On November 21, 2023, the U.S. Office of Foreign Assets Control (OFAC) announced its largest settlement in history with the virtual currency exchange Binance. This almost-billion dollar settlement is a part of a larger comprehensive settlement with the Department of Justice, FinCEN, and the CFTC, totaling over $4 billion. OFAC found that Binance had allowed 1.6 million transactions in violation of multiple sanctions regimes while Binance’s C-Suite was complicit. Binance’s blunders that led to this enforcement action highlight the importance of management commitment to compliance programs.Continue Reading Binance’s Paper Compliance Program Crumples Under OFAC Scrutiny in Largest OFAC Settlement in History
In 1947, then President Harry Truman pledged that the United States would support any nation in its efforts to resist Communism and prevent its spread. The policy was commonly called, “Containment,” capturing the concept that countries aligned with U.S. policy would surround the Soviet Union and its allies, containing the spread of their ideologies. The policy was maintained as doctrine and a guiding principle in U.S. policy throughout the Cold War era.Continue Reading China Semiconductor Export Regulations, Episode IV – “Technological Containment” – U.S. Semiconductor Restrictions Aim to Align Allies with U.S. Policy
The US just catapulted into being the world leader on regulating AI. Bypassing Congress, the White house issued an Executive Order focusing on safe, secure and trustworthy AI and laying out a national policy on AI. In stark contrast to the EU, which through the soon to be enacted AI Act is focused primarily on regulating uses of AI that are unacceptable or high risk, the Executive Order focuses primarily on the developers, the data they use and the tools they create. The goal is to ensure that AI systems are safe, secure, and trustworthy before companies make them public. It also focuses on protection of various groups including consumers, patients, students, workers and kids.Continue Reading White House Executive Order Ramps Up US Regulation of and Policy Toward AI
- Advanced Computing and Supercomputing ECCNs are expanded.
- Controls applied to exports to countries other thanChina; countries from where items may be reexported to China.
- Chipmaking equipment controls are expanded and the de minimis rule reduced.
- New entities are added to the U.S. Entity List with the Footnote 4 (FN4) FDPR designation.
- More U.S.-person activity is controlled.
The U.S. antiboycott laws and regulations have been around since the era of disco. In stark contrast to fast-moving sanctions and export controls, we rarely see updates to the antiboycott regulations or enforcement strategies. Last October, however, the Department of Commerce, Bureau of Industry and Security (BIS) announced enhancements to its antiboycott enforcement strategy. As part of its implementation of this updated enforcement strategy, BIS has both expanded the scope of required antiboycott reports and flagged antiboycott compliance specifically for government contractors. These moves demonstrate how BIS plans to focus its enforcement efforts on Federal contractors.Continue Reading Antiboycott Update for Government Contractors and More
On August 9, 2023, President Biden issued an Executive Order (E.O.) ordering the issuance of outbound investment restrictions. This E.O. comes after nearly a year of anticipation (as we have documented on several occasions over the past year). This is the start of the reverse Committee on Foreign Investment in the United States (CFIUS) process that has been mostly speculation (and blog articles) until yesterday. In conjunction, the Treasury Department issued a press release, fact sheet, and Advance Notice of Proposed Rulemaking (ANPRM) seeking comments from the public on the proposed restrictions by September 28.Continue Reading Reverse CFIUS Unveiled: Focus on China, Semiconductors, Artificial Intelligence, and Quantum Computing
The North American Free Trade Agreement (NAFTA) may have been replaced effective July 1, 2020 by the United States-Mexico-Canada Agreement (USMCA), but the rules of NAFTA remain alive and well in the halls of the enforcement agencies on both sides of the border.Continue Reading Gone but Not Forgotten: The Continuing Importance of NAFTA Compliance
The Department of Homeland Security (“DHS”) announced on July 21, 2023 they will publish a revised version of Form I-9 on August 1, 2023. DHS also announced an enhanced remote verification flexibility using video for E-Verify employers, both for clean-up of I-9s created during the pandemic and going forward.Continue Reading DHS Announces New Form I-9 and Remote Verification for E-Verify Employers
On March 31, 2023, the U.S. Department of Treasury and Internal Revenue Service (IRS) released proposed guidance clarifying how manufacturers may meet the critical minerals and battery sourcing requirements for the clean vehicle tax credit under the 2022 Inflation Reduction Act (“IRA”). The IRA substantially modified the tax credit incentive structure of the Internal Revenue Code as it relates to electric vehicles (“EV”). As the demand for lithium and critical minerals is higher than ever, taxpayers and EV manufacturers alike have been eagerly anticipating this guidance.Continue Reading Tax Credits for Electric Vehicle Batteries Under the Inflation Reduction Act: Free Trade Agreement Edition
On June 23, 2023, the EU released its 11th package of sanctions on Russia. This package is designed to improve enforcement with new anti-circumvention rules, new trade restrictions, and new designations. The anti-circumvention rules are quite a novel aspect and could result in the first extraterritorial reach of European sanctions.Continue Reading The EU’s 11th Sanctions Package: The Long(er) Arm of the Law
The United States and its allies are aiming to choke off the supplies that support the last vestiges of Russian industry. On May 19, 2023, the Bureau of Industry and Security (BIS) released new regulations implementing additional restrictions under the Export Administration Regulations (EAR) as well as corrections and clarifications on existing controls for Russia and Belarus. Those additions build on recent export control regulations issued on February 24, 2023 (which we discuss here) and significantly expand controls over items that can be used in even basic electronics and manufacturing. The new regulations continue BIS’s push to leave very little that may be sent into Russia from the United States.Continue Reading Everything but the Kitchen Sink (and Maybe That Too!): New Export Controls on Russia Cover Whole Categories of Low-Level Commercial Electronic and Mechanical Equipment