American Trade & Manufacturing Blog

OFAC Sanctions Petroleos de Venezuela, S.A. (PdVSA)

Posted in Economic Sanctions

In light of the political crisis in Venezuela and the U.S. government’s support for the self-declared Interim President, Juan Guadió, on January 28, 2019, the Office of Foreign Assets Control (OFAC) added Petróleos de Venezuela, S.A. (PdVSA), Venezuela’s state-owned oil and gas company, to its list of Specially Designated Nationals and Blocked Persons. As a result, U.S. persons are now generally prohibited, subject to the limited exceptions below, from engaging in any transactions, directly or indirectly, with PdVSA or any entities owned 50 percent or more by PdVSA. As one of the most important sources of revenue for the embattled regime of Nicolás Maduro, this new designation is intended to further pressure Mr. Maduro to relinquish power.

As U.S. Treasury Secretary Steven Mnuchin stated, this designation “will help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela. The path to sanctions relief for PdVSA is through the expeditious transfer of control to the Interim President or a subsequent, democratically elected government.”

Along with this designation, OFAC concurrently amended previously issued General License (GL) 3 and issued several new GLs authorizing certain maintenance, wind down, and other activities, including, but not limited to, the following:

  • General License 3A, which supersedes GL 3 in its entirety, authorizes all transactions related to and the provision of financing for, and other dealings in specified bonds as well as bonds issued both prior to August 25, 2017 and by U.S. entities owned or controlled, directly or indirectly, by the Venezuelan government, other than Nynas AB, PDV Holding, Inc. (PDVH), CITGO Holding, Inc. (CITGO), and any of their subsidiaries.
  • General License 7 authorizes:
    • through July 27, 2019, U.S. persons to engage in transactions and activities with respect to PDVH, CITGO, and any of their subsidiaries, where the only PdVSA entities involved are PDVH, CITGO, or any of their subsidiaries;
    • through April 28, 2019, PDVH, CITGO, and any of their subsidiaries to engage in transactions and activities ordinarily incident and necessary to the purchase and importation of petroleum and petroleum products from PdVSA and its subsidiaries.
  • General License 8 authorizes, through July 27, 2019, Chevron Corporation, Halliburton, Schlumberger Limited, Baker Hughes, and Weatherford International to continue operations in Venezuela involving PdVSA or its subsidiaries.
  • General License 9 authorizes all transactions and activities ordinarily incident and necessary to dealings in any debt (including specified bonds, promissory notes, and other receivables) of PdVSA or its subsidiaries, issued prior to August 25, 2017, provided that any divestment or transfer of, or facilitation of divestment or transfer of, any holdings in such debt must be to a non-U.S. person. GL 9 also authorizes all transactions and activities ordinarily incident and necessary to dealings in any bonds issued prior to August 25, 2017 by PDVH, CITGO, Nynas AB, or any of their subsidiaries.
  • General License 10 authorizes U.S. persons in Venezuela to purchase refined petroleum products for personal, commercial, or humanitarian uses from PdVSA or its subsidiaries. Notably, this GL does not authorize any commercial resale, transfer, exportation, or reexportation of refined petroleum products.
  • General License 11 authorizes, through March 29, 2019, U.S. person employees and contractors of non-U.S. entities located outside the United States and Venezuela to engage in all transactions and activities ordinarily incident and necessary to the maintenance or wind down of operations, contracts, or other agreements involving PdVSA or its subsidiaries.
  • General License 12 authorizes, through April 28, 2019, all transactions and activities ordinarily incident and necessary to the purchase and importation into the United States of petroleum and petroleum products from PdVSA or its subsidiaries. This GL also authorizes, through February 27, 2019, all transactions and activities ordinarily incident and necessary to the wind down of operations, contracts, or other agreements, including the importation into the United States of goods, services, or technology involving PdVSA or its subsidiaries.
  • General License 13 authorizes, through July 27, 2019, all transactions and activities where the only PdVSA entities involved are Nynas AB or any of its subsidiaries;
  • General License 14 authorizes all transactions that are for the conduct of the official business of the U.S. government by U.S. government employees, grantees, or contractors.

In general, revenues owed to PdVSA or its subsidiaries from the activities authorized in these GLs are to be deposited in blocked accounts, which will be released upon a peaceful transition of power. In addition, on January 25, 2019, President Trump signed an Executive Order that broadens the previous definition of “Government of Venezuela” to now include persons that have acted, or have purported to act, on behalf of the Government of Venezuela, including members of the Maduro regime.

