Global Trade & Foreign Policy Insights

On October 9, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a six-page guidance statement to financial institutions about best practices under the Export Administration Regulations (EAR). 

On June 21, 2024, the U.S. Department of the Treasury’s (Treasury) Office of Investment Security released proposed language for the Outbound Investment Security Program (hereafter, the Proposed Rule).

China recently enacted a revision to the PRC Law on Guarding State Secrets, and shortly after Hong Kong followed suit when it passed the Safeguarding National Security Ordinance.

As a resource to our clients, our global team—which includes attorneys resident in China—has designed a mini-series of presentation recordings outlining recent international trade updates between the U.S. and China in key areas. 

On May 20, 2024, the PRC Ministry of Commerce (MOFCOM) announced the inclusion of three U.S. companies on its unreliable entities list over sales of arms to Taiwan. We discussed the implementation of the Unreliable Entity List here. The move mimics similar designations in February 2023, which we wrote about here, and follows recent actions by the BIS and Treasury to apply new export controls and sanctions on Chinese entities for allegedly doing business with Russia.

On February 28, President Biden issued a major new executive order. The E.O. directs the Attorney General to issue regulations within 180 days that prohibit or restrict U.S. persons from engaging in transactions with “countries of concern” involving the transfer of Americans’ bulk sensitive data or U.S. government-related data. 

2024 is already shaping up to be a big year on the national security front. In less than two months, there have already been several notable national security developments.

On September 30, 2022, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published a rule (the Final Rule) implementing the beneficial ownership information reporting requirements of the Corporate Transparency Act (the CTA).

It’s been another big year on the national security front. The Biden administration finally published its long-awaited Executive Order (E.O.) restricting U.S. investors from making investments in Chinese companies working on certain technologies and products. Evidence is mounting that the Committee on Foreign Investment in the United States (CFIUS or the Committee) is taking longer than ever to process transactions and, even when foreign investors can avoid CFIUS review, local communities are starting to fill the gaps in CFIUS’s authorities by making certain investments untenable. Finally, the Department of Energy (DOE) issued proposed guidance on its interpretation of “foreign entity of concern” (FEOC), a term that is becoming popular in national security-related statutes and regulatory frameworks.

On December 4, 2023, the U.S. Department of Energy (DOE) published its proposed interpretation of the statutory definition of “foreign entity of concern” (FEOC) in the Infrastructure Investment and Jobs Act of 2021, commonly known as the Bipartisan Infrastructure Law (BIL).

Financial institutions have long asked how—and to what extent—they need to comply with export controls, and recently, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) have started to respond.

The United States temporarily eased select sanctions related to Venezuela’s oil sector on October 18, 2023, after Maduro’s government and the opposition reached an agreement on electoral guarantees for an internationally monitored vote in the second half of 2024.

Earlier this month, on August 9, 2023, the Biden administration issued its long-awaited Executive Order (the E.O.) announcing new restrictions on the ability of U.S. persons to invest in Chinese companies developing certain types of sensitive technologies and products. The new E.O., titled “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern,” directs the U.S. Department of the Treasury (Treasury) to issue regulations that will either prohibit or require notification of outbound investments in Chinese companies undertaking identified activities relating to certain products and technologies in the following three industry sectors: (1) semiconductors and microelectronics, (2) quantum information technologies, and (3) artificial intelligence.

The annual report for 2022 shows that the CFIUS process is becoming more difficult to negotiate in a timely and predictable manner, and in some cases, transactions can get bogged down in the CFIUS quagmire for several months.

The European Union (EU) formally adopted an eleventh package of sanctions against Russia on June 23, 2023. This package focuses on preventing the circumvention of existing measures and includes a new anti-circumvention tool, new designations, additional import and export control bans and restrictions, new measures related to transport, tighter measures related to energy, clarification on existing measures, and additional media broadcasting bans.

The Committee on Foreign Investment in the United States recently issued two new frequently-asked-questions on its website. The new FAQs provide additional guidance on (1) timing for mandatory filings and (2) ownership disclosure requirements for investment funds. CFIUS does not have many FAQs—and they are not frequently updated—so the new FAQs are particularly noteworthy and provide helpful insight into the areas where CFIUS is most focused.