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:
- DHS/CBP Posts Notice Concerning 8 Jul ACE Capabilities Deployment, The Daily Bugle, 8 June, ITEM #6.
- Treasury/OFAC: “American Honda Finance Corporation Settles 13 Alleged CACR Violations,” The Daily Bugle, 8 June, ITEM #9.
- Commerce/BIS Posts Reminder of Offsets Reporting Requirements for Calendar Year 2016, The Daily Bugle, 9 June, ITEM #1.
- DoD/DSCA Publishes SAMM and Policy Memorandum, 4-10 Jun, The Daily Bugle, 9 June, ITEM #8.
- EU Amends and Corrects Restrictive Measures Concerning Iran, North Korea, Terrorism, and Syria, The Daily Bugle, 9 June, ITEM #10.
DHS/CBP Posts Notice Concerning 8 Jul ACE Capabilities Deployment
(Source: CSMS #17-000334, 8 June 2017.)
On 8 July 2017, U.S. Customs and Border Protection (CBP) will deploy a series of new Automated Commercial Environment (ACE) capabilities to support Collections and Statements, Reconciliation, Drawback*, Duty Deferral and Liquidation (with the exception of the previously deployed electronic posting of the Notices of Liquidation on CBP.gov).
CBP has posted updated documentation including Information Notices by capability and the June 2017 ACE Entry Summary Business Rules and Process Document in the “What’s New with ACE” section.
Software vendors and self-filers should reference the ACE CATAIR technical documentation to ensure systems are up to date with the latest ACE documentation. These resources are available through here.
*Please note that the drawback capabilities being deployed on July 8, 2017 are part of the ACE core trade processing capabilities, and include the following:
– Consolidation to single entry type 47
– For electronic claims, submission of entire drawback package electronically
– System validations
– Integration with post release processes
– Improved system controls
SEPARATELY, CBP is planning future additional drawback capabilities for implementation pursuant to the Trade Facilitation and Trade Enforcement Act (TFTEA).
Please send questions on the upcoming ACE deployment to AskACE@cbp.dhs.gov.
Treasury/OFAC: “American Honda Finance Corporation Settles 13 Alleged CACR Violations”
American Honda Finance Corporation (AHFC), a motor vehicle finance company headquartered in California that specializes in various forms of financing in the United States for purchasers, lessees, and authorized independent dealers of Honda and Acura products, has agreed to remit $87,255 to settle its potential civil liability for 13 apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR) (the “Alleged Violations”).
Between February 2011 and March 2014, Honda Canada Finance, Inc. (HCFI) — a majority- owned subsidiary of AHFC located in Canada — approved and financed 13 lease agreements between an unaffiliated Honda dealership in Ottawa, Canada and the Embassy of Cuba in connection with the Cuban Embassy’s leasing of several Honda vehicles. The Cuban entity had the word “Cuba” in its name and provided documentation to HCFI demonstrating it was a Government of Cuba entity. Although AHFC and HCFI had policies and procedures in place to review transactions against OFAC’s List of Specially Designated Nationals and Blocked Persons for compliance with U.S. economic sanctions laws, they did not include the names of countries subject to OFAC-administered comprehensive sanctions in their screening system. AHFC and HCFI were not involved in the business of exporting vehicles internationally.
Overall, between 28 February 2011 and 3 March 2014, HCFI approved the financing of 13 lease agreements with the Cuban entity totaling $276,999. Three of the lease agreements, totaling $58,281, were initiated and/or approved by HCFI on or about 3 March 2014 — approximately two months after AHFC submitted its initial voluntary self-disclosure to OFAC regarding similar apparent violations. The total base penalty amount for the 13 Alleged Violations was $138,500.
OFAC has determined that AHFC voluntarily self-disclosed the Alleged Violations to OFAC, and that the Alleged Violations constitute a non-egregious case.
The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A. OFAC considered the following to be aggravating factors:
– AHFC had reason to know of the conduct that led to the Alleged Violations, particularly the transactions that occurred after AHFC had filed its initial voluntary self-disclosure with OFAC;
– HCFI personnel appear to have had actual knowledge of the Cuban Embassy’s involvement in the lease agreements in question;
– the Alleged Violations resulted in harm to U.S. sanctions program objectives at the time they occurred; and
– AHFC is a large and commercially sophisticated financial institution.
OFAC considered the following to be mitigating factors:
– AHFC has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the Alleged Violations;
– AHFC took remedial action in response to the Alleged Violations, including by implementing a new policy governing its OFAC policies and proprietary systems;
– AHFC cooperated with OFAC’s investigation by voluntarily self-disclosing the Alleged Violations, providing detailed and well-organized information in a timely and efficient manner, and by signing and extending a statute of limitations tolling agreement; and
– while the transactions described above constitute apparent violations of the CACR, OFAC issued a specific license to AHFC in June 2015 regarding the subject leases.