These measures mark a significant expansion of U.S. economic sanctions on Venezuela, and additional measures are not off the table. “The United States is holding accountable those responsible for Venezuela’s tragic decline, and will continue to use the full suite of its diplomatic and economic tools to support Interim President Juan Guaidó, the National Assembly, and the Venezuelan people’s efforts to restore their democracy,” said Secretary Mnuchin.

The Crisis in Venezuela – New Sanctions Forthcoming?

Posted in Economic Sanctions, Export Controls

On January 23, 2019, the leader of Venezuela’s National Assembly, Juan Guaidó, declared himself the acting President of Venezuela and announced he would assume the powers of the Venezuelan executive branch until new national elections are held. The move was a direct challenge to Venezuela’s sitting president, Nicolás Maduro, who was reelected to a second term in a widely denounced, allegedly rigged election last year. Several countries across the Americas, including, most notably, the United States, have recognized Mr. Guaidó as the legitimate Venezuelan President. As Vice President Mike Pence explained in an op-ed, “[t]his is a humanitarian crisis and also a matter of regional security.” He added, “[f]or the sake of [U.S.] vital interests, and for the sake of the Venezuelan people, the U.S. will not stand by as Venezuela crumbles.”

U.S. companies doing business in Venezuela should exercise caution, as reports indicate that new U.S. economic sanctions against Venezuela could be forthcoming. Current U.S. sanctions do not prohibit doing business in Venezuela or with the Venezuelan government, but instead focus on certain financial transactions involving the Venezuelan government and certain sanctioned individuals and companies, including those operating in the gold sector as well as Venezuelan government officials. With certain exceptions, current financial restrictions prohibit U.S. persons from engaging in transactions related to, the provision of financing for, or other dealings in certain new debt involving the Venezuelan government, including government-owned or -controlled entities such as Petróleos de Venezuela, S.A. (PdVSA); bonds issued by or dividend payments or other distributions of profits to the Venezuelan government; purchases of securities from or any debt owed to the Venezuelan government; any digital currency/coin/token issued by, for, or on behalf of the Venezuelan government; any debt owed to the Venezuelan government that is pledged as collateral on or after May 21, 2018; and any sale, transfer, assignment, or pledging as collateral by the Venezuelan government of any equity interest in any entity 50% or more owned by the Venezuelan government. In addition, U.S. persons are prohibited from engaging in transactions with any designated individuals/entities, and must ensure that any dealings with the Venezuelan government do not involve, directly or indirectly, any designated Venezuelan government officials.

While it appears that the U.S. government has been considering increasing sanctions against Venezuela for some time now, the current crisis in the country increases the likelihood that new sanctions will be imposed relatively soon. Reports indicate that the U.S. government is considering increased sanctions on the Venezuelan oil and gold sectors, as well as other sanctions, if Mr. Maduro resorts to force against his opponents. Any new sanctions targeting the oil sector, including PdVSA, could potentially include restrictions on Venezuelan oil import volumes or even a full ban on U.S. imports of Venezuelan oil. Other options could include sanctions against the Venezuelan military (assuming they remain under Mr. Maduro’s control) and the designation of additional Venezuelan government officials/entities. As one government official told the Wall Street Journal, all options are on the table.

Given the fluid situation in Venezuela, we expect that any new sanctions would go into effect quickly, as the Trump Administration seeks to facilitate a rapid end to the current crisis. U.S. companies operating in Venezuela, particularly in the oil sector, would thus be well advised to proceed with caution on any new transactions involving the Venezuelan government.

Jonathan Babcock, a Law Clerk in Wiley Rein’s International Trade practice, contributed to this post.

Global Law Firm Enters into Settlement Agreement with DOJ for Failure to Register as a Foreign Agent

Posted in Announcements

Yesterday, January 17, 2019, the U.S. Department of Justice (DOJ) announced that it has entered into a settlement agreement (Agreement) with Skadden, Arps, Slate, Meagher & Flom LLP (Skadden) to resolve the law firm’s failure to register as an agent of the Government of Ukraine under the Foreign Agents Registration Act (FARA).

