Groundbreaking Russia Sanctions Bill Introduced in the Senate

A bipartisan group of US Senators introduced a bill on January 11, 2017 – the Countering Russian Hostilities Act of 2017 – that would impose unprecedented sanctions on Russia and persons and entities conducting certain types of business involving Russia.  This bill would codify into law most of the existing sanctions targeting Russia, making it harder (though not impossible) for the incoming Trump administration to reverse those sanctions through executive action.  It would also impose broad new sanctions aimed at both US and non-US persons covering a broad list of activities involving the Russian oil/gas, technology, financial, defense/intelligence, construction, engineering, and civil nuclear sectors.  For more information, please see our advisory.

Entrepreneurs and Investors Granted Improved Immigration Option

President Obama’s 2014 administrative actions incorporated directives for changes aimed at establishing needed avenues for entrepreneurs and investors within the existing immigration categories.  In late December 2016, an important and promising action item intended to open US immigration opportunities for entrepreneurs and investors was finalized.  This new action item is the clarification of the National Interest Waiver (NIW) standard and the elimination of overwhelming requirements for qualification under this valuable option.  For more information, please see our advisory.

New DOJ Guidance Could be a Game Changer for Export Controls and Sanctions Enforcement

Steptoe’s Meredith Rathbone and Peter Jeydel co-authored an article in Risk & Compliance, “New DOJ Guidance Could be a Game Changer for Export Controls and Sanctions Enforcement.”  The article was published in the January-March issue and centers on how the US Department of Justice’s guidance may cause difficulties and new risks for industries.

For more information, please see the full article in Risk & Compliance (free subscription required).

Fifth Circuit Rules on Extraterritoriality of ATS Claims, Creating Circuit Split

On January 3, 2017, the United States Court of Appeals for the Fifth Circuit issued a decision in Adhikari v. Kellogg Brown & Root, Inc., No. 1520225 (5th Cir. Jan. 3, 2017) relevant to US government contractors and subcontractors performing contracts overseas. In the decision, the court held that claims asserted against a US defense contractor for injuries incurred in Iraq were not cognizable under the Alien Tort Statute (ATS). In foreclosing plaintiffs’ claims, the Fifth Circuit held that the presumption against extraterritorial application of a statute bars claims under the ATS for injuries occurring outside the US. This decision creates a clear circuit split with the Fourth Circuit, increasing the possibility that the Supreme Court will weigh in on the issue. Clarification from the Supreme Court will enable US government contractors and subcontractors overseas to better evaluate their risks of exposure to claims under the ATS. For more information, please see our advisory.

ESTA Application Requests Social Media Identifiers

The US Customs and Border Protection (CBP) recently added a request for social media identifiers as part of the screening process for the visa waiver program (VWP).  This is a unique security screening tactic for the Department of Homeland Security (DHS), marking the first time DHS has requested social media identifiers for immigration benefits or travel application.  The Electronic System for Travel Authorization (ESTA) application lists the social media questions as optional.  It is too early to assess the consequences of answering (or declining to answer) these new questions.  For more information, please see our advisory.

New US Cyber Sanctions on Russia

Obama Expands Cyber Sanctions to Cover Election Hacking, Then Uses it to Sanction Russian Intelligence Agencies and Others

On December 29, 2016, the President amended Executive Order 13964, which was originally issued in April 2015, to explicitly authorize sanctions on those found to be “tampering with, altering, or causing a misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions.”   See our earlier advisories, here and here, for more information about the original executive order and the related regulations.

