Insights

DOJ Criminal Division announces Revised Corporate Enforcement Policy

Date: 01/17/2023

On January 17, 2023, Assistant Attorney General (AAG) for the U.S. Department of Justice (DOJ) Criminal Division Kenneth Polite announced the “first significant changes” to the Criminal Division’s Corporate Enforcement Policy (CEP) since 2017. AAG Polite’s remarks come roughly four months after Deputy Attorney General (DAG) Lisa Monaco’s speech, calling for all DOJ components to reexamine their voluntary self-disclosure (VSD) policies and “to clarify the benefits of promptly coming forward to self-report, so that chief compliance officers, general counsels, and others can make the case in the boardroom that voluntary self-disclosure is a good business decision.” According to AAG Polite, the Criminal Division “took the DAG’s call as an opportunity to reassess and strengthen” its existing policies. The revised CEP, which “applies to all corporate criminal matters” handled by the Criminal Division, offers companies “new, significant, and concrete incentives to self-disclose misconduct,” and even where companies do not self-disclose, incentivizes “companies to go far above and beyond the bare minimum when they cooperate” with DOJ investigations.

Treasury Releases First-Ever CFIUS Enforcement and Penalty Guidelines

Date: 10/20/2022

On October 20, 2022, the U.S. Department of the Treasury, acting as Chair of the interagency Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”), released the first-ever CFIUS Enforcement and Penalty Guidelines (“the Guidelines”). The Committee, sometimes called a “black box” for its notoriously opaque internal processes, is authorized to review certain transactions involving foreign investment in the United States and certain real estate transactions by foreign persons to determine the effect of such transactions on U.S. national security. CFIUS is tasked with identifying and mitigating certain national security risks, often by entering into agreements or imposing conditions on transaction parties. The Guidelines provide insight into how CFIUS determines whether and in what amount to impose a penalty or take some other enforcement action against a party that fails to comply with CFIUS mitigation agreements or other legal obligations.

DDTC Issues Two Open General Licenses

Date: 07/20/2022

On July 13, 2022, the U.S. Department of State Directorate of Defense Trade Controls (“DDTC”), as part of a pilot program, issued two Open General Licenses (“OGL”), which were subsequently published via Federal Register on July 20, authorizing the retransfer and reexport of defense articles subject to the International Traffic in Arms Regulations (“ITAR”) within or between Australia, Canada, and the United Kingdom. Like General Licenses issued by the Office of Foreign Assets Control under the U.S. Treasury Department, OGL No.1 and OGL No. 2 apply if the transaction meets the stated requirements, without specific application to DDTC.

New Wave of Russian Sanctions, General Licenses, FAQs, and Export Controls

Date: 06/29/2022

On June 27 and 28, 2022, the U.S. government unleashed a new wave of sanctions and related measures aimed at Russians and Russian industry in response to Putin’s ongoing war against Ukraine. The Department of Treasury Office of Foreign Assets Control (“OFAC”) 1) added 99 persons to the Specially Designated Nationals and Blocked Persons (“SDN”) List, and 2) prohibited the importation of gold from Russia. OFAC also issued five new General Licenses. 

Forced Labor and the Uyghur Forced Labor Prevention Act

By: Olga Torres, Managing Member, Derrick Kyle, Senior Associate, and William Klaess, Associate
Date: 06/21/2022

 Today, June 21, 2002, the Uyghur Forced Labor Prevention Act (“UFLPA”) comes 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.

 

Nuclear Regulatory Commission Suspends General License Authority to Export Radioactive Material to Russia

Date: 05/19/2022

On May 17, 2022, the Nuclear Regulatory Commission (“NRC”) issued an order, effective immediately, suspending the general license authority under NRC regulations to export radioactive material and deuterium for nuclear end use to Russia. Now, exporters of such material must apply to the NRC for a specific license to export to Russia.

De Minimis Dominates International Trade Commission Hearing on Foreign Trade Zones

Date: 05/19/2022

On May 17, 2022, the U.S International Trade Commission (“USITC”) held a public hearing in connection with an investigation into the effect of Foreign Trade Zone (“FTZ”) policies and practices on U.S. firms operating in U.S. FTZs and under similar programs in Canada and Mexico. FTZs are secured areas located in or near U.S. Customs and Border Protection (“CBP” or “Customs”) ports of entry,

Commerce Expands Export Controls on Shipments of EAR99 Items to or within Russia

Date: 05/10/2022

On May 9, 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced a new final rule, to be published on May 11, 2022, expanding export controls against Russia under the Export Administration Regulations (“EAR”). The final rule imposes a license requirement under 15 C.F.R § 746.5(a)(1)(ii) for exports, reexports, or transfers (in-country) to or within Russia for additional items subject to the EAR identified under specific Harmonized Tariff Schedule (“HTS”) descriptions. The final rule adds 205 HTS codes at the 6-digit level (and descriptions) and 478 corresponding 10-digit Schedule B numbers (and descriptions) to the chart in Supplement No. 4 to Part 746.

