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20-1218 Friday ” Daily Bugle “

20-1218 Friday “Daily Bugle”

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Friday, 18 December 2020

  1. Justice/ATF Publishes Objective Factors for Classifying Weapons with “Stabilizing Braces”
  2. State: “Designation of Ashraf al-Qizani and Saraya al-Mukhtar as Specially Designated Global Terrorists”
  3. State: “Rescission of Determination Regarding Sudan”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS Adds China’s SMIC to the Entity List, Restricting Access to Key Enabling U.S. Technology
  3. State/DDTC: (No new postings)
  4. EU Commission: “Candidates for Dispute Settlement Activities under EU Trade and Investment Agreements”
  5. EU Amends Decision 2014/512/CFSP Concerning Restrictive Measures in View of Russia’s Actions Destabilising The Situation in Ukraine
  6. European Union Amends Decision (CFSP) 2018/1789 to Combat the Illicit Trade in and Proliferation of Small Arms and Light Weapons in Arab States
  1. ECD: “China’s Use of Sanctions, Export Controls is ‘Just the Beginning,’ Former US Officials Say”
  2. Forbes: “Export Controls Become New Stick In US-China Tech Race”
  1. KPMG: “Export Controls and Sanctions Survey”
  2. R|D Report: “ATF to Publish Objective Factors for Classifying Weapons with Stabilizing Braces”
  3. T.G. Ficaretta: “New DOJ Rules Delay Publication of Firearms Guidance”
  1. Friday List of Approaching Events: 188 Events Posted This Week, Including 14 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

(Source: Federal Register, 18 Dec 2020) [Excerpts]
 
85 FR 82516: Notice
* AGENCY: Bureau of Alcohol, Tobacco, Firearms, and Explosives, Department of Justice.
*ACTION: Notice; request for comment.
* SUMMARY: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) is publishing the objective factors it considers when evaluating firearms with an attached stabilizing brace to determine whether they are considered firearms under the National Firearms Act (“NFA”) and/or the Gun Control Act (“GCA”). ATF publishes this notice to inform and invite comment from the industry and public on the proposed guidance, Objective Factors for Classifying Weapons with “Stabilizing Braces,” prior to issuing a final document. Upon issuance of final guidance, ATF will provide additional information to aid persons and companies in complying with Federal laws and regulations. This notice also outlines ATF’s enforcement priorities regarding persons who, prior to publication of this notice, made or acquired, in good faith, firearms equipped with a stabilized brace. Finally, this notice previews ATF’s and the Department of Justice’s plan to subsequently implement a separate process for current possessors of stabilizer-equipped firearms to choose to register such firearms in compliance with the NFA, including an expedited application process and the retroactive exemption of such firearms from the collection of NFA taxes.
* DATES: Written comments must be postmarked and electronic comments must be submitted on or before January 4, 2021. Commenters should be aware that the electronic Federal Docket Management System will not accept comments after midnight Eastern time on the last day of the comment period.
* ADDRESSES: You may submit comments, identified by docket number ATF 2020R-10, by any of the following methods-
  • Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments.
  • Mail: Office of Regulatory Affairs, Enforcement Programs and Services, Bureau of Alcohol, Tobacco, Firearms, and Explosives, 99 New York Ave. NE, Mail Stop 6N-518, Washington, DC 20226; ATTN: ATF 2020R-10.
  • Fax: (202) 648-9741.
Instructions: All submissions received must include the agency name and docket number (ATF 2020R-10). All properly completed comments received will be posted without change to the Federal eRulemaking portal, www.regulations.gov, including any personal information provided. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” heading of the SUPPLEMENTARY INFORMATION section of this document.

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(Source: Federal Register and Federal Register, 18 Dec 2020) [Excerpts]
 
85 FR 82564-82565: Notices
–  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 Ashraf al-Qizani, also known as Ashraf al-Gizani, also known as Abu `Ubaydah al-Kafi, also known as Achref Ben Fethi Ben Mabrouk Guizani, also known as Achraf Ben Fathi Ben Mabrouk Guizani, is a foreign person who is a leader of leader of Jund al-Khilafah in Tunisia (JAK-T), 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.
 
–  Acting under the authority of and in accordance with sections 1(a)(ii)(A) 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 Saraya al-Mukhtar, also known as Saraya al-Mokhtar, also known as SaM, also known as al-Mukhtar Brigades, also known as AMB, also known as Al-Mukhtar Companies, also known as Bahraini Islamic Resistance Al-Mukhtar Companies, also known as Bahraini Islamic Resistance, also known as Al-Muqawama al-Islamiyya al-Bahrania, is a foreign person who poses a significant risk of committing acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States.
 
