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The Month in International Trade – April 2024

Client Alert | 12 min read | 05.09.24

Top Trade Developments

Crowell Welcomes

Crowell Events

Crowell Speaks

This news bulletin is provided by the International Trade Group of Crowell & Moring. If you have questions or need assistance on trade law matters, please contact Jana del-Cerro, Anand Sithian, or Simeon Yerokun or any member of the International Trade Group.

Top Trade Developments

Aid and Sanctions: Ukraine, Israel, and Taiwan Aid Bill Expands U.S. Sanctions and Export Control Authorities

The latest U.S. foreign aid bill supporting Ukraine, Israel, and Taiwan enacted on April 24, 2024 enhances U.S. sanctions and export controls including expanding (1) the statute of limitations for sanctions violations; (2) the President’s authority to coordinate sanctions efforts with the European Union and the United Kingdom; (3) sanctions and export controls on Iran (including some targeted at Chinese financial institutions); and (4) new sanctions authorities targeting terror groups.

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For more information, contact: Caroline Brown, Carlton Greene, Anand Sithian, Jeremy Iloulian, Laurel Saito

New U.S. Sanctions and Export Controls Imposed on Iran Following Recent Attacks on Israel

On Thursday, April 18, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced new sanctions on Iran following its April 13, 2024 attack on Israel. OFAC designated 16 individuals and ten entities as Specially Designated Nationals and Blocked Persons (SDN), specifically those involved in Iran’s unmanned aerial vehicle (UAV), steel, and automobile industries. In coordination with OFAC, the UK ‘s Office of Financial Sanctions Implementation (OFSI) has also announced that it is introducing sanctions on Iran.

In a separate announcement, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) announced new changes to the Export Administration Regulations (EAR) which further restrict Iran’s access to “low-level technology” and expand the scope of items which require a license for export or re-export to Iran. The new restrictions build on Commerce’s February 2023 action targeting Iran’s involvement in supplying drones to support Russia’s invasion of Ukraine, and impose further restrictions on items that are reexported or exported from abroad to Iran, Russia, Belarus, or the Temporarily Occupied Crimea region of Ukraine and covered regions of Ukraine, which now constitutes all items identified in BIS’s “Common High Priority List.”

For more information, contact: Jana del-Cerro, Jeremy Iloulian Dmitry Bergoltsev

DDTC Publishes Proposed ITAR Amendments to Enhance AUKUS Defense Trade

On May 1, 2024, the Department of State’s Directorate of Defense Trade Controls (DDTC) published a proposed rule that, if implemented, would streamline defense trade between and among Australia, the United Kingdom (UK), and the United States in furtherance of the trilateral security partnership (the “AUKUS” partnership).

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For more information, contact: Jana del-Cerro, Chandler Leonard, Dilan Wickrema

BIS Streamlines Export Controls for Transfers to and Among Australia and the UK

On April 19, 2024, the Department of Commerce’s Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to enhance technological innovation and support the goals of the AUKUS trilateral security partnership.

The interim final rule makes six primary export control policy changes that effectively provide Australia and the UK nearly the same licensing treatment under the EAR as Canada.  The first three changes remove license requirements for national security column 1, regional stability column 1, and missile technology column 1 reasons for control for Australia and the UK.  The fourth change removes license requirements for 0A919 items to Australia and the UK.  The fifth change is the removal of military end-use and end-user-based license requirements for certain items detailed in EAR § 744.9.  The sixth export control policy change revises the requirements for the transfer of certain significant items controlled under ECCN 9E003.

Read the press release on the BIS website here and the link to the Federal Register for the interim final rule is here.

For more information, contact: Jana del-Cerro, Dmitry Bergoltsev, Chandler Leonard, Dilan Wickrema

CFIUS Proposes Enhanced Enforcement and Mitigation Rules and Steeper Penalties for Non-Compliance

The Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) has published proposed regulatory amendments that, if implemented, would expand CFIUS’s authority to seek information for non-notified transactions, establish timelines for parties to respond to CFIUS’s mitigation proposals, and increase penalties for certain violations to the greater of $5 million or the value of the transaction.

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For more information, contact: Caroline Brown, Addie Cliffe, Jana del-Cerro, Nimrah Najeeb, Chandler Leonard, Dilan Wickrema

House Panel Set to Introduce GSP Renewal

The House Ways & Means Committee is set to review a slate of bills addressing trade with China, among which is a bill to renew the Generalized System of Preferences (“GSP”)—which expired in 2020—until 2030. The “Generalized System of Preferences Reform Act” proposes the “largest reforms to the GSP program since inception,” including permanently banning China from eligibility for GSP treatment. The bill would also update other product eligibility criteria, increasing the rule of origin (“ROO”) requirement from 35 to 50 percent, updating the competitive needs limitations (“CNLs”) by increasing the threshold from $215 million to $500 million, and directing the International Trade Commission (“ITC”) to conduct a new economic analysis to identify possible changes to products eligible for duty-free treatment as part of the GSP program. As it stands, the bill is currently awaiting a vote in the House.

Read the text of the bill here.

For more information, contact: John Brew, Andrew Schlegel

Withhold Release Order Issued on Shanghai Select Safety Products and Subsidiaries

17 months since it’s last issuance of a Withhold Release Order (WRO), U.S. Customs and Border Protection (CBP) revives its enforcement mechanism to target a Chinese importer and its affiliates operating in the safety products industry.