Treasury Specifies “Services” Prohibited for Export to Russia under Executive Order 14071

Date: 05/09/2022

On May 8, 2022, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a determination pursuant to Executive Order (“EO”) 14071. The determination specifies that the provision of the following activities to any person in Russia are prohibited: accounting services, trust and corporate formation services, and management consulting services. The prohibition takes effect on June 7, 2022 and does not apply to services provided to entities located in Russia owned or controlled by U.S. persons, or any services in connection with the wind down or divestiture of any entity in Russia not owned or controlled by a Russian person. The determination expands EO 14024 to prohibit such services.

 

What Was the Impact of Section 232 and Section 301 Duties on Your Company?

Date: 05/06/2022

If your company has been negatively impacted by the Section 232 and Section 301 duties, you may now have another opportunity to voice your concerns in Washington. On May 5, 2022, the U.S. International Trade Commission (ITC) published information regarding a fact-finding investigation into the economic impact of the Section 232 and 301 duties on U.S. industries.

U.S. Trade Representative Initiates Four-Year Review of Section 301 Tariffs

Date: 05/05/2022

On May 3, 2022, the U.S. Trade Representative (“USTR”) announced a statutory two-phase review of the Section 301 tariffs on Chinese-origin goods. USTR also published a Federal Register Notice draft describing the process for filing requests for extension of the tariffs.

U.S. Responds to Russian Invasion of Ukraine With Devastating “Further Consequences” For the Russian Economy, Including Export Controls and Additional Economic Sanctions.

By: Olga Torres, Managing Member
Date: 02/24/2022

President Biden, following a meeting with the Leaders of the G7 on Thursday morning, addressed the ongoing Russian invasion of Ukraine as well as the “further consequences” that the U.S., in conjunction with many other nations, would be imposing against Russia. President Biden announced additional economic sanctions targeting major Russian financial institutions as well as more designations of Russian elites and their family members. Notably, President Biden for the first time announced that new export controls will be implemented to “cut off more than half” of Russia’s high-tech imports. However, despite pressures from domestic lawmakers and foreign heads of state, Russia was not ousted from the SWIFT financial messaging system, nor was Russian President Putin himself personally sanctioned. But, as President Biden made clear, such options remain “on the table.”

New U.S. Economic Sanctions Against Russia

By: Torres Law
Date: 02/22/2022

Over the past 48 hours, the U.S. government and its allies have responded to Russia’s aggression in eastern Ukraine with new sanctions against Russia. This trade alert summarizes the economic sanctions imposed by the U.S. government to date. 

Highlights of the 2020 CFIUS Annual Report to Congress

Date: 08/03/2021

On July 29, 2021, CFIUS published its 2020 Annual Report summarizing CFIUS-covered transaction declarations and notices, outlining mitigation measures and conditions, demonstrating credible evidence of coordinated strategies by foreign actors to acquire critical U.S. technology companies, and reporting on foreign direct investment in the U.S. by countries that boycott Israel or do not ban terrorist organizations.

Biden Signs Executive Order Protecting Americans’ Sensitive Data from Foreign Adversaries

By: Olga Torres and Derrick Kyle
Date: 06/11/2021

On June 9, 2021, President Biden signed an Executive Order (“June 9 E.O.”)1 elaborating on measures to protect the information and communications technology and services (“ICTS”) supply chain with specific emphasis on connected software applications.2 The June 9 E.O. directs federal agencies to (1) assess the threats posed by connected software applications controlled by foreign adversaries, (2) provide recommendations on how to protect sensitive personal data of U.S. persons, and (3) evaluate transactions involving connected software applications that pose risks to U.S. national security. The June 9 E.O. also revokes three Executive Orders issued last fall by former President Trump that targeted several Chinese communications and financial technology software applications, including TikTok and WeChat.

What You Need to Know Regarding the New Rule Requiring Greater Scrutiny of Information and Communications Technology and Services Transactions

By: Olga Torres, Managing Member
Date: 01/26/2021

On January 19, 2021, the Department of Commerce (“Commerce”) published its interim final rule on “Securing the Information and Communications Technology and Services Supply Chain” (the “Final Rule”) to implement the provisions of a May 15, 2019 Executive Order on the same topic.

