;

20-0527 Wednesday “Daily Bugle “

20-0527 Wednesday “Daily Bugle”

 this copy of the Daily Bugle to others or share 
this subscription link
Wednesday, 27 May 2020

  1. Items Scheduled for Future Federal Register Edition
  2. Commerce/BIS: (No new postings)
  3. State/DDTC: (No new postings)
  1. SCP: “Hong Kong is No Longer Autonomous from China, US Determines” 
  2. Reuters:”EU Frees Up Export of Coronavirus Protection Equipment”
  1. BakerMcKenzie: “United States: A New Approach to OFAC’s Rejected-Transactions Reporting” (Part I)
  2. Kelley Drye: “Chinese Businesses and a Government Institute Now Subject to Export Restrictions”
  1. ECTI Presents: e-Seminar sale – 20% off all e-Seminar Training
  2. FCC Academy Presents June Webinars: “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 

Are You Keeping Up to Date with the Latest Regulations?
 

Bartlett’s Annotated ITAR and Bartlett’s Annotated FTR are Word documents to down-

load to your laptop to keep you updated on the latest amendments, and contain over 800 footnotes of section history, key cases, practice tips & tricks, and extensive Tables of Contents.
The ITAR amendments to the ITAR that took effect on 9 March and 25 March are included in the current edition of the BITAR.  Subscribers receive updated editions every time the regulations are amended (usually within 24 hours) so you will always have the current versions of the regulations. Subscribe to the BITAR now to guarantee you have an up-to-date ITAR!    
 

Combo
BITAR + BAFTR
Price: $300
Offer: $275

 
Buy Here

BITAR

Price: $200

BAFTR

  Price: $100

EXIM ITEMS FROM TODAY’S FEDERAL REGISTER

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

OGS OTHER GOVERNMENT SOURCES

 
* Justice/ATF; NOTICES; Agency Information Collection Activities; Proposals, Submissions, and Approvals; [Pub. Date: 28 May 2020] [PDF]
 
* Treasury/OFAC; NOTICES; Blocking or Unblocking of Persons and Properties; [Pub. Date: 28 May 2020] [PDF]
 
* USTR; NOTICES; Product Exclusion Amendments: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation; [Pub. Date: 28 May 2020] [PDF]
 
* USTR; NOTICES; Product Exclusion: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation; [Pub. Date: 28 May 2020] [PDF]

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

OGS_a22. Commerce/BIS: (No new postings)

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

OGS_a3
3. State/DDTC:  
(No new postings)

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

COM NEWS

NWS_a14. SCP: “Hong Kong is No Longer Autonomous from China, US Determines”

(Source: South China Post, 27 May 2020)

 
In a huge blow to Hong Kong, the Trump administration informed Congress on Wednesday that the city is no longer suitably autonomous from China. The assessment is a crucial step in whether the city continues to receive preferential economic and trade treatment.
 
“No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground,” US Secretary of State Mike Pompeo said in a statement. “This decision gives me no pleasure. But sound policy making requires a recognition of reality.” “While the United States once hoped that free and prosperous Hong Kong would provide a model for authoritarian China, it is now clear that China is modeling Hong Kong after itself,” Pompeo said.
 
The State Department’s certification is a recommendation and does not necessarily lead to an immediate next step. US officials, including President Donald Trump, now must decide to what extent sanctions or other policy measures should be levelled on the city.
 

NWS_a15. Reuters: “EU Frees Up Export of Coronavirus Protection Equipment”

(Source: Reuters, 26 May 2020) [Excerpts]
 
The European Union ended its controls on the export of coronavirus protective equipment on Tuesday after concluding that supplies for European medical and other workers were now adequate.
 
It’s the latest phasing down of coronavirus restrictions in Europe as the health crisis eases, with a growing number of EU countries confident that they are far better placed to deal with any so-called second covid-19 wave.
 
