The Daily Bugle Weekly Highlights: Week 6 (4 Feb-8 Feb 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, Alexander P. Bosch, Vincent J.A. Goossen, and Alex Witt.

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Last week’s highlights of The Daily Bugle included in this edition are:

  1. Justice Department Settles Immigration-Related Discrimination Claim Against Honda Aircraft Company LLC; The Daily Bugle; Monday, 4 Feb 2019, Item #5;
  2. UK DIT Publishes “Export Control (Amendment) (EU Exit) Regulations 2019”; The Daily Bugle; Monday, 4 Feb 2019, Item #9;
  3. EU Commission Imposes Definitive Safeguard Measures on Imports of Steel Products; The Daily Bugle; Tuesday, 5 Feb 2019, Item #7;
  4. Treasury/OFAC Posts Settlement Agreement with Kollmorgen Corporation Concerning Apparent Iran Sanctions Regulations; The Daily Bugle; Thursday, 7 Jan 2019, Item #6;
  5. EU Commission Updates TARIC-Dual Use Correlation List; The Daily Bugle; Friday,  8 Feb 2019, Item #5.

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Justice Department Settles Immigration-Related Discrimination Claim Against Honda Aircraft Company LLC

(Source: Justice, 1 Feb 2019.) [Excerpts.] 

The Justice Department today (1 Feb) reached a settlement agreement with Honda Aircraft Company LLC (Honda Aircraft), a wholly owned subsidiary of American Honda Motor Co. Inc., and subsidiary of Honda Motor Co. Ltd., that manufactures and sells business jet aircrafts. The settlement resolves a claim that Honda Aircraft, headquartered in Greensboro, North Carolina, refused to consider or hire certain work-authorized non-U.S. citizens because of their citizenship status, in violation of the Immigration and Nationality Act’s (INA) anti-discrimination provision.

The Department’s independent investigation determined that between August 2015 and December 2016, Honda Aircraft published at least 25 job postings that unlawfully required applicants to have a specific citizenship status to be considered for the vacancies. The Department concluded that the company’s unlawful practice of restricting job vacancies to U.S. citizens and in some cases, to U.S. citizens and lawful permanent residents (LPR), was based on a misunderstanding of the requirements under the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). The discriminatory job postings were published on Honda Aircraft’s website and several third-party websites.

  “The Department of Justice is committed to ensuring that employers do not unlawfully exclude non-U.S. citizens because of their citizenship status,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “Employers who are subject to the ITAR or the EAR should carefully review their responsibilities under anti-discrimination statutes.”

The ITAR regulates specific exports of defense articles and services, and – absent State Department authorization – limits access to certain sensitive information to “U.S. persons,” which are defined as U.S. citizens, U.S. nationals, lawful permanent residents, asylees, and refugees. The EAR similarly regulates commercial goods and technology that could have military applications. The EAR limits access to export-controlled technology and information to “U.S. persons” absent authorization from the Department of Commerce.  Neither the ITAR nor the EAR requires or authorizes employers to hire only U.S. citizens and LPRs. Employers that limit their hiring to U.S. citizens and/or LPRs without legal justification may violate the INA’s anti-discrimination provision.

Under the settlement agreement, Honda Aircraft will pay a civil penalty of $44,626, and remove all specific citizenship requirements from current and future job postings unless they are authorized by law. The agreement also requires certain employees to attend training on the INA’s anti-discrimination provision and ensure that trained personnel review future job advertisements.  

The INA’s anti-discrimination provision prohibits employers from discriminating in hiring or recruiting or referring for a fee based on a person’s citizenship, immigration status, or national origin. In the absence of a legal basis (such as a law, regulation, or government contract that requires U.S. citizenship restrictions), employers, recruiters and referrers for a fee may not limit job opportunities or otherwise impose barriers to employment based on an individual’s citizenship or immigration status. By requiring a specific citizenship status as a condition of employment, Honda Aircraft’s job postings created discriminatory barriers for work-authorized individuals and unlawfully excluded U.S. nationals, asylees, refugees, and, in some cases, LPRs.

The Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation. … 

Applicants or employees who believe they were subjected to discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral for a fee; or discrimination in the employment eligibility verification process (Form I-9 and E-Verify) based on their citizenship, immigration status or national origin; or retaliation can file a charge or contact IER’s worker hotline for assistance.

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UK DIT Publishes “Export Control (Amendment) (EU Exit) Regulations 2019”

(Source: Legislation.gov.uk, 2 Feb 2 019.) 

The UK Department for International Trade (TID) has published new export control legislation on legislation.gov.uk.

The regulations, which may be cited as the the Export Control (Amendment) (EU Exit) Regulations 2019 and save for regulation 4(31) come into force on exit day, are available here.

