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Copy of 19-0502 Thursday “Daily Bugle'”

19-0502 Thursday “Daily Bugle”

Thursday, 2 May 2019

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, DOE/NRC, Customs, NISPOM, EAR, FACR/OFAC, FAR/DFARS, FTR/AES, HTSUS, and ITAR), plus news and events.  Subscribe 
here 
for a free subscription.  
Contact us
 
for advertising inquiries and rates. [Editor’s note:  This is a re-release of today’s Daily Bugle, which was incorrectly dated 1 May.]

[No items of interest noted today.] 

  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.)
  3. DoD/DSCA Posts Policy Memo 19-26
  4. State/DDTC: (No new postings.)
  5. Justice: “Criminal Division Announces Publication of Guidance on Evaluating Corporate Compliance Programs”
  6. Treasury/OFAC Announces Settlement Agreement with MID-SHIP Group LLC
  7. Treasury/OFAC Publication: “A Framework for OFAC Compliance Commitments”
  8. EU Council Publishes Statement on the Full Activation of the Helms-Burton (LIBERTAD) Act by the U.S.
  9. Belgium/DFA Announces Launch of Digital Platform to Facilitate Permit Applications”
  1. Deutsche Welle: “EU Says Will Respond to Controversial US Move on Cuba”
  2. The National Law Review: “Foreign Investments in US Biotech Now Covered by CFIUS”
  3. World Tribune: “Daimler Has No Clue How Kim Jong-Un Got Its Armored Limousines”
  1. A. V. Lupo, T.M. Polino & E. R. Kutner: “US State Department Considering Strict Origin Rules for Jewelry”
  2. J. McShane: “Alexa, Are You a U.S. Person?”
  3. J. Norton & E. J. Krauland: ” New Jersey Software Company Settles with OFAC for Accepting Late Payments from Rosneft”
  4. M. Volkov: “DOJ Issues New and More Robust Guidance on Evaluation of Corporate Compliance Programs (Part I of IV)”
  1. ECS Presents “ITAR/EAR Bootcamp: Achieving Compliance” on 8-9 Jul in Seattle, WA
  2. FCC Presents “Designing an Internal Compliance Program for Export Controls & Sanctions”, 1 Oct in Bruchem, the Netherlands
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: DHS/Customs (5 Apr 2019), DOC/EAR (11 Apr 2019), DOC/FTR (24 Apr 2018), DOD/NISPOM (18 May 2016), DOE/AFAEC (23 Feb 2015), DOE/EINEM (20 Nov 2018), DOJ/ATF (14 Mar 2018), DOS/ITAR (19 Apr 2018), DOT/FACR/OFAC (15 Mar 2018), HTSUS (18 Apr 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

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OGSOTHER GOVERNMENT SOURCES

OGS_a11. Items Scheduled for Publication in Future Federal Register Editions
(Source: Federal Register)

 

* Commerce/ITA; NOTICES; Meetings: Civil Nuclear Trade Advisory Committee
[Pub. Date: 3 May 2019.)

 

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OGS_a33
. DoD/DSCA Posts Policy Memo 19-26

(Source: DoD/DSCA), 1 May 2019.)
 
 
– On May 25, 2018, Swaziland was renamed the Kingdom of Eswatini reflecting changes implemented by the U.S. Board of Geographic Names. Effective immediately, SAMM Table C4.T2A. Security Cooperation (SC) Customer and Regional Codes and FMS Eligibility (Regions), is updated with the lines below to indicate the new name and maintain the historical reference to the former name.

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OGS_a55. Justice: “Criminal Division Announces Publication of Guidance on Evaluating Corporate Compliance Programs”

(Source: Justice, 30 Apr 2019.)
 
The Criminal Division announced today the release of a guidance document for white-collar prosecutors on the evaluation of corporate compliance programs. The document, entitled “The Evaluation of Corporate Compliance Programs,” updates a prior version issued by the Division’s Fraud Section in February 2017. It seeks to better harmonize the guidance with other Department guidance and standards while providing additional context to the multifactor analysis of a company’s compliance program.
 
