On June 1, 2020, the US Department of Justice (DOJ) Criminal Division, with little fanfare, issued updated guidance on the Evaluation of Corporate Compliance Programs (2020 Guidance). The document, which was released without any accompanying public announcement or explanation, updates an April 30, 2019 version of the document (2019 Guidance), as discussed in our May 9, 2019 Advisory. The 2019 Guidance updated original guidance published by the Division’s Fraud Section on February 8, 2017 (2017 Guidance), as discussed in our 2017 FCPA Mid-Year Review.

The DOJ’s evaluation of the effectiveness of a company’s compliance program continues to be a relevant factor to charging decisions under the Principles of Federal Prosecution of Business Organizations in the Justice Manual, as well as to an organization’s eligibility to receive a reduction in criminal fines calculated under the US Sentencing Guidelines (USSG); it is also important to the DOJ’s assessment of whether a monitor is warranted.

Continue Reading Client Advisory: DOJ Updates Corporate Compliance Program Guidance, Emphasizes Role of Data

On April 29, 2020, the European Commission announced plans to develop a legislative proposal by 2021 that will require EU companies to conduct mandatory human rights and environmental due diligence on their operations and global supply chains. If passed, the new law would also include provisions for corporate liability with possible sanctions imposed for non-compliance.

The announcement follows the publication of a study conducted for the European Commission which focused on the due diligence requirements to identify, prevent, mitigate and account for abuses of human rights, including the rights of the child and fundamental freedoms, serious bodily injury or health risks, and environmental damage including with respect to climate. The announcement comes as part of wider efforts across the European Union to prevent human rights abuses and protect vulnerable workers.

Continue Reading Client Alert: Calls for European Companies to Focus on Human Rights Abuses in Supply Chain

On May 29, President Trump announced in a White House news conference the US government would “begin the process” to revoke the “full range of agreements” providing the Hong Kong Special Administrative Region of China separate treatment from mainland China under US law on topics including “export controls on dual use technologies,” among others, “with few exceptions.” The United States also plans to sanction Chinese and Hong Kong officials “directly or indirectly involved in eroding” Hong Kong’s autonomy.

The president’s announcement contained few specifics on the proposed measures or a timeline for their implementation. Similarly, no Executive Order has been issued by the president identifying any specific changes to be made. We anticipate additional guidance and actions from the White House and relevant agencies, including the US Departments of State, Treasury, and Commerce, in the coming days and weeks.

For more on this issue, click here to see Steptoe’s full Client Advisory.

On Friday, May 1, President Trump issued an Executive Order declaring a national emergency with respect to the threat posed to the United States bulk-power system by certain equipment potentially liable to exploitation by “foreign adversaries.” Under the Executive Order, certain foreign-supplied equipment used in the US bulk-power system will be subject to US government review and potentially prohibited by the Secretary of Energy, in consultation with other US agencies.

Join members of Steptoe’s International Trade, Energy, and Export Controls teams for a 30-minute on demand webinar on how the new Executive Order could impact suppliers and other companies whose products are used throughout the US bulk-power system.

Click here to sign up to view the on-demand webinar.

On May 29, 2020, President Trump announced in a White House news conference that the US government would begin taking steps to revoke the “full range of agreements” providing the Hong Kong Special Administrative Region of China separate treatment under US law on topics including customs, extradition, and export controls “with few exceptions.” The United States also plans to sanction Chinese and Hong Kong officials “directly or indirectly involved in eroding” Hong Kong’s autonomy, the President announced.

The President’s announcement contained few specifics on the proposed measures or a timeline for their implementation. We anticipate additional guidance and actions from the US Departments of State, Treasury, and Commerce in the coming days and weeks.  

Continue Reading United States to Take Steps to Revoke Hong Kong’s Separate Status, Impose Sanctions and Enhanced Export Controls after Beijing National Security Vote

A recent letter from former high-ranking European Commission officials to the current Commission President Ursula von der Leyen raises various trade and market protection concerns and urges the Commission to take certain actions.

The letter raises legitimate areas of concern both as regards the current crisis in global trade and EU trade policy more generally. However, it is less than clear that the letter accurately identifies either the real problems or the best solutions. In our view, a more useful and convincing call to action would emphasize a need rather for rounding out and effective enforcement of a set of EU policy instruments able to address the emergence of new market threats (whether from the US, China or elsewhere, whether in the form of unilateral measures outside the WTO context, massive subsidies or other elements of unfair competition).

Click here for the full Client Alert for more information on this issue and thoughts on EU trade policy.

On May 26, 2020, the European Commission announced that it would not prolong the Export Authorization Scheme for Personal Protective Equipment (PPE) it had put in place due to the COVID-19 crisis. The Commission explained that the scheme has “served its purpose” in ensuring adequacy of supply of PPE in the EU. The measures ceased to apply on the same day.

Since April 26, 2020, exporters have requested more than 1,300 authorizations, of which 95% have been approved. As a result, over 13 million protective masks, around 1 million protective garments and over 350,000 protective masks and visors have been exported from the EU since April 16.

Continue Reading EU Ends Export Authorization Scheme for Personal Protective Equipment

As businesses remain closed and employees continue to work remotely, the Department of Homeland Security (DHS) has revisited COVID-19 related accommodations for Form I-9 Employment Verification. There have been several flexibility policy extensions, with related employer follow-up obligations that must be tracked. There also has been a scheduled Form I-9 update, with related guidance. Employers need to follow all of these developments closely, to assure compliance during this unprecedented situation and after businesses resume normalized operations.

Click here to read the full client advisory.

On May 19, the US Department of Commerce’s Bureau of Industry and Security (BIS) published a new interim final rule, retroactively effective on May 15, amending the Foreign-Produced Direct Product Rule (FPDP) under the US Export Administration Regulations (EAR). The new rule expands the jurisdictional scope of the EAR and restricts the non-US supply of semiconductor chips to Huawei Technologies and its affiliates on the Commerce Department Entity List (Supplement No. 4 to 15 C.F.R. Part 744).

Some aspects of the rule are subject to a “savings clause” or delay in application of the new restrictions. BIS will be accepting comments regarding the interim final rule until July 14.

For more on this issue, read our Client Advisory.

On Tuesday, May 19, the Department of Commerce issued a Notice requesting comments on a newly initiated Section 232 national security investigation into electrical transformers, and key components of the transformers, which we addressed earlier in one of our blog posts. The investigation focuses on liquid and dry transformers above 1 KVA power handling capacity. As set forth in the notice: “[T]he investigation has been undertaken to determine the effect on the national security of imports of Laminations for Stacked Cores for Incorporation into Transformers, Stacked Cores for Incorporation into Transformers, Wound Cores for Incorporation into Transformers, Electrical Transformers, and Transformer Regulators (hereinafter “Products”). If the Secretary finds that Products are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, the Secretary shall so advise the President in his report on the findings of the investigation.” 

Continue Reading Commerce Seeks Comments in National Security Investigation Involving Imports of Electric Transformers, Key Components of Transformers