No Post-Brexit Arrangement on Data Protection Will Affect UK-EU Trade

The European Union (EU) is preparing to treat the United Kingdom (UK) as a third country after its withdrawal from the bloc, commonly known as Brexit.  Unless a deal is agreed before 29 March 2019, the UK’s trade with the EU will be heavily impacted by regulatory restrictions, increased costs, and lengthier procedures applicable to the movements of people, goods and services.  Less obvious is the impact on trade of the “no deal” scenario from potentially restricted data flows. With only eight months left until Brexit Day, the UK and EU have yet to start talks on a data protection agreement.

Data flows play an increasingly important part in international trade and are estimated to contribute up to 2.8 trillion USD to the world economy.  In 2016 alone, EU services reliant on data exported to the UK, such as finance, telecoms and entertainment, were worth approximately 36 billion EUR. Data flows from the UK to the EU constitute as much as three-quarters of all data from the UK. Under the EU’s General Data Protection Regulation (GDPR), however, personal data included in such data flows must be protected. For companies, this can include employee data (e.g. payroll information, biographical information, etc.) and customer data (e.g., contact information, transaction information, biographical information, social media profiles, etc.). Data flows from the EU to a third country are permitted if there is an adequacy decision by the European Commission that the third country’s data protection laws are adequate to meet the objectives of the GDPR or through another adequacy mechanism approved by the European Commission (e.g., EU-approved Binding Corporate Rules, use of Standard Contractual Clauses, etc.). Continue Reading

Commerce Initiates National Security Investigation Into Uranium Imports

On Wednesday, July 18, the Department of Commerce announced that it would begin investigating the effects of uranium imports on the national security interests of the United States.  The investigation will be conducted under Section 232 of the Trade Expansion Act of 1962.  Two U.S. uranium producers – Ur-Energy and Energy Fuels Resources Inc. – petitioned Commerce in January 2018 to open the investigation.

According to the petitioners, a domestic supply of uranium is essential to national defense, as uranium is critical to military applications and a significant portion of electricity for the U.S. power grid.  Petitioners assert that they have struggled financially to compete with uranium imports from countries like Russia, Kazakhstan, Uzbekistan, and China that have targeted the U.S. market.  The petition states that imports have grown dramatically to capture almost 80% of domestic uranium demand, while U.S. producers have been forced to idle production and lay off workers.  Petitioners note that six U.S. nuclear reactors – required to enrich uranium for defense purposes – have closed since 2013 and another eight are scheduled to close between 2018 and 2025.  In a statement made regarding initiation of the investigation, Secretary of Commerce Wilbur Ross cited the fact that “U.S. uranium production had been 49 percent of U.S. requirements in 1987.  Today, U.S. uranium production has dropped to only five percent of U.S. requirements.”

Commerce has 270 days to submit a report to President Trump as to whether uranium imports threaten to impair U.S. national security.  If Commerce reaches an affirmative conclusion, the president is authorized to take actions deemed “necessary to adjust the imports of such article” to address the harm, including by imposing tariffs or other import restrictions, or through indirect action such as domestic industry assistance.  The two petitioning companies have called for a quota on uranium imports that would reserve 25% of the U.S. nuclear market for domestic production, and domestic procurement rules that would require the government to purchase U.S.-sourced uranium. Continue Reading

U.S. Department of Commerce Lifts ZTE Denial Order

Today the U.S. Department of Commerce lifted its denial order on Chinese telecommunications firm ZTE Corp., allowing THE U.S. and other companies to resume most business with ZTE.

The Commerce Department imposed the denial order in April after ZTE made false statements to the Commerce Department in connection with an earlier settlement agreement regarding violations of the U.S. embargoes on Iran and North Korea.  The denial order broadly barred U.S. companies from selling goods, software, or technology to ZTE Corp, which effectively brought the company to a standstill.

In exchange for lifting the denial order, ZTE has paid an additional $1.4 billion ($1 billion in fines and $400 million in an escrow account), changed its management, and agreed to compliance monitoring measures.  Citing concerns regarding U.S. national security, U.S. legislators are debating a proposed amendment to a must pass defense spending bill that would re-impose sanctions on ZTE.

USTR Proposes Third Round of Tariffs on Chinese Imports

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 list covers more than 6,000 products, including seafood and agriculture, chemicals, textiles, metals, electronics, and a host of consumer goods from apparel to furniture to appliances.  The list is valued at $200 billion annually and follows prior action on $50 billion worth of Chinese imports.

This latest round of tariffs will take effect at a later date following a public review process, including an opportunity for the submission of written comments and an opportunity to participate in a public hearing.  USTR is seeking public input on:

  • Whether any listed products should be retained or removed, and whether any products not listed should be added;
  • The level of the duty rate; and
  • The appropriate aggregate level of trade to be covered by additional duties.

