Every Monday we post the highlights out of last week’s FCC Export/Import Daily Update (“The Daily Bugle”). Send out every business day to approximately 8,000 readers of changes to defense and high-tech trade laws and regulations, The Daily Bugle is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III, Salvatore Di Misa, 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 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 week’s highlights of The Daily Bugle included in this edition are:
- Treasury/OFAC Issues Venezuela General License 5C and Amends FAQs, 13 April 2020; Item #4.
- DHS/CBP: “Section 301 China – Extension of Certain Product Exclusions”; The Daily Bugle; Tuesday, 14 April 2020; Item #4.
- UK ECJU: “Strategic Export Controls: Licensing Data”; Wednesday, 15 April 2020; Item #5.
- State/DDTC Publishes Report on Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments; The Daily Bugle; Thursday, 16 April 2020; Item #4.
- USITC: “COVID–19 Related Goods: U.S. Imports and Tariffs; Institution of Investigation”; The Daily Bugle; Friday, 17 April 2020; Item #1.
Treasury/OFAC Issues Venezuela General License 5C and Amends FAQs
10 Apr 2020: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing General License 5C, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After July 22, 2020.”
OFAC is amending a related Frequently Asked Question:
Q: What does Venezuela-related General License 5C authorize?
A: The President issued Executive Order (E.O.) 13835 on May 21, 2018. Subsection 1(a)(iii) of E.O. 13835 prohibits U.S. persons from engaging in transactions related to the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela (GOV) of any equity interest in an entity owned 50 percent or more by the GOV. One effect of subsection 1(a)(iii) is to require authorization before U.S. persons may engage in certain transactions regarding any equity interest in an entity owned 50 percent or more by the GOV. After E.O. 13835 was issued, OFAC received inquiries about how and whether subsection 1(a)(iii) of E.O. 13835 could affect the ability to enforce bondholder rights to the CITGO shares serving as collateral for the Petróleos de Venezuela, S.A. (PdVSA) 2020 8.5 percent bond. OFAC issued General License 5 on July 19, 2018, which removed E.O. 13835 as an obstacle to holders of the PdVSA 2020 8.5 percent bond gaining access to their collateral.
General License 5 was replaced and superseded on October 24, 2019, and most recently by General License 5C, with a delay in effectiveness until July 22, 2020. Between October 24, 2019 and July 22, 2020 (the date the authorization in General License 5C becomes effective), there is no authorization in effect that licenses against subsection 1(a)(iii) of E.O. 13835 applicable to the holders of the PdVSA 2020 8.5 percent bond. As a result, during such period, transactions related to the sale or transfer of CITGO shares in connection with the PdVSA 2020 8.5 percent bond are prohibited, unless specifically authorized by OFAC.
To the extent an agreement may be reached on proposals to restructure or refinance payments due to the holders of the PdVSA 2020 8.5 percent bond, additional licensing requirements may apply. OFAC would encourage parties to apply for a specific license and would have a favorable licensing policy toward such an agreement.
DHS/CBP: “Section 301 China – Extension of Certain Product Exclusions”
On April 10, 2020, the U.S. Trade Representative (USTR) published Federal Register (FR) Notice 85 FR 20332 to extend for 12 months certain product exclusions covered by the April 18, 2019 notice (see 84 FR 16310) for Section 301 duties on China ($34B Action – Tranche 1).
These product exclusions relate to the imposed additional duties on Chinese goods with an annual trade value of approximately $34 billion, apply retroactive to the July 6, 2018 effective date of the $34 billion action, and will extend to April 18, 2021.
The scope of each exclusion is governed by the scope of the HTSUS 10-digit classification and product descriptions in the Annex per FR notice 85 FR 20332; not by the product descriptions set out in any particular request for exclusion. A link to the Federal Register Notice is embedded in this message.
The functionality for the acceptance of the extended product exclusions will be available in the Automated Commercial Environment (ACE) by 7am, Eastern Standard Time on April 14, 2020.
For reference, instructions for importers, brokers, and filers on submitting entries to CBP containing certain product exclusions that were extended are set out below:
In addition to reporting the regular Chapters 84 and 90 classifications of the HTSUS for the imported merchandise, importers shall report the HTSUS classification 9903.88.07 (Articles, the product of China, as provided for in U.S. note 20(j) to this subchapter, each covered by an exclusion granted by the USTR for imported merchandise subject to the exclusion).
- Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.07 is submitted.
