On March 26, 2024, the Eastman Chemical Company (“Petitioner”) submitted a petition (“Petition”) to the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“ITC” or “Commission”) for the imposition of antidumping duties (“ADD”) on dioctyl terephthalate (“DOTP”) from Malaysia, Poland, Taiwan, and Turkey. DOTP is a plasticizer used in a variety of applications, including flooring, PVC compounds, wall coverings, toys, and many others. The Petition asserts that imports of DOTP from the specified countries are being “dumped” (i.e., sold for less than fair value) in the United States and injuring U.S. domestic industry. To offset the alleged dumping, Petitioner requests that the U.S. impose ADD on products within the scope of the Petition.

On February 28, 2024, the U.S. Department of State and The Boeing Company (Boeing) agreed to an administrative settlement regarding 199 violations by Boeing of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). As a result of that settlement, Boeing was fined $51 million ($27 million to be paid over the next 3 years, plus $24 million suspended but required to be applied internally to consent agreement conditions). Boeing will also be subject to a plethora of other conditions over the next three years, including government monitoring via a Special Compliance Officer, which will oversee Boeing’s adherence to the conditions of the settlement. 

Ending a legal saga that began in 2013 and involved an appeal to the Supreme Court, which declined to hear the case, the Department of Justice (“DOJ”) on March 11 announced that Ford Motor Company (“Ford”) agreed to pay $365 million to resolve penalties related to the customs misclassification and undervaluation of approximately 162,833 cargo vans imported into the United States. DOJ alleged that from April 2009 to August 2013 Ford engaged in a scheme whereby the company imported Transit Connect vans from Turkey with a “sham” rear seat to make these vans appear to be passenger vehicles rather than cargo vehicles. Per the DOJ press release, the rear seats “were never intended to be, and never were, used to carry passengers.”

On February 7, the U.S. Department of Justice (DOJ) announced that settlements and judgements under the False Claims Act (FCA) exceeded $2 billion for the 2022 fiscal year. The 2022 fiscal year also had the second-highest number of settlements and judgments for any given year in the history of the act.

Ensuring compliance with U.S. export controls, import regulations, and economic sanctions is common practice for companies that engage in international trade. These companies often have internal compliance policies and due diligence practices that help to monitor compliance for everyday operations. In addition, companies undergoing structural, or ownership changes often must conduct trade-related due diligence to assess compliance risks associated with a relevant target company. 

Global maritime shipping is the keystone of international commerce. So when international shipping is in crisis, global trade and supply chains are likewise brought into crisis. The shipping sector has faced many challenges to ocean transit over the last several years. As we can see from the current global news headlines, the shipping sector is facing yet another significant challenge from the Houthi rebel attacks on ships in the Gulf of Aden and the Red Sea, a necessary route for vessels transiting the Suez Canal. 

On December 28, 2023, a federal court sentenced New Hampshire charity NuDay (a/k/a NuDay Syria) to five years of probation – the maximum sentence for an organizational defendant – for three counts of Failure to File Export Information.

In its third memorandum in the past two years,¹ BIS recently announced further updates to its Voluntary Self-Disclosure (VSD) process related to administrative violations. My last article covered BIS’s April 18, 2023 memorandum, which discussed incentives for companies to disclose violations after uncovering “significant violations” or risk higher penalties because a failure to disclose will be treated as an aggravating factor.

On December 26, 2023, the Office of the United States Trade Representative (“USTR”) announced the extension to May 31, 2024, of all current exclusions from Section 301 tariffs on Chinese-origin goods. The extended exclusions include 77 COVID-related exclusions and 352 previously reinstated exclusions. 

Regular readers of our newsletter, and those familiar with U.S. import and export regulations, know that U.S. Customs and Border Protection (“CBP” or “Customs”) generally enforces the U.S. import regulations, while multiple executive government agencies administer regulations related to the export of goods.

In July 2019, CBP updated its Mitigation Guidelines (the “Guidelines”), specifically the section related to forfeiture remission for export seizures. [1]

Many importers have experienced at one time or another that horrible, stomach-turning feeling that comes with the realization that merchandise they have been importing has been entered under the wrong HTS code, with the incorrect value, or with the incorrect country of origin. These and similar errors constitute violations of 19 U.S.C. § 1592, and upon such discovery, the importer must ask, “Should I submit a Prior Disclosure to U.S. Customs and Border Protection (“CBP”)?” The answer to that question will depend on a variety of factors, which will be discussed in this article.

In 2022, Customs and Border Protection (“CBP” or “Customs”) processed $3.35 trillion in imports, issued 2,121 penalties, and collected $19.3 million from penalties and liquidated damages. [1] Section 1592 of the Tariff Act of 1930 is the primary customs penalty provision and is the enforcement tool used by CBP to ensure compliance with Harmonized Tariff Schedule of the United States (“HTSUS”) classification, valuation, and other entry requirements. 

In 2016, the United States implemented legislation revising 19 U.S.C. § 1321 (“Section 321”) and thereby increasing the de minimis amount for imports into the United States from $200 to $800, meaning an importer is not required to pay duties if the merchandise has a fair market retail value at or below $800. In 2018, the U.S. began imposing a 25% tariff on most goods from China. The convergence of these two issues – the ability to import duty-free under $800 and the steep duties applicable to Chinese goods – led many vendors of Chinese merchandise to take advantage of Section 321 de minimis treatment for certain imports.

Importing merchandise into the United States can be a tricky process for even magical folk. There are a variety laws and regulations enforced by U.S. Customs and Border Protection (“CBP” or “Customs”), and violations can lead to significant consequences including monetary penalties. In a more practical sense, lack of compliance with the Customs regulations can cause increased regulatory scrutiny, delay the release of merchandise by CBP, and affect an importer’s ability to meet internal deadlines or other obligations related to the imported merchandise. Quite the impediment for a man whose distribution business is conducted over the course of one night!

The discovery of actual or potential International Traffic in Arms Regulations (“ITAR”) violations presents the question of whether to disclose the conduct to the Department of State Directorate of Defense Trade Controls (“DDTC”). For certain violations, the ITAR sets forth mandatory disclosure requirements, and specific circumstances may give rise to an affirmative duty to inform DDTC of certain activities and transactions.

Receiving an administrative subpoena, summons, or other request for information from a federal U.S. agency can be surprising, but it is not an uncommon scenario in the trade world. The main agencies in charge of administering and enforcing U.S. trade laws each have the power to compel the disclosure of certain information or documentation that may be related to an agency’s enforcement of import, export, or economic sanctions regulations.

On June 16, 2023, the U.S. Department of Commerce (“Commerce”) issued a long-awaited final rule (the “Final Rule”), effective July 17, 2023, related to the Information and Communications Technology Supply Chain.¹ Among other clarifications, the Final Rule identifies the Under Secretary of Commerce for Industry and Security as responsible

On October 17, 2023, the U.S. Department of Commerce Bureau of Industry & Security (“BIS”) released three rules amending the Export Administration Regulations (“EAR”) to strengthen export controls on advanced computing semiconductors and semiconductor manufacturing equipment to arms embargoed countries, including the People’s Republic of China (“China”), and to place certain additional entities in China on BIS’s Entity List. 

