Insights

For the latest Trump trade executive actions, please view the below Torres Trade Trump Table for important information. This table will be monitored and updated regularly. The last update occurred July 3, 2025.

On May 1, 2025, the Defense Counterintelligence and Security Agency (DCSA) approved a new highly anticipated version of the Certificate Pertaining to Foreign Interests (Standard Form 328 or “SF 328”). The new version became mandatory on May 12, 2025. This form is intended for entities seeking or maintaining a facility security clearance to disclose foreign ownership, control, or influence (also known as FOCI). Detailed instructions on how to respond now accompany the form, intended to streamline the process and ensure more specificity and clarity to filers.

As the United States continues to implement and adjust elevated tariffs on a wide range of foreign-origin imports, accurate classification of goods under the Harmonized Tariff Schedule (“HTS”) has become a critical compliance priority for U.S. importers. Recent developments, including changing reciprocal tariffs, fentanyl-related tariff actions, and evolving product exclusions, have made HTS codes the gateway to both significant financial exposure and potential tariff relief. Against this backdrop, even small import classification errors can lead to costly penalties or missed tariff exclusion opportunities. This article explores the latest tariff developments and highlights how importers can navigate the growing risks and responsibilities associated with HTS classification in today’s trade landscape.

In a surprise move on May 13, 2025 while addressing the attendees of the Saudi-U.S. Investment Forum in Saudi Arabia, President Trump announced that he would be “ordering the cessation of sanctions against Syria in order to give them a chance at greatness.” At the time of the announcement, it was initially unclear how exactly the Administration would enact the “cessation.” However, any questions about how the removal of sanctions prohibitions would be implemented – at least initially – were answered on May 23, 2025, when the Department of the Treasury Office of Foreign Assets Control (OFAC) issued General License 25 authorizing many activities previously prohibited under the Syria Sanctions Regulations.

On February 10, 2025, President Trump issued two Proclamations announcing the reinstatement of the 25% tariff on all steel imports and the reinstatement and increase of tariffs on aluminum imports to 25% pursuant to Section 232 of the Trade Expansion Act of 1962 (Section 232). Under the Proclamations, the tariffs also apply to certain steel and aluminum derivative articles. (For further discussion regarding the Proclamations, see our previous trade alert.) The Proclamations also required the Secretary of Commerce (the “Secretary”) to establish a process for including additional derivative steel and aluminum articles to the list of products covered by the tariffs.

On June 16, 2025, President Trump issued an Executive Order titled “Implementing the General Terms of the United States of America-United Kingdom Economic Prosperity Deal” (“the E.O.”). The E.O. implements several changes to tariffs on UK imports based on “General Terms” agreed to by the U.S. and UK that were previously announced on May 8, 2025.[1]

On June 13, 2025, President Trump signed an Executive Order authorizing Nippon Steel’s acquisition of United States Steel Corporation (U.S. Steel) pursuant to the transaction parties entering a National Security Agreement (NSA) with the U.S. Department of the Treasury.

On June 3, 2025, President Trump signed a Proclamation increasing Section 232 tariffs on steel and aluminum imports, including derivative articles, from 25% to 50% ad valorem. The increase follows the reinstatement and expansion of these tariffs which became effective on March 12, 2025. (For information about the previous expansion, see our trade alert President Trump Announces 25% Tariffs on Steel and Aluminum.) The steel and aluminum tariff increase became effective at 12:01am Eastern Standard Time on June 4, 2025, and applies to goods entered for consumption or withdrawn from warehouses for consumption after that time.

On May 28, 2025, a three-judge panel of the U.S. Court of International Trade (“CIT”) held that all Trump administration tariff actions based on the International Emergency Economic Powers Act (“IEEPA”) are unconstitutional. The CIT’s decision is in response to two lawsuits – one filed on behalf of five small businesses and the other filed by a coalition of 12 states – and results in an injunction against the IEEPA tariffs.

*Update: On May 29, 2025, the U.S. Court of Appeals for the Federal Circuit in Washington, DC granted the United States' request for an administrative stay of the Court of International Trade’s injunction until further notice.