According to the Agreement, since 2012, Skadden was involved in a public relations campaign for the Government of Ukraine that was directed towards the U.S. media. As such, Skadden was acting as an “agent of a foreign principal” under the statute. Although the FARA Registration Unit reached out to Skadden on several occasions regarding the law firm’s involvement in this public relations campaign, DOJ noted in a press release that a “partner then at Skadden made false and misleading statements to the FARA Unit, which led it to conclude in 2013 that the firm was not obligated to register under FARA.” DOJ later discovered that Skadden was actually required to register in 2012, but failed to do so. In addition to agreeing to retroactively register under FARA as part of the Agreement, Skadden has agreed to pay the U.S. Department of Treasury the fees and expenses that it received from Ukraine during the representation – i.e., more than $4.6 million.

Under FARA, individuals and/or entities that engage in one or more covered activities– e.g., public relations activities, political activities, etc. – within the United States and on behalf of a foreign principal must register under FARA unless an exemption to registration applies. This case reinforces the importance of understanding the registration triggers and reporting requirements under the statute. It also highlights the significant penalties (civil, criminal, and reputational) that can result from failure to comply with these obligations.

A copy of the settlement agreement is available here.


Wiley Rein’s FARA Handbook, which reviews the laws and regulations that govern whether an entity should register with the FARA Registration Unit of the DOJ, the registration process, the obligations of registered agents, and the penalties that may be imposed for FARA violations, can be read here. For more information about FARA, please contact one of the authors of this alert.

Impact of the United States-Mexico-Canada Agreement on Data Privacy Rules

Posted in Trade Agreement Compliance

On September 30, the United States, Mexico and Canada reached agreement on the United States-Mexico-Canada Agreement (USMCA) to replace the North American Free Trade Agreement (NAFTA). The agreement also significantly updates NAFTA with new rules, including rules regarding data privacy. The Administration intends to use the USMCA as a template for future potential trade agreements with Japan, the United Kingdom, the European Union (EU), and others. Therefore, the new rules in the USMCA potentially will impact not just doing business in Canada and Mexico, but potentially also in other significant markets.

The USMCA data privacy rules are included in the digital trade chapter. This is an important update to NAFTA, which does not contain any rules on data privacy or digital trade in general. This also means that the data privacy rules should be viewed along with the overall objectives of the USMCA’s digital trade chapter to reduce cross-border data flow barriers and limit domestic data storage requirements. Thus, while the USMCA’s data privacy rules are not a trade-off per se for liberalizing cross-border data flows, they certainly help address concerns about the impact on individuals of allowing such data flows.

The USMCA requires the United States, Canada, and Mexico to maintain a legal framework to protect personal data but leaves the content and enforceability of such laws up to each country. Specifically, the agreement creates only two hard commitments: 1) to adopt or maintain a legal framework that protects the personal information of the users of digital trade; and 2) to publish information on the personal information protections the country provides to users of digital trade, including how individuals can pursue remedies and businesses can comply with any legal requirements.

While the remaining data privacy rules are not obligatory importantly, they encourage the United States, Canada, and Mexico to have their respective privacy regimes reflect a common set of principles and be compatible. These principles include limitation on collection and use of data; security safeguards; transparency; individual participation; and accountability. Moreover, each country is urged to consider principles and guidelines of relevant international bodies, such as the Asia-Pacific Economic Cooperation (APEC) Privacy Framework and the Organisation for Economic Co-operation and Development (OECD). Recommendation of the Council concerning Guidelines governing the Protection of Privacy and Transborder Flows of Personal Data. Finally, the United States, Canada, and Mexico jointly recognize in the agreement that compliance with data privacy protections and any restrictions on cross-border flows of personal information should be necessary and proportionate to the risks presented and should not discriminate against parties from the other USMCA countries.

Regardless of the above, the USMCA specifically recognizes that there are different legal approaches to protecting personal information, including comprehensive privacy, personal information, or personal data protection laws; sector-specific laws covering privacy; or laws that provide for the enforcement of voluntary private sector undertakings. However, the United States, Canada, and Mexico agreed to promote compatibility and exchange information on their respective mechanisms. The USMCA specifically identifies the APEC Cross-Border Privacy Rules system as a valid mechanism to facilitate cross-border information transfers while protecting personal information.

