Updated as of March 9, 2022
Key Takeaways of OFAC (Treasury), BIS (Commerce), and State Actions
- Major Russian Banks Blocked from the U.S. Financial System
Russian Risk: Transactions with Russian Banks and Exports to Russia Create Greatest Exposure Under New EU and UK Ukraine-Related Sanctions
Updated as of March 3, 2022
Key Takeaways of EU and UK Recent Actions Against Russia and Ukraine Breakaway Regions
- The EU adopted sanctions restrictions targeting financial institutions, other entities, and individuals, and imposing territorial restrictions on Donetsk and Luhansk. The sanctions also include broad export restrictions to Russia detailed below.
- In the UK, Prime Minister Boris Johnson has promised and adopted a “massive package of economic sanctions” including asset freeze restrictions; potential exclusion of Russian banks from the UK financial system, including preventing access by such banks to GBP and clearing services in the UK; and dual-use export restrictions to Russia.
U.S., UK and EU Sanctions Over the Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) Regions of Ukraine
Updated as of February 25, 2022
Key Takeaways
- On February 21, 2022, the White House issued a new Executive Order (EO) that imposes comprehensive sanctions
Verify, Then Trust: Commerce Adds 33 Parties in China to Unverified List
- BIS added 33 Chinese companies to the Unverified List.
- The UVL places lesser restrictions designees than an Entity List or Sanctions designation
- BIS may not have been able to verify the entities because of new Chinese laws restricting compliance with extraterritorial laws; creating a potential conflict of laws for these and other companies.
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Arming for a Trade War: The EU Proposes an Unprecedented Anti-Coercion Regulation
Key Takeaways
- The proposed regulation would arm the EU with a counterstrike capability if non-EU countries take economic action against a Member State.
- Where a Member State is subject to economic interferences from non-EU states that affect its legitimate sovereign choices.
- The European Commission to take some or all of the following measures against the interfering state:
- Impose tariffs;
- Implement quotas;
- Restrict access to EU financial markets; or
- Reduce intellectual property protections[1]
Continue Reading Arming for a Trade War: The EU Proposes an Unprecedented Anti-Coercion Regulation
CFIUK Comes to Life: The National Security and Investment Act 2021
A new framework for foreign direct investments in the United Kingdom
Takeaways
- The United Kingdom Government has adopted a CFIUS-style National Security and Investment Act (“the Act”).
- The new law takes effect in later in 2021, but UK Government may look back at deals from November 2020 onward.
- The Act is considered one of the most far-reaching systems in the world, carrying civil and criminal penalties for a failure to notify.
- A notifiable acquisition completed without the approval of the Secretary of State is void (of no legal effect).
- The UK Government has stated that it will work closely with investors to help ease the market into the new framework of investment rules.
Continue Reading CFIUK Comes to Life: The National Security and Investment Act 2021
CFIUK: The United Kingdom Introduces a New Mechanism for Foreign Direct Investment Screening
Key takeaways
→ The new National Security and Investment Bill expands the UK government’s powers to intercede in acquisitions of UK companies where it determines there is a potential national security threat.
→ The Bill creates a new government agency, the Investment Security Unit (ISU) to oversee foreign direct investment review, removing the power from the competition/antitrust regulator, the CMA.
→ Regulators will be able to “call in” transactions that were not notified but that the Secretary of State determines may pose a national security risk.
→ A mandatory notification will be introduced for certain sectors, including penalties for failure to notify, but the details of those requirements have not been completed.
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The Next Four Years in International Business
Over the past few weeks, we have been speculating on the international trends and tides we expect to see in the next four years under a new U.S. presidential administration. So that you can enjoy our prognostications (before our program gets greenlighted as a Netflix special) we provide here:
- A recording of our webinar, entitled “The Four Years in International Business Webinar”
(for those playing along at home, see if you can spot the part where Scott’s power goes out while we’re discussing tariff reductions!)
- A bulleted summary of the key takeaways of our webinar.
Continue Reading The Next Four Years in International Business