The Daily Bugle Weekly Highlights: Week 1 (1-5 Jan 2018)

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, Alexander P. Bosch, and Vincent J.A. Goossen.

We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOJ/ATF, DoD/DSS, DoD/DTSA, 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:

  1. State Amends ITAR to Adjust Civil Monetary Penalties for Regulatory Provisions, including the AECA and CWC Act; The Daily Bugle; Wednesday, 3 January 2018, ITEM #1;
  2. USITC Updates HTS for 2018; The Daily Bugle; Thursday, 4 January 2018, ITEM #5;
  3. UK DIT/ECO Revokes Prior Versions of Five OGELs; The Daily Bugle; Thursday, Thursday, 4 January 2018, ITEM #6;
  4. Hong Kong TID Temporarily will Suspend all E-Services on 19 Jan; The Daily Bugle; Thursday, 4 January 2018, ITEM #8.
  5. ; The Daily Bugle; Friday, 5 January 2018, ITEM #3; and
  6. DHS/CBP Posts Reminder Concerning Statements Deployment, 6 Jan; The Daily Bugle; Friday, 5 January 2018, ITEM #4.

Highlight 1

State Amends ITAR to Adjust Civil Monetary Penalties for Regulatory Provisions, including the AECA and CWC Act

(Source: Federal Register, 3 Jan 2018.) [Excerpts.]

83 FR 234-237: Department of State 2018 Civil Monetary Penalties Inflationary Adjustment

* AGENCY: Department of State.

* ACTION: Final rule.

* SUMMARY: This final rule is issued to adjust the civil monetary penalties (CMP) for regulatory provisions maintained and enforced by the Department of State. The revised CMP adjusts the amount of civil monetary penalties assessed by the Department of State based on the December 2017 guidance from the Office of Management and Budget. The new amounts will apply only to those penalties assessed on or after the effective date of this rule, regardless of the date on which the underlying facts or violations occurred.

* DATES: This final rule is effective on January 3, 2018. …

* SUPPLEMENTARY INFORMATION: … On December 15, 2017, OMB notified agencies that the annual cost-of-living adjustment multiplier for 2018, based on the Consumer Price Index, is 1.02041. Additional information may be found in OMB Memorandum M-18-03, here. This final rule amends Department CMPs for fiscal year 2018.

Overview of the Areas Affected by This Rule

Within the Department of State (Title 22, Code of Federal Regulations), this rule affects four areas:

(1) Part 35, which implements the Program Fraud Civil Remedies Act of 1986 (PFCRA), codified at 31 U.S.C. 3801-3812;

(2) Part 103, which implements the Chemical Weapons Convention Implementation Act of 1998 (CWC Act);

(3) Part 127, which implements the penalty provisions of sections 38(e), 39A(c), and 40(k) of the Arms Export Control Act (AECA) (22 U.S.C. 2778(e), 2779a(c), 2780(k)); and

(4) Part 138, which implements Section 319 of Public Law 101-121, codified at 31 U.S.C. 1352, and prohibits recipients of federal contracts, grants, and loans from using appropriated funds for lobbying the Executive or Legislative Branches of the federal government in connection with a specific contract. …

Part 138

Section 319 of Public Law 101-121, codified at 31 U.S.C. 1352, provides penalties for recipients of federal contracts, grants, and loans who use appropriated funds to lobby the Executive or Legislative Branches of the federal government in connection with a specific contract, grant, or loan. Any person who violates that prohibition is subject to a civil penalty. The statute also requires each person who requests or receives a federal contract, grant, cooperative agreement, loan, or a federal commitment to insure or guarantee a loan, to disclose any lobbying; there is a penalty for failure to disclose.

Applying all previous adjustments in accordance with the 2015 Act, the maximum penalties for both improper expenditures and failure to disclose, was: For first offenders, a penalty of $18,936; for others, not less than $19,246, and not more than $192,459. Applying the 2018 multiplier (1.02041) provided by OMB, the new maximums are: For first offenders, $19,322; for others, not less than $19,639, and not more than $196,387.

Summary

Citation in 22 CFR Old penalty 2018 Penalty
§35.3 $10,957 up to

$328, 734

$11,181 up to

$335, 443

§103.6 Prohibited Acts $36,849 $37,601
§103.6 Recordkeeping Violations $7,370 $7,520
§127.10(a)(1)(i) $1,111,908 $1,134,602
§127.10(a)(1)(ii) $808,458 $824,959
§127.10(a)(1)(iii) $962,295 $981,935
§138.400 First Offenders $18,936 $19,639
§138.400 $19,246 up to $192,459 $19639 up to

$192,549

2018 multiplier: 1.02041    

Jerry C. Drake, Acting Executive Director, Office of the Legal Adviser and Bureau of Legislative Affairs, Department of State.

Highlight 2

USITC Updates HTS for 2018

(Source: USITC, 1 Jan 2018)

On 1 January 2018, the U.S. International Trade Commission (“USITC”) posted the updated Harmonized Tariff Schedule (“HTS”) for 2018.