Scheduled to take effect on March 22, 2021, the Final Rule is intended to address the growing security risk to the nation’s information and communications systems from using technology developed by “foreign adversaries.” Commerce has requested public comment on the rule up until the time the rule takes effect (feedback must be received by March 22, 2021).

Imposition of Sanctions Against Turkish Entities and Persons Under CAATSA (“Countering Americas Adversaries Through Sanctions Act”)

By: Olga Torres and Matt Lapin
Date: 12/15/2020

On December 14, 2020, the U.S. announced sanctions against the Republic of Turkey’s Presidency of Defense Industries (SSB), pursuant to Section 231 of CAATSA, for procuring the S-400 surface-to-air missile system from Russia’s Rosoboronexport. SSB is Turkey’s primary defense procurement entity and has responsibilities in defense industrial development.

Where Does Your Food Come From? FDA Proposes Changes Affecting Traceability Records for Certain Foods

By: Donna Wedgeworth, Trade Advisor
Date: 10/02/2020

On September 21st, the U. S. Food and Drug Administration (FDA) announced a proposed rule change to the Food Safety Modernization Act (FSMA).

CFIUS FINAL RULE: HOW EXPORT CONTROL REGULATIONS WILL IMPACT MANDATORY FILINGS

By: Olga Torres, Managing Member and Maria Alonso, Associate
Date: 09/15/2020

The U.S. Department of the Treasury Office of Investment Security (“Treasury”) published a final rule on September 15, 2020, significantly changing the mandatory filings administered by the Committee on Foreign Investment in the United States (“CFIUS”). 

DDTC Provides Updated COVID-19 Measures

By: DDTC Web Notice
Date: 04/24/2020

Yesterday the Directorate of Defense Trade Controls published an update to its operations. Read this trade alert for full details.

Importers Facing “Significant Financial Hardship” May Defer Duty Payments for 90 Days

Date: 04/20/2020

On April 18, 2020, President Trump issued an Executive Order providing authority to the Secretary of the Treasury, under 19 U.S.C. § 1318, to extend the deadline for payments of certain estimated duties, taxes, and fees for importers suffering significant financial hardship during the national emergency created by the COVID-19 novel coronavirus pandemic.

New CFIUS Part 802 Geographic Reference Tool

Date: 03/25/2020

Pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), the Committee on Foreign Investment in the United States (“CFIUS”) is authorized to review certain real estate transactions by foreign persons in the United States. The regulations at 31 C.F.R. part 802[1] (effective on February 13, 2020), implement CFIUS’s authority to review certain “covered real estate transactions,” involving the purchase or the lease by, or a concession to, a foreign person of certain real estate in the United States. The real estate transactions subject to review include transactions meeting certain criteria and that are in, or around, sensitive sites such as specific airports, maritime ports, and military installations. The airports and maritime ports are identified in the regulations and contained on lists published by the U.S. Department of Transportation. Furthermore, the military installations are listed at Appendix A to Part 802.

DDTC and Census COVID-19 Status of Operations

Date: 03/19/2020

Today the Directorate of Defense Trade Controls published an update to its operations.

New Interim Final Rule Creates End-to-End Encryption Carve-Out for ITAR Technical Data

By: Olga Torres and Derrick Kyle
Date: 12/26/2019

The Department of State Directorate of Defense Trade Controls (“DDTC”) has published an interim final rule (“the Interim Final Rule”) seeking public comments and clarifying that certain transfers of encrypted technical data are not exports, reexports, or retransfers subject to the International Traffic in Arms Regulations (“ITAR”).

Tariffs on Wine, Whisky, and Cheese Provide Extra Fright This Halloween

By: Torres Law
Date: 10/30/2019

Halloween parties are an annual tradition for many Americans. But this year Halloween may be a little spookier than usual as some popular party items could become more expensive.

Treasury Issues Proposed Regulations and Requests Public Comments

By: Torres Law, International Trade & National Security
Date: 09/23/2019

On September 17, 2019, the U.S. Department of the Treasury issued a press release announcing two proposed regulations that will implement provisions of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). The proposed regulations will be published in the Federal Register on September 24, 2019, and they will expand the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”). Specifically, the two proposed regulations will address certain non-controlling investments and real estate investments by foreign persons. The deadline to submit comments on the proposed regulations is October 17, 2019, and pursuant to FIRRMA the regulations will take effect no later than February 13, 2020.