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.
 
Dated: November 27, 2020 and December 9, 2020.
Michael R. Pompeo, Secretary of State.

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(Source: Federal Register, 18 Dec 2020) [Excerpts]
 
85 FR 82565: Notice
 
In accordance with sections 1754 (c) and 1768(c) of the National Defense Authorization Act for Fiscal Year 2019 (50 U.S.C. 4813(c) and 4826(c)), I hereby rescind the Determination of August 12, 1993, regarding Sudan, effective December 14, 2020. This action is based upon the considerations contained in the memorandum accompanying the Presidential Report of October 26, 2020, regarding Sudan.
 
This rescission shall also satisfy the provisions of section 620A(c) of the Foreign Assistance Act of 1961 (22 U.S.C. 2371(c)), and section 40(f) of the Arms Export Control Act (22 U.S.C. 2780(f), and, to the extent applicable, section 6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)), and as continued in effect by Executive Order 13222 of August 17, 2001). … 

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OGS OTHER GOVERNMENT SOURCES

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(Source: Commerce/BIS, 18 Dec 2020)
 
The Bureau of Industry and Security (BIS) in the Department of Commerce (Commerce) added Semiconductor Manufacturing International Corporation (SMIC) of China to the Entity List.  BIS is taking this action to protect U.S. national security.  This action stems from China’s military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex.
“We will not allow advanced U.S. technology to help build the military of an increasingly belligerent adversary.  Between SMIC’s relationships of concern with the military industrial complex, China’s aggressive application of military civil fusion mandates and state-directed subsidies, SMIC perfectly illustrates the risks of China’s leverage of U.S. technology to support its military modernization,” said Commerce Secretary Wilbur Ross.
“Entity List restrictions are a necessary measure to ensure that China, through its national champion SMIC, is not able to leverage U.S. technologies to enable indigenous advanced technology levels to support its destabilizing military activities,” added Ross.
The Entity List designation limits SMIC’s ability to acquire certain U.S. technology by requiring U.S. exporters to apply for a license to sell to the company.  Items uniquely required to produce semiconductors at advanced technology nodes-10 nanometers or below-will be subject to a presumption of denial to prevent such key enabling technology from supporting China’s military-civil fusion efforts.
BIS also added more than sixty other entities to the Entity List for actions deemed contrary to the national security or foreign policy interest of the United States.  These include entities in China that enable human rights abuses, entities that supported the militarization and unlawful maritime claims in the South China Sea, entities that acquired U.S.-origin items in support of the People’s Liberation Army’s programs, and entities and persons that engaged in the theft of U.S. trade secrets.
The Entity List is a tool utilized by BIS to restrict the export, re-export, and transfer (in-country) of items subject to the Export Administration Regulations (EAR) to persons (i.e., individuals, organizations, and companies) reasonably believed to be involved, or to pose a significant risk of becoming involved, in activities contrary to the national security or foreign policy interests of the United States.  Additional license requirements apply to exports, re-exports, and transfers (in-country) of items subject to the EAR to listed entities, and the availability of most license exceptions is limited.

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Dispute settlement is an important part of implementing the EU’s trade and investment agreements with third countries. The European Commission is responsible for ensuring that it functions properly.  
This includes:
  • appointing arbitrators or experts in specific dispute settlement cases, and;
  • establishing:
    • rosters of pre-appointed arbitrators;
    • rosters of trade and sustainable development experts, and;
    • tribunal members of Investment Court Systems. 
The Commission maintains a pool of candidates from which it will draw qualified individuals for specific agreements. Individuals will be proposed by the Commission to the Council, which will decide on their appointments. The lists are subsequently agreed with the third country concerned, typically by a decision of a joint committee.
The Commission – in conjunction with Member States’ authorities – is now inviting applications to the pool of arbitrators or the separate pool of trade and sustainable development experts. Note that a call for candidates for the Investment Court Systems will take place at a later stage, when the agreements with such systems will enter into force.
selection panel of experienced international judges and academics will vet the candidates to confirm their suitability for appointment. Recruitment to the panel will start shortly.
In line with its adherence to the Equal Representation in Arbitration Pledge and support for its work, the Commission will seek to ensure gender balance in its list of proposals to the Council for the pool and in appointing arbitrators or trade and sustainable development experts in specific disputes.

