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

On August 5, 2019, the European Commission (“Commission”) published its official Guidance on Internal Compliance Programmes (“Guidance”).[1] The Guidance aims to clarify and harmonize implementation of Regulation 428/2009 on Dual-Use Goods[2] (“Dual-Use Regulation”) by competent Member State authorities (“national export authorities”) and EU-based exporters of dual-use goods (“exporters”). While the Guidance is non-binding, national export authorities will take it into careful account when considering applications to export, transit or broker dual-use items.

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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 2019.

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

On May 2, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control released “A Framework for OFAC Compliance Commitments”, providing general guidance on the elements OFAC considers to compose an effective sanctions compliance program.

Broadly, the framework endorses a risk-based approach to compliance (recognizing that no two compliance programs will

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 first quarter of 2019.

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

 

As we have discussed in prior posts, the Trump Administration has threatened since January 2019 to permit claims under Title III of the Helms-Burton Act for “trafficking” in property claimed by Americans and expropriated by Cuba to proceed. Title III has been suspended since the Helms-Burton Act was enacted in 1996.
On April 17, 2019,

On March 27, 2019, journalists affiliated with Reuters reported that the Kunlun Group (“Kunlun”), a China-based tech firm, was preparing to sell its wholly owned subsidiary, Grindr, after the Committee on Foreign Investment in the United States (“CFIUS”) informed the group that Kunlun’s continued ownership of Grindr constituted a national security risk.  This forced divestiture of Grindr is a pointed reminder that CFIUS remains focused on protecting the sensitive personal data of U.S. citizens, has the power to upend closed deals that have not been cleared by the committee, and is dedicating increased resources to the review of transactions that are not notified to CFIUS.
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The Office of Foreign Assets Control of the U.S. Treasury Department recently issued a series of instructive press releases regarding enforcement actions taken against several companies.  The decision to publicize these enforcement actions could signal a more activist and expansionist approach to sanctions enforcement matters and may evidence a broadening of OFAC’s enforcement priorities as the long run of enforcement against financial institutions begins to wind down.  The actions demonstrate a focus on acquisition due diligence and conduct by overseas entities, and in particular on aggressive action against U.S. companies who fail to terminate sanctioned business by their newly acquired overseas subsidiaries; indeed, in a number of these cases OFAC took enforcement action despite the fact that the U.S. acquiror explicitly directed the termination of the sanctioned business, was deceived by officials of the acquired entity, and voluntarily self-reported the violation after discovering it.  OFAC has also begun to spell out, in enforcement actions, the elements of sanctions compliance programs it imposes on violators (and, presumably, would consider a benchmark for other companies).
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After brisk movement through the EU legislative process, the proposed EU Regulation on Foreign Direct Investment Screening (the “Regulation”) was approved by the European Parliament on February 14, 2019. This development comes amidst a global sprint to strengthen and establish foreign direct investment laws, including in France, UK, Germany, and Hungary, as well as the US and China.

Although individual Member States retain their authority to screen (i.e., investigate, condition, prohibit, or unwind) foreign direct investments (“FDI”), the Regulation introduces and formalizes numerous procedures and criteria for cooperation among Member States and with the Commission.  Specifically, it sets out an EU-wide framework on this process and grants competence to the European Commission (“EC”) to intervene with an official opinion on the grounds of “public order and security”.  Additionally, it provides an official forum for Member States to weigh in and potentially affect the course of foreign investment activities across the European Union.
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OFAC has clarified that, pursuant to the terms of General License 14 and General License 16, it still expects all U.S. persons who participated in transactions with United Company Rusal PLC, EN+ Group PLC, JSC EuroSibEnergo, or their subsidiaries in reliance on the general licenses during the period when these entities were SDNs (April