“Effective compliance programs play a critical role in preventing misconduct, facilitating investigations, and informing fair resolutions,” Assistant Attorney General Brian A. Benczkowski said. “Today’s guidance document is part of our broader efforts in training, hiring, and enforcement to help promote corporate behaviors that benefit the American public and ensure that prosecutors evaluate the effectiveness of compliance in a rigorous and transparent manner.”
 
The guidance document sets forth topics that the Criminal Division has frequently found relevant in evaluating a corporate compliance program, organizing them around three overarching questions that prosecutors ask in evaluating compliance programs: First, is the program well-designed? Second, is the program effectively implemented? And, third, does the compliance program actually work in practice?
 
To that end, Part I of the document discusses various hallmarks of a well-designed compliance program relating to risk assessment, company policies and procedures, training and communications, confidential reporting structure and investigation process, third-party management, and mergers and acquisitions.   Part II details features of effective implementation of a compliance program, including commitment by senior and middle management, autonomy and resources, and incentives and disciplinary measures. Finally, Part III discusses metrics of whether a compliance program is in fact operating effectively, exploring a program’s capacity for continuous improvement, periodic testing, and review, investigation of misconduct, and analysis and remediation of underlying misconduct.
 

The document was compiled with the input of components across the Division, including attorneys from the Office of the Assistant Attorney General, Fraud Section, and the Money Laundering and Asset Recovery Section. For the full guidance document, click here.

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(Source:
Treasury/OFAC, 2 May 2019.)
 
MID-SHIP, a company headquartered in Port Washington, New York, has agreed to settle its potential civil liability for five apparent violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F.R. part 544 (WMDPSR). Specifically, between on or about February 18, 2011 and on or about November 14, 2011, MID-SHIP processed five electronic funds transfers, totaling approximately $472,861, that pertained to payments associated with blocked vessels identified on OFAC’s List of Specially Designated Nationals and Blocked Persons. These transactions appear to have violated § 544.201 of the WMDPSR. OFAC determined that MID-SHIP did not voluntarily self-disclose the apparent violations, and the apparent violations constitute an egregious case.
 
For more information, please visit the following web notice.
 
New information on OFAC Civil Penalties and Informal Settlements is now available.

 

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(Source:
Treasury/OFAC, 2 May 2019.) [Excerpts.]
 
Today OFAC has published A Framework for OFAC Compliance Commitments to provide organizations subject to U.S. jurisdiction, as well as foreign entities that conduct business in or with the United States or U.S. persons, or that use U.S.-origin goods or services, with a framework on the essential components of a sanctions compliance program. The document also outlines how OFAC may incorporate these components into its evaluation of apparent violations and resolution of investigations resulting in settlements. Finally, the document includes an appendix that offers a brief analysis of some of the root causes of apparent violations of U.S. economic and trade sanctions programs OFAC has identified during its investigative process. For a complete copy of the publication and more information on this action, please visit this page. 
 
[Introductory portion of 8-page document:]
 
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces U.S. economic and trade sanctions programs against targeted foreign governments, individuals, groups, and entities in accordance with national security and foreign policy goals and objectives.
 
OFAC strongly encourages organizations subject to U.S. jurisdiction, as well as foreign entities that conduct business in or with the United States, U.S. persons, or using U.S.-origin goods or services, to employ a risk-based approach to sanctions compliance by developing, implementing, and routinely updating a sanctions compliance program (SCP). While each risk-based SCP will vary depending on a variety of factors-including the company’s size and sophistication, products and services, customers and counterparties, and geographic locations-each program should be predicated on and incorporate at least five essential components of compliance:  
 
(1) management commitment;  
(2) risk assessment;  
(3) internal controls;  
(4) testing and auditing; and  
(5) training.
 
