Every month we post the highlights of FCC’s Export/Import Daily Update (“The Daily Bugle”). The Daily Bugle is sent out every business day to approximately 10,000 readers, who keep up to date with changes in defense and high-tech trade laws and regulations. It is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III and Elina Tsapouri.
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 European Union, 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. To subscribe, click here.
Last month’s highlights of The Daily Bugle included in this edition are:
- State/DDTC: “New FAQs: Open General License Pilot Program”; Tuesday, 2 Aug 2022; Item #5
- Commerce/ITA: “Complying with Sanctions and Export Controls in Russia and Belarus”; Friday, 5 Aug 2022; Item #5
- Canada: “New Requirements for Importing Handguns into Canada”; Friday, 5 Aug 2022; Item #7
- OMB/OIRA Reviews of Proposed Ex/Im Regulations; Tuesday, 9 Aug 2022; Item #5
- Commerce/BIS Implements 2021 Wassenaar Decisions on Section 1758 Technologies; Monday, 15 Aug 2022; Item #3
- State/DDTC: “Notifications to the Congress of Proposed Commercial Export”; Monday, 15 Aug 2022; Item #5
- DHS/CBP: “Notice of Revocation of Customs Brokers’ Licenses”; Wednesday, 24 Aug 2022; Item #2
- State/DDTC: “ITAR Reorganization Rule 1: Website & DECCS Updates Take Effect on Tuesday, 6 September 2022”; Tuesday, 30 Aug 2022; Item #6
- GAO Ex/Im Report: “Export-Import Bank: Status of End-Use Monitoring of Dual-Use Exports as of August 2022”; Wednesday, 31 Aug 2022; Item #5
State/DDTC: “New FAQs: Open General License Pilot Program”
(Source: State/DDTC, 1 Aug 2022)
The Directorate of Defense Trade Controls has published 18 new FAQs on the new Open General License (OGL) pilot program, as well as OGL Nos. 1 and 2. See FAQs here.
Commerce/ITA: “Complying with Sanctions and Export Controls in Russia and Belarus”
(Source: Tradeology, 3 Aug 2022)
As discussed in our previous blog, Russia’s unprovoked attack on Ukraine and the subsequent Western sanctions and export controls imposed have forced U.S. exporters to rethink the way they perceive the Russian market and conduct business in the country. It has also prompted all of us at the International Trade Administration (ITA) to consider how best we can support U.S. exporters as they seek to ensure their businesses are in compliance with the relevant laws and regulations. As such, ITA’s Office of Russia, Ukraine and Eurasia has compiled and centralized a series of resources that may be of assistance to U.S. exporters. Please see the complete document on the ITA Russia web page for additional details and read on for a high-level overview of the resources that the document contains.
U.S. Government Information & Resources
- While the United States government has imposed significant sanctions and export controls on Russia in response to its unlawful aggression against Ukraine, some U.S. companies can still do business in Russia.
- In addition to sanctions and export controls on Russia, the U.S. government has also imposed stringent restrictions on Belarus, including new export controls, in response to its substantial enabling of Russia’s attack on Ukraine.
- The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is the lead agency for implementing and enforcing sanctions. The Department of Commerce’s Bureau of Industry and Security (BIS) and its Export Administration Regulations (EAR) are the lead agents for implementing and enforcing export controls.
- Humanitarian aid, agricultural commodities, medicine, medical devices, and telecommunication devices which support the free flow of information are generally exempt from export controls.
- Apart from the above, to see if your transaction is affected, check out end users on the Consolidated Screening List (CSL)on ITA’s website. A search tool and a downloadable list are available.
- Make sure your product is properly classified and does not require a BIS license due to expanded export controls against Russia and Belarus. To find out more, call an export counselor at (202) 482-4811 (Washington D.C. outreach office), or at (949) 660-0144 (Western regional office), or e-mail EXDOEXS@bis.doc.gov.
- To see lists of sanctioned persons and sanctions programs, check out the OFAC website.
- Check with your financial institution before contracting for payment from Russia. More than 80% of Russia’s financial sector is currently sanctioned by the United States.
