On January 5, 2023, President Biden signed into law the Protecting American Intellectual Property Act of 2022 (the “PAIP Act”), bipartisan legislation that authorizes the imposition of sanctions on foreign persons that have engaged in significant theft of trade secrets of U.S. persons.Continue Reading PAIP Act Authorizes Sanctions for Trade Secret Theft by Chinese Actors
2022 did not see as many legislative changes of the German foreign direct investment regime (“FDI Regime“) as in years before. However, several foreign direct investments with a Chinese nexus reviewed by the German FDI authority, the Federal Ministry of Economics and Climate Action (“BMWK“), attracted public attention in 2022:Continue Reading German FDI Reviews of Chinese Investments in 2022 Confirm the Current Trend – Strict Scrutiny and Political Dimension in Decision Making
In addition to the maritime services ban targeting Russian Federation-origin crude oil, which we wrote about here, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) recently has taken actions related to, and having implications for, the international oil sector. Certain of those actions suggest a potential easing of oil sector-related sanctions on Venezuela while others show a continued focus on the Iranian oil sector.Continue Reading Recent OFAC Actions Related to the Oil Sector
On December 5, 2022, the maritime services ban targeting Russian-origin crude oil that previously had been announced by an international coalition of countries, including the United States, the European Union, and the United Kingdom, took effect. While each coalition member has enacted its own measures to give effect to the ban (as we discussed previously here), the measures enacted by the coalition members are generally consistent and include the same major features, namely, a maritime services ban and associated price cap “safe harbor” or exemption. Since the effective date of the maritime services ban, Russian President Vladimir Putin has issued a decree prohibiting the supply of Russian-origin oil and oil products to certain foreign persons applying the price cap, and OFAC has issued additional guidance relating to the upcoming implementation of the maritime services ban with respect to Russian-origin petroleum products.Continue Reading Recent Developments Regarding the Maritime Services Ban on Russian-Origin Crude Oil and Petroleum Products (with Price Cap “Safe Harbor” or Exemption)
On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023 (the “Bill”), which allocated approximately $1.7 trillion in federal funding to various government agencies, including the U.S. Department of Commerce (“Commerce”) and the U.S. Department of the Treasury (“Treasury”).Continue Reading Potential Outbound Investment Screening Regime Receives Federal Funding
On September 9, 2022, the French Ministry of Economy (the “Minefi”) issued its first guidelines on the regulation of foreign investment control in France (“FDI Regulation”) (the “Guidelines”).
The Guidelines were eagerly awaited as certain provisions of the FDI Regulation leave room for discretion and there is no published decision-making practice on which the relevant stakeholders may rely. While the Guidelines do not constitute an element of hard law, they provide useful insight into the official interpretation of certain elements of the FDI Regulation. By contrast, clarifications regarding the identification of “sensitive activities” remain underwhelming.
On October 20, 2022, the U.S. Department of the Treasury released its first-ever Committee on Foreign Investment in the United States (CFIUS) Enforcement and Penalty Guidelines (the Guidelines). The Guidelines provide background and context regarding (1) the types of conduct that can result in CFIUS-related violations, (2) how CFIUS gathers information regarding potential CFIUS-related violations, and (3) the enforcement process CFIUS follows with respect to CFIUS-related violations, including the factors that CFIUS considers in determining whether a penalty is warranted and the calculation of any such penalty. Continue Reading U.S. Treasury Department Issues First-Ever Guidance on CFIUS Enforcement and Penalty Practices
On October 11, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and Financial Crimes Enforcement Network (“FinCEN”) announced related enforcement settlements with Bittrex, Inc., a U.S.-based digital asset exchange and hosted wallet services company (the “Company”), to settle violations of U.S. sanctions and the Bank Secrecy Act (“BSA”) and related regulations, respectively. The OFAC Settlement, the largest of OFAC’s digital asset-related enforcement actions to date, and the FinCEN Consent Order collectively result in the Company paying a civil penalty of approximately $30 million. Following OFAC’s release of its “Sanctions Compliance Guidance for the Virtual Currency Industry” (which we wrote about here) and recent revelations regarding prosecution by the U.S. Department of Justice of digital asset-related U.S. sanctions violations (which we wrote about here), this joint OFAC-FinCEN enforcement action illustrates the U.S. government’s continued focus on the digital asset industry’s compliance with U.S. sanctions and the potentially significant penalties parties can face for U.S. sanctions and BSA violations. Continue Reading OFAC and FinCEN Announce Joint Enforcement Action Against U.S.-Based Digital Asset Exchange
On October 7, 2022, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) announced an interim final rule and a final rule imposing new export controls designed to restrict China’s ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors. According to BIS, the rules, which reflected consultation with close allies and partners, as well as private industry, and are being issued pursuant to the Export Control Reform Act of 2018, are part of the U.S. government’s ongoing review of export control policies toward China and follow several other regulatory and enforcement actions announced earlier this year (e.g., implementing multilateral export controls on advanced semiconductor and gas turbine engine technologies, on which we wrote about here). Continue Reading The United States Tightens China-Related Export Controls on Advanced Computing and Semiconductor Manufacturing Items
Last week, the Financial Crimes Enforcement Network of the Department of the Treasury adopted a final rule (the “Final Rule”) to implement the beneficial ownership reporting requirements of the Corporate Transparency Act, part of the Anti-Money Laundering Act of 2020.
This legislation requires a range of U.S. legal entities, and non-U.S. legal entities registered to do business in the United States, to report information on their underlying beneficial owners to FinCEN. The Final Rule provides for a January 1, 2024, effective date.
Every company or other legal entity that has been formed or does business in the United States, either directly or through subsidiaries, and their corporate and legal advisors, should review the CTA and the Final Rule to understand whether it will impose reporting requirements on them. Going forward, the requirements of the Final Rule will need to be considered in any type of financial or corporate transaction that involves the creation or acquisition of legal entities in the United States, with relevance for mergers and acquisitions, private equity and private funds, structured finance and restructurings, among others.
Please click here to read the full alert memorandum.