Global Trade Brief – June/July 2017

This month’s Global Trade Brief reviewed BIS reminders, PSC requirements, air split entry processing, cargo release entry status reports, FDA Foreign Supplier Verification Program and more.
Global Trade Brief – June/july 2017


BIS Reminds Defense Industry of Offsets Reporting Requirements


BIS reminds U.S. companies that pursuant to DPA they must report annually information on contracts for the sale of defense articles or defense services to foreign countries or foreign companies that are subject to offsets agreements exceeding $5,000,000 in value. Consistent with the DPA, U.S. companies are also required to report annually to Commerce information on offsets transactions completed in performance of existing offsets commitments for which an offsets credit of $250,000 or more has been claimed from the foreign representative.


PSC requirements for TIB (Entry Type 23)


Changes to data elements of a TIB can be performed via PSC.  However, a PSC may not change a TIB entry to another entry type, nor can a PSC change a non TIB entry to a TIB entry



July 8th Effective Date

  • (ACE) Becoming the Sole CBP-Authorized Electronic Data Interchange (EDI) System for Processing Electronic Drawback and Duty Deferral Entry and Entry Summary Filings
  • Modifications of the National Customs Automation Program Tests Regarding Reconciliation, Post-Summary Corrections, and Periodic Monthly Statements




Air Split Entry Processing

  • Cargo moving on the same air waybill but not declared in the ACE air manifest system as a split, is not eligible for split entry processing.  As such, one entry per conveyance is required.  This applies to a single house air waybill split across multiple master air waybills.ACE currently does not have an edit to enforce this policy.  ABI filers can determine if a carrier’s air waybill was split by submitting a cargo manifest entry release query (CQ transaction).  Split air waybills will have a part indicator A, B, C, etc. in the response message.It is the filer’s responsibility to ensure that cargo on a single bill of lading, moving on multiple conveyances, and not declared as a split are entered separately.Source


Cargo Release Entry Status Report

  • Effective May 23rd, ACS B35 Unresolved Entry Report is no longer utilized to reconcile unresolved entries.  The CR-007 Cargo Release Entry Status report has been deployed to the Cargo Release workspace in ACE Reports.  This report lists cargo entries that have been filed, but not released and/or cancelled.  The report sorts the entries by the number of days since the entry was filed and provides an “entry status” for each entry.Unlike the B35 Report, entries that are in “Pending” status in the Ocean, Air, and Rail environments, will “drop” off the report after 30 days automatically, reducing the reconciliation time expended to process cancellation requests from filers.  Truck entries that are in Pending status will not drop off the report, regardless of the entry status and/or the number of days unresolved.  All truck entries will need to be reconciled accordinglyReconciliation of each entry should be completed within sixty days, however, entries that are identified on the report as “Document Required” and/or “Intensive status” may indicate that the cargo is in port being held pending receipt of a document and/or reconciliation of an “Intensive” examination requirement.  Those entries should be reconciled as expeditiously as possible.Source 


FDA Foreign Supplier Verification Program – Data Requirements


  • Effective May 30, 2017, Transmission of Foreign Supplier Verification Program data becomes mandatory. Among the mandatory ACE data elements is the Unique Facility Identifier (UFI) for the FSVP Importer. FDA recognizes the DUNS as a UFI acceptable to FDA, and FDA expects the transmission of the FSV Importer’s DUNS number in this field in PG19. FDA will temporarily allow the submission of “UNK” (unknown) as the syntax for the DUNS number for the FSV Importer in PG19.  “UNK” should only be used if the nine-digit, site-specific DUNS number is not available at the time the entry is transmitted.Source 

TSCA Certification Option for Expedited Release Shipments


  • CBP recognizes the difficulties to submit TSCA certification prior to entry for shipments that make entry through expedited release programs, such as Fast and Secure Trade (FAST), Border Release Advanced Screening and Selectivity (BRASS), Line Release and express consignment consolidated informal entries. As such, for these shipments only, CBP will not require the submission of the TSCA certification documentation prior to entry, but will instead permit the importer and carrier to have the TSCA certification documentation available for submission upon request by a CBP Officer. The filer will be required to submit the TSCA certification documentation, for each shipment, at the time of the entry summary filing.Source

