On February 10, 2021, in response to the February 1, 2021, military coup in Myanmar (Burma),[1] President Biden issued an executive order (the Burma EO)[2] authorizing the imposition of blocking sanctions against a range of individuals and entities.  Concurrently, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) designated 10 individuals (two of the individuals were already designated under a different sanctions authority) and three entities on the list of Specially Designated Nationals and Blocked Persons.  All property and interests in property of persons sanctioned under the Burma EO are blocked and all transactions within U.S. jurisdiction in which a sanctioned person has an interest are prohibited.  Sanctions also extend to any entity directly or indirectly 50% or more owned by one or more sanctioned persons or entities. Continue Reading United States Imposes Sanctions in Response to Military Coup in Myanmar

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2021”.

The new year comes in the midst of an evolving landscape for economic sanctions, including the transition away from a U.S. administration that has relied on tightening economic sanctions as a key component of a number of foreign policy initiatives. In 2021, boards of directors should be aware of the ongoing implementation of new China-related sanctions, sanctions risks relating to ransomware attacks and the potential sanctions implications of foreign-policy shifts by the Biden administration.

To read the full post, please click here.

For a PDF of the full memorandum, please click here.

Cleary Gottlieb partner Paul Marquardt, counsel Chase Kaniecki, and associates Nate Kurcab, Nora McCloskey, and Elise Lane co-authored the United States chapter in Lexology Getting The Deal Through Foreign Investment Review 2021.

To read the chapter, click here or visit the Lexology website (subscription may be required.)

In one of a series of lame-duck sanctions and export control actions rushed into place before the transition to the Biden Administration, on January 5, 2021, President Trump issued an Executive Order Addressing the Threat Posed by Applications and Other Software Developed or Controlled by Chinese Companies (the Executive Order)[1] authorizing the Commerce Department to regulate or prohibit any transaction involving a U.S. person or within the jurisdiction of the United States with persons that develop or control the following Chinese connected software applications, or with their subsidiaries: Continue Reading President Trump Authorizes Restrictions on Additional Chinese Applications and Calls for Potential New Export Restrictions on Personal Data; Details to Come

As noted in our previous blog post, Executive Order (EO) 13959 introduced novel sanctions prohibiting U.S. persons from purchasing publicly traded securities (debt or equity) issued by companies designated by the U.S. Government as “Communist Chinese military companies” (CMCs), as well as an ill-defined group of securities “designed to provide economic exposure” to the targeted Chinese securities. These restrictions go into effect on Monday, January 11. While over the last two weeks, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has begun to issue guidance regarding the implementation of EO 13959, significant uncertainties and market confusion remain. This memorandum summarizes the current status.

Please click here to read the full alert memorandum.

As part of the National Defense Authorization Act for 2021 (the “NDAA”), Congress has passed the most significant U.S. anti-money laundering (“AML”) legislation since the USA PATRIOT Act of 2001, the “Anti-Money Laundering Act of 2020” (“AMLA 2020”).

Although President Trump has threatened to veto the NDAA, the majorities supporting the legislation would be sufficient to override the veto if members do not change their votes.

The legislation requires U.S. corporations and LLCs and non‑U.S. corporations and LLCs registered to do business in the United States to disclose information on their underlying beneficial owners to the Financial Crimes Enforcement Network (“FinCEN”) of the Department of the Treasury, if there is no applicable exemption. After implementation, we expect financial institutions no longer to bear the primary burden of establishing the underlying beneficial ownership of many customers as they will have access to the disclosures (with customer consent).

AMLA 2020 also makes sweeping changes to other areas of the U.S. AML regime, including by: (i) providing more guidance and feedback to financial institutions on AML compliance programs required under the Bank Secrecy Act, (ii) increasing resources and enhancing enforcement tools to police AML compliance, and (iii) implementing initiatives to strengthen and modernize FinCEN and AML supervision writ large.

Please click here to read the full alert memorandum.

Abu Dhabi and Dubai have recently issued their first Foreign direct investment licenses allowing foreign investors to own up to 100% of UAE companies engaged in certain types of activities. Abu Dhabi has also recently adopted its own positive list of economic activities eligible for an FDI License in the emirate, featuring a generous total of 1586 activities across the agricultural, industrial and service sectors.

These developments substantively complete the implementation, in the largest two of the UAE’s seven emirates, of the foreign direct investment regime which was first established by a law dated September 2018.

Further, the positive list recently adopted by Abu Dhabi is a corroboration of the Abu Dhabi Economic Vision 2030 and, more generally, delivers on several promises in terms of reinforcing the UAE’s commitment and continued efforts to attract foreign investment and achieve non-oil economic diversification.

This memorandum provides an overview of the Abu Dhabi positive list and outlines the process that foreign investors must follow to obtain an FDI License in the UAE.

Yesterday, President Trump issued an Executive Order[1] that will, following an initial two-month grace period and a further ten-month wind-down period in which only dispositions are permitted, prohibit U.S. persons (including citizens and U.S. legal entities acting outside the United States and foreign citizens and legal entities acting inside the United States)[2] from engaging in any transactions in publicly traded securities (debt or equity) issued by companies that the U.S. government designates as tied to the Chinese military (Designated Entities), as well as in any securities linked (in an undefined manner) to the targeted Chinese securities.  The 31 current Designated Entities are listed at the end of this note.[3] Continue Reading Trump Administration Bans Transactions in Securities of Military-Linked Chinese Companies: Potentially Far-Ranging Consequences Remain Unclear

On November 11, the UK Government proposed a new national security screening regime that would allow the Government to intervene in “potentially hostile” foreign investments that threatened UK national security while “ensuring the UK remains a global champion of free trade and an attractive place to invest.”

If approved by Parliament, the National Security and Investment Bill would introduce a mandatory and suspensory CFIUS-like regime. We expect the new regime will come into force in the first half of 2021, assuming it receives Parliamentary approval. Given its broad scope and retrospective application, foreign investors considering transactions that may raise national security issues should already consider engaging with the Government and taking account of the new regime in deal negotiations and transactional documents.

Please click here to read the full alert memorandum.

This trade summary provides an overview of WTO dispute settlement decisions and panel activities, and EU decisions and measures on commercial policy, customs policy and external relations, for the second quarter of 2020.

If you have any questions regarding the above, do not hesitate to contact fclaprevote@cgsh.com or tmuelleribold@cgsh.com.