20-0318 Wednesday “Daily Bugle “

20-0318 Wednesday “Daily Bugle”

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Wednesday, 18 March 2020

  1. Commerce/BIS Recommends Partial Remand and Final Denial Order for Nordic Maritime Pte. Ltd. and Morten Innhaug
  1. Items Scheduled for Future Federal Register Edition
  2. DHS/CBP: “Customs Broker License Examination – Notification” 
  3. Commerce/Census Announces Electronic Submission of Voluntary Self-Disclosure and Data Request
  1. STR: “Multiple China Tariff Exclusions Extended for One Year”: 
  1. Bloomberg Law: “Insight: Trade Compliance Tips for Software and Web Service Providers” 
  1. ECTI Presents: Classifying Aircraft Part Technology Webinar: April 22  
  2. FCC Academy: U.S Export Controls: ITAR, EAR, and FMS  
  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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1. Commerce/BIS Recommends Partial Remand and Final Denial Order for Nordic Maritime Pte. Ltd. and Morten Innhaug 

Federal Register
, 18 Mar 2020) [Excerpts]

85 FR 15414-15428: Partial Remand and Final Denial Order 

* Agency: Bureau of Industry and Security, Commerce.
* Action: Recommended Decision and Order
* Summary: The Bureau of Industry and Security (BIS or Agency) initiated this administrative enforcement action against Nordic Maritime Pte. Ltd. (Respondent Nordic) and Morten Innhaug (Respondent Innhaug) on April 28, 2017. BIS alleges Respondent Nordic committed three violations and Respondent Innhaug committed one violation of the Export Administration
Regulations (EAR or Regulations). 15 CFR parts 730-74 (2012-14). The first three allegations allege Respondent Nordic: (1) Illegally reexported certain equipment to Iran; (2) acted with knowledge when it illegally reexported the equipment; and (3) made false and misleading statements during the BIS investigation.17 The single charge against Respondent Innhaug alleges he aided and abetted Respondent Nordic in violating the regulations.

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Items Scheduled for Future Federal Register Editions
(Source: Federal Register)

* Commerce/BIS; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals:  Voluntary Self-Disclosure of Antiboycott Violations [Pub. Date: 19 Mar 2020]   
* Commerce/BIS; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals:  Voluntary Self-Disclosure of Violations of the Export Administration Regulations [Pub. Date: 19 Mar 2020]  

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DHS/CBP: DHS/CBP Postpones April 1 Customs Broker License Exam 

, 17 Mar 2020
Due to the unprecedented situation related to coronavirus (COVID-19) across the country, and the closure of our testing centers, Customs and Border Protection (CBP) regretfully must postpone the April 1, 2020 Customs Broker License Exam (CBLE). CBP will provide additional information in the coming days, so please check cbp.gov website for updates. For immediate concerns regarding the broker exam, you may email Broker Management Branch at brokermanagement@cbp.dhs.gov.

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Commerce/Census Announces Electronic Submission of Voluntary Self-Disclosure & Data Request 

, 17 Mar 2020

In an effort to maintain the health and safety of staff, many U.S. Census Bureau employees will be operating remotely via telework. During this time, our call centers and email inboxes will remain open to assist the trade daily. However, we will have limited access to physical mail. For those that are submitting a Voluntary Self-Disclosure (VSD) or data request, please send it electronically to the Trade Regulations Branch (TRB) in a password-protected file to

emd.askregs@census.gov (for VSDs) or Data User & Trade Outreach Branch (DUTOB) to gtmd.outreach@census.gov

 (for data requests). Additionally, you can send either request to our secure fax at 301-763-8835. We appreciate your patience and cooperation during this time.  

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NWS_a25. STR: “Multiple China Tariff Exclusions Extended for One Year”

Sandler, Travis & Rosenberg
, 18 Mar 2020) [Excerpts]
The exclusions of the following products from the Section 301 additional 25 percent tariff on imports of List 1 goods from China have been extended through March 25, 2021. …
– electric motors, AC, permanent split capacitor type, each in a housing with outside diameter of 84 mm or less, with output of 6 W or more but not exceeding 16 W (HTSUS 8501.10.4020)
– inoculator sets of plastics, each consisting of a plate with multiple wells, a display tray, and a lid; when assembled, the set measuring 105 mm or more but not exceeding 108 mm in width, 138 mm or more but not exceeding 140 mm in depth, and 6.5 mm or less in thickness (HTSUS 9027.90.5650) …
These exclusions are available for any product that meets the specified product description, regardless of whether the importer filed an exclusion request. …


COM_a26. Bloomberg Law: “Insight: Trade Compliance Tips for Software and Web Service Providers” 

