How Much of the Cuba Embargo Could the President Unilaterally Lift?

The conventional wisdom in Washington’s legal and policy circles is that the core aspects of the US economic sanctions embargo on Cuba are mandated by statute, and therefore all the President can do is tinker around the edges, that is, in areas where Congress has been silent, or at least has not specifically addressed a particular question.  Despite the great fanfare that has accompanied President Obama’s efforts to relax the embargo, since the reestablishment of diplomatic relations with Cuba, the reality has been quite modest: primarily, the moves have made basic business operations simpler in a narrow group of sectors such as transportation, telecommunications, education and non-profits, and in areas like travel and family remittances, along with a few others.  For many industries, the remaining legal restrictions continue to deter market entry.  Obama Administration officials have stated that they would like for the embargo to be lifted entirely, to allow a normal level of commerce with Cuba, while acknowledging continuing obstacles on the Cuban side.  The Administration has indicated that the reason they have moved so cautiously in lifting some of the restrictions over the past few years is because of the statutes that remain on the books that they do not have the power to overturn by executive action.

However, on October 17, 2016, the Treasury Department’s Office of Foreign Assets Control (OFAC) published a new general license at Section 515.534 of the Cuban Assets Control Regulations (CACR) that appears to show a crack in the Administration’s public position about why it cannot do more to lift the embargo.  Continue Reading

Extend It Again, Sam: OFAC Continues Limited Belarus Sanctions Relief

The Treasury Department has extended limited sanctions relief related to certain Belarusian entities through April 2017. On October 18, 2016, the Office of Foreign Assets Control (OFAC) issued a general license which continues the partial easing of restrictive measures originally adopted in October 2015.  The relief, which was extended by six months, covers certain transactions with the following nine entities: Belarusian Oil Trade House; Belneftekhim; Belneftekhim USA, Inc.; Belshina OAO; Grodno Azot OAO; Grodno Khimvolokno OAO; Lakokraska OAO; Naftan OAO; and Polotsk Steklovolokno OAO. Continue Reading

DUI Charges Can Interfere With Travel

The holiday season is a popular time for travel and celebration.  Both activities relate to a US Department of State (DOS) policy that can interfere with foreign nationals’ international travel.  Foreign nationals who have been charged with Driving While Intoxicated (DUI) or related charges may have their visa stamps revoked under DOS authority.  This policy, known as “prudential revocation,” can occur without the knowledge of the affected traveler.  For more information, please see our advisory.

US Lifts All Economic and Financial Sanctions on Myanmar (Burma), But Risks Remain

Following up on our previous post, on October 7, 2016, President Obama issued an Executive Order (which we will refer to as the New EO), lifting all US economic and financial sanctions on Myanmar.  This order follows a September 14, 2016 announcement on which we previously advised.  The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a fact sheet, frequently asked questions (FAQ), and delisting announcement; the Financial Crimes Enforcement Network (FinCEN) issued a press release and an exceptive relief announcement implementing and explaining these changes.

The most significant change in the New EO is the termination of the national emergency involving Myanmar and the revocation of previous executive orders imposing economic and financial sanctions on the country.  These sanctions are set forth in OFAC’s Burmese Sanctions Regulations, which OFAC should soon remove from the Code of Federal Regulations (CFR).  With the issuance of the New EO, OFAC no longer administers any economic or financial sanctions on Myanmar.  However, certain restrictions on commerce and financial activity, detailed in our new in-depth advisory, will remain.

How the 2016 Election Will Impact Public Policy Developments

Sunday’s presidential town hall debate was the second of three opportunities for candidates Donald Trump and Hillary Clinton to make their case to the American electorate.  In addition to the discussion of personal and character issues, the candidates touched on a range of policy issues, including tax policy, financial services, energy, and international trade.  The candidates shared their visions for the country for the next four years.

The general election is four weeks from today.  In addition to the White House, the election will determine control of the House and Senate.  Regardless of the outcome, there will be a new administration next January.

This second advisory in the series highlights some key public policy areas, such as the consideration of sanctions, that a new administration and Congress will face.  Please join us on November 10 for a webinar where we break down the election and offer our analysis on the implications for you and your industry.  For more information, please see our advisory.

