International Trade, USA updates

Trump and Congress pave way for potential delisting of publicly traded Chinese companies
Arent Fox LLP
  • USA
  • 15 January 2021

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.

FCC's new foreign ownership review rules set to take effect
Arent Fox LLP
  • USA
  • 15 January 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.

DHS joins in broad enforcement effort against forced labour in apparel supply chains
Arent Fox LLP
  • USA
  • 08 January 2021

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.

Trump bars investments by US persons in Communist Chinese military companies
Arent Fox LLP
  • USA
  • 27 November 2020

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.

Military licence review factors expanded for NS-controlled items to China, Venezuela and Russia
Arent Fox LLP
  • USA
  • 13 November 2020

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.

New ECCN proposed for emerging software used to operate nucleic acid assemblers and synthesisers
Arent Fox LLP
  • USA
  • 13 November 2020

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.

Government steps up actions against forced labour as Congress considers further measures
Arent Fox LLP
  • USA
  • 30 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.

CFIUS 2.0: mandatory filings now pegged to export control rules
Arent Fox LLP
  • USA
  • 30 October 2020

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.

Human rights now part of US export licensing review for nearly all export licences
Arent Fox LLP
  • USA
  • 23 October 2020

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.

OFAC's new ransomware advisory
Arent Fox LLP
  • USA
  • 23 October 2020

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.

Goods from China under heavy forced labour scrutiny
Arent Fox LLP
  • USA
  • 25 September 2020

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.

BIS launches rulemaking process for foundational technologies and hints at potential areas of control
Arent Fox LLP
  • USA
  • 18 September 2020

The Bureau of Industry and Security (BIS) has published the advance notice of proposed rulemaking (ANPRM) on foundational technologies, which seeks public comment on criteria for identifying and defining 'foundational technologies' essential to US national security. Although the ANPRM is vague, the potential for stronger control of items currently controlled as Export Administration Regulation 99 or for anti-terrorism, crime control, short supply or UN reasons should prompt comments.

Sanctions on Chinese apparel companies for forced labour hit retail supply chains
Arent Fox LLP
  • USA
  • 18 September 2020

Fashion and luxury goods companies should be concerned about the recent sanctioning of Chinese companies in Xinjiang province by the US Departments of Treasury and Commerce and other US Customs and Border Protection (CBP) developments relating to importing products that contain fabric made with prison or forced labour. Notably, there is a risk that garments made from cotton produced by Xinjiang Production and Construction Corps could be subject to a CBP withhold release order.

CBP extends transition period for companies to comply with new Hong Kong marking requirements
Arent Fox LLP
  • USA
  • 11 September 2020

US Customs and Border Protection recently issued new guidance providing an additional 45-day transition period for compliance with new marking requirements for goods produced in Hong Kong that are imported into the United States. This extends the transition period for companies to comply with the requirements from 25 September 2020 to 9 November 2020.

CBP gets tough on forced labour: turning supply chain risks into advantages
Arent Fox LLP
  • USA
  • 11 September 2020

US Customs and Border Protection recently announced that it had collected $575,000 in penalties resulting from a civil enforcement action against importer Pure Circle USA for imports made with forced labour. This action indicates that CBP is following through with its mandate to prevent goods produced using forced labour from entering the stream of commerce and penalise importers when such goods do enter.

BIS expands Huawei Foreign Direct Product Rule to capture wide swath of COTS products
Arent Fox LLP
  • USA
  • 04 September 2020

The Department of Commerce, Bureau of Industry and Security (BIS) recently issued a final rule adding additional Huawei non-US affiliates to the Entity List, confirming the expiration of the temporary general licence and amending the so-called 'Foreign Direct Product Rule'. BIS also issued another final rule clarifying that prohibitions on Entity List entities apply regardless of the role that the entities play in a transaction.

National security podcast: government zeroes in on China
Arent Fox LLP
  • USA
  • 04 September 2020

Driven by national security concerns, over the past three years the government has taken a much more aggressive position on an array of technology issues involving China. These policy and regulatory changes range from significant new export controls and new supply chain screening of Chinese technology to efforts to jumpstart US research and development and 'reshore' manufacturing in strategic technology areas.

CBP issues guidance on new marking requirements for goods from Hong Kong
Arent Fox LLP
  • USA
  • 28 August 2020

In July 2020 President Trump issued an executive order concerning certain import and export trade requirements between the United States and China. Subsequently, US Customs and Border Protection published a notice in the Federal Register providing an effective date for the new marking and the penalties for incorrect marking and released further guidance on the origin of goods from Hong Kong for Section 301 China tariff purposes through the issuance of FAQs.

Huawei rule part two: you 'use', you lose (government contracts)
Arent Fox LLP
  • USA
  • 28 August 2020

The Federal Acquisition Regulation Council recently published a long-awaited interim rule implementing Section 889(a)(1)(B) of the National Defence Authorisation Act 2019. Essentially, the new rule prohibits government agencies from entering into, extending or renewing a contract with contractors if they use any equipment, system or service that uses certain Chinese telecoms equipment or services as a substantial or essential component of any system or as critical technology as part of any system.

US administration takes on Chinese social media
Arent Fox LLP
  • USA
  • 21 August 2020

President Trump recently signed an executive order (EO) banning 'transactions' – which have yet to be identified by the US Department of Commerce – relating to TikTok and its parent, ByteDance Ltd. The EO states that the spread of the Chinese mobile app continues to threaten the national security, foreign policy and economy of the United States. In addition to concerns relating to sensitive personal data, the EO points to concerns pertaining to influence operations.

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