The bloc introduced an export authorisation scheme on March 15 for all personal protective equipment, which could only then be exported to a non-EU nation if approved by individual EU countries. …
 
The restrictions came in after a number of countries, including France and Germany, introduced their own export controls, angering fellow members such as Italy that were most in need of such equipment.
 
The EU-wide controls on exports largely restored flows of protective equipment within the bloc.

COM COMMENTARY

 
* Author: Alexandre Lamy, Esq., 1-202-835-1862, BakerMckenzie
 

In June 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), significantly changed the scope of reporting requirements related to so-called rejected transactions, particularly in terms of expanding the reporting base beyond financial institutions and funds transfers. In February, OFAC issued FAQs to confirm that these reporting requirements apply to companies outside the financial sector.[FN/1] However, OFAC has not provided public guidance to nonfinancial sectors seeking to comply with U.S. sanctions about which types of transactions should be reported under Title 31, Section 501.604 of the Code of Federal Regulations.[FN/2]
 
After providing background on OFAC reporting requirements, this article proposes a common-sense framework for companies seeking to comply with OFAC’s rejected-transactions reporting requirements.  
 
Which types of rejected transactions had to be reported prior to June 2019? Between OFAC’s first implementation of Title 31, Part 501 of the Code of Federal Regulations as the reporting, procedures and penalties regulations, [FN/3] and June 21, 2019, Section 501.604 was limited to financial institutions, giving them 10 business days to report to OFAC about funds transfers that were rejected for U.S. sanctions reasons.  
 
The plain language of this OFAC provision had focused on financial institutions, which are the main parties in a transaction processing funds transfers. Financial institutions have generally been very adept at blocking or rejecting payments to comply with OFAC obligations. Financial institutions’ notifications about rejected transactions alert other parties involved in a transaction that it likely violated U.S. sanctions, and OFAC will learn about through financial institutions fulfilling their Section 501.604 reporting obligations. Rejections of funds transfers have been undertaken by financial institutions where the funds are not blocked (i.e., frozen) under OFAC’s regulations but processing the transaction would violate U.S. sanctions. – reporting of blocked property in which a specially designated national or blocked person has an interest is governed by Title 31 Section 501.603 of the Code of Federal Regulations.[FN/4] 


 
 
 
 
 

Before the amendment of Section 501.604, that provision included two examples of rejected funds transfers: (1) “referencing a blocked vessel but where none of the parties or financial institutions involved in the transaction is a blocked person” and (2) “making unauthorized transfers from U.S. persons to Iran.”


 
 
 
 
 

What did OFAC change in June 2019 with respect to Section 501.604?
  Most significantly, OFAC expanded the potential reporting base for Section 501.604 from “U.S. financial institutions” to any “U.S. person (or person subject to U.S. jurisdiction), including a financial institution” and from “funds transfers” to “transactions.”[FN/5]


 
In its June 2019 notice, OFAC removed the helpful examples of rejected funds transfers that had been included in Section 501.604, but provided the following definition of a covered transaction: “transactions related to wire transfers, trade finance, securities, checks, foreign exchanges, and goods or services.” OFAC has maintained one general FAQ about rejected funds transfers from January 2015,[FN/6] which focuses on scenarios involving financial institutions. OFAC solicited public comments in response to its June 2019 changes to Section 501.604, and many commenters requested that OFAC clarify what constitutes a rejected transaction.[FN/7]
 
Who is subject to the rejected-transactions reporting requirements? The rejected-transactions reporting requirements apply to U.S. persons and persons subject to U.S. jurisdiction – together, Section 501.604 parties. In OFAC’s regulations, U.S. persons are defined to include “a United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.”[FN/8]. … 
 
[FN/1] OFAC FAQs: Sanctions Compliance,U.S. Department of the Treasury(2020),  https://www.treasury.gov/resourcecenter/faqs/Sanctions/Pages/faq_compliance.aspx#36 (last visited May 19, 2020). 


