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On May 15, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) issued an interim final rule (the Interim Rule) amending the direct product rule under the Export Administration Regulations (EAR) to further restrict Huawei Technologies Co., Ltd. (Huawei) and its affiliates designated on the Entity List from receiving semiconductor and other products produced outside the United States using U.S.-origin software and technology.  The changes, which are effective immediately (but subject to two savings clauses), could have a significant impact on the ability of non-U.S. foundries that manufacture semiconductor products for Huawei and its affiliates (e.g., HiSilicon) using U.S.-origin software or technology to continue to do so (and could have a corresponding significant impact on the competitiveness of U.S. semiconductor manufacturing equipment and software).  BIS also extended the temporary general license (TGL) that authorizes certain activities subject to the EAR involving Huawei and its affiliates through August 13, 2020.[1]…
Continue Reading BIS Expands Export Restrictions on Huawei, Extends Temporary General License

On April 28, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) published two final rules and one proposed rule[1] that will result in tighter restrictions on exports, reexports, and in-country transfers of dual-use items subject to the Export Administration Regulations (EAR) and controlled for national security reasons to China, Russia, Venezuela, and a number of other countries.  Companies involved in exports and reexports of controlled items to these countries should carefully review the changes.…
Continue Reading BIS Tightens National Security Export Controls

On December 31, 2019 the French Government adopted a Decree and a Ministerial Order, which implement the reform of the French foreign investment control regime initiated by the Law n°2019-486 of May 22, 2019.   Since many years, foreign direct investment in certain sensitive sectors for French national interests has been subject to prior clearance by the Minister for the Economy.

The Decree notably aims to expand the scope of sectors subject to prior foreign investment control and to clarify and simplify the authorization procedure. Together with the Ministerial Order, it constitutes the new framework applicable to foreign investments in France. The Decree also includes measures aimed at implementing in France the cooperation mechanism provided for under EU Regulation 2019/452 of March 19, 2019 establishing a framework for the screening of foreign direct investments in the European Union (the “EU Regulation 2019/452”).…
Continue Reading French Foreign Investment Control – New Rules Applicable as From April 1st, 2020

In June of 2019, OFAC amended its Reporting, Procedures and Penalties Regulations (RPPR), apparently effecting a radical expansion of the obligation of non-financial institutions in the U.S. to report “rejected” transactions involving U.S.-sanctioned persons.  OFAC has long required financial institutions to report rejected financial transactions involving sanctioned persons.  (“Rejected” transactions involve persons who are not Specially Designated Nationals (SDNs) or other persons whose property within U.S. jurisdiction is blocked, but with whom transactions are nevertheless prohibited, such as private individuals and companies resident in Iran and not explicitly designated for sanctions.  U.S. persons may not execute these transactions but are not required to block and report any related assets that come within their control; to take the historical example of funds transfers, the payment is returned to the sender rather than being frozen in a blocked account.)  The amended reporting guidelines expanded that obligation from financial institutions to all U.S. persons and persons within the United States, defined the relevant transactions to include “transactions related to wire transfers, trade finance, securities, checks, foreign exchange, and goods or services,” and (as before) did not define “reject” at all.  If any person subject to U.S. jurisdiction does reject a transaction for goods or services (financial or otherwise) for sanctions reasons, it is now legally required to report that rejection within ten days.…
Continue Reading New FAQs Provide Little Clarity on Expanded OFAC Reporting Obligations for Non-Financial Institutions

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 fourth quarter of 2019.

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

Brexit has happened.  The United Kingdom is no longer part of the European Union or the European Economic Area.  But in the short term, nothing really changes.  The UK has entered a transition period during which it remains bound by EU rules and trade policy.

Until the end of the transition period, which is set out in the UK Withdrawal Agreement, the rights and obligations of EU law continue to apply in the UK largely as they did before, although the UK will be outside the EU’s decision making institutions.  The transition period is due to end on 31 December 2020, unless both sides agree to an extension.  So far, the UK Government has refused to consider a possible extension and the UK Parliament has even legislated to prohibit the Government from agreeing one. Parliament can of course undo the prohibition but, at this point, an extension looks unlikely. Under the Withdrawal Agreement any extension must be agreed with the EU by June 2020.…
Continue Reading Brexit: No Change Until end-2020; Uncertainty Thereafter

On January 13, 2020, the U.S. Department of the Treasury (“Treasury”) released final regulations (the “Final Regulations”) implementing the updates to the foreign investment review process of the Committee on Foreign Investment in the United States (“CFIUS”) contained in the Foreign Investment Risk Review Modernization Act of 2018 (“…

Regulation 2017/2321,[1] which introduced a new methodology for calculation of normal value[2] in trade defence cases (“New Methodology”), entered into force on December 20, 2017 (see here). Two years on, a review of the Commission’s implementation practice provides useful insight into questions of evidentiary burden, practical application, and selection of representative third country.
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Continue Reading Two Years On: Implementation of the New Methodology in Anti-Dumping Cases

Today, the U.S. Department of Commerce published for comment proposed regulations that would create sweeping authority to oversee, and potentially require the removal of, purchases of foreign telecommunications and IT technology linked to “foreign adversaries” by persons in the United States and U.S. companies overseas.  The draft regulations on “Securing the Information and Communications…

The U.S. Department of Commerce’s Bureau of Industry and Security has issued a rule, effective immediately, lowering the permissible level of de minimis U.S.-origin content in goods to be exported to Cuba.  Items manufactured outside the United States now may have no more than 10% U.S.-origin content (reduced from 25%) if they are to…