The updated HTS can be found here.

Highlight 3

UK DIT/ECO Revokes Prior Versions of Five OGELs

(Source: UK DIT/ECO)

UK’s Export Control Office has posted notices on its website that prior versions of the following Open General Export Licenses (“OGELs”) are revoked:

Revoked open general export licences (Turkey)

Revoked open general export licences (technology for dual-use items)

Revoked open general export licences (oil and gas exploration: dual-use items)

Revoked open general export licences (low value shipments)

Revoked open general export licences (cryptographic development)

Highlight 4

Hong Kong TID Temporarily will Suspend all E-Services on 19 Jan

(Source: Hong Kong TID, 4 Jan 2017.)

All e-services of our website will be suspended from 18:30 to 22:30 on 19 January 2018 (Friday) due to system maintenance.

We apologize for any inconvenience caused.

Highlight 5

DHS/CBP Extends In-bond Regulation Enforcement Dates

(Source: CSMS #18-000013, 4 Jan 2018.)

CBP will extend the time frame for initial implementation of these regulatory changes for all participants for six months. CBP Officers will continue to accept paper CBP Form 7512 and input the data on the trade’s behalf until July 2, 2018. On that date, paper forms will no longer be accepted for input into the ACE system by CBP Officers. The new implementation schedule will be as follows:

* July 2, 2018 – Paper CBP Form 7512 will no longer be accepted by CBP for input into ACE. Electronic filing of new in-bond transactions will be the responsibility of the trade. Paper forms or other paper alternatives (screen prints or plain paper documents etc.) will be accepted as part of enforcement processes at the border or verification/audit operations such as warehouse withdrawals, FTZ exports and transfers or vessel/aircraft supply operations where additional information is required on paper forms that is not provided for electronically.

* August 6, 2018 – Electronic reporting of all transactions will be mandatory; CBP will no longer accept paper copies of the CBPF 7512 to perform arrival and export functionality. These functions will be the requirement of the carrier. Electronic reporting will be mandatory. In addition, electronic reporting of diversion to a port other than reported on the original in-bond will be required. An ACE edit will reject arrival if not performed. Electronic reporting of bonded cargo location (FIRMS code) will be required. An ACE edit will reject arrival if not provided.

* At this time, no date is set for implementation of the provision requiring the 6 -digit Harmonized Tariff Schedule number requirement for Immediate Transportation movements.

The Frequently Asked Questions Document posted online is being updated to reflect the changes.

– Related CSMS No. 17-000736

Highlight 6

DHS/CBP Posts Reminder Concerning Statements Deployment, 6 Jan

(Source: CSMS #18-000015, 5 Jan 2018.)

On January 6, 2018, CBP will deliver ACE Deployment G, Release 3B. At this point, ACE will become the system of record for all statements with the exception of Reconciliation statements. CBP will deliver Statements for Reconciliations as part of ACE Deployment G, Release 4 on February 24, 2018.

No later than January 13, 2018, CBP will deploy ACE Statements reports with the Statements universe, which replaces the Account Revenue universe. The new ACE Statements reports will be available under the Statements tab found in the applicable trade account workspace. In addition, two existing “quickview” reports for brokers and importers (AR-007) will remain available in ACE.

CBP will work with filers to address any issues related to this deployment of Statements in ACE, and will provide support as necessary.

Deployment G, Release 3B Support Calls:

CBP will host a series of calls to communicate the status of the statements deployment from Sunday, January 7 through Friday, January 12.

SUNDAY, January 7, 2018, 1:00 PM ET – On this call, CBP will communicate the status of the statements deployment.

MONDAY, January 8, 2018 through FRIDAY, January 12, 2018, 2:00PM ET to 3:00PM ET – On these calls, CBP will provide a short deployment status followed by an open question and answer session

For the January 7 through January 12 calls, please use the following conference line: (877) 336-1828 / PC: 6124214.

Deployment G Resources:

More information may be found in the Information Notices posted to CBP.gov at the links below.

ACE Deployment G, Release 3A and 3B Information Notice

ACE Deployment G Reports Information Notice

Related CSMS No. 17-000807

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About the Author

Alexander Bosch

Alexander P. Bosch, Program Manager. Alexander Bosch has, due to his multidisciplinary academic background, a good overview of how the world of trade compliance is constructed. He is responsible for the drafting of engagement proposals, writing policies and procedures and designing an Internal Compliance Program, performing compliance assessments, audits, investigations related to (potential) export control violations, and is assistant editor of FCC’s daily newsletter, The Export/Import Daily Update (“The Daily Bugle”). In addition, Alexander plays a key role in the development and teaching of FCC’s training programs, and the Executive Masters in International Trade Compliance (EMITC) program, which FCC has set up in cooperation with the University of Liverpool London Campus. Alexander previously was responsible for a project for the Dutch government in which he assessed the effects of the U.S. Export Control Reform (ECR) upon the Dutch government and industry. He has earned his Master’s degree in International Relations from the University of Groningen and has written his master-thesis on the subject of European defense cooperation.

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