The USMCA’s data privacy rules appear to be supported by most stakeholders and commenters. While some may wish that the rules were stricter, they recognize that the USMCA’s rules go farther than those in the Trans-Pacific Partnership agreement in requiring data protection and promoting compatibility. There is particular support for the USMCA allowing different approaches to data privacy while also promoting the APEC Cross-Border Privacy Rules.

The next steps are for the three countries to sign the USMCA, likely by the end of November, and then for Congress to pass legislation to approve and implement the agreement. Congressional consideration of the USMCA probably will not occur until next year. The combination of Congress’ full schedule after the midterm elections and various procedural and reporting requirements that apply to USMCA legislation prevent it from being voted on this year.

Webinar: What You Need to Know About the USMCA Agreement

Posted in Announcements, Antidumping

What You Need to Know About the USMCA Agreement: What’s In It, How It Will Affect Your Business, How It Is Different from NAFTA, and What’s Next

The US-Mexico-Canada Agreement (USMCA) is a modernization of the North American Free Trade Agreement (NAFTA), the 24-year old trilateral trade deal. Dan Pickard, Steve Claeys, and Nova Daly will discuss the details of the agreement, how it will affect U.S. industries, antidumping orders and enforcement concerns, the approval process, and how parties affected by the agreement may comment and seek clarifications as it goes on to Congressional review.

| DATE: Wednesday, November 7, 2018

| TIME: 12:00 p.m. – 1:00 p.m. (EDT)

Please join us for our in-depth discussion on the new trade agreement

RSVP Here

About the Speakers:

Dan Pickard, partner, counsels U.S. and international clients on the laws and regulations governing international trade, with particular emphasis on import remedy, anti-bribery, national security, and export control issues. He represents and advises clients in matters related to trade remedy investigations (including antidumping, countervailing duty, and safeguard cases), U.S. economic sanctions, export controls, anti-boycott measures, and the Foreign Corrupt Practices Act (FCPA). View full bio

Steve Claeys, partner, assists clients on a variety of international trade law and policy matters, including bilateral and multilateral trade agreements, trade remedies and safeguards, foreign market access barriers, e-commerce and digital trade, agriculture trade, and customs enforcement. He has 25 years of experience advising members of Congress, senior White House and U.S. Department of Commerce officials. View full bio

Nova Daly, a senior public policy advisor and experienced international investment and trade policy professional, has held senior leadership positions at the U.S. Departments of the Treasury and Commerce, the White House, and the U.S. Senate. Drawing on his experience, including as a member of the Trump Transition Team for trade, he provides both high-level insight and deep operational experience to help clients navigate the policy and regulatory environment surrounding cross-border business activities. View full bio

More Info

  • This event is complementary but advance registration is required.
  • Webinar instructions will be distributed prior to the webinar. Materials may be provided following the webinar. CLE credit is not being offered for this program.
  • For more information, please email Lynne Stabler at lstabler@wileyrein.com.

Webinar: The New Immediate & MANDATORY CFIUS Filing Regulations – What You Need to Know and Do Before the Regulations Take Effect on November 10

Posted in Announcements

The New Immediate & MANDATORY CFIUS Filing Regulations – What You Need to Know and Do Before the Regulations Take Effect on November 10

Wednesday, October 24, 2018 | 12:00 p.m. – 1:00 p.m. (EDT)

New CFIUS regulations were announced on October 10, 2018, and will go into effect on November 10, 2018. Rick, Nova, and Lori will discuss these new rules – which require mandatory reporting of deals to CFIUS – including possible civil penalties, and will explain how these regulations will affect your business. They will also provide insight on the fast comment process on these new regulations that will close on November 10, 2018.

RSVP Here

More Info:

  • This event is complementary but advance registration is required.
  • Webinar instructions will be distributed prior to the webinar. Materials may be provided following the webinar. CLE credit is not being offered for this program.
  • For more information, please email Lynne Stabler at lstabler@wileyrein.com.

Wiley Rein Publishes Updated Foreign Corrupt Practices Act Handbook

Posted in Announcements, FCPA

Wiley Rein’s Foreign Corrupt Pratices Act (FCPA) and Anti-Corruption Practice has published an updated FCPA Handbook (Seventh Edition). Since 1977, U.S. companies conducting business with foreign government entities and government officials have had to comply with the FCPA, which prohibits U.S. companies from bribing any foreign official to obtain or retain business.  Companies and individuals found in violation of the FCPA may be subject to substantial fines, imprisonment, and/or forfeiture of property.

