On September 18, 2020, the U.S. Department of Commerce (Commerce) released for public inspection substantively identical notices[1] specifying the transactions relating to mobile applications TikTok and WeChat to be prohibited pursuant to the executive orders related to both entities issued by President Trump on August 6, 2020 (the TikTok Notice and the WeChat Notice, respectively, and together, the Notices).[2]  Commerce withdrew both Notices before formal publication on September 22, presumably to address uncertainty regarding the effective dates in light of developments in both matters; the TikTok Notice has already been re-issued with revised timing, but negotiations over a possible partial sale of TikTok continue.[3]  The WeChat Notice has yet to be re-issued, possibly as a result of timing uncertainty regarding the preliminary injunction discussed below.[4]
Continue Reading Commerce Provides Clarity on the Potential Scope of the TikTok and WeChat Bans; All Else Remains Murky

On August 20, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) published a final rule[1] that further tightens restrictions under the Export Administration Regulations (“EAR”) on Huawei Technologies Co., Ltd. and its affiliates designated on the Entity List administered by BIS (“Huawei”) (the “Final Rule”).  The Final Rule: (i) expands the prohibition on providing items manufactured with controlled U.S. technology or software to Huawei to include all items transferred to Huawei or for a Huawei device, whether or not specifically designed by or for Huawei ; (ii) removes most of the Temporary General License (“TGL”) that permitted some transactions involving Huawei, including activities that support existing networks and equipment; and (iii) added 38 non-U.S. affiliates of Huawei to the Entity List.  The Final Rule was published in the Federal Register on August 20, but became effective upon being made available for public inspection on August 17.

In a contemporaneous final rule,[2] BIS clarified that license requirements for entities included on the Entity List apply regardless of the role that the listed entity has in the transaction (i.e., purchaser, intermediate consignee, ultimate consignee or end-user) (the “Entity List Final Rule”).  This clarification applies to all entities on the Entity List, not just Huawei.
Continue Reading BIS Further Tightens Export Restrictions on Huawei

Following completion of a review by the Committee on Foreign Investment in the United States (“CFIUS”), President Trump recently issued an Executive Order requiring ByteDance to, among other things, divest itself of assets and property that enable or support operation of the TikTok application in the United States within 90 days (the “CFIUS Order”).  This was not an unexpected outcome.  We previously reported on the unusual nature of CFIUS’s review here.  The week before, President Trump issued a different Executive Order authorizing the Commerce Department to prohibit transactions involving a U.S. person or within the jurisdiction of the United States with ByteDance (the “Commerce Order”), with details of the restrictions to come in 45 days.  We previously reported on the Commerce Order here.  According to press reports, negotiations for a possible acquisition of TikTok continue, and it remains to be seen whether those restrictions will come to fruition and on what timetable.
Continue Reading President Trump Orders TikTok Divestment; Sweeping Order Appears to Indicate a Broadening of CFIUS’s Jurisdiction

Following the enactment of the Hong Kong Autonomy Act (HKAA), the issuance of Executive Order 13936, which implemented sanctions authorities under the HKAA and other statutes, and other recent U.S. sanctions designations and enforcement actions, many multinational entities based or operating in Hong Kong are concerned with how to navigate the new

Last night, President Trump issued two Executive Orders establishing a framework for prohibiting transactions involving popular Chinese-owned communications apps WeChat and TikTok.[1]  Contrary to some press reports, the Executive Orders do not prohibit all transactions with their respective parent companies; they do not in fact set out the scope of the restrictions.  Rather, they give the Commerce Department authority to prohibit any transaction involving a U.S. person or within the jurisdiction of the United States involving the two services; each of the Executive Orders clearly states “45 days after the date of this order, the Secretary shall identify the transactions subject to subsection (a) of this section [which contains the broad authority to prohibit].”[2]  Furthermore, the scope of Commerce’s authority is subtly (and no doubt intentionally) different in the two Executive Orders: with respect to TikTok, the authority covers any transaction with ByteDance, TikTok’s parent; with respect to WeChat, the authority covers any transaction relating to WeChat involving its parent, Tencent Holding.  Commerce will, within 45 days, take further action specifying exactly which transactions will be prohibited; it is even possible, particularly with respect to TikTok if the mooted divestiture of U.S. operations occurs, that no restrictions will be imposed.[3]  Unless and until Commerce implements the Executive Orders, no restrictions are in place and their precise future scope is unknown.
Continue Reading President Trump Authorizes Restrictions on WeChat and TikTok; Details to Come