The Daily Bugle Weekly Highlights: Week 33 (12 – 16 August 2019)

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 6,500 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, Sven Goor, and Alex Witt.

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. UK ECJU updates 2 Open General Export Licences (OGELs); The Daily Bugle; Tuesday, 13 August 2019, Item #5;
  2. Commerce/BIS Adds 17 Entities, Modifies 23, and Removes 2 Entities on the Entity List; The Daily Bugle; Wednesday, 14 August 2019, Item #1;
  3. DoD, GSA, NASA Amend FAR and Prohibits Contracting for Certain Telecommunications and Video Surveillance Services or Equipment; The Daily Bugle; Wednesday, 14 August 2019, Item #2;
  4. UK ECJU Publishes New Notice on New Control on Exporting Submersible Vessels and Related Equipment to Russia; The Daily Bugle; Wednesday, 14 August 2019, Item #8;
  5. State Department Sanctions Chinese entity Zhuhai Zhenrong Company Limited; The Daily Bugle; Thursday, 15 August 2019, Item #2;
  6. Treasury/OFAC Announces $345,315 Settlement with Trade Credit Insurer for Violation of Foreign Narcotics Kingpin Sanctions Regulations; The Daily Bugle; Friday, 16 August 2019, Item #2;

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1. UK ECJU updates 2 Open General Export Licences (OGELs)

(Source: UK ECJU, 13 August 2019.)

The UK Export Control Joint Unit (ECJU) within the Department of International Trade (TID) has published the following update on its website:

The open general export licence (historic military vehicles and artillery pieces) has been updated to remove the requirement for exporters to register for this licence.

The open general export licence (military goods: for demonstration) has been updated to include an option for the goods to remain under the control of the exporter’s agent.

The updated OGELs come into force on Tuesday 13 August 2019.

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2. Commerce/BIS Adds 17 Entities, Modifies 23, and Removes 2 Entities on the Entity List

(Source: Federal Register, 14 August 2019.) [Excerpts.]

84 FR 40237-40247: Addition of Certain Entities to the Entity List, Revision of Entries on the Entity List, and Removal of Entities from the Entity List

* AGENCY: Bureau of Industry and Security, Commerce.

* ACTION: Final rule.

* SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding seventeen entities, under a total of nineteen entries, to the Entity List. These seventeen entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These entities will be listed on the Entity List under the destinations of Armenia, Belgium, Canada, the People’s Republic of China (China), Georgia, Hong Kong, Malaysia, the Netherlands, Russia, the United Arab Emirates (U.A.E.), and the United Kingdom (U.K.). This rule also modifies a total of twenty-three entries on the Entity List under the destinations of China, Hong Kong, and Russia. Finally, this rule removes a total of three entities under the destinations of China and the U.A.E. The removals are made in connection with requests for removal that BIS received pursuant to the EAR and a review of information provided in those requests.

* DATES: This rule is effective August 14, 2019.

* FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Email: ERC@bis.doc.gov.

* SUPPLEMENTARY INFORMATION:

Background

The Entity List (Supplement No. 4 to part 744 of the Export Administration Regulations (EAR)) identifies entities for which there is reasonable cause to believe, based on specific and articulable facts, have been involved, are involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States. The EAR (15 CFR parts 730-774) impose additional license requirements on, and limit the availability of most license exceptions for, exports, reexports, and transfers (in-country) to listed entities. The license review policy for each listed entity is identified in the “License review policy” column on the Entity List, and the impact on the availability of license exceptions is described in the relevant Federal Register notice adding entities to the Entity List. BIS places entities on the Entity List pursuant to part 744 (Control Policy: End-User and End-Use Based) and part 746 (Embargoes and Other Special Controls) of the EAR.

The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and all decisions to remove or modify an entry by unanimous vote.

