With or without a deal and unless there is a last minute extension, the United Kingdom will leave the European Union (EU) at 11 pm London time on 29 March 2019.  Since triggering the exit process, the UK has worked towards having a deal in place that would ensure a smooth departure, including a transition period that would largely preserve the status quo until the end of 2020 or even beyond.   At the same time, however, both the UK and the EU have engaged in contingency planning in the event a deal could not be agreed or failed to be ratified.  For the UK, this has included efforts to revise legislation to remove references to the EU and its agencies to ensure that UK law could function on Day One after leaving the EU.  This process has involved the review of hundreds of legislative acts to create new statutory instruments, many of which have yet to be passed into law.  The legislative backlog means that necessary legislation may not be in place before 29 March 2019.  To avoid a legal gap, the UK adopted the EU (Withdrawal) Act 2018 and provided therein a catch all provision to ensure that EU law that is not addressed elsewhere is retained.

Should the UK leave the EU without a deal, the UK will impose, update and lift sanctions as of 30 March pursuant to regulations issued under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). Sanctions regimes that are not covered would continue to apply, as retained EU law under the EU (Withdrawal) Act.   Sanctions laws apply to actions taken by UK persons, which includes companies and individuals, in the UK or anywhere else.
Continue Reading United Kingdom Legislating to Avoid a Legal Gap after Brexit but Warns UK Persons to Confirm the Details

Prime Minister Theresa May’s recent visit to Kenya, South Africa and Nigeria was the latest in the United Kingdom’s global diplomacy effort to secure strategic economic­ partnerships in preparation for the UK leaving the European Union (EU).  In the first visit of a UK Prime Minister to Africa since 2013, a 29 person delegation of government and private sector representatives pursued May’s goal of becoming Africa’s biggest foreign investor within four years.  As a result of the trip, trade and investment deals worth some 300 million GBP were announced, involving everything from automobile manufacturing and digital money transfer services to insurance and agricultural technology. Importantly, the UK also reached a deal with the Southern African Customs Union and Mozambique to facilitate trade and announced major investments in education and voluntary family planning for the future of African youth.

Trade between the UK and Africa already is worth 31 billion GBP annually.  By 2050, a quarter of the world’s consumers will be African. According to the Prime Minister, “With a shared passion for entrepreneurship, technology and innovation, now is the time for UK companies to strengthen their partnerships with Africa to boost jobs and prosperity both at home and overseas.”

According to the African Agricultural Technology Foundation, 233 million Africans are either suffering from hunger or are malnourished; 32 million of these are under the age of five.  While Africa’s economy is driven by agriculture, farming continues to be largely at a subsistence level:  80 percent of the 51 million farmers are small holder farmers.  Further, 95 percent of all farming in Africa is entirely dependent on rainfall.  The challenge under these conditions is to increase food production by 50 to 70 percent by 2050 without destroying the environment.  What will be required is a combination of increasingly sophisticated farming techniques (e.g. precision farming), precision breeding; improved stewardship; access to advancements achieved by modern biotechnology to increase drought tolerance, increase yield, and combat plant pests and diseases; and enabling regulatory policies and frameworks.  Critical is the fact that more efficient agriculture directly translates into freeing women and children to pursue other economic activities and/or education.
Continue Reading Could Brexit Benefit Africa Through Science-based Decisions on GMOs?

On 4 June, the European Commission advised economic operators to prepare for the consequences of the United Kingdom leaving the European Union on their imports and exports.   Following the UK’s withdrawal, UK inputs, including materials and certain processing operations, will no longer be considered EU origin for purposes of enjoying preferential treatment.   Whether a particular good qualifies depends on the rules of origin specified in each trade agreement between the EU and its trading partners.  The Commission advises EU exporters to treat any UK inputs as “non-originating” when determining the EU’s treatment of their goods post-Brexit and to take appropriate steps to be able to prove the preferential origin of goods without counting UK inputs as EU content.  Economic operators importing goods into the EU also are advised to take steps to ensure that the exporter can demonstrate compliance with EU preferential origin rules given the exclusion of UK inputs after Brexit.
Continue Reading BREXIT UPDATE: European Commission Warns Importers and Exporters of Goods with Possible UK Origin

