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The Daily Bugle Weekly Highlights: Week 29 (13 – 17 July 2020)

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 8,500 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:

  1. Justice/ATF Requests eComments on Extension Without Change of a Currently Approved Collection Federal Firearms License (FFL) RENEWAL Application-ATF Form 8 (5310.11) Part II; Tuesday, 14 July 2020; Item #1
  2. Canada TID: “Export of items listed on the Export Control List to Hong Kong”; Tuesday, 14 July 2020; Item #5
  3. State/DDTC: “Hong Kong Executive Order: Licensing Policy Change for Hong Kong”; Wednesday, 15 July 2020; Item #6
  4. White House: The President’s Executive Order on Hong Kong Normalization; Wednesday, 15 July 2020; Item #9
  5. Treasury/OFAC: “Amendment of Nicaragua Sanctions Regulations; Publication of Nicaragua-related General License; Amendment of Ukraine-related General Licenses”; Friday, 17 July 2020; Item #7

 

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Justice/ATF Requests eComments on Extension Without Change of a Currently Approved Collection Federal Firearms License (FFL) RENEWAL Application-ATF Form 8 (5310.11) Part II

(Source: Federal Register, 14 Jul 2020)

 

85 FR 42432: Notice

* AGENCY: Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.

* ACTION: 60-Day notice.

* SUMMARY: The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection (IC) is also being published to obtain comments from the public and affected agencies.

* DATES: Comments are encouraged and will be accepted for 60 days until September 14, 2020.

* FOR FURTHER INFORMATION CONTACT: If you have additional comments, regarding the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions, or additional information, please contact: Tracey Robertson, Federal Firearms Licensing Center, either by mail at 244 Needy Road, Martinsburg, WV 25405, by email at Tracey.Robertson@atf.gov, or by telephone at 304-260-3643

 

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Canada TID: “Export of items listed on the Export Control List to Hong Kong”

(Source: Canada TID)

 

  Canada is deeply concerned by the passage of national security legislation for Hong Kong by the Standing Committee of the National People’s Congress of China. This legislation was enacted in a secretive process, without the participation of Hong Kong’s legislature, judiciary or people, and in violation of international obligations.

  Accordingly, the Minister of Foreign Affairs announced that, effective July 3, 2020: “Canada will treat exports of sensitive goods to Hong Kong in the same way as those destined for China. Canada will not permit the export of sensitive military items to Hong Kong.”

  In order to ensure that sensitive items are not exported to Hong Kong, Global Affairs Canada will closely scrutinize all export permit applications for items to Hong Kong, and will deny permits that are not in line with Canada’s domestic and international legal obligations, foreign policy or security interests.

  Global Affairs Canada will continue to monitor the evolving situation and may reassess the above decision in light of changes on the ground.

Exporters will be advised of any new developments with respect to export permits to Hong Kong.

   For further information, please contact the Export Controls Division at Global Affairs Canada by phone or email: 613-996-2387 / tie.reception@international.gc.ca.

 

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State/DDTC: “Hong Kong Executive Order: Licensing Policy Change for Hong Kong”

(Source: State/DDTC), 15 Jul 2020)

   

  On July 14, 2020, the President signed an Executive Order that requires, among other actions, Hong Kong to be treated as the People’s Republic of China (PRC) for the purposes of the Arms Export Control Act (AECA), with a specific carve-out to support Hong Kong persons residing outside the Hong Kong Special Administrative Region or the PRC who were previously authorized access to defense articles subject to the ITAR.  Hong Kong is now considered to be included in the entry for China under section 126.1(d)(1) of the ITAR and therefore subject to a policy of denial for all transfers subject to the ITAR.  The U.S. government is taking this action because the Chinese Communist Party has fundamentally undermined Hong Kong’s autonomy and thereby increased the risk that sensitive U.S. items will be illegally diverted to the PRC.

FAQs

Q: The EO provides that the President is terminating export licensing suspensions for exports of defense articles to certain Hong Kong persons.  Are exports of defense services to those Hong Kong persons permitted? 

