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 27, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) issued an advance notice of proposed rulemaking (the ANPRM) requesting public comment on the definition of, and criteria for identifying, “foundational” technologies[1] that are essential to U.S. national security and should be subject to more stringent export controls.[2]  The ANPRM marks another step toward implementing the long-delayed “emerging and foundational technology” provisions of the Export Control Reform Act of 2018 (ECRA).[3]  Like the earlier ANPRM regarding emerging technologies, the rulemaking is still at a conceptual stage.
Continue Reading BIS Issues Long-Awaited Request for Public Comment on Foundational Technologies

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

On July 14, President Trump issued an Executive Order pursuant to the Hong Kong Policy Act eliminating the separate status of Hong Kong and China under various provisions of U.S. law, including export controls, immigration, tax, and extradition, as well as providing for the implementation of recent Hong-Kong related sanctions authorities.

Please click here to

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 2020.

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

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