Updated Antiboycott Rules
Strengthening antiboycott measures. On October 6, the DOC announced the strengthening of the antiboycott enforcement program. Antiboycott rules prohibit U.S. persons from engaging in foreign government-sanctioned boycotts against U.S. allies. The new rules impose enhanced penalties, reprioritize violation categories, require admissions of misconduct, and place a renewed focus on foreign subsidiaries. Notably. BIS has frequently pushed the industry to implement effective compliance programs. The antiboycott policy changes appear to be part of that effort. With the enhanced antiboycott laws, companies should reevaluate their compliance programs, ensuring antiboycott activities are covered, and foreign subsidiaries of U.S. companies understand their obligations.
Expansive, New Export Controls on Semiconductors
New controls. On October 7, BIS announced new controls on semiconductor exports to China and established new criteria for making additions to the Entity List. BIS added new control classifications to the Commerce Control List (CCL) in the EAR for advanced chips and manufacturing equipment for such chips; three new foreign direct product rules; U.S. person controls; and catch-all controls related to supercomputers and semiconductors. Read more about the controls in our Bass, Berry & Sims blog.
Notably. The two new rules cover considerable ground. They are complicated and highly fact-specific. Companies should carefully review the rules and note, in particular, that certain provisions have different effective dates.
What comes next? National Security Advisor Jake Sullivan articulated the administration’s position on American technological leadership in September when he called to develop “as large of a lead as possible” in critical technologies rather than maintain the old approach of keeping a “relative” advantage over adversaries. According to reports, the Biden administration is currently weighing imposing new controls limiting China’s access to quantum computing and artificial intelligence software. The Administration reportedly continues to outline an outbound investment review mechanism via Executive Action. Additionally, reports suggest that the United States is pushing for a deal with its allies to implement the recent semiconductor rules jointly.
If you have any questions about these enforcement updates and how they may impact your business, please contact the authors.
International Trade Practice Group
The Bass, Berry & Sims International Trade Practice Group helps clients navigate the complex regulations associated with a global marketplace. Our team is experienced in guiding clients through challenging issues related to economic sanctions (OFAC), exports (DDTC and the ITAR; BIS and the EAR), imports (CBP), anti-bribery (DOJ and SEC), anti-boycott regulations (OAC and Treasury), and the Committee on Foreign Investment in the United States (CFIUS). Our work in this area has been recognized in leading legal industries outlets, including Chambers USA whose researched revealed “Bass, Berry & Sims represents a range of clients in export controls and economic sanctions matters. The team is experienced in handling EAR, OFAC and ITAR issues.” A client added, “Bass, Berry & Sims is very responsive and service-oriented.” (from Chambers USA 2022 ). Learn more here.
Thaddeus R. McBride 202-827-2959 | tmcbride@bassberry.com
Thad McBride advises public and private companies on the legal considerations essential to successful business operations in a global marketplace. He focuses his practice on counseling clients on compliance with U.S. export regulations (ITAR and EAR), economic sanctions and embargoes, import controls (CBP), and the Foreign Corrupt Practices Act (FCPA). He also advises clients on anti-boycott controls, and assists companies with matters involving the Committee on Foreign Investment in the United States (CFIUS).
7 International Trade Enforcement Roundup |
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