A: Section 902(a)(3) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (Public Law 101-246, 22 U.S.C. 2151 note) prohibits “[t]he issuance of licenses under section 38 of the Arms Export Control Act for the export to the People’s Republic of China of any defense article on the United States Munitions List….”  As a result, the President is not required to make a determination under section 902(b)(2) of that Act in order for DDTC to authorize exports of defense services to Hong Kong persons.  DDTC will review on a case-by-case basis license applications to export defense services to Hong Kong persons who (1) are physically located outside of Hong Kong or the PRC and (2) were authorized to receive defense articles prior to July 14, 2020.  Exporters may continue to rely on available exemptions consistent with the provisions of ITAR § 126.1(a).

  We refer you to the U.S. Department of Commerce for additional information on exports to Hong Kong controlled under the Commerce Control List.

Q: I have a previously approved export authorization which names Hong Kong as a transfer territory.  Is this authorization still valid?

A: Yes.  Current, valid, non-exhausted authorizations naming Hong Kong as a transfer territory are not affected by the Executive Order.  At this time the Department is not taking steps to revoke or rescind previously approved authorizations to export defense articles or services to Hong Kong.

Q: Does this action apply to all end-users in Hong Kong, or just government entities?

A: In accordance with the Executive Order, Hong Kong is now treated as China under section 126.1(d)(1) of the ITAR and there is a presumption of denial for license requests where a Hong Kong person is named as an end-user, licensee (signatory) or sublicensee, or where Hong Kong appears as a marketing, transfer, re-transfer, re-export, sales, or distribution territory.

 

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White House: The President’s Executive Order on Hong Kong Normalization

(Source: White House, 14 Jul 2020) [Excerpts]

 

  By the authority vested in me as President by the Constitution and the laws of the United States of America, including the United States-Hong Kong Policy Act of 1992 (Public Law 102-393), the Hong Kong Human Rights and Democracy Act of 2019 (Public Law 116-76), the Hong Kong Autonomy Act of 2020, signed into law July 14, 2020, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), section 212(f) of the Immigration and Nationality Act of 1952 (8 U.S.C. 1182(f)), and section 301 of title 3, United States Code,

