This past year saw a significant dip in the number of Foreign Corrupt Practices Act (FCPA) enforcement actions, but at the same time a series of new and important policy initiatives emanating from the White House and from the Department of Justice (DOJ) that signal a substantial commitment to investigating and prosecuting corruption-related crimes and

On December 23, 2021, and following strong bipartisan support in Congress, President Biden signed the Uyghur Forced Labor Prevention Act (“UFLPA” or “Act”) into law.  P.L. 117-78 (2021).  The UFLPA builds on previous congressional and executive branch actions aimed at responding to allegations of forced labor and other human rights concerns in China’s Xinjiang Uyghur Autonomous Region (“XUAR”).  In particular, the UFLPA introduces a rebuttal presumption that “any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in” the XUAR were made with forced labor and are therefore ineligible for entry into the United States.  In addition, the UFLPA details Congressional expectations for a whole of government enforcement strategy with respect to allegations of XUAR-related forced labor and expands economic sanctions introduced under the Uyghur Human Rights Policy Act of 2020 to cover “{s}erious human rights abuses in connection with forced labor” in the XUAR.

In recognition of the compliance challenges related to the above-described rebuttable presumption, the Forced Labor Enforcement Task Force (“FLETF”) is soliciting comments on how best to ensure that “goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China are not imported into the United States.”  These comments are due no later than March 10, 2022.  As discussed further below, importers should consider submitting comments to the FLETF concerning this set of issues, which will ultimately inform the enforcement strategy employed by U.S. Customs and Border Protection (“CBP”) at the border.  Additionally, importers should begin top-to-bottom reviews of their supply chains to ensure compliance with the newly-introduced rebuttable presumption prior to its implementation in June of this year.

Continue Reading Understanding the Uyghur Forced Labor Prevention Act and What Comes Next

Significant diplomatic capital has been invested by the EU, the United States, the UK and NATO in developing policies to deter Russia from invading Ukraine. Sanctions have been the main focus of discussion. EU Member States agreed in Council Conclusions that potential sanctions will include “a wide array of sectoral and individual restrictive measures that would be adopted in coordination with partners”, and UK Prime Minister Johnson stated before parliament that the UK and its allies are considering “imposing coordinated and severe sanctions, heavier than anything we have done before against Russia”.

However, what exactly such statements mean remains unclear. Furthermore, government officials have explicitly refused to give any information when asked about the details, and those who have given information did so under the condition of anonymity. To help companies plan ahead in light of such uncertainty and to help assess the risk of exposure to EU/UK sanctions, we outline below what EU/UK sanctions may be adopted, and key indicators that may influence both the severity and timing of such sanctions.

Continue Reading Assessing Potential EU and UK Sanctions Against Russia

Economic sanctions and export controls will form a core part of any multilateral response to an escalation of Russia’s military actions targeting Ukraine. While it is not possible to predict with certainty whether an escalation will occur or what form the responsive measures would take, this blog post outlines some of the current US sanctions proposals and authorizations to assist companies in taking preliminary steps to assess their potential exposure.

As of January 2022, none of the United States, the EU, or the UK have implemented any new, significant Russia-related sanctions or export control measures concerning Russia’s recent military buildup near the Russia-Ukraine border. Based on events in 2014 and the sanctions that ensued, companies could face rapid and potentially disruptive regulatory restrictions with wide-ranging impacts on a variety of industries. Some measures could be imposed within hours of a triggering event, or even prior to a specific triggering event. The US, EU, and UK are likely to coordinate a sanctions response to some extent, but some variations across different jurisdictions’ sanctions measures are also to be expected.  According to reports, policymakers have yet to agree on the triggers for new sanctions, and diplomatic efforts are ongoing.

Continue Reading Preparing for New Russia-Related Sanctions and Export Controls

On December 29, 2021, the PRC State Council’s Information Office (the Information Office) published a white paper on export controls, providing a comprehensive picture of China’s current legal and regulatory regime for export controls and potential future changes in export control governance. The document is China’s first white paper on export controls and comes approximately one year after the implementation of the PRC Export Control Law in December 2020.

On the same day, the PRC Ministry of Commerce (MOFCOM), which plays a central role in administering China’s export control regime for non-military items, issued a statement giving more information about the White Paper, while an unnamed MOFCOM official gave an interview to Chinese state-owned media discussing the White Paper in the context of PRC government policy with respect to multilateral export controls as well as China’s national security and development interests.

