Picture your company being hauled into U.S. court to defend litigation for your Cuba business that is lawful in your home country. That is the scenario that the Trump administration and Cuba hawks in Congress are aiming to arrange. The Trump administration is preparing to part the practice of past presidents to allow U.S. persons to sue non-U.S., non-Cuban companies for doing business in Cuba, dealing in property seized by the Cuban government since the 1959 revolution.
Continue Reading The New Suits of Havana: How Non-U.S. Companies May Soon Be Sued for Their Business in Cuba

*This is an updated version of the December 10th blog post.

Key Takeaways:

  • Emerging technology sectors are being reviewed now for new export controls that could take effect in 2019 (list below).
  • You may submit comments on the criteria the U.S. government will use to determine what technologies are subject to export controls.
  • The deadline for comments has been extended to January 10, 2019.
  • We can help.


Continue Reading Comment Deadline Extended: Export Controls on Emerging Technologies

Key Takeaways:

  • Emerging technology sectors will soon be subject to new export controls.
  • Affected sectors include biotech, computing, artificial intelligence, positioning and navigation, data analytics, additive manufacturing, robotics, brain-machine interface, advanced materials, and surveillance.
  • New export controls on these sectors will likely require companies to obtain a license to export products to China and other destinations, and impose restrictions on sharing information with foreign nationals.
  • These sectors will also be added the list of industries subject to enhanced foreign investment scrutiny by the U.S. Committee on Foreign Investment in the United States (CFIUS).
  • The U.S. government has invited comments on the criteria to be used to establish new controls. The deadline for comments is December 19, 2018.

Export controls and other regulations often lag a step or two behind the times. That trend has accelerated with the pace of technological advancement. As a result, for many years, technical know-how in many cutting-edge technical fields has not been subject to export controls. This has meant that many commercial technical innovations could be freely exported without significant restrictions. As long as they were not designed for a military application, and no encryption technology involved, many new ideas developed in the United States were simply unaccounted for in the U.S. Export Administration Regulations (EAR).

But the U.S. Department of Commerce, Bureau of Industry and Security (BIS) is about to make up a lot of ground in a single, large leap.
Continue Reading The Little Regulation That Will Make a Big Change in How You Do Business: Department of Commerce to Establish New Export Controls on Emerging Technologies

The Prohibitions

On May 8, 2018, the United States withdrew from the Joint Comprehensive Plan of Action and reimposed all pre-JCPOA sanctions against Iran. We provide a detailed discussion of the reimposition in our article linked here (and linked here is our prediction, a year earlier, that it would happen). After a prescribed wind-down period, all U.S. sanctions on Iran are now in force. Effectively, U.S. sanctions on Iran now return to their pre-2016 levels, including secondary sanctions on non-U.S. companies transacting with the Government of Iran and many of Iran’s industries and financial institutions.
Continue Reading CLIENT ALERT: Iran Sanctions Are Back On: Can Business Continue?

  • On October 10, 2018, the Committee on Foreign Investment in the United States put into effect the first mandatory filing requirement ever imposed by CFIUS. The Department of Treasury’s summary of the Pilot Program is available here.
  • Effective November 10, 2018, CFIUS will require reviews of critical technology investments – including certain non-controlling investments – from any country.
  • A failure to file notice or a new short form declaration to CFIUS may result in a civil monetary penalty up to the value of the transaction.
  • The requirements will not apply to any transaction that is completed prior to November 10, 2018 or any transaction for which the material terms were established prior to October 11, 2018.

Background

On August 13, 2018, President Trump signed FIRRMA into law. FIRRMA is a transformational expansion of the authority of the Committee on Foreign Investment in the United States (CFIUS) to review certain transactions that previously eluded the Committee’s jurisdiction (discussed in our blog, here). Congress left many critical aspects of the FIRRMA framework to be addressed through regulations promulgated by the Department of Treasury. Although we do not expect final rules to be forthcoming until late 2019 or early 2020, Congress empowered the Department of Treasury to “test-drive” parts of FIRRMA through Pilot Programs. Those programs can be implemented simply, taking effect 30 days after publication of the program requirements in the Federal Register. The adoption and implementation of the Pilot Program for critical technologies represents the Department of Treasury’s first attempt to implement substantive parts of FIRRMA prior to issuing formal regulations.
Continue Reading FIRRMA Takes Form as CFIUS Enacts a New Pilot Program Targeting “Critical Technologies”

This week, you have likely heard about FIRRMA, the Foreign Investment Risk Review Modernization Act, the law that will expand CFIUS. We have written about a number of aspects of the new law as it was being made, including the following:

In this alert, we provide a quick overview of the major points of that law.
Continue Reading Expanding CFIUS: New Law Strengthens And Slows Investment Review

All this past week, you have been hearing about FIRRMA, the new legislation that will increase the powers of the Committee on Foreign Investment in the United States that is expected to be signed into law in the coming weeks. As we predicted here and here, FIRRMA will authorize CFIUS to review non-controlling investments by foreign companies, to enhance restrictions on investment in certain “critical technology,” to target real estate deals in proximity to sensitive U.S. Government sites, and to require mandatory filings for certain investments by foreign government-owned entities.
Continue Reading Life in the Fast Lane: CFIUS-Free Investments, if You’re From the Right Country

Imagine telling your company’s Board of Directors that the company will have to knowingly violate the law. Further, you might note, the American Law Institute’s Principles of Corporate Governance state that, with very limited exceptions, a director who knowingly causes the corporation to disobey the law violates his duty of care. The protections of the Business Judgement Rule may not be available to a board member who, charged with navigating the Scylla and Charybdis of a conflict of laws, steers right into the shoals of noncompliance.

Beginning August 6, that will be the situation facing the thousands of companies that are subject to U.S. sanctions on Iran and to EU regulations blocking those sanctions. While it appears to be a stark choice, some nuances to the regulations may make navigating the narrow straights of the conflict of laws a less Odyssean and more practically manageable.
Continue Reading Stuck in the Middle With You: EU Blocking Statutes, Iran Sanctions, and the Thousands of Businesses Caught In Between

This week, there were reports that the Trump Administration would use emergency powers to restrict Chinese investment in the United States. On Wednesday, the White House backed away from that position after the House of Representatives passed a bill on Tuesday expanding and increasing the powers of the Committee on Foreign Investment in the United States (CFIUS). The bill is called the Foreign Investment Risk Review Modernization Act (FIRRMA).
Continue Reading On FIRRMA Ground: Congress to Restrict Foreign Investment and Expand Export Controls

I spent last week in Seoul talking to clients about the latest changes to U.S. trade and sanctions policy (as South Korea is one of Iran’s largest trading partners, it is understandable that some concerns have arisen there in May). Interestingly, a topic that came up often was how to reenter the North Korean market. The people with whom I spoke, in industries ranging from financial, to manufacturing, to technology, to legal, were sanguine on the possibility of a détente and the resulting opportunities for investment, growth, and profit in a reopened North Korea.
Continue Reading Your Way-Too-Early Guide to North Korean Investment: Big Opportunities, Big Risks, and the Regulatory Guidance to Identify Both