The US State Department recently solicited feedback on its draft US Government Guidance for the Export of Hardware, Software and Technology with Surveillance Capabilities and/or Parts/Know-How. The draft guidance aims to provide insight to exporters on the considerations to weigh prior to exporting items with intended and unintended surveillance capabilities and could foreshadow new export controls and a US State Department review.
The Committee on Foreign Investment in the United States (CFIUS) is finalising its draft regulations to implement the Foreign Investment Risk Review Modernisation Act 2018 (FIRRMA). FIRRMA overhauled the operations and jurisdiction of CFIUS, but one aspect of the new law that has received little attention is the expansion of CFIUS's jurisdiction to cover a broader range of real estate transactions.
List 4A goes into effect, all Section 301 tariffs are to increase by 5%, the US Trade Representative deadlines loom and the president has ordered US companies to "search for alternatives" to China sourcing. This is your end-of-summer Section 301 China tariffs round-up.
Throughout the past few months, the United States and China have levied new tariffs, increased existing tariffs and imposed ever-higher retaliatory tariffs. Now, nearly all of the two countries' enormous bilateral trade is subject to double-digit tariffs. In this era of uncertainty, company executives understand that due diligence must be based on a fulsome understanding of the threat that lies ahead. As such, corporate leaders must take proper pre-emptive action and enlist expert legal advice.
Among other recent blows to Huawei, the Department of Defence, the General Services Administration and the National Aeronautics and Space Administration have issued an interim rule amending the Federal Acquisition Regulation to implement a key provision of the John S McCain National Defence Authorisation Act for Fiscal Year 2019. In light of this, US companies should carefully review their transactions with Chinese tech companies to ensure that they do not fall foul of any prohibitions.
President Trump recently signed an executive order, freezing all assets in which the Venezuelan government has an interest that are in US hands and prohibiting US persons from conducting transactions with the Venezuelan government, unless specifically exempted or authorised. Although this is not an embargo on all trade with Venezuela, the executive order goes substantially further than the previous sanctions.
President Trump recently tweeted that, beginning on 1 September 2019, importers can expect a 10% tariff on $300 billion of Chinese goods. While the Office of the US Trade Representative (USTR) has yet to issue specific coverage for this new 10% tariff, importers should expect to see the goods subject to it on the proposed Section 301 List 4. The USTR has also indicated that a List 4 exclusion request process could come on the heels of the current List 3 exclusion request timetable.
The US State Department recently announced the issuance of another round of sanctions on the Russian government in relation to the Chemical and Biological Weapons Control and Warfare Elimination Act 1991, which will come into effect on 19 August 2019. While this second round of sanctions is unlikely to affect most US companies, it may affect US banks, but only with respect to transactions involving non-ruble bonds and funds from the Russian sovereign issued after 26 August 2019.
US secondary sanctions are sanctions that the United States can apply to wholly non-US actors in wholly non-US transactions of which the US administration disapproves. A sanctioned individual or entity can be put on the Specially Designated Nationals list, but there is no well-defined numerical threshold for imposing sanctions. This article identifies some of the problems with the application of secondary sanctions and offers some potential solutions.
At a recent G20 Summit press conference, President Trump said that he would not lift the existing Section 301 tariffs on China, but would also not add tariffs on any additional Chinese imports "for at least the time being" as part of an agreement to resume negotiations with China. This article summarises the current status of the Section 301 List 4 goods and the List 3 product exclusion process which commenced on 30 June 2019.
A company recently entered into a $400,000, 18-month consent agreement with the Department of State, Directorate of Defence Trade Controls (DDTC) to settle six alleged violations of the International Traffic in Arms Regulations (ITAR). The key issue was the company's ITAR empowered official, who was neither empowered nor an expert. Through this consent agreement, the DDTC is sending a message to the industry: an empowered official must have (among other things) sufficient authority to stop a transaction.
Because of the length of time since Section 301 duties were first imposed on Chinese imports, many 2018 entries first covered by the duties are approaching their liquidation date (if they have not liquidated already). As such, this article compiles US Customs and Border Protection guidance regarding how importers can preserve their rights to have product exclusions applied to merchandise that is close to liquidation or is still within the period before liquidation becomes final.
The Department of Commerce, Bureau of Industry and Security (BIS) has issued a final rule which added five recently developed or developing technologies to the Export Administration Regulations' Commerce Control List that are essential to US national security. In particular, BIS amended four export control classification numbers and added a new one. These changes came into force on 23 May 2019 and have an immediate impact on parties exporting the newly controlled goods.
The Committee on Foreign Investment in the United States (CFIUS) is drafting the implementing regulations for the Foreign Investment Risk Review Modernisation Act. Foreign investors are closely following how CFIUS will exercise its new 'country specification' authority – specifically, whether it will create a negative or positive list of specific countries whose transactions are, respectively, either required to undergo or exempt from CFIUS review.
The US Trade Representative recently published a Federal Register notice requesting comments on the proposed exclusion process for List 3 of the Section 301 tariffs on Chinese imports. As part of various changes to the exclusion process, the proposal does not appear to include a mechanism for applicants to designate specific information requested as being business confidential on the current form.
The US Court of Appeals for the Federal Circuit recently ruled that where the scope of an anti-dumping/countervailing duty order is ambiguous, US Customs and Border Protection has no independent authority to suspend liquidation without explicit instructions from the US Department of Commerce.
Between the addition of Huawei Technologies Co Ltd – the world's largest telecoms equipment maker – to the Entity List and a new executive order declaring a national emergency relating to information and communications technology and services, May 2019 has proved to be a period of non-stop excitement for the export control world. This article discusses what these changes mean for US companies.
Mirroring President Trump's recent threats – which came just days after the Section 301 tariff on List 3 products was increased from 10% to 25% following a breakdown in trade negotiations between the United States and China – the administration has released a fourth list of Chinese-origin products that will be subject to additional duties. For these tariffs to become effective, the Office of the United States Trade Representative will need to publish a final notice after a public comment period and hearing.
Earlier in May 2019, President Donald Trump announced that the Section 301 tariffs on List 3 products would be increased from 10% to 25%, effective from 10 May 2019. He also stated that a fourth list of $325 billion in Chinese imports would be taxed at 25%. Meanwhile, US Trade Representative Robert Lighthizer has stated that his office has "begun preparations to launch a process" for interested parties to seek an exclusion from the List 3 tariffs.
President Donald Trump recently issued an executive order authorising broad new sanctions with respect to the steel, aluminium, iron and copper sectors of Iran. The announcement came hours after Iran announced that it would no longer fully comply with elements of the Joint Comprehensive Plan of Action. The executive order is a major expansion of existing statutory secondary sanctions which relate to steel and aluminium and also addresses two new sectors – copper and iron.