Today, the U.S. Department of Commerce announced new prohibitions on certain transactions involving the WeChat and TikTok mobile applications pursuant to two Executive Orders issued last month. The new restrictions, spelled out in Federal Register notices available here and here, restrict U.S. companies from providing certain services to Tencent and ByteDance that support
U.S. Department of Defense Updates List of Companies Associated with the Chinese Military
On August 28, 2020, the U.S. Department of Defense (DOD) updated its list of “Communist Chinese military companies” that provide expertise and technological support to the Chinese military. The list, which includes a number of large state-owned enterprises in China, does not impose sanctions or export restrictions on the listed companies, although some of the
U.S. Adds 24 Chinese Construction and Communications Companies to the Entity List
Today the Bureau of Industry and Security (BIS) added 24 Chinese state-owned companies to the Entity List for their role in the construction of artificial islands in the South China Sea. The Entity List prohibits the export, re-export, and transfer (in-country) of items subject to the Export Administration Regulations (EAR) to these companies without a
Expansion of U.S. Huawei Restrictions: More Foreign-Made Items Are Caught By U.S. Export Controls
On August 20, the Bureau of Industry and Security (“BIS”) published a final rule (“final rule”) amending the Export Administration Regulations (“EAR”) to expand restrictions on transactions involving Huawei entities that are included on BIS’s Entity List (“designated Huawei entities”). The newly expanded rule applies to a broader range of items produced outside of the
BIS Confirms: Entity List Restrictions Apply to All Parties, Including Freight Forwarders and Purchasers
On August 20, 2020, the Bureau of Industry and Security (BIS) will publish a final rule confirming that the Entity List licensing requirements apply to all transactions in which a listed party plays a role – including where the listed party is the ultimate consignee, end-user, purchaser, or intermediate consignee. The new rule formally codifies
Goodbye “Made in Hong Kong,” Hello “Made In China”
Updated August 24, 2020: CBP has extended the transition period for compliance with this rule change by 45 days until November 9, 2020. See the CSMS notice here.
Yesterday, U.S. Customs and Border Patrol (CBP) issued a new rule that requires importers to begin marking Hong Kong goods as “made in China” for
President Issues Executive Orders Targeting TikTok and WeChat
Last Thursday, the President issued two executive orders (“E.O.s”) targeting social media applications TikTok (and its parent company, ByteDance) and WeChat (and its parent company, Tencent Holdings). The E.O.s direct the Department of Commerce (“DOC”) to prohibit transactions involving the applications. Companies that deal directly with TikTok or WeChat in the United States and abroad or use their services need to evaluate the scope of those activities and determine if they will be affected by the E.O.s.
The E.O.s were issued pursuant to the national emergency declared in E.O. 13873 regarding information and communication services in the United States that are controlled by persons within the jurisdiction of a “foreign adversary.” In issuing the E.O.s, the President cited concerns that the Chinese government could gain access to Americans’ personal information collected by the applications, among other policy considerations. The President has the power to issue the directives under the International Emergency Economic Powers Act (“IEEPA,” 50 U.S.C. 1701 et seq.), which provides the President with the authority to declare national emergencies and implement sweeping trade controls based on national security concerns.
The intended scope of the E.O.s is not clear due to ambiguous language used in Section 1, which contain the E.O.s’ primary prohibitions. Here is an excerpt of that section from the TikTok order:
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OFAC announces first Hong Kong sanctions designations
On Friday, OFAC issued its first designations under the new Hong Kong sanctions program imposed by E.O. 13936.
OFAC added 11 current and former Hong Kong government officials, including Carrie Lam, Hong Kong’s Chief Executive, to its List of Specially Designated Nationals (SDN List). As a result, all property and interests in property of
China and Hong Kong Developments: Sanctions, Export Controls, and Supply Chain Risks
Over the last month, the United States has taken a variety of steps to increase pressure on China in response to the imposition of China’s National Security Law in Hong Kong and alleged human rights abuses in Xinjiang. These measures include new sanctions programs targeting Hong Kong, export and trade control restrictions, and sanctions targeting actors in the Xinjiang region. The U.S. government also issued a lengthy Advisory warning U.S. and global companies of supply chain risks related to forced labor and other human rights issues in Xinjiang.
In this post, we highlight some key risks that companies should consider when doing business in the region against the backdrop of rising U.S.-China tensions.
U.S. Warns that Nord Stream 2 and second line of TurkStream are now in scope for U.S. secondary sanctions
Today the U.S. State Department published updated guidance indicating that significant transactions related to Nord Stream 2 and the second line of TukStream may be subject to U.S. secondary sanctions penalties under Section 232 of CAATSA.
Section 232 authorizes the U.S. government to impose a bevy of sanctions on non-U.S. parties that make investments in