ERC Entity List Decisions

Additions to the Entity List

Under Sec.  744.11(b) (Criteria for revising the Entity List) of the EAR, entities for which there is reasonable cause to believe, based on specific and articulable facts, have been involved, are involved, or pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States, and those acting on behalf of such persons, may be added to the Entity List.

This rule implements the decision of the ERC to add seventeen entities, under a total of nineteen entries, to the Entity List; one of these entities is being added under three entries. The seventeen entities being added are located in Armenia, Belgium, Canada, China, Georgia, Hong Kong, Malaysia, the Netherlands, Russia, the U.A.E. and the U.K. The seventeen entities are being added based on Sec. 744.11 (License requirements that apply to entities acting contrary to the national security or foreign policy interests of the United States) of the EAR. The nineteen entries consist of two entries located in Armenia, two entries located in Belgium, one entry located in Canada, four entries located in China, one entry located in Georgia, one entry located in Hong Kong, one entry located in Malaysia, one entry located in the Netherlands, one entry located in Russia, four entries located in the U.A.E., and one entry located in the U.K. …

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3. DoD, GSA, NASA Amend FAR and Prohibits Contracting for Certain Telecommunications and Video Surveillance Services or Equipment

(Source: Federal Register, 13 August 2019.) [Excerpts.]

84 FR: 40216-40223: Federal Acquisition Regulation: Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment

* AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

* ACTION: Interim rule.

* SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement section 889(a)(1)(A) of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232).

* DATES: Effective Date: August 13, 2019.

 – Applicability: Contracting officers shall include the provision at FAR 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment and clause at FAR 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment as prescribed–

In solicitations issued on or after August 13, 2019, and resultant contracts; and In solicitations issued before August 13, 2019, provided award of the resulting contract(s) occurs on or after August 13, 2019. Contracting officers shall modify, in accordance with FAR 1.108(d), existing indefinite delivery contracts to include the FAR clause for  future orders, prior to placing any future orders.

If modifying an existing contract or task or delivery order to extend the period of performance, including exercising an option, contracting officers shall include the clause in accordance with

1.108(d). The contracting officer shall include the provision at 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment, in all solicitations for an order, or notices of intent to place an order, including those issued before August 13, 2019, where performance will occur on or after that date, under an existing indefinite delivery contract.

 – Comment date: Interested parties should submit written comments to the Regulatory Secretariat Division at one of the addresses shown below on or before October 15, 2019 to be considered in the formation of the final rule. …

SUPPLEMENTARY INFORMATION:

  1. Background

This interim rule revises the FAR to implement section 889(a)(1)(A) of the NDAA for FY 2019 (Pub. L. 115-232). Section 889(a)(1)(A) prohibits agencies from procuring or obtaining, or extending or  renewing a contract to procure or obtain, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as a critical technology as part of any system, on or after August 13, 2019.

“Covered telecommunications equipment or services,” as defined in the statute, means–

Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities);

For the purpose of public safety, security of Government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities);

Telecommunications or video surveillance services provided by such entities or using such equipment; or

Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country. …

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4. UK ECJU Publishes New Notice on New Control on Exporting Submersible Vessels and Related Equipment to Russia

(Source: UK ECJU, 14 August 2019.)

A new national control covering the export of submersible vessels and related equipment, software and technology to Russia comes into force on 14 August 2019. A link to the list of items subject to the new control can be found below.

This additional control is a consequence of Russia developing certain capabilities – including the ability to track, access and disrupt undersea communication cables. These activities represent a risk to our national security and the new control is intended to mitigate this risk.

The control only applies to exports to Russia. Export licence applications for items subject to the new control will be assessed on a case-by-case basis against the consolidated EU and national arms export licensing criteria.

The new control has been implemented by an amendment to the Export Control Order 2008. The Export Control (Amendment) (No. 2) Order 2019 (SI 2019/1159)introduces a new control entry, PL9012, into Schedule 3 of the Export Control Order 2008.

 

The text of new control will be added to the consolidated list of strategic military and dual use items that require export authorisationon GOV.UK.

Read the new control.