Even though the Trump administration is reviewing the outbound foreign investment review regime, enforcement has begun. We’ve now heard multiple reports that the Treasury Department is reaching out to U.S. venture capital and private equity firms, inquiring about investments that might be covered transactions.

*Republished with permission from Foreign Investment Watch. This article was first published in May 2025.

On February 21, 2025, the Trump administration published its “America First Investment Policy” memorandum. Among other items, the Policy calls for the United States to restrict China-affiliated persons from investing in strategic sectors of the U.S economy, create an expedited “fast track” process to facilitate investment from specific allied partners, and establish new rules to prevent U.S. companies from investing in industries that advance China’s Military-Civil Fusion strategy.

The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) plays a critical role in protecting U.S. national security and advancing foreign policy objectives through its regulation of U.S. exports. Two important tools in BIS's enforcement arsenal are the Entity List and the Unverified List (“UVL”). These lists identify foreign persons and organizations that present potential risks to U.S. national security and impose restrictions on U.S. exporters’ ability to do business with those entities. Inclusion on either list can have significant commercial and reputational consequences. However, listed parties do have avenues to seek removal through formal procedures.

This article provides an overview of the BIS Entity List and Unverified List, the implications of being listed, and basic procedures for seeking removal from these lists.

With U.S. trade policy constantly evolving and Customs enforcement increasing, importers face more pressure than ever to ensure customs compliance from the beginning. One misstep – whether it is a misclassified product, an incorrect origin declaration, or a mistaken claim under the United States-Mexico-Canada Agreement (“USMCA”) or any other preferential treatment claim– can lead to costly penalties, shipping delays, and harm to your company’s reputation. U.S. Customs and Border Protection (“CBP” or “Customs”) adopts a strict approach to enforcement related to product classification accuracy and origin eligibility that requires importers to be vigilant in their compliance efforts. This guide outlines the most common mistakes importers make and how they can be avoided to maintain smooth trade operations and a clear supply chain.

On April 29, the Trump administration published two actions, an Executive Order (EO) and a Proclamation, announcing amendments to the current convoluted tariff situation. The EO describes when and how various tariff actions are applied cumulatively, or “stack,” and the Proclamation amends the tariff regime for automobiles and automobile parts, described (as initially implemented) in our previous trade alert. Together, these measures clarify, adjust, and in some cases reduce, the tariff burdens on the U.S. automotive sector and some other importers.

This article provides an overview of the most recent tariff updates affecting businesses operating within the semiconductor, pharmaceutical, and critical mineral industries. Below we outline recent tariff exclusions for semiconductor products and new investigations into certain semiconductors, pharmaceuticals, and critical minerals which can lead to higher tariffs for these product groups. Industries affected by the newly launched investigations should consider filing a public comment.

On April 9, 2025, President Trump issued an Executive Order “Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment” (“the E.O.”) amending prior executive orders imposing “reciprocal tariffs” on all imports of foreign-origin goods pursuant to the President’s authority under the International Emergency Economic Powers Act (“IEEPA”). The E.O. announced partial relief from the new reciprocal tariffs for all U.S. trading partners, except for China, which will now be subject to a total tariff rate of up to 170%.

90-Day Pause on Country-Specific Tariff Rates

On April 2, 2025, President Trump announced long-awaited reciprocal tariffs on imports of foreign goods into the United States. This action follows the President’s recent announcement on March 26, 2025, of a 25% tariff on imports of automobiles and automobile parts.

On March 26, 2025, President Trump issued a Proclamation announcing the imposition of a 25% tariff on imported automobiles set to become effective on April 3, 2025, and certain automotive parts, set to become effective no later than May 3, 2025. These automotive tariffs will follow what the President has dubbed “Liberation Day” (i.e., April 2, 2025), the day new reciprocal and sectoral tariffs are planned to go into effect on a wide range of imports from various countries.[1] 

Just two days after the tariffs on all Mexican and Canadian products became effective, on March 6, President Trump announced amendments to the tariffs against Mexico and Canada “to minimize disruption to the United States automotive industry and automotive workers.” Specifically, the amendments provide that the tariffs would not apply to goods that qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA). The amendments also lowered the duty rate for non-qualifying imports of potash from Canada and Mexico. (For background on the tariffs and retaliation, see our earlier article, U.S. Implements New Tariffs on Canada, Mexico, and China.)