On July 26, 2023, the Forced Labor Enforcement Task Force (“FLETF”), chaired by the Department of Homeland Security, issued updates to its Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China (the “Strategy”)1 related to enforcement by U.S.

On October 17, 2023, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (“Petitioner”) submitted a petition (“Petition”) to the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“ITC” or “Commission”) for the imposition of antidumping duties (“ADD”) on bus and truck tires from Thailand. 

The State Department’s Directorate of Defense Trade Controls (“DDTC”) published its third consent agreement of the year on August 28, 2023. This consent agreement is part of an administrative settlement with Island Pyrochemical Industries Corporation (“IPI”)1 involving three alleged violations of the Arms Export Control Act (“AECA”) and the International Traffic in Arms Regulations (“ITAR”). Specifically, IPI engaged in unauthorized brokering activities related to the transfer of ammonium perchlorate (“APC”)2 from an entity from China, a proscribed country under §126.1 of the ITAR, to a Brazilian company. In addition, IPI misrepresented the roles of the Chinese and Brazilian entities and falsely stated that it was the manufacturer of APC on DSP-5 license applications.  

Any person or company in the United States that manufactures, exports, temporarily imports, or brokers items, including technical data and software (defense articles), or performs certain services (defense services) that are controlled under the International Traffic in Arms Regulations (ITAR) is required to register with the U.S. Department of State Directorate of Defense Trade Controls (DDTC) and keep that registration current. Current in the context of the ITAR means not only the information that is current at the time the registration is initially submitted, but the registration information must accurately reflect the registered entity’s current information at any point in its timeline. 

Industry is well aware of the final rule published on April 28, 2020 (Final Rule), by the U.S. Department of Commerce, Bureau of Industry and Security (BIS) that, among other changes, revises the Export Administration Regulations (EAR) § 744.21 provision related to Military End Uses and Military End Users in the People’s Republic of China (China), Russia, or Venezuela, and significantly expands the license requirements on exports, reexports, and transfers (in-country) of such items. See our previous article for more details about the EAR revisions stipulated in the Final Rule. Importantly, the Final Rule adds the Electronic Export Information (EEI) filing requirement in the Automated Export System (AES) for exports to China, Russia, or Venezuela. Specific provisions of the Final Rule became effective on June 29 and most recently, other aspects took effect on September 27.

On August 9, 2023, President Biden issued an Executive Order (“E.O.”) on outbound investment regulation. This long-anticipated action marks the first time the U.S. government has sought to regulate investments made abroad by U.S. firms.

In the United States export control laws and regulations require companies to receive export licenses prior to releasing any controlled items or technologies to non-U.S. persons. The process of determining what is controlled under the export regulations is a complex, technical process requiring the assistance of technical experts (such as engineers) and experts in the export regulations. The restrictions on releases of controlled technologies are known as “deemed exports” to non-U.S. persons such as, foreign national employees working in the U.S. under valid work visas. The practical difficulties arising from performing export classification reviews and determining who is a U.S. person or a non-U.S. person as defined in the export regulations often leads to inadvertent discriminatory practices that run afoul of anti-discrimination laws in the U.S. This is because oftentimes companies may believe it is easier to avoid having non-U.S. persons on staff altogether rather than risking export regulation violations. 

any importers will discover at some point that products they import may be subject to anti-dumping duties (“ADD”) or countervailing duties (“CVD”). With Washington’s continued aggressive approach toward unfair trade practices by foreign competitors, particularly China, importers must prepare for additional ADD/CVD orders and enforcement by U.S. Customs and Border Protection (“Customs” or “CBP”). This article seeks to explain the options an importer has if it discovers that any of its products are potentially subject to ADD/CVD.

From tariffs on dairy and solar products to rules of origin for automobiles, the three parties to the United States-Mexico-Canada Agreement (“USMCA”) have disagreed on a variety of issues since the agreement came into force in 2020. This time, the subject of the dispute is corn, or more specifically, the measures taken by Mexico to ban the import of certain genetically engineered (“GE”) corn and other GE products.  

In our recent article Amid TikTok Tensions, CFIUS Signals Increased Enforcement and Other Updates, we discussed updates from the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) primarily with respect to enforcement. 

In May 2023, the leaders of the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom gathered in Hiroshima, Japan, for the annual G7 summit. The symbolic significance of these global leaders meeting in the city devastated by an atomic bomb on August 6, 1945, was very impactful, particularly to Japan’s Prime Minister, Kishida Fumio, a Hiroshima native. 

On April 20, 2023, VTA Telecom Corporation (“VTA”) entered into an administrative consent agreement with the U.S. Department of State’s Directorate of Defense Trade Controls (“DDTC”) to resolve six alleged violations of the Arms Export Control Act (“AECA”) and the International Traffic in Arms Regulations (“ITAR”) for unauthorized exports of defense articles and technical data to Vietnam.

The United States Office of Foreign Assets Control (“OFAC”) issued an Alert on April 17, 2023, warning U.S. persons about the possible evasion of the price cap imposed by the Department of Treasury on Russian oil.

The United States-Mexico-Canada-Agreement (“USMCA” or the “Agreement”) was formed to promote growth in North American trade in a way that is beneficial to each of the state parties to the Agreement. However, as with any agreement, disputes can and do arise concerning the interpretation of the USMCA and the responsibilities of the state parties. 

As TikTok CEO Shou Zi Chew was facing (often contentious) questions from members of Congress during a four and a half hour hearing on March 23, 2023, many casual observers were learning for the first time about the interagency Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”). 

On April 6, 2023, the Department of Treasury Office of Foreign Assets Control (“OFAC”) and the Department of Commerce Bureau of Industry and Security (“BIS”) announced a settlement with Microsoft Corporation (“Microsoft”) and issued a combined $3.3 million in civil penalties to settle potential violations of sanctions and export control laws pertaining to Russia and other sanctioned jurisdictions. 

On March 20, 2023, the U.S. Commerce Department announced that an agreement had been reached in the antidumping and countervailing duty (AD/CVD) investigation on imports of white grape juice concentrate (WGJC) from Argentina,

Torres Trade Law is pleased to share our contribution to “The Law Reviews: Mergers & acquisitions” Review 16th Edition. Our Managing Member, Olga Torres, and Senior Associate, Derrick Kyle, authored a chapter on U.S. Trade Compliance Due Diligence. The chapter focuses on two essential considerations when conducting trade due diligence. The chapter discusses U.S. trade due diligence required for M&A transactions, focusing on successor liability from violations by the target company and the impact of foreign investment reviews triggered by acquisition or investment by foreign persons.

The Mergers & Acquisitions Review provides a practical overview of global M&A activity and the legal and regulatory frameworks governing M&A transactions in major jurisdictions worldwide.

To receive a copy of the book, please email operations@torrestradelaw.com. The number of hard copies is limited and will be given on a first come first basis. 

*Reproduced with permission from Law Business Research Ltd. This article was first published in December 2022.   

