State revises ITAR on defense services

The Departments of State and Commerce are each issuing separate but complementary proposed rules regarding personal services to foreign defense and intelligence activities. State's review of "defense service" in the ITAR focused on identifying activities of U.S. persons that provide a critical military or intelligence advantage such that they warrant control under the ITAR and are activities that are not currently subject to the ITAR; or are controlled under the ITAR, but the current control language would benefit from additional clarity..

Dubai Skyline. The new rules extend controls to US allies like Saudi Arabia, Jordan and the UAE

BIS End User Changes / US Persons Rules

Commerce released two new proposed rules governing military and intelligence end uses and end users, including activities by U.S. persons, as well as amendments to the EAR controls on Foreign-Security End Users (FSEUs) and expanding controls on activities of “U.S. persons.” BIS is proposing amendments to control “support” furnished by “U.S. persons” to identified foreign- security end users. These rules propose to implement the broadest expansion of presidential export control authority since the Export Control Reform Act (ECRA) was signed in August 2018.

BIS formalizes Iran FDP Rule Changes imposed by Congress

July 24 the Bureau of Industy and Security published a Final Rule formalizing the changes to the Export Administration Regulations imposed by Congress in the emergency supplemental appropriation [HR 815] signed into law April 24th. As a result of this new FDP Rule, exporters require a U.S. Government authorization for transfer of these items when produced outside the United States with certain U.S. technology, software, or production equipment when exports are destined to Iran or for use in connection with certain equipment destined to Iran, even when such items were never exported from the United States.

Standards Export Control Rule Published

The long-awaited Standards Rule has been published by the Commerce Department, revising Export Administration Regulations to facilitate US industry participation in international standards setting bodies. In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to revise the scope and the terms used in the EAR to describe “standards-related activities” that are subject to the EAR. As we reported last month [12385] lack of clear guidance from Commerce has chilled come companies' participation for fear of running afoul of export controls.

Welcome to Your WTTL

The Washington Tariff and Trade Letter introduces a web-based format for easier review, research and sharing. Clicking on a story in the newsletter will now bring you to the full text on our new web site. A .pdf version of the newsletter is available below. For any questions about website access and your subscription, please contact us at Info@TradeRegs.com – Or call the Editor, Frank Ruffing, at +1.703.283.5220

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Vol 44 No. 31 July 29, 2024

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The latest news

Brazil’s Ag Trade Plan Stalls

Brazil’s much-publicized proposal on to move forward the long-stalled World Trade Organization agriculture negotiations appears to be another casualty of WTO members’ inability to find consensus, said people familiar with the developments. Brazil appears to have pulled out all the stops trying to secure support from key countries like the United States, the European Union, China and farm offensive and defensive countries, in an effort to ensure its passage at the WTO’s General Council meeting earlier this week.

More trade & tariff news

CBP Lacey Act Update

U.S. Customs and Border Protection’s Office of Trade and the USDA is hosting a webinar on Wednesday, August 21, 2024, at 2:00 p.m. ET titled Lacey Act and Phase VII Implementation. The webinar will provide an overview of the Lacey Act, describe the 2008 amendments to the act covering plants and plant products and their requirements, and provide the latest updates on Phase VII of the Import Declaration Implementation Schedule.

China Exposure Disclosure Mandate

House China hawks introduced legislation aimed at "ensuring transparency into the material and systemic risk posed by US investment in and reliance on China." The PRC Risk Transparency Act will require public companies with "meaningful exposure' to China to disclose what percentage of their revenue, profit, capital investment and supply chain is tied to the PRC. It also will require these companies to disclose their relationships with the Chinese Communist Party and with companies identified by the US government as national security threats or human rights violators.

Bill to Prosecute Trade Crimes

A bipartisan group of House lawmakers, including the chairman and ranking member of the House Select Committee on China, unveiled legislation yesterday creating a new structure within the US government to prosecute international trade crimes. This bill would direct DOJ to establish a new structure dedicated to prosecuting nternational trade crimes in order to enhance US capabilities for detecting, investigating and prosecuting trade fraud, duty evasion, transshipment and other trade-related crimes.