CBP Processing of DTCC Licenses for Carnet Importations


  • Carnets are processed using the paper carnet and are not yet automated.  As a result, the ability to collect information for Partner Government Agencies, including licenses, is limited to paper as well.  When processing carnets, CBP will allow the use of paper copies of the export licensing documents in lieu of electronic information.  As a matter of policy, CBP will not reject carnets for the purpose of collecting license information electronically.  Export procedures will still require AES filing with appropriate license documentation.Source


FTA Origination Analysis and Certification when no Tariff Change Rule (TCR)

Manufacturers, exporters and importers are advised that a very limited number of tariff items in the Harmonized Tariff Schedule of the United States (HTSUS) do not have corresponding free trade agreement (FTA) tariff change rules (TCRs) (also known as “product specific rules of origin” or by the acronym “PSRs”) because they were negotiated using a Harmonized Tariff Schedule (HTS) that was subsequently modified in 2007, 2012, or 2017, and the corresponding TCRs have not been implemented. Until revised TCRs are implemented, manufacturers/exporters/importers of affected goods seeking to perform a tariff-shift origination analysis should classify the good and its materials using the most recent HTSUS in which the tariff item has a corresponding TCR and perform the origination analysis using that year’s HTSUS. Until revised TCRs are implemented, the certificate of origin, ideally, should indicate both the current HTSUS number and the previously corresponding HTSUS number used to perform the origination analysis in parenthesis and with wording to that effect.





EASE Update: Clients need not worry about the newly added individuals and entities as these are updated daily in EASE and clients may download these lists automatically.



OFAC designated Peruvian national Gino Dusan Padros Degregori as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act for playing a significant role in international narcotics trafficking. Further OFAC designated Peruvian national Guillermo Jean Pierre Zegarra Martinez, a key financial facilitator for Padros Degregori and three businesses in Lima, Peru, that are owned or controlled by Padros Degregori.




OFAC identified Mexican national Jose Luis Ruelas Torres and the Ruelas Torres Drug Trafficking Organization as Significant Foreign Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act.  Jose Luis Ruelas Torres is the leader of the Ruelas Torres DTO, a family-based, independent opium and heroin production and distribution organization that smuggles multi-kilogram heroin quantities into the United States.  OFAC is also designating 10 key Ruelas Torres DTO associates as Specially Designated Narcotics Traffickers pursuant to the Kingpin Act for their role in the organization.




OFAC designated four Colombian nationals (Santiago Alvarez Castro, Mariana Gallon Aristizabal, Claudia Mercedes Vargas Giraldo, Gabriel Jaime Aguilar Ramirez) as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act because of their links to previously designated SDNTs Juan Santiago Gallon Henao, Pedro David Gallon Henao, and La Oficina de Envigado.  Also designated today are five Colombian companies (Clamasan S.A.S., Guisanes S.A.S., C.M.V. Carnes S.A.S., Agropecuaria Mais S.A.S., and Agroindustrias Cima S.A.S – operate out of a single address in Medellin, Antioquia, Colombia), identified by OFAC as being ultimately owned, controlled, or directed by Juan Santiago Gallon Henao through the help of the individuals designated.




OFAC took action to disrupt the leadership of Jama’at ul Dawa al-Qu’ran and financial support networks of JDQ, the Taliban, al-Qa’ida, Lashkar-e-Tayyiba, the Islamic State of Iraq and Syria and ISIS – Khorasan by designating Hayat Ullah Ghulam Muhammad, Ali Muhammad Abu Turab, Inayat ur Rahman, and a purported charity managed by Inayat ur Rahman, the Welfare and Development Organization of Jamaat-ud-Dawah for Qur’an and Sunnah (WDO). These actions were taken pursuant to EO 13224, which targets terrorists and those providing support to terrorists or acts of terrorism




Pursuant to EO 13224 of September 23, 2001, OFAC determined that the person known as Hashem Safieddine committed, or poses a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States and should therefore be designated a Specially Designated Global Terrorist.