At the same time, the President used this newly expanded authority to sanction a number of Russian individuals and entities.  Notably, the President sanctioned the two primary intelligence agencies of the Russian Federation, the GRU and the FSB.  This is the first time the U.S. Government has used the cyber-related sanctions authority in that executive order.  Continue Reading

DDTC and BIS Publish Long-Awaited Final Rules for Category XII: Night Vision and Cameras

On October 12, 2016, the State Department’s Directorate of Defense Trade Controls (DDTC) and the Commerce Department’s Bureau of Industry and Security (BIS) published companion final rules to amend Category XII of the United States Munitions List (USML) and move some less sensitive items to the Commerce Control List (CCL).  The final rules will become effective on December 31, 2016.  Category XII (Fire Control, Range Finder, Laser, Optical and Guidance Control Equipment) is one of the last categories to be addressed.   The final rules come after two sets of proposed rules.  Read Steptoe’s advisory here to learn how the final rules incorporate many of the provisions in the proposed rules, but also make some important changes.

How Employers Can Prepare for Trump Era Immigration Changes

A great deal of information is circulating through the legal press speculating about the changes the Trump administration will bring to the immigration benefits and enforcement landscape.  The overall direction of immigration changes under the new administration is clear, but the legal specifics are not yet defined.  With inauguration less than a month away, employers need to consider how to: prepare for yet-to-be determined changes; reduce exposure to immigration enforcement actions; and safeguard access to needed foreign national employee talent.  Read more at Steptoe’s advisory, where we suggest options for US businesses to prepare for potential Trump administration immigration changes.

Roundup of Recent AML/Sanctions Enforcement Actions

Capping off a year of robust sanctions enforcement, two recent enforcement actions highlight the risks of doing business with sanctioned countries, in particular Iran.  In December 2016, federal and New York state regulators initiated enforcement actions related to alleged sanctions violations involving Iran.  In the first enforcement action, Italy’s largest retail bank, Intesa Sanpaolo SpA (Intesa), was alleged to have engaged in dollar-clearing transactions on behalf of Iranian clients.  In the second action, a US person individual, Kenneth Zong, was alleged to have engaged in a scheme to move restricted Iranian funds out of South Korea and transfer them to Iranian recipients.  Read more at Steptoe’s advisory here.

BIS Eases Burma-Related Export Restrictions

On December 23, 2016, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) issued a final rule amending the Export Administration Regulations (15 C.F.R. Parts 730-774) to ease export restrictions against Burma consistent with Executive Order 13742, issued in October 2016. That executive order, which we previously have summarized, terminated the national emergency declared with respect to Burma under the International Emergency Economic Powers Act, along with all sanctions targeted against Burma administered by the U.S. Department of Treasury, Office of Foreign Assets Control (“OFAC”). As we noted in our summary, following the issuance of EO 13742, Burma remained subject to an arms embargo and certain export restrictions, and certain Burmese persons remained designated on OFAC’s List of Specially Designated Nationals (“SDNs”) under sanctions programs unrelated to Burma (such as programs related to North Korea and narcotics trafficking).

The BIS final rule eases certain EAR restrictions related to exports and reexports to Burma. First, BIS is removing and reserving Section 744.22 of the EAR, which imposed a licensing requirement for exports and reexports of all items “subject to” the EAR to persons designated under executive orders imposing sanctions targeting Burma, as the executive orders are no longer in effect and there are no persons designated thereunder. Second, BIS is moving Burma from Country Group D:1 to Country Group B, which will make exports and reexports to Burma eligible for a broader range of license exceptions.

It should be noted that certain EAR restrictions remain in effect with respect to Burma. First, Burma remains in Country Groups D:3 (countries raising proliferation concerns related to chemical and biological weapons) and D:5 (U.S. arms embargoes). This means that Burma remains ineligible for certain license exceptions, including (but not limited to) those related to 9×515 or “600 series” items. Additionally, Burma remains in Computer Tier 3 for purposes of License Exception “Computers (APP)” in Section 740.7 of the EAR. This means that Burma is eligible only for exports and reexports of certain technology and source code under the license exception, as compared with the range of computers, related components, technology, and source code available to countries listed in Computer Tier 1. Before the initial imposition of sanctions against Burma in 2007, it was a Computer Tier 1 country.