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 Updates USPAB Guidance; Friday, 6 Jan 2023; Item #6
- UK ECJU Back to 20-day Response Time for Info Requests for Export Licences; Monday, 9 Jan 2023; Item #7
- Treasury/OFAC: “Publication of Iran-related FAQs”; Wednesday, 11 Jan 2023; Item #6
- Department of State 2023 Civil Monetary Penalties Inflationary Adjustment and New Maximum Penalty for Violation of Section 38 of the AECA; Thursday, 12 Jan 2023; Item #4
- State/DDTC Seeks Comments onForm DS–7787, Disclosure of Violations of the Arms Export Control Act”; Friday, 13 Jan 2023; Item #1
- EU Commission Amends (EU) 2021/821 of the European Parliament and of the Council as Regards the List of Dual-use Items; Friday, 13 Jan 2023; Item #9
- Commerce/BIS Amends EAR: Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification; Adding Macau to China Controls; Wednesday, 18 Jan 2023; Item #1
- EU Commission Publishes Guidelines for Data Collection and Preparation of the EU Annual Report On Dual-Use Export Controls under Regulation (EU) 821/2021; Friday, 27 Jan 2023; Item #5
- State/DDTC: “DECCS User Group for 2023”; Monday, 30 Jan 2023; Item #4
State/DDTC Updates USPAB Guidance
(Source: State/DDTC, 5 Jan 2023)
The Directorate of Defense Trade Controls (DDTC) has updated the guidance for U.S. persons abroad (USPAB) applications. A new guidance document, as well as a submission letter template and sample §126.13 certification letter for USPAB authorization requests, are located on the “Guidance & Instructions” page of the DDTC website.
Submission letter template and sample §126.13 certification letter:
* PDF 12/09/2022: USPAB – Guidance for USPAB Authorization Requests
* PDF 12/09/2022: USPAB submission letter template
* PDF 12/09/2022: USPAB – Sample §126.13 Certification Letter for USPAB Authorization Requests
USPAB FAQs have been revised and updated. You can view the FAQs individually by visiting the FAQ section of the DDTC website or download a pdf copy of the FAQs here.
UK ECJU Back to 20-day Response Time for Info Requests for Export Licences
(Source: UK Export Control Joint Unit, 5 Jan 2023) [Excerpts]
Following notice to exporters 2020/10, relating to interim arrangements during the coronavirus (COVID-19) outbreak, we are pleased to announce that we are resuming some pre-COVID case handling arrangements for export licence applications.
Reverting response times
During the pandemic, the response time for requests for information (RFI) was increased to 40 working days to allow extra time for exporters to gather their material. Effective from the publication of this notice, the response time for RFIs will revert to 20 working days, as was the arrangement pre-COVID.
Treasury/OFAC: “Publication of Iran-related FAQs”
(Source: Treasury/OFAC, 11 Jan 2023)
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing one new Iran-related Frequently Asked Question (FAQ 1110) and amending several Iran-related Frequently Asked Questions (FAQs 337, 338, 339, 340, 341, 342, 343, 344, 345, 346, 348, 434, 435, 436, 437, 438, 439, 440, 441, 442, 443, and 853).
Department of State 2023 Civil Monetary Penalties Inflationary Adjustment and New Maximum Penalty for Violation of Section 38 of the AECA
(Source: State/DDTC, 11 Jan 2023)
On January 11, 2023, the Department of State published a final rule to adjust the civil monetary penalties at section 127.10 of the International Traffic in Arms Regulations (ITAR) as part of a larger rule amending penalties for all regulatory provisions maintained and enforced by the Department of State. In addition, the rule amends the maximum penalty for violation of section 38 of the Arms Export Control Act (22 U.S.C. 2778) in accordance with section 9708 of the 2023 National Defense Authorization Act (NDAA) (Pub. L. 117-263).
The new statutory maximum penalty for violations of section 38, as amended by section 9708 of the 2023 NDAA, is the greater of $1,200,000 or the amount that is twice the value of the transaction that is the basis of the violation with respect to which the penalty is imposed. ITAR section 127.10(a)(1)(i) is amended to reflect the statutory language of AECA section 38(e) and will be subject to future annual inflationary adjustments. The new amounts for violation of section 38 will apply only to those penalties assessed for violations occurring on or after December 27, 2022.