General Recommendations for U.S. Exporters Considering Russia or Belarus
- Sign up for automatic e-mail notifications from OFAC.
- Check the Federal Registerfor BIS, OFAC, and other USG actions and set up an account that will allow you to receive automatic e-mail notification of U.S. government actions regarding Russia.
ITA Points of Contact
- Russia: Policy Team Lead Tanner Johnson, firstname.lastname@example.org, (202) 790-7350
- Russia: Russia Desk Officer Agnes Pawelkowska, email@example.com, (202) 336-9672
- Eurasia: Minister Counselor for Commercial Affairs Heather Byrnes, firstname.lastname@example.org,  (312) 457-7278
Canada: “New Requirements for Importing Handguns into Canada”
(Source: Canada TID, 5 Aug 2022)
Notice to Importers No. 1090 – Temporary requirements for importing restricted handguns into Canada until the coming into force of the proposed amendments to the Firearms Act under Bill C-21
Export and Import Permits Act
Serial No. 1090
Date: August 5, 2022
Table of contents
(1) The purpose of this Notice is to advise importers of the introduction of new, temporary import control measures related to restricted handguns that will be in place until the proposed amendments to the Firearms Act under Bill C-21 come into force. Accordingly, from August 19 2022 until the coming into force of the proposed amendments to the Firearms Act under Bill C-21, the import of restricted handguns into Canada will require an individual import permit.
(2) Restricted handguns are controlled by paragraph 70(1) of the Import Control List. Note that a permit is not required to import into Canada any firearm that is an “antique firearm” as defined in section 84(1) of the Criminal Code, or as prescribed in the Regulations Prescribing Antique Firearms.
(3) The Minister of Foreign Affairs maintains the discretion to issue or deny permit applications on a case‑by‑case basis, which are approved only when the Minister is satisfied that such imports would be consistent with Canada’s security or policy interests.
(4) With respect to the import of restricted handguns, applications for import permits and international import certificates will normally be denied by the Minister, unless for one of the following end uses:
a) police, military, law enforcement/security services;
c) to protect the life of an individual or other individuals pursuant to an Authorization to Carry issued by a Chief Firearms Officer under section 20(a) of the Firearms Act;
d) for use in connection with his or her lawful profession or occupation pursuant to an Authorization to Carry issued by a Chief Firearms Officer under section 20(b) of the Firearms Act; or,
e) to train, compete or coach in a handgun shooting discipline that is on the programme of the International Olympic Committee or the International Paralympic Committee and the individual provides a letter to a chief firearms officer from a provincial or national sport shooting governing body indicating
- that the individual trains, competes or coaches in such a discipline,
- the specific discipline in which the individual trains, competes or coaches, and
- that the handgun that the individual seeks to acquire is necessary for training, competing or coaching in that specific discipline.
(5) An import permit will normally be issued by the Minister to allow a restricted handgun for which a registration certificate was already issued to be returned to Canada.
(6) The import of any restricted handgun into Canada without a valid import permit would constitute an offence under section 19 of the Export and Import Permits Act.
(7) The following Import Controls web page explains the requirements of the import process, and also lists controls administered by other government departments.
(8) Importers must prepare and submit the appropriate import permit application(s) for all restricted handguns that are being imported into Canada. For a step-by-step description of how to apply for an Import Permit for Firearms, Related Goods and Ammunition, please consult this website.
(9) Prospective importers must prepare and submit their appropriate international import certificate application(s) for all restricted handguns that are proposed for import, if required by the exporting country. For a step-by-step description of how to apply for an International Import Certificate, please consult this website.
(10) This Notice has been prepared for guidance and convenience of reference only. Global Affairs Canada does not provide legal advice on the foregoing. For all purposes of interpreting and applying the law, readers should consult the Export and Import Permits Act and its associated regulations. These publications are available online.
(11) For further information, importers may contact us by using the coordinates below. Importers are invited to note the creation of a new, dedicated email address for queries related to firearms.