Dramatic Rise in FinCEN Enforcement

On October 3rd, the Financial Crimes Enforcement Network (FinCEN) assessed a $12 million penalty against the sports betting company CG Technology. Like something out of a bad TV crime drama, CG executives were involved with an illegal gambling operation dubbed the “Jersey Boys.”  CG failed to implement an anti-money laundering (AML) compliance system and to train its staff accordingly, which led to repeated failures to file required reports on currency transactions and suspicious activities. The fine is one of the largest ever for an entity in the gambling industry and highlights FinCEN’s increasingly aggressive AML enforcement efforts, as well as the agency’s growing focus on entities outside the financial industry, as traditionally understood.

Over the last several years FinCEN has dramatically ramped up its enforcement activity. Our analysis found both the number of individual enforcement actions brought and the aggregate dollar amount of penalties assessed by the agency skyrocketed between 2011-2015 when compared with the five-years prior. Continue Reading

U.S. Lifts All Economic Sanctions on Myanmar (Burma)

Today the President issued an Executive Order lifting all U.S. economic and financial sanctions on Myanmar, pursuant to a previous announcement on which we commented at the time.  In addition, the Treasury Department’s Office of Foreign Assets Control (OFAC) has issued a fact sheet, frequently asked question (FAQ), and delisting announcement, and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued a press release and an exceptive relief announcement.

At the time of the President’s September 14, 2016 announcement that he intended to terminate the national emergency and remove most U.S. sanctions on Myanmar, there remained some uncertainty about the extent of the President’s authority to lift certain sanctions with a statutory mandate, and about how far the President would want to go in removing restrictions on doing business with the Myanmar military (Tatmadaw) and in sensitive sectors such as jade and gemstones.  Today’s action answers most of these questions.  OFAC’s sanctions on Myanmar are no longer in force, and it is expected soon to remove the Burmese Sanctions Regulations (BSR) from the Code of Federal Regulations (CFR) in their entirety.  All 111 Specially Designated Nationals (SDNs) listed by OFAC under the authority of the BSR (i.e. under the “[BURMA]” tag) have already been delisted.  That includes government officials, major private sector businesses and – quite notably – military-linked state-owned enterprises and military procurement/contracting entities.  This means that in general it will now be lawful from a sanctions perspective for U.S. companies and individuals to do business with former SDNs, although various legal and reputational risks will continue to complicate any such endeavor, especially for dealings with military-linked entities.

Continue Reading

Significant Update to US Encryption Export Rules (and Other Commerce Control List Changes)

On September 20, the US Department of Commerce (DOC) published a final rule revising the Commerce Control List (CCL) and other sections of the Export Administration Regulations (EAR).  This rule implements revisions decided at the December 2015 Wassenaar Arrangement plenary meeting, but also includes additional updates to the EAR.  The final rule revises 58 Export Control Classification Numbers (ECCNs), adds two ECCNs, and revises license exception eligibility for seven ECCNs.  The changes center on ECCNs controlled for national security reasons, but the most significant changes are to DOC’s encryption rules, which last saw major changes in June 2010.  The DOC changes took effect at the September 20 publication of this final rule.  For more information, please see our advisory.

Chinese Business and Tourist Travelers Must Enroll in Visa System Beginning November 29

Beginning the end of November, nationals of the People’s Republic of China holding 10-year B visas will not be able to travel to the United States without a valid Electronic Visa Update System (EVUS) enrollment.  US Customs and Border Protection (CBP) has designated November 29 as the implementation date for the newly-created EVUS enrollment requirement.  EVUS enrollment is mandatory for People’s Republic of China passport holders traveling to the United States pursuant to 10-year, B-1 (business visitor), or B-2 (visitor for pleasure) visas.  Enrollment, where required, must occur prior to commencing travel.  Failure to register will result in denial of boarding or denial of entry by land.  Thus, the initial implementation of the EVUS requirement has the potential to create significant disruption in China-US travel for the unprepared. For more information, please see our advisory.

When is the Right Time to Make a CFIUS Filing?

Foreign investors in US companies often must consider multiple regulatory issues.  Among those is whether to seek clearance from the Committee on Foreign Investment in the United States, or CFIUS.  A related question is when to file with CFIUS.  Comparatively little guidance is available on the latter question.  To learn more about whether and when to make a CFIUS filing, read the full Law360 article here.