Excerpts of the explanatory memorandum are included below. 

(2) Purpose of the instrument

(2.1) These Regulations are made to address inoperabilities and deficiencies of United Kingdom law arising from the withdrawal of the UK from the EU and to ensure EU- derived domestic export control legislation operates effectively post-exit.

Explanations

What did any relevant EU law do before exit day?

(2.2) These Regulations amend provisions within the following domestic legislation: the Export of Radioactive Sources (Control) Order 2006 and the Export Control Order 2008, and other domestic subordinate legislation in connection with EU sanctions regimes.

(2.3) The Export of Radioactive Sources (Control) Order 2006 makes provision for licenses with references to persons established within and exporting from the European Union. The Export Control Order 2008 gives effect to EU directives on the movement of military goods and firearms within the EU and creates penalties pursuant to several EU export control regulations.

(2.4) The Export Control (Somalia) Order 2011, the Export Control (Al-Qaida and Taliban Sanctions) Regulations 2011 and the Export Control (Sudan, South Sudan and Central African Republic Sanctions) Regulations 2014 (“the Sanctions Offences Orders”) make provision for criminal offences in relation to contravention of directly applicable EU sanctions regimes concerning those countries.

Why is it being changed?

(2.5) The changes are being made because the provisions either relate to reciprocal arrangements or are otherwise redundant upon exit from the EU. The amendments also include amendments to references to EU instruments which are no longer appropriate.

What will it now do?

(2.6) The Regulations omit provisions which are dependent on the UK’s membership of the EU, and substitute references to the EU with references to the UK as appropriate.

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EU Commission Imposes Definitive Safeguard Measures on Imports of Steel Products

(Source: European Commission, 1 Feb 2019.) 

Today, the European Commission published a regulation imposing definitive safeguard measures on imports of steel products. These measures will take effect tomorrow, 2 February, and replace the provisional ones in place since July 2018. 

A Commission investigation was launched in March 2018 as part of the European Union’s response to the decision by the United States to impose tariffs on steel products. This investigation showed that imports of steel products into the EU have been increasing sharply. This is seriously threatening EU steelmakers, who are still in a fragile position due to persistent overcapacity in the global steel market and an unparalleled number of unfair trade practices by certain trading partners. The restrictions on the US market caused by the Section 232 tariffs on steel are causing a diversion of trade flows into the EU.

These measures are fully in line with the EU’s WTO commitments and have been carefully shaped to preserve a continued flow of imports that guarantees effective competition in the European steel market and sufficient choice for the numerous EU users of steel.

The measures concern 26 steel product categories and consist of tariff-rate quotas above which a duty of 25% will apply. The tariff rate quotas fully preserve the traditional levels of imports into the EU and will be increased progressively. This system is similar to the provisional measures currently in place, with some important modifications that minimize trade disruptions and preserve traditional trade arrangements in terms of quantities and origins. For example, the main supplying countries will benefit from individual quotas based on their own historical imports.

These measures should remain in place for a period up to three years, but can be reviewed in case of changed circumstances.

The Commission has also decided to suspend the prior surveillance mechanism for the same products covered by the definitive measures as long as they are in effect.

Background

The Commission imposed provisional safeguard measures on imports of steel in July 2018.

The safeguard measures are part of the three-pronged response outlined by the European Commission in 2018. As a result of the import duties applied by the United States as of 23 March 2018 under Section 232 the US Trade Expansion Act of 1962, exporting steel to the United States has become less attractive. 

There are already indications that, as a consequence, steel suppliers have diverted some of their exports from the US to the EU.

For More Information

  – Regulation imposing definitive safeguards on steel

  – Provisional measures – July 2018

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Treasury/OFAC Posts Settlement Agreement with Kollmorgen Corporation Concerning Apparent Iran Sanctions Regulations

(Source: Treasury/OFAC, 7 Feb 2019.)

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $13,381 settlement with Kollmorgen Corporation (“Kollmorgen”) of Radford, Virginia.  Kollmorgen has agreed to settle potential civil liability on behalf of its Turkish affiliate Elsim Elektroteknik Sistemler Sanayi ve Ticaret Anonim Sirketi (“Elsim”) for six apparent violations of Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR).  The apparent violations involved Elsim dispatching employees to Iran to service machines and providing other services to Iran in violation of ITSR § 560.215.  OFAC determined that Kollmorgen voluntarily self-disclosed the apparent violations on behalf of Elsim and that the apparent violations constitute a non-egregious case.

For more information, please visit this web notice​ andpress release.  

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EU Commission Updates TARIC-Dual Use Correlation List

(Source: European Commission, 10 Jan 2019.)

The updated correlation list between TARIC and the Dual-Use Annex of the Regulation 428/2009 can be found here.