USMCA Labor Complaint Targets Chinese Plant

The United States is asking Mexico to review whether workers at a Chinese-owned manufacturing facility located in Mexico are being denied worker rights. The request, under the US-Mexico-Canada Agreement’s rapid response labor mechanism, seeks information on whether workers at the Impro Industries Mexico, S. de R.L. de C.V. facility in the city of Villa de Reyes in the State of San Luis Potosí, Mexico, are being denied the right to freedom of association and collective bargaining. Impro is a Hong-Kong based maker of cast and machined component parts for use in the aerospace, energy, medical, automotive, and agricultural industries,. Impro’s 'Phase One' Project features a 1,200,000 square feet facility, 45km south of the San Luis Potosi International Airport.

On the calendar

AGOA Forum in Washington

United States Trade Representative Katherine Tai this week hosted the 2024 U.S.-sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA Forum) in Washington, D.C. The AGOA trade preference program overall has been a success, but is “showing some age,” making its upcoming reauthorization the perfect opportunity to think about how to improve it, US Trade Representative Katherine Tai said earlier this week..

State Street fined $7.4 million for Russia Sanctions

OFAC announced a $7,452,501 settlement with State Street Bank and Trust Company on behalf of itself and its subsidiary, Charles River Systems, Inc. State Street agreed to settle its potential civil liability for 38 apparent violations of OFAC's Ukraine-/Russia-Related sanctions. The apparent violations involved invoices that were redated or reissued by Charles River between 2016 and 2020 for certain customers who were subject to Directive 1 of Executive Order 13662, as well as certain payments outside of the applicable debt tenor (maturity range) accepted by Charles River from these customers.

WTO Fails on Fisheries

Members of the World Trade Organization have ended the first half of this year on a somber note of failure, with little or no consensus on any of the targeted negotiations, including disciplines on fisheries subsidies that led to the depletion of global fish stocks. Members failed to find a way forward on a planned second phase of disciplines on subsidies contributing to overcapacity and over fishing during a two-day meeting of the General Council that ended Tuesday.

Chinese Connected Vehicles Ban Floated

Legislation to ban Chinese-made connected vehicles from US military bases and other federal installations was introduced yesterday by Sen. Sherrod Brown (D-Ohio). The Countering Adversary Reconnaissance (CAR) Act would bar Chinese connected vehicles from much of the U.S., making it impractical and unprofitable to import them in the first place. The Countering Adversary …

"Cooperative Contact" charged as Chinese agent.

A Florida man was charged with conspiring and acting as an agent of the PRC without notification to the Attorney General. If convicted, he faces a maximum penalty of 15 years in prison. From as early as 2012, Peng Li, 59 allegedly served as a cooperative contact working at the direction of officers of the Ministry of State Security to obtain information of interest to the PRC government.

DPRK Hospital Hacker Charged

A grand jury in Kansas City, Kansas, returned an indictment on Wednesday charging a fugitive North Korean national for his involvement in a conspiracy to hack and extort U.S. hospitals and other health care providers, launder the ransom proceeds, and then use these proceeds to fund additional computer intrusions into defense, technology, and government entities worldwide. Rim Jong Hyok worked for North Korea’s Reconnaissance General Bureau (RGB), a military intelligence agency, and participated in the conspiracy to target and hack computer networks of U.S. hospitals and other health care providers, encrypt their electronic files, extort a ransom payment from them, launder those payments, and use the laundered proceeds to hack targets of interest to the North Korean regime.

Two Years for Shipments to Russia

An Illinois woman was sentenced to 24 months in federal prison for conspiring to unlawfully export to Russia defense articles – including thermal imaging riflescopes and night-vision goggles – without a license in violation of the Arms Export Control Act. To conceal her unlawful activities, when Shifrin exported the defense articles to Russia, she listed fictitious sender names and addresses on the packages containing the defense articles, falsely identified the items in the packages as non-export-controlled items such as clothing, and concealed the defense articles in other items such as toolkits and kitchen appliances.