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.

On February 11, 2020, Judge Stanton of the U.S. District Court for the Southern District of New York denied Dresser-Rand Company’s (Dresser Rand) motion for summary judgment in a suit to collect on a promissory note issued by Petróleos de Venezuela, S.A. (PdVSA).  The Court’s decision turned on a finding that payment by PdVSA was legally impossible under U.S. sanctions.  That finding was based on incomplete briefing by the parties and appears seriously flawed given the licenses and guidance provided by the Department of Treasury’s Office of Foreign Assets Control (OFAC).  We discuss the decision and the U.S. sanctions regime as applied to the promissory note below.

Continue Reading District Court Decision Incorrectly Holds that OFAC Sanctions Bar PdVSA from Making Payment on Pre-Sanctions Debts

Brexit has happened.  The UK is no longer an EU Member State.  What does that mean for competition law in the UK?

Has Anything Changed?

In the short term, nothing will change.  Until the end of the transition period set out in the UK Withdrawal Agreement, the rights and obligations of EU law continue to apply just as they did before.  That 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 has even sought to legislate against one. Continue Reading UK Competition Law After Brexit – Plus Ça Change…

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 (“FIRRMA”).  The Final Regulations, effective February 13, 2020, largely track the September 2019 proposed regulations (the “Proposed Regulations”) to implement FIRRMA’s expansion of CFIUS’s jurisdiction.  FIRRMA in turn codified existing CFIUS practice as it has evolved in recent years, particularly with respect to a focus on U.S. businesses involving critical technologies, critical infrastructure, and sensitive personal data, and added a limited mandatory filing regime.  The Final Regulations continue this incremental path by incorporating revisions to address issues arising from public comments on the Proposed Regulations and the sunset of the CFIUS pilot program rules (the “Pilot Program”).

The Final Regulations apply to all transactions entered into (binding agreement signed, public offer launched, proxies solicited, or options exercised) after February 13, 2020.  An interim rule defining an entity’s “principal place of business” is concurrently effective and open for comment until February 18, 2020.  Treasury further delayed implementation of the filing fees called for by FIRRMA, which will be separately addressed in a future rulemaking.  Treasury also indicated that future rules will narrow the scope of the critical technologies filing requirements.

Please click here to read the full alert memorandum.

Update: On January 16, 2020, OFAC announced a 90-day wind-down period for persons engaged in transactions that could be sanctioned under Executive Order 13902 with respect to the construction, mining, manufacturing, and textiles sectors of the Iranian economy.  Parties should wind down any sanctionable dealings in those sectors before April 9, 2020.  Consistent with previous wind-down periods, OFAC noted that parties entering into new business during this period may be sanctioned. Continue Reading Iran Secondary Sanctions Expanded to Cover Construction, Mining, Manufacturing, and Textiles Sectors

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.

Continue Reading Two Years On: Implementation of the New Methodology in Anti-Dumping Cases

On the evening of December 9, 2019, a U.S. congressional conference committee released the compromise version of the National Defense Authorization Act for Fiscal Year 2020 (“NDAA 2020” or “Defense Bill”).  NDAA 2020, which will be voted upon without further amendment and is virtually certain to be enacted into law, contains provisions that would authorize new secondary sanctions relating to the Nord Stream 2 and TurkStream projects, Syria, and North Korea. Continue Reading Compromise U.S. Defense Bill Provides for New Secondary Sanctions Against Russia, Syria, and North Korea

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 Technology and Services Supply Chain” are open for comment for thirty days.

The Proposed Regulations create a process for national security reviews of purchases of information and communications technology and services within U.S. jurisdiction.  Commerce will be able to initiate a review of any transaction connected to a foreign person occurring after May 15, 2019, including agreements signed prior to that date that are still being performed.

If Commerce concludes, after interagency consultation, that an ICTS transaction with links to a “foreign adversary” poses an “undue risk” to U.S. critical infrastructure or the U.S. digital economy or an “unacceptable risk” to U.S. national security or U.S. persons, it will be empowered take a range of actions to address any concerns, including prohibiting or unwinding the transaction or imposing mitigation measures.  There is no process for pre-clearance or advisory opinions contemplated; U.S. buyers will be subject to after-the-fact remedies at Commerce’s discretion.

To read more, click here.