21-0104 Monday ” Daily Bugle “

21-0104 Monday “Daily Bugle”

(The Daily Bugle was not published last Friday, New Year’s Day)
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Monday, 4 January 2021

  1. State: “Global Magnitsky Human Rights Accountability Act Annual Report”
  2. Treasury/OFAC: “Notice of OFAC Sanctions Actions”
  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  4. DHS/CBP: “Changes to AGOA Designations for the Democratic Republic of Congo; Extension of Duty-Free Rates for Products from Israel; and Reduction of EU Duty Rates”
  5. DoD/DSCA Policy Memos of Interest: “CY 2021 Transportation Costs Look Up Table Rates”
  6. Treasury/OFAC: “Release of the 2019 Terrorist Assets Report”
  7. UK OFSI: “Financial Sanctions: Guidance and Information on Monetary Penalties”
  8. Hong Kong TID: “Air Transshipment Cargo Exemption Scheme for Specified Strategic Commodities: List of Valid Registrants (1 Jan 2021)
  1. EUS: “New Uk Sanctions Regimes Now In Force”
  1. Lock Lord: “‘International’ Issues in an Otherwise ‘Domestic’ Deal”
  2. Thompson Hine: “USTR Announces Additional Tariffs in US-EU WTO Aircraft Dispute”
  3. Wilmer Hale: “OFAC Issues Guidance on Sanctioned Chinese Military Companies”
  1. Monday List of Ex/Im Job Openings: 70 Jobs Available – 4 New Job Openings This Week
  1. Bartlett’s Unfamiliar Quotations 
  2. Editor’s Note: Your Customs Broker Triennial Status Report is Due 28 Feb 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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(Source: Federal Register) [Excerpts]
86 FR 174: Notice
* ACTION: Notice.
* SUMMARY: This notice contains the text of the report required by the Global Magnitsky Human Rights Accountability Act, as submitted by the Secretary of State.
* FOR FURTHER INFORMATION CONTACT: Bob Viglietta, Email: VigliettaR@state.gov, Phone: (202) 647-8836.
* SUPPLEMENTARY INFORMATION: On December 10, 2020, the Secretary of State approved the following report pursuant to the Global Magnitsky Human Rights Accountability Act (Pub. L. 114-328, Title XII, Subtitle F) (“the Act”), which is implemented and built upon by Executive Order 13818 of December 20, 2017, “Executive Order Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption” (E.O. 13818). The text of the report follows: “Pursuant to Section 1264 of the Act, and in accordance with E.O. 13818, the Secretary of State, in consultation with the Secretary of the Treasury, submits this report to detail the Administration’s implementation of the Act in 2020. …”

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(Source: Treasury/OFAC) [Excerpts]
86 FR 186: Notice
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Notice.
* SUMMARY:The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC’s Specially Designated Nationals and Blocked Persons List based on OFAC’s determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.

* DATES: See SUPPLEMENTARY INFORMATION section for effective dates.

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OGS_a24. Commerce/BIS: (No new postings)

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OGS_a35. State/DDTC: (No new postings)

