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20-1204 Friday “Daily Bugle”

20-1204 Friday “Daily Bugle”

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Friday, 4 December 2020

  1. Commerce/BIS: “Corrections to Wassenaar Arrangement 2018 Plenary Decisions Implementation; and Other Revisions Related to National Security Controls”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: “DECCS Outage Notice: Monday 7 Dec; 6-8am EST”
  1. CNBC: “Pentagon Blacklists China Chipmaker SMIC and Oil Producer CNOOC”
  2. Daily Maverick: “Britain Sent Saudi Arabia Thousands of Spare Parts for Warplanes Amid Arms Embargo”
  3. NHK: “China to Add Items to its Export Control List”
  1. Blakes: “Canada-United Kingdom Trade: Seamless Transition Based on CETA Rules”
  2. Husch Blackwell: “Opportunity to Request Administrative Review”
  3. Steptoe: “OFAC Adds Chinese Tech Company CEIEC to SDN List, Issues General License 38 Authorizing Wind-Down Activities”
  4. White & Case: “15 Asia-Pacific Countries Sign World’s Largest FTA; A Closer Look at RCEP’s Key Outcomes and Implications”
  1. Friday List of Approaching Events: 194 Events Posted This Week, Including 9 New Events
  1. Bartlett’s Unfamiliar Quotations 
  2. Editor’s Note: Your Customs Broker Triennial Status Report is Due in 2021 
  3. Are Your Copies of Regulations Up to Date? Find the Latest Amendments Here. 
  4. Weekly Highlights of the Daily Bugle Top Stories 
  5. Submit Your Job Opening and View All Job Openings 
  6. Submit Your Event and View All Approaching Events 

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EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

(Source: Federal Register, 4 Dec 2020) [Excerpts]
 
85 FR 78684: Rule
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Correcting amendments.
* SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by making corrections to address errors that were inadvertently introduced with the September 11, 2020, Federal Register publication of “Wassenaar Arrangement 2018 Plenary Decisions Implementation; and Other Revisions Related to National Security Controls (Final Rule)”.
* DATES: This rule is effective December 4, 2020.
* FOR FURTHER INFORMATION CONTACT: Logan Norton, Regulatory Policy Division, Logan.Norton@bis.doc.gov, (202) 812-1762.

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

OGS OTHER GOVERNMENT SOURCES

(Source: Federal Register)
 

* Treasury/OFAC: NOTICES; Blocking or Unblocking of Persons and Properties [Pub. Date: 7 Dec 2020] (PDF), (PDF), (PDF)

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

OGS_a23. Commerce/BIS: (No new postings)

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  The Defense Export Control and Compliance System (DECCS) Registration application will be unavailable to industry from 6:00 AM (EST) through 8:00 AM (EST) Monday, December 7 for scheduled system maintenance. Please ensure work in progress is saved prior to the scheduled downtime.

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COM NEWS

(Source: CNBC, 3 Dec 2020) [Excerpts]

 
   China’s largest chipmaker and national offshore oil and gas producer were added Thursday to a blacklist of alleged Chinese military companies, the Pentagon said in an evening statement.
The Department of Defense designated a total of four companies as being either owned or controlled by the People’s Liberation Army.
  • Semiconductor Manufacturing International Corp.
  • China National Offshore Oil Corp.
  • China Construction Technology Co. Ltd.
  • China International Engineering Consulting Corp.
   The additional four companies added Thursday brings the total number of blacklisted firms to 35.
   U.S. officials have long complained that Chinese companies are beholden to the People’s Republic of China and collect sensitive information on behalf of the People’s Liberation Army. The Chinese Communist Party has previously said that it does not engage in industrial espionage. …
   The move will likely escalate tensions between the world’s two largest economies and adds to the list of pressing geopolitical issues awaiting President-elect Joe Biden. …
   SMIC is viewed as a major player in China’s effort to boost its domestic semiconductor industry, an ambition that was accelerated by the U.S.-China trade war. Imposing export controls on SMIC would impact U.S. companies that sell chip-making technology to China manufacturers. …