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THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on European Union, and in particular Article 29 thereof,
Having regard to the proposal from the High Representative of the Union for Foreign Affairs and Security Policy,
Whereas:
(1) On 31 July 2014, the Council adopted Decision 2014/512/CFSP (1).
(2) On 19 March 2015, the European Council agreed that the necessary measures would be taken to clearly link the duration of the restrictive measures to the complete implementation of the Minsk agreements, bearing in mind that the complete implementation was foreseen for 31 December 2015.
(3) On 29 June 2020, the Council adopted Decision (CFSP) 2020/907 (2), renewing Decision 2014/512/CFSP until 31 January 2021 in order to enable it to further assess the implementation of the Minsk agreements.
(4) Having assessed the implementation of the Minsk agreements, the Council considers that Decision 2014/512/CFSP should be renewed for a further six months in order to enable the Council to further assess their implementation.
(5)Decision 2014/512/CFSP should therefore be amended accordingly,
HAS ADOPTED THIS DECISION:
Article 1: The first subparagraph of Article 9(1) of Decision 2014/512/CFSP is replaced by the following: This Decision shall apply until 31 July 2021.
Article 2: This Decision shall enter into force on the day following that of its publication in the Official Journal of the European Union.
Done at Brussels, 17 December 2020.

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OGS_a69. EU Amends Decision (CFSP) 2018/1789 to Combat the Illicit Trade in and Proliferation of Small Arms and Light Weapons in Arab States 
 
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on European Union, and in particular Articles 28(1) and 31(1) thereof,
Having regard to the proposal from the High Representative of the Union for Foreign Affairs and Security Policy,
Whereas:
(1) On 19 November 2018, the Council adopted Decision (CFSP) 2018/1789 (1) in support of combating the illicit trade in and proliferation of small arms and light weapons in the Member States of the League of Arab States.
(2) Article 5(2) of Decision (CFSP) 2018/1789 provides that that Decision is to expire 24 months after the date of conclusion of the agreement referred to in Article 3(3) of that Decision.
(3) On 30 October 2020, the Small Arms Survey (SAS), which is the implementing Agency of the project referred to in Article 1 of Decision (CFSP) 2018/1789, requested the authorisation of the Union to extend the implementation period set out in that Decision by six months, thereby bringing the total duration of the implementation period to 30 months. The requested extension is due to the COVID-19 pandemic and the subsequent postponement of a number of activities provided for by the project.
(4) The requested amendment of Decision (CFSP) 2018/1789 concerns Article 5(2) thereof.
(5) The extension of the implementation period set out in Decision (CFSP) 2018/1789 by six months can be performed without any financial resource implication,
HAS ADOPTED THIS DECISION:
Article 1. Article 5(2) of Decision (CFSP) 2018/1789 is hereby replaced by the following:  This Decision shall expire 30 months after the date of the conclusion of the agreement referred to in Article 3(3).
Article 2. This Decision shall enter into force on the date of its adoption.
Done at Brussels, 17 December 2020.

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COM NEWS

(Source: Export Compliance Daily, 18 Dec 2020) [Excerpts]

 
As the U.S. increasingly relies on sanctions, export controls and trade restrictions as foreign policy tools, it should expect China to follow its example, former U.S. government officials said. While other countries are beginning to mimic U.S. trade strategies, the policies are most notably taking hold in China, the officials said, which recently rolled out an export control regime has increased threats of sanctions for foreign interference in Hong Kong and Taiwan and issued regulations for its unreliable entity list. …

NWS_a211. Forbes: “Export Controls Become New Stick In US-China Tech Race”

(Source: Forbes, 15 Dec 2020) [Excerpts]

 
Trump’s China policy is here to stay, even with a Biden administration coming soon. Expanded export controls and increasing investigations by the Committee on Foreign Investment in the United States (CFIUS) are the many examples of multiple regulatory vectors targeting China.
 
Despite the polarizing nature of current American politics and the 2020 presidential election, Democrats and Republicans are generally aligned in their views on Chinese investment and Big Tech. International investors and US businesses should bear in mind how the recent high-profile bans of the social media apps like TikTok and WeChat not only impact investment activity, but also reveal America’s strategy for internet security and tech hegemony.
 
In the latest example of US-China tensions, the Trump administration made it even more difficult for Huawei to obtain US-made chips. The Commerce Department announced an expansion to the Foreign Direct Product Rule on August 17, 2020, preventing any company from selling to Huawei without a license any product, made anywhere in the world with US technology. US policies preventing Huawei and potential affiliates from circumventing export controls expanded to an additional 38 affiliates in 21 countries. The number of blacklisted entities since Huawei was first added in May 2019 now totals 152 companies.

