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The Daily Bugle Weekly Highlights: Week 38 (14 -18 Sep 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. USTR: “Notice of Product Exclusion Extension Amendment — China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation”; Wednesday, 16 Sep 2020; Item #4
  2. EU External Action: “Arms Exports: Remarks by The High Representative/Vice-President Josep Borrell at the EP Plenary”; Thursday, 17 Sep 2020; Item #5
  3. Singapore Customs Updates of Interest: “Changes to The Strategic Goods Control List”; Thursday, 17 Sep 2020; Item #6
  4. Commerce/BIS Prohibits WeChat and TikTok Transactions to Protect the National Security of the United States; Friday, 18 Sep 2020; Item #4
  5. EU Commission/ Directorate-General Trade: “Notice to Stakeholders withdrawal Of The United Kingdom And Eurules In The Field Of Dual-Use Export Controls”; Friday, 18 Sep 2020; Item #9

 

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USTR: “Notice of Product Exclusion Extension Amendment — China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation”

(Source: Federal Register, 16 Sep 2020) [Excerpts]

 

85 FR 57925: Notice

* AGENCY: Office of the United States Trade Representative.

* ACTION: Notice of product exclusion extension and amendment.

* SUMMARY: Effective September 24, 2018, the U.S. Trade Representative imposed additional duties on goods of China with an annual trade value of approximately $200 billion as part of the action in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The U.S. Trade Representative initiated the exclusion process on June 24, 2019, and has granted 15 sets of exclusions under the $200 billion action. These exclusions expired on August 7, 2020. On May 6 and June 3, 2020, the U.S. Trade Representative invited the public to comment on whether to extend particular granted exclusions. On August 11, 2020, the U.S. Trade Representative announced a determination to extend certain previously granted exclusions. This notice makes one technical amendment to a previously extended exclusion.

* DATES: The product exclusion extension amendment announced in this notice applies as of August 7, 2020, and continues through December 31, 2020. This notice does not further extend the period for product exclusion extensions. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.

* FOR FURTHER INFORMATION CONTACT: For general questions about this notice, contact Associate General Counsel Philip Butler or Assistant General Counsel Benjamin Allen, or Director of Industrial Goods Justin Hoffmann at (202) 395-5725. For specific questions on customs classification or implementation of the product exclusions identified in the Annex to this notice, contact traderemedy@cbp.dhs.gov.

 

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EU External Action: “Arms Exports: Remarks by The High Representative/Vice-President Josep Borrell at the EP Plenary”

(Source: European Union External Action, 15 Sep 2020) [Excerpts]

 

“Decisions on arms export receive great attention and are politically sensitive because, indeed, trade in arms may potentially carry the risk of serious breaches for human rights, humanitarian law and regional stability. Most of the times the three things together. A strict implementation by Member States of the agreed Common Position on arms export is, therefore, essential to uphold European Union values and strategic objectives. As you state in you Report, this is also crucial for our credibility as a geopolitical player.  A high level of convergence as regards its full application will indeed more effectively ensure respect for human rights and international law by all parties involved.

I think we can say that we, the European Union, are moving fast in the field of defence: European Defence Fund (EDF) and European Peace Facility (EPF) will serve to strengthen internal collaboration on defence matters to make the European Union a more capable security provider at the global level. Our defence industries will become ever closer intertwined, they will strength our strategic autonomy, the protection of our citizens, while fostering innovation and saving costs. All that is right, but at the same time, in this context, further convergence of arms export policies becomes still more important.

As mentioned in your draft resolution, maintaining a vibrant and innovative defence industry in the European Union is a key component of our strategic autonomy and our European defence. It serves to ensure our capabilities and reduce dependency, while the defence industry is also a major source of technological innovation.

I may give you more examples: in 2018, it generated more €100 billion of revenues and supported more than 400,000 jobs in Europe. To ensure a thriving defence industry, exports are essential.

Of course, the defence industry is different from other industrial sectors and deserves a special consideration, taking into account its obvious links to national and international security, human rights and humanitarian values. That is why the European Union Member States have also exported control rules in place for military equipment, since 2008.  … In your own assessment on the Common Position on arms export control, you stress three key objectives: the need for increased control, convergence and transparency.   

First, on your support for an increased control. Let me start by saying that I am grateful your report welcomes Operation IRINI’s objective to implement the United Nations arms embargo on Libya. This is a concrete example of what the European Union does to prevent arms ending up in the wrong hands.  Further, as a global actor, the European Union supports outreach activities to assist countries in the European neighbourhood and beyond, in setting up arms export control mechanisms and implementing the Arms Trade Treaty.

Second, on transparency. The European Union Member States are already among the most transparent countries, including in arms export. Still, in order to increase the possibility for further scrutiny and accountability, I am glad to say that, this year, the European External Action Service will launch a public searchable database on its website, to allow all stakeholders to consult and analyse Member States’ arms exports in a user-friendly way. So, everybody will be able to know what the Member States arms export is about in a way that everybody could know whatever data they want about it.

Third and last, increased convergence. Member States are holding regular exchanges to share information on policies, denial of licenses and possible measures. As a concrete result, a new initiative has been launched and the Working Party on Arms Export is currently preparing a Council Decision to set rules on end-user certificates for the export of small arms and light weapons and their ammunition. … 

The next annual European Union arms export report on 2019 will become available shortly; probably next month, in October -two months earlier than in previous years. It will bring a lot of precious information about these developments. … ” 

 

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Singapore Customs Updates of Interest: “Changes to The Strategic Goods Control List”

(Source: Singapore Customs, 15 Sep 2020) [Excerpts]

 

Updates to the Strategic Goods Control List 

(1) Singapore Customs would like to inform you that the new Strategic Goods (Control) Order 2020 (“SGCO 2020”) has been gazetted on 15 September 2020 and will come into effect from 16 November 2020. You may access the SGCO 2020 via our website at www.customs.gov.sg > Businesses > Strategic Goods Control > Strategic Goods Control List. 