OFAC has designated Attallah Salman ‘Abd Kafi al-Jaburi (al-Jaburi), ISIS leader in charge of factories producing improvised explosive devices (IEDs), vehicle-borne improvised explosive devices (VBIEDs), and explosives pursuant to EO 13224 of September 23, 2001 which targets terrorists and those providing support to terrorist or acts of terrorism




OFAC designated Hashim Muhsin Aydarus al-Hamid (al-Hamid) and Khalid Ali Mabkhut al-Aradah (al-Aradah), both Yemen-based tribal leaders who facilitated the transfer of weapons and money and the movement of individuals in support of AQAP. Actions were taken in conjunction with the State Department’s designation of Hashem Safieddine, a senior leader in Hizballah, and Muhammad al-Isawi, the leader of ISIS – Sinai. These actions were taken pursuant to EO 13224, which targets terrorists and those providing support to terrorists or acts of terrorism.




OFAC designated five individuals and five entities (Muhammad Abbas, al-Ajnihah, Al-Bustan Charity, Ihab Makhluf, Iyad Makhluf, Cham Islamic Bank, Muhammed Bin-Muhammed Faris Quwaydir, Syrian Company for Information Technology) in response to continued acts of violence committed by the Government of Syria, led by Bashar al-Assad, against its own citizens.  The action was taken pursuant to three E.O. 13572, which targets persons responsible for human rights abuses in Syria, their supporters, and supporters of senior officials or certain activities related to public corruption; E.O. 13582, which targets the Government of Syria and its supporters; and E.O. 13382, which targets proliferators of weapons of mass destruction and their supporters.




OFAC designated seven targets in connection with Iran’s ballistic missile program.  OFAC designated two senior Iranian defense officials (Morteza Farasatpour, Rahim Ahmadi), including a defense official who facilitated the sale of explosives and provided other support to Syria and the director of the organization responsible for Iran’s solid-fueled ballistic missile program.  In addition, OFAC designated a China-based network (Chinese national Ruan Runling and three associated Chinese companies) that is supporting Iran’s military by supplying millions of dollars’ worth of missile-applicable items and an Iran-based entity that is assisting Iran’s ballistic missile program. The actions were taken pursuant to EO 13382, which targets proliferators of weapons of mass destruction and their means of delivery and supporters of such activity.




OFAC designated six entities and three individuals ( State Affairs Commission, the Korean People’s Army, and the Ministry of People’s Armed Forces , Moscow-based Ardis-Bearings LLC and its director, Igor Aleksandrovich Michurin, Kim Su-Kwang, an official of the Reconnaissance General Bureau, Korea Computer Center,  Independent Petroleum Company , Songi Trading Company  Korea Zinc, Industrial Group  Ri Song-hyok, and identified three entities, in response to North Korea’s ongoing development of weapons of mass destruction and continued violations of United Nations Security Council resolutions. The designations and identifications were made pursuant to E.O. 13382, which targets WMD proliferators and their supporters; E.O. 13687, which targets the Government of North Korea, the Workers’ Party of Korea, and their supporters; and E.O. 13722, which targets, in part, North Korea’s revenue from coal, metal, and labor, as well as its energy and financial services industries.




OFAC has sanctioned a senior Democratic Republic of the Congo official pursuant to Executive Order 13413, which authorizes sanctions in light of activities that threaten the peace, security, or stability of the DRC. OFAC has designated François Olenga (Olenga), the head of the “Maison Militaire,” or Military House of the President, which oversees the Republican Guard, an entity that has, or whose members have, engaged in actions or policies that undermine democratic processes or institutions in the DRC and the Safari Beach, a resort located on the outskirts of Kinshasa, for being owned or controlled by Olenga.





Effective May 26, 2017 sixteen persons are added to the Entity List, implementing the decision of the ERC. They have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. They consist of eleven entries located in Pakistan, three entries in Turkey and two entries in the United Arab Emirates.