ITAR section 127.10(a)(1)(ii) and (iii) providing maximum penalties under sections 39A (22 U.S.C. 2779a) and 40 (22 U.S.C. 2780) of the AECA, respectively, are adjusted for inflation in accordance with the December 2022 guidance from the Office of Management and Budget. The revised amounts for violations of those sections will apply only to those penalties assessed on or after January 11, 2023, regardless of the date on which the underlying facts or violations occurred.
DDTC has updated its ITAR Reorg I – Redline document to reflect amended section 127.10.
- 87 FR 16396 – ITAR Reorg I – ITAR Redline(DOCX, 443KB)
State/DDTC Seeks Comments on Form DS–7787, Disclosure of Violations of the Arms Export Control Act”
(Source: Today’s Federal Register, 88 FR 2382, 13 Jan 2023) [Excerpts]
* ACTION: Notice of request for public comment.
* SUMMARY: The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
* ABSTRACT: [Excerpts] DDTC encourages voluntary disclosures of violations of the AECA and ITAR. The information disclosed is analyzed by DDTC to ultimately determine whether to take administrative action concerning any violation that may have occurred. Voluntary disclosures may be considered a mitigating factor in determining the administrative penalties, if any, that may be imposed. Failure to report a violation may result in circumstances detrimental to the U.S. national security and foreign policy interests and will be an adverse factor in determining the appropriate disposition of such violations. Also, the activity in question might merit referral to the Department of Justice for consideration of whether criminal prosecution is warranted. In such cases, DDTC will notify the Department of Justice of the voluntary nature of the disclosure, but the Department of Justice is not required to give that fact any weight. ITAR § 127.12 describes the information which should accompany a voluntary disclosure. Historically, respondents to this information collection submitted their disclosures to DDTC in writing via hard copy documentation. However, as part of an IT modernization project designed to streamline the collection and use of information by DDTC, a discrete form (Form Number: DS–7787) has been developed for the submission of voluntary disclosures. This will allow both DDTC and respondents submitting a disclosure to more easily track submissions.
* DATES: The Department will accept comments from the public up to March 14, 2023.
* ADDRESSES: You may submit comments by any of the following methods:
- Web: Persons with access to the internet may comment on this notice by going to www.Regulations.gov. You can search for the document by entering “Docket Number: DOS-2022-0047” in the Search field. Then click the “Comment Now” button and complete the comment form.
- Regular Mail: Send written comments to: Directorate of Defense Trade Controls, Department of State; 2401 E St. NW, Suite H1205, Washington DC 20522.
You must include the DS form number, information collection title, and the OMB control number in any correspondence.
EU Commission Amends (EU) 2021/821 of the European Parliament and of the Council as Regards the List of Dual-use Items
(Source: Official Journal of the EU, 11 Jan 2023)
THE EUROPEAN COMMISSION,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Regulation (EU) 2021/821 of the European Parliament and of the Council of 20 May 2021 setting up a Union regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items (1), and in particular Article 17(1) thereof,
(1) Regulation (EU) 2021/821 requires dual-use items to be subject to effective control when they are exported from or in transit through the Union, or are delivered to a third country as a result of brokering services provided by a broker resident or established in the Union.
(2) Annex I to Regulation (EU) 2021/821 establishes the common list of dual-use items that are subject to controls in the Union. Decisions on the items subject to controls are taken within the framework of internationally agreed dual-use controls.
(3) The list of dual-use items set out in Annex I to Regulation (EU) 2021/821 needs to be updated regularly in order to ensure full compliance with international security obligations, to guarantee transparency, and to maintain the competitiveness of economic operators. The control lists adopted by the international non-proliferation regimes and export control arrangements have been changed during 2021, and therefore Annex I to Regulation (EU) 2021/821 should be amended accordingly. In order to facilitate references for export control authorities and economic operators, Annex I to that Regulation should be replaced.
(4) Regulation (EU) 2021/821 empowers the Commission to update the list of dual-use items set out in Annex I by means of delegated acts, in conformity with the relevant obligations and commitments, and any amendment thereof, that Member States and, where applicable, the Union have accepted as members of the international non-proliferation regimes and export control arrangements, or by ratification of relevant international treaties.