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(Source: DHS/CBP)
This message is to inform the trade community of the following modifications pursuant to Presidential Proclamation 10128 (PP 10128) issued on December 22, 2020 and published in the Federal Register (85 FRN 85491) on December 29, 2020. The modifications include the reinstatement of the Democratic Republic of Congo as an African Growth Opportunity Act (AGOA) beneficiary and designation as a lesser developed beneficiary (LDB) sub-Saharan African country; the extension of the US-Israel Free Trade Agreement on certain agricultural products, and duty reductions for select tariff numbers negotiated under the European Union Agreement.
Effective January 1, 2021, the DRC is reinstated and designated as a lesser developed beneficiary (LDB) sub-Saharan African country under section 112(c) of the AGOA.  In order to reflect this designation in the Harmonized Tariff Schedule of the United States (HTSUS), the general note 16(a) to the HTSUS is modified to include the DRC on the list of beneficiary sub-Saharan countries and note 2(d) to subchapter XIX of chapter 98 of the HTSUS as a qualifying lesser developed beneficiary sub-Saharan African country.  
Goods imported from the DRC entered for consumption, or withdrawn from warehouse for consumption, on or after January 1, 2021, 12:01 AM EST are eligible to claim preferential tariff treatment under AGOA, by placing the Special Program Indicator (SPI) ‘D’ before the eligible tariff number.  The goods must meet the 35% value-added rule and all applicable AGOA requirements. 
Textile and apparel goods are not eligible for entry under subchapter XIX of chapter 98 of the HTSUS until the USTR has determined that the DRC has adopted an effective visa system and made significant progress towards implementing Customs procedures in line with AGOA requirements.
CBP will complete the ACE programming of the DRC changes on January 14, 2021.  Importers may file a Post Summary Correction (PSC) or file a protest (pursuant to 19 USC § 1514) to claim duty refunds on eligible entries filed on January 1, 2021 thru January 14, 2021.
PP 10128 extends the US-Israel Free Trade Agreement benefits on Agricultural Products through December 31, 2021.
Effective January 1, 2021, 12:01 AM EST, eligible agricultural goods (as identified in Annex I of 85 FRN 85491) imported from Israel and entered, or withdrawn from warehouse, for consumption, may claim preferential tariff treatment into the United States. 
CBP has completed ACE programming for these duty modifications.
The United States entered into an agreement with the European Union on November 20, 2020.  As a result, PP 10128 modifies the duty rates for six tariff items identified in Annex II of 85 FRN 85491.  The six tariff subheadings subject to this duty reduction are the following: 1604.20.05, 3214.90.50, 3601.00.00, 7013.41.50, 9613.11.00, and 9613.90.80.  These duty reductions are retroactive as of August 1, 2020 and applicable for unliquidated entry summaries or entry summaries not final as of August 1, 2020.   Importers may file a Post Summary Correction (PSC) or file a protest (pursuant to 19 USC § 1514) to claim duty refunds on eligible entries.
Further duty reductions on the following five tariff subheadings will be effective on August 1, 2021 for goods entered, or withdrawn from warehouse, for consumption: 1604.20.05, 3214.90.50, 3601.00.00, 9613.11.00, and 9613.90.80.  CBP has completed ACE programming for these duty modifications.  … 

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(Source: DoD/DSCA, 3 Jan 2020) [Excerpts]
SUBJECT: Calendar Year (CY) 2021 Transportation Costs Look Up Table Rates (DSCA 20-87) (SAMM E-Change 515)
Attached is the CY21 Transportation Rates to be applied to sensitive and hazardous end items that are shipped to Foreign Military Sales (FMS) customers via the Defense Transportation System. These CY21 rates will be published as E-Change 515 to the Security Assistance Management Manual, Appendix 2, A2.2. DFAS Indianapolis will update the Defense Integrated Financial System (DIFS) with the new rates effective 4 January 2021.
This policy memo supersedes DSCA Policy Memo 20-03, Calendar Year (CY) 2020 Transportation Cost Look-Up Table Rates.
The DSCA point of contact is Stuart Taylor who can be reached at (571) 274-9538 or email: stuart.h.taylor2.civ@mail.mil.

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(Source: Treasury/OFAC, 31 Dec 2020)
The Office of Foreign Assets Control has released its 2019 Terrorist Assets Report.