If after conducting an investigation and determining that a civil monetary penalty (“CMP”) is the appropriate administrative action in response to an apparent violation, the Office of Compliance and Enforcement (OCE) will determine which of the following or other elements should be incorporated into the subject person’s SCP as part of any accompanying settlement agreement, as appropriate. As in all enforcement cases, OFAC will evaluate a subject person’s SCP in a manner consistent with the Economic Sanctions Enforcement Guidelines (the “Guidelines”).
 
When applying the Guidelines to a given factual situation, OFAC will consider favorably subject persons that had effective SCPs at the time of an apparent violation. For example, under General Factor E (compliance program), OFAC may consider the existence, nature, and adequacy of an SCP, and when appropriate, may mitigate a CMP on that basis. Subject persons that have implemented effective SCPs that are predicated on the five essential components of compliance may also benefit from further mitigation of a CMP pursuant to General Factor F (remedial response) when the SCP results in remedial steps being taken.
 
Finally, OFAC may, in appropriate cases, consider the existence of an effective SCP at the time of an apparent violation as a factor in its analysis as to whether a case is deemed “egregious.”
 
This document is intended to provide organizations with a framework for the five essential components of a risk-based SCP, and contains an appendix outlining several of the root causes that have led to apparent violations of the sanctions programs that OFAC administers. OFAC recommends all organizations subject to U.S. jurisdiction review the settlements published by OFAC to reassess and enhance their respective SCPs, when and as appropriate.   . . .
 

[The remainder of the document is available here.]

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The European Union deeply regrets the full activation of the 1996 Helms-Burton (LIBERTAD) Act by the United States. The decision to activate Title III, and opening the way for action under Title IV, is a breach of the commitments undertaken in the EU-US agreements of 1997 and 1998, which had been respected by both sides without interruption since then. This will cause unnecessary friction and undermines trust and predictability in the transatlantic partnership.
 
The EU considers the extra-territorial application of unilateral restrictive measures to be contrary to international law and will draw on all appropriate measures to address the effects of the Helms-Burton Act, including in relation to its WTO rights and through the use of the EU Blocking Statute. The EU will continue to work with its international partners who have also voiced their concerns in this regard.
  

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(Source: Belgium, Department of Foreign Affairs, 29 Apr 2019.)
 
On the 29th of April, Flanders Department of Foreign Affairs has launched a digital platform which enables organizations to submit their applications for trade in dual use and military goods online.
 
The platform allows organizations and individuals to easily submit their applications at any time and makes it easy for users to access and manage all their documents and current applications. In addition to applying for permits, it is also possible to report on the use of the applications.
 
The Government of Flanders has been strongly committed to the digitization of its services for some years now. This digital transformation also applies to the Department of Foreign Affairs, and its Strategic Goods Control unit. Head of unit, Michael Peeters explains: “Our unit is only partially active in Flanders international trade, but as we all know, dual-use export controls are characterized by their sensitivity. In order to prevent the risk of improper use, building a digital platform was more important than ever.”
 
Control for international trade in strategic goods in Flanders is entrusted to the Department of Foreign Affairs.
 

The Digital Platform manual is a step by step guide for organizations and individuals. 

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NWSNEWS

(Source:
Deutsche Welle, 2 May 2019.) [Excerpts.]
 
The EU says a move by the US to fully implement the Helms-Burton Act on Cuba violates international law. European companies could be affected by lawsuits resulting from Washington’s decision.
The European Union said on Thursday it would take “measures” in response to a decision by Washington to allow lawsuits in US courts against companies using premises confiscated by the communist government of Cuba.
 

The EU considers the US move to be “contrary to international law” and “will draw on all appropriate measures to address the effects of the Helms-Burton Act, including in relation to its WTO rights,” according to a statement from the EU’s top diplomat, Federica Mogherini.
 
The administration of US President Donald Trump announced in April that it would activate a provision of the 1996 Helms Burton Act that has been waived by every president since the law was passed, due to objections from US allies doing business in Cuba. …

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NWS_a2
11. The National Law Review: “Foreign Investments in US Biotech Now Covered by CFIUS”

(Source: The National Law Review, 1 May 2019.)
 