Beginning just after midnight on March 4, 2025, the United States implemented a 25% tariff on imports from Canada and Mexico (except Canadian “energy resources,” which are subject to a 10% tariff), and increased tariffs on China from 10% to 20%. These tariffs are implemented under the International Emergency Economic Powers Act (IEEPA) pursuant to national emergencies declared by President Trump related to the influx of illegal immigrants and drugs, particularly fentanyl, into the United States. For additional background on the initial actions, please see our previous trade alert, Tariffs on Mexico and Canada Delayed; China Retaliates Against 10% Tariff.

On February 21, 2025, President Trump issued a memorandum titled "America First Investment Policy" (the “Policy”), outlining new measures to shape U.S. investment policy. Though the Policy makes it clear that the United States welcomes foreign investment, its overarching theme is that “economic security is national security” and cautions against national security threats from “foreign adversaries” like the People’s Republic of China.

Pursuant to a Federal Register notice (“Notice”) released on February 20, 2025, the Office of the United States Trade Representative (USTR) seeks public comments to identify unfair trade practices by other countries and to investigate harm to the United States from non-reciprocal trade arrangements. The USTR’s request for comments is pursuant to the America First Trade Policy Presidential Memorandum and the Presidential Memorandum on Reciprocal Trade and Tariffs. For background on the “reciprocal tariffs,” see our earlier trade alert, President Trump Announces Plan to Establish “Reciprocal Tariffs” on All Countries. The USTR will use the information to recommend appropriate actions to remedy such practices in a report to the President.

On February 13, 2025, President Trump issued a Presidential Memorandum on “Reciprocal Trade and Tariffs” (the “Reciprocal Tariffs Memorandum”), introducing the “Fair and Reciprocal Plan” to determine “the equivalent of a reciprocal tariff with respect to each foreign trading partner.” The reciprocal tariffs may be implemented as soon as April 2025.[1]

President Trump’s pick for Attorney General, Pam Bondi, took quick action upon her swearing in on February 5, 2025, to make changes within the Department of Justice (“DOJ”) via the issuance of fourteen separate memorandum directives to DOJ employees. The memoranda kick-off Bondi’s efforts to re-calibrate DOJ policies, enforcement priorities, and internal procedures to align with broader policies of the Trump administration. Two of the memoranda in particular, one laying out a “General Policy Regarding Charging, Plea Negotiations, and Sentencing” (“General Policy Memorandum”) and the other focused on the “Total Elimination of Cartels and Transnational Criminal Organizations” (“Cartel Policy Memorandum”), include several key changes related to the DOJ’s enforcement of corporate crime, corruption, and national security-related laws.

On February 10, 2025, President Trump issued an Executive Order on “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security” (“the E.O.”). The E.O. orders Attorney General, Pam Bondi, to cease initiation of new enforcement actions under the Foreign Corrupt Practices Act (“FCPA”), review all existing investigations and enforcement actions, and issue new guidelines and policies as necessary.

On February 10, 2025, the Trump administration published a proclamation announcing reinstatement of the 25% tariff on all steel imports (“Steel Proclamation”). That same day, President Trump also issued a proclamation announcing the reinstatement and increase of tariffs on aluminum imports to 25% (“Aluminum Proclamation”). The tariffs will be imposed on steel and aluminum articles imported from all countries, and the Proclamations announced tariffs on certain steel and aluminum product derivatives. The reinstated tariffs become effective on March 12, 2025.

President Donald Trump has agreed to delay the implementation of tariffs on imports from Mexico and Canada for 30 days, following negotiations with the leaders of both countries. For more information about the threatened tariffs, see yesterday’s trade alert, U.S. Imposes Tariffs on Imports from Canada and China Beginning February 4; Mexican President Announces One Month Implementation Delay (published before the announcement of the delay of tariffs on Canada). The decision to delay implementation comes after Mexico and Canada committed to enhance border security and combat the flow of fentanyl into the United States.

