Sale of Cartier Jewels Triggers OFAC Violations – Luxury Brands Should Be Aware of U.S. Sanctions Risks

A settlement agreement between Richemont North America, the parent company of Cartier, and the Office of Foreign Assets Control (OFAC) for violations of U.S. sanctions regulations is an important wake up call for U.S. and global retailers, which have often considered themselves to be somewhat outside the scope of U.S. sanctions laws.  In truth, the rules apply to all companies and have the greatest application to those that export goods or conduct other international business.

According to OFAC, two Cartier boutiques in the United States sold jewelry to a customer who directed Cartier to Continue Reading

New U.S. Sanctions on North Korea – What You Need To Know

Last week the U.S. government announced new sanctions on North Korea designed to target non-U.S. persons, aircraft, vessels, and financial institutions that facilitate trade and transactions with the country.  The Executive Order contained four elements: new authority to designate persons as Specially Designated Nationals (SDNs), sanctions on certain aircraft and vessels that visit North Korea, blocking bank accounts used by North Koreans, and secondary sanctions on foreign financial institutions that conduct or facilitate certain transactions involving North Korea.

New SDN Designation Authority: The Office of Foreign Assets Control (OFAC) has the power to blacklist the following persons as SDNs: Continue Reading

EU-Canada Free Trade Agreement (CETA)

The Comprehensive Economic and Trade Agreement (“CETA”), the much anticipated free trade agreement between the European Union and Canada went into effect on September 21st.  CETA is a terrific opportunity for global companies to take advantage of duty savings offered by the FTA as it  expands market access for the EU and Canada through comprehensive tariff elimination across all sectors of the economy.

Under CETA, Canada and the EU have committed to eliminate or reduce tariffs on goods imported from the other party, provided they qualify under the CETA rules of origin. Tariffs on 98% of goods including apparel and footwear, industrial products, and fish and seafood and over 93% of food and agriculture goods were eliminated immediately upon entry into force of the agreement.  Tariffs on the additional tariff lines will be eliminated gradually within seven years.  Continue Reading

Solar Cell 201 Investigation Moves to Remedy Phase

On Friday, September 22, 2017, the U.S. International Trade Commission (“USITC”) unanimously determined that crystalline silicon photovoltaic (CSPV) cells and modules are being “imported into the United States in such increased quantities as to be a substantial cause of serious injury” to the domestic industry.

The petition was filed in late May 2017 on behalf of Suniva, Inc., (“Suniva”) and was later joined by a second U.S. producer, SolarWorld Americas Inc., (“SolarWorld”). Continue Reading

KORUS Special Session to Be Held in October

A day after South Korean Trade Minister Kim Hyun-chong met with U.S. Trade Representative Robert Lighthizer, the parties have set a special second session of the Korea-U.S. Free Trade Agreement (KORUS) joint committee for October 4, 2017, in Washington.

The first special session of the KORUS joint committee (the first meeting of its kind under the agreement) took place in August, at USTR Lighthizer’s request, and focused on the U.S. goods trade deficit with South Korea.  Trade Minister Kim did not agree to amend KORUS as suggested by the United States, but did propose a joint study on the impact of KORUS and the cause of the U.S. bilateral trade deficit.   Continue Reading

U.S. Trade Negotiator Calls China “Unprecedented” Threat

On Monday September 18th, U.S. Trade Representative Robert Lighthizer warned that China’s trade practices represent “a threat to the trading system that is unprecedented.”  This was his first public speech since being confirmed in May as USTR.

The World Trade Organization (“WTO”) cannot “successfully manage mercantilism on this scale,” said Lighthizer at an event hosted by the Center for Strategic and International Studies in Washington, D.C.  He went on to say that the Trump administration is prepared to address a wide range of abuses by China.  The administration also plans to review existing trade deals, such as NAFTA; and focus more on bilateral trade agreements than multinational accords, including free-trade talks with the United Kingdom “at the appropriate time.”

More information regarding the speech can be found here.

Federal Circuit Affirms 16-Year Import Ban Against Indian Stainless Steel Producer Viraj Profiles  

On September 11, 2017, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) issued a judgment without opinion affirming the International Trade Commission’s (“ITC”) decision in Viraj Profiles Limited v. ITC (2016-2482) that resulted in a limited exclusion order against Indian stainless steel producer Viraj Profiles Limited (“Viraj”).  The exclusion order prohibits the importation into the United States of all stainless steel products manufactured by or on behalf of Viraj.  The order has been in effect since July 2016 and will remain in place for a period of 16.7 years. Continue Reading

Risks in the common practice of sending technical data outside the U.S. — New Jersey company penalized $400,000

Does your company source components or parts outside the U.S.?  When doing so, you need to be careful about sending unlicensed export controlled technical data like drawings, blueprints and manufacturing instructions as part of an RFQ or production process.  Many companies send such information to overseas parts vendors and to non-U.S. person employees at domestic vendors without a systematic check to see if the information requires an export license.  And an increasing number of companies already have — or are establishing — offshore engineering centers of their own, or they have a relationship with an offshore third party engineering center, without focusing on the need to implement a rigorous process to ensure that data exchanged with those centers is licensed for export when needed.  Similar challenges arise when engineers and procurement personnel at U.S.-based business units collaborate with a sister facility abroad, or they use web-based collaborative platforms (e.g. Sharepoint) for product development without thinking through export control concerns.  Continue Reading

Commerce Announces Preliminary Subsidy Margins on Certain Tool Chests and Cabinets from China

On September 12th, the Commerce Department announced preliminary subsidy rates in its countervailing duty (“CVD”) investigation of certain tool chests and cabinets from China.  The rates calculated for the two examined Chinese producers and most other Chinese producers/exporters range from 17.32 to 32.07 percent.  See the Fact Sheet here.

In addition, thirty-one Chinese companies that failed to respond to Commerce’s initial inquiries received a “total” adverse rate of 112.99 percent.   The scope of this investigation, which Commerce modified based on petitioner’s recommendations, covers certain metal tool chests and tool cabinets, with drawers, (tool chests and cabinets), from China.  As a result of Commerce’s preliminary determination, imports of covered tool chests and cabinets from China that enter the United States will be subject to cash deposits consistent with the preliminary subsidy rates.  Continue Reading

Time to Review Your Encryption Classifications – BIS Updates Primary Purpose Exemption

The Bureau of Industry and Security (BIS) recently published changes to its encryption regulations in an effort to simplify the text and focus the scope of controls.  The biggest change is that Note 4, the “primary purpose exemption,” has been replaced by a positive list of controlled items.  These changes also introduce the term “cryptography for data confidentiality” as the key to defining what is and is not captured by the new positive list.

Many companies will need to review encryption classifications in light of these changes, and many other companies that have encryption in software (or hardware) that have not addressed export control issues should take advantage of this change in the rules to do so now.

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