New Foreign Investment Status Quo: CFIUS Mandatory Filings and Potential Penalties

By: Olga L Torres, Managing Member, Maria Alonso, Associate, Pierfilippo Natta, Legal Intern
Date: 10/11/2018

On October 10, 2018, the U.S Department of the Treasury issued temporary regulations to conduct pilot programs to implement provisions of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), which became effective August 13, 2018, and amended section 721 of the Defense Production Act of 1950 specifically to protect American technology companies and intellectual property. As Torres Law previously discussed in several articles, the Committee on Foreign Investment in the United States (“CFIUS”) reviews foreign investment in U.S. companies for national security considerations, and FIRRMA has significantly expanded CFIUS jurisdiction.

Department of Commerce Makes Changes to the Steel and Aluminum Tariff Exclusion Request Process

By: Olga Torres, Managing Member, Derrick Kyle, Associate
Date: 09/11/2018

On September 11, 2018, the Department of Commerce (“Commerce”) issued an interim final rule in the Federal Register updating the process by which companies may request exclusion from additional duties on steel and aluminum articles pursuant to Section 232.

New Changes to the United States Foreign Investment Laws: What Foreign Investors Need to Know

By: Torres Law
Date: 08/13/2018

On August 13, 2018, President Trump signed the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (NDAA) into law. The NDAA contains the Foreign Investment Risk Review Modernization Act (FIRRMA), which makes significant changes to the Committee on Foreign Investment in the United States (CFIUS). This article briefly summarizes a number of changes to the current CFIUS process that will significantly impact foreign companies seeking to invest in U.S.-based businesses. The changes introduced by FIRRMA are the most significant changes made to CFIUS in over a decade.

Latest Developments Regarding Tariffs on China

By: Torres Law
Date: 08/07/2018

On August 7, 2018, the United States Trade Representative (“USTR”) announced it had finalized a list of $16 billion worth of imports from China that will be subject to a 25% tariff rate. 

Trade Wars Heating Up: More Tariffs on China

By: Torres Law
Date: 08/03/2018

On August 1, 2018, the United States Trade Representative (“USTR”) announced it was considering raising the proposed tariffs on $200 billion worth of goods imported from China from 10% to 25%. This is the latest in a long string of developments aimed at urging China to stop its unfair practices, open its market, and engage in true market competition. 

Product Exclusions Announced for Section 301 Tariffs

By: Olga Torres, Managing Member, Jonathan Creek, Associate
Date: 07/06/2018

On July 6, 2018, the United States Trade Representative ("USTR") announced the procedures for filing and obtaining product exclusions from the recently announced Section 301 tariffs on the imports of $34 billion worth of Chinese goods. Exclusion requests are due by October 9, 2018.

Tariffs: The Never-Ending Saga

By: Olga L Torres, Managing Member, Jonathan Creek Associate
Date: 06/18/2018

On June 15, 2018, the Trump Administration took the next step in escalating trade tensions with China by imposing additional 25% tariffs on imports of more than 800 products under Section 301 of the Trade Act of 1974.

U.S. to Withdraw from "Decaying and Rotten" Iran Nuclear Deal

By: Olga Torres, Managing Member, Derrick Kyle, Associate
Date: 05/09/2018

On May 8, 2018, President Trump announced the United States will withdraw from the Joint Comprehensive Plan of Action (“JCPOA”), commonly referred to as the “Iran Nuclear Deal,” which was adopted on October 18, 2015 and implemented on January 16, 2016 (“Implementation Day”). 

Steel and Aluminum Tariff Exemptions Extended...For Now

By: Jonathan Creek, Associate
Date: 05/07/2018

This article discusses the latest on tariff exemptions by the Trump Administration. 

DDTC Overhauls its Website

By: Torres Law
Date: 05/07/2018

On April 30, 2018, the Directorate of Defense Trade Controls (“DDTC”) announced it had launched a new, redesigned version of its website. This is the first time DDTC has made changes to its website in several years. The new website is designed to improve the navigation, searchability, accessibility, and improve the experience on mobile devices. The improvements are expected to continue in the future, as the Department of State seeks to improve and provide a more consistent experience across all Department sites. If you have any questions about the redesign, or where information is located on the new website, please feel free to contact us or DDTC’s response team at (202) 663-1282. To access the new website, go to https://www.pmddtc.state.gov/.

 

FLIR Enters Into Consent Agreement with DDTC

By: Olga Torres, Managing Member and Jonathan Creek, Associate
Date: 04/26/2018

On April 24, 2018, FLIR Systems, Inc. (“FLIR”) entered into a consent agreement with the Directorate of Defense Trade Controls (“DDTC”) for alleged violations of the International Traffic in Arms Regulations (“ITAR”). FLIR manufactures and exports advanced sensors and integrated sensor systems for various military and commercial platforms used to protect borders, gather intelligence, and protect critical infrastructure. Notably, the consent agreement was reached after FLIR submitted 18 voluntary self-disclosures (“VSD”) between 2008 and 2017.

