On Tuesday, May 19, the U.S. Commerce Department published a regulation (effective May 15, 2020) that prohibits sale to Huawei of a microchip made to a Huawei specification, made outside the United States with non-U.S. materials, sent from a foreign country, by a foreign person.
To quote the philosopher, hol’ up.
How is that even possible? Continue Reading
Posted in Import and CustomsOn May 1, 2020, President Trump issued Executive Order 13920 (“Executive Order”), which prohibited certain transactions involving bulk-power system electric equipment manufactured or supplied by persons owned by, controlled by, or subject to the jurisdiction of a foreign adversary that poses an undue risk of catastrophic effects on the security or resiliency of U.S. critical infrastructure or the national security of the U.S. The Executive Order poses several potential problems for electric industry participants, particularly renewable generation owners, developers and investors, which will likely cause uncertainty in equipment procurement decisions. The Executive Order and its potential issues are discussed below. Continue Reading
Posted in Import and CustomsIs your company in a high-risk zone? Does it have the following risk characteristics?
✓ Your company imports more than $10 million of goods.
✓ You are mid-market: between $50 million and $2 billion in annual turnover.
✓ Your company has experienced higher than average growth in revenues, personnel, or imports over the past 2 – 10 years.
If your company fits this profile, you may be at an elevated risk of customs violations. Many companies in this high-risk zone have outgrown their customs compliance function. Without knowing it, they may be creating violations and, since the statute of limitations is five years, they may not know about the violations until the government comes knocking on their door years after the fact. Continue Reading
Posted in CoronavirusCOVID-19 took the world by surprise and continues to spread across the globe in more than 210 countries and counting. The outbreak in the United States escalated rapidly, with over 585,000 confirmed cases as of April 14, 2020. The federal government and a number of hard-hit states were caught off guard, and soon learned that their inventories of personal protective equipment (“PPE”) and other life-saving equipment such as test kits and ventilators were insufficient to keep pace with the pandemic. The demand for equipment to fight COVID-19 skyrocketed and government and commercial entities have shifted into high gear to respond. Whether motivated by humanitarian concern or commercial enterprise, many state and local governments, companies and individuals are now looking abroad to procure critical supplies on an expedited basis. At the same time, many foreign industrial manufacturers are positioning themselves for the high demand of exports by adapting their facilities to produce PPE. For example, Chinese electric car maker BYD announced on March 13, 2020 it is now the largest face mask factory in the world—less than one month after converting its facilities in response to the pandemic. In the midst of these exigent circumstances, the global supply chain landscape is replete with Foreign Corrupt Practices Act landmines—and well-intentioned companies hoping to partner with foreign PPE manufacturers could become a casualty if they don’t watch their step. Continue Reading
Posted in CFIUSThe pandemic that has put our world a bit sideways has, as you might expect, set back our publication date. We should have paper copies of the (much anticipated) CFIUS Book: Second Edition available by mid-May 2020. However, because we have the text ready, we will publish a series of preview excerpts for your review and, of course, as teasers for the New York Review of Books.
In this excerpt we discuss a new decision that investors will face as they approach investment in the United States, whether to file a full Joint Voluntary Notice or to file a short-form Declaration, also sometimes referred to as “CFIUS Lite.”
Please don’t hesitate to reach out and tell us what you think.
— Reid Whitten Continue Reading
The scenario happens all the time:
Your engineering department has identified a need for more personnel who will work with export-controlled information. Management has approved the hiring, and your Human Resources manager has drafted the job posting.
What could go wrong? Export controls and anti-discrimination laws require employers to navigate an often-overlooked fine line when recruiting and hiring foreign nationals for positions involving export controlled information.
Taking a break from reporting on COVID-19 legal developments, we turn for a moment to what is happening now on export control of autonomous vehicle technology.
The autonomous vehicle R&D sector is booming, largely in the last three years. Companies are investing in sensor technology and machine learning, and creating pilot programs to test self-driving cars both for individuals and ride-sharing purposes.
Posted in CoronavirusThe global Coronavirus Disease 2019 (“COVID-19” or “coronavirus”) outbreak has caused supply chain disruptions to businesses around the world. From delayed production to halted factory operations and slim shipping and freight options, the coronavirus costs keep mounting for businesses facing huge losses. Developing a cogent response to the outbreak can be extremely challenging, given the scale of the crisis and the rate at which it is evolving. Sheppard Mullin has mobilized a task force to assist clients address potential legal issues that may arise with respect to their supply chain or contracts.
Posted in CoronavirusWith the growing concern about Coronavirus Disease 2019 (“COVID-19” or “coronavirus”) some foreign nationals who live outside the U.S. have decided to fly to the U.S. and wait out the crisis. This article discusses the related visa and immigration issues, and what U.S. Customs and Border Protection requires to admit someone into the U.S. Continue Reading
Posted in Import and CustomsOn December 2, 2019, the U.S. Trade Representative (USTR) announced that in response to a digital services tax law passed in France, it would be retaliating with stringent tariffs on luxury products coming from France. The potential tariffs could target up to $2.4 billion worth of French imports into the United States, with duties as high as 100%.[1] Continue Reading