Source: Daily Maverick, 3 Dec 2020) [Excerpts]

 
   The UK military supplied 2,323 spare parts for Tornado fighter jets to an arms company in Saudi Arabia last year, despite a court order against exporting weapons for use in the Yemen war, Declassified UK has found.
  • British arms company BAE Systems maintains the Saudi air force’s Tornado fleet which bombs Yemen, the world’s worst humanitarian catastrophe.
  • Exports of Tornado spares were allowed to continue because the scheme began before a court ordered an embargo on new licences.
  • UK customs made 194 seizures of goods that violated arms export law, a four-year high, but prosecuted no one.
  • Britain donated arms to a Somali counter-terrorist unit and took part in an ‘outreach event’ with Israel’s arms industry last year, amid human rights abuses in both countries.
   Saudi planes bombing Yemen received 2,323 spare parts from the UK military last year, according to the government’s annual report into strategic export controls, which was published four months later than usual due to the coronavirus.
   The long-awaited report shows that supplies to Saudi Arabia’s air force and navy continued despite a court order in June 2019 banning new export licences for use in Yemen.
   Tornado spare parts were exempt from the arms embargo because they were covered by licences issued prior to the court ruling. The equipment was diverted from the Royal Air Force (RAF), which stopped flying its own Tornado fleet in March 2019. …
   In another attempt to downplay the extent of British support for the Saudi air force, the government has told Parliament that none of the Saudi Tornados has returned to the UK for maintenance since the Yemen war began in 2015.
However, Declassified has found from a freedom of information request that the RAF gave Saudi air force technicians a bespoke training course on Tornado maintenance at RAF Cosford in England last year, in addition to the export of thousands of spare parts.
   There are also RAF instructors on secondment to BAE Systems who provide training support to Saudi Tornado aircrew. …
  The UK’s Department for International Trade repeatedly claims that Britain has “one of the most rigorous defence export regimes in the world” which “assesses all export licences in accordance with strict licensing criteria”. …

(Source: NHK, 3 Dec 2020) [Excerpts]

 
   The Chinese government plans to announce additional items to be covered by the country’s new export control law that took effect on Tuesday.
The law is designed to strengthen export controls on products and technologies that can be converted for military use.
  Under the law, the exports of those items require government approval and shipments to blacklisted foreign firms are banned or restricted.
China’s Commerce Ministry spokesperson, Gao Feng, spoke to reporters on Thursday one day after the Chinese government unveiled the first items to come under the new law.
   Gao noted that the ministry is working hard to draw rules related to the law, and that more items will be added to the export control list and announced in due course.
   He dismissed concerns expressed by foreign firms over the implementation of the law and its potential effect on their business activities.
   Gao stressed that China will control its exports strictly based on international practices and the new law, so that foreign businesses have no need to worry.
Manufacturers in Japan have been worried that controls may cover rare-earth metals they need to make high-tech products.

COM COMMENTARY

(Source: Blakes, 2 Dec 2020)

 
* Principal Author: Greg Kanargelidis, 416-863-4306, Blake, Cassels & Graydon LLP
 
   On November 21, 2020, Canada and the United Kingdom jointly announced that they had reached an agreement in principle on the Canada-United Kingdom Trade Continuity Agreement (Continuity Agreement). The Continuity Agreement, which has not yet been signed, ensures that the trading relationship established under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) will continue in effect following the end of the transition period under the BrexitWithdrawal Agreement (Withdrawal Agreement) on December 31, 2020.
 
BACKGROUND
   As discussed in our September 2017 Blakes Bulletin: CETA Now In Force: Are You Maximizing The Benefits, CETA came into effect on a provisional basis on September 21, 2017, eliminating more than 98 per cent of the tariff lines between the CETA parties, as well as modifying import quotas and government procurement requirements.
  Following a referendum in 2016, the UK began negotiating its withdrawal from the EU. In January 2020, the UK and EU signed the Withdrawal Agreement, following which the UK officially left the EU on January 31, 2020. The Withdrawal Agreement provided that the UK would remain in the EU’s single market during a transitional period lasting until December 31, 2020, in order to allow the parties to negotiate a new trade agreement as between themselves. As of the date of this Blakes Bulletin, a new trade agreement has not yet been agreed upon.
 