 
Chinese and other foreign firms are not only vulnerable to stricter export controls, but as of October 15, 2020, the Department of the Treasury enacted further regulations bolstering CFIUS’ jurisdiction to review deals where they converge with US export controls – a market-changing consideration for US businesses and investors alike. Any deal where the critical technology would require a “US regulatory authorization” for export, re-export, transfer (in-country), or re-transfer of such technology to certain parties or foreign persons in the ownership chain, is now recognized as a mandatory filing. In short, if a US company would need an export license to transfer the technology to a foreign purchaser of the US company, a CFIUS review is mandatory. 

COM COMMENTARY

(Source: KPMG, 16 Dec 2020)

 
* Principal Author: Steven Brotherton, Principal, 1-415-963-7861, KPMG
 
Export controls and sanctions regulations are in a period of global flux with more countries tightening existing laws or imposing new ones. Simultaneously, enforcement is increasing with fines escalating. Understanding how companies are impacted by these more stringent regulations will be critical to shaping export compliance programs to maximize their effectiveness.
 
KPMG has developed an export controls and sanctions survey, with the objective of producing a comprehensive analysis and detailed benchmark report profiling how organizations of varying industry, size, and geographies are impacted by, and responding to, changing regulations both within the U.S. and globally. Among other things, the survey addresses the compliance organization structure, program priorities,  third party engagement, use of automation, and compliance challenges.  The results of this survey will be used to develop a comprehensive report that can be used to better understand how a cross-section of industries are approaching compliance and ways you can improve your own program.
 
 
While this survey is applicable to all industries, it is primarily tailored to gather information about the concerns and challenges corporations and universities face when exporting goods and services. By completing this survey you will receive a copy of our summary report that you can use to help shape and grow your export compliance program*.
 
*At the end of this survey, you will have the opportunity to elect to receive an advance copy of the KPMG Export Controls & Sanctions Benchmarking Report.

(Source: R|D Alert, 17 Dec 2020)

 
* Principal Author: Johanna Reeves, Esq., 1-202-715-9941, Reeves & Dola LLP
 
The Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) is set to publish a notice (the “Notice”) on the objective features the agency considers when evaluating firearms with an attached stabilizing brace to determine whether said firearms are subject to the National Firearms Act (“NFA”). ATF will accept comments from the public until January 4, 2021 (this is the first business day after January 1, which is technically 14 days after the publication date of December 18, 2020). ATF is referring to this publication as “proposed guidance” that does not have the force and effect of law and is not meant to bind the public in any way. ATF goes on to state that, “although there is no requirement that a guidance document be published for notice and comment, ATF has decided to publish the proposed objective factors in the Federal Register for a brief comment period, given the public interest surrounding these issues.”
 
This Notice is the most recent development in the pistol brace saga, and some would say it is not shocking. However, earlier this past summer, when suspicions began forming within industry and certain lawmakers that ATF was secretly working on possibly banning stabilizing braces, at least one trade group publicly announced that it had spoken with ATF officials and was satisfied that pistol braces were not being reviewed for restrictions.
 
Background – The National Firearms Act
Congress enacted the NFA in 1934 under its taxing power to control certain weapons believed to be contributing to violent crime. Through registration and tax requirements, the statute controls such weapons as machineguns, silencers (suppressors), destructive devices, and short barrel rifles and shotguns.
 
For a rifle to be subject to the NFA as a short barrel rifle, the following must be present: (1) the weapon must be designed, redesigned, made or remade, and intended to be fired from the shoulder; (2) the weapon must have a rifled bore; (3) the weapon must use the energy of an explosive in a fixed cartridge to fire a single projectile for a single pull of the trigger; and (4) the weapon must have a barrel or barrels measuring less than 16 inches in length, or an overall length less than 26 inches.
 
The statutory criteria for classification of a shotgun as a short barrel shotgun are: (1) the weapon must be designed, redesigned, made or remade, and intended to be fired from the shoulder; (2) the weapon must have a smooth bore; (3) the weapon must use the energy of an explosive in a fixed shotgun shell to fire either a number of projectiles (ball shot) or a single projectile (rifled slugs) for each pull of the trigger; and (4) the weapon must have a barrel or barrels of less than 18 inches in length, or an overall length less than 26 inches.
 
The NFA requires registration of all firearms listed in the statute, advance ATF approval for any transfer, and payment of a $200 transfer tax for each firearm transferred (except so-called “any other weapons,” which are subject to a $5 transfer tax). In addition to the licensing requirements of the GCA, persons who engage in the business of manufacturing NFA firearms must register with ATF and pay a special (occupational) tax.
 
ATF Firearm Classifications
Industry is encouraged to seek an evaluation (classification) from ATF whenever there is a question as to how a certain firearm configuration may be controlled under the laws and regulations, including whether a particular configuration may be subject to the NFA. As noted above, the proposed criteria in the Notice is what would be used by ATF when reviewing a firearm with an attached stabilizing brace. 
 