The expansion of CFIUS’s jurisdiction to cover the biotechnology sector presents an additional regulatory hurdle for foreign investors that requires careful advance planning.
The Committee on Foreign Investment in the United States (CFIUS) is a United States federal interagency committee chaired by the US Treasury Department. CFIUS is charged with reviewing and addressing any adverse implications for US national security posed by foreign investment in US businesses.
 
The enactment of the Foreign Investment Risk Review Modernization Act (FIRRMA) in 2018 strengthened CFIUS’ mandate and broadened its jurisdiction over a range of foreign investment transactions involving various US industries, including the US biotech industry. Prior to the enactment of FIRRMA, US biotechnology companies were largely unconcerned with CFIUS in relation to transactional matters. These companies generally focus on research and development, mainly the discovery of therapeutics and diagnostics for diseases, which are activities of little or no concern for US national security outside the limited areas of bioterrorism and toxins. …
 

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(Source:
World Tribune, 1 May 2019.) [Excerpts.]
 
North Korean leader Kim Jong-Un has raised eyebrows at recent high-profile summits by arriving in grand style in stretch limousines made by Daimler.
 
Kim used the limousines at his meeting last week with Russian President Vladimir Putin and both of his earlier summits with U.S. President Donald Trump.
 
But the German automaker says it has no idea how the North Korean dictator got the limos. Daimler told The Associated Press that it has no business dealings with the North.
 
The sale of luxury goods to North Korea, including limousines, is banned under UN sanctions. …


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COMMCOMMENTARY

(Source: Arent Fox LLP, 1 May 2019.)
 
* Authors: Anthony V. Lupo, Esq., anthony.lupo@arentfox.com, + 202-857-6353; Teresa M. Polino, Esq., Teresa.Polino@arentfox.com, +1 202-350-3745; and Elyssa R. (Emsellem) Kutner, Esq., Elyssa.kutner@arentfox.com, + 212-492-3002. All of Arent Fox LLP.
 
Fashion accessory and luxury goods importers of fine jewelry and costume jewelry containing gemstones and/or precious metals (e.g., gold), should be aware of a current proposal being considered by State Department officials.
 
State Department officials recently met with trade organizations in NYC to discuss requiring the jewelry industry to declare the country of origin of all materials in products of jewelry. The possible origin declaration requirement would be for all raw materials in jewelry such as diamonds, colored gemstones, metals (such as gold), and the like. Additionally, the new rules might require a declaration of chain of custody, i.e., the movement from owner to owner.
 
The State Department noted that the new requirements were being considered because the Kimberley Process, an international certification scheme that regulates the trade of diamonds to prevent the sale of conflict diamonds, is inadequate. Specifically, the Kimberley Process has failed to expand its definition of conflict diamonds to include abuses by governments. The State Department believes the unregulated sales of diamonds is therefore funding abusive regimes such as Iran, Venezuela, and countries in Africa, and that providing US consumers with information regarding the origin, and possibly other supply chain information, of the raw materials used in jewelry, is important in the fight against such regimes.
 

In light of these developments, affected importers should consider closely monitoring the proposed requirement and becoming involved in the process by lobbying themselves or through trade associations. Additionally, importers should begin to review their supply chains to understand how their goods could be affected if the new rules are implemented. 

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(Source: Export Solutions, 16 Apr 2019.)  
 
* Author: Jim McShane, Sr. Consultant, Trade Compliance, Export Solutions.
 
“Hey Alexa, are you a U.S. Person?”
Imagine this. A conference call with your foreign-based customer is about to begin. Today’s agenda includes technical discussions of recent upgrades and changes to the designs of some ITAR-controlled items. Your Trade Compliance Officer has reviewed the material and confirmed that export authorizations are in place approving the subject matter to be discussed with your customer. All attendees on the call have been identified and Restricted Party Screening has already occurred, per your company’s compliance program. The call is ready to begin, but what about that device on your desk? The one that answers your questions, provides weather updates, and queues your favorite playlists? “Alexa, are you a U.S. Person?”
 