TEXT IS NOT YET AVAILABLE
   The Continuity Agreement is intended to take effect on January 1, 2021 and, as Canada’s Minister of Small Business, Export Promotion and International Trade Mary Ng stated at an appearance before the House of Commons International Trade Committee, is a “replication” of the CETA provisions. The goal of the Continuity Agreement is to create a seamless transition from a plurilateral to a bilateral trading relationship for Canada vis-à-vis the UK, and to remove much of the uncertainty felt by importers and exporters on both sides of the Atlantic.
  The text of the Continuity Agreement has not yet been made available, and little is known of the details. Minister Ng has stated that the Continuity Agreement preserves the tariff elimination achieved under CETA, maintains priority access to the UK for Canadian service suppliers, and to the UK government procurement market. The Minister has also hinted that the Agreement includes investor protection provisions, but balanced with Canada’s right to regulate in the public interest.
   The Minister also indicated that the Continuity Agreement contains provisions relating to digital trade, as well as a continuation of other aspects of the CETA, such as provisions on women entrepreneurs, small business, the environment and labour. Minister Ng further indicated that no additional market access has been provided to British cheese under this agreement, which was a concern for Canadian producers, but it is unclear whether that position will change as further negotiations are held toward a more definitive deal next year.
   The Continuity Agreement is said to contain provisions concerning the start of renewed negotiations between Canada and the UK towards a more comprehensive trade agreement, which are to commence within one year of the Agreement’s effective date, and to conclude within three years. 
   Canada is expected to introduce implementing legislation with a view to having the Continuity Agreement take effect by the beginning of 2021. However, the House of Commons is scheduled to rise on December 11, 2020, leaving precious little time for the completion of parliamentary procedures for the adoption of an international trade agreement, including tabling of the legislation in the House for 21 sitting days and having implementing legislation passed by both the House of Commons and Senate. Given the timing pressures, Minister Ng has also referenced certain unspecified “mitigating measures” that Canada and the UK are discussing, in the event that the Continuity Agreement is not ready to come into force on January 1, 2021.
 
CANADA – UK TRADE RELATIONSHIP
   The UK is currently Canada’s single largest EU trading partner, with more than double the value of both imports and exports as compared to the next largest EU trading partner. The UK is Canada’s fifth largest trading partner, with two-way trade of C$29-billion in 2019. The Continuity Agreement is thus an important step to ensuring stability and predictability in the Canada-UK trading relationship by maintaining the benefits under CETA between the two countries while a new agreement is negotiated. The Continuity Agreement is also an important step forward for the UK as it embarks on a future separate from the EU.
  While certain issues will need to be ironed out, it is anticipated that Canada and the UK will aim to deepen their trading ties when negotiation of a more detailed and wide-ranging agreement commences next year. Canadian importers and exporters should keep a close eye on the many bilateral agreements that the UK has already concluded and still plans to conclude, including any agreement with the EU. CETA contains a “most favoured nation” clause, a standard term in trade agreements that guarantees the parties will receive treatment no less favourable than that provided to another country. To the extent the UK is able to secure more generous terms from the EU in its negotiations, Canada may also be able to take advantage of them.
 
PARTICIPATION BY CANADIAN BUSINESS IN NEGOTIATIONS
   Canadian businesses, both importers and exporters, should now be considering changes they would like to see in a bilateral trading agreement between Canada and the UK. Minister Ng has stated that she will be seeking to consult with interested parties, and the Canadian trade negotiators will no doubt welcome input from businesses since they will be the primary beneficiaries of any improved market access that Canada is able to negotiate with the UK.

