On December 2, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) issued a new directive (Directive 1) prohibiting with immediate effect U.S. persons from transacting or participating in the primary and secondary markets of new Belarusian sovereign debt, in any denomination, with a maturity of greater than 90 days. In coordination with the European Union, United Kingdom, and Canada, OFAC also designated over 30 individuals and entities determined to have contributed to “ongoing attacks on democracy, human rights, and international norms” on the list of Specially Designated Nationals and Blocked Persons (“SDN List”) and issued General License No. 5, authorizing transactions and activities ordinarily incident and necessary to the wind down of transactions involving newly sanctioned Open Joint Stock Company Belarusian Potash Company or Agrorozkvit LLC, or any of their subsidiaries, until April 1, 2022. Continue Reading OFAC Imposes Sanctions on Belarusian Sovereign Debt, Announces New Designations
On November 8, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) designated a virtual currency exchange, Chatex, and its infrastructure support providers on the list of Specially Designated Nationals and Blocked Persons (SDN List) for their role in facilitating financial transactions for ransomware actors.[i] The Financial Crimes Enforcement Network (FinCEN) also released an updated advisory on ransomware and the use of the financial system to facilitate ransomware payments.[ii] These actions were taken in furtherance of a coordinated “whole-of-government” effort to disrupt criminal ransomware actors and the virtual currency exchanges used to launder ransom payments around the world. Continue Reading OFAC Ramps up Targeting of Ransomware-linked Actors and FinCEN Updates Ransomware Advisory
On October 15, 2021, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued “Sanctions Compliance Guidance for the Virtual Currency Industry” (the “Guidance”). The Guidance follows recent guidance and advisory letters directed to the virtual currency industry relating to the risk of facilitating ransomware payments and is OFAC’s most comprehensive virtual currency-specific advisory to date. In particular, the Guidance directly addresses some simpler interpretive questions, discusses sanctions compliance programs and “best practices,” and provides hints about OFAC’s enforcement priorities going forward. Continue Reading OFAC Issues Sanctions Guidance to Virtual Currency Industry
The Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) is a U.S. government interagency committee that has the authority to review investments that provide a foreign person with control or, in some cases, certain non-controlling rights over a U.S. business and evaluate the extent to which such transactions raise national security concerns. For decades following the establishment of CFIUS, the Committee largely only reviewed transactions that parties proactively submitted to CFIUS. This primarily was due to CFIUS’s limited resources and dedication of such resources to reviewing transactions notified to CFIUS. In 2018, Congress passed the Foreign Investment Risk Review Modernization Act (“FIRRMA”), which, among other things, provided CFIUS with additional resources to identify transactions that: (1) could be within the jurisdiction of CFIUS, (2) potentially raise national security concerns, and (3) were not notified to CFIUS (often referred to as “non-notified transactions”). Continue Reading A Look Behind the CFIUS Non-Notified Process Curtain; How it Works and How to Handle Outreach From CFIUS
Earlier this week, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) published a final rule (the “Final Rule”) imposing export controls on additional emerging technologies pursuant to the Export Control Reform Act of 2018 (“ECRA”). We previously wrote about the process to identify and impose export controls on emerging and foundational technologies under the ECRA, as well as the steps taken in furtherance of that process, here and here. Continue Reading New Biotech Export Controls Expand CFIUS Mandatory Notification Requirements
Let’s use a typical U.S. sponsored private equity fund as an example. In this example, the limited partnership (“Fund”) is registered in the Cayman Islands and managed by a U.S.-based investment firm through a U.S.-based general partner (“GP”) entity and U.S. citizens in New York making investment decisions. Continue Reading Is Your U.S. Sponsored Private Equity Fund a Foreign Person for CFIUS Purposes?
On September 21, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC): (i) issued an updated advisory on potential sanctions risks for facilitating ransomware payments; and (ii) designated SUEX OTC, S.R.O. (SUEX), a virtual currency exchange, on the list of Specially Designated Nationals and Blocked Persons (SDN List) for its role in facilitating financial transactions for ransomware actors. These actions demonstrate the U.S. government’s increasing focus on virtual currencies as a key means of facilitating ransomware payments and related money laundering, as well as OFAC’s commitment to combating ransomware attacks and other malicious cyber activities. Continue Reading OFAC Updates Ransomware Advisory and Sanctions Virtual Currency Exchange
Magnachip Semiconductor Corporation (“Magnachip”), a South Korea-based semiconductor company, recently disclosed that the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) threatened to recommend that President Biden exercise his authority to block a Chinese private equity firm’s acquisition of Magnachip due to unresolvable national security concerns. Given Magnachip’s very limited nexus to the United States, this case demonstrates the willingness of CFIUS to stretch its jurisdictional arms, especially when it comes to transactions implicating sensitive sectors. Continue Reading CFIUS Threatens to Block Magnachip Deal; Shows Willingness to Interpret its Jurisdiction Broadly
The “Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region” was signed on November 27, 2020 and entered into force partially on the same day and partially on May 19, 2021.
Significantly, the Supplemental Arrangement modifies and expands the existing “Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region”, which entered into force on February 1, 2000. The modifications simplify enforcement proceedings and enhance judicial support to parties subsequent to arbitration proceedings bridging Mainland China and the Hong Kong Special Administrative Region, including by providing for:
- Simultaneous enforcement of arbitral awards in Hong Kong and Mainland China;
- Extension of the scope of the Enforcement Arrangement to cover also the recognition of arbitral awards;
- The ability for parties to arbitration proceedings with a seat in one of the two jurisdictions to apply to the courts of the other for interim measures after the rendering of an arbitral award;
- Enforcement of all arbitral awards having a seat in Hong Kong in Mainland China and vice versa, regardless of the administering arbitration institution.
This Alert Memorandum analyzes and summarizes the most prominent elements of the Supplemental Arrangement which are likely to be of significance to practitioners and users of arbitration involving Mainland China and Hong Kong.
The Committee on Foreign Investment in the United States (CFIUS) recently released its 2020 annual report, which provides information and statistics regarding transactions reviewed by CFIUS in 2020. For the first time, the 2020 annual report also includes information regarding so-called non-notified transactions identified and reviewed by CFIUS. Continue Reading CFIUS Releases 2020 Annual Report