As the war in Ukraine continues, the diversion of restricted goods and technology to Russia remains a risk for exporters. The Republic of Turkey has become a primary diversion point for such restricted goods.

On February 17, 2023, the U.S. Department of Justice (“DOJ”) and the U.S. Department of Commerce (“Commerce”) announced the creation of the Disruptive Technology Strike Force (“DTSF”). 

On February 7, 2023, the U.S. Department of Justice (“DOJ”) announced that settlements and judgements under the False Claims Act (“FCA”) exceeded $2 billion for the 2022 fiscal year. The 2022 fiscal year also had the second-highest number of settlements and judgments for any given year in FCA history. 

On December 5, 2022, the U.S. Department of State Directorate of Defense Trade Controls (“DDTC”) issued new Compliance Program Guidelines (“the Guidelines”) intended to provide an overview of DDTC’s expectations for an effective compliance program. The Guidelines discuss controls contained in the Arms Export Control Act (“AECA”) and the International Traffic in Arms Regulations (“ITAR”). The Guidelines also outline key elements of an effective ITAR Compliance Program (“ICP”), and identify suggestions, common compliance pitfalls, and tips for best practices.  

To more effectively counter transnational corruption and economic sanctions evasion, recent changes to the U.S. anti-money laundering (“AML”) whistleblower regime expand and reinforce whistleblower protections and rewards in the Bank Secrecy Act of 1970, as amended (“BSA”).¹ These changes to the BSA/AML whistleblower framework have significant implications, not only for “financial institutions” (as defined in the BSA) already subject to regulation under the BSA, but for all individuals and entities seeking to comply with U.S. economic sanctions administered by the U.S. Department of the Treasury (“Treasury”) Office of Foreign Assets Control (“OFAC”).

We have seen a tremendous year in the trade and national security front and are now, more than ever, deeply aware of the impact trade compliance professionals have on safeguarding national security in the face of continued geopolitical threats. Here are some of the 2022 year-end review highlights.

The U.S. Department of Commerce Bureau of Industry and Security (“BIS”) is cracking down on foreign governments that prevent the end-use checks the BIS uses to ensure compliance with Export Administration Regulations (“EAR”). 

The Office of the United States Trade Representative (“USTR”) is conducting a review of the China Section 301 tariffs that were put into place in 2018 under the Trump administration. 

On October 7, 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced a major new rule that restricts the ability of the People’s Republic of China (“PRC” or “China”) to obtain advanced computing chips
 

When considering who must register under the Foreign Agents Registration Act (“FARA” or “the Act”), one normally thinks of individuals, law firms, or marketing firms, the typical kinds of agents that must register for lobbying or image-laundering activities on behalf of foreign persons. 

On Tuesday, August 2, 2022, the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee) released its Annual Report to Congress for calendar year 2021. The report, replete with charts, tables, and graphs visualizing the data and comparing it to prior years, broadly details the work the Committee has done in the past year concerning oversight of foreign investment transactions in areas deemed critical to U.S. national security. There are several key takeaways from the report that are particularly important to international businesses looking to invest in the United States.

The Foreign Agents Registration Act of 1938 (“FARA” or “the Act”) is a controversial disclosure law that aims to combat covert foreign influence in the United States by promoting transparency with respect to the political, media, and public relations activities of so-called “agents of foreign principals.”

DOJ’s new compliance certification requirement seeks to “empower” CCOs.

A new policy at the U.S. Department of Justice (“DOJ”) pertaining to Foreign Corrupt Practices Act (“FCPA”)/anti-corruption compliance has recently sent shockwaves through the corporate compliance community. The change was first previewed by Assistant Attorney General (“AAG”) for the DOJ’s Criminal Division Kenneth Polite in a speech delivered on March 22, 2022:

On June 21, 2022 the Uyghur Forced Labor Prevention Act (“UFLPA”) went into effect. It is the latest – and perhaps strongest – tool in the belt of U.S. regulatory and enforcement agencies to combat forced labor. The UFLPA puts the onus on importers to ensure their supply chains and merchandise are free from forced labor. This article will discuss forced labor enforcement generally, the UFLPA, and what it means for importers and how they can comply with the new regulations.

On May 23, 2022, the U.S. Department of Commerce Bureau of Industry and Security (“BIS”) published a proposed rule identifying new unilateral export controls on four dual-use biological marine toxins, the synthesis and collection of which BIS has identified for evaluation in accordance with the criteria set forth in Section 1758 of the Export Control Reform Act of 2018 (“ECRA”).1 Section 1758 requires BIS to identify and establish appropriate controls on the export, reexport, or transfer (in-country) of “emerging and foundational technologies” that are “essential to the national security of the United States.”2 Importantly, the proposed rule announced a change in BIS’s approach to identifying new technologies of high strategic importance for control: moving forward, BIS will no longer distinguish between “emerging technologies” and “foundational technologies,” but rather “will characterize all technologies identified pursuant to Section 1758 as ‘Section 1758 technologies.’”

Amid political and trade tensions between the United States and the People’s Republic of China (“China”), President Trump issued Executive Order (“EO”) 13959 on November 12, 2020, to address the national emergency posed by the exploitation of United States capital to resource and enable the development and modernization of China’s military, intelligence, and other security organizations.

Lately there has been much chatter about Environmental, Social, and Governance (“ESG”) policies in business. Elon Musk has called ESG “an outrageous scam.” And while there is no clear definition, investors and ratings agencies, as well as ultimate buyers and consumers, increasingly look for financially and morally sound companies that are committed to these principles, and the U.S. government is codifying various aspects of the wider ESG umbrella into law. While commenters tend to focus much attention on the Environmental side, this article will look at the trade-related areas encompassed by the Social and Governance aspects of ESG, including Human Rights, Forced Labor, Trade Controls, Anti-Corruption, and other areas of trade-related corporate compliance.

Now more than ever, U.S. and multinational companies must do everything they can to ensure strict compliance with international sanctions imposed on Russia, Belarus, and individuals linked to those governments.

On January 21, 2022, the U.S. Directorate of Defense Trade Controls (“DDTC”) entered into a consent agreement with Torrey Pines Logic, Inc. (“TPL”) and its founder and president, Dr. Leonid Volfson, for alleged violations of the Arms Export Control Act (“AECA”) and the International Traffic in Arms Regulations (“ITAR”). TPL, an electro-optics and communications equipment company, allegedly committed violations that involved the attempted unauthorized export and unauthorized export of defense articles, including to proscribed destinations; involvement in ITAR-regulated activities while ineligible; and failure to maintain export transaction records.

On May 23, 2022, President Joe Biden, when asked whether the United States would get involved militarily if China invaded Taiwan, answered firmly, “Yes. That’s the commitment we made.”¹ As the world watches the war in Ukraine,

As the U.S. and the European Union continue to impose new sanctions on Russia in response to the invasion of Ukraine, regulatory authorities continue their pursuit of companies and individuals who violate those sanctions. The most recent example is a settlement agreement between the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) and S&P Global, Inc. (“S&P”).