[FN/2] Reports on Rejected Transactions, 31 C.F.R. § 501.604 (2020).
[FN/3] Reporting and Procedures Regulations, 62 Fed. Reg. 45,101 (Aug. 25, 1997).
[FN/4] Reports on Blocked and Unblocked Property, 31 C.F.R. §501.603 (2020).
[FN/5] Reporting, Procedures and Penalties Regulations, 81 Fed. Reg. 29,055 (Jun. 21, 2019) (to be codified at 31 C.F.R. pt. 501). 
[FN/6] OFAC FAQs: Sanctions Compliance,U.S. Department of the
[FN/7] Reporting, Procedures and Penalties Regulation,Regulations.gov(2019),  


https://www.regulations.gov/docket?D=OFAC-2019-


[FN/8] United States Person; U.S. Person, 31 C.F.R. §510.326 (2020).
 
(Part II of this Commentary will be posted in tomorrow’s Daily Bugle.) 

(Source: Kelley Drye, 26 May 2020)
 
* Author: Jennifer Liu, Esq., 1-202-342-8522, Kelley Drye
 
On May 22, 2020, the Department of Commerce’s Bureau of Industry and Security (BIS) announced the addition of the following businesses and a government institute to the agency’s Entity List in response to involvement in or support for human rights abuses related to the Xinjiang Uighur Autonomous Region (XUAR):
 
(1) China’s Ministry of Public Security’s Institute of Forensic Science
(2) Aksu Huafu Textiles Co.
(3) CloudWalk Technology
(4) FiberHome Technologies Group and the subsidiary Nanjing FiberHome Starrysky Communication Development
(5) NetPosa and the subsidiary SenseNets; Intellifusion; and IS’Vision
 
All of these parties will be subject to significant restrictions on exports or reexport of products, software and technology from the U.S. Contact us for details if you have existing or proposed business with any of these parties.

TE EX/IM TRAINING EVENTS & CONFERENCES

 
*What: e-Seminar Training Sale – 20% off with code:
 
stayhome
*When: Now through 31st May
 
*Where: Online training – delivered electronically on USB
*Sponsor: Export Compliance Training Institute (ECTI) 
*Register:
 
here
or contact 1-540-433-3977

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

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

EN EDITOR’S NOTES

EN_a110. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 

* Cornelius Vanderbilt
(1794-1877, was an American business magnate and philanthropist, descended from a Dutch farmer immigrant from the village of De Bilt in Utrecht, Netherlands. Vanderbilt was one of the richest Americans in history and wealthiest persons in the world, having built his wealth in railroads and shipping. According to historian H. Roger Grant, “Contemporaries often hated or feared Vanderbilt or at least considered him an unmannered brute.)
– “There is no friendship in trade.”

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

 

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.

19 May 2020: 85 FR 29849: Amendments to General Prohibition Three (Foreign-Produced Direct Product Rule) and the Entity List.   
 
 
DOC FOREIGN TRADE REGULATIONS (FTR): 15 CFR Part 30.   Last Amendment: 24 Apr 2018: 83 FR 17749: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates. 
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. 
6 May 2020: 85 FR 26847, Notice (not an amendment) temporarily reduced the registration fee schedule in ITAR 122.3 until April 30, 2021. 

 

 
DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders

10 Apr 2020:
85 FR 20158:

North Korea Sanctions 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.
 

* * * * * * * * * * * * * * * * * * * *
The Daily Bugle Archive

Are you searching for updates from the past editions of the Daily Bugle? 

We publish a list of over 100 trade compliance job openings every day.

Submit your job for free.
PermanentJobListView All Job Openings

Are you looking for a new job in trade compliance?
Click here to see the current job openings.

We publish a list of over 100 trade compliance events every day. Submit your event for free.

PermanentJobListView All Events

Are you looking for an upcoming event?   
Click here to see upcoming events.

Scroll to Top