Continue Reading China’s First White Paper on Export Controls Summarizes Legal Developments, Opposes “Abuse” of Export Controls

On December 9, 2021, the US government announced an arms embargo on Cambodia, driven by a litany of issues, including concerns about the country’s military cooperation with China and human rights abuses.  The arms embargo is implemented through the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR), under amendments made by the Department of State’s Directorate of Defense Trade Controls (DDTC) and the Department of Commerce’s Bureau of Industry and Security (BIS), respectively.

The State Department final rule adds Cambodia to Section 126.1 of the ITAR, which imposes a unilateral US arms embargo. The BIS final rule similarly adds Cambodia to EAR Country Group D:5 (US arms-embargoed countries).  The BIS rule also imposes a more restrictive review policy for license applications for dual-use items controlled for national security reasons and subjects Cambodia to the EAR’s broad military and military-intelligence end-use and end-user restrictions.

Continue Reading US Imposes Arms Embargo on Cambodia Over China Concerns

On December 8, 2021, the UK government announced a package of measures to revise certain aspects of the UK’s export control regime following the completion of a regime review by the government.  The measures include revisions to the licensing criteria for strategic export controls, an expansion in the scope of the military end-use control and a tightening of controls on exports to China.  Taken together, the measures represent a significant reworking of the UK export control regime.  Affected businesses should carefully analyze the new requirements to ensure that they remain compliant, particularly given substantial revisions to the licensing criteria for strategic export controls, which have been applied with immediate effect.

Continue Reading UK Announces Measures To Rework Export Control Regime

They have been almost a decade in the making, but have finally arrived: new U.S. export controls on “cybersecurity items,” including products and technology involving “intrusion software” and IP network communications surveillance.  Published today but effective January 19, 2022, the interim final rule from the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) amends the Export Administration Regulations (“EAR”) to add these new cybersecurity export controls.  The interim final rule is highly technical and complex, but ultimately contains a mix of good news and bad for the cybersecurity community.  BIS states in its press announcement that the rule is only intended to restrict “malicious cyber activities,” but it nonetheless imposes compliance obligations and costs even when activities ultimately are not restricted.  At least in this sense, the rule will impact the entire cybersecurity sector.

Continue Reading Cybersecurity Community Beware: US Finally Enacts “Intrusion Software” Rule

On September 24, 2021, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License 14 (GL-14) and General License 15 (GL-15), authorizing certain types of humanitarian transactions involving Afghanistan that could relate to the Taliban or the Haqqani Network that would otherwise be prohibited by the Global Terrorism Sanctions Regulations (GTSR), the Foreign Terrorist Organizations Sanctions Regulations (FTOSR), or Executive Order (EO) 13224.

Both the Taliban and the Haqqani Network are designated by OFAC as Specially Designated Global Terrorists (SDGTs) pursuant to EO 13224. The Haqqani Network is also designated by the US Department of State as a Foreign Terrorist Organization (FTO) under section 219 of the Immigration and Nationality Act.  Furthermore, several of the individual members of the Taliban and the Haqqani Network are designated by OFAC as SDGTs.

These groups have recently taken control of, and appointed officials (including at least one individual designated as an SDGT) to administer, the Government of Afghanistan and its associated agencies and organizations.  As a result, there are concerns that interactions with the Government of Afghanistan could be prohibited to the extent they involve a person subject to US sanctions or expose parties to broader risks under US counter-terrorism financing laws.

Continue Reading OFAC’s New Afghanistan-Related Humanitarian Licenses: Opportunities and Challenges

On June 9, 2021, the White House issued a new Executive Order (EO) that revokes three Executive Orders issued in 2020 and early 2021 that were aimed specifically at TikTok, WeChat, and eight other China-linked communications and financial technology software applications.

In place of these EOs, the new EO, “Protecting Americans’ Sensitive Data from Foreign Adversaries,” builds on steps the US Commerce Department has already taken under EO 13873 of May 15, 2019, to protect the information and communications technology and services (ICTS) supply chain against threats from China and other identified foreign adversaries.

As a result of the new EO, the US government will further analyze the risks arising from the use of applications such as TikTok and WeChat – including risks related to the security of Americans’ sensitive data — and could take further steps to mitigate those risks, either through existing ICTS regulations or through additional executive and legislative actions.

Continue Reading Biden Administration Revokes TikTok and WeChat Executive Orders, Revises Framework on Security Threats from Foreign Apps