On February 4, 2022, the House of Representatives passed the National Critical Capabilities Defense Act of 2021 (“NCCDA”) as part of the much larger America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act of 2022 (“COMPETES Act”). The COMPETES Act has many aims related to shoring up domestic manufacturing, protecting technology capabilities, and generally, as the name suggests, improving the country’s competitiveness with the rest of the world, primarily China.

The largest criminal monitorship in U.S. history has ended. On March 22, 2022 a U.S. judge ruled that Chinese telecommunications giant ZTE Corporation had completed the terms of its five-year probation, which began in 2017 following ZTE’s criminal plea agreement for its role in exporting controlled U.S. products to embargoed countries.

On March 2, 2022, as part of a string of sanctions and export controls, the Russia/Belarus Foreign Direct Product (“FDP”) Rule and Russia/Belarus-Military End User (“MEU”) FDP Rule took effect.¹ These rules, generally, restrict the sale to Russia and Belarus of foreign-produced items produced with certain controlled U.S.-origin software or technology.

Reprinted with permission from the March 2022 issue of Export Compliance Manager. By Donald Pearce, Senior Advisor in the Global Risk, Monitorship, and Investigations Practice at Torres Trade Advisory, LLC.

Wondering how the new Russian sanctions will impact your company? Shipping Solutions and Olga Torres, Managing Member of Torres Law and Torres Trade Advisory, discuss the basics of these new Russian sanctions and what impact they may have on your company operations. Watch the 20-minute conversation.

We are delighted to share our contribution to “The Law Reviews: Mergers & Acquisitions” Review 15th Edition, where our Managing Member, Olga Torres, and Senior Associate, Derrick Kyle, authored a chapter on US Trade Compliance Due Diligence.

The Mergers & Acquisitions Review provides a practical overview of global M&A activity and the legal and regulatory frameworks governing M&A transactions in major jurisdictions worldwide.

The Chapter provides an overview of the M&A transactions, conducting due diligence related to US trade regulations, and foreign investment regulations in the context of an acquisition by a foreign company. 

The Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury (“Treasury”) has made clear that businesses engaging in certain activities involving virtual currencies are subject to registration, reporting, recordkeeping, and other anti-money laundering (“AML”) requirements under the Bank Secrecy Act and its implementing regulations (collectively, “BSA”). In response to recent developments in the field of financial technology (“fintech”), FinCEN has issued new guidance and advisories related specifically to activities involving virtual currencies and ransomware payments.

This article introduces FinCEN and the BSA, identifies AML risks associated with virtual currencies and ransomware that businesses may encounter in 2022 and beyond, and discusses best practices for navigating the complex and rapidly evolving BSA landscape.

On June 9, 2021, Momentus Inc., a U.S. commercial space company offering in-space transportation and infrastructure services, as a condition to its acquisition by a foreign-owned company, entered into a National Security Agreement with the Department of Defense (“DoD”) and Department of Treasury. Under this agreement, Momentus was required to “implement increased security measures, hire key positions to provide additional oversight and appoint a [Committee on Foreign Investment in the United States (“CFIUS”)]-approved director to its board of directors.”¹ In doing so, Momentus agreed to mitigate the national security risks associated with its foreign ownership.

The U.S. Department of Justice ("DOJ") is making it harder on companies that commit corporate crimes. A lot harder.

That’s the message that Deputy Attorney General Lisa Monaco recently gave attendees at the American Bar Association's White Collar Crime Conference in Miami. In her speech, DAG Monaco laid out the major changes to how the DOJ will approach corporate crimes and the individuals who commit them.

On October 28, 2021, Deputy Attorney General Lisa Monaco addressed the ABA’s National Institute on White Collar Crime, in which she made clear that monitorships are back on the menu as a means of ensuring corporate compliance. DAG Monaco stated that, “to the extent that prior Justice Department guidance suggested that monitorships are disfavored or are the exception,” she is rescinding that guidance, emphasizing “that the department is free to require the imposition of independent monitors whenever appropriate.”¹

Knowledge of the monitorship process – what may lead to it and what it can mean for your organization – is crucial for general counsels and employees alike. This article intends to demystify these court appointments, providing an overview of Department of Justice² Monitorships, when they are imposed, what they can entail and cost, and what they mean for both industry and counsel.

In January 2022, a Providence, Rhode Island man was arrested by federal agents on suspicion of making false statements to law enforcement and conspiring to export hundreds of privately made firearms to the Dominican Republic. Federal, state, and local investigators allege that Robert Alcantara, 34, was behind a network that assembled “ghost guns” for export to the Dominican Republic. With Export Control Reform moving the jurisdiction of non-military firearms violations to the U.S. Department of Commerce, similar investigations are becoming more common in the export-enforcement realm.

According to a new survey conducted by Foreign Investment Watch, both corporate executives and confidential and anonymous, and included separate questions for corporate executives and outside counsel.

On September 21, 2021, in a first-of-it-kind action, the U.S. Department of the Treasury Office of Foreign Assets Control (“OFAC”) imposed economic sanctions on SUEX OTC, S.R.O. (“SUEX”), a virtual currency exchange,

In recent years, the U.S. Government (“USG”) has taken numerous actions to target forced labor and other human rights violations, with a significant increase in 2020 and early 2021. These include the issuance of trade-related restrictions, such as import and export laws, economic sanctions, and civil monetary penalties,

Olga Torres provides commentary for the Foreign Investment Watch survey on CFIUS readiness. According to this new survey, both corporate executives and outside counsel feel more knowledgeable about CFIUS and feel better prepared to comply with filing obligations or inquiries from the Committee.

This article first appeared in the Foreign Investment Watch Journal on August 6, 2021 (www.foreigninvestmentwatch.com) and is reproduced with permission.

The Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”), under the U.S. Department of the Treasury (“Treasury”), has the authority to review for national security risks certain foreign investment transactions in U.S. businesses.

On July 6, 2021, the U.S. Government published a notice of proposed rulemaking and request for comments on an amendment to the Code of Federal Regulations (“CFR”) regarding the determination of non-preferential origin for imports from Mexico and Canada: Non-Preferential Origin Determinations for Merchandise Imported from Canada or Mexico for Implementation of the Agreement Between the United States of America, the United Mexican States, and Canada.

Emilio Arteaga is a Jr. Partner at Vazquez Tercero & Zepeda law firm in Mexico City. Torres Law and Vazquez Tercero & Zepeda are member law firms of Alliott Group Alliance and often collaborate on international trade corporate matters involving the United States and Mexico, including USMCA compliance issues.

For many years, the Committee on Foreign Investment in the United States ("CFIUS") has had the authority to review non-notified transactions – deals which have not been submitted to CFIUS for review and approval – but until recently, resources for such efforts were limited. That changed in 2018, when the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”) significantly bolstered resources for CFIUS oversight and enforcement activities.

On June 2, 2021, the U.S. Trade Representative (“USTR”) announced the imposition – and immediate 180-day suspension – of 25% tariffs on goods from six countries pursuant to findings in the Section 301 of the Trade Act of 1974 investigations (“Section 301 investigations”) into digital services tax (“DST”) regimes.

