Modernizing NAFTA: The United States-Mexico-Canada Trade Agreement

By Curtis Dombek, Enumale Agada and J. Scott Maberry on January 17, 2020 Posted in Free Trade Agreements (FTA), United States-Mexico-Canada Agreement (USMCA)

On January 16, 2020, the United States Senate voted by an overwhelming majority to pass the implementing legislation for the United States-Mexico-Canada Trade Agreement (USMCA) after months of tense negotiations with Democrats over revisions to the original agreement which had been signed by all three signatories on November 30, 2018.

The USMCA has been touted by its supporters as a comprehensive and modern trade agreement to replace the North Atlantic Free Trade Agreement (NAFTA). But how does the USMCA differ from NAFTA and what is so modern about it? The following is a brief overview of the notable differences between this 21^st century agreement and its predecessor: Continue Reading

UPDATED: China Trade War Scorecard: Keeping Track of Tariffs

By Reid Whitten, Julien Blanquart* and Lisa Mays on January 16, 2020 Posted in Import and Customs

With round after round of tariffs on Chinese goods, announcements, removals, exclusions, delays, increases and, of course, tweets regarding all of the above, it can be easy to get lost on where, exactly, things stand with respect to Tariffs implemented under Section 301 of the Trade Act. Below we provide a brief overview and reference chart, complete with links to the relevant notices. We will update the chart as the U.S. government adds, removes, or changes the tariffs.

** This is an update to our August 19, 2019 post. **

Almost two years into the trade war, the United States and China have reached a preliminary agreement. On January 15, 2020, the United States Trade Representative published that agreement. The agreement includes provisions on intellectual property, technology transfer, agriculture, currency, and expanding trade.

Per that agreement, the USTR will reduce duties on List 4A, which is roughly $120 billion worth of Chinese goods, from 15 to 7.5 percent effective on February 14, 2020.
Continue Reading

Where’d You Get Your Tech? New Rules May Allow the U.S. Government to Unwind Your Latest IT Transaction

By Reid Whitten and Julien Blanquart* on December 18, 2019 Posted in CFIUS, Export Administration Regulations (EAR) and Commercial Exports, ITAR and Defense Exports

On November 26, 2019, the U.S. Department of Commerce issued a proposed rule that could change how you procure IT goods and services.

The rule would allow the Commerce Department to review your company’s purchase of information and communications technology and services (ICTS), and to impose mitigation measures or unwind your transaction.

Go ahead. Read that again. We’ll wait. Continue Reading

Chasing Huawei: BIS May Change the Rules of the Game to Target One Player

By Reid Whitten and Lisa Mays on December 18, 2019 Posted in Export Administration Regulations (EAR) and Commercial Exports

The U.S. Department of Commerce is considering tightening export controls in two major ways. The changes are aimed at choking off supplies to Huawei, but the move could impact a wide range of commercial transactions for all EAR items and technology exported or reexported to China. Continue Reading

Who’s the Boss? The CFIUS “Control” Definition for Global Venture Capital Funds

By Reid Whitten on November 12, 2019 Posted in CFIUS, Uncategorized

My VC Fund has U.S. and non-U.S. General Partners, will I need to file CFIUS declarations for every investment I want to make in tech, in infrastructure, or in a company with customers’ personal data?

This is a critical question at the fore of concerns for diversified investment funds with foreign-person directors. There are more than a few funds that have non-U.S. General Partners – perhaps posted overseas to scout potential investments abroad, or U.S. residents but not yet citizens who bring global experience to a U.S. table. In an increasingly global marketplace, there is a clear potential advantage for a U.S. investment fund to look for the most talented investors with the broadest perspectives from around the world. Continue Reading

Laundering the Loot: Videogame Developer Valve Ends In-game Key Sales Because of Financial Criminal Activity

By Fatema Merchant and James Gatto on November 12, 2019 Posted in Anti-Money Laundering

Money laundering is no game. Yet, some games have been used for money laundering. That’s what prompted Valve to announce that it would end the online sales of loot box “keys” for its game Counter-Strike Global Offensive (CS:GO).