Bloomberg Law
, 18 Mar 2020)
* Principal Author:
Mario Mancuso
, 1-202-389-5070,
Kirkland & Ellis LLP
Technology companies face strict liability for violating economic sanctions and export controls. Kirkland & Ellis attorneys give tips on how these companies can make their trade compliance programs as cutting edge as their products and services.
Trade compliance professionals in technology companies face the unique challenge of designing risk-based compliance tools adapted to the latest innovations in products, web services, and platforms.
Though the U.S. government advocates companies implement risk-based compliance solutions, companies actually face strict liability for any violations of economic sanctions and export controls, and balancing compliance risks against the realities of the fast-changing tech industry can be especially difficult.
The following tips can help keep your trade compliance program as cutting edge as your products and services.
Calibrate Your Screening Program
Many customers demand instant access to products and services as soon as they set up an account. Companies face difficulties screening customers against U.S. government restricted party lists and clearing false positives at the fast pace that the market demands. Even temporarily approving a transaction while screening occurs can risk committing a violation. High customer volumes can make designing an effective screening program that can work at the speed of business especially challenging.
Additionally, customers that register for online services may have limited incentives to provide complete physical addresses, either because there is no need for shipment or for privacy reasons. However, accurate physical addresses can be vital for clearing parties in restricted list searches.
The Office of Foreign Assets Control (OFAC) has penalized companies for screening programs that do not catch subtle variations in names or addresses (e.g., spelling, capitalization). In light of these challenges, it is important to require and receive a meaningful amount of identifying information about counterparties in order to effectively screen and identify bad actors.
Although tech companies employing software engineers can be tempted to write their own screening programs, specialist third party vendors have finely tailored their products to the regulations and may be worth considering. Companies may also want to use a plug-in to verify that customer addresses are legitimate, or IP blocking to prohibit customers in embargoed countries.
Avoid Inadvertent Exports
A company must carefully determine whether it engages in exports, as failing to identify those scenarios can result in unwitting violations, which in the software and services space can quickly multiply. U.S. export controls reach beyond the shipment of tangible items abroad, and can include providing software online for local download or sending controlled technical data via email.
Providers of Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), or Infrastructure-as-a-Service (IaaS) should not automatically assume their activities are not exports without first consulting the rules.
As of Dec. 26, 2019, both the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR) do not consider the sending abroad of certain unclassified technical data to be an export if the data is encrypted end-to-end using encryption modules compliant with the “FIPS 140-2” standard or its successors.
Compliance personnel for companies providing cloud-based solutions should ensure the company’s activities meet the applicable criteria.
Refresh Your Product Classifications
This year, the Commerce Department is likely to issue (or in any event, propose) new export controls on emerging technologies, which would subject additional products to licensing requirements. The forthcoming regulations are likely to impact the tech industry, including products related to artificial intelligence, microprocessors, autonomous driving, robotics and quantum computing.
Certain open source and publicly available products are not subject to the EAR, while other software and hardware implementing encryption is on the Commerce Control List. It is prudent to review classifications on a regular basis to account for any regulatory changes. Companies often implement an automated system to flag shipments that may require a license based on classification and end user.
Rely on Available General Licenses, But Carefully
Companies should also regularly review any applicable OFAC General Licenses or applicable License Exceptions in the EAR. To improve access to the internet and telecommunications, OFAC has issued General Licenses that authorize provision of certain types of software and technology to some sanctioned countries.
In addition, License Exception ENC in the EAR eliminates license requirements for many types of software that are only controlled due to encryption functionality. Reviewing and understanding these exceptions and their requirements, and refreshing the analysis often, can help in establishing a smoother supply chain and business model.
Avoid Deemed Export Pitfalls
Under the EAR and ITAR, the “release” of technical data or source code to a foreign national in the United States is
considered to be an export to the foreign national’s home country (a “deemed export”).
As more companies rely on foreign nationals for software development and engineering services, the risk of unauthorized deemed exports has increased. Classifying products and technology is a good first step in determining whether restrictions apply to any foreign national employees.
Creating a technology control plan is another useful way to implement procedures to control employee access to restricted items or technology. Consult with labor counsel to check that such procedures are consistent with anti-discrimination laws and employee rights.
Remember Foreign-Made Products With U.S. Content
In addition to controls over products made in the U.S., U.S. export controls extend to products made abroad that contain more than the specified “de minimis” quantities of controlled U.S. content, or that are the “direct product” of certain types of controlled technologies.
As these rules are currently in flux regarding exports to countries such as China, maintaining a close watch on non-U.S. manufactured items and tracing U.S.-origin content are key compliance program challenges.


ECTI Presents: Classifying Aircraft Part Technology Webinar: April 22

Danielle Hatch)
* What: Classifying Aircraft Part Technology
* When: April 22, 2020; 1:00 p.m. (EDT)
* Where: Webinar
* Sponsor: Export Compliance Training Institute (ECTI)
* ECTI Speaker: Scott Gearity
* Register
here or contact Danielle Hatch, 540-433-3977.

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TE_a28. FCC Academy: U.S. Export Controls: ITAR, EAR, and FMS

U.S. Export Controls: ITAR

Tuesday, 7 April 2020, Online
More Info

U.S. Export Controls: EAR

Wednesday, 8 April 2020, Online
More Info

The ABC of Foreign Military Sales (FMS)

Tuesday, 9 April 2020, Online
More Info


EN_a19. Bartlett’s Unfamiliar Quotations

(Source: Editor)


* Edgar Cayce
(18 Mar 1877 – 3 Jan 1945; was an American self-professed clairvoyant who gave more than 14,000 psychic readings while allegedly in a self-induced sleep state.)
  – “For he who expects nothing shall not be disappointed, but he that expects much – if he lives and uses that in hand day by day – shall be full to running over. “
  – “When ye are prepared for a thing, the opportunity to use it presents itself.”

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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 
: 19 CFR, Ch. 1, Pts. 0-199.
5 Apr 2019:84 FR 13499-13513: Civil Monetary Penalty Adjustments for Inflation.


24 Feb 2020:
85 FR 10274-10278
: Amendments to Country Groups for Russia and Yemen Under the Export Administration Regulations


DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.   Last Amendment: 24 Apr 2018: 83 FR 17749-17751: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates


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.)  

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 9239-9240: Bump-Stock-Type Devices.

DOS INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): 22 C.F.R. Ch. I, Subch. M, Pts. 120-130.  23 Jan 2020: 85 FR 3819:

Department of State final rule amending § 121.1, USML Categories I, II, and III, and numerous related sections (effective Mar. 9, 2020). Next change: 25 March 2020.
DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

13 Mar 2020:
85 FR 14572-14573:
General Licenses Issued Pursuant to Venezuela-Related Executive Order 13835


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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