Key dates include:

  • July 27, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing, and for filing pre-hearing submissions.
  • August 17, 2018: Due date for submission of written comments.
  • August 20-23, 2018: Section 301 Committee public hearing.
  • August 30, 2018: Due date for submission of post-hearing rebuttal comments.

The tariffs are part of the Trump Administration’s response to USTR’s investigation under Section 301(b)(1) of the Trade Act of 1974 regarding China’s acts, policies and practices related to intellectual property and forced technology transfers.  As mentioned, the most recent announcement follows prior USTR action on a combined $50 billion worth of Chinese imports:

  • The first set of tariffs – which took effect July 6, 2018 – covers 818 products valued at $34 billion (at a tariff rate of 25%).  The list was drawn from a draft list of 1,333 products published in April and finalized by USTR after a public comment process.  On July 6, USTR announced a product exclusion process for domestic interests seeking product-specific exclusions from the tariffs.
  • A second set of 284 products – valued at $16 billion – will see tariffs take effect at a later date following an ongoing public review process similar to that outlined above.
  • The tariffs in these first two sets targeted Chinese imports containing “industrially significant technologies, including those related to China’s ‘Made in China 2025’ industrial policy.”
  • The third set includes products from across all sectors of the Chinese economy, including some subheadings that commenters suggested for inclusion in the first round.

China announced retaliatory tariffs almost immediately in response to the U.S. release of its first two lists.  On June 18, following China’s announcement, President Trump directed USTR to identify $200 billion worth of Chinese goods for additional tariffs.  In response to USTR’s release of its latest list, China indicated it was considering non-tariff retaliatory measures.


Date Action Product List Tariff Rate Value of Imports Key Dates
6/15/2018 USTR finalized first set of 818 tariff lines of Chinese imports; products previously subject to public comment; product-exclusion process now open


1st set available here 25%


$34 billion


Effective date: 7/6/2018

Requests for product-exclusions due: 10/9/2018


USTR released second set of 284 tariff lines of Chinese imports; public comment underway 2nd set

available here

25% $16 billion Written comments due: 7/23/2018

Public hearing to be held: 7/24/2018

Rebuttal comments due: 7/31/2018

Effective date: TBD


6/16/2018 China released retaliation list to be implemented in two phases – 545 tariff lines and 114 tariff lines (covering U.S. imports into China)


1st set available here


2nd set available here







$34 billion




$16 billion

Effective date:  7/6/2018




Effective date: TBD



USTR released a third set of 6,000+ tariff lines of Chinese imports; will be subject to public comment


3rd set available here 10% $200 billion Request to appear at public hearing due: 7/27/2018

Written comments due: 8/17/2018

Public hearing to be held: 8/20-8/23/2018

Rebuttal comments due: 8/30/2018

Effective date: TBD


7/10/2018 China  reportedly considering additional non-tariff retaliation measures  


USTR Announces Section 301 Exclusion Process

On Friday, July 6, 2018, the United States Trade Representative (USTR) announced a process for U.S. interests to obtain product-specific exclusions from tariffs on Chinese imports as a result of the U.S. investigation into, and response to, China’s IP practices (see attached Federal Register notice).  The duties, applied under Section 301 of the Trade Act of 1974, took effect on July 6 and cover an annual trade value of approximately $34 billion.  In imposing the new tariffs, USTR focused on “products identified as benefiting from China’s industrial policies, including the ‘Made in China 2025’ program.”

A complete list of products – covering 818 tariff lines – currently subject to the new tariffs (at a rate of 25%) is available here.  USTR will consider excluding a particular product within a subheading (but not the tariff subheading as a whole) from the tariffs.  Note that USTR is currently considering / accepting public comment on an additional 284 proposed tariff lines.  Once finalized, the additional tariffs will likely be accompanied by a similar exclusion process.

In announcing the exclusion process, USTR indicated it received comments that specific products “were only available from China, that imposition of additional duties on the specific products would cause severe economic harm to a U.S. interest, and that the specific products were not strategically important or related to the ‘Made in China 2025’ program.”  The new exclusion process was designed to address those concerns.

USTR will accept requests from all interested persons, including trade associations.  Each request must specifically identify a particular product and provide supporting data as well as the rationale for the exclusion request.  Entities wishing to exclude more than one product must submit a separate request for each product. Continue Reading

WTO Declines to Find Australia’s Tobacco Product Packaging Restrictions Inconsistent with Trade Rules

Last week, a WTO dispute settlement panel ruled that Australia’s plain packaging rules for tobacco products do not violate WTO rules.  In April 2012, Honduras requested consultations with Australia at the WTO over Australia’s 2011 law banning logos, trademarks, and other distinctive packaging for tobacco products in favor of uniform-color packages with health-related warnings and images across the front of the packages and brand names printed in small, standardized fonts.  Honduras challenged the law under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the WTO Technical Barriers to Trade Agreement, and the national treatment provision of GATT 1994.  Similar challenges later brought by the Dominican Republic, Cuba, and Indonesia to Australia’s plain packaging law were consolidated with Honduras’s dispute and ruled upon at the same time.  The WTO dispute settlement panel was composed in May 2014.