As of last week, Valve indicated that CS:GO container keys purchased in-game can no longer leave the purchasing account. Thus, they cannot be sold on the Steam Community Market or traded. Pre-existing CS:GO container keys are unaffected–those keys can still be sold and traded.

These CS-GO keys have historically been traded on the Steam Community Market as well as third party websites. The keys could be bought with money from the in-game shop or from Steam. Continue Reading

The Golden Ticket: Will Your Company be Excepted from New CFIUS Regulations?

By Reid Whitten on October 18, 2019 Posted in CFIUS

By now, you have skimmed through the proposed FIRRMA regulations issued on September 17 2019, and you have very likely read a dozen summaries of those regulations (with titles like “New Proposed CFIUS Regulations Published” or “Five Things You Have Got to Know About FIRRMA” or even “Drop 10 Pounds in One Week AND Learn About Foreign Investment Restrictions!”), but none of those summaries, including our excellent précis of the regulations, could cover all the details in the more than 300 pages of text proposed by the Committee on Foreign Investment in the United States.

For that reason, we propose a series of focused articles where we will get our hands dirty and dig into the regulations to unearth those little gems that may be an advantage to your company.

Today we will look at the concepts of Excepted Foreign States and Excepted Investors and help you determine whether your business may slip the net of the new CFIUS regulations implemented under FIRRMA and invest in U.S. businesses without the burden of a CFIUS notification or filing. Continue Reading

One Higher Ed Requirement To Know Now

By A. Joseph Jay, III, J. Scott Maberry and Lisa Mays on October 18, 2019 Posted in Uncategorized

The U.S. Department of Education is just now starting to pay attention to a reporting requirement in the Higher Education Act (HEA) that harkens back to the 1980s. Penalties for failure to properly report can be stark, including imprisonment. While this Administration’s Education Department has typically engaged with the higher education community, its responses to outreach on this recently expanded requirement have been terse. Continue Reading

A Low-Key Way to Eliminate Thousands in Import Duties: Miscellaneous Tariff Bill (MTB) Duty Suspension

By J. Scott Maberry and Lisa Mays on October 18, 2019 Posted in Import and Customs

On Friday, October 11, 2019, the U.S. International Trade Commission (ITC) opened the Miscellaneous Tariff Bill (MTB) “duty suspension” process. That process allows companies to petition for suspensions and reductions to the normal duty on qualifying U.S. imports. A successful MTB petition can be very valuable: if the suspension is granted, the importer can save up to $500 thousand per year on import taxes. The deadline to submit a petition is December 10, 2019. Continue Reading

CFIUS Proposes Rules to Implement FIRRMA

By Reid Whitten, Brian Weimer and Eamon Tierney on September 20, 2019 Posted in CFIUS

Key Takeaways:

Technology Infrastructure and Data. CFIUS will focus its review on investments in critical Technology, critical Infrastructure, and sensitive personal Data (“TID Businesses”).
- Critical technologies is defined to include certain items subject to export controls along with emerging and foundational technologies under the Export Control Reform Act of 2018.
- CFIUS provides a very helpful list of critical infrastructure and functions to help assess whether any business is a TID Business. We reproduce most of this list at the end of this blog article. (Sneak preview: telecom, utilities, energy, and transportation dominate the list.)
- The proposed regulations provide much-needed guidance on what constitutes sensitive personal data and also seek to limit the reach of the definition so it does not cast too wide a net over transactions in which CFIUS really should have no national security concern.
Exceptions for Certain Countries. Investors from certain countries may be excepted from CFIUS jurisdiction when making non-controlling investments.
New Set of Rules for Real Estate. In a companion piece, CFIUS proposed for the first time a detailed set of rules related to investments in real estate. We will cover this in a separate blog article to be published in the near future.
Expansion of Short-Form Declaration Use. The proposed rules provide parties the choice to use a short-form declaration for any transaction under CFIUS jurisdiction in lieu of a long-form notice.
Comments Due by October 17, 2019. Members of the public may submit comments on the proposed regulations any time between now and October 17, 2019. Final regulations must be adopted by CFIUS and become effective no later than February 13, 2020.

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