I, DONALD J. TRUMP, President of the United States of America, determine, pursuant to section 202 of the United States-Hong Kong Policy Act of 1992, that the Special Administrative Region of Hong Kong (Hong Kong) is no longer sufficiently autonomous to justify differential treatment in relation to the People’s Republic of China (PRC or China) under the particular United States laws and provisions thereof set out in this order.   . . .  I therefore determine that the situation with respect to Hong Kong, including recent actions taken by the PRC to fundamentally undermine Hong Kong’s autonomy, constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States.  I hereby declare a national emergency with respect to that threat. In light of the foregoing, I hereby determine and order:
   Sec. 1.  It shall be the policy of the United States to suspend or eliminate different and preferential treatment for Hong Kong to the extent permitted by law and in the national security, foreign policy, and economic interest of the United States.
   Sec2.  Pursuant to section 202 of the United States-Hong Kong Policy Act of 1992 (22 U.S.C. 5722), I hereby suspend the application of section 201(a) of the United States-Hong Kong Policy Act of 1992, as amended (22 U.S.C. 5721(a)), to the following statutes: . . .
   Sec3.  Within 15 days of the date of this order, the heads of agencies shall commence all appropriate actions to further the purposes of this order, consistent with applicable law, including, to:
     (a)  amend any regulations implementing those provisions specified in section 2 of this order, and, consistent with applicable law and executive orders, under IEEPA, which provide different treatment for Hong Kong as compared to China;
     (b)  amend the regulation at 8 CFR 212.4(i) to eliminate the preference for Hong Kong passport holders as compared to PRC passport holders;
     (c)  revoke license exceptions for exports to Hong Kong, reexports to Hong Kong, and transfers (in-country) within Hong Kong of items subject to the Export Administration Regulations, 15 CFR Parts 730-774, that provide differential treatment compared to those license exceptions applicable to exports to China, reexports to China, and transfers (in-country) within China;
     (d)  consistent with section 902(b)(2) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (Public Law 101-246), terminate the export licensing suspensions under section 902(a)(3) of such Act insofar as such suspensions apply to exports of defense articles to Hong Kong persons who are physically located outside of Hong Kong and the PRC and who were authorized to receive defense articles prior to the date of this order;
     (e)  give notice of intent to suspend the Agreement Between the Government of the United States of America and the Government of Hong Kong for the Surrender of Fugitive Offenders (TIAS 98-121);
    (f)  give notice of intent to terminate the Agreement Between the Government of the United States of America and the Government of Hong Kong for the Transfer of Sentenced Persons (TIAS 99-418);
     (g)  take steps to end the provision of training to members of the Hong Kong Police Force or other Hong Kong security services at the Department of State’s International Law Enforcement Academies;
     (h)  suspend continued cooperation undertaken consistent with the now-expired Protocol Between the U.S. Geological Survey of the Department of the Interior of the United States of America and Institute of Space and Earth Information Science of the Chinese University of Hong Kong Concerning Scientific and Technical Cooperation in Earth Sciences (TIAS 09-1109);
     (i)  take steps to terminate the Fulbright exchange program with regard to China and Hong Kong with respect to future exchanges for participants traveling both from and to China or Hong Kong;
     (j)  give notice of intent to terminate the agreement for the reciprocal exemption with respect to taxes on income from the international operation of ships effected by the Exchange of Notes Between the Government of the United States of America and the Government of Hong Kong (TIAS 11892);
     (k)  reallocate admissions within the refugee ceiling set by the annual Presidential Determination to residents of Hong Kong based on humanitarian concerns, to the extent feasible and consistent with applicable law; and
     (l)  propose for my consideration any further actions deemed necessary and prudent to end special conditions and preferential treatment for Hong Kong.
Sec4.  All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: . . .
Sec5.  I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to section 4 of this order would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations as provided by section 4 of this order.
Sec6.  The prohibitions in section 4(a) of this order include: . . .
Sec7.  The unrestricted immigrant and nonimmigrant entry into the United States of aliens determined to meet one or more of the criteria in section 4(a) of this order, as well as immediate family members of such aliens, or aliens determined by the Secretary of State to be employed by, or acting as an agent of, such aliens, would be detrimental to the interest of the United States, and the entry of such persons into the United States, as immigrants and nonimmigrants, is hereby suspended.  . . .
Sec8.  (a)  Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited. . . .
Sec9.  Nothing in this order shall prohibit transactions for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof.
Sec10.  For the purposes of this order: [definitions] . . .
Sec11.  For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to section 4 of this order would render those measures ineffectual.  I therefore determine that for these measures to be effective in addressing the national emergency declared in this order, there need be no prior notice of a listing or determination made pursuant to section 4 of this order.
Sec12.  The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order.  The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions within the Department of the Treasury.  All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.
Sec13.  The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to submit recurring and final reports to the Congress on the national emergency declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).
Sec14.  (a)  Nothing in this order shall be construed to impair or otherwise affect: …
Sec15.  If, based on consideration of the terms, obligations, and expectations expressed in the Joint Declaration, I determine that changes in China’s actions ensure that Hong Kong is sufficiently autonomous to justify differential treatment in relation to the PRC under United States law, I will reconsider the determinations made and actions taken and directed under this order.
DONALD J. TRUMP
THE WHITE HOUSE
July 14, 2020

 

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Treasury/OFAC: “Amendment of Nicaragua Sanctions Regulations; Publication of Nicaragua-related General License; Amendment of Ukraine-related General Licenses” 

(Source: Treasury/OFAC, 16 Jul 2020)

 

   The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Nicaragua Sanctions Regulations (31 CFR part 582) to incorporate the Nicaragua Human Rights and Anticorruption Act of 2018. OFAC is also adding a general license authorizing certain United States government activities. This regulatory amendment is currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on July 17, 2020. 

   In addition, OFAC is amending two general licenses related to GAZ Group by issuing Ukraine-related General License No. 13O, “Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in GAZ Group,” and Ukraine-related General License 15I, “Authorizing Certain Activities Involving GAZ Group.”

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