Recently, Amazon admitted that thousands of their employees located around the world are listening to conversations through Alexa and transcribing excerpts of these conversations. This is not just a privacy issue. It also raises potential questions and concerns about export violations. Amazon admits that the employees who listen, monitor and transcribe conversations are located outside of the United States. (Specifically, they have mentioned Costa Rica, India and Romania. However, there was nothing to indicate that these are the only foreign locations. China, anyone?) With that in mind, it’s not difficult to imagine that Amazon’s employee transcribers could meet the definition of “Foreign Persons,” and that these persons might not be approved on export authorizations to participate in technical discussion about controlled items. If that is the case, it means the Amazon employees have no authority to participate in or transcribe information discussed that is export controlled. And if that doesn’t give you enough pause, then consider the following: Where do these transcriptions go? Where are they stored? Who reads them? Are these persons also “Foreign Persons” under the regulations?
 
While Amazon attempts to make a case for privacy stating that: “Employees do not have direct access to information that can identify the person or account as part of this workflow”, it was reported in Bloomberg that “recordings sent to the Alexa reviewers don’t include your full name and address. However, they are linked with an account number, as well as a device serial number and your first name.”
 
Privacy concerns aside, the content contained in these transcriptions – and how that content may be controlled by U.S. export regulations – is a serious issue. It is not good enough to simply assume that all of the discussions/transcriptions have to do with “benign” topics like shopping lists and household errands. Consent Agreements between the U.S. government and others have been reached on far less. Consider the recent Consent Agreement between DDTC and FLIR, which confirmed that Foreign Person Employees had access to Technical Data and that access did not mean that the employees viewed the Technical Data, but rather, they had the ability to view the Technical Data. Is Alexa providing this same capability to Amazon employees?
 
Many IT systems today have safeguards to prevent unauthorized access and retrieval of export controlled information without authorizations. That said, conversations that occur outside of the secure networks – and the subsequent retrieval/distribution of export-controlled information – opens a whole new aspect to the question of how much security is required when discussing export controlled information?
 

So, the next time you want to know the weather in Buford, Wyoming, before beginning a conference call with your foreign customers, go ahead and ask Alexa. Then unplug her. 

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* Authors: Jillian Norton, Esq., jnorton@steptoe.com; and Edward J. Krauland, Esq., ekrauland@steptoe.com. Both of Steptoe & Johnson LLP.
 
On April 25, 2019, OFAC announced that Haverly Systems, Inc. (“Haverly”), a New Jersey software company, had agreed to pay $75,375 to settle apparent violations from 2014 related to Haverly’s collection of payments from JSC Rosneft (“Rosneft”), a Russian oil major on OFAC’s Sectoral Sanctions Identifications (“SSI”) list. The key issue was OFAC’s finding that Haverly accepted the payments from Rosneft outside of the then-applicable 90-day window and thereby dealt in the restricted “new debt” of Rosneft. This appears to be the first time OFAC has published a settlement involving violations of the SSI list Directives, and underscores the importance for companies subject to U.S. jurisdiction of monitoring invoicing and payments with SSI list entities and their subsidiaries. Non-U.S. companies may also face “secondary sanctions” risk under Section 228 of CAATSA, on which we have previously advised, for certain types of transactions with SSI list designees. See also our previous advisory on OFAC’s SSI list sanctions, along with our previous discussion of the CAATSA-mandated changes to those sanctions.
 
Pursuant to Directive 2 under Executive Order 13662 and § 589.201 of OFAC’s Ukraine-Related Sanctions Regulations, U.S. persons are prohibited from transacting or otherwise dealing in “new debt” of longer than certain stated maturity periods of SSI list designees or any entities of which they own 50% or more. At the time of this apparent violation, the relevant maturity period was 90 days. [FN/1] “Debt” is defined broadly to include any “extensions of credit.” OFAC has stated in FAQ guidance that open payment terms, such as the time permitted to pay commercial invoices, also fall within the scope of “new debt.”
 