BIS issues orders denying export privileges of the following Individuals:

  • Jose Abraham Benavides-Cira: exported defense articles designated on the USML namely, 5.56 caliber rifles, from the United States to Mexico, without the required U.S. Department of State licenses
  • Edwin Navarro Makasiar II: exported defense articles designated on the USML  namely two Glock Model 23, .40 caliber pistols and approximately 2,500 rounds of .223 caliber and 5.56 mm ammunition from the United States to the Philippines, without the required U.S. Department of State licenses
  • Manuel Morales: export to Mexico defense articles designated on the USML namely, 540 rounds of 7.62 x 39 caliber ammunition and seven 7.62 x 39 caliber magazines, without the required U.S. Department of State Licenses
  • Ali Reza Parsa: exported  electronic components to customers located in Iran, without the required U.S. Government authorization





BIS adds ten entities ( Riviera Sunrise Resort & Spa, KPSK, OOO, Concord Catering, IFDK, ZAO,  Bike Center, Limited Liability Company Concord Management and Consulting, Molot-Oruzhie, Oboronlogistika, Private Military Company, Wolf’ Holding of Security Structures) to the Entity List as they are acting contrary to the national security or foreign policy interests of the United States. BIS is taking this action to ensure the efficacy of existing sanctions on the Russian Federation (Russia) for violating international law and fueling the conflict in eastern Ukraine. These entities will be listed on the Entity List under the destinations of the Crimea region of Ukraine and Russia.





Pursuant to E.O. 13224, DOS designates Muhammad Ahmad ‘Ali al-Isawi, aka Abu

Osama al-Masri, aka Abu Usamah al-Masri as a Specially Designated Global Terrorist.



Pursuant to E.O. 13224, DOS designates Marwan Ibrahim Hussayn Tah al-Azawi, an Iraqi ISIS leader connected to ISIS’ development of chemical weapons for use in on going combat against Iraqi Security Forces.



Cryomech agrees to Pay a $28,000 Civil Penalty and Undergo a Third-Party Audit to Settle EAR Violations



Cryomech engaged in conduct prohibited by the EAR when it exported an LNP-20 Liquid Nitrogen Plant, an item subject to the EAR, and designated EAR99, and valued at $33,587, from the United States to the All-Russian Scientific Research Institute of Experimental Physics (VNIIEF) a.k.a. Russian Federal Nuclear Center – VNIIEF in Sarov, Russia, without the required BIS license.



Cryomech, Inc., of Syracuse, New York, has agreed to pay a $28,000 civil penalty and undergo a third-party audit of its export controls compliance program to settle charges that it committed one violation of EAR § 764.2(a)



Axis Communications, Inc., Agrees to Pay a $700,000 Civil Penalty and Undergo a Third-Party Audit to Settle EAR Violations


BIS alleged that between on or about March 16, 2011, and on or about July 15, 2013, Axis engaged in conduct prohibited by the EAR when it made unlicensed exports from the United States to Mexico of thermal imaging cameras, items subject to the EAR, classified under ECCN 6A003.b.4, controlled for national security and regional stability reasons, and valued in total at $391,819.


Further, BIS alleged that on two occasions, on or about June 17, 2013, and on or about July 15, 2013, respectively, Axis failed to comply with the recordkeeping requirements set forth in the EAR § 762.2 in connection with exports from the United States and Mexico of thermal imaging cameras, items subject to the EAR, classified under ECCN 6A003.b.4, and controlled for national security and regional stability reasons. Axis allegedly failed to retain documents as required under EAR § 762.2, including, but not limited to, invoices relating to these exports.



Axis Communications, Inc., of Chelmsford, Massachusetts, has agreed to pay a $700,000 civil penalty and undergo a third-party audit of its export controls compliance program to settle charges.



OFAC Reaches Settlement with American Honda Finance Corp



OFAC Alleged 13 apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515. The Violations occurred between February 2011 and March 2014, when Honda Canada Finance, Inc. a motor vehicle finance company headquartered in California — a majority-owned subsidiary of AHFC located in Canada — approved and financed 13 lease agreements between an unaffiliated Honda dealership in Ottawa, Canada, and the Embassy of Cuba in connection with the Cuban Embassy’s leasing of several Honda vehicles.



(OFAC) determined that AHFC voluntarily self-disclosed the Alleged Violations to OFAC, and that the Alleged Violations constitute a non-egregious case and AHFC has agreed to remit $87,255 to settle its potential civil liability.



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