The handbook briefly reviews the principal provisions of the FCPA, outlines issues and factors likely to signal FCPA-sensitive situations, and summarizes recent developments that have returned international bribery and corruption to the political spotlight. U.S. companies should rigorously review their FCPA compliance programs and ensure that their overseas branches, subsidiaries, managers and agents are aware of corporate procedures for handling contracts with foreign government entities or involving government officials. A well-conceived compliance program is an essential element for avoiding trouble and, should problems arise, a critical mitigating factor under the corporate sentencing guidelines.

An excerpt of the updated handbook can be read here.

Wiley Rein attorneys are prepared to answer questions on the FCPA and respond to specific corporate compliance concerns and enforcement concerns. For a complete copy of the handbook, or for more information about the FCPA, please contact one of the authors listed on this alert.

To view the 2018 Annual FCPA Mid-Year Review webinar, click here.

New Regulations Implement Significant Expansion of CFIUS Jurisdiction – Mandatory Filings and Civil Penalties

Posted in CFIUS

On October 10, 2018, the U.S. Department of the Treasury took the first step toward implementing the recently enacted Foreign Investment Risk Review Modernization Act (FIRRMA) by publishing new regulations that empower the Committee on Foreign Investment in the United States (CFIUS) to review transactions that were not previously subject to CFIUS scrutiny. Treasury also implemented several conforming amendments to the existing CFIUS regulations. CFIUS is a multi-agency committee that reviews foreign investment in U.S. companies for national security considerations. Its rulings have significant impacts on U.S. investment policy and foreign investment flows into the U.S., especially those from China. On August 13, 2018, the President signed FIRRMA into law as part of the National Defense Authorization Act for Fiscal Year 2019 (NDAA). Our summary of the law’s major provisions is available here.

New “Pilot Program” Regulations

Whereas CFIUS was previously a voluntary process with authority to review only transactions that could result in foreign control of a U.S. business, effective November 10, 2018, CFIUS will now require reviews of even certain non-controlling critical technology investments from any country, including ANY acquisition of an equity interest that affords a foreign person with access to specified information or governance rights. Failure to file either a new short-form “Declaration” or a full CFIUS notice 45 days before closure of a deal could result in civil monetary penalties up to the value of the transaction.[1]

Foreign investments covered under these “Pilot Program” regulations are those in which the foreign investor acquires any of the following powers:

  1. Access to any material nonpublic technical information in the possession of the target U.S. business;
  2. Membership or observer rights on the board of directors or equivalent governing body of the U.S. business, or the right to nominate an individual to a position on the board of directors or equivalent governing body of the U.S. business; or
  3. Any involvement, other than through voting of shares, in substantive decision-making of the U.S. business regarding the use, development, acquisition, or release of critical technology.

The U.S. critical technology businesses covered under the Pilot Program are those that produce, design, test, manufacture, fabricate, or develop a critical technology that is either (1) utilized in connection with the U.S. business’s activity in one or more Pilot Program Industries or (2) designed by the U.S. business specifically for use in one or more Pilot Program Industries. Critical technology is defined by FIRRMA to include, among others, emerging and foundational technologies which will be later identified and controlled pursuant to the Export Control Reform Act of 2018. The Pilot Program only applies to U.S. critical technology businesses in the following 27 industries identified by their respective North American Industry Classification System (NAICS) code:

