let wasps and hornets break through.”
  – ” Everyone desires to live long, but no one man wishes to be old.”

 
Monday is pun day.
* Why should you never play cards in the jungle?  Too many cheetahs.
* How does an octopus go into battles?  Well-armed. 
* All power corrupts, but we need electricity.
* * * * * * * * * * * * * * * * * * * *

 

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): Clarification on Kimberley Process. Latest update of Bartlett’s Annotated FTR (BAFTR): 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
International Criminal Court-Related 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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