The ATF division responsible for evaluating and classifying firearms is the Firearms and Ammunition Technology Division (“FATD”) within ATF’s Office of Enforcement Programs and Services. FATD is made up of two branches: an industry services branch and a criminal branch. The Firearms Technology Industry Services Branch supports the firearms industry and the general public by responding to technical inquiries and by testing and evaluating firearms submitted for classification as to their regulation under the GCA and/or NFA. The Firearms Technology Criminal Branch issues firearm classifications in response to requests from law enforcement or pursuant to an investigation.
 
The Notice provides a description of the firearm evaluation process. “Generally, when FATD evaluates a firearm sample, it examines its overall configuration, physical characteristics, objective design features that are relevant under the statutory definitions of the GCA and NFA, and any other information that directly affects the classification of a particular firearm sample. Even though firearms may appear to have similar features, an ATF classification pertains only to the particular sample submitted, because variations in submissions, applicable statutes, judicial interpretations of these statutes, the manufacturer’s or maker’s intent, and the objective design features supporting that intent, make the general applicability of any particular classification exceedingly rare.”
 
So even though neither the statute nor the regulations require an ATF classification, arguably to achieve full comfort for compliance purposes, one must obtain an ATF classification. To underscore this, it is important to remember that courts will often defer to ATF’s technical expertise and statutory interpretation when there is a question as to whether a firearm is subject to the NFA.
 
Please note, for the general public, including industry, the processing times for firearm classifications is at least a year due to personnel shortages. How can a company licensed under the Gun Control Act as a manufacturer or importer realistically operate a business with such a shocking delay?
 
The Objective Design Features
The Notice sets forth nine “objective design features” (many of which arguably are more subjective rather than objective) that ATF proposes to consider when evaluating whether a firearm with a stabilizing brace has been “designed or redesigned, made or remade, and intended to be fired from the shoulder.” The design features ATF has identified are (each described in detail in the Notice):
  •     The type of firearm and caliber;
  •     The weight and length of the firearm;
  •     Length of pull;
  •     The method with which the brace is attached;
  •     “Objective” design features of the brace;
  •     Whether the aim point results in upward or downward trajectory;
  •     The presence of a secondary grip;
  •     The presence of sights and scopes; and
  •     Installation of peripheral accessories commonly found on rifles or shotguns.
ATF explains that the listed factors are based on known stabilizing braces and similar attachments, and that no single factor or combination of factors is necessarily dispositive because “FATD examines each weapon holistically on a case-by-case basis.”
 
Further it is important to note that the so-called objective list is not exhaustive because of changes in design or configuration of a weapon or attachment as well as future changes in technology. In other words, ATF reserves the option of identifying other factors that could be relevant to a weapon’s classification, with ATF having the sole authority to determine such factors.
 
Affected Stabilizer-Equipped Firearms
In the Notice, ATF explains that it recognizes there has been a “misunderstanding” among industry that a pistol with a stabilizing brace would always be a treated as a pistol. But this is not always the case, according to ATF, “because some firearms are configured or have characteristics such that they meet the statutory definition of ‘rifle or shotgun'”, thereby bringing it within the controls of the NFA. Such firearms ATF refers to in the Notice as “affected stabilizer-equipped firearms.”
 
ATF does recognize that “most persons who acquired affected stabilizer-equipped firearms in good-faith reliance on representations, made by those selling the stabilizing braces or the firearms, that those firearms were not subject to the NFA.” To address this, ATF presents a plan to work with such persons.
 
ATF’s Plan to Allow Current Possessors to Cure Affected Stabilizer-Equipped Firearms
ATF states that “following issuance of this notice, ATF and DOJ plan to implement a separate process by which current possessors of affected stabilizer-equipped firearms may choose to register such firearms to be compliant with the NFA.” The process would include expedited processing of registration applications and retroactive exemption from the NFA tax, as long as the firearms were made or acquired prior to the publication of “this notice.” Query whether the cut-off date will be December 18, 2020 (the publication date of this Notice) or another date (maybe the date of publication of the final guidance?. We reached out to ATF for clarification of this language and were informed the date has not been determined yet.
 
ATF further explains that the separate process may include the option to (i) register the firearm in compliance with the NFA, (ii) permanently remove and dispose of the stabilizing brace, (iii) replace the barrel with one that is at least 16″ or greater for a rifle, or at least 18″ for a shotgun, (iv) surrender the firearm to ATF, or (v) destroy the firearm. ATF states it will exercise its discretion not to enforce the registration provision of the NFA against any person who, before publication of this notice (again, does this mean December 18, 2020, or another date based on publication of the final guidance document), in good faith acquired, transferred, made, manufactured, or possessed an affected stabilizer-equipped firearm. However, note that this discretion will hinge on there being no substantial public safety concern.
 