On February 1, 2025, President Trump announced significant new tariffs on imports from Mexico, Canada, and China, set to take effect on February 4, 2025. The tariffs were announced via three separate Executive Orders (EOs) and are imposed on Canada to “Address the Flow of Illicit Drugs Across [the] Norther Border,” on Mexico to “Address the Situation at [the] Southern Border,” and on China to “Address the Synthetic Opioid Supply Chain in . . . China.” Importantly, unlike tariffs on China implemented under Section 301 of the Trade Act of 1974 (Section 301) in the first Trump administration, the new tariffs are imposed under the International Emergency Economic Powers Act (IEEPA) and are pursuant to a national emergency declared by President Trump.

This article will provide a brief overview of EO 14105 and proposed implementing rules, as well as related legislative developments focused on outbound investment screening, and the outlook for outbound investment screening procedures.

*Reproduced with permission from the State Bar of Texas International Law Section. This article was first published in August 2024.

On January 13, 2025, the Department of Commerce Bureau of Industry and Security (BIS) announced new rules restricting the export of advanced artificial intelligence (AI) chips and certain closed AI model weights in an expected move that was preemptively criticized by giants in the tech and semiconductor industries. The 168-page “Framework for Artificial Intelligence Diffusion” interim final rule (the “Rule”) adds a global licensing requirement for the export of advanced AI chips and closed AI model weights but with certain exclusions for some allied countries. Compliance with most portions of the new rule is required by May 15, 2025, and interested persons may submit public comments on the rule until May 15, 2025.

In this continued era of protectionist and mercantilist trade policies arising from the United States, there are strategies that can be carefully evaluated and pursued to maximize Customs duty savings when importing. This article briefly summarizes a few strategies. Importantly, all duty saving strategies are heavily scrutinized by the government and should be carefully evaluated before implementation. 

The Committee on Foreign Investment in the United States (“CFIUS” or “the Committee) is an interagency body of the U.S. government that plays a critical role in safeguarding national security by reviewing foreign investments in U.S. businesses and assets. Established in 1975 through an Executive Order issued by President Gerald Ford, CFIUS initially served as an advisory committee to monitor and evaluate the impact of foreign investments on the U.S. economy. Over time, its role has evolved significantly to focus on identifying and mitigating risks to national security posed by such investments.

On December 2, 2024, the U.S. Department of Commerce Bureau of Industry and Security (“BIS”) issued two new rules further restricting China’s capability to produce advanced semiconductors. One final rule (the “Entity List Updates Rule”) adds 140 entities to the BIS Entity List and assigns 16 entities the new Footnote 5 designation. Concurrently, an interim final rule makes several changes to the Export Administration Regulations (“EAR”), including adding new Foreign Direct Product (“FDP”) rules, adding or modifying several Export Control Classification Numbers (“ECCNs”) on the Commerce Control List (“CCL”), adding new license exceptions, and other revisions.

On December 23, 2024, the Office of the United States Trade Representative (USTR) launched an investigation of China’s acts, policies, and practices related to targeting of the semiconductor industry for dominance. The investigation was launched under Section 301 of the Trade Act of 1974.

Torres Trade Law is pleased to share our contribution to “The Law Reviews: Mergers & acquisitions” Review 17th 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.

*Reproduced with permission from Law Business Research Ltd. This article was first published in January 2024.

On November 1, 2024, the U.S. Department of Treasury (“the Treasury”), as chair of the Committee on Foreign Investment in the United States (“CFIUS”), published a Final Rule expanding its authority to review certain transactions involving foreign investment in U.S. real estate. CFIUS has jurisdiction to review certain “covered real estate transactions” located within specific degrees of proximity to sensitive government and military sites. The new Final Rule, which becomes effective on December 9, 2024, includes the addition of 59 new military installations and government sites designated as sensitive, ultimately broadening CFIUS jurisdiction. This Final Rule continues the trend of increasing government monitoring authority over foreign investment in U.S. real estate, a trend reflected at both the federal and state level.

On November 17, 2024, the Department of the Treasury (“Treasury”), in its role as chair of the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”), published a final rule (“Final Rule”) increasing maximum penalties for violations and expanding the Committee’s ability to compel parties to respond to information requests, among other revisions. The final rule becomes effective on December 26, 2024, and is very similar to the proposed rule, dated April 15, 2024, of which we wrote about in our article, Less Bark and More Bite? CFIUS Proposed Rule Enhancing Enforcement Capabilities. 

