The growing role that international trade rules are playing has led many corporate leaders to look beyond regularly imposed tariffs. Recent additions to trade agreements include deep-reaching requirements on non-tariff issues, such as labour provisions, which have become intrusive to the entire supply chain – and none more so than the automotive parts industry. This article examines what is in store for the automotive industry under the Biden administration.
Following the region-wide withhold release orders (WROs) against cotton and tomato products produced in China's Xinjiang Uyghur Autonomous Region (XUAR), Customs and Border Protection (CBP) has provided XUAR-specific FAQs. The FAQs clarify CBP's approach to enforcement of the WROs and publish its requirements to satisfy the burden of proof to evidence that goods were not produced with forced labour. However, underlying challenges remain.
The Federal Trade Commission has issued a $1.2 million fine against glue manufacturer Chemence, Inc for violating a 2016 consent order requiring the company to qualify its Made in USA claims in its promotional materials and on its product packaging. To date, this is the largest fine issued over a Made in USA claim.
The US Court of International Trade recently took long-awaited action on the nearly 4,000 cases challenging the Section 301 duties imposed on goods from China. Chief Judge Timothy C Stanceu assigned the cases to a three-judge panel, which is expected to issue a case management order so that active litigation can proceed. Companies which have paid Section 301 duties on products from China that are included on Lists 3 or 4(a) may still have an opportunity to file a suit to potentially recover the duties.
As one of the last official actions of the Trump administration, the US Department of Commerce issued the Securing the Information and Communications Technology and Services Supply Chain interim final rule. If implemented by the Biden administration, the rule would significantly affect companies that have an international nexus in numerous sectors, including telecoms service providers, internet and digital service providers and data hosting or computing equipment manufacturers.
President Biden recently signed an executive order (EO) to direct more spending of the federal government's procurement budget on American-made products, while rethinking the existing regulatory framework. By narrowing the loopholes that allow government purchases of foreign products, increasing agency accountability and directing agencies to seek out US suppliers, the EO aims to revitalise the domestic manufacturing industry and create American jobs in furtherance of Biden's economic recovery plan.
Just two weeks into 2021, US Customs and Border Protection expanded its enforcement efforts against forced labour in China. This follows months of increasing pressure from labour and human rights groups and members of Congress to halt imports of cotton and agricultural products from China's Xinjiang Uyghur Autonomous Region. In addition, the government is considering seeking increased enforcement authority to prevent certain importers from being able to import into the United States.
This podcast examines how to navigate Section 889 of the National Defence Authorisation Act 2019. It focuses on the US government restrictions on the procurement and use of covered telecoms equipment and services from certain Chinese-owned entities within the US government supply chain.
The last four years have been turbulent, to say the least, with more changes to come under the Biden administration. Some issues from 2020 will remain in focus and will be tempered by the Biden administration's need to repair the damage done to US relations with key trading partners. This article aims to help businesses anticipate and prepare for these changes by examining six hot-button trade issues to watch out for in 2021.
For the first time, the Federal Communications Commission (FCC) will have formal rules governing the process for Team Telecom review of licence applications involving foreign ownership. However, the FCC declined to adopt exclusions for applications that have undergone review by the Committee on Foreign Investment in the United States (CFIUS) on the grounds that CFIUS review analyses distinct foreign ownership concerns.
President Trump recently signed into law the Holding Foreign Companies Accountable Act, which aims to increase oversight of Chinese companies listed on US stock exchanges and force the delisting of those that refuse to comply with US audit inspection requirements. This bipartisan legislation was motivated by longstanding US frustrations over China precluding inspections of locally conducted audits of Chinese companies.
The Department of Homeland Security (DHS) recently blocked imports of cotton products from a major Chinese state-owned firm in the Xinjiang Uighur Autonomous Region, saying that the company uses forced labour of ethnic Uighur Muslims. In doing so, the DHS has joined the Trump administration's efforts to punish human rights abuses in the region. This article examines this and other recent enforcement actions in the forced labour area, as well as what they mean for apparel importers.
In his last days in office, President Trump has taken a swipe against companies identified by the Department of Defence as Communist Chinese military companies by prohibiting US persons from investing in such companies. According to the applicable executive order, the national security concerns stem from China exploiting US investors to finance the development and modernisation of its military through its military-civil fusion policy.
The US Department of Commerce, Bureau of Industry and Security (BIS) recently issued a final rule amending the licence review policy for items on the Commerce Control List that are controlled for national security reasons and destined for China, Venezuela or Russia. The amended Export Administration Regulations trigger a presumption of denial in a more expansive way and specify new and expansive factors which BIS will use in its case-by-case licence application assessment.
The US Department of Commerce, Bureau of Industry and Security (BIS) has proposed a new Export Control Classification Number to control software that is capable of being used to operate nucleic acid assemblers and synthesisers due to concerns that such software could be used to create pathogens and toxins as biological weapons. If adopted, this will be the fifth set of emerging technology controls that BIS has published and the second set of unilateral emerging technology controls.
The Committee on Foreign Investment in the United States (CFIUS) is now following new rules on mandatory filings for certain foreign investments in critical technology companies. On behalf of CFIUS, the US Department of the Treasury's Office of Investment Security initially issued proposed regulations in May 2020. After considering public comments, the treasury made minor revisions to the proposed regulations and published a final rule in September 2020, which took effect on 15 October 2020.
The government has recently stepped up its enforcement against forced labour. As particular regions come under increased media scrutiny, this issue has seen renewed interest in Congress, which is considering several bills to enhance forced labour enforcement. Moreover, with the United States taking a whole-of-government approach against goods made from forced labour, companies must act now to mitigate risk in their supply chains. This article discusses these actions in further detail.
The US Department of Commerce, Bureau of Industry and Security (BIS) recently released a final rule revising its licensing policy for crime control and detection (CC) items, which is designed to promote respect for human rights throughout the world. On the same day, BIS made another CC-related move, issuing a final rule regarding new controls on water cannon systems and related parts and components, with the preamble specifically describing riot and crowd control in Hong Kong.
The US Department of Treasury's Office of Foreign Assets Control recently issued an advisory highlighting sanctions risks associated with facilitating ransomware payments on behalf of victims targeted by malicious cyberattacks. Relatedly, the US Department of Treasury's Financial Crimes Enforcement Network issued guidance alerting financial institutions to their role in processing ransomware and associated payments, red flags and reporting information.
The Department of Homeland Security through US Customs and Border Protection (CBP) recently issued new withhold release orders (WROs) aimed at entities involved in the import, downstream manufacturing or sale of certain apparel, cotton, hair products and computer parts. As the WROs were backdated, they may adversely affect merchandise that is currently being shipped to the United States or which is already in CBP's custody.