Export Controls and Sanctions

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Today the Bureau of Industry and Security (BIS) announced that it is suspending license exceptions for exports, re-exports, or transfers to or within Hong Kong that provide differential treatment than license exceptions available for shipments to mainland China.  In other words, if a license exception is not available for shipments to China, then it can…

Bureau of Industry and Security Issues Guidance on Rule

The new Bureau of Industry and Security (“BIS”) rule prohibiting certain exports, reexports, and transfers of items to “military end-users” and “military end-uses” in China, Russia, and Venezuela is effective today.

The new rule creates additional due diligence burdens on manufacturers and exporters in the materials…

On May 22, 2020, the Department of Commerce’s Bureau of Industry and Security (BIS) announced the addition of the following  businesses and a government institute to the agency’s Entity List in response to involvement in or support for human rights abuses related to the Xinjiang Uighur Autonomous Region (XUAR):

  • China’s Ministry of Public Security’s Institute

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The Department of State’s Office of Defense Trade Controls Policy announced that they are temporarily suspending, modifying, and excepting certain International Traffic in Arms Regulations (ITAR) requirements in an effort to mitigate the impact of the COVID-19 pandemic.  The temporary changes are as follows:

  • As of February 29, 2020, ITAR registrations and fees with an

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On April 28, 2020, the Department of Commerce’s Bureau of Industry Security (“BIS”) published three separate rules which, in response to the Administration’s conclusion that “civil-military integration” in China is increasing, impose significant additional restrictions on the export of dual-use items to strategic rivals including China, Russia, and Venezuela.  These rules, when implemented, will have an especially acute effect on transactions with China.  Specifically, consistent with the Administration’s conclusion that these countries present national security and other foreign policy concerns, BIS restricted exports, re-exports, and in-country transfers to these destinations by: 1) issuing a final rule expanding end-use and end-user restrictions related to China by expanding the scope of prohibitions to include “military end-users” in China and expanding the definition of “military end use”,  among other changes; 2) issuing a final rule removing a license exception that allows the export of some items to certain countries that present national security concerns, including China and Russia, provided that the end-use was civilian (license exception CIV); and 3) issuing a proposed rule narrowing the scope of a license exception that allows the re-export of some items that present national security concerns (license exception APR).

These changes, which are largely effective on June 29, 2020, will create additional hurdles in transactions with China, Russia, and Venezuela.  …
Continue Reading Bureau of Industry and Security Imposes Significant Additional Restrictions on Exports to China, Russia, and Venezuela

Our previous blog post listed the specific types of PPE respirators, masks, and gloves restricted for export from the U.S. on April 10, 2020 by the Federal Emergency Management Agency (FEMA) in response to the COVID-19 pandemic.

On April 21, 2020, FEMA published a list of exemptions to those export restrictions which includes:

  • shipments to

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On April 22, 2020, President Trump ordered Chevron to “wind down” its business in Venezuela by December 1, 2020. This will have a significant impact on companies that supply Chevron with equipment used for oil and gas projects in Venezuela that were previously licensed.

Effective April 21, 2020, the Department of Treasury’s Office of Foreign…

On April 10, 2020, the Federal Emergency Management Agency (FEMA) issued a temporary final rule (TFR), pursuant to the Defense Protection Act (DPA) and related authorities[1], to require explicit approval for exports of certain personal protective equipment (PPE).  This TFR is aimed at allocating certain scarce or threatened materials for domestic use as needed for national defense during the COVID-19 pandemic.  The TFR took effect April 7, 2020, and remains effective until August 10, 2020.  This date could be extended.

Five Types of PPE Currently Covered:

Pursuant to this TFR, shipments of the following five types of PPE, determined by the Secretary of Health and Human Services (HHS) to be “scarce or threatened materials”, may NOT leave the United States without explicit FEMA approval:

  • N95 Filtering Facepiece Respirators, including devices that are disposable half-face-piece non-powered air-purifying particulate respirators intended for use to cover the nose and mouth to reduce exposure to pathogenic biological airborne particulates;
  • Other Filtering Facepiece Respirators (e.g., those designated as N99, N100, R95, R99, R100, or P95, P99, P100), including single-use, disposable half-mask respiratory protective devices that cover the user’s airway and offer protection from particulate materials at an N95 filtration efficiency level;
  • Elastomeric, air-purifying respirators and appropriate particulate filters/cartridges;
  • PPE surgical masks, including masks that cover the user’s nose and mouth and provide a physical barrier to fluids and particulate materials; and
  • PPE gloves or surgical gloves, including exam and surgical gloves, as well as gloves intended for the same purposes.

Note that this list is not exhaustive, and that the FEMA Administrator may add other materials if they are determined to be scarce and critical materials essential for national defense.  Other such materials would be added to this allocation order, and there would be a Federal Register notice.

FEMA Approval Process

Pursuant to this TFR, before any shipments of these materials may leave the United States, the U.S. Customs and Border Patrol (CBP) will detain the shipment temporarily, so that FEMA may determine in a reasonable time period, which is not defined, and acting based on promoting national defense how to proceed.  They could either issue a rated order for all or part of the shipment and return the merchandise for domestic use (i.e., not allowing the export at all), or they could allow the export in whole or in part.…
Continue Reading FEMA Issues New Rule Requiring Approval for Exports of Certain Personal Protective Equipment

Even as companies make rapid changes to respond to business challenges posed by the COVID-19 pandemic, executives and compliance team leaders must protect their company and employees by continuing to comply with critical U.S. international trade laws and regulations (including those addressing customs, anti-corruption, export controls, and economic sanctions).  Trade regulations are not suspended, and it is important to not make assumptions or conclude that the law does not apply during this difficult time with all of the issues competing for attention, not least family and employee health and company survival.  With the need to move so quickly, we have seen clients inadvertently come close to trade compliance violations that would not pose a problem for them in normal times.  The following suggestions are intended to help companies reduce the risk of certain significant federal international trade law violations and avoid inbound and outbound shipment delays – while continuing to operate.

Trade rules and surrounding circumstances are changing quickly.  For example, the Administration very recently appeared to be seriously considering suspending or lowering certain import tariffs, but backed away from that approach given the complexity of administering a revised system on short notice, among other problems.  You are likely also seeing reports about various countries’ restrictions on exports of medicine, medical equipment (including protective equipment and ventilators), and food, among other products.  How do you keep up with what is actually happening that may affect your company and what is just rumor that you do not need to react to?

One step companies are taking is to include key personnel from their trade compliance and legal teams in the decision processes related to changing international transactions.  You need to move quickly, but including a team member who knows trade rules can help keep things on track and help avoid clear compliance errors.

Here are four substantive areas of U.S. trade regulation that should continue to be part of international transaction diligence:  U.S. anti-corruption, export controls, and sanctions laws (that permit most exports of medicines, medical devices, and food to sanctioned locations), and U.S. Customs rules on personal protective equipment and medical devices (among other imported items). …
Continue Reading COVID-19 – Four Key International Trade Compliance Considerations