Requirements for Steel and Aluminum Exclusion Requests Announced

By: Olga Torres, Managing Member, Jonathan Creek, Associate
Date: 03/19/2018

On March 19, 2018, the U.S. Department of Commcer ("DOC") published an interim final rule (“the Interim Final Rule”) listing the requirements for companies seeking product-based exclusions to the steel and aluminum tariffs previously announced by President Trump on March 8, 2018.

Tariffs on Steel, a Sign of Trade Wars on the Horizon

By: Olga Torres, Managing Member, Jonathan Creek, Associate
Date: 03/08/2018

On March 8, 2018, President Trump announced his decision to implement tariffs on steel and aluminum imports. These tariffs go into effect on March 23, 2018,[1] 15 days after President Trump’s announcement.

 

[1] In our initial publication of the article, we had a typographical error and stated the effective date was March 16. The correct date is March 23, 2018.

Census Bureau Requests Public Comments Regarding Routed Export Transactions

Date: 10/08/2017

On October 6, 2017, the U.S. Census Bureau’s International Trade Management Division (“ITMD” or “Census Bureau”) published an Advanced Notice of Proposed Rulemaking (“ANPRM”) seeking public comments regarding standard and routed export transactions.[1] The comment period will end on December 5, 2017. The Census Bureau is particularly interested in comments regarding the definition of a routed export transaction and the responsibilities of parties in routed export transactions. 

 

[1] Foreign Trade Regulations (FTR): Request for Public Comments Regarding Standard and Routed Export Transactions, 82 FR 46739 (proposed Oct. 6, 2017) https://www.federalregister.gov/documents/2017/10/06/2017-21569/foreign-trade-regulations-ftr-request-for-public-comments-regarding-standard-and-routed-export#h-7.

Trade Alert: DDTC: 07-29-2016

Date: 07/29/2016

The Office of Defense Trade Controls Director, Sue Gainor, has announced her departure. Her exact departure date and her replacement are not yet known. 

Trade Alert: DDTC: 07-28-2016

Date: 07/28/2016

The Directorate of Defense Trade Controls (DDTC) published revisions to United States Munitions List (USML) Categories XIV (Toxicological Agents) and XVIII (Directed Energy Weapons). Commerce published a parallel final rule a well.

Trade Alert: BIS: 07-22-2016

Date: 07/22/2016

The Bureau of Industry and Security (BIS) recently published a final rule on penalty determinations, which became effective July 22, 2016. The rule outlines the factors that the Office of Export Enforcement (OEE) considers when setting penalties and on deciding whether to pursue administrative charges. According to BIS, the objective of this rule is to make penalty determinations more predictable and in line with penalties issued by the Treasury Department’s Office of Foreign Assets Control (OFAC). 

Trade Alert: DDTC: 07-22-2016

Date: 07/22/2016

In response to questions from gunsmithing businesses, on July 22, 2016, DDTC issued guidance confirming registration is not required for certain activities that do not meet the ordinary, contemporary, common meaning of “manufacturing” under the ITAR. 

Trade Alert: DDTC: 07-21-2016

Date: 07/21/2016

On July 21, 2016, DDTC published public comments submitted by industry regarding the Interim Final Rule amending the ITAR and harmonizing certain ITAR and EAR definitions. 

Trade Alert: DDTC: 07-15-2016

Date: 07/15/2016

On July 15, 2016, DDTC published information regarding the relaunching of its company visit program (CVP). CVPs are in-person visits by Directorate of Defense Trade Controls (DDTC) staff to conduct outreach, or pursuant to a consent agreement. The visits are not audits. Although the agency claims these visits are performed to provide guidance and training to companies and are not investigative in nature, companies should take these visits seriously. If DDTC discovers a potential violation it could “recommend” companies file disclosures. Please note that the CVP is different from the “Blue Lantern” program, which consists of end-use checks by embassy personnel overseas and focus on end-user and end-use verifications related to DDTC authorizations. 

Trade Alert: DOJ: 07-08-2016

Date: 07/08/2016

On July 8, 2016, the Department of Justice issued a press release regarding a recent criminal case involving a Chinese national sentenced to 15 months in prison for conspiring to sell “fake” integrated circuits to a U.S. buyer. The Chinese national, and his co-conspirators, approached a U.S. person to order integrated circuits which had military applications, including radiation tolerance for uses in space. After being told that these integrated circuits could not be exported to China, the conspirators proposed to supply fake integrated circuits to replace the ones they intended to steal. 

Categories