As deals increase in complexity, and ownership structures are oftentimes opaque and obfuscated, it is important to be mindful of CFIUS’s continued stance of requesting identities of Limited Partners (LPs) in transactions involving investments funds.

In the past five to six years, more transactions being reviewed by CFIUS involve venture capital and private equity deals. This results in more complex ownership reviews, including CFIUS reviewing LPs in investment funds. In its 2024 Annual CFIUS Conference in Washington, D.C., CFIUS emphasized the need to provide information regarding LPs. 

On November 25, 2024, President-elect Donald Trump provided some additional clarity on his immediate tariff plans in a post on Truth Social. Specifically, Trump announced his intent to sign an Executive Order on his first day in office to impose a 25% tariff on all products from Mexico and Canada. According to the post, the tariff will remain in effect for an indefinite period tied to fentanyl smuggling and illegal immigration. In a separate post, President-elect Trump also announced his intention to add a 10% tariff “above any additional tariffs” on all Chinese-origin products. Factoring in current 25% Section 301 tariffs on Chinese goods, this means that some Chinese products will be subject to a 35% tariff in addition to their normal duty rate. Trump similarly tied this tariff hike to China’s role in the fentanyl crisis.

A second Donald Trump presidency ushers in a moment in international trade without precedent…other than the first Trump presidency. It is often difficult to predict how a new administration will act, but in this case, the “new” president has previously shown that he does not always conform to the typical expectations of the office, particularly with respect to international trade. Below we outline a few initial impressions on the potential impacts the Trump presidency will have on global relationships and discuss how you can prepare for the new administration.

On October 28, 2024, the Treasury Department unveiled its final outbound rule, which regulates U.S. investment in China. According to experts, the rule could actually ensnare U.S. companies, particularly if they have significant Chinese ownership or significant financial connections to China. Managing Member, Olga Torres, shares her key highlights with Foreign Investment Watch.

*Reproduced with permission from Foreign Investment Watch. The article was first published on November 1, 2024.

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) just issued a significant rule change that reshapes the landscape of export control enforcement.

The practice of determining an item’s country of origin (“COO”) and utilizing the principal of “substantial transformation” to help make this determination is likely a familiar concept for many U.S. importers in the context of compliance with U.S. Customs regulations. However, the principal of substantial transformation is also recognized by the U.S. Office of Foreign Assets Control (“OFAC”) as being applicable in the somewhat unique context of U.S.

The Department of Justice really wants violators of the Foreign Corrupt Practices Act (FCPA) to come forward: following a January 2023 revision of its Corporate Enforcement Policy that incentivized voluntary self-disclosure, the agency launched a DOJ whistleblower reward pilot program on March 24, 2024. 

Just in time for Spooky Season, the Biden Administration announced executive actions related to the much used – and much lamented, depending on who you ask – de minimis exemption, which allows shipments valued at $800 or less to enter the United States duty-free and with reduced information requirements. Among other changes, the executive actions propose to remove de minimis treatment for merchandise subject to Section 301 Chinese-origin goods.

On August 14, 2024, the Department of the Treasury (“Treasury”) announced in a press release a revamped Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) enforcement webpage. Among other updates, the webpage provides information about six CFIUS penalty actions from 2023 and 2024. For the past several years, CFIUS’s webpage only included two enforcement actions, one from 2018 and another in 2019. The lack of enforcement action likely gave the casual observer the impression that the Committee was not actively enforcing the CFIUS regulations. Now, the Treasury press release touts, “In 2023 and to date in 2024, CFIUS has issued three times more penalties than it had in the previous nearly 50-years since its establishment.” 

Much has been written about the Corporate Transparency Act (“CTA”), which was enacted on January 1, 2021, and went into effect on January 1, 2024. Briefly, the CTA requires “reporting companies” to disclose beneficial ownership information (“BOI”) to the federal government. A perhaps overlooked effect of the CTA’s BOI reporting rule is its potential impact on the Department of the Treasury’s continual search for foreign investment transactions that were not notified to the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”).