(5) Considering the importance of ensuring full compliance with international security obligations as soon as practically possible, this Regulation should enter into force on the day following that of its publication.
(6) Regulation (EU) 2021/821 should therefore be amended accordingly,
HAS ADOPTED THIS REGULATION:
Annex I to Regulation (EU) 2021/821 is replaced by the text in the Annex to this Regulation.
This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 21 October 2022. See the ANNEX I list of dual-use items referred to in article 3 of this regulation here.
Commerce/BIS Amends EAR: Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification; Adding Macau to China Controls
(Source: Today’s Federal Register, 88 FR 2821, 18 Jan 2023) [Excerpts]
* AGENCY: Bureau of Industry and Security, Department of Commerce.
* ACTION: Interim final rule; update.
* SUMMARY: On October 7, 2022, the Bureau of Industry and Security (BIS) updated the Export Administration Regulations (EAR) to implement necessary controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items, and to make other changes to the EAR to ensure that appropriate controls are in place for these items, including specific activities of “U.S. persons.” This rule makes an initial update to the controls to more effectively achieve the policy objectives identified in previous regulations by adding the same controls implemented on China in that rule to Macau. The public may submit comments on the controls in the October 7 advanced computing and semiconductor manufacturing equipment rule, which BIS is extending to Macau in this rule. BIS intends to publish a subsequent rule to respond to the comments received, including making updates to the controls included in the October 7 advanced computing and semiconductor manufacturing equipment rule.
* DATES: Effective date: This rule is effective on January 17, 2023.
Comments due: Comments must be received by BIS no later than January 31, 2023.
EU Commission Publishes Guidelines for Data Collection and Preparation of the EU Annual Report On Dual-Use Export Controls under Regulation (EU) 821/2021
(Source: EU Commission, 24 Jan 2023)
Opening date: 24 January 2023
Deadline: 28 February 2023, 18:00 (CET)
Department: Directorate-General for Trade
Target audience: All stakeholders with an interest in export of dual-use items and technologies (e.g. exporters, industry associations, government authorities, academia, research institutions and non-governmental organisations).
Why we are Consulting
EU annual export control reports have been prepared since 2013 and include licensing data collected through a dedicated mechanism developed with Member States on a voluntary basis. The EU Dual Use Regulation (EU) 2021/821 (the Regulation) mandates the collection of certain licensing information relevant to the implementation and enforcement of export controls, for reasons of effectiveness, consistency and transparency of export controls inside the EU. In particular, Article 26 of the Regulation requires that the annual report should include specific information on the licensing, administration and enforcement of controls in the EU:
[Title]: TRANSPARENCY, OUTREACH, MONITORING, EVALUATION
Article 26 Regulation EU 2021/821 . . .
Respond to the Consultation
Stakeholders are invited to provide feedback by submitting comments using the button below. The Commission is collecting and will publish stakeholders’ contributions on EU Survey and make them available to the experts of the Member States in the DUCG. The Commission will also publish a summary of the consultation. Respond to the consultation here.
State/DDTC: “DECCS User Group for 2023”
DDTC is excited to announce the enrollment period is open for the 2023 DECCS User Group. What is it?
- The mission of the Defense Export Controls and Compliance System (DECCS) User Group (DUG) is to allow individual industry users to provide feedback on DECCS by establishing and maintaining a forum for active and regular communication between DECCS users and the Directorate of Defense Trade Controls (DDTC).
- DUG members will have the opportunity to:
- Identify functional and technical challenges when interacting with DECCS, and
- Provide feedback and input for future DECCS enhancements and system support initiatives.
Who should be involved?
- DDTC is looking for a diverse group of up to 50 industry volunteers (representatives of companies, government agencies and third-party organizations) enrolled with DECCS who can provide the end-user point-of-view on issues related to the system.
- Open to U.S.-based and international members.
What is the time commitment?
- DDTC plans to engage with DUG volunteers when there is system functionality ready for User Acceptance Testing. Time will vary based on testing requested. In total, time will not exceed 20 hours.
- Participation in the DUG Spring and Fall meetings.
- The DUG User Group term will span one calendar year.
How to get involved:
- To express your interest, email PM_DDTCProjectTeam@state.govby COB February 28, 2023 and provide your name & company/government affiliation (as applicable)
- DDTC will inform applicants by March 31, 2023 on DUG membership selection