In its report, issued on June 28, 2018, the WTO panel concluded that Honduras, the Dominican Republic, Cuba, and Indonesia did not demonstrate that Australia’s plain packaging law and related regulations were inconsistent with the various WTO agreement provisions cited.  Specifically, the plain packaging measures were not shown to be more restrictive than necessary to achieve a legitimate regulatory objective; to impede the registration, use, or enforcement of trademarks; to mislead with respect to or diminish geographical indications; or to devalue the Cuban Government Warranty Seal otherwise provided on Cuban-origin tobacco products. Continue Reading

U.S. Government and ZTE Agree to Have Denial Order Lifted Upon Payment of Penalty

On June 7th, Secretary of Commerce Wilbur Ross announced that the U.S. government reached an agreement with ZTE Corporation (ZTE) to lift a denial order suspending the export privileges of ZTE for a period of seven years.  Under this new agreement, ZTE must pay $1 billion and place an additional $400 million in escrow in a U.S.-approved bank within 90 days of this superseding order.  The Bureau of Industry and Security (BIS) will lift the denial order after the payment has been received and notify the public that ZTE has been removed from the Denied Persons List.

In addition to the civil monetary penalty, ZTE must adhere to several other conditions under the new agreement, which collectively are the most severe penalty BIS has ever imposed on a company.  Most notably: Continue Reading

OFAC Formally Rescinds General License H – Foreign Subsidiaries of U.S. Companies Must Withdraw from Iran

Yesterday the Office of Foreign Assets Control (OFAC) formally rescinded General License H, requiring foreign subsidiaries of U.S. companies to wind down remaining business related to Iran by 11:59 pm EST on November 4, 2018.  After that date, foreign subsidiaries of U.S. companies and other owned or controlled entities will generally be prohibited from conducting any business related to Iran, including wind down activity.  This action was required following the President’s announcement on May 8 that the United States would withdraw from the multilateral Iran nuclear deal (the Joint Comprehensive Plan of Action or JCPOA).

OFAC issued amended FAQs and replaced General License H with a new Section 560.537 to the Iranian Transactions and Sanctions Regulations (ITSR, 31 C.F.R. Part 560) authorizing the following wind down activities related to foreign subsidiaries’ business with Iran: Continue Reading

New Bonds Needed for Importers of Products on the Section 301 List

With the Section 301 25% duties on imports of Chinese made products set to go into effect on July 6, 2018, importers should be aware that they may need to increase their bond amounts.  Bonds are based on value and duty on imported goods.  U.S. Customs and Border Protection (“CBP”) routinely reviews bond amounts for their sufficiency.  After the Section 232 duties on imported steel and aluminum went into effect recently, CBP sent letters to certain importers giving them thirty days to increase their bonds to be commensurate with the new tariffs.  While bonds are based on imports for the previous twelve months, the time period is rolling and we expect CBP to be aggressively reviewing imports from China beginning on July 6, 2018.

President Trump Targets Chinese Investments in the United States

On Wednesday, President Trump issued a statement in support of restrictions on Chinese investment in the United States in firms with critical technologies, and in greater protection of those technologies through enhanced export controls.  In particular, the President has thrown his support behind the Foreign Investment Risk Review Modernization Act (FIRRMA), bipartisan legislation that passed in the House on Tuesday.  FIRRMA intend to strengthen the existing Committee on Foreign Investment in the United States (CFIUS) by expanding the scope of foreign investment restrictions that the Administration could block for national security reasons.

CFIUS is an inter-agency committee that has jurisdiction to review transactions that could result in control of a U.S. business by a foreign person  If CFIUS determines the transaction presents a national security risk, it can take action to mitigate the risk or refer the case to the President for further action.  The reforms under FIRRMA would expand CFIUS’s jurisdiction to review foreign minority investments in start-ups in key sectors, certain sensitive real estate transactions, and joint ventures – all of which are currently not subject to examination.  The FIRRMA bill passed in the House specifically notes that the “national security risks related to foreign investment, particularly those emanating from countries such as China and Russia, warrant an appropriate modernization of the processes and authorities of {CFIUS}.”  FIRRMA would also expand existing export controls that govern trade in sensitive technologies. Continue Reading