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5. State Department SanctionsChinese entity Zhuhai Zhenrong Company Limited

(Source: Federal Register, 15 August 2019.) [Excerpts.]

84 FR 41802-41803: Notice of Department of State Sanctions Actions Pursuant to Executive Order 13846 of August 6, 2018

* SUMMARY: The Secretary of State has determined, in consultation with the heads of relevant agencies, that the Chinese entity Zhuhai Zhenrong Company Limited (Zhuhai Zhenrong), has knowingly, on or after November 5, 2018, engaged in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran. The Secretary of State has selected certain sanctions to be imposed upon Zhuhai Zhenrong and Youmin Li, Zhuhai Zhenrong’s Executive Director and General Manager, who has been determined to be (i) a corporate officer or principal of Zhuhai Zhenrong and (ii) a principal executive officer of Zhuhai Zhenrong, or to perform similar functions with similar authorities as such an officer.

* DATES: The Secretary of State’s determination that Zhuhai Zhenrong has knowingly, on or after November 5, 2018, engaged in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran, and the Secretary of State’s selection of certain sanctions to be imposed upon Zhuhai Zhenrong and Youmin Li, are effective on September 16, 2019.

* FOR FURTHER INFORMATION CONTACT: Taylor Ruggles, Director, Office of Economic Sanctions Policy and Implementation, Bureau of Economic and Business Affairs, Department of State, Washington, DC 20520, tel.: (202) 647-7677, email: RugglesTV@state.gov.

* SUPPLEMENTARY INFORMATION:

Background: Pursuant to section 3(a)(ii) of E.O. 13846, the Secretary of State has selected the following sanctions to be imposed upon Zhuhai Zhenrong:

  – Prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which Zhuhai Zhenrong has any interest; Prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of Zhuhai Zhenrong;

  – Block 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 Zhuhai Zhenrong, and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in;

  – Prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of Zhuhai Zhenrong;

  – Restrict or prohibit imports of goods, technology, or services, directly or indirectly, into the United States from Zhuhai Zhenrong; and

  – Impose on the principal executive officer or officers, or persons performing similar functions and with similar authorities, of Zhuhai Zhenrong the sanctions described in sections 5(a)(i)-5(a)(iv) and 5(a)(vi) of E.O. 13846, as selected by the Secretary of State (as described below).

Pursuant to sections 4(e) and 5(a)(vii) of E.O. 13846, the Secretary of State has selected the following sanctions to be imposed upon Youmin Li, Zhuhai Zhenrong’s Executive Director and General Manager, who has been determined to be (i) a corporate officer or principal of Zhuhai Zhenrong and (ii) a principal executive officer of Zhuhai Zhenrong, or to perform similar functions with similar authorities as such an officer:

  – The Secretary of State shall deny a visa to, and the Secretary of Homeland Security shall exclude from the United States, Youmin Li;

  – Prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which Youmin Li has any interest;

  – Prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of Youmin Li;

  – Block 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 Youmin Li, and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in; and

  – Restrict or prohibit imports of goods, technology, or services, directly or indirectly, into the United States from Youmin Li. …

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6. Treasury/OFAC Announces $345,315 Settlement with Trade Credit Insurer for Violation of Foreign Narcotics Kingpin Sanctions Regulations

(Source: Treasury/OFAC, 16 Aug 2019.)

Atradius Trade Credit Insurance, Inc. (“ATCI”) of Hunt Valley, Maryland, a trade credit insurer licensed to operate in the state of Maryland, is a subsidiary of Atradius N.V. ATCI has agreed to remit $345,315 to settle its potential civil liability for two apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations, 31 C.F.R. Part 598. The Office of Foreign Assets Control (OFAC) has determined that ATCI did not make a voluntary self-disclosure of the Apparent Violations, and that these Apparent Violations constitute a non-egregious case.

For more information, please visit the following web notice.

For more information on this specific action, please visit our Recent Actions page.

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