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(Source: UK OFSI, 4 Jan 2021) [Excerpts] 
This guidance is produced by the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, which is the authority for the implementation of financial sanctions in the UK. It outlines your obligations under financial sanctions as well as OFSI’s approach to licensing and compliance issues. It takes into account relevant case law and guidance at the date of publication. This guidance is general in nature so you should also refer to the relevant, up-to-date legislation as well as specific OFSI guidance where it is available. Please note that each case will be considered on the facts and the specific legal requirements that apply. Please note that OFSI cannot issue definitive guidance on how a UK court might interpret these laws. Finally, this guidance does not represent legal advice. If you are unsure about your obligations in a given case, you should consider taking independent legal advice. …

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(Source: Hong Kong Trade, 4 Jan 2021) [Excerpts]
The Trade and Industry Department implements the Air Transhipment Cargo Exemption Scheme for Specified Strategic Commodities (SCTREX) (referred below as “the Scheme”) to facilitate the air transshipment of specified strategic commodities through Hong Kong.  Registrants under the Scheme are, subject to certain conditions, exempted from licensing requirements under the Import and Export Ordinance (Cap. 60) and the Import and Export (Strategic Commodities) Regulations (Cap. 60G) (referred below as “the Regulations”) in respect of air transshipment cargo of specified strategic commodities.

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The UK is no longer implementing EU sanctions (the Brexit transition period has ended). OFSI notice here. This means:
1)   The new UK sanctions regulations are now in force, including the new UK Libya regulations that have now been published: The Libya (Sanctions) (EU Exit) Regulations 2020
2)   There is a new consolidated list of asset freeze targets to reflect UK designations made under Sanctions Act regulations. These are not all the same as the EU sanctions list (see below).
3)   There is now a licensing application page including the Sanctions Act licence application form.
4)   OFSI has published a bridging document to help facilitate sanctions screening as a result of the changes to the list.
5)   OFSI issued its first general licence today (INT/2020/059, under Regulation 64 of The Russia (Sanctions) (EU Exit) Regulations 2019. It permits payments to the State Unitary Enterprise of the Crimean Republic ‘Crimean Sea Ports’ for services provided at the ports of Kerch Fishery Port, Yalta Commercial Port and Evpatoria Commercial Port, and for services by Gosgidrografiya and Port-Terminal branches of the Crimean Sea Ports, and for reimbursement out of non-frozen funds for such payments. Notice here.
On the new UK list, 113 people / entities on EU sanctions regulations have not been designated in the UK so are no longer subject to an asset freeze / travel ban in the UK. This presumably means the UK considered that there are not reasonable grounds to suspect the reasons given in the EU listings are correct or that it is otherwise not appropriate to list them.  Those people / entities could only be removed from the EU list if the Council of the EU removed them or the General Court of the EU ordered it.   
  • 11 entries have been included in the list as aliases of existing entries (but do not have a separate listing).
  • 10 entries are on lists where the title of the regulations under the Sanctions Act refers to a different regime than the EU regulation under which they were previously listed.
  • 7 UN listings no longer have an asset freeze associated with their UK listing so have been removed from the asset freeze list but are still remain with a travel ban on the UK list.

1 entry was formerly listed under multiple regimes, now just Iran the (nuclear) regime.