The Directorate of Defense Trade Controls, usually referred to as “DDTC,” is somewhat notorious for- as the saying goes- holding their cards close to the vest when it comes to offering guidance on specific topics related to the ITAR and how it applies to exporting goods and services to foreign persons or countries. So, for any U.S. exporter whose products or services are captured under the ITAR, it is important to take notice when DDTC speaks by publishing guidance.  

On March 25, 2024, DDTC published a short series of Frequently Asked Questions regarding joint ventures[1] and how those contractual arrangements affect an exporter’s DDTC registration. Following are a few of the key points from the FAQs.

This article will provide an overview of the global legal landscape for forced labor due diligence, highlight jurisdictions with forced labor due diligence and reporting requirements, and examine the kinds of steps companies should be taking to address forced labor risks in their supply chains and comply with relevant laws.

On July 23, 2024, the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) released its annual report to Congress regarding the Committee’s national security reviews and investigations of certain foreign investment transactions from the preceding year. The report offers valuable insight into the CFIUS review process and highlights the various foreign investment transaction elements that are coming under scrutiny. Even with an overall decrease in global merger and acquisition activity in 2023, CFIUS activity was still significant.

On May 22, 2024, the United States Trade Representative (“USTR”) announced the publication of a Federal Register Notice (“the FRN”) setting forth additional and increased Section 301 tariffs for specific Harmonized Tariff Schedule of the U.S. (“HTSUS”) subheadings. In addition, the FRN provides details on products subject to potential exclusions from the tariffs and establishes a period for interested parties to provide comments on the tariff modifications and potential exclusions.

On May 14, 2024, the United States Trade Representative (“USTR”) announced the publication of its long-awaited report on the Four-Year Review of Actions Taken in the Section 301 Investigation: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation (“the Report”). Considering the reported efficacy of the tariffs as strategic measures to counteract adverse Chinese policies and practices, and findings that unfair practices persist, President Biden and the USTR are now set to take further action related to Section 301 tariffs on Chinese-origin goods.

The U.S. agencies most well-known for their enforcement of U.S. trade and national security laws are the Bureau of Industry and Security (“BIS”), the Directorate of Defense Trade Controls (“DDTC”), the Office of Foreign Assets Control (“OFAC”), and U.S. Customs and Border Protection (“CBP” or “Customs”). However, the Department of Justice (“DOJ”) can often play a critical role in these types of matters. 

A new proposed rule issued by the Committee on Foreign Investment in the United States (CFIUS) seeks to expand the scope of information that CFIUS can request from parties, expand its ability to monitor and investigate non-notified transactions, target procedural weaknesses in mitigation negotiations, and increase penalties. Written comments on the proposed rule must be received by May 15, 2024. 

March 2024 was a busy month for U.S. Customs and Border Protection (“CBP” or “Customs”) with respect to the Enforce and Protect Act (“EAPA”) regulations related to the evasion of antidumping and countervailing duties (“AD/CVD”). On March 11, CBP made a new dashboard available, which allows the public to review statistics related to EAPA cases that have made it to the “interim measures” or “determination of evasion” stages of investigations. Separately, on March 18, CBP published a final rule, which adopts amendments to the initial EAPA regulations originally published as an interim final rule on August 22, 2016.

On April 19, 2024, the Department of Commerce Bureau of Industry and Security (“BIS”) published an interim final rule (“Interim Rule”), amending the Export Administration Regulations (“EAR”) to enhance cooperation and technological innovation between the United States, Australia, and the United Kingdom (“UK”) pursuant to the AUKUS Trilateral Security Partnership (“AUKUS”).

Many companies, particularly Software-as-a-Service (“SaaS”) and start-up companies, continue to struggle with the concept of export control classification of items with encryption functionality. This ongoing confusion is understandable for a few reasons. First, many SaaS companies do not export their software in the traditional sense. Software purchasing has moved beyond the days of downloading and installing software onto a computer from, for example, a CD-ROM. (Most newer laptops no longer contain disc drives.) But these companies may still unknowingly be exporting software according to regulatory definitions.

