1. Biden Administration Trade Posture
The Biden administration is slowly and steadily reviewing the choices of the Trump administration. So far, the administration has struck a cope with the EU to finish the 17-12 months-outdated dispute over subsidies to Boeing and Airbus, has continued using sanctions as a mechanism to additional U.S. nationwide safety and international coverage, and is addressing home financial coverage to enhance U.S. manufacturing of important applied sciences and to safeguard U.S. know-how in opposition to international unfair commerce practices. At the identical time, President Biden is leveraging relationships with strategic companions such because the EU and Australia to reform the WTO, bolster the Paris Agreement on local weather change, and promote an choice to China’s Belt and Road Initiative with the OECD and G-7. This steadiness between free commerce and safety of home trade is tenuous. On the one hand, Biden has maintained tariffs on metal and aluminum and duties on uncommon earth metals from China. On the opposite hand, to construct new merchandise within the United States, we want uncommon earth supplies, most available in China, which is more and more adversarial to U.S. nationwide safety coverage. Moreover, open and free commerce with international nations, together with China, ends in decrease costs for U.S. shoppers. The subsequent six months will inform us extra as each Congress and the administration use home coverage to construct power from inside and to engender multinational cooperation.
2. Payoneer Settles OFAC Sanctions Violations for Over $1.4 Million
The Office of Foreign Assets Control (OFAC) settled with Payoneer Inc., a publicly traded New York-based on-line cash transmitter, for $1.4 million in civil fines for two,260 obvious violations associated to processing funds for both events positioned within the Crimea area of Ukraine, Iran, Sudan, and Syria, or people listed on the Specially Designated Nationals and Blocked Persons List. OFAC additionally decided that Payoneer’s sanctions compliance program was poor with respect to screening, testing, auditing, and transaction assessment procedures. OFAC discovered that Payoneer had cause to know the placement of the customers it subsequently recognized as topic to sanctions based mostly on widespread indicators of location inside its possession. There are price-efficient methods to keep away from such sanctions violations. Please tell us if you wish to be taught extra.
3. Biden Administration Advises Companies to Exit Xinjiang
In an up to date Xinjiang Supply Chain Business Advisory, the Biden administration advises corporations to contemplate exiting provide chains and investments with hyperlinks to pressured labor or surveillance programs in Xinjiang or different provinces of China; in any other case, they run the chance of violating U.S. regulation. The advisory, collectively printed by State, Treasury, Commerce, Homeland Security, Labor, and the Office of the U.S. Trade Representative, urges corporations with enterprise within the area to undertake heightened due diligence measures. However, the advisory warns that finishing enough due diligence to completely establish and keep away from complicity in human rights abuses might not be potential because of the lack of presidency and company transparency, the specter of detention for auditors and responsive staff, and the police state ambiance in Xinjiang. These elements have led corporations to refuse to conduct audits on this area. This problem can also be a priority for extra than simply U.S. corporations, as seen by the main focus on the G-7 conferences on eradicating pressured labor.
4. U.S. Government Issues Business Advisory on Risks of Doing Business in Hong Kong
In one other interagency advisory, issued on July 16, the U.S. authorities advises corporations working in Hong Kong that they face potential regulatory, monetary, authorized, and reputational dangers. Businesses working in Hong Kong, in addition to people and international nationals, are topic to China’s lately enacted National Security Law (NSL) and its imprecise and broad legal provisions. As such, Hong Kong authorities might require companies to offer info on their clients, censor their clients’ on-line speech, and give up knowledge. Companies ought to proceed to observe the implementation of the NSL and be prepared to reply if the Hong Kong authorities takes motion in opposition to them. Hong Kong is not thought-about a separate vacation spot beneath the Export Administration Regulations, so corporations exporting to Hong Kong should observe the foundations for exporting to China.
5. Top Reporting Foreign Investors Include Japan, Sweden According to Annual CFIUS Report
The Committee on Foreign Investment within the United States (CFIUS) has supplied its annual report to Congress, detailing statistics on important know-how declarations and key determinations, and giving an summary of transactions reviewed by CFIUS. Top reporting international traders in U.S. corporations producing important applied sciences are Japan, Sweden, Canada, Germany, and the UK. Israel and China are decrease on the checklist.
6. Heads Up, Tech Companies: U.S. and Australia Negotiate Tech Transfer Agreement
As of July 1, the United States and Australia have begun negotiating a bilateral Technology Safeguards Agreement to extend cooperation and trade of delicate applied sciences and knowledge within the civil area sector. The settlement will current guidelines that can permit U.S. corporations to collaborate with Australian counterparts, whereas appropriately managing the motion of delicate applied sciences and items.
7. First Biden Administration FCPA Enforcement Action Offers Compliance Reminders
Swiss-based world engineering firm Amec Foster Wheeler Limited (Foster Wheeler) has entered right into a three-year deferred prosecution agreement with the Department of Justice and has agreed to pay $41 million in penalties for violations of the Foreign Corrupt Practices Act (FCPA). Foster Wheeler didn’t correctly conduct due diligence on third-social gathering brokers earlier than hiring them. Those third-social gathering brokers obtained inside confidential info from a authorities official. While Foster Wheeler is a Swiss firm owned by a UK mother or father firm, U.S. authorities asserted jurisdiction as a result of the corporate traded on Nasdaq and engaged in e-mail correspondence associated to the undertaking on a U.S.-based e-mail server, highlighting that even minimal U.S. actions can set off U.S. jurisdiction.
8. China Tariffs (Section 301) Court Case Update
In the continuing Court of International Trade (CIT) case difficult the legality of “Section 301” duties imposed beneath List 3 and List 4A, the CIT has granted a preliminary injunction stopping liquidation of entries that embody such duties. The plaintiffs requested the injunction to maintain the entries unliquidated to protect their rights to 301 obligation refunds on these entries. The request was made as a result of the federal government refused to stipulate that the CIT has the ability to grant refunds of 301 duties on liquidated entries, even when the plaintiffs in the end win. As a results of the injunction, the case is successfully paused whereas the CIT and the events work to agree on a course of to cease liquidation of the right entries and cope with the sensible implications of this probably years-lengthy liquidation freeze. The authorities has been given till Aug. 6 to ascertain a course of for figuring out and freezing the entries that should stay unliquidated. Meanwhile, becoming a member of the litigation continues to be potential and doing so provides corporations an opportunity to recoup List 3 and List 4A duties within the occasion they’re deemed illegal.
Trade tip of the month: The Biden administration has been ramping up sanctions in opposition to a lot of nations, together with Russia, Belarus, and China, and including an elevated variety of entities to U.S. restricted-social gathering lists. U.S. corporations ought to be sure that their compliance packages are in a position to establish any specifically designated nationals, events beneath sectoral sanctions, or different restricted events. Regularly working restricted-social gathering screenings in opposition to buying and selling companions will assist forestall sanction violations.
Additional Resources
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