 
* Principal Author: Beau Jackson, Esq., 1-816-983-8202, Husch Blackwell LLP
 
  On December 2, 2020, Commerce announced in the Federal Register the opportunity to request an annual administrative review for products that are currently subject to antidumping and countervailing duties. In addition to administrative reviews, Commerce has included an opportunity to request a new suspension agreement proceeding pertaining to sugar from Mexico.
The products and countries that have been listed in the Federal Registernotice are the following:
AD
  • Brazil: Carbon Steel Butt-Weld Pipe Fittings
  • Chile: Certain Preserved Mushrooms
  • Germany: Non-Oriented Electrical Steel
  • India: Carbazole Violet Pigment 23, Certain Hot-Rolled Carbon Steel Flat Products, Commodity Matchbooks, Stainless Steel Wire Rod
  • Indonesia: Certain Hot-Rolled Carbon Steel Flat Products
  • Japan: Prestressed Concrete Steel Wire Strand, Non-Oriented Electrical Steel, Welded Large Diameter Line Pipe
  • Oman: Circular Welded Carbon-Quality Steel Pipe
  • Pakistan: Circular Welded Carbon-Quality Steel Pipe
  • Republic of Korea: Non-Oriented Electrical Steel, Welded ASTM A-312 Stainless Steel Pipe, Welded Line Pipe
  • Russia: Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products
  • Singapore: Acetone
  • Socialist Republic of Vietnam: Uncovered Innerspring Units
  • South Africa: Uncovered Innerspring Units
  • Spain: Acetone
  • Sweden: Non-Orientated Electrical Steel
  • Taiwan: Carbon Steel Butt-Weld Pipe Fittings, Non-Oriented Electrical Steel, Steel Wire Garment Hangers, Welded ASTM A-312 Stainless Steel Pipe
  • Thailand: Carbon and Alloy Steel Threaded Rod
  • China: Aluminum Wire, Carbazole Violet Pigment 23, Cased Pencils, Crystalline Silicon Photovoltaic Cells, Hand Trucks, Honey, Malleable Cast Iron Pipe Fittings, Mattresses, Melamine, Multilayered Wood Flooring, Non-Orientated Electrical Steel, Porcelain On-Steel Cooking Ware, Refillable Stainless Steel Kegs, Silicomanganese, Vertical Metal File Cabinets
  • Turkey: Welded Line Pipe
  • United Arab Emirates: Circular Welded Carbon-Quality Steel Pipe
CVD
  • India: Carbazole Violet Pigment 23, Certain Hot-Rolled Carbon Steel Flat Products, Commodity Matchbooks
  • Indonesia Certain Hot-Rolled Carbon Steel Flat Products
  • Taiwan: Non-Oriented Electrical Steel
  • Thailand: Certain Hot-Rolled Carbon Steel Flat Products
  • China: Aluminum Wire and Cable, Crystalline Silicon Photovoltaic Cells, Melamine, Non-Oriented Electrical Steel, Multilayered Wood Flooring, Refillable Stainless Steel Kegs, Vertical Metal File Cabinets
  • Turkey: Welded Line Pipe
  As part of this annual review process, Commerce intends to select respondents based on an analysis of U.S. Customs and Border Protection (CBP) data for U.S. imports during the period of review which is released only to legal counsel for interested parties.  Any party wishing to participate in the antidumping and countervailing duty review process, or who may be affected by duties on the products identified in the Federal Register notice, should file a request for review no later than December 31, 2020.  In order to be eligible to participate in the review, a party must either be an exporter or importer of the specific products during the specific time periods identified in the Federal Register notice.