On April 17, 2024, the United States Trade Representative (“USTR”) initiated an investigation pursuant to Section 301 of the Trade Act of 1974 (“Section 301”) regarding China’s acts, policies, and practices to dominate the maritime, logistics, and shipbuilding sector. The investigation was initiated following the filing of a petition (“Petition”) by several domestic labor unions (“Petitioners”) representing these industries. The USTR encourages interested parties to submit comments on any issue covered by the investigation. Comments are due by May 22, 2024.

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.”

In a move that highlights the U.S. government’s ongoing fight against evasion of sanctions and export control laws, the Departments of the Treasury, Commerce, and Justice yesterday published yet another Tri-Seal Compliance Note directed specifically at foreign persons, describing the applicability of these international trade and finance laws to foreign-based persons (the “March 6 Compliance Note”). Since Russia’s invasion of Ukraine in February 2022 and the significant increase of sanctions and export controls targeting Russia, these Departments have published Tri-Seal Compliance Notes on “Third-Party Intermediaries Used to Evade Russia-Related Sanctions” and “Export Controls and Voluntary Self-Disclosure of Potential Violations.”

Today, on the brink of the two-year anniversary of Russia’s invasion of Ukraine, President Biden announced additional sanctions and export controls against Russia and entities in third countries that have supported the Russian war effort. The February 23 Statement describes that the 500 new sanctions against Russia are “for its ongoing war of conquest on Ukraine and for the death of Aleksey Navalny,” the Russian opposition leader and anti-corruption activist that suspiciously died in a Russian prison on February 16.

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. 

On September 14, 2023, the U.S. Department of the Treasury held the annual Committee on Foreign Investment in the United States (“CFIUS”) Conference in Washington, DC.

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. 

On July 31, 2023, the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) released its annual report to Congress of the Committee’s national security reviews and investigations of certain foreign investment transactions from the preceding year. The report offers valuable insight into the CFIUS review process and highlights the various foreign investment transaction elements that are coming under scrutiny. 

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.

On July 26, 2023, the Department of Justice (“DOJ”), the Department of Commerce’s Bureau of Industry and Security (“BIS”), and the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) published their second Tri-Seal Compliance Note of the year. The first compliance note was issued on March 2 and focused on the importance of proactive trade compliance by companies and efforts to combat evasion of Russia-related sanctions and export controls. This time, the three departments have provided guidance pertaining to the other side of the compliance coin – what a company should do when it discovers it has been involved in potential violations of U.S. sanctions or export controls.  

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.

In recent years, Singapore has become a significant hub for international commerce. According to the U.S. International Trade Administration, the U.S. was Singapore’s fourth largest source of imports in 2021 and the primary choice for technology firm regional headquarters.  In addition, Singapore’s economy relies heavily on “transshipment and its status as a business hub.”  As such, Singapore serves as a focal point for international trade, and as two recent U.S. government actions suggest, a possible new focus for trade-related enforcement.

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,

In a memorandum published by the Bureau of Industry and Security on April 18, 2023, the Office of Export Enforcement (OEE) announced that it wants to incentivize voluntary self-disclosures (VSDs) after a party uncovers “significant” possible violations of the Export Administration Regulations (EAR), the types of violations that reflect national security harm.

In its announcement today, OEE spelled out the types of benefits that industry or academia gets when deciding to file a VSD, which often include a substantial reduction in potential monetary liability. Today’s announcement comes after OEE’s announcement last year, shifting administrative enforcement policies that impacted the VSD process.

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”).

On February 24, 2023, the one-year anniversary of Russia’s invasion of Ukraine, the White House announced a series of actions that the U.S. and Group of 7 (“G7”) will take to support Ukraine and impose further costs on Russia.

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.

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.

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,

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.

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,

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.

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.

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.

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.

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.

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.”

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. 

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.

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.

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.

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 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.

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.

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).

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.

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.

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.

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

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.

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”). 

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.

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.

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

This article summarizes important developments affecting international trade.

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.

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.

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.

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

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. 

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”).

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.

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.

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.

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.

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.

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.

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.

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. 

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. 

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.

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.

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.

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”). 

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

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/.

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.

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.

Managing Member, Olga Torres, was interviewed by the International Lawyer Network. Check out what she has to say about her law practice at https://lnkd.in/ewJwfAi

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.

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.

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.