On October 7, 2022, in a move that was hailed by senior U.S. government officials as a paradigm shift in U.S. export controls policy toward China, the Department of Commerce’s Bureau of Industry and Security (BIS) issued an interim final rule that amends the Export Administration Regulations (EAR) to impose new and expanded controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items. Transactions for supercomputer end-uses and transactions involving certain entities on the Entity List are now subject to additional export controls, as are certain semiconductor manufacturing items and transactions for certain IC end uses. U.S. person activities as they relate to certain semiconductor activities in China are also now restricted.

Certain aspects of the rule, specified below, including the availability of license exceptions, became effective immediately on October 7, 2022. The new restrictions on U.S. person activities under § 744.6 became effective on October 12, 2022. The remainder of the provisions with a delayed effective date are specified below and will become effective on October 21, 2022. BIS is also accepting public comments on the interim final rule through December 12, 2022.

Separately, also on October 7, 2022, BIS issued a final rule, which revised the Unverified List (UVL) and clarified the activities and criteria that may lead to the addition of an entity to the Entity List. BIS stated that a sustained lack of cooperation by the host government in a country where an end-use check is to be conducted, such as China, that effectively prevents BIS from determining compliance with the EAR, will be grounds for adding an entity to the Entity List.

The U.S. policy goals behind the new rules are ambitious and seek to degrade China’s advanced computing capabilities in an unprecedented manner. As summarized recently by National Security Advisor Jake Sullivan: “On export controls, we have to revisit the longstanding premise of maintaining ‘relative’ advantages over competitors in certain key technologies.  We previously maintained a ‘sliding scale’ approach that said we need to stay only a couple of generations ahead. That is not the strategic environment we are in today. Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.”

The broad implications of these new rules, along with their efficacy from a policy standpoint, may take some time to come fully in to focus. For now, it is clear that any U.S. or non-U.S. individuals or entities that play any role in the global semiconductor supply chain—whether as manufacturers, producers, consumers, or otherwise—need to carefully review the new rules to determine what is required to comply and, if necessary, seek guidance or a license from BIS.

Continue Reading BIS Issues Expansive New Rules Targeting China

In a new rule that took effect on September 15, 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) expanded and clarified the scope of the Export Administration Regulations (EAR) in a number of ways, some of which impose significant new compliance challenges related to Russia and Belarus.  To stay up with the latest developments, readers are encouraged to monitor and review new guidance in the form of Frequently Asked Questions (FAQs) published by BIS at https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/russia-belarus.

Continue Reading US Implements Subtle but Significant Expansions of Export Controls on Russia, Belarus, and Other Countries

On July 19, 2022, President Biden issued Executive Order (EO) 14078 to strengthen the US Government’s efforts to combat and deter hostage-taking and wrongful detention of US nationals abroad.  Issued pursuant to the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act (Levinson Act), the International Emergency Economic Powers Act, and other authorities, EO 14078 strengthens existing hostage recovery activities and infrastructure and authorizes the Secretary of State, in consultation with the Secretary of the Treasury and the Attorney General, to impose blocking sanctions on persons determined to be responsible for or complicit in, to have directly or indirectly engaged in, or to be responsible for ordering, controlling, or otherwise directing, the hostage-taking of a United States national or the wrongful detention of a United States national abroad, or to have attempted to engage in such activity.

Continue Reading New Executive Order Targets Persons Responsible for Hostage Taking and Wrongful Detention

Between April 18 and May 2, 2022, the US government continued to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia.  Most significantly, on April 21, President Biden issued a Proclamation prohibiting “Russian-affiliated vessels” from entering US ports.  Otherwise, the US government has focused on utilizing its existing authorities to impose further costs on Russia.

Over the last two weeks of April, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated over 40 individuals and entities including Transkapitalbank (TKB), re-issued an expanded set of Ukraine- / Russia- Sanctions Regulations (URSR), and issued several new or revised general licenses, including one relating to the provision of assistance by nongovernmental organizations, and 8 Frequently Asked Questions (FAQs).

Separately, the Commerce Department’s Bureau of Industry and Security (BIS) continues to be focused on restricting the Russian aviation sector, issuing a temporary denial order (TDO) on the Russian cargo aircraft carrier, Aviastar, for operating aircraft on flights into and out of Russia without the BIS authorization required under the Export Administration Regulations (EAR), and providing weekly updates to its list of commercial and private aircraft operated in potential violation of the EAR.

Continue Reading April 18 – May 2, 2022 Russian Sanctions Update

The United States government has continued to impose numerous economic sanctions and export controls measures following Russia’s invasion of Ukraine.  On February 24, 2022, the US Commerce Department’s Bureau of Industry and Security (BIS) significantly expanded export controls applicable to Russia.  On February 25, 2022, the US Treasury Department’s Office of Foreign Assets Control (OFAC) added Russian President Vladimir Putin and others to the Specially Designated Nationals (SDN) List.  It also imposed significant economic sanctions measures targeting Russia’s financial system — including by imposing sanctions on Russia’s largest financial institutions and limiting the ability of certain Russian state-owned and private entities to raise capital.  Together, OFAC’s actions, which were taken pursuant to Executive Order (EO) 14024 following Russia’s invasion of Ukraine, are estimated to affect nearly 80 percent of all banking assets in Russia.