Export Controls Operations Division (TIE), Trade and Export Controls Bureau, Global Affairs Canada. Telephone: 343-203-4331; Email: TIE-Firearms.Armesemail@example.com; Internet: Export and Import Controls
OMB/OIRA Reviews of Proposed Ex/Im Regulations
Agency: State; DDTC
Title: International Traffic in Arms Regulations: Definitions
Abstract: The Department proposes to reorganize ITAR part 120 to consolidate all ITAR definitions into one part and to organize the definitions in a manner that enhances their clarity and ease of use.
Agenda Stage of Rulemaking: Final Rule Stage
Commerce/BIS Implements 2021 Wassenaar Decisions on Section 1758 Technologies
(Source: Commerce/BIS, 15 Aug 2022)
The Commerce Department’s Bureau of Industry and Security (BIS) issued an interim final rule effective today that establishes new export controls on four technologies that meet the criteria for emerging and foundational technologies under Section 1758 of the Export Control Reform Act (ECRA) and are essential to the national security of the United States.
These Section 1758 technologies support the production of advanced semiconductors and gas turbine engines. These four technologies are among the items that the 42 Participating States of the Wassenaar Arrangement reached consensus to control at the December 2021 Plenary.
The United States additionally controls a wider range of technologies, including additional equipment, software, and technology used to produce semiconductors, beyond the items agreed upon in the Wassenaar Arrangement.
“Technological advancements that allow technologies like semiconductors and engines to operate faster, more efficiently, longer, and in more severe conditions can be game changers in both the commercial and military context,” said Under Secretary of Commerce for Industry and Security Alan Estevez. “When we recognize the risks as well as the benefits, and act in concert with our international partners, we can ensure that our shared security objectives are met, innovation is supported, and companies across the globe operate on a level playing field.”
“Global commerce is driven by innovation—new ideas, and novel ways to apply old ones. BIS is vigilant in assessing the development of new technology and whether it may be used for civil and military purposes,” said Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler. “We are protecting the four technologies identified in today’s rule from nefarious end use by applying controls through a multilateral regime. This rule demonstrates our continued commitment to imposing export controls together with our international partners. Export controls are most effective when multilaterally imposed.”
The four technologies covered by today’s rule include two substrates of ultra-wide bandgap semiconductors: Gallium Oxide (Ga2O3), and diamond; Electronic Computer-Aided Design (ECAD) software specially designed for the development of integrated circuits with Gate-All-Around Field-Effect Transistor (GAAFET) structure; and Pressure Gain Combustion (PGC) technology. Additional information about these technologies is provided below:
- Gallium Oxide and diamond are materials that allow semiconductors that use them to work under more severe conditions, such as at higher voltages or higher temperatures. Devices that utilize these materials have significantly increased military potential.
- ECAD is a category of software tools used for designing, analyzing, optimizing, and validating the performance of integrated circuits or printed circuit boards. ECAD software is used in a variety of applications by the military and aerospace defense industries for designing complex integrated circuits. GAAFET technology approaches are key to scaling to three nanometer and below technology nodes. GAAFET technologies enable faster, energy efficient, and more radiation-tolerant integrated circuits that can advance many commercial as well as military applications including defense and communications satellites
- PGC technology has the extensive potential for terrestrial and aerospace applications, including rockets and hypersonic systems. BIS has added controls on development and production technology for combustors that are not described on the U.S. Munitions List.
Additional Background: In a May 23, 2022 rule (link), BIS informed the public that the agency would no longer characterize new controls as corresponding to “emerging” or “foundational” technologies pursuant to Section 1758 of ECRA, instead referring to the technologies at issue as “Section 1758 technologies.” As BIS noted in that rule, this approach reflects the difficulties in drawing meaningful and functional distinctions between technologies for purposes of fulfilling BIS’s statutory obligations under Section 1758 of ECRA. Additionally, referring to such items as Section 1758 technologies maximizes BIS’s flexibility and effectiveness.
Additional information about the Wassenaar Arrangement is available online here. Further information on other changes agreed to during the Wassenaar Arrangement’s December 2021 Plenary is available here.
