1. Chinese trade tensions escalate
On June 3, President Joe Biden signed Executive Order 14032, replacing and replacing previous implementing orders that prohibited Americans from buying and selling government securities of Chinese companies and entities identified as military companies. Chinese Communists (CCMC). This new OE transfers the authority from the Ministry of Defense to the Treasury to designate CCMCs, and has broadened the scope of companies potentially subject to designation to include not only Chinese companies linked to the “military-industrial complex” in China, but also those of the “military-industrial complex” in China. technology sector. The Office of Foreign Assets Control (OFAC) updated the government list of Chinese companies and entities subject to a US investment ban (and renamed it the list of Chinese companies in the military industrial complex (CMIC)) . Trading in these securities must generally cease before August 2; however, divestiture operations may continue until June 2, 2022. Companies will need to assess their direct and indirect holdings in CMICs, ensure that appropriate controls are in place, and monitor OFAC’s list of CMICs at the same time. ‘to come up.
China responded on June 10 by adopting and promulgating the PRC’s Law on Combating Foreign Sanctions. Chinese law will be triggered when action to comply with sanctions laws injures a Chinese side; the law provides a legal basis for massive reprisals against individuals and their families as well as organizations responsible for enforcing foreign sanctions. Thus, entities doing business in both jurisdictions will have to navigate potentially competing legal obligations under US sanctions and Chinese anti-sanctions regulations.
2. The recent crackdown on forced labor in China has an impact on imports of several industries
In the face of continued repression from the Biden administration, companies need to know how to show that their imported goods were not manufactured with forced labor. The Customs and Border Protection (CBP) provided guidance in two recent decisions regarding the documentation that importers must submit to demonstrate that goods held by CBP under a withholding order, or WRO, were not subjected to forced labor. According to these recent decisions, the necessary documents include records of production or processing, descriptions of each entity and production stage of an item’s supply chain, transport documents and properly dated certificates of origin and descriptive. However, CBP has since removed those decisions from its public website and said they were posted in error, creating some uncertainty as to the accuracy of the guidance contained therein.
- Solar sector latest target of import ban due to forced labor in Xinjiang
Materials such as polysilicon, used in solar power generation, join other industry-specific products previously banned for import into the United States from Xinjiang province. Xinjiang producer Hoshine Silicon Industry Co. Ltd. would use forced labor in the production of its polysilicon. The CBP issued a WRO on silica-based products manufactured by Hoshine and its subsidiaries, resulting in shipments being held back at US ports. Importers of these products should be aware of this new ban and be prepared to provide CBP with relevant documents showing that the goods were not produced in Xinjiang if a shipment is detained at the port.
- Fishing industry targeted for use of forced labor
Further demonstrating a policy of non-tolerance towards companies that resort to forced labor, CBP issued a WRO against Dalian Ocean Fishing Co., Ltd. As a result of this action, all tuna, swordfish and other seafood from fishing vessels owned or operated by Dalian will be banned from entering the United States and detained in port. This is the first such action against an entire fleet and not just against a ship.
3. Imminent deadline for export licenses to Russia related to commercial space launches
As announced in March, the US Departments of Commerce and State added Russia to the list of countries subject to a policy of refusing to export defense items and services. There are currently exceptions, and the State Department can license government space cooperation and commercial space launch activities until September 1. The Department of Commerce also approves these licenses on a case-by-case basis. Commercial space industry players should review their ITAR and EAR licensing requirements and submit any license applications as soon as possible so that they can receive approval before these exceptions expire on September 1.
4. Exemptions for the “Made in America” requirement will be limited
On June 11, the White House Office of Management and Budget released a memorandum to federal agency heads containing additional guidance on exemptions from President Biden’s “Made in America” executive order of March. . The OE 14005 aims to increase the national content requirements for federal contracts and fill in the gaps to determine the country of origin. The recent memo outlines the first steps on how to minimize exemptions from all Made in America laws. There will be phased implementation, but foreign entities will need to focus on the details when contracting with the government.
5. Foreign entrepreneurs can stay in the United States under the restarted international entrepreneur rule.
The Biden administration has announced that it is reinstating the International Entrepreneur Rule and its parole program, which allows foreign entrepreneurs to stay in the United States temporarily to develop and oversee their start-up businesses. The program was created under the Obama administration and was previously scheduled to be terminated by the Trump administration. To qualify, entrepreneurs must own at least 10 percent of the capital of a newly created company, demonstrate that the startup has substantial growth and job creation potential, have received a capital investment of at least 250 $ 000 from qualified US investors or at least $ 100,000 in grants or awards from government entities and play a vital role in the operation of the startup.
6. The fight against corruption established as a fundamental national security interest by Biden
In a June 3 national security memorandum, the Biden administration pledged to fight corruption as an economic and national security priority. There will be a 200-day inter-agency review, which will lead to policy recommendations on how to better fight corruption. While it will take time for any changes in application or policy to be implemented, companies should take this time to review their compliance programs to protect themselves and their employees from potential liability. .
Business tip of the month: Aluminum importers and brokers should be made aware of the Commerce Department’s new licensing requirements for imports of most aluminum products as of June 28. Licenses can be obtained up to 60 days before the scheduled entry date and must be completed by the completion of the CBP Entry Summary (CF-7501) documentation. The aluminum import monitoring and analysis system is modeled on the steel import monitoring and analysis system and uses the same license application platform.