In its notice of enforcement, OFAC states that Haverly licensed software and provided related support to Rosneft and issued invoices for this on August 19, 2015. Haverly did not violate Directive 2 in issuing these invoices because they were payable by their terms in not more than 90 days. However, OFAC alleges that Rosneft did not make payment on the first invoice until May 31, 2016 – approximately nine months after its issuance. So the violation was in accepting this late payment. OFAC has issued FAQ guidance that in the event such an SSI list entity fails to make payment within the permitted period of time, a U.S. person should report that to OFAC and consider seeking a specific license to authorize accepting the late payment. In our experience, however, obtaining such licenses can be a challenge. (OFAC states in its notice that “OFAC would have likely authorized the transactions had Haverly requested a license to receive the payments.” However, the processing times for such requests can be lengthy.)
 
So how did this issue come to OFAC’s attention? OFAC states that Haverly did not submit a voluntary disclosure. It appears that the parties’ banks may have reported the violations to OFAC after flagging concerns about possible Directive 2 violations and rejecting some of the attempted late payments. Parties should take note that blocked or rejected payments can be a significant OFAC enforcement risk.
 
OFAC states in the web notice that it encourages all companies “to exercise enhanced due diligence in business relationships with entities subject to the SSI list and to avoid the use of unorthodox business practices – such as the amendment or alteration of trade documents, or resubmission of payment information without a sanctions related term, phrase, or location.” Companies – both U.S. and non-U.S. – should monitor invoicing and payments involving SSI list entities and their subsidiaries, and flag for legal and compliance review any payments blocked or rejected by banks.
 
[FN/1] For new debt issued on or after November 28, 2017, the relevant tenor under Directive 2 has been reduced to 60 days. Other SSI list Directives have other maturity periods.
  

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(Source: V
olkov Law Group Blog, 1 May 2019. Reprinted by permission.)
 
* Author: Michael Volkov, Esq., Volkov Law Group, mvolkov@volkovlaw.com, 240-505-1992.
 
In a major development in ethics and compliance program expectations, the Justice Department has issued a new and important revised guidance on the Evaluation of Corporate Compliance Programs (HERE). The new Evaluation Guidance supersedes the prior document issued in February 2017, which contained a lengthy list of questions on key topic areas.
 
The headline from this new Evaluation Guidance is significant – the Justice Department has advanced the ball with respect to ethics and compliance or raised the bar yet again (whatever analogy fits the bill) for corporate compliance programs. The Evaluation Guidance is a major document that brings together many significant trends in the compliance area and places the DOJ stamp on these trends. For the compliance officer, this is a new and important document that should be communicated throughout their respective organizations, starting with the board and senior management.
 
The new Evaluation Guidance was issued the same day as Brian Benczkowski delivered a speech on the topic at the recent Ethics Compliance initiative meeting in Dallas, Texas (here for copy of speech). As noted by Brian,
 
“[T]here are three fundamental questions a prosecutor should ask in evaluating a company’s compliance program:
 
First, is the program well-designed?
 
Second, is the program effectively implemented?
 
And, third, does the compliance program actually work in practice?”
 
Benczkowski explained, the updated Evaluation Guidance “uses these questions as a framework to categorize the topics that the Department has frequently found relevant in evaluating a corporate compliance program, and also provides guidance from other Department and enforcement documents.”
 
Benckowski concluded, “[C]ompliance is a fast-moving field, and one in which evolving technologies and globalization of economies and enforcement can provide both challenges and solutions.”
 