For more information regarding OFAC regulations, please visit: http://www.treasury.gov/ofac.
Commerce/BIS Posts Reminder of Offsets Reporting Requirements for Calendar Year 2016
(Source: Federal Register) [Excerpts.]
82 FR 26775-26776: Reminder of Offsets Reporting Requirements for Calendar Year 2016
* AGENCY: Bureau of Industry and Security, Department of Commerce.
* ACTION: Notice; annual reporting requirements.
* SUMMARY: This notice is intended to remind the public that U.S. companies are required, pursuant to the Defense Production Act of 1950, as amended (DPA), to report annually to the Department of Commerce (Commerce) information on contracts for the sale of defense articles or defense services to foreign countries or foreign companies that are subject to offsets agreements exceeding $5,000,000 in value. Consistent with the DPA, U.S. companies are also required to report annually to Commerce information on offsets transactions completed in performance of existing offsets commitments for which an offsets credit of $250,000 or more has been claimed from the foreign representative. Such reports from calendar year 2016 must include relevant information and must be submitted to Commerce no later than 15 June 2017. …
* FOR FURTHER INFORMATION CONTACT: Ronald DeMarines, Office of Strategic Industries and Economic Security, Bureau of Industry and Security, U.S. Department of Commerce, telephone: 202-482-3755; fax: 202-482-5650; email: email@example.com.
* SUPPLEMENTARY INFORMATION: …
The authorities of the Secretary regarding offsets have been delegated to the Under Secretary of Commerce for Industry and Security. The regulations associated with offsets reporting are set forth in part 701 of title 15 of the Code of Federal Regulations. Offsets are compensation practices required as a condition of purchase in either government-to-government or commercial sales of defense articles and/or defense services, as defined by the Arms Export Control Act (22 U.S.C. 2778) and the International Traffic in Arms Regulations (22 CFR 120-130). Offsets are also applicable to certain items controlled on the Commerce Control list (CCL) and with an Export Control Classification Number (ECCN) including the numeral “6” as its third character (“600 series” items). The CCL is found in Supplement No. 1 to part 774 of the Export Administration Regulations.
An example of an offset is as follows: A company that is selling a fleet of military aircraft to a foreign government may agree to offset the cost of the aircraft by providing training assistance to plant managers in the purchasing country. Although this distorts the true price of the aircraft, the foreign government may require this sort of extra compensation as a condition of awarding the contract to purchase the aircraft. As described in the regulations, U.S. companies are required to report information on contracts for the sale of defense articles or defense services to foreign countries or foreign companies that are subject to offsets agreements exceeding $5,000,000 in value. U.S. companies are also required to report annually information on offsets transactions completed in performance of existing offsets commitments for which offsets credit of $250,000 or more has been claimed from the foreign representative. …
Dated: 6 June 2017.
Matthew S. Borman, Acting Assistant Secretary for Export Administration.
DoD/DSCA Publishes SAMM and Policy Memorandum, 4-10 Jun
* DSCA Policy Memo 17-17 Assignment of Program Code “Z7” to track Fiscal Year (FY) 2017/2018 Funds Provided for Security Cooperation Overseas Contingency Operations has been posted.
EU Amends and Corrects Restrictive Measures Concerning Iran, North Korea, Terrorism, and Syria
(Source: Official Journal of the European Union)
– Council Regulation (EU) 2017/964 of 8 June 2017 amending Regulation (EU) No 267/2012 concerning restrictive measures against Iran
– Council Implementing Regulation (EU) 2017/965 of 8 June 2017 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and amending Implementing Regulation (EU) 2017/150
– Commission Implementing Regulation (EU) 2017/970 of 8 June 2017 amending Council Regulation (EC) No 329/2007 concerning restrictive measures against the Democratic People’s Republic of Korea
– Council Decision (CFSP) 2017/974 of 8 June 2017 amending Decision 2010/413/CFSP concerning restrictive measures against Iran
– Council Decision (CFSP) 2017/972 of 8 June 2017 updating and amending the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism, and amending Decision (CFSP) 2017/154
– Council Implementing Decision (CFSP) 2017/975 of 8 June 2017 implementing Decision (CFSP) 2016/849 concerning restrictive measures against the Democratic People’s Republic of Korea
– Corrigendum to Council Implementing Regulation (EU) 2017/907 of 29 May 2017 implementing Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria ( OJ L 139, 30.5.2017 )
– Corrigendum to Council Decision (CFSP) 2017/917 of 29 May 2017 amending Decision 2013/255/CFSP concerning restrictive measures against Syria ( OJ L 139, 30.5.2017 )