(Source: JD Supra, 30 Dec 2020
* Author: Scott Arrington, Esq., Locke Lord LLP
Covid has wreaked havoc on deal numbers and the economy generally, but one light at the end of the tunnel we are all hopefully approaching quickly is that buyers with significant cash reserves will start to buy companies and assets that need to sell as a result of those economic troubles. Some of those buyers will be non-US individuals or entities coming to America to hunt for opportunities, and accordingly a good number of US in-house lawyers who have spent their entire careers doing purely domestic transactions will need to get up to speed on the “international” aspects of the sale of a company or assets that have always been purely domestic.
Although a lawyer on the sell side of such a transaction will have a considerably smaller number of “international” issues to think about than a lawyer on the buy side, of course, the issues a sell side lawyer needs to master are still important and very likely to be novel for someone who has always done domestic work. This piece discusses some of the main “international” issues you should consider if you find yourself on the sell side of such a transaction.
Prohibited Parties – A threshold issue for any sale to a non-US party is whether the prospective buyer is on any of the prohibited persons lists maintained by the US federal government. The Bureau of Industry and Security maintains lists of persons/entities prohibited from exporting from the United States (the Denied Parties List) or from receiving exports or re-exports of goods, software or technology that is subject to US export control laws (the Entity List and the Unverified List). The Office of Foreign Assets Control (“OFAC”) also has the Specially Designated Nationals list (“SDN List”) and other lists. Importantly, OFAC considers any company that is owned 50% or more by someone on the SDN List to be an SDN. Of note, if you manufacture or export defense articles or defense services, the Directorate of Defense Trade Controls has a Debarred Persons Lists as well as a list of countries that are subject to an arms embargo. Although it is relatively unusual for someone looking for US companies or assets to show up on one of these lists, it definitely happens. A quick check of these lists to make sure your counterparty – and in some cases its owners/principals – is not on one of them is definitely time well-spent.
CFIUS – The Committee on Foreign Investment in the United States (“CFIUS”) is an interagency committee of the federal government that reviews foreign investments in US businesses and real estate. The law makes some filings with CFIUS discretionary, while others are mandatory. Determining whether a filing is mandatory takes some analysis, of course, but determining whether a discretionary filing should be made takes both analysis and a good bit of judgment. Even if a filing was discretionary, the President may unwind a transaction if CFIUS determines that the transaction raises national security risks (whether a filing was made or not). Accordingly, the need for a CFIUS review is decidedly not just a buyer issue but also something a US seller should also examine closely. In addition, from a purely logistical perspective, the timing of the filing should be incorporated into the transaction closing timeline.
ITAR –  If you are in the defense space, the International Traffic in Arms Regulations (“ITAR”) have pre-closing filing requirements that are similar to those under the CFIUS regulations when selling to a buyer that is owned or controlled by a foreign person or entity. Importantly, ITAR covers not only products that most people would consider “arms” but also products that many people would never expect to be covered. As a result, any company that sells products to the defense industry or defense contractors should ensure it has a solid grasp of its product classifications – for ITAR and other purposes.
Deemed Exports – Even if your company has never exported a single product or has no intention of doing so, you need to be aware of the deemed export rules if you plan on selling assets or a company to a non-US buyer. Under the Export Administration Regulations (and similar rules under the ITAR), a “deemed export” occurs whenever certain controlled technology and information is disclosed or made accessible to a non-US person – and a sale of an entity or assets that includes that technology or information, regardless of whether the buyer takes the assets outside the US, could qualify. If it does qualify, then the seller needs to obtain a license to consummate the transaction (assuming it would not be barred, which is also a possibility).
Some of these issues require a simple check in many/most cases, but some require more substantial analysis. Doing the appropriate diligence on all of them up front, however, can prevent a significant amount of cost and trouble later – and hopefully put you on the path to a successful closing.

(Source: Thompson Hine, 31 Dec 2020)  
* Author: Scott E. Diamond, 1-202-263-4197, Thompson Hine
The Office of the U.S. Trade Representative (USTR) announced that it will add on January 12, 2021 “certain products of certain EU member States” to the list of products subject to additional duties in the ongoing World Trade Organization (WTO) dispute with the European Union (EU) over subsidies for large civil aircraft.  In October 2019, the United States was authorized by a WTO dispute settlement panel to impose additional duties on approximately $7.5 billion in EU products as a result of the WTO Large Civil Aircraft litigation.  See Update of October 4, 2019 and February 17, 2020.  In a separate but related WTO dispute in September 2020, the EU was authorized to impose its own additional tariffs on approximately $4 billion in U.S. products.  See Update of November 11, 2020.
In implementing these additional tariffs, the USTR in a press release

 stated, “the EU used trade data from a [benchmark reference] period in which trade volumes had been drastically reduced due to the horrific effects on the global economy from the COVID-19 virus”; according to the USTR, this resulted in the EU imposing tariffs “on substantially more products than would have been covered if it had utilized a normal period.”  Despite objections from the USTR, the EU has refused to change its approach.   
In response, the USTR announced these additional tariffs “to keep the two actions proportionate to each other” and will change its reference period to the same period used by the EU.

