Sanctions

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In one of a series of lame-duck sanctions and export control actions rushed into place before the transition to the Biden Administration, on January 5, 2021, President Trump issued an Executive Order Addressing the Threat Posed by Applications and Other Software Developed or Controlled by Chinese Companies (the Executive Order)[1] authorizing the Commerce Department…

As noted in our previous blog post, Executive Order (EO) 13959 introduced novel sanctions prohibiting U.S. persons from purchasing publicly traded securities (debt or equity) issued by companies designated by the U.S. Government as “Communist Chinese military companies” (CMCs), as well as an ill-defined group of securities “designed to provide economic exposure” to the…

As part of the National Defense Authorization Act for 2021 (the “NDAA”), Congress has passed the most significant U.S. anti-money laundering (“AML”) legislation since the USA PATRIOT Act of 2001, the “Anti-Money Laundering Act of 2020” (“AMLA 2020”).

Although President Trump has threatened to veto the NDAA, the majorities supporting the legislation would be sufficient…

Yesterday, President Trump issued an Executive Order[1] that will, following an initial two-month grace period and a further ten-month wind-down period in which only dispositions are permitted, prohibit U.S. persons (including citizens and U.S. legal entities acting outside the United States and foreign citizens and legal entities acting inside the United States)[2] from engaging in any transactions in publicly traded securities (debt or equity) issued by companies that the U.S. government designates as tied to the Chinese military (Designated Entities), as well as in any securities linked (in an undefined manner) to the targeted Chinese securities.  The 31 current Designated Entities are listed at the end of this note.[3] …
Continue Reading Trump Administration Bans Transactions in Securities of Military-Linked Chinese Companies: Potentially Far-Ranging Consequences Remain Unclear

On November 11, the UK Government proposed a new national security screening regime that would allow the Government to intervene in “potentially hostile” foreign investments that threatened UK national security while “ensuring the UK remains a global champion of free trade and an attractive place to invest.”

If approved by Parliament, the National Security and…

Yesterday afternoon, the U.S. Department of State issued the first of two mandatory reports under the Hong Kong Autonomy Act (HKAA), identifying 10 Hong Kong and mainland China officials as materially contributing to the erosion of Hong Kong’s autonomy (the “Section 5(a) Report”).[1]  Because the same individuals were already designated on the List of Specially Designated and Blocked Persons (“SDN List”) maintained by the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) on August 7, 2020,[2] the practical effect of the report is limited to setting a deadline of 30 to 60 days for the U.S. administration to issue the second required report under the HKAA identifying foreign financial institutions that knowingly conduct a “significant” transaction with the 10 individuals listed in yesterday’s Section 5(a) Report (the “Section 5(b) Report”).[3]  We discussed the reports required under the HKAA and the potential impact of those reports in our earlier blog post.[4]…
Continue Reading State Department Releases Hong Kong Autonomy Act Persons Report, Starts the Clock for Foreign Financial Institutions Report

In the wake of one of the largest reported medical ransomware attacks in U.S. history,[1] the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) issued last week a pair of advisories to assist in efforts to combat the increasing threat of ransomware attacks and related sanctions and anti-money laundering (AML) compliance issues.[2]  Like our blog post last month on the same topic, the advisories highlight the importance of considering the legal risks relating to ransomware payments and confirm that OFAC may pursue enforcement actions against ransomware payments that violate U.S. sanctions.[3]…
Continue Reading OFAC and FinCEN Issue Advisories on Cyber Ransom Payments

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

Last month, reports surfaced that fitness technology company Garmin may have made a multimillion dollar payment in response to a ransomware attack with reported links to Evil Corp, a Russian hacking group subject to U.S. sanctions.  This incident and other recent reports of ransomware attacks against large companies highlights that companies should consider potential civil and criminal liability under U.S. sanctions laws when responding to ransomware attacks. …
Continue Reading Ransomware and Sanctions Compliance: Considerations for Responses to Attacks