This Notice is not a determination that any particular weapon with a stabilizing brace is an NFA-controlled firearm. “To the extent the ATF Director subsequently issues such a determination, the ATF Director, at the direction of the Attorney General [note the change in administration that is about to occur in a few weeks], plans retroactively to exempt such firearms from the collection of NFA taxes, provided those firearms were made or acquired in good faith prior to the publication of this notice.” (Emphasis added).
 
Opportunity to Comment
Remember, this Notice is just that, a notice of guidance that will become effective only after ATF publishes the document in final form in the Federal Register, which will occur sometime after ATF receives and reviews the public comments. “Upon issuance of final guidance, ATF will provide additional information to aid persons and companies in complying with Federal laws and regulations.”
 
It is very important that industry take this opportunity to submit comments to ATF. Comments must reference the docket number (ATF 2020R-10) and include the commenter’s first and last name and full mailing address. Comments may be submitted once the Notice is officially published on December 18, 2020 (the official publication will be available at the Federal Register website).
 
The most effective comment is one that provides examples and recommendations for ATF to improve the substance of the guidance. This is industry’s opportunity to have a say in what ATF will publish, and comments will be public. Although ATF will decide what comments to accept or deny, the final guidance document will address comments received and the agency’s response. Specific instructions on comment submission is in the Notice.

 
 
This year the Department of Justice (“DOJ”) published two regulations adding new requirements to guidance documents issued by DOJ components. The regulations will likely delay the issuance of written guidance to members of the firearms industry and the public and may result in less guidance being issued. This bulletin will discuss the two new regulations and their impact on the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”).
 
The Regulations
 
DOJ published interim final rules in the Federal Register on August 19, 2020 (85 FR 50951), and October 7, 2020 (85 FR 63200). These regulations codify the 2017 memo of Attorney General Sessions directing all DOJ components to stop issuing guidance documents, such as letters to regulated entities, that effectively bind private parties, without going through the notice and comment requirements of the Administrative Procedure Act. The memorandum, as well as the regulations, requires agencies to include disclaimer language in guidance documents clearly notifying the recipient the documents have no legally binding effect and do not have the force and effect of law. The regulations make it clear ATF may not issue guidance documents that purport to create rights or obligations binding on persons outside the executive branch.
 
The term “guidance document” is defined in DOJ regulations to include any agency statement setting forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statute or regulation. This definition would include most ATF rulings, ATF procedures, and FFL newsletters providing guidance on provisions of the Gun Control Act of 1968 and National Firearms Act. The term could also include private letter rulings requesting guidance on provisions of the federal firearms laws if ATF or DOJ determines the documents are designed to guide the conduct of the broader regulated public.
 
The regulations in 28 C.F.R. 50.27 provide that “significant guidance documents” must be reviewed and approved by the Attorney General, Deputy Attorney General, or the head of a component whose appointment is required to be made by the President. Significant guidance documents must also be reviewed and approved by the Office of Management and Budget (“OMB”) and made available public comment for not less than 30 days. The term “significant guidance document” is defined to include those that lead to an annual effect on the economy of $100 million or more or adversely affect the economy, productivity, or jobs. The term also includes documents that raise novel legal or policy issues arising out of legal mandates or the President’s priorities.
 
Impact on ATF
 
          1. ATF Rulings
 
ATF issues rulings to provide guidance on how the law and regulations apply to a particular set of facts. Rulings are not legally binding, but they provide the firearms industry with relevant, timely guidance on issues that affect a significant number of licensees. Examples of significant ATF rulings include ATF Rul. 2006-2 (devices that are activated by a single pull of the trigger to initiate an automatic firing cycle regulated as machineguns) and ATF Rul. 2008-1 (upper assembly of FNC rifle is classified as the receiver). The most recent firearms rulings issued by ATF are ATF Rul. 2016-3, which authorizes licensed manufacturers to consolidate their records of manufacture with their separate firearms disposition records; ATF Rul. 2016-4, authorizing importers to submit an electronic version of ATF Form 6A; and ATF Ful. 2016-5, authorizing manufacturers of destructive devices to mark them with sequential lot numbers when being manufactured for and transferred to the federal government.
 
