REGULATORY COMPLIANCE NEWSLETTER – Vol. 0104-2008

NEWS:

Focusing on the ITAR--A Seminar Series—Training in Defense Trade Regulatory Requirements and Practices

The Bureau of Industry and Security (BIS) issued a final rule that amends the EAR by making the following changes: Removing the post office box address for the BIS, updating the contact information for the San Jose field office, reinserting missing footnotes in sections describing License Exceptions, removing certain non-Country Group D countries from Country Group D, correcting formatting in the supplement listing items subject to the military end- use license requirement for the People's Republic of China (PRC), correcting the Code of Federal Regulations legal authority citation for part 745 of the EAR, removing a reference to Libya under embargoed destinations, adding fax information for submitting a request for approval to submit applications electronically, clarifying the requirements for obtaining an Import Certificate or an End-User Statement, changing Validated End-User report requirements, amending the contact information for the Ministry of Commerce of the PRC, making a technical correction to shipping tolerances, and removing references to certain entries on the Commerce Control List. In addition, this rule amends the Defense Priorities and Allocations System (DPAS) Regulation by updating an office name and by removing a reference to a form. Effective Date: January 2, 2008.

The Customs and Border Protection (CBP) issued a proposed rulemaking to help prevent terrorist weapons from being transported to the United States , vessel carriers bringing cargo to the United States are currently required to transmit certain information to CBP about the cargo they are transporting prior to lading that cargo at foreign ports of entry. This document proposes to require both importers and carriers to submit additional information pertaining to cargo before the cargo is brought into the United States by vessel. CBP must receive this information by way of a CBP-approved electronic data interchange system. The information required is reasonably necessary to further improve the ability of CBP to identify high-risk shipments so as to prevent smuggling and ensure cargo safety and security. The proposed regulations are specifically intended to fulfill the requirements of section 203 of the Security and Accountability for Every (SAFE) Port Act of 2006 and section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002. Written comments must be submitted on or before March 3, 2008.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) issued a final rule conforms the regulations in 27 CFR Part 447 to the revised International Traffic in Arms Regulations by amending the list of countries from which the importation of defense articles into the United States is proscribed by adding Afghanistan and removing South Africa and some of the states composing the former Soviet Union (Armenia, Azerbaijan and Tajikistan ). The rule also removes the arms embargo against the countries of Serbia and Montenegro . It also clarifies an outdated reference in the regulations to Zaire , currently known as the "Democratic Republic of the Congo," and makes a miscellaneous technical amendment to the regulations. Effective Date: December 26, 2007.

Suspension of Defense Export Licenses for Sri Lanka -- In accordance with “Department of State, Foreign Operations, and Related Programs Appropriations Act, 2008,” effective December 26, 2007, it is the policy of the United States to deny applications for licenses and other approvals to export or otherwise transfer defense articles and services to Sri Lanka. The only exception to this policy is that licenses may be issued for technical data or equipment made available for the limited purposes of maritime and air surveillance and communications. Such licenses remain subject to case-by-case review.

Replacement of Section 9.4 of the “Guidelines for Preparing Agreements” -- In the process of adjudicating hardware license requests in furtherance of agreements over the past several years, DTCL has encountered numerous instances of license value exceeding the authorized value for hardware under the agreement. In some of these instances, the unauthorized increase in value of the agreement has required congressional notification (or re-notification) of the agreement and enforcement action by the Office of Defense Trade Controls Compliance. As part of the incremental move towards full implementation of electronic licensing using D-Trade, many of the DDTC internal audit functions now performed manually by licensing officers will be incorporated into the business rules of D-Trade. The Director of Licensing is implementing new guidance for hardware license requests “in furtherance” of agreements. This action is intended to prepare industry for the upcoming D-Trade requirements. Further, it transfers the audit responsibility back to the applicant for verification of whether they meet all of the requirements. As a result, Section 9.4 of the “Guidelines for Preparing Agreements” is replaced in its entirety. This new guidance reflects many of the requirements in the current version of Section 9.4. However, it is now presented in a new structured format to allow standardized review of the information by licensing officers. The “Sample Letter of Explanation” template does not represent new data gathering requirements; instead it is a request for data review under the record keeping requirements of 22 CFR §122.5. Effective February 1, 2008, any submission not meeting these requirements is subject to Return Without Action

The Office of Foreign Assets Control (OFAC), Department of Treasury announced revisions to their watch list on December 28, 2007. Entities have been added in the notice and information on existing parties on the watch list has been updated with new addresses and branch offices.

DENIED PARTIES SCREENING UPDATE:

The following entities were added to the Denied Persons List. The full list of changes can be accessed at the OCR web site.

• *ENTIRE COUNTRY* , SRI LANKA
  Privileges affected: In accordance with Department of State, Foreign Operations, and Related Programs Appropriations Act, 2008, effective December 26, 2007, it is the policy of the United States to deny applications for licenses and other approvals to export or otherwise transfer defense articles and services to Sri Lanka. The only exception to this policy is that licenses may be issued for technical data or equipment made available for the limited purposes of maritime and air surveillance and communications. Such licenses remain subject to case-by-case review.
  Effective date: 12/26/07, Expiration date: UNTIL RESCINDED
• China National Aero-Technology Import and Export Company, CHINA , AKA/DBA: a.k.a. CATIC
  Privileges affected: Also includes any successor, sub-unit, or subsidiary thereof. Pursuant to Sections 2 and 3 of the Iran and Syria Nonproliferation Act of 2000 (P.L. 106-178), the U.S. Government determined on November 22, 2004, that the measures authorized in Section 3 of the Act shall apply to the foreign entity identified in the report submitted pursuant to Section 2(a) of the Act.
  Effective date: 05/09/02, Expiration date: 12/27/2008
  F.R. Date: 01/05/2007, Citation: 67 FR 34983; 70 FR 133; 70 FR 77441; 72 FR 606

CONFERENCES:

International Trade Compliance Strategies, LLC -- http://www.itcstrategies.com/

Title: Export Controls and Compliance
Date: February 4 - 5, 2008
Location: Huntsville, AL

Unz & Co. Seminars – http://www.unzco.com/

Title: Export Operations, Export Controls & Licensing, Introduction to ITAR, ITAR Licensing Workshop
Date: January 14 – 18, 2008
Location: Tampa, FL

Title: Import Operations, Harmonized Tariff System , U.S. Customs Audit
Date: January 22 – 25, 2008
Location: Charlotte, NC

Title: Classification Under Schedule B
Date: January 29, 2008
Location: Atlanta, GA

Title: Import Operations, Harmonized Tariff System, U.S. Custom Audit, International Terms of Sale , Payment and Letter of Credit
Date: January 28 – February 1, 2008
Location: New Orleans, LA

Title: Understanding and Implementing C-TPAT
Date: January 30, 2008
Location: Atlanta, GA

DL Exports International

For a list of seminars please visit http://www.dlexports.com/

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Disclaimer:

This newsletter is not intended to provide legal guidance. Adherence to this decision does not relieve the exporter of the statutory responsibilities of complying with the applicable statutes, regulations, policies and procedures of the U.S. Government

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