Companies and financial institutions rely on their counsel to stay on top of current and upcoming sanctions and export controls policies. In this rapidly changing political environment, do you have the knowledge you need to keep clients informed?
In both business and finance, organizations must be aware of their compliance and disclosure obligations, enforcement trends and priorities, and emerging risks. And it’s not enough to simply know about them – in all industries, companies are expected to make compliance programs a priority, or risk steep penalties.
The Trump administration has implemented numerous sanctions and export control measures. Under the incoming Biden administration, we are certain to see these policies evolve. Here are some examples of the current landscape and what to anticipate in the years ahead:
In an attempt to limit Huawei’s access to products using U.S. semiconductor software and technology, the Trump administration’s Commerce Department’s Bureau of Industry and Security (BIS) expanded and extended U.S. export controls jurisdiction to certain items when destined for Huawei or its affiliates that are designated on the BIS Entity List.
Additionally, BIS issued a final rule that significantly expands the restrictions in connection with transfers of certain items subject to the Export Administration Regulations for “military end use” and “military end users” in China, Russia, and Venezuela.
Another Trump administration policy resulted in the passage of the Hong Kong Autonomy Act (HKAA). The HKAA represented changes to, and the tightening of, U.S. export control restrictions applicable to Hong Kong in an attempt to maintain the autonomy of Hong Kong. The HKAA expands the range of persons potentially subject to U.S. sanctions – those involved in compliance should stay on top of this.
Finally, the Trump administration relied on economic tools of coercion to further foreign policy aims. U.S. sanctions against Iran have continued to escalate, resulting in multilateral tensions. Sanctions against Russia may increase if concerns are raised about attempted interference in the presidential election. Under a Biden administration, will we see alignment between the U.S., EU and Canada with respect to these sanctions? Stay tuned.
Of course, with sanctions come countersanctions. Russia, the EU, and China, among others, have increased the use of countersanctions to push back against U.S. sanctions and to threaten economic harm against parties that choose to comply with U.S. requirements. Any such measures could influence the policies of the incoming administration.
In the face of these complex, changing issues, anyone involved in compliance should make sure they understand where we’ve been, and where we’re going, in order to help clients develop best practices for trade controls and other activities.
For over twenty years, Practising Law Institute (PLI) has offered the go-to program on trade control laws and regulations. At PLI’s December 10 live webcast, Coping with U.S. Export Controls and Sanctions, high-level officials from the Departments of Commerce, State, Treasury, and Justice will provide an inside look at these topics. The program will include interactive discussions among key officials from the government agencies that regulate cross-border trade and investment, as well as experienced corporate executives and top lawyers in the field.
Practising Law Institute is a nonprofit learning organization dedicated to keeping attorneys and other professionals at the forefront of knowledge and expertise. PLI is chartered by the Regents of the University of the State of New York and was founded in 1933 by Harold P. Seligson. The organization provides the highest quality, accredited, continuing legal and professional education programs in a variety of formats which are delivered by more than 4,000 volunteer faculty including prominent lawyers, judges, investment bankers, accountants, corporate counsel, and U.S. and international government regulators. PLI publishes a comprehensive library of Treatises, Course Handbooks, Answer Books and Journals also available through the PLI PLUS online platform. The essence of PLI’s mission is its commitment to the pro bono community. View PLI’s upcoming live webcasts here.
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