Yesterday, the Office of Foreign Assets Control (“OFAC”) announced sanctions against three prominent Bulgarian individuals and 64 related companies for corruption. The designations are the largest action in the history of Executive Order 13818, which implements the Global Magnitsky Human Rights Accountability Act and authorizes sanctions on parties that engage in significant corruption or human
Earlier this week, the COVID-19 Accountability Act was introduced in the Senate and the House by Rep. Senator Lindsey Graham and Rep. Doug Collins respectively. While the text of the draft legislation is not yet available, a summary indicates that it would require within sixty days that the President certify to Congress that China has:
“Provided a full and complete accounting to any COVID-19 investigation led by the United States, its allies, or United Nations affiliates, such as the World Health Organization (WHO);
- Closed all wet markets that have the potential to expose humans to health risks; and
- Released all pro-democracy advocates in Hong Kong that were arrested in the post COVID-19 crackdowns.”
If there is no such certification, the Act would then authorize the President to impose at least two of a variety of sanctions to hold China accountable, including travel bans, visa revocations, asset freezes, restricting U.S. financial institutions from loaning money to Chinese businesses, and barring Chinese firms from being listed on American stock exchanges. Such sanction would be effective until the certification could be made.…
Continue Reading COVID-19 Accountability Act – New Potential Sanctions on China
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, 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
Companies outside the U.S. contemplating purchases of U.S. business (and potential U.S. acquisition targets) are continuing to parse the Department of the Treasury’s two proposed regulations continuing implementation of the Foreign Investment Risk Review Modernization Act (“FIRRMA”). The proposed rules change the Committee’s jurisdiction and certain procedures related to the national security reviews undertaken by the Committee on Foreign Investment in the United States (“CFIUS”). These proposed regulations provide additional clarity regarding how CFIUS intends to implement the FIRRMA amendments. When implemented, these regulations will formally expand CFIUS jurisdiction – but will also formalize current CFIUS practice in most respects. Implementation is scheduled to occur on or before February 13, 2020.
Jurisdiction over non-controlling investments
Traditionally, CFIUS exercised jurisdiction over investments that result in the “control” of a non-U.S. person over a U.S. business. After FIRRMA implementation, CFIUS will have jurisdiction over certain investments that do not result in control by a non-U.S. person. Specifically, CFIUS will have jurisdiction over non-controlling investments if the investment is in a specific company type, and if it affords the investor specific, enumerated rights.
The draft regulations identify several company types that satisfy the first part of the test. The first type is a business that produces or otherwise deals in certain “critical technologies.” A separate statute authorizes the Department of Commerce to identify these critical technologies. Although the Department of Commerce did identify examples of these technologies in a 2018 rulemaking, that process is not yet complete.…
Continue Reading CFIUS to Cover More Foreign Investments in U.S. Companies
Targets $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent
On July 10, 2018, the United States Trade Representative (USTR) announced it was initiating the process of imposing a 10% tariff on Chinese imports as a supplemental action under Section 301 of the Trade Act of 1974. USTR’s proposed…
The Trump Administration is using an infrequently used provision of the trade laws, Section 301 of the Trade Act of 1974 to impose an additional 25% tariff on $50 billion worth of Chinese products imported into the U.S. The proposed list covers 1300 tariff lines and includes medicaments, pumps and valves, machinery for the oil and gas, agriculture, food, beverage, and apparel industries, motors, generators, trucks, bulldozers, railway cars, automobiles, helicopters, airplanes, and boats, and consumer products such as dishwashers, microwaves, TV’s, and VCR’s. (see full list here)
The proposed list covers the following sectors (See blog post from March 21):
- New advanced information technology
- Automated machine tools and robotics
- Aerospace and aeronautical equipment
- Maritime equipment and high tech shipping
- Modern rail transport equipment
- New energy vehicles and equipment
- Power equipment
- Agricultural equipment
- New materials
- Biopharma and advanced medical products
As required under Section 241 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), last night the U.S. government released a public, unclassified version of the much-anticipated “Kremlin Report.” The report was intended to ‘name and shame’ Russian political and business leaders, list their assets outside of Russia, provide an index of corruption with respect to the listed individuals, determine estimated net worth of the listed parties, and analyze the impact of imposing sanctions on listed parties.…
Continue Reading U.S. Issues the Much-Anticipated “Kremlin Report” under New Russia Sanctions Law