Articles Posted in Exports

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On 24 June 2024, the EU adopted its 14th package of sanctions against Russia.  The latest measures include:

  • The designation of 116 additional individuals and entities across a number of industries for their responsibility in undermining Ukraine’s territorial integrity, sovereignty, and independence.
  • A limited ban on contracts with Russian state energy companies and additional support for countries with energy needs to curb reliance on Russia.
  • Anti-circumvention measures, including requirements for EU parent companies to use “best efforts” to ensure that non-EU subsidiaries do not undermine EU sanctions.
  • A ban on the use of “System for Transfer of Financial Messages” (SPFS) (a Russian equivalent of SWIFT) by EU entities operating outside of Russia and a new power for the EU to designate third-country users of SPFS outside of Russia, which will then be subject to a transaction ban.
  • Comprehensive bans on port access by vessels contributing to Russian warfare, non-scheduled flights by controlled by Russian entities, and road transport of goods with 25% or more Russian ownership.
  • An amendment to the existing import-related restrictions concerning Russian diamonds.
  • Further import and export controls impacting Russia’s military-industrial complex and cultural property goods from Ukraine.
  • A requirement for the rejection of intellectual property rights applied for by Russian residents, nationals or entities.
  • A prohibition on accepting funding from the Russian state and its proxies by EU political parties, foundations, NGOs and media service providers.
  • An exemption to the ban on providing software services to Russia in cases where entities are controlled by an EU parent company and other select regions or services are provided by employees who were hired prior to February 2022.
  • A requirement for enhanced reporting, confidentiality requirements, and the promotion of voluntary self-disclosures.
  • Measures to allow EU operators to claim compensation in EU commercial and civil courts for damages caused by Russian companies further to sanctions.

These measures are summarized in further detail below.

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On April 19, 2024, the Department of Commerce Bureau of Industry and Security (BIS) issued an interim final rule reducing export control licensing requirements for Australia and the United Kingdom (UK) as a means to further strengthen the AUKUS trilateral security partnership between the three countries. With this rule, Australia and the UK will have nearly the same liberal licensing treatment under the Export Administration Regulations (EAR) as Canada. For example, many Commerce-controlled items, including certain military, aerospace and satellite-related items, will now be eligible for export or reexport to Australia and the UK without a license.

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The U.S. Department of Commerce amended the Export Administration Regulations (EAR), effective March 15, 2024, to move Nicaragua from Country Group B to Country Group D, and added it to the list of countries subject to the military end use and military end user restrictions. Additionally, the State Department’s Directorate of Defense Trade Controls (DDTC) amended the International Traffic in Arms Regulations (ITAR) to add Nicaragua to the list of countries for which it is U.S. policy to deny licenses or other approvals for exports of defense articles and defense services. This will restrict EAR license exceptions and ITAR exemptions that may have previously authorized certain exports, reexports, and transfers of controlled items to Nicaragua and will place limitations on what technology and technical data can be released to Nicaraguan nationals in the United States.

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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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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 EU’s new Joint Communication on a European Economic Security Strategy proposes a methodology for an EU economic security risk assessment and identifies measures to mitigate these risks. The Strategy is noteworthy because it offers a comprehensive view of the EU’s overarching strategy for multiple existing or proposed new EU legislative and policy tools including export controls, FDI screening and domestic investment in critical technology through the EU’s own proposed Chips Act, and how these tools would work together to reduce EU economic security risks. It also signals the EU’s intention to align more closely with the U.S. regarding China, including with respect to reducing supply chain dependencies and new tools like outbound investment controls.

(This is the second post of a three-part series on U.S., UK and EU alignment on economic security strategy.)

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On June 8, 2023, the United States and the United Kingdom announced the Atlantic Declaration for a Twenty-First Century U.S.-UK Economic Partnership (“Declaration”). The Declaration reaffirms the need to adapt and reimagine the unique alliance between the two countries. From critical and emerging technologies to digital transformation, clean energy, and defense collaboration, businesses can leverage the partnership to exploit new trans-Atlantic opportunities.

(This is the first post of a three-part series on U.S., UK and EU alignment on economic security strategy.)

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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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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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