Any U.S. company that manufactures, exports, or temporarily imports items or performs defense services that are controlled under the International Traffic in Arms Regulations (ITAR) is required to register with the U.S. Department of State Directorate of Defense Trade Controls (DDTC) and keep that registration current. Current in the context of the ITAR means not only the company information that is current at the time the registration is initially submitted, but the information in the registration must accurately reflect the registered company’s current information at any point in the company’s timeline. When certain changes occur within the registered company, such as a change of control, a merger or acquisition, or a change in executive leadership, those changes must be reported to DDTC and the company’s ITAR registration must be updated. At a minimum, ITAR registration must be renewed annually.

Safeguarding technical data and preventing unauthorized exports of controlled technical data is a challenge for most companies. As demonstrated by the Honeywell consent agreement, the U.S. Government (“USG”) will not take violations involving unauthorized exports of controlled technical data lightly. Therefore, industry should carefully assess their compliance programs to ensure that technical data is safeguarded properly. This article provides an overview of the Honeywell consent agreement and discusses general recommendations for safeguarding technical data.

On April 27, 2021, Honeywell International, Inc. (“Honeywell”) entered into a consent agreement with the U.S. Department of State Directorate of Defense Trade Controls (“DDTC”) for alleged violations of the Arms Export Control Act (“AECA”) and the International Traffic in Arms Regulations (“ITAR”). Specifically, Honeywell, a defense contractor based in Charlotte, North Carolina, allegedly exported and retransferred ITAR-controlled technical data without required authorization. 

On January 19, 2021, the Department of Commerce (“Commerce”) published an interim final rule, “Securing the Information and Communications Technology and Services Supply Chain,” (“ICTS Rule”) implementing Executive Order 13873.

On March 5, 2021, U.S. Customs and Border Protection ("CBP") issued a ruling that denied a protest from Dandong Huayang that clothing made at its Chinese factory was not produced by North Korean employees.

The U.S. semiconductor industry has always been very important to the country’s national security. As a result, the U.S. government ("USG") continues to increase legal protections of the semiconductor industry by imposing certain foreign investment restrictions and export controls.

This article will discuss some of the recent foreign investment deals reviewed by the Committee on Foreign Investment in the United States (“CFIUS”) and recent export controls involving the semiconductor industry.

U.S. companies involved in international trade and transactions have become accustomed to compliance hurdles when conducting business with the Russian Federation ("Russia").

Prior to the inauguration of President Biden, many commenters predicted additional sanctions or other punitive measures against Russia at the beginning of the new presidential administration. These predictions were fulfilled on March 2, 2021, when multiple U.S. executive branch agencies announced additional measures against Russia in response to the poisoning of Russian opposition figure Aleksey Navalny.

The digital payments arm of Chinese ecommerce giant Alibaba plans to sell off a Kansas City-based biometric security firm it acquired with the blessing of CFIUS in 2016. Here are all the basics you need to know, with expert insights.

In 2020, the U.S. Department of the Treasury issued several final regulations to implement the Foreign Investment Risk Review Modernization Act of 2018, which as readers will recall expanded the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”). In addition, the U.S. Government also issued in 2020 several regulatory actions that impact foreign investments, including the identification and review by the U.S. Department of Commerce for “emerging and foundational technologies that are essential to the national security of the United States,” among others. Overall, the final CFIUS regulations along with other regulatory actions call for closer scrutiny of foreign investments and the export controls.

Towards the end of its term, the Trump Administration continues to strengthen regulation of trade with China, even when it means leaving implementation of the new controls to the Biden Administration.

For companies doing business in and with China, the increased export controls and economic sanctions – a recent executive order prohibiting transactions with popular Chinese mobile payment apps, a new ‘Military End Use’ list that tightens export licensing for designated items, and a ban on securities investments in Chinese military entities – call for enhanced due diligence to ensure compliance.

On January 9, 2021, the Ministry of Commerce of China issued new Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Laws and Other Measures (“the Counteracting Rules”). The Counteracting Rules are proposed to counteract the negative impact on Chinese entities (citizens, legal persons or other organizations) caused by unjustified extra-territorial application of foreign laws and other measures, and to safeguard China’s national sovereignty, security and development interests.

On December 21, 2020, the Department of Defense (“DoD”) published a final rule with request for comments (the “Final Rule”), effective on February 24, 2021, codifying NISPOM in Title 32, Part 117 of the Code of Federal Regulations (“CFR”). In addition to codifying the NISPOM, the Final Rule makes other changes relevant to industrial security.

As January 20, 2021 approaches and the advent of a new president and presidency emerges, what can we expect from a Biden administration and its Customs and Border Protection (“CBP” or “Customs”) Transfer Pricing policy? What opportunities are available for global companies to manage and make retrospective inter-company Transfer Pricing adjustments? Different customs options and opportunities exist depending upon each companies’ analysis and needs.

The sad fact of forced labor in global supply chains cannot be denied. There are many indicators that forced labor is taking place, including restriction of movement and isolation, intimidation and violence, withholding of wages, retention of identification documents, reporting to immigration authorities, debt bondage, abusive working and living conditions, and excessive work schedules.

In response to this growing human rights concern, the U.S. has enacted regulatory controls, including import and export laws, economic sanctions, and regulations impacting U.S. government contracts, to encourage due diligence and responsible business conduct in global supply chains. This article will provide an overview of the recent developments in regulatory requirements governing forced labor prevention in global supply chains and recommended due diligence protocols.

Ransomware attacks have increased exponentially in recent years and COVID-19’s remote work policies only contributed to how successful bad actors are in perpetrating the attacks. If your company is not currently working towards increasing cybersecurity controls, it has never been a better moment to start doing so, especially if you deal with sensitive technologies or defense industries. In addition to the obvious business challenges companies face when dealing with a ransomware attack, there are several U.S. government laws, regulations, and implementing agencies that companies must be mindful of in the aftermath of an attack.

Browse our export & trade guides below:

• Guide to Foreign Person “Deemed Export” Licenses
• ITAR Material Change and Registration Renewal Guide & Checklist
• Huawei Entity List Guide
• EEI Filings Guide
• Customs Valuation Are You Undervaluing Merchandise
• Controlled Item Marking Requirements
• Transaction Due Diligence
• Guide to Successor Liability and Trade Law in Mergers and Acquisitions
• Guide to Economic Sanctions
• Export Agency Visit Summary Tracking Sheet
• Export Jurisdiction And Classification - Quick Reference Guide
• Voluntary Self-Disclosure Handbook
• US Export Controls and Sanctions Overview
• Guide to Complying with U.S. Export Control and Immigration  Laws
• Fundamental Elements of Effective Trade Compliance Programs
• Export Classification Quick reference
• Customs Guide For General Counsel, C-Executives, And Accounting Firms
• Guide To The Generalized System Of Preferences
• Red Flags in Transaction Due Diligence
• ADD/CVD Scope Rulings

Now more than ever Chinese investment in the United States is facing barriers stemming from the strict reviews conducted by the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”). After several high-profile cases, which our law firm has covered in previous articles and are summarized below, the general consensus is that Chinese investment will be greatly scrutinized – and in many cases completely blocked – to satisfy the U.S. government’s national security concerns.