Product Exclusions granted a 12-month extension under HTS 9903.88.07:
- 10.9080, 8425.39.0100, 8431.20.0000, 8479.90.9496, 8481.90.9040 and 9030.33.3800
Imports which have been granted a product exclusion from the Section 301 measures, and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 Federal Register notices, but instead are subject to the FTZ provisions in 19 CFR part 146.
Duty exclusions granted by the USTR are retroactive for imports on or after the initial July 6, 2018 effective date of the Tranche 1, $34B Action, of the China Section 301 trade remedies. To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe, but within 180 days of the liquidation action, importers may protest the liquidation.
Reminder: When importers, brokers, and/or filers are submitting an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise, please reference CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTSUS when 98 or 99 HTSUS are required).
For ease of reference, a summary of Section 301 duties and product exclusion notifications are provided as an attachment.
Questions from the importing community concerning ACE entry rejections involving product exclusions should be referred to their CBP Client Representative. Questions related to Section 301 entry-filing requirements, please refer to CSMS message #40969690 (Information on Trade Remedy Questions and Resources) https://content.govdelivery.com/accounts/USDHSCBP/bulletins/27125da
UK ECJU: “Strategic Export Controls: Licensing Data”
(Source: UK ECJU, 15 Apr 2020)
UK ECJU publishes updates by adding the quarterly data for 1 October to 31 December 2019, and annual data for 1 January to 31 December 2019.
Find all the new data here.
State/DDTC Publishes Report on Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments
(Source: State/DDTC, 15 Apr 2020) [Excerpts]
This document is an unclassified Executive Summary of the Report that is transmitted pursuant to Section 403 of the Arms Control and Disarmament Act, as amended (22 U.S.C. § 2593a), which requires a report by the President on Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments. This unclassified Executive Summary is intended to address the requirement in that statute that a report be submitted to Congress not later than April 15 annually. The full-length unclassified version of the Report will be provided at the earliest possible opportunity consistent with safe personnel and reduced staffing practices necessitated by the COVID-19 pandemic, along with the SECRET and the TOP SECRET/SCI level annexes.
SCOPE OF THE REPORT
The full Report assesses U.S. compliance with and adherence to arms control, nonproliferation, and disarmament agreements and related commitments in 2019, including confidence- and security-building measures (CSBMs), as well as the compliance and adherence in 2019 of other nations to arms control, nonproliferation, and disarmament agreements and commitments, including CSBMs and the Missile Technology Control Regime, to which the United States is a participating State. The issues addressed in the Report will primarily reflect activities from January 1, 2019, through December 31, 2019, unless otherwise noted.[a]
The Compliance Report includes reporting and analysis at the levels of classification for which reliable supporting information is available. The unclassified and SECRET versions of the Report recount as much information as possible, but certain issues can be discussed only at higher levels of classification. Some compliance concerns are raised and some findings of violations are made, for instance, only in the SECRET or TOP SECRET/SCI-level elements of the Report.
USITC: “COVID–19 Related Goods: U.S. Imports and Tariffs; Institution of Investigation”
(Source: Federal Register, 17 Apr 2020) [Excerpts]
85 FR 21459: Notice of investigation.
* AGENCY: United States International Trade Commission.
* ACTION: Notice of investigation.
* SUMMARY: Following receipt on April 7, 2020, of a request from the House Committee on Ways and Means and the Senate Committee on Finance (the Committees), under section 332(g) of the Tariff Act of 1930, the U.S. International Trade Commission (Commission) instituted Investigation No. 332-576, COVID-19 Related Goods: U.S. Imports and Tariffs, for the purpose of providing a report that identifies imported goods related to the response to COVID-19, their source countries, tariff classifications, and applicable rates of duty.
* Background: As requested by the Committees, the Commission will conduct an investigation and prepare a report that, to the extent practical, identifies imported goods related to the response to COVID-19, their source countries, tariff classifications, and applicable rates of duty. For each product that the Commission so identifies, the Commission will seek to provide:
- The 10-digit HTS code for the article;
- its legal description;
- general duty rate;
- any special or additional rates of duty imposed on the article, the dates on which the rates were imposed, and the authorities under which they were imposed;
- whether any such duties have been suspended and, if so, the date of suspension as well as how long the suspension is scheduled to last;the total rate of duty imposed on such article, including any
- special or additional rate of duty; and
- the major countries of origin for each such article, and the import value of each such article from each country for the years 2017-2019. …