COM_a310. Steptoe: “OFAC Adds Chinese Tech Company CEIEC to SDN List, Issues General License 38 Authorizing Wind-Down Activities”

(Source: International Compliance Blog, 3 Dec 2020)
 
* Principal Author: A. Cherie Tremaine, Esq., 1-202-429-1308, Steptoe & Johnson LLP
 
  On November 30, 2020, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the addition of Chinese company CEIEC to its list of Specially Designated Nationals and Blocked Persons (SDN List), pursuant to Executive Order 13692, for “its role in undermining democracy in Venezuela.”  OFAC also issued General License 38 authorizing certain wind-down activities with CEIEC, as well as an FAQ regarding the designation and general license.
  According to Treasury, CEIEC, also known as China National Electronic Import-Export Company, has over 200 offices and subsidiaries worldwide.  CEIEC explains on its website, https://www.ceiec.com/About, that it is a “close partner of many foreign government[s], military and security department[s], to help them fulfill their mission of securing citizen’s confidence to health, safety, economic growth and public governance.”
  In the press release announcing CEIEC’s addition to the SDN List, Treasury explained that the designation is due to the company’s involvement in “actions or policies that undermine democratic processes or institutions” in Venezuela.  For example, Treasury stated that CEIEC provided “software, training, and technical expertise to Venezuela[n] government entities, which was then used against the people of Venezuela.”
  Concurrent with CEIEC’s designation, OFAC issued General License 38, which authorizes until 12:01 a.m. eastern standard time on January 14, 2021, certain transactions and activities by US persons that are ordinarily incident and necessary to the wind down of transactions and activities involving CEIEC or its subsidiaries.  In addition, and of significance to non-US persons, the FAQ issued by OFAC notes that from a “secondary sanctions” perspective, non-US persons should be mindful of the wind-down period set forth in the General License. This FAQ states in part that “[e]ntering into new business involving the Blocked CEIEC Entities will not be considered wind-down activity.  Non-U.S. persons unable to wind down activities with the Blocked CEIEC Entities before 12:01 a.m. eastern standard time, January 14, 2021, may seek guidance from OFAC.”

TE EX/IM TRAINING EVENTS & CONFERENCES

(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;
 

On-Line:
 

* 9 Dec: “DECCS Tips and Tricks Webinar“; State/DDTC

* 9 Dec: “WIT-NC Virtual Event: 2020 YEAR END HIGHLIGHTS & SUCCESSES“; Women in Trade – Northern California chapter (WIT-NC)
* 9 Dec: “U.S. – U.K. FinTech Exchange”; U.S. Commerce Dpt
* 31 Mar-1 Apr 2021: “SIA Imports 101 Webinar (2 half day sessions)“; SIA
 
On Location:
 
* 17-18 May 2021: New Orleans, LA, USA; “2021 Spring Advanced Conference“; SIA
* 12-14 Jul 2021: National Harbor, MD, USA; “2021 Summer Back to Basics Conference“; SIA
* 25-26 Oct: Arlington, VA, USA; “2021 Advanced Fall Conference“; SIA

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EN EDITOR’S NOTES

EN_a113. Bartlett’s Unfamiliar Quotations

(Source: Editor)
 

* Thomas Carlyle (4 Dec 1795 – 5 Feb 1881) was a British historian, satirical writer, essayist, translator, philosopher, mathematician, and teacher. He is best known for his books On Heroes, Hero-Worship, and The Heroic in History.)
  –  “Wondrous is the strength of cheerfulness, and its power of endurance – the cheerful man will do more in the same time, will do it better, will preserve it longer, than the sad or sullen.”
 
Friday funnies
* One night a Viking named Rudolph the Red was looking out the window when he said, “It’s going to rain.”  His wife asked, “How do you know?” “Because Rudolph the Red knows rain, dear.”
* What disease can you get from Christmas decorations?  Tinsillitis.
* What do you get if you cross a Christmas tree with an iPad?  A pineapple!
* Teacher: “Johnny, please define claustrophobia.”  Johnny: “Would that be the Fear of Santa Claus?”
* Why did Rudolph get a bad report card?  Because he went down in history.
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Triennial status reports and accompanying fees are due to CBP no later than February 28th, 2021. Electronic reporting opens on December 15th, 2020. To submit your report electronically, visit THIS LINK.
* * * * * * * * * * * * * * * * * * * *

 

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. 

4 Dec 2020: 
85 FR 78684:  Correcting amendments to EAR

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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