But even in these uncertain times, we have also seen some Chinese transactions approved by CFIUS, confirming that not all Chinese investment is off limits.

If you have not noticed, 2020 is a U.S. presidential election year. If you missed that fact, you may also not realize that the United States is in the midst of a years-long trade war with China. The convergence of these two circumstances has caught the attention of the business community, particularly as relates to trade policy.

The long-awaited, Advanced Notice of Proposed Rulemaking ("ANPRM") soliciting comments on the definition of, and criteria for, identifying “foundational technologies” (“the Notice”) was finally issued on August 27, 2020, by the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”). The deadline to submit comments is October 26, 2020.

Most people are familiar with the social media sensation, TikTok, a mobile device application which allows users to create and share short-form videos. It is reported that there have been over 175 million downloads of the application in the U.S. Despite its popularity, most TikTok users are oblivious to how the national security concerns raised by the current White House Administration will affect them. Not to mention many users are probably unaware and will be surprised to learn that TikTok is a Chinese application. Beijing-based, ByteDance Ltd. (ByteDance) is the parent company of TikTok.

USMCA implementation is fast approaching. To download a copy of a sample USMCA Certificate of Origin, please click here for PDF version or here for Excel version. Please ensure that you review the certificate and make any required modifications based on your product or certifier type as-needed.

Labor & Trade: Is Mexico Ready for USMCA’s Labor Chapter?

This presentation outlines the intersection between labor and trade law under the new United States Mexico Canada (USMCA) free trade agreement. Specifically, it provides an overview of the novel rapid response mechanism under the USMCA, which permits parties to request expedited reviews by an independent panel of an alleged Denial of Rights of free association and collective bargaining. Download by clicking here.

Browse our export & trade checklists below:

• ITAR Material Change and Registration Renewal Guide & Checklist
• Transaction Due Diligence Checklist
• Top 10 Tasks To Prepare For Export Agency Site Visit
• The STA License Exception
• EEI Filing Checklist
• Export Agency Visit Summary Tracking Sheet

Earlier this month, e-commerce, retail, and data giant Amazon.com, Inc. ("Amazon") agreed to a settlement with the Office of Foreign Assets Control ("OFAC") for apparent violations of U.S. sanctions programs.

In order to better manage the Defense Industrial Base’s compliance with cybersecurity obligations under the Defense Federal Acquisition Regulation Supplement (“DFARS”), the Department of Defense (“DoD”) is instituting a new program that requires defense contractors and subcontractors to obtain a certification of compliance with cybersecurity requirements to be eligible for bidding on and receiving government contracts. 

The COVID-19 pandemic has affected nearly all aspects of everyday life, but sometimes it is easy to forget that the U.S. Government must also adjust its operations to be able to meet regulatory requirements during the pandemic. 

Agreements executed under the International Traffic in Arms Regulations (“ITAR”) serve as a licensing tool for the transfer of defense articles, technical data, manufacturing know-how, and defense services between a U.S. party and a foreign party. Fulfilling the requirements of those agreements is a critical part of ITAR compliance, as demonstrated by the recent L3Harris Technologies, Inc. (“L3Harris” or “the Company”) consent agreement with the U.S. Department of State (“State”), Directorate of Defense Trade Controls (“DDTC”).

On June 29, 2020, revisions to the Export Administration Regulations (“EAR”) that will impact many exporters and reexporters – particularly those doing business with the People’s Republic of China – became effective. 

On May 21, 2020, the U.S. Department of the Treasury (“Treasury”) published a Proposed Rule that includes two important changes impacting mandatory filings.

This article summarizes important developments affecting international trade.

Companies often must decide whether to conduct internal investigations after receiving information that could indicate ongoing violations of export control or economic sanction laws and regulations. It is important that they take adequate steps to preserve attorney-client privilege, immediately stop ongoing violations, and ensure resources and personnel are assigned to the investigative team. Deciding whether to conduct an investigation will ultimately depend on a variety of factors, and there are a number of decisions to be made at the outset of the investigation as outlined below.

The U.S. Department of the Treasury finalized the new Committee on Foreign Investment in the United States (“CFIUS”) regulations, which became effective on February 13, 2020.[1]

Amongst other matters, the new regulations significantly expand CFIUS’s jurisdiction for non-controlling investments, including the review of transactions involving U.S. businesses that manage or collect “sensitive personal data” of U.S. citizens.

This article outlines OFAC’s most recent actions.

If your company is fortunate enough to receive federal R&D funding, it is important to remember that these grants do not relinquish responsibility for compliance with trade regulations.

The intersection of immigration, anti-discrimination, and U.S. export control laws can be confusing for employers. But recent settlement agreements between the U.S. Department of Justice (“DOJ”) and multinational corporations and large international law firms, demonstrate that the DOJ will not tolerate employers discriminating against non-U.S. persons. This article will provide an overview of the intersection, and friction between, U.S. immigration, anti-discrimination, and export control laws and regulations.

***This article first appeared in the WorldECR journal in their November 2019 Issue.

On December 18, 2019, the United States Trade Representative (“USTR”) officially signaled the first real respite in the ongoing trade war with China by publishing a Notice of Modification of Action  to suspend a planned 15% duty on certain products from China that was originally scheduled to take effect on December 15, 2019. This early Christmas present came after nearly two years of the USTR extending and increasing tariffs on Chinese goods pursuant to Section 301 of the Trade Act of 1974 (“Section 301”).

On September 17, 2019, the U.S. Department of the Treasury (“Treasury”) issued two proposed rules that would expand the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”).[1] If enacted, these new proposed regulations could have major implications on foreign investment and real estate transactions in the United States and investors and companies must be aware of such potential impact.

In 2019, the U.S. Department of Commerce Bureau of Industry and Security (“BIS”) entered into six settlement agreements with companies (not including individuals) for export violations of the Export Administration Regulations (“EAR”).

Some of the companies were assessed civil penalties as a result of their violations, while others lost their export privileges.

Very few words evoke feelings of fear and loathing quite like the word “audit.” But Compliance professionals understand that auditing internal trade compliance processes is a necessary method of maintaining healthy trade controls and avoiding costly penalties.

Since President Trump took office in January of 2017, he has shown his desire to follow through with trade policies that were a central part of his campaign. 

In recent years, the U.S. Securities and Exchange Commission appears to be taking a more active role in a regulatory area for which it is not traditionally associated: economic sanctions.

On September 19, 2019, the U.S. Directorate of Defense Trade Controls (“DDTC”) entered into a consent agreement with L3Harris Technologies, Inc. (“L3Harris”) for alleged violations of the Arms Export Control Act (“AECA”) and the International Traffic in Arms Regulations (“ITAR”). 

On August 14, 2019, the U.S. Customs and Border Protection (“CBP”) issued a notice of proposed rulemaking requiring customs brokers to verify the identity of their importer clients, in particular non-resident importers.

Current rules and regulations only require customs brokers to obtain very minimal details regarding importers to which they provide services.

What is the appropriate standard for determining whether a defendant has acted willfully in violation of the Arms Export Control Act (“AECA”)? On August 20, 2019, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) weighed in on this question in U.S. v. Burden. 