The Evaluation Guidance is broken down within the three questions noted above with some overlapping discussions. In general, the topics include:
 
– Risk Assessment
– Policies and Procedures
– Training and Communications
– Confidential Reporting Structure and Investigation Process
– Third-Party Management
– Mergers and Acquisitions
– Commitment by Senior and Middle Management
– Autonomy and Resources
– Incentives and Disciplinary Measures
– Continuous Improvement, Periodic Testing and Review
– Investigation of Misconduct
– Analysis and Remediation of Any Underlying Misconduct
 
The Evaluation Guidance contains a number of new topics and specific questions that highlight DOJ’s continued interest, including risk assessments, design of corporate compliance programs, corporate culture, investigations and training.
 

Compliance officers should carefully review this new and important document.

  

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TEEX/IM TRAINING EVENTS & CONFERENCES

TE_a117. ECS Presents “ITAR/EAR Bootcamp: Achieving Compliance” on 8-9 Jul in Seattle, WA


 
* What: ITAR/EAR Bootcamp:  Achieving Compliance; Seattle, WA
* When: July 8-9, 2019
* Where:
Sheraton Grande
* Sponsor: Export Compliance Solutions & Consulting (ECS)
* ECS Speaker Panel:  Suzanne Palmer, Mal Zerden
* Register here or by calling 866-238-4018 or e-mail

 spalmer@exportcompliancesolutions.com 

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TE_a218. FCC Presents “Designing an Internal Compliance Program for Export Controls & Sanctions”, 1 Oct in Bruchem, the Netherlands

 
This training course is designed for compliance officers, managers, and other professionals who aim to enhance their organization’s compliance efforts. The course will cover multiple topics and tackle various key questions, including but not limited to:
– Setting the Scene: ensuring compliance in the export control and sanctions arena
– What is expected from your organization? A closer look at the official frameworks and guidelines from U.S. and European government agencies
– Key elements of an ICP
– Best practice tips for enhancing your current compliance efforts  
– Internal controls samples (policies, procedures, instructions)
– Strategic benefits of having an ICP.
 
* What: Designing an Internal Compliance Program for Export Controls & Sanctions”
* Date: Tuesday, 1 Oct 2019
* Location: Full Circle Compliance, Landgoed Groenhoven, Dorpsstraat 6, Bruchem, The Netherlands
* Times:
  – Registration and welcome: 9.00 am – 9.30 am
  – Training course hours: 9.30 am – 4.30 pm
* Level: Intermediate
* Target Audience:  the course provides valuable insights for both compliance professionals, employees and (senior / middle) management working in any industry subject to U.S. and/or EU (member state) export control laws and sanctions regulations.
* Instructors: Drs. Ghislaine C.Y. Gillessen RA (Managing Director) and Marco M. Crombach MSc (Senior Manager).
* Information & Registration: click here or contact us at events@fullcirclecompliance.eu or 31 (0)23 – 844 – 9046.  

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ENEDITOR’S NOTES

* Hedda Hopper (born Elda Furry; 2 May 1885 – 1 Feb 1966; was an American actress and gossip columnist, notorious for feuding with her arch-rival Louella Parsons.)
  – “Two of the cruelest, most primitive punishments our town deals out to those who fall from favor are the empty mailbox and the silent telephone.”
 
Novalis (was the pen name of Georg Philipp Friedrich Freiherr von Hardenberg; 2 May 1772 – 25 March 1801; a poet, author, mystic, and philosopher of Early German Romanticism.)
  – “To become properly acquainted with a truth, we must first have disbelieved it, and disputed against it.”

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EN_a320
. Are Your Copies of Regulations Up to Date?
(Source: Editor)

 

*
DHS CUSTOMS REGULATIONS: 19 CFR, Ch. 1, Pts. 0-199.  Implemented by Dep’t of Homeland Security, U.S. Customs & Border Protection.