State/DDTC: “Notifications to the Congress of Proposed Commercial Export”
(Source: State/DDTC, 15 Aug 2022)
On August 11, 2022, DDTC provided notice in the Federal Register that the attached Notifications of Proposed Commercial Export Licenses were submitted to Congress on the dates indicated.
DHS/CBP: “Notice of Revocation of Customs Brokers’ Licenses”
(Source: Today’s Federal Register, 86 FR 52001, 24 Aug 2022) [Excerpts]
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
* ACTION: Revocation of customs brokers’ licenses.
* SUMMARY: This document provides notice of the revocation by operation of law of customs brokers’ licenses.
* SUPPLEMENTARY INFORMATION: This document provides notice that, pursuant to section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641), and section 111.30(d) of title 19 of the Code of Federal Regulations (19 CFR 111.30(d)), the following customs brokers’ licenses were revoked by operation of law, without prejudice, for failure to file a triennial status report. A list of revoked customs brokers’ licenses appears HERE with both the port, which issued the licenses, and the brokers’ names within the port of issuance whose licenses were revoked, set forth alphabetically. … [Editor’s Note: Hundreds of names are listed. Check THIS LINK to make sure you and your friends are not listed.]
State/DDTC: “ITAR Reorganization Rule 1: Website & DECCS Updates Take Effect on Tuesday, 6 September 2022”
(Source: DDTC News & Events)
ITAR Reorganization Rule 1: Website & DECCS Updates
The DDTC website and Defense Export Control and Compliance System (DECCS) applications are undergoing maintenance to update ITAR citations to reflect regulatory changes taking effect on Sept. 6, 2022 as a result of the ITAR Reorganization Rule 1 (87 FR 16396, Mar. 23, 2022). Updates are being made on a rolling basis. As DDTC updates its webpages, some ITAR references on the website may be temporarily outdated. We expect these changes to be completed and updated no later than September 9th.
Effective September 6, all DECCS applications (Registration, Licensing, Advisory Opinions, and Commodity Jurisdictions) will reflect the revised ITAR citations.
For a complete listing of all ITAR Reorganization Rule I moves and revisions, see this table. For a redlined ITAR showing all moves and revisions, see this summary.
[Editor’s Note: DDTC’s Redlined ITAR contains an error on page 180 where it states for changes to §126.1, “(o-q) [Reserved].” It should state “(p-q) Reserved.“ Section 126.1(o), Cambodia, was not removed from the ITAR. An accurate version of the ITAR will be available in Bartlett’s Annotated ITAR (“The BITAR”) by subscription HERE.]
GAO Ex/Im Report: “Export-Import Bank: Status of End-Use Monitoring of Dual-Use Exports as of August 2022”
(Source: GAO-22-106090, 30 Aug 2022) [Excerpts]
The Export-Import Bank’s mission is to support U.S. jobs by facilitating U.S. exports through loans, loan guarantees, and insurance.
According to its policy, the Bank generally cannot finance defense goods and services unless they are nonlethal and primarily used for civilian rather than military purposes. The Bank monitors these “dual-use” items to ensure they are used mostly for civilian purposes.
We report each year on these dual-use exports. The bank did not finance any new dual-use exports in FY 2021. It continued to monitor use of two satellites sold to Mexico and received documents showing Mexico was in compliance with policy.
(Read Full Report Here.)
What GAO Found
As of August 2022, the Export-Import Bank (EXIM) was monitoring the end use of a single transaction that it had continued to finance in fiscal year 2020, as summarized below:
- Two satellites for the government of Mexico. EXIM had provided financing to the government of Mexico for (1) a fixed-service satellite that launched in December 2012 and became operational in February 2013 and (2) a mobile-service satellite that launched in October 2015 and became operational in December 2015. In 2022, EXIM received all documents from the government of Mexico on time and subsequently determined that Mexico was in compliance with the bank’s dual-use policy.
EXIM did not finance any new exports under its dual-use authority in fiscal year 2021, according to EXIM authorization data and EXIM officials.