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Hot-button trade issues in 2021
Arent Fox LLP
  • International Trade
  • USA
  • 22 January 2021

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.

Podcast: navigating Section 889 of National Defence Authorisation Act
Arent Fox LLP
  • International Trade
  • USA
  • 22 January 2021

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.

FCC's new foreign ownership review rules set to take effect
Arent Fox LLP
  • International Trade
  • 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.

Trump and Congress pave way for potential delisting of publicly traded Chinese companies
Arent Fox LLP
  • International Trade
  • 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.

DHS joins in broad enforcement effort against forced labour in apparel supply chains
Arent Fox LLP
  • International Trade
  • 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
  • International Trade
  • 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.

New ECCN proposed for emerging software used to operate nucleic acid assemblers and synthesisers
Arent Fox LLP
  • International Trade
  • 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.

Military licence review factors expanded for NS-controlled items to China, Venezuela and Russia
Arent Fox LLP
  • International Trade
  • 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.

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

Sanctions on Chinese apparel companies for forced labour hit retail supply chains
Arent Fox LLP
  • International Trade
  • 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.

BIS launches rulemaking process for foundational technologies and hints at potential areas of control
Arent Fox LLP
  • International Trade
  • 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.

CBP extends transition period for companies to comply with new Hong Kong marking requirements
Arent Fox LLP
  • International Trade
  • 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
  • International Trade
  • 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.

National security podcast: government zeroes in on China
Arent Fox LLP
  • International Trade
  • 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.

BIS expands Huawei Foreign Direct Product Rule to capture wide swath of COTS products
Arent Fox LLP
  • International Trade
  • 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.

CBP issues guidance on new marking requirements for goods from Hong Kong
Arent Fox LLP
  • International Trade
  • 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.

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