Should human rights concerns be a consideration for exporters engaged in international trade? New draft guidance proposed by the U.S. Department of State aims to provide a potential roadmap for tackling this issue.

The trade dispute between the U.S. and China that started mid-2016 has no end in sight. As part of his presidential campaign, then-candidate Donald Trump threatened to apply tariffs on various imports from China. Now that he is President, these tariffs have come to fruition: after several failed rounds of trade negotiations with China, the “Section 301” probe into alleged Chinese intellectual property theft started in earnest early 2018. 

The current U.S.-China trade war does not appear to end with tariffs, however. Biomedical research appears to be the latest unlikely victim.

The USTR is still accepting exclusion requests for products subject to the trade action on $200 Billion of Chinese goods, also known as “List 3” products

FedEx Corporation (“FedEx”) has openly challenged the Bureau of Industry and Security’s (“BIS”) jurisdiction to enforce the EAR with respect to actions taken by freight forwarders. 

In April 2019, CFIUS published a notice on its website that in 2018 it had issued a $1 million fine for breaches of a 2016 CFIUS mitigation agreement. 

On June 19, 2019, Mexico became the first country to ratify the United States-Mexico-Canada Agreement (USMCA). By a vote of 114 to 4, Mexico’s Senate approved the replacement to the North America Free Trade Agreement, making Mexico the first country to ratify to the new treaty.

In spite of a short-term reprieve from additional tariffs on select products, trade uncertainty under the Trump administration continues for U.S. companies that do business with China.

The Council of the European Union just made investing in the EU more complicated.

Among the tools used by the U.S. Government to impose sanctions on both entities and individuals, few are as powerful as "U.S. Denied Party Lists."

Inclusion on a U.S. Denied Party List can have adverse consequences even if the designated parties are ultimately removed from the list, as two recent cases involving lawsuits against OFAC involving due process concerns will demonstrate.

In the United States, when violations of the export rules are discovered, exporters have the option to prepare and submit Voluntary Self-Disclosures to the U.S. export agencies in exchange for reduced penalties. These VSDs are formal statements containing a description of the violation and a promise to remedy the conduct that led to it.

Unfortunately, companies do not always follow through with the full implementation of the promised corrective measures, in some cases discontinuing the remedial process measures altogether. 

This article discusses how new regulations significantly change foreign investments in U.S. businesses and the temporary Pilot Program, which addresses specific risks related to U.S. critical technologies.

This article first appeared in the Newsletter of the International Law Section (www.ilstexas.org) of the State Bar of Texas, and is reproduced with the Section’s permission.

The export control regulations are difficult enough to understand in their own right. But for companies that are also involved in defense contracting, whether as prime contractors or subcontractors, the export control regulations occasionally intersect with additional requirements of the Defense Federal Acquisition Regulations Supplement (“DFARS”), making compliance much more difficult.

The North American Free Trade Agreement (“NAFTA”) has been in effect since January 1, 1994, and more than two decades later, on May 18, 2017, the United States Trade Representative (“Trade Representative”), Robert Lighthizer, notified Congress of the United States' intention to renegotiate NAFTA. The United States commenced renegotiations with Canada and Mexico on August 16, 2017.

On August 29, 2018, in a settlement involving Clifford Chance US, LLP, a large international law firm, the Department of Justice (“DOJ”) provided the export community with a perfect example of the intersection of, and friction between, immigration anti-discrimination laws and the export control regulations, namely the International Traffic in Arms Regulations (“ITAR”) and the Export Administration Regulations (“EAR”).

This article will discuss U.S. economic sanctions on Russia as enforced by the Office of Foreign Assets Control (“OFAC”), a government agency within the U.S. Department of the Treasury. Specifically, we will provide an overview of Directive 4 to Executive Order 13662 (“Directive 4”), which prohibits certain transactions related to the Russian oil sector.1 While Directive 4 does not prohibit all oil sector transactions with companies in Russia, it does create many potential obstacles for U.S. businesses. We will also briefly discuss Russian oil sector prohibitions administered by the Department of Commerce Bureau of Industry and Security (“BIS”).2 Russia and Texas are two of the largest producers of oil and gas in the world, and, because many companies involved in the petroleum industry in Texas have dealings with Russian entities or individuals, they are likely to be faced with sanctions issues. Below we describe some of the issues that need to be addressed prior to the commencement of transactions involving Russian parties in the context of certain oil exploration and production activities.

This article first appeared in the Newsletter of the International Law Section (www.ilstexas.org) of the State Bar of Texas, and is reproduced with the Section’s permission.

The U.S. government maintains a variety of lists of sanctioned or denied parties—including entities, individuals, aircraft, and vessels—with whom companies and individuals are prohibited or restricted from dealing. These lists are assembled for different reasons and under differing authorities. That is, what might get an entity onto a list and how that entity might work to get off the list depends on the authorities and the national security purposes underlying the designation.

Since the Trade Facilitation and Trade Enforcement Act of 2015 (“TFTEA”) was signed into law in February 2016, U.S. Customs and Border Protection (“CBP”) has increased enforcement of U.S. import laws and regulations. Increased enforcement and associated risks should drive an increased focus by importers on compliance with CBP regulations. However, there remains a knowledge gap among some importing companies and non-trade attorneys related to a few of the basics of import regulations. In this regard, businesses and corporate attorneys should familiarize themselves with the issues below in order to navigate the increasingly risky waters of customs compliance.

Past compliance with the full range of international trade, export controls, and economic sanctions laws and regulations should be a critical element of due diligence in mergers and acquisitions. Unfortunately, trade compliance is often overlooked.

Suite aux suspicions relatives à l’éventuelle création d’une arme nucléaire par l’Iran, la communauté internationale et plus précisément les pays du P+5 (les Etats-Unis, la Russie, la Chine, la France, le Royaume Uni, l’Allemagne), l’Union Européenne et l’Iran ont conclu un accord en 2015 connu sous le nom de Joint Comprehensive Plan of Action (JCPOA). Le 8 mai 2018, le président Trump a annoncé sa décision de cesser la participation des États-Unis au plan d'action global commun (JCPOA), et de commencer à réimposer les sanctions nucléaires américaines qui ont été levées pour effectuer l'allégement mentionné dans le JCPOA.

Section 22 CFR §740.20 of the Export Administration Regulations (“EAR”) provides for the Strategic Trade Authorization (“STA”) license exception. Between July 2011 and December 2016, 849 companies used license exception STA. During the same time period, the Bureau of Industry and Security (“BIS”) conducted 296 STA audits. This means that over 30% of STA users were subject to government review. This article examines STA use and audits by BIS.

From time to time importers may receive from U.S. Customs and Border Protection (“CBP” or “Customs”) a CBP Form 28 (“CF 28”) Request for Information. The issuance of a CF 28 is a standard procedure used by Customs to gain more information about entered merchandise. Totally harmless, right? Not necessarily. As discussed below, it is important for importers, and customs brokers responding on behalf of importers, to take the issuance and response to a CF 28 seriously.