The new EU products subject to the additional tariffs will be “goods of France and Germany, as these countries have provided the greatest level of WTO-inconsistent large civil aircraft subsidies.”  These goods include aircraft manufacturing parts, certain non-sparkling wine, and certain cognac and other grape brandies.  See forthcoming Federal Register notice.  The EU quickly responded by issuing a statement indicating that this action disrupts ongoing negotiations and that it “will engage with the new U.S. administration at the earliest possible moment to continue these [WTO dispute] negotiations and find a lasting solution to the dispute.”  

(Source: Wilmer Hale, 31 Dec 2020) [Excerpts]
* Principal Author: Ambassador Charlene Barshefsky, 1-202-663 6130, Wilmer Hale
On December 28, 2020, the Department of the Treasury Office of Foreign Assets Control (OFAC) published awaited guidance on the implementation of Executive Order (EO) 13959, “Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies,” which President Trump issued on November 12, 2020. EO 13959 will prohibit, as of January 11, 2021, purchases by U.S. persons of certain securities issued by so-called Communist Chinese military companies. OFAC’s guidance comes in the form of Frequently Asked Questions (FAQs) 857, 858, 859, 860, and 861. The State Department also issued a press release the same day addressing OFAC’s guidance.
The new FAQs, discussed below, address some-but not all-key questions asked by industry groups regarding the EO’s scope. While OFAC is working on additional guidance that it may publish prior to January 11, 2021, fund managers, broker-dealers, investment advisors, banks and many others are now making challenging compliance and commercial decisions with limited information about this novel sanction program.
Click here to read the full alert


MS_a115. Monday List of Ex/Im Job Openings: 70 Jobs Available – 4 New Job Openings This Week

(Source: Events & Jobs Editor)
New Jobs
* Avient Corporation; Avon Lake, OH; Trade Compliance Analyst 
* OPW; Smithfield, NC; Trade Compliance Specialist 

Click here for the full list

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EN_a116. Bartlett’s Unfamiliar Quotations

(Source: Editor)

* Victor Borge (Børge Rosenbaum; 3 Jan 1909 – 23 Dec 2000; was a Danish comedian, conductor, and pianist who achieved great popularity in radio and television in the United States and Europe.  His blend of music and comedy earned him the nickname “The Clown Prince of Denmark.”)
  – “Santa Claus has the right idea – visit people only once a year.”
* Henry George Bohn (4 Jan 1796 – 22 Aug 1884; was a British publisher. He is principally remembered for the Bohn’s Libraries which he inaugurated. These comprised editions of standard works and translations, dealing with history, science, classics, theology, and archaeology.)
  – “He who knows himself best esteems himself least.”
Monday is pun day.
* I’m not impressed with the organizers of the New Year’s Eve celebration at Times Square. They always drop the ball.
* A cell phone and a firework were arrested on New Year’s Eve. One was charged, and the other was let off.
* I was going to quit all my bad habits for the new year, but then I remembered that nobody likes a quitter.
* Did you hear about the guy who started fixing breakfast at midnight on December 31?  He wanted to make a New Year’s toast!
* A New Year’s resolution is something that goes in one year and out the other.
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EN_a616. Editor’s Note: Customs Brokers — Don’t forget: Your Customs Broker Triennial Status Report is Due 28 Feb 2021

(Source: Editor)
Triennial status reports and accompanying fees are due to CBP by February 28th, 2021. Electronic reporting is open now. To submit your report electronically, visit THIS LINK.
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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.
Latest Update 


5 Apr 2019: 84 FR 13499:

Civil Monetary Penalty Adjustments for Inflation. 
28 Dec 2020: 85 FR 84211;   Revisions to Country Groups for Ukraine, Mexico, and Cyprus

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 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. 

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.


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.

1 Jan 2019: 19 USC 1202 Annex.
HTS System Update #2009 of 29 Dec 2020.  
  – HTS codes for AES are available here.
  – HTS codes that are not valid for AES are available here.


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