As part of the ongoing Export Control Reform initiative, the Directorate of Defense Trade Controls (“DDTC”) and Bureau of Industry and Security (“BIS”) has issued proposed rules that would move certain items currently controlled on the International Traffic in Arms Regulations (“ITAR”) to the Export Administration Regulations (“EAR”).  The proposed rules would move some items

Despite the fact that export controls on dual-use goods derive from international agreements such as the Wassenaar Arrangement, significant differences can be seen as controls are implemented by different countries. The same is true in the European Union notwithstanding the fact that the EU’s dual-use regulation (Council Regulation (EC) No. 428/2009) is binding on its 28 Member States.  Accordingly, while Regulation 428/2009 exempts telecom and information security equipment with encryption where there is limited cryptography functionality and/or products are mass-marketed and cannot be readily changed (the “Cryptography Note”), the exact scope of the exemptions is determined by each Member State.
Continue Reading UK Unpacks Encryption Controls

According to Bloomberg, the Trump administration is considering using the International Emergency Economic Powers Act (IEEPA) to block Chinese investments in industries or technologies “deemed important” to the U.S.  (This statute has been used primarily to authorize economic sanctions and embargoes administered by the Office of Foreign Assets Control).  To utilize IEEPA, the President

In the near future, trade between the U.S. and India will likely be simplified.  Late last week, the Wassenaar Arrangement admitted India as a member (India’s membership will be formalized shortly), and the Australia Group is expected to admit India in the coming months.  Both organizations are Multilateral Export Control Regimes that inform U.S. export

March 2019 is coming and importers and exporters need to be prepared for what lies ahead. The UK is leaving not only the EU but its Customs Union.  No longer will imports into a distribution center in the EU cover sales in the UK.  Companies will need to set up logistics to manage UK imports and exports and be compliant with new UK customs regulations.  It is likely that a two year “standstill” or “transition” period will be agreed for the April 2019 to March 2021 period.  Should the UK leave the EU without an agreed deal on trade and customs, however, the UK would be a third country vis-à-vis the EU (now typically referred to as the “EU27” denoting the 28 EU Member States minus the UK) and all imports and exports between the UK and the EU bloc would be governed by WTO rules.

According to the British Retailers Consortium, with Brexit more than 180,000 companies could be required to make customs declarations for the first time and the UK is expecting more than 200 million additional customs declarations annually.  The most significant impact is feared for goods that are transported by road between the UK and the EU27 due to the lack of infrastructure at port facilities to handle queues of trucks on both sides of the Channel.  The Republic of Ireland faces significant obstacles given its use of the UK as a land-bridge to the EU single market.  While it is unimaginable that a solution will not be found, without an open skies agreement between the UK and the EU27, airplanes carrying everything from people to post, packages and time-sensitive goods will not be able to fly.     
Continue Reading New Customs Rules for a Post-Brexit United Kingdom

On Thursday November 9th,  the Office of Foreign Assets Control (“OFAC”) published new regulations in the Federal Register executing June’s National Security Presidential Memorandum (“NSPM”) regarding U.S. sanctions against Cuba.  (See our previous post on the NSPM here).  The State Department and Bureau of Industry and Security (“BIS”) also published complementary rules giving effect to the changes in the Cuba sanctions.  The rules became effective with their publication in the Federal Register.

The primary purpose of the rule changes is to prevent commerce between the U.S. and Cuba from benefiting the Cuban military.  The State Department’s regulation includes a new Cuba Restricted List, which lists parties deemed to be under control of or acting on behalf of the Cuban military, intelligence, or security services personnel. 
Continue Reading New Sanctions Placed on Trade with Cuba