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Various reports indicate that the Group of Seven nations (G7) will announce its initial capped price for Russian-origin crude oil transported by maritime means (“seaborne”) this week. The cap will come into effect on December 5, 2022, for crude oil (including condensate) and February 5, 2023, for petroleum products.

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On October 28, 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued guidance on its October 7, 2022 interim final rule (Rule) that imposed new export controls on certain advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and semiconductor manufacturing items exported to the People’s Republic of China (PRC). Comments on the Rule will be accepted until December 12, 2022. Our previous blog post on the Rule may be found here.

The guidance offers several important clarifications, including regarding the definition of a covered “facility,” the impact of the Rule on deemed exports, and the scope of the “activities of U.S. persons” restrictions. An overview may be found below.

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On October 24, 2022, the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) and Department of State (State) announced new sanctions designations for Nicaragua, targeting a key state mining company and amending Executive Order (E.O.) 13851 to expand the U.S. government’s authority to issue sanctions in reactions to abuses by the Ortega-Murillo regime.

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On October 7, 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an interim final rule (the “Rule”) imposing sweeping new export controls targeting certain advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items intended for the People’s Republic of China (PRC).

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In response to Russia/Ukraine conflict, and Belarus’ ensuing support for Russia, the United States and global allies have imposed sweeping sanctions and export control restrictions on both Russia and Belarus. These actions are discussed extensively in our prior publications.

The sanctions and export controls restrictions especially target Russia and have had a significant impact on the Russian economy. Virtually every industry is impacted, and Russia’s financial institutions, businesses and prominent individuals are being targeted by ever-widening sanctions and export control restrictions imposed by the United States and global allies. As the situation evolves, further restrictions remain possible.

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On September 29, 2022, the U.S. government took an important step in its efforts to increase transparency, combat shell companies, and limit abuse of entities and trusts formed under U.S. state law. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a final rule implementing provisions of the Corporate Transparency Act (CTA), which requires entities to report information about their beneficial owners, i.e., individuals who ultimately own or control the company as well as the “company applicant” who created or registered the entity. The rule will go into effect on January 1, 2024, allowing time for industry to familiarize itself with the new requirements. The CTA is an important component of the Anti-Money Laundering Act of 2020, and this final rule will have significant implications for a variety of companies, investors and professionals that organize via U.S. companies and certain trusts.

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In the final few days of September, the U.S. and global allies issued a number of sanctions and export controls against actors who have supported Russia’s referendums in Ukraine and related attempts to annex four Ukrainian territories. The referendums have been condemned by the Group of 7 (G7) nations, which committed to imposing further economic costs on individuals and entities both inside and outside of Russia.

The latest measures include actions by the Office of Treasury’s Office of Foreign Assets Control (OFAC), the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the U.S. Department of State, and the United Kingdom (UK) Office of Financial Sanctions Implementation (OFSI), as well as further announcements from the European Union (EU), described in turn below.

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Takeaways

  • The G7 has announced consensus on a price cap for Russian origin oil and petroleum products to be implemented across a wide coalition of countries.
  • The cap would be implemented by prohibiting services related to the maritime transportation of Russian-origin crude oil and petroleum products unless the products are purchased below the capped price, and thus impacts a broad array of industries.
  • The capped prices have yet to be determined and are proposed to be aligned with the implementation of restrictions in the EU’s sixth sanctions package, which will reportedly go into effect by December 5, 2022.

On September 2, 2022, the Group of 7 (G7) nations formally announced its consensus to implement a global price cap on Russian oil and petroleum products in response to the ongoing conflict in Ukraine. The Joint Statement does not provide a specific timeline for implementation of the price cap, but notes that it seeks to align implementation with related measures within the EU’s sixth sanctions package, which will come into effect on December 5, 2022. (See here for prior analysis of this package.) The initial capped price has not been announced, and will be decided by the full coalition in advance of implementation.

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On August 15, 2022, the Department of Commerce’s Bureau of Industry and Security (BIS) published an interim final rule introducing new controls on four “emerging and foundational technologies” that were identified during the December 2021 plenary meeting of the multilateral Wassenaar Arrangement. These items are two substrates of ultra-wide bandgap semiconductors (gallium oxide and diamond), electronic computer aided design (ECAD) software specially designed for the development of integrated circuits with Gate-All-Around Field-Effect Transistor (GAAFET) structure, and pressure gain combustion (PGC) engine technology for the production and development of gas turbine engines.

The new controls were implemented effective on August 15, 2022, with the exception of the controls for ECAD software, which will be effective on October 14, 2022. BIS has requested public comments only on the new ECAD controls, which are due by September 14, 2022.

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