(2) The SGCO 2020 brings Singapore’s strategic goods control list up to date with the 2019 Wassenaar Arrangement’s Munitions List, and the 2019 European Union’s List of Dual-Use Items (“EUDL”). 

The EUDL contains dual-use items controlled by the four multilateral export control regimes (the Australia Group, the Missile Technology Control Regime, the Nuclear Suppliers Group and the Wassenaar Arrangement). 

(3) The SGCO 2020 will incorporate revisions such as new controls, as well as editorial changes for consistency and clarity of controls.

A document on the amendments can be found via our website at www.customs.gov.sg > Businesses > Strategic Goods Control > Resources. Amendment to the Strategic Goods (Control) Brokering Order 2019

(4) An amendment will be made to the Strategic Goods (Control) Regulations to reflect its reference to the new SGCO 2020. There are no changes to the scope of brokering controls. 

(5) The Strategic Goods (Control) (Brokering) (Amendment) Order 2020 will come into effect from 16 November 2020. Amendment to the Strategic Goods (Control) Regulations 

(6) An amendment will be made to the Strategic Goods (Control) Regulations to reflect its reference to the new SGCO 2020. There are no changes to the scope of transhipment and transit controls. 

(7) The Strategic Goods (Control) (Amendment) Regulations 2020 will come into effect from 16 November 2020. 

Hard Copies of the Subsidiary Legislation

(8) You may purchase copies of the subsidiary legislation from Toppan Leefung Pte Ltd: Toppan Leefung Pte Ltd 1 Kim Seng Promenade #18-01/06 Great World City (East Tower) Singapore 237994 Tel: (65) 6826 9685 / (65) 6826 9629 E-mail: legalpub@toppanleefung.com

 

Website: www2.toppanleefung.com/webshop  

 

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Commerce/BIS Prohibits WeChat and TikTok Transactions to Protect the National Security of the United States

(Source: Commerce/BIS, 18 Sep 2020)

 

In response to President Trump’s Executive Orders signed August 6, 2020, the Department of Commerce (Commerce) today announced prohibitions on transactions relating to mobile applications (apps) WeChat and TikTok to safeguard the national security of the United States. The Chinese Communist Party (CCP) has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S. Today’s announced prohibitions, when combined, protect users in the U.S. by eliminating access to these applications and significantly reducing their functionality. 

“Today’s actions prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party,” said U.S. Department of Commerce Secretary Wilbur Ross. “At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations.”

While the threats posed by WeChat and TikTok are not identical, they are similar. Each collects vast swaths of data from users, including network activity, location data, and browsing and search histories. Each is an active participant in China’s civil-military fusion and is subject to mandatory cooperation with the intelligence services of the CCP.  This combination results in the use of WeChat and TikTok creating unacceptable risks to our national security.

As of September 20, 2020, the following transactions are prohibited:

(i) Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S.;

(ii) Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S.

As of September 20, 2020, for WeChat and as of November 12, 2020, for TikTokthe following transactions are prohibited:

(1) Any provision of internet hosting services enabling the functioning or optimization of the mobile application in the U.S.;

(2) Any provision of content delivery network services enabling the functioning or optimization of the mobile application in the U.S.;

(3) Any provision directly contracted or arranged internet transit or peering services enabling the function or optimization of the mobile application within the U.S.;

(4) Any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.

Any other prohibitive transaction relating to WeChat or TikTok may be identified at a future date. Should the U.S. Government determine that WeChat’s or TikTok’s illicit behavior is being replicated by another app somehow outside the scope of these executive orders, the President has the authority to consider whether additional orders may be appropriate to address such activities. The President has provided until November 12 for the national security concerns posed by TikTok to be resolved. If they are, the prohibitions in this order may be lifted. . . .  

Background:

On August 6, 2020, President Trump signed Executive Orders (E.O.) 13942, Addressing the Threat Posed by TikTok, and E.O. 13943, Addressing the Threat Posed by WeChat. In the E.O.s, the President determined that the apps capture vast swaths of information from U.S. users, leaving the data vulnerable to CCP access for nefarious purposes. Commerce, at the Direction of the President, was required to identify transactions within 45 days to protect national security and the private data of millions of people across the country. Today’s announced prohibitions fulfill the President’s direction and mitigate national security risks.

 

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EU Commission/ Directorate-General Trade: “Notice to Stakeholders withdrawal Of The United Kingdom And Eurules In The Field Of Dual-Use Export Controls”

(Source: European Commission/Directorate-General Trade, 16 Sep 2020)[Excerpts]

 

Since 1 February 2020, the United Kingdom has withdrawn from the European Union and has become a “third country”.1The Withdrawal Agreement2provides for a transition period ending on 31 December 2020. Until that date, EU law in its entirety applies to and in the United Kingdom.During the transition period, the EU and the United Kingdom will negotiate an agreement on a new partnership, providing notably for a free trade area. However, it is not certain whether such an agreement will be concluded andwill enter into force at the end of the transition period. In any event, such an agreement would create a relationship which in terms of market access conditions will be very different from the United Kingdom’s participation in the internal market,in the EU Customs Union, and in the VAT and excise duty area. In any case, all interested parties, and especially economic operators, are reminded ofthe legal situation applicable after the end of the transition period. …

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