American Trade & Manufacturing Blog

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

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.







CFIUS Reform Legislation Signed into Law – Important Changes Become Effective Immediately

Posted in CFIUS

President Trump signed the Foreign Investment Risk Review Modernization Act (FIRRMA) into law today, August 13, 2018, as part of the National Defense Authorization Act for Fiscal Year 2019 (NDAA). FIRRMA significantly expands the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to review transactions that were not previously subject to CFIUS scrutiny, including certain real estate transactions and non-controlling investments in critical technology companies, critical infrastructure companies, and companies that maintain or collect sensitive personal data of U.S. citizens. The new legislation also allows parties to covered transactions to file short-form “declarations” in lieu of a more detailed notice, requires mandatory filings for certain kinds of transactions, and reforms the CFIUS review process in several other important respects. Our summary of the law’s major provisions is available here.

Many provisions of FIRRMA become effective immediately. These include the extension of the initial review period from 30 days to 45 days, provisions relating to mitigation agreements, and the information sharing and funding aspects of the law. Other provisions (including those expanding the scope of what constitutes a “covered transaction” and provisions governing voluntary and mandatory declarations) will not go into effect until the earlier of 18 months after enactment or 30 days after publication in the Federal Register of a determination by CFIUS that the regulations, organizational structure, personnel, and other resources necessary to administer the law’s provisions are in place.

The focus now turns to the rulemaking process, where stakeholders will have an opportunity to submit comments and help shape the regulations that the U.S. Department of Treasury ultimately adopts to implement this sweeping new law. We also expect CFIUS to launch one or more pilot programs in the coming months to implement certain new authorities under FIRRMA. The scope and procedures for any pilot programs under FIRRMA will be published in the Federal Register in advance.

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 FIRRMA on inbound foreign investment, the upcoming notice and comment rulemaking process, or the new CFIUS pilot programs, please do not hesitate to contact one of the members of our CFIUS and national security practice listed on this alert.

BIS Announces Good News for India, Bad News for South Sudan on Export Controls Front

Posted in Export Controls

Does your company export products or technology to India or South Sudan? If so, last Friday, the Commerce Department’s Bureau of Industry and Security (BIS) made changes to the export controls on these countries that may impact your operations, particularly if your company exports “600 series” military commodities, software, or technology or satellite-related items.

First, recognizing India’s membership in three out of four multilateral export control regimes and its status as a Major Defense Partner of the United States, BIS added India to Country Group A:5 in the Export Administration Regulations (EAR)—the list of close U.S. allies granted favorable export status. A key benefit of being an A:5 country is that U.S. companies can now use License Exception STA to export “600 series” military items as well as satellite-related items to India without the need to apply for a specific license. BIS also formally recognized India’s membership in the Wassenaar Arrangement, added India to Country Group A:1, and removed license requirements for EAR items controlled for National Security Column 2 reasons.

On the flip side, BIS also updated the EAR to add South Sudan to Country Group D:5—the list of countries that are subject to arms embargoes. This change is designed to ensure that the EAR’s D:5 list mirrors the State Department’s list of Section 126.1 prohibited countries in the International Traffic in Arms Regulations, to which South Sudan was added earlier this year. Although the amendment is mostly a formality, as the D:5 list includes a note stating that State’s Section 126.1 prohibited countries list is controlling, BIS’s rule serves to put exporters on notice of South Sudan’s new status. One important impact of the arms embargo designation is that exports to South Sudan of satellite-related items and “600 series” military items are subject to a general policy of denial, except for certain types of transactions, such as exports in support of peacekeeping and humanitarian operations. The D:5 designation also limits the ability of foreign companies utilizing U.S. “600 series” (or satellite-related) parts or components from shipping their end products incorporating such parts or components to South Sudan.


BIS Adds 44 Chinese Entities and Institutions to its Entity List

Posted in Export Controls

Last week, the Department of Commerce’s Bureau of Industry and Security (BIS) added eight Chinese entities and 36 subordinate institutions to its Entity List, ratcheting up tensions with China and reflecting the administration’s crackdown on U.S. exports that officials believe are being used to strengthen the Chinese military.

Historically, companies often are added to BIS’s Entity List for engaging in activities related to proliferation of weapons of mass destruction. Here, some of the newly designated entities—including China Electronic Technology Group Corporation (CETC) 13 and some of its subordinate institutions—were added due to their alleged illicit procurement of U.S. commodities and technologies for unauthorized military end-uses in China. The remaining entities—including China Aerospace Science and Industry Corporation (CASIC) Second Academy and some of its subordinate institutions—were added to the Entity List based on a risk of diversion of items to military end-uses in China.

The new restrictions prohibit exports, reexports, and transfers (in-country) of any items subject to the U.S. Export Administration Regulations (EAR) to the newly-designated entities, along with any other transaction in which these entities act as a purchaser, intermediate consignee, ultimate consignee, or end-user of items subject to the EAR. In other words, even common, off-the-shelf EAR99 and mass market hardware, software, and technology cannot be provided to these 44 Chinese entities/institutions without U.S. government authorization. Further, export licenses are subject to a policy of denial, and no EAR license exceptions can be used for transactions with the designated entities.

This action is notable because it is part of much larger U.S.-China trade tensions. It also reveals the administration’s concerns regarding China’s use of commercial and dual-use U.S. items for military purposes, including not only proliferation of weapons of mass destruction but also conventional military applications. U.S. companies should brace for more restrictions on trade with China, as the President is expected to sign legislation this month that may be used to impose additional export controls on China/Chinese entities, including on the provision of “emerging and foundational technologies” as well as items for military end-users/end-uses.

USTR Announces List of $200 Billion Worth of Chinese Goods that May Be Subject to 10 Percent Tariffs

Posted in Customs Law, Trade Policy

On July 10, 2018, the United States Trade Representative (USTR) issued another list of Chinese products that may be subject to 10% duties stemming from the Section 301 investigation into China’s unfair practices related to technology transfer, intellectual property, and innovation. This list of products includes 6,031 tariff subheadings, covering a broad range of products, including agricultural goods, chemicals, building materials, and electronics, with an annual trade value of approximately $200 billion.

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Wiley Rein Wins AMM Award for Steel Excellence as ‘Best Legal Services Provider’ for Two Years Running

Posted in Announcements

Washington, DC—For the second consecutive year