  – Last Amendment: 5 Apr 2019:
84 FR 13499-13513: Civil Monetary Penalty Adjustments for Inflation
 

DOC EXPORT ADMINISTRATION REGULATIONS (EAR): 15 CFR Subtit. B, Ch. VII, Pts. 730-774. Implemented by Dep’t of Commerce, Bureau of Industry & Security.
  – Last Amendment: 11 Apr 2019: 84 FR 14608-14614: Revisions to the Unverified List (UVL) 
 
* DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.  Implemented by Dep’t of Commerce, U.S. Census Bureau.
  – Last Amendment: 24 Apr 2018: 83 FR 17749-17751: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates
  – HTS codes that are not valid for AES are available here.
  – The latest edition (1 Jan 2019) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and approximately 250 footnotes containing case annotations, practice tips, Census/AES guidance, and explanations of the numerous errors contained in the official text. Subscribers receive revised copies in Microsoft Word every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR. Government employees (including military) and employees of universities are eligible for a 50% discount on both publications at www.FullCircleCompiance.eu.   

 

DOD NATIONAL INDUSTRIAL SECURITY PROGRAM OPERATING MANUAL (NISPOM): DoD 5220.22-M. Implemented by Dep’t of Defense.
  – Last Amendment: 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; Implemented by Dep’t of Energy, National Nuclear Security Administration, under Atomic Energy Act of 1954.
  – Last Amendment: 23 Feb 2015: 80 FR 9359, comprehensive updating of regulations, updates the activities and technologies subject to specific authorization and DOE reporting requirements. This rule also identifies destinations with respect to which most assistance would be generally authorized and destinations that would require a specific authorization by the Secretary of Energy.
 
DOE EXPORT AND IMPORT OF NUCLEAR EQUIPMENT AND MATERIAL; 10 CFR Part 110; Implemented by Dep’t of Energy, U.S. Nuclear Regulatory Commission, under Atomic Energy Act of 1954.
  – Last Amendment: 20 Nov 2018, 10 CFR 110.6, Re-transfers.
 

* DOJ ATF ARMS IMPORT REGULATIONS: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War.  Implemented by Dep’t of Justice, Bureau of Alcohol, Tobacco, Firearms & Explosives.
  – Last Amendment: 14 Mar 2019: 84 FR 9239-9240: Bump-Stock-Type Devices 

 

DOS INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130. Implemented by Dep’t of State, Directorate of Defense Trade Controls.
  – Last Amendment: 19 Apr 2019: 84 FR 16398-16402: International Traffic in Arms Regulations: Transfers Made by or for a Department or Agency of the U.S. Government   
  – The only available fully updated copy (latest edition: 19 Apr 2019) of the ITAR with all amendments is contained in Bartlett’s Annotated ITAR (“BITAR”), by James E. Bartlett III. The BITAR contains all ITAR amendments to date, plus a large Index, over 800 footnotes containing amendment histories, case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text. Subscribers receive updated copies of the BITAR in Word by email, usually revised within 24 hours after every ITAR amendment. The BITAR is available by annual subscription from the Full Circle Compliance website. BAFTR subscribers receive a $25 discount on subscriptions to the BITAR, please contact us to receive your discount code.
 
* DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders. 

Implemented by Dep’t of Treasury, Office of Foreign Assets Control.

  – Last Amendment: 15 Mar 2019: 84 FR: 9456-9458: List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (CAPTA List) 
  
* USITC HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA), 1 Jan 2019: 19 USC 1202 Annex. Implemented by U.S. International Trade Commission. (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)

  –
Last Amendment: 18 Apr 2019: Harmonized System Update (HSU) 1906

  – HTS codes for AES are available here.
  – HTS codes that are not valid for AES are available here.

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EN_a0321
Weekly Highlights of the Daily Bugle Top Stories

(Source: Editor) 

Review last week’s top Ex/Im stories in “Weekly Highlights of the Daily Bugle Top Stories” published  
here

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EPEDITORIAL POLICY

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Vincent J.A. Goossen and Alexander Witt; and Events & Jobs Editor, Sven Goor. The Ex/Im Daily Update is emailed every business day to approximately 7,000 readers of changes to defense and high-tech trade laws and regulations. 
We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

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* CAVEAT: The contents of this newsletter cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.


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