Turnin’ Havana to Atlanta: The White House Opens Doors for U.S. Telecommunications Investment in Cuba and Latin America

Cuba Map

Historic changes in relations between the United States and Cuba (that touch nerves in Hip-Hop and on Capitol Hill) and new U.S. sanctions against Venezuela may provide increased opportunities for U.S. business generally, and electronic communications technologies and infrastructure providers in particular.  This week’s Cuba and Venezuela headlines, combined with recent and historic shifts in telecommunications and broadcasting markets in Mexico, on which we reported here, herald historic changes in Latin American electronic communications and infrastructure markets.

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New Russian Sanctions Legislation

On December 18, the President signed legislation passed by Congress that authorizes further sanctions on Russia.  The Ukraine Freedom Support Act of 2014 (UFSA) is aimed to assist “in restoring Ukraine’s sovereignty and territorial integrity” and to deter the Russian Government “from further destabilizing and invading Ukraine and other independent countries in Central and Eastern Europe, the Caucasus and Central Asia.” While the legislation authorizes a range of new sanctions on Russia’s defense and energy sectors as well as foreign financial institutions who engage in sanctionable transactions, it also grants the President significant discretion to waive both the industry-wide sanctions and specific transactions on national security grounds.

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Mandatory Reporting of Foreign Direct Investments in the U.S.

Overview

The Department of Commerce’s Bureau of Economic Analysis (BEA) has reinstated the mandatory reporting requirements of the BE–13, Survey of New Foreign Direct Investment in the United States, which was discontinued in 2009 due to budget restrictions.  It is expected to result in the filings of reports from approximately 1,350 U.S. affiliates of foreign companies each year.  The survey collects information on the acquisition or establishment of U.S. business enterprises by foreign investors, which was collected on the previous BE–13 survey, and information on expansions by existing U.S. affiliates of foreign companies, which was not previously collected.  The statistical data will be used to measure the amount of new foreign direct investment in the United States, assess the impact on the U.S. economy and any potential implications for national security, and based on this assessment, inform future policy decisions.

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A New Latitude: Charting a Course for Cuba

Today President Barack Obama made a stunning speech announcing steps the United States will take to reduce U.S. sanctions against Cuba. The announcement followed the release of two U.S. citizens held by the Cuban government. Alan Gross was detained by Cuban authorities in 2009 while working as a USAID subcontractor. Separately, a U.S. intelligence officer, not named in the announcement but described by the President as “one of the most important” U.S. intelligence agents in Cuba, had been imprisoned in Cuba for nearly two decades.

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DOJ Issues Opinion, Provides (Some) Comfort on Successor Liability

In a recent Opinion Procedure Release (OPR), Number 14-02, the U.S. Department of Justice expressly limited successor liability for a US company purchasing a non-US company that had paid bribes in the past.  In so doing, DOJ may have given a little bit of comfort to US companies and issuers thinking about purchasing non-US companies.  But as described below, we emphasize “little bit.”

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Military Electronics Export Reform: Let the Chips Fall Where They May

Every time there is a new round of reforms under the President’s Export Control Reform initiative, we hear the same advice:

  1. Controls on certain items are eliminated or reduced (which creates new opportunities for manufacturers and exporters); but
  2. The new rules bring new complexities, so be careful.

Attorneys in the export control space correspondingly inundate us with articles advising, in effect, call your export control lawyer.

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Drop Your Weapons: The United States Restricts Military Exports to Venezuela

The U.S. Department of Commerce, Bureau of Industry and Security (BIS) has amended the Export Administration Regulations (EAR) to restrict exports to Venezuela of certain items intended for “a military end use or end user.”  These changes complement a pre-existing U.S. arms embargo against Venezuela – in place since 2006 – that was imposed because of Venezuela’s failure to cooperate on counterterrorism initiatives.

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China and Australia Conclude Landmark Free Trade Agreement Negotiations

Summary

On November 17, 2014, China and Australia completed their negotiations for a China-Australia Free Trade Agreement (“ChAFTA”) by signing a Declaration of Intent which contained the essential elements of the free trade deal and commits both countries to draft the legal text of the agreement for signature at a later date.  This agreement ends almost a decade of free trade negotiations between China and Australia.  The ChAFTA is significant because it will initially lower and ultimately eliminate tariffs on a wide range of exports between the two countries boosting bilateral trade between the world’s second largest economy and a significant U.S. free trade partner in Asia.

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Round Two: Prosecutors Reopen Bank Settlements

With our political system suffering from a growing chasm down party lines, our public servants seem to be increasingly vulnerable to public pressure.  Politicians scramble to fight for whatever cause du jour will garner them the most support.  And lately, no political act is guaranteed to please Main Street quite so much as blaming the U.S. banking system for the country’s woes.  (It is not just the government attacking the banks; as we reported here, Arab Bank of Jordan is currently facing penalties after a jury of its peers decided the bank was liable for seemingly attenuated violations of the Anti-Terrorism Act.)

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ECR Episode XI: Rewriting the Guide to the Galaxy – Satellites Passed to Commerce Control

Glancing through the fictional but fascinating Hitchhiker’s Guide to the Galaxy (Rsch. Ford Prefect; Pub. Megadodo Publications), one might recognize that the assertions therein are a bit confusing. Similarly, one might become confused when reviewing another, less whimsical, guide to the galaxy: the revised United States Munitions List Category XV – Spacecraft and Related Articles.

On November 10, 2014 Export Control Reform revisions will go into effect reshaping the USML category that has covered communications satellites for nearly 20 years. If you are responsible for complying with satellite export controls, we offer the same profound and pithy advice one finds right on the cover of the Hitchhiker’s Guide, “Don’t Panic.”

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