  • Aircraft Manufacturing NAICS Code: 336411
  • Aircraft Engine and Engine Parts Manufacturing NAICS Code: 336412
  • Alumina Refining and Primary Aluminum Production NAICS Code: 331313
  • Ball and Roller Bearing Manufacturing NAICS Code: 332991
  • Computer Storage Device Manufacturing NAICS Code: 334112
  • Electronic Computer Manufacturing NAICS Code: 334111
  • Guided Missile and Space Vehicle Manufacturing NAICS Code: 336414
  • Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing NAICS Code: 336415
  • Military Armored Vehicle, Tank, and Tank Component Manufacturing NAICS Code: 336992
  • Nuclear Electric Power Generation NAICS Code: 221113
  • Optical Instrument and Lens Manufacturing NAICS Code: 333314
  • Other Basic Inorganic Chemical Manufacturing NAICS Code: 325180
  • Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing NAICS Code: 336419
  • Petrochemical Manufacturing NAICS Code: 325110
  • Powder Metallurgy Part Manufacturing NAICS Code: 332117
  • Power, Distribution, and Specialty Transformer Manufacturing NAICS Code: 335311
  • Primary Battery Manufacturing NAICS Code: 335912
  • Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing NAICS Code: 334220
  • Research and Development in Nanotechnology NAICS Code: 541713
  • Research and Development in Biotechnology (except Nanobiotechnology) NAICS Code: 541714
  • Secondary Smelting and Alloying of Aluminum NAICS Code: 331314
  • Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing NAICS Code: 334511
  • Semiconductor and Related Device Manufacturing NAICS Code: 334413
  • Semiconductor Machinery Manufacturing NAICS Code: 333242
  • Storage Battery Manufacturing NAICS Code: 335911
  • Telephone Apparatus Manufacturing NAICS Code: 334210
  • Turbine and Turbine Generator Set Units Manufacturing NAICS Code: 333611

Conforming Amendments to Existing CFIUS Regulations

In addition to the new Pilot Program regulations which become effective on November 10, 2018, Treasury has also implemented several conforming amendments to the existing CFIUS regulations. These changes are effective October 11, 2018 and include the following amendments to 31 CFR Part 800:

  • Section 800.103 is amended to provide clarity with respect to the applicability of the amendments, such as FIRRMA’s extension of the CFIUS review period from 30 days to 45 days.
  • Section 800.104 expands the definition of “covered transaction” to include transactions, transfers, agreements, or arrangements, the structure of which is designed or intended to evade or circumvent CFIUS.
  • Section 800.202 expressly provides for criminal liability under 18 U.S.C. Section 1001 for all information provided to CFIUS.
  • Section 800.207 revises the definition of “covered transaction” to be consistent with FIRRMA.
  • Section 800.209 revises the definition of “critical technologies” to be consistent with FIRRMA and include emerging and foundational technologies controlled pursuant to the Export Control Reform Act of 2018.
  • Section 800.224 revises the definition of “transaction” to be consistent with FIRRMA and includes certain changes in rights that a foreign person has with respect to a U.S. business in which the foreign person has an existing investment, as well as transactions structured to evade or circumvent CFIUS.
  • Sections 800.301 and 800.302 add examples that illustrate the application of the expanded scope of “covered transactions.”
  • Section 800.401 implements a shift to electronic submissions of voluntary notices.
  • Section 800.402 modifies certain of the requirements regarding the content of voluntary notices, including allowing parties to stipulate that a transaction is a covered transaction and, as relevant, a foreign government-controlled transaction.
  • Section 800.502 revises the timing of the review period, extending the period from 30 days to 45 days consistent with FIRRMA.
  • Section 800.506 defines the “extraordinary circumstances” pursuant to which an investigation period can be extended by one 15-day period.
  • Section 800.702 incorporates additional exceptions with respect to information sharing by CFIUS.
  • Section 800.801 removes the language “intentionally or through gross negligence” in the provisions allowing for the imposition of civil penalties.
  • Section 800.802 authorizes the Committee to negotiate a remediation plan for lack of compliance with a mitigation agreement, require filings for future covered transactions, or seek injunctive relief.

Wiley Rein has an unparalleled CFIUS and national security practice that draws on senior government-level experience with CFIUS member agencies and numerous representations of domestic and international companies in complex transactions involving nearly every industry sector subject to CFIUS review. Should you have any questions regarding the immediate impact of this new CFIUS Pilot Program, please do not hesitate to contact one of the members of our CFIUS and national security practice listed on this alert.


[1] Note that these Pilot Program regulations do not apply to any transaction for which:

(1) The completion date is prior to November 10, 2018; or

(2) The following has occurred before October 11, 2018:

(i) The parties to the transaction have executed a binding written agreement or other document establishing the material terms of the transaction;

(ii) A party has made a public offer to shareholders to buy shares of a Pilot Program U.S. business; or

(iii) A shareholder has solicited proxies in connection with an election of the board of directors of a Pilot Program U.S. business or has requested the conversion of convertible voting securities.