Finally, on February 26, 2022, the United States and European Union countries, together with the United Kingdom and Canada, announced an agreement to block certain Russian banks from access to SWIFT (with Japan also agreeing the following day), to impose sanctions on Russia’s Central Bank, and to limit the ability of certain Russian nationals connected to the Russian government to obtain citizenship in their countries. They further agreed to ensure effective transatlantic coordination in implementing sanctions, including by sanctioning additional Russian entities and persons, and by working together and with other governments around the world to identify and freeze sanctioned Russian assets.

Continue Reading Biden Administration Imposes Sweeping Financial Sanctions, Export Controls after Russian Invasion of Ukraine

In this advisory, members of our Sanctions and Export Control team provide a preliminary assessment of the expected policy approach of President-elect Biden’s administration to major US sanctions programs, including China and Hong Kong, Russia, Iran, Cuba, Venezuela, Syria, North Korea, and Sudan sanctions programs.

While specific steps to be taken will be revealed in

On September 18, 2020, the US Commerce Department announced the prohibited transactions (which would be effective as of September 20, subject to a court-ordered suspension discussed below) aimed at limiting the use of WeChat (and possibly also TikTok) within the United States. These prohibitions may have some effect outside the United States as well. Technology companies, Internet infrastructure companies, financial institutions, and other companies that support these apps should take particular note since the prohibitions are directed at business-to- business engagement, as opposed to individual users of these apps. However, users should consider that their ability to continue to use WeChat in particular within the United States may become severely restricted, and perhaps eventually eliminated. The Commerce Department’s September 18 announcement explains that these prohibitions are intended to “protect users in the U.S. by eliminating access to these applications and significantly reducing their functionality.”

As background, on August 6, President Trump issued Executive Orders 13942 and 13943, directing the Secretary of Commerce to identify, within 45 days, specific types of prohibited transactions related to ByteDance Ltd. (including TikTok) and WeChat. See our earlier blog post for more detail. In two Notifications issued on September 18 (the WeChat notice is available here, and the ByteDance / TikTok notice is here), the Commerce Department identified a broad set of business-to-business transactions involving WeChat and ByteDance / TikTok that would be prohibited under US law.

Importantly, the timing for these prohibitions is different for each of the two Notifications.

  • The WeChat prohibitions were to take effect on September 20. However, they were temporarily blocked by a preliminary injunction issued by a US federal magistrate judge on September 19. The outcome of this litigation remains uncertain.
  • The limited ByteDance / TikTok prohibitions that were slated to take effect on September 20 were suspended by the Commerce Department until September 27 at 11:59 p.m. eastern. In a press release issued after the Notifications themselves, the Commerce Department stated that this delay was provided “in light of recent positive developments . . . at the direction of President Trump.” The effective date of most of the ByteDance / TikTok prohibitions as stated in the Notification is not until November 12, 2020, which would align with the 90-day period for divestment of TikTok in the United States that was ordered by the President on August 14. A proposed divestment or other type of partnership to operate TikTok within the United States is currently under review by the Committee on Foreign Investment in the United States (CFIUS). President Trump stated that he has given the most recent proposed deal for TikTok his “blessing,” but the CFIUS process is not yet complete; nor has the deal closed. Commerce’s press release states that “the President has provided until November 12 for the national security concerns posed by TikTok to be resolved. If they are, the prohibitions in this order may be lifted.” The Chinese government has also indicated that any such deal would be subject to its approval as well.


Continue Reading US Commerce Department Identifies Prohibited Transactions Involving WeChat and TikTok

In July 2020, the Committee on Foreign Investment in the United States (“CFIUS”) released its Annual Report to Congress for Calendar Year (“CY”) 2019.  The Annual Report, which fulfills certain statutory reporting requirements, provides information on covered transactions filed with CFIUS during 2019.  Among other things, the 2019 Annual Report provides some initial data and other insights into CFIUS’s administration of the Foreign Investment Risk Review Modernization Act (“FIRRMA”), which expanded the jurisdiction of CFIUS and included new reporting requirements.

Continue Reading Analysis of Annual Report of CFIUS to Congress for Calendar Year 2019

On January 14, Germany, France and the UK initiated the dispute resolution mechanism in the Joint Comprehensive Plan of Action (JCPOA) based on Iran’s decision to pull away from its obligations under the agreement. While the European participants see the dispute resolution mechanism as a way to keep the JCPOA alive, triggering the mechanism also serves as the first of several steps that must be taken before UN and EU sanctions could potentially be reimposed. Though the reimposition of sanctions is far from inevitable, it is important to understand the functioning of the dispute resolution mechanism in order to anticipate the timeline of any possible future developments.
Continue Reading Germany, France and the UK begin the JCPOA’s Dispute Resolution Mechanism Process – A Gateway for the Reimposition of UN and EU sanctions?

On December 26 the State Department will publish a long-awaited rule amending the International Traffic in Arms Regulations (ITAR) by providing a definition of activities that are not exports, reexports, retransfers, or temporary imports at 22 CFR section 120.54. Notably, this definition provides much-needed guidance on whether and under what circumstances end-to-end encrypted technical data is controlled under the ITAR. Published as an interim final rule, the State Department will accept comments through January 25, 2020, which could result in additional changes. However, the effective date of the interim final rule is set to be March 25, 2020, ninety days after publication in the Federal Register.


Continue Reading State Department publishes long-awaited ITAR rule on encryption and other excluded activities