Non-U.S. companies involved in the reexporting of U.S. goods or technology should familiarize themselves with the applicable U.S. export laws, regardless of where they are located. This is because the U.S. export and economic sanctions laws have wide ranging extraterritorial reach. 

This article serves as an update on the most recent tariff related developments.

The Committee on Foreign Investment in the United States (“CFIUS”) is an interagency body which has the authority to assess the national security implications of transactions that could result in control of U.S. businesses by a foreign person. The CFIUS is chaired by the U.S. Secretary of Treasury and includes representatives from 16 U.S. departments and agencies. Over the last thirty years, the CFIUS has advised the president concerning foreign investment, particularly with respect to transactions that, for one reason or another, the CFIUS believes the president should review in the interest of national security. Under the CFIUS’s guidance, U.S. presidents have only blocked a total of five transactions, two of which have happened in the last six months under President Trump. This article provides a brief summary regarding recent cases and proposed legislation that will impact foreign investment in the United States.

Pursuant to Section 231(a) of the Countering America’s Adversaries Through Sanctions Act (“CAATSA” or “the Act”),[1]  beginning January 29, 2018, President Trump is required to impose five or more of the Act’s laundry list of sanctions, found in Section 235, on persons that the President has determined to have knowingly engaged in a “significant transaction” with a person that is part of, or operating for or on behalf of, the defense or intelligence sectors of the Russian government. This article reviews the extraterritorial impact of the Act on non-U.S. persons, and provides some guidance regarding how to best prepare for these new developments.

On December 31, 2017 the Generalized System of Preferences (“GSP”) trade program expired after Congress failed to reauthorize the program.

The deadline for full compliance with NIST 800-171 was December 31, 2017. Originally it was believed that, in order to be fully compliant with NIST 800-171, defense contractors would be required to have implemented all 110 of the security requirements by December 31, 2017. However, subsequent guidance from the Department of Defense (“DoD”) shows this is not necessarily the case.

In 2009, the U.S. Customs and Border Protection (“CBP”) published guidelines that govern the enforcement and mitigation of civil penalties for companies and other entities that fail to comply with the Foreign Trade Regulations (“FTR”) in 15 C.F.R. § 30.[1]. While Section 30 includes a list of violations that trigger civil penalties, it also lists mitigating factors for violations.

On August 14, 2017, U.S. Customs and Border Protection (“CBP”) issued its first notification of final determination of antidumping duties (“ADD”) evasion pursuant to the Enforce and Protect Act (“EAPA”).

Despite the perceived success of KORUS, under which exports of U.S. goods and services to South Korea were estimated at $63.8 billion in 2016,[1] on the morning of September 1, 2017, President Donald Trump reportedly informed his senior officials of his intent to withdraw from the agreement.[2] Although this announcement may be unsurprising to those following the administration’s renegotiation of NAFTA, the news sparked some controversy across industries that rely heavily on South Korean markets, such as the agricultural industry.

This article is the second part of a two-part series. In the first article, we introduced the types of company visits conducted by the two major U.S. export agencies,[1] and discussed potential outcomes and consequences of these visits. In this second article, we discuss what to expect during a visit from the agencies and best practices to prepare for them.  The first article can be accessed here.

Aside from a modest rollback regarding the Obama Administration’s effort to allow Americans to travel to Cuba, a number of enforcement cases relating to Iran, some additional designations with respect to Syria, and sanctions-enabling legislation relating to Russia, much of the recent news in economic sanctions has been dominated by two countries: North Korea and Venezuela.

Perhaps the information came from a colleague or a customer or an anonymous tip left on your company’s “tip line.”  Or it could have been a comment made during a presentation at a professional meeting.  Something caught your attention and triggered the realization that you may have a U.S. export controls violation.  Whether or not you have experienced that sinking feeling, prudent compliance requires that you be prepared to take appropriate action at the first sign of trouble.  

Many exporters are at least vaguely familiar with the “company visits” or “outreach visits” conducted by the export control agencies, but most have very little idea what these visits actually entail, how a company is selected for a visit, or the potential consequences of such a visit. Exporters, freight forwarders, non-exporting manufacturers of defense articles, and companies that share controlled technology with foreign persons, resulting in “deemed exports” should thoroughly prepare for these visits if they are ever “lucky enough” to be selected.

Two recent U.S. court decisions will increase corporate officers’ and compliance professionals’ risks for personal liability for Customs law violations. Specifically, the decisions relate to fraudulent, grossly negligent, or negligent activity under the Customs penalty statute, 19 U.S.C. § 1592.  

On June 16 2017, President Trump announced changes to the United States’ economic sanctions against Cuba. This article provides a brief synopsis of the announced changes and potential impact.

It is easy to think of the various U.S. government agencies with trade control responsibilities as operating entirely separate from one another. Often, that can be the case. Industry professionals have learned through the process of Export Control Reform that many trade procedures are not at all synchronized amongst the respective agencies. A final rule published by the Department of State this year serves as a reminder that, in many ways, certain functions of the various trade agencies are inextricably linked, and these agencies rely on one another to perform certain tasks. 

On June 29, 2017, in an effort to continue to transform the way U.S. Customs and Border Protection (“CBP”) approaches trade through the Centers of Excellence and Expertise (“Centers”), CBP released a new trade process document that includes new responsibilities and procedures for importers, brokers, agents, or filers.

On March 30, President Trump announced his intent to nominate Mira Radielovic Ricardel to the position of Under Secretary of Commerce for Export Administration.

On January 19, 2017, the Bureau of Industry and Security (“BIS”) published a final rule regarding new support documentation requirements with respect to exports to Hong Kong.

With the signing of two new executive orders, President Trump is taking the first steps in fulfilling two of his favorite campaign promises, both relating to trade: (1) no longer tolerating trade abuse that damages the American economy and (2) decreasing the national trade deficit. 

The recent presidential campaign was notable for the debate concerning whether interaction with foreign entities benefitted the U.S. While trade deficits and offshoring of U.S. jobs grabbed headlines, there has been growing attention to the acquisition of U.S. companies by foreign entities. 

On March 7, 2017, the U.S. Department of Justice (“DOJ”), the Treasury Department's Office of Foreign Assets Control (“OFAC”), and the Commerce Department's Bureau of Industry and Security (“BIS”) together levied the largest ever export and sanctions related penalty against Chinese telecommunications firm ZTE Corporation (“ZTE”). ZTE agreed to the combined $1.19 billion fine to settle a number of alleged violations of U.S. sanctions targeting Iran. 

Over the past decade, the availability of cloud computing services has grown exponentially to the point where cloud access is now viewed almost as a public utility. Cloud Service Providers (“CSPs”) may operate internationally, and CSP servers are often located in countries other than that of the user, leading to export control concerns. 

This article briefly discusses the types of activities that trigger the brokering registration requirement under the International Traffic in Arms Regulations for freight forwarders. 

The first weeks of the Trump Administration have been eventful, but there has been little action in the area of export controls and economic sanctions. In this regard, there's no clear consensus just yet as to whether and how significantly President Trump plans to deviate from the course set over the last eight years of the Obama Administration.

This article discusses the potential implications of NAFTA's renegotiation or withdrawal.