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This past year saw a continued trend in building supply chain resiliency, as this topic has grown increasingly important following COVID-19, the conflict in Ukraine, shifting landscape on tariffs, forced labor concerns and a number of other factors. Increasingly, supply chains are having to respond to policy concerns requiring shifting production away from China, either through onshoring or friend shoring as a means of strengthening US national and economic security interests.

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Takeaways

  • On January 16, 2024, the Bureau of Industry and Security Office of Export Enforcement announced several updates to its VSD process aimed at enhancing the program’s overall efficiency and effectiveness.
  • These enhancements create a more streamlined disclosure process for minor violations, including through abbreviated narratives, quarterly bundled disclosures, and limiting the requirement to include a five-year lookback.
  • As the third VSD policy enhancement in as many years, BIS continues to incentivize and facilitate parties’ cooperation in the VSD program.

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During 2023 both Congress and the Biden Administration repeatedly expressed the need to secure critical supply chains, particularly batteries that rely heavily on lithium and critical minerals sourced from China. Concerns have been framed in terms of national security focusing on the danger of relying too heavily on products integral to our defense or economy or human rights relating to enforcement of the Uyghur Forced Labor Prevention Act (UFLPA). Continue reading →

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On January 17, 2024, the U.S. Department of State announced the redesignation of the Yemen-based Ansarallah (commonly referred to as the “Houthis”) as a Specially Designated Global Terrorist organization (SDGT). The decision to redesignate Ansarallah comes after several months of attacks by Houthi forces against international maritime vessels in both the Red Sea and Gulf of Aden.

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In 2023, the United States sharpened its focus on deterring China’s ability to develop advanced technology with the potential to threaten U.S. national security. To do so, the U.S. government has implemented several new restrictions and requirements related to critical technologies. Some of these measures, such as the announcement of an outbound investment regime, are entirely new tools. Others, like updates to semiconductor related export controls and newly sanctioned entities, build on existing regimes.

Below, we outline several of the key developments aimed at restricting China’s technology sector which U.S. and multinational businesses should remain aware of. Continue reading →

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2023 witnessed significant developments from the United States government aimed at countering China’s influence and curbing potential threats to U.S. national security. These developments have spanned legislative and administrative action, shifting long-standing paradigms within export controls, import controls, and sanctions. The Biden Administration is increasingly utilizing these tools as strategic elements of foreign policy, often in conjunction with allied nations.

The restrictions on trade with China are rapidly evolving and increasingly nuanced, influenced by growing Congressional attention on the U.S.-China relationship, increased pressure on the Department of Commerce, and international interest in upholding strong supply chains. For companies to navigate these tensions, they must remain well-informed regarding the myriad of regulations which have been imposed in the past year.

This post is the first in a series dedicated to highlighting notable developments in the sanctions and export controls realm targeting China. This series will span across three sectors in which our team has been notably engaged: technology, energy, and supply chain resiliency. The final blog in the series will forecast expected developments through 2024.

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The United Kingdom introduced new sanctions against Russia on December 14, 2023, with the European Union also adopting its twelfth package of sanctions against Russia on December 18, 2023.

The latest UK restrictions include:

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On October 5, 2023, the National Archives Information Security Oversight Office (ISOO) released a joint notice to provide guidance on facility clearances for joint ventures (JVs) in the National Industrial Security Program (NISP). This guidance addresses the interaction of NISP requirements and an October 16, 2020 Small Business Administration (SBA) rule on JVs and also aims to clarify confusion arising from a Government Accountability Office (GAO) decision interpreting the SBA 2020 rule. The ISOO joint notice concludes that the SBA rule on JVs does not materially alter the requirements under the NISP concerning which entities are required to obtain facility security clearances (FCL) and a NISP Cognizant Security Agency (CSA) (such as the Defense Counterintelligence and Security Agency) will continue to make these determinations.

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On November 6, 2023, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced a $206,213 settlement with Swift Prepaid Solutions, Inc. d/b/a daVinci Payments (daVinci) for apparent violations of sanctions regarding Crimea, Iran, Syria and Cuba. The financial services and payments firm was penalized by OFAC for enabling prepaid reward cards to be redeemed by persons who purchased the cards from sanctioned jurisdictions.

The November 6 settlement reflects a growing trend in OFAC enforcement actions to emphasize the importance of geolocation and blocking for financial and web services companies.

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https://www.globaltradeandsanctionslaw.com/files/2023/11/1200px-US-DOC-BureauOfIndustryAndSecurity-Seal.svg_-300x300.pngOn November 6, 2023, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) held a public briefing to address industry questions concerning the latest export controls on advanced computing and semiconductor manufacturing. The new controls, which BIS announced on October 17, 2023, update existing export restrictions related to advanced computing and semiconductor manufacturing equipment. The public briefing did not provide substantive updates to the October 17 announcements but offered context and indicated where BIS intends to issue additional guidance.

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