On August 27, 2020, the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) published an advance notice of proposed rulemaking (“ANPRM”) to solicit comments from industry and other stakeholders about how BIS should approach the establishment of new export controls on “foundational technologies” under the U.S. Export Administration Regulations (“EAR”).   Comments must be received by October 26, 2020.   This is an important opportunity for both U.S. and non-U.S. companies, industry groups, academic institutions and others to have a role in shaping this new U.S. regulatory process at an early stage.

The U.S. government is required under Section 1758 of the Export Control Reform Act of 2018 (“ECRA”) to “identify emerging and foundational technologies” that are “essential to the national security of the United States” and that are not yet subject to export controls for most countries, and then to “establish appropriate controls” on such technologies, which “at a minimum” are to include restrictions on providing such technologies to China and other U.S. arms-embargoed countries.  Therefore, the end result of this process may be new U.S. export controls on China and other countries that are viewed as more sensitive from the perspective of U.S. national security.  Any controls ultimately established for foundational technologies will be relevant not just for export controls, but also other regulatory areas.  Notably, “emerging and foundational technologies” controlled pursuant to Section 1758 of ECRA will be treated as “critical technologies” for the purpose of foreign investment national security reviews led by the Committee on Foreign Investment in the United States (“CFIUS”), as we previously advised.


Continue Reading Export Controls on “Foundational Technologies” – Opportunity for Public Comment

On July 14, the president issued Executive Order (EO) 13936, directing US federal agencies to revoke or suspend the Hong Kong Special Administrative Region’s (HKSAR) special status from mainland China under select laws and regulations.  As of August 15, several agencies had announced rule changes or proposed changes to implement the president’s directive. After

On August 4, a massive explosion tore through Beirut’s port and surrounding neighborhoods, killing over 200 people and displacing an estimated 300,000 from their homes. In the aftermath of the explosion, angry protesters took to the streets and the country’s cabinet resigned.

In the days since the blast, countries around the world have pledged US$300m in humanitarian assistance for Lebanon and a number of charity drives have raised considerable funds. Initial estimates put the material cost of the explosion as high as US$15 billion.

The purpose of this blog post is to provide some topline US sanctions and export control considerations for institutions and individuals considering the distribution of funds and/or goods or services to Lebanon.

For organizations looking for specific advice on navigating US sanctions and export controls, including Steptoe’s pro bono engagements, contact a member of our Economic Sanctions or Export Controls teams.


Continue Reading Charitable giving in times of crisis: Lebanon

On August 6, 2020, the White House issued a pair of Executive Orders (EOs) (available here and here) under the International Emergency Economic Powers Act (IEEPA) that could limit US users’ access to mobile apps from China’s Tencent Holdings Ltd. (Tencent) and ByteDance Ltd. (ByteDance). The EOs, which direct the Commerce Department to identify prohibited transactions within 45 days, could also limit other transactions involving US-origin goods, technology, and software to the companies and certain subsidiaries.

The two EOs build on the IEEPA national emergency declared in EO 13873 of May 15, 2019, Securing the Information and Communications Technology and Services Supply Chain, which, among other things, directs the Commerce Department to restrict the “acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service” that is “designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary.”

(Click here to read Steptoe’s earlier blog post on EO 13873.)


Continue Reading Executive Orders Aim to Restrict US Dealings with Chinese App Makers TenCent, ByteDance within 45 Days

Skirting over financial crime due diligence when considering a quick transaction in an emerging market can cost you dearly down the line when regulators or shareholders discover issues with regulatory compliance after your transaction. The safer and ultimately more cost-effective course may be an independent assessment of the financial crimes compliance risks before completing cross-border

On July 31, The Commerce Department’s Bureau of Industry and Security (BIS) will publish a notification in the Federal Register amending the Export Administration Regulations (EAR) to suspend the availability of all License Exceptions for Hong Kong that provide differential treatment as compared to those available to China.  This EAR change implements the announcement made

Beginning August 13, 2020, executive agencies will be prohibited from contracting with companies that use “covered telecommunications products or services” (i.e., technologies from certain China-based companies) – even if the use is unrelated to performance of federal contracts.

On July 13, 2020, the FAR Council issued an interim rule amending the Federal Acquisition Regulation (FAR)

On July 14, President Trump issued an Executive Order (EO) strengthening and expanding sanctions mandated by Congress under the Hong Kong Autonomy Act (HKAA), which the president also signed into law on July 14. In particular, the EO introduces blocking sanctions against foreign persons pursuant to the International Emergency Economic Powers Act in response to

On July 1, 2020, the US Departments of State, Treasury, Commerce, and Homeland Security jointly issued an advisory, “Risks and Considerations for Businesses with Supply Chain Exposure to Entities Engaged in Forced Labor and other Human Rights Abuses in Xinjiang” (the “Advisory”). Although this Advisory does not set out any new laws, it was published shortly after the Uyghur Human Rights Policy Act of 2020 (the “Act”) was signed into law on June 17, 2020. These developments suggest a shift in enforcement focus on the Xinjiang Uyghur Autonomous Region (“XUAR”), including imports from XUAR, exports and technology transfers to XUAR, and other business activity in China that may implicate XUAR.

The Advisory urges US and non-US businesses, academic institutions, research service providers, and investors with connections to XUAR to implement appropriate human rights due diligence policies, procedures, and internal controls to mitigate reputational, economic, and legal risks. The Advisory suggests that the failure to take appropriate due diligence steps may increase the risk of sanctions or law enforcement activity by the US government.


Continue Reading US Agencies Issue Xinjiang Business Advisory Targeting Tech and Other Industries Along with Supply Chains

The US Department of Commerce’s Bureau of Industry and Security (“BIS”) has issued new FAQs on its website addressing the new military end use / military end user rule (“MEU Rule”) and the expansion of the MEU controls for China, Russia, and Venezuela. For a summary of the MEU rule changes, please see our prior blog post detailing the changes to Section 744.21 and other related provisions in the Export Administration Regulations (“EAR”).

There are 32 FAQs, which provide a summary of the new MEU Rule, guidance on specific scenarios, and interpretations of the key terms, including, “military end use” and “military end user.” Below we discuss a few of the key points from the BIS FAQs regarding military end users, military end uses, and due diligence.


Continue Reading BIS Issues New FAQs Regarding the Expansion of the Military End Use / Military End User Rule