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Mario Torrico is an associate in the Government Contracts, Investigations, and International Trade Practice Group in the firm's Washington, D.C. office.

Today, in a rare demonstration of bipartisanship, the U.S. Senate passed the Uyghur Forced Labor Prevention Act (the “Act”) – the text of which was a compromise between Senator Marco Rubio (R-Fla.) and Representative Jim McGovern (D-Mass.) – which had already passed the house on Tuesday of this week. Over the years, including most recently in February 2021 (see our post here), we’ve seen different attempts from both chambers to pass legislation prohibiting the imports of goods from Xinjiang or the Xinjiang Uygur Autonomous Region (“XUAR”) – a region in China where, per the U.S. Department of Labor and media reporting, the Chinese government has detained and persecuted more than one million Uyghurs and other Muslim minorities. President Biden has signaled that he will sign this bill into law.

Continue Reading The Uyghur Forced Labor Prevention Act: Congress Finally Takes Action

How do you tackle the complicated and often seemingly insurmountable problem of human rights abuses around the world? The U.S. Government typically uses a variety of tools: diplomatic efforts, international aid, sanctions, import restrictions on forced labor – the whole carrot-and-stick universe. Enter… Export Controls.

Continue Reading The Intersection of Export Controls and Human Rights: Combating the Misuse of Technologies to Curb Human Rights Abuses

The Treasury Department’s Office of Foreign Assets Control (OFAC) took action last Monday, November 8, 2021, and sanctioned a Latvia-based exchange, Chatex, its associated support network, and two ransomware operators for facilitating financial transactions for ransomware actors. In total, OFAC designated Chatex and 57 cryptocurrency addresses (associated with digital wallets) as Specially Designated Nationals (SDNs). OFAC took this action pursuant to Executive Order 13694, issued in 2015, which provides broad sanctions authority to address the national security threat posed by malicious cyber-actors outside the United States.

Continue Reading OFAC Enforcement Impacts NFTs: As Crypto Enforcement Ramps Up to Combat Ransomware, Robust Compliance is Key

Background

Last Friday, the Office of Foreign Assets Control (OFAC) published more targeted guidance for digital asset companies related to compliance with sanctions and best practices for mitigating risks. This guide comes on the heels of OFAC’s first enforcement action against a cryptocurrency exchange, SUEX (which we discussed in our blog here). Given the rise of ransomware threats from malicious cyber-actors that are often linked to sanctioned countries and persons, the lack of very robust regulatory oversight of the virtual currency world, the emerging nature of the technologies, and the growth of the market, it is clear that OFAC hopes crypto companies will pay more attention to sanctions risks and compliance with the issuance of this guidance. While the guide covers a lot of familiar territory, we outline a few key takeaways below.


Continue Reading Sanctions Compliance for Crypto: OFAC Issues Guidance Targeting Virtual Currency Industry

Today, the United States Trade Representative issued a notice informing the importing community about a new Section 301 exclusion process and seeking comments from affected importers. The comment period begins on October 12, 2021, and ends on December 1, 2021.

Continue Reading Exclusions 2.0. The USTR Announces a New Section 301 Exclusion Process for Chinese Products

Companies are putting forth more effort, thought, commitment, and resources into environmental, social, and corporate governance (ESG) considerations across their business lines. The focus of ESG has primarily centered around climate change and sustainability, but the “S” in ESG is becoming increasingly important to consumers and other stakeholders. As global corporate citizens become more vocal about asserting their identity and values, it is critical to think about how their global trade and compliance policies and supply chains reflect those values. Issues like forced labor in the supply chain, third party diligence, and how to build an ethical culture are part and parcel of a strong compliance program. But these issues also present opportunities for companies to reflect their values in a fundamental way and speak to what consumers are demanding with their dollars.

Continue Reading ESG, Global Trade, and Forced Labor: Aligning Compliance with Company Values

Yesterday, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions on SUEX OTC, S.R.O, a cryptocurrency exchange, for its role in laundering money to ransomware attackers. According to OFAC, SUEX facilitated criminal transactions involving at least eight ransomware variants and 40% of SUEX’s known transaction history involved bad actors. The designation of SUEX is the first time OFAC has sanctioned a virtual currency platform – and this approach may prove to be a useful regulatory tool to make malicious cyberactivity less profitable and therefore deter cyber-criminals. Treasury Secretary Janet Yellen said the government is “committed to using the full range of measures, to include sanctions and regulatory tools, to disrupt, deter, and prevent ransomware attack[s].”

Continue Reading First OFAC Sanctions Against a Cryptocurrency Exchange: Could the Designation of SUEX Signal an Enforcement Trend to Combat Cybercrime?

This is the second of three articles on the Solar Industry and Forced Labor. Here we focus on interactions with solar module suppliers. Our first article in the series focused on regulations in this area, and our next will focus on investors and their requirements.

Continue Reading Clean Energy’s Messy Problem II: The Solar Industry, I͟t͟s͟ S͟u͟p͟p͟l͟i͟e͟r͟s, and the Complex Task of Combatting Forced Labor

On June 9, 2021, President Biden signed an Executive Order (“EO”) revoking Trump’s orders on TikTok and WeChat. In their stead, President Biden’s EO subjects software applications controlled or owned by “foreign adversaries” (i.e., China, Cuba, Iran, North Korea, Russia, and Nicolas Maduro) to a review process led by the Commerce Department to evaluate whether an app presents U.S. national security concerns. This EO fits within the broader confrontation between the United States and China when it comes to emerging technologies, sensitive personal data, and the threats we see from cyberattacks that exploit vulnerabilities in U.S. IT systems.
Continue Reading Beyond TikTok and WeChat: How Biden’s New EO Could Impact Foreign-Owned Apps

Last week, on June 3, 2021, President Biden issued an Executive Order (“E.O.”) prohibiting U.S. investments in designated Chinese companies deemed to undermine “the security or democratic values of the United States and [its] allies” (see here). The E.O. is the most recent in a long list of foreign policy actions seeking to put pressure on China using economic tools to curtail China’s surveillance and intelligence activities against the United States. The E.O. amends and supersedes Trump’s Executive Order 13959 (“E.O. 13959”), as amended by Executive Order 13974 (“E.O. 13974”), which similarly prohibited U.S. persons from engaging in certain transactions with companies placed on the Defense Department’s Chinese Communist Military Companies (“CCMC”) list. The E.O. contains a new list, the “Chinese-Military Industrial Companies” (“CMIC”), that replaces the CCMC for purposes of prohibiting certain transactions by U.S. persons. The new CMIC list includes many of the previously-designated companies on the CCMC list, including, for example, Huawei and Hikvision. While previous prohibitions on these companies focused on export restrictions, the U.S. government is tightening the avenues for U.S. companies to safely conduct business with many Chinese behemoths. For U.S. companies that deal regularly with China, it would make sense to think more broadly about those business relationships as companies develop their strategic plans.
Continue Reading President Biden Issues a New…ish Ban on Certain Chinese Investments