Foreign Agents Registration Act Webinar

Posted in Announcements

Foreign Agents Registration Act (FARA): Navigating Audits and Other Compliance Issues in a New Era of Enforcement

Tuesday, October 2, 2018 | 12:00 p.m. – 1:00 p.m. EDT

The Foreign Agents Registration Act (FARA), once a little-known law, continues to garner heightened attention given a recent string of high profile enforcement actions under the statute. The law, which has been on the books since 1938, is a disclosure statute administered and enforced by the Department of Justice (DOJ), which requires that foreign agents engaged in certain covered activities (e.g., lobbying, public relations, political activities, etc.) to make periodic public disclosures to the U.S. government regarding these activities unless an exemption to registration applies.

During this webinar, guided by Dan Pickard and Tessa Capeloto from Wiley Rein’s International Trade Practice, you will learn about a variety of FARA-related topics, including:

  • Registration triggers and exemptions;
  • Measures to ensure compliance;
  • Navigating DOJ audits under FARA; and
  • Recent developments.

Register here.

More Info

  • This event is complementary but advance registration is required.
  • Webinar instructions will be distributed prior to the webinar. Materials may be provided following the webinar. For more information, please email Lynne Stabler at lstabler@wileyrein.com.

Imports of Unfairly Traded Indian Stainless Steel Flanges Plummet As A Result of Recent Trade Case

Posted in Antidumping, Dumping and Subsidies, Trade Remedies

Approximately a year ago, on August 16, 2017, a petition for antidumping (AD) and countervailing (CVD) duties on stainless steel flanges from China and India was filed by the Coalition of American Flange Producers (CAFP), an association of U.S. producers of stainless steel flanges. The case was brought in response to unfairly dumped and subsidized flanges being increasingly imported into the United States by Chinese and Indian producers. Last week, on August 13, 2018, the U.S. Department of Commerce (DOC) issued its final determinations in its AD and CVD investigations of Indian stainless steel imports, finding that Indian flanges are being dumped at rates of 19.16 to 145.25 percent and subsidized at rates of 4.92 to 256.16 percent.

While these margins are high and reflect the substantial degree to which Indian stainless steel flanges are unfairly traded in the United States, even before these determinations, this case has had a significant and positive effect on U.S. imports and the U.S. industry. That is, in the year prior to the filing of the petition, imports of stainless steel flanges from India surged dramatically, rising from approximately 400,000 to 1,000,000 kilograms per month. In the year since the filing of the petition, imports from India have decreased dramatically, falling to just 200,000 kilograms per month.

As shown in the chart above, examined at a more granular level, imports of Indian stainless steel flanges continued to decrease as the case progressed. While the petition was filed in August 2017, import levels actually fluctuated for the remainder of 2017, likely the result of Indian producers rushing flanges into the United States in advance of anticipated AD and CVD duties. However, once DOC issued its preliminary AD and CVD determinations, in which it forecasted high margins, imports plummeted. For instance, on January 23, 2018, DOC issued its CVD preliminary determination finding that Indian imports were being subsidized at rates of 5.00 to 239.61 percent. This caused a sharp decline in Indian imports. Similarly, on March 28, 2018, DOC issued its AD preliminary determination, finding that Indian imports were being dumping at rates of 18.10 to 145.25 percent. This caused an even steeper decline in Indian imports. The point being, as this case progresses, and the extent to which Indian stainless steel flanges are unfairly traded is made more clear, imports of those flanges have continued to plummet.

It should be stressed, however, that even the current duty deposit rates do not reflect the final duties that importers will owe on incoming shipments. Under the U.S. system, the duties paid at entry remain contingent, and changeable, until DOC concludes a post-investigation administrative review of those duties. With respect to stainless steel flanges from India and China, this means that final duty liability for imports subject to the preliminary duties will not be determined until mid-2019 at the earliest. Because of the lengthy contingent liability that AD and CVD duties represent, as well as the potential for final duties to be much higher than those paid at entry, importers may need to seek increased customs bonding to continue to import stainless steel flanges from India and China. Sureties may also require additional fees or security to underwrite bonds on such entries, given the increased uncertainty and risk involved.

Ultimately, Wiley Rein and the CAFP anticipate that DOC’s significant, final AD and CVD margins will cause Indian imports to continue to decrease, keeping them at stable and fair levels. This will allow U.S. stainless steel flange producers to compete on a level playing field, enabling them to produce more flanges and hire more workers here in the United States.

 

 

 

 

 

 

.