Effective Wednesday, April 10, 2024, U.S. Customs and Border Protection (CBP) will detain work gloves manufactured by Shanghai Select Safety Products Company, Limited and its two subsidiaries from China, Select (Nantong) Safety Products Co. Limited and Select Protective Technology (HK) Limited. CBP personnel will detain these products at all U.S. ports of entry and detained shipments will be excluded or subject to seizure and forfeiture if proof of admissibility is not presented to CBP by the importer.

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For more information, contact: John Brew, Pierfilippo Natta, Emily Devereaux

EU Parliament Approves Forced Labor Ban

On April 26th, the European Parliament voted overwhelmingly in favor of adopting a regulation banning all products made with forced labor from the European Union, with 555 votes in favor, 6 votes against, and 45 abstentions.

The approval comes a little over a month after the Parliament and the European Council reached a deal on a draft text of the proposed regulation, which grants the European Commission the authority to investigate “suspicious goods, supply chains, and manufacturers” originating outside of the EU for the possible use of forced labor.

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For more information, contact: Pierfilippo Natta, Andrew Schlegel

Making the EU Courts More Efficient for Trade-Related Decisions

In recent years, the number of cases brought before the Court of Justice of the European Union (CJEU) has significantly increased. To address this, the European Council has adopted changes that should give the CJEU considerably more flexibility in how it handles certain preliminary ruling requests, and in particular those relating to international trade issues.

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For more information, contact: Vassilis Akritidis, Oleksii Yuzko

A New European Commission Proposal on Foreign Direct Investment Screening: Towards Greater Harmonization?

As part of a recent package of initiatives aimed at strengthening the EU’s economic security, the European Commission has put forward a proposal to revise the EU Foreign Direct Investment (FDI) Screening Regulation. This proposal reflects the Commission’s experience with the existing FDI Regulation over the past three years, and it seeks to bring Member State national rules on FDI screening closer together and improve cooperation between Member States and the Commission.

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For more information, contact: Karl Stas, Jean-Baptiste Blancardi

OFSI Launches New Financial Sanctions FAQs

On May 1, 2024, the UK’s financial sanctions regulator – the Office of Financial Sanctions Implementation (“OFSI”) – launched a new Frequently Asked Question service, setting out consolidated responses to frequently asked questions about UK financial sanctions.

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For more information, contact: Dj Wolff, Sophie Davis

Crowell Welcomes

Tim Laderach is an Associate based in our Washington, DC office. He is joining us from University of Michigan Law School. Most recently, Tim was a Law Clerk with the U.S. Senate Committee on the Judiciary, where he worked directly with the staff of Chair Richard Durbin. He has been a Navy Reservist since 2020, where he filled a critical gap in manning as outpatient division officer at Naval Medical Center San Diego while deployed on COVID-19 support orders. Tim has a diverse background in both health and law, having served as the Department Head for the Office of the Attending Physician at the U.S. Capitol, providing top-notch customer service and pharmacy services to a demanding clientele at the highest levels of government (US Congress and SCOTUS). He is looking forward to joining the International Trade Group at Crowell.

Crowell Events

 

Practitioner Perspectives on Proposed AUKUS ITAR Amendments from Australia, the UK, and the United States
Webinar | 05.13.24, 4:30 PM EDT - 5:30 PM EDT | CLE Offered

REGISTER HERE

Crowell lawyers Jana del-Cerro and Dilan Wickrema (C&M recent DDTC Policy office alumni) will be joined by Eva Galfi (Principal at International Trade Advisors in Australia) and Richard Tauwhare (former Head of Export Control Policy in the UK) to discuss the rulemaking, explain the practical implications, identify outstanding questions, and provide our thoughts on likely next steps.

For questions about this webinar, please contact Jessica Bernanke.

Crowell Speaks

“Changing Sanctions: How to Stay Ahead?” – ENGAGE 2024 (June 4, 2024).
Speaker: Anand Sithian

Masterclass: The Threat from Within a Financial Institution (May 17, 2024).
Speaker: Anand Sithian

U.S. Sanctions in 2024: Key Developments and Compliance Challenges (May 16, 2024).
Speaker: Anand Sithian

“Custom Broker Management” – ICPA Europe Conference - Dublin (April 24, 2024).
Speaker: Vassilis Akritidis

Czech Arms Company Reassures CFIUS Over Purchase Of US Ammunition Business
April 9, 2024 – Global Competition Review
Related Professionals: Caroline Brown

“The Fourth Line of Defense: Whistleblowers and the New Cost of Non-Compliance” – 2024 Association of Certified Anti-Money Laundering Specialists (ACAMS) Assembly Hollywood Conference (April 8, 2024).
Panelist: Anand Sithian

“Financial Crime Considerations: OFAC and FinCEN Latest Developments” – Prepaid Accounts Compliance (April 8, 2024).
Speaker: Nicole Succar.

“Countering Sanctions and Export Controls Evasion in the Financial Services Industry” – Kharon and Crowell Webinar (April 4, 2024).
Speakers: Jana del-Cerro, Dj Wolff

Banks Need Better Data to Catch Export Control Evasion, Industry Official Says
April 1, 2024 – Export Compliance Daily
Related Professionals: Jana del-Cerro, Dj Wolff

Contacts

Insights

Client Alert | 3 min read | 12.13.24

New FTC Telemarketing Sales Rule Amendments

The Federal Trade Commission (“FTC”)  recently announced that it approved final amendments to its Telemarketing Sales Rule (“TSR”), broadening the rule’s coverage to inbound calls for technical support (“Tech Support”) services. For example, if a Tech Support company presents a pop-up alert (such as one that claims consumers’ computers or other devices are infected with malware or other problems) or uses a direct mail solicitation to induce consumers to call about Tech Support services, that conduct would violate the amended TSR. ...

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