The new regulatory requirements will likely slow down the issuance of ATF rulings issued under the Gun Control Act and National Firearms Act. All draft rulings will be reviewed by DOJ to determine whether they are significant guidance documents. This review will likely take months.  If the ruling is considered significant, then it must be transmitted to OMB for review. The new regulations do not specify a timeframe for OMB review. Following OMB review, the proposed ruling must be published in the Federal Register for a 30-day public comment period. ATF must then evaluate the comments and address them in a separate memorandum submitted to DOJ and OMB. Only after DOJ and OMB clear the ruling may it be published in final form. This process could take many months, particularly if a large number of comments are received.
 
Notably, for the period 2010-2015 ATF published thirteen firearms rulings. From 2016-present ATF has issued four rulings.
 
          2. ATF Procedures
 
ATF Procedures provide guidance on the processes industry members should use to comply with the law and regulations. They are not legally binding and merely provide ATF’s views on a method of complying with the law. An example of a recent ATF procedure is ATF Procedure 2020-2, which provided recordkeeping procedures for licensees who facilitate private transfers of firearms. ATF procedures must now be reviewed by DOJ to determine whether they are significant guidance documents. Because such documents merely set forth processes for complying with the law, it is unlikely they would be considered significant. Nonetheless, the DOJ review process may result in considerable delay in issuing ATF Procedures.
 
          3. FFL Newsletters
 
FFL Newsletters are also affected by the new rules. For the period 2010-2015 ATF published 10 FFL newsletters. From 2016-present ATF published four FFL newsletters, with only one newsletter published in 2019 and none so far in 2020. FFL Newsletters are “guidance documents,” but it is unclear whether they would fit within the definition of “significant guidance document.” Newsletters provide timely, relevant information to the firearms industry on regulatory compliance. Newsletter articles are brief and to the point, and they are an invaluable source of information for FFLs.
 
As with rulings and procedures, proposed FFL Newsletters must be submitted to DOJ for review to determine whether they are significant. That review process will delay publication by a minimum of 30 days. If the newsletters include articles considered “significant,” then OMB review, publication in the Federal Register, and public comment will be required. Alternatively, ATF may opt to omit items in newsletters deemed significant. FFLs will likely see more newsletters issued in 2021 as ATF and DOJ work through the kinks in the review process.
 
          4. Variance Requests
 
Letters requesting guidance on matters specifically addressed in the law or regulations are generally not guidance documents and will continue to be handled in the same way they were before. A number of ATF regulations (e.g., 27 C.F.R. §§ 478.22, 478.122(c), 478.123(c), 478.125(h)) authorize FFLs to request authority to maintain required records in a manner not specified in the regulations and to request authority to conduct other aspects of the firearms business in a way other than that set forth in the regulations (generally known as “variances”). Accordingly, ATF will continue to respond to variance requests as authorized under these regulations. It is unlikely that variance requests would be considered “significant guidance documents,” and few would require DOJ review. This means the vast majority of variance requests should not be delayed in processing within ATF.
 
          5. Marking Variances
 
ATF regulations in 27 C.F.R. §§ 478.92(a)(4) and 479.102(c) allow the Firearms and Ammunition Technology Division (“FATD”) to approve alternate methods of marking firearms other than those specified in the law and regulations. ATF responses to marking variance applications are generally not considered guidance documents, and FATD will continue to process marking variances as they were before the regulations were issued. It is unlikely any routine marking variances would require DOJ review. However, ATF will handle marking variances on a case-by-case basis depending on the issues presented by the particular request and may submit them to DOJ if necessary.
 
          6. Firearms and Ammunition Import Classifications
 
ATF regulations in 27 C.F.R. §§ 447.42 and 478.112 require persons who wish to import firearms and ammunition into the United States to obtain a Form 6 import permit from ATF. Generally, only sporting firearms may be lawfully imported for commercial sale. Accordingly, ATF must evaluate and classify firearms and ammunition sought for import. If particular firearms, ammunition, and other defense articles have not been approved for import in the past, FATD will continue to evaluate them and issue classifications. The vast majority of such classifications should not require DOJ review and will be processed in the same timeframe (generally 6 weeks) as in the past. However, if ATF believes the classification could be a “significant guidance document,” it would be submitted to DOJ for review. An example of a classification that is significant might be a new model firearm or firearm device not previously evaluated by ATF. A classification that sets forth new factors or methods of classification not utilized by ATF in the past might also amount to a significant classification. If the classification must be reviewed and approved by DOJ, it could be delayed by a number of months. If it must also be reviewed by OMB and published for public comment, a longer delay will result.
 
          7. Classifications of Domestically Produced Firearms
 
ATF regulations in 27 C.F.R. §§ 478.26 and 478.27 authorize ATF to determine whether a particular firearm is a curio or relic or a destructive device. Accordingly, ATF will continue to process requests for such classifications in the same manner as the agency did before. As for other types of domestically produced firearms, neither the law nor regulations require or specifically authorize such firearms classifications. Nonetheless, ATF officials advise they will continue to encourage manufacturers to submit a sample and request a classification before introducing a new model of firearm into the market.
 
Firearms classifications are generally not guidance documents, except when directed to a particular party and designed to guide the conduct of the broader regulated public. Such classifications could also be significant guidance documents depending on the factors used and conclusions reached in the ATF classification letter. As stated above, classifications of new model firearms, those that utilize new methods of analysis or factors not articulated before, and classifications that reverse prior ATF determinations could all amount to significant guidance documents. Under the new DOJ regulations, the internal review process will likely be longer and DOJ review of some classifications will be required. This means the current 6-9-month processing time for classifications may be longer. If the classification is significant, a delay of a year or more may result.
 
          8. Other Requests for Guidance
 
Aside from variances and firearms classifications, FFLs request written guidance from ATF on a wide variety of topics. Examples of such requests include guidance on FFL employees or potential employees convicted of a felony that has been expunged, pardoned, or set aside; questions on whether a federal firearms license is required and/or the type of license; and questions about compliance with National Instant Criminal Background System (NICS) requirements.
 
ATF is not required by the law or regulations to provide written guidance to the firearms industry or the public on any topics not specifically addressed in the law or regulations. However, ATF receives a lot of routine conduct-of-business questions from FFLs and has in the past provided written responses. ATF officials will continue to answer such questions submitted to Headquarters and ATF field offices. If the responses are routine questions the agency has answered in the past, it is unlikely they would be significant guidance documents. If the responses are not routine, they may require referral to DOJ for a determination whether they are significant. If this occurs, the responses could be delayed for several months. If a determination is made that the response is a significant guidance document, the delay may be months to over a year.
 
Conclusion
 
The 2017 Sessions memo and recent DOJ regulations are resulting in less guidance, published and unpublished, being issued by ATF. The guidance being issued is subject to a longer review process within ATF and DOJ that delays the guidance being issued. ATF field divisions will continue to enforce the law, but FFLs and the public will have less information on how the agency interprets it. The next Administration will have to determine whether this is the appropriate balance between oversight and open, timely communication with the firearms industry.

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:

 
* 19 Jan 2021: “ITAR FUNdamentals“; FD Associates
* 28 Jan 2021: “8th Annual Customs/Import Boot Camp“; Global Training Center
* 22-24 Mar 2021: “ITAR for the Empowered Official“; FD Associates
* 12 Apr 2021: “Importing Procedures“; Global Training Center
* 13 Apr 2021: “Importing 201“; Global Training Center
* 14 Apr 2021: “International Letters of Credit“; Global Training Center
* 19-23 Apr 2021: “U.S. Export Controls from a Foreign Perspective“; FD Associates
* 26 Apr 2021: “International Logistics“; Global Training Center
* 10 May 2021: “Importing Procedures“; Global Training Center
* 11 May 2021: “Importing 201“; Global Training Center
* 12 May 2021: “International Letters of Credit“; Global Training Center
* 15 Jun 2021: “Importing Procedures“; Global Training Center
* 16 Jun 2021: “Importing 201“; Global Training Center
* 17 Jun 2021: “International Letters of Credit“; Global Training Center

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EN EDITOR’S NOTES

EN_a116. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 
* Hector Hugh Munro (18 Dec 1870 – 14 Nov 1916; better known by the pen name Saki and also frequently as H. H. Munro, was a British writer whose witty, mischievous, and sometimes macabre stories satirize Edwardian society and culture. He is considered by English teachers and scholars as a master of the short story, and often compared to O. Henry and Dorothy Parker. Influenced by Oscar Wilde, Lewis Carroll, and Rudyard Kipling, he himself influenced A. A. Milne, Noël Coward, and P. G. Wodehouse.)
 – “The young have aspirations that never come to pass, the old have reminiscences of what never happened.”
 
Friday funnies
 
* What should you sing at a snowman’s birthday party? “Freeze a jolly good fellow!”
* I asked my wife what she wanted for Christmas and she told me nothing would make her happier than a diamond necklace. So I gave her nothing.
* The year you stop believing in Santa is the year you start getting clothes for Christmas.
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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 Bartlett’s Annotated FTR “BAFTR” is 15 Dec 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. 

11 Dec 2020: 85 FR 79836: Extension of temporary suspensions, modifications and exceptions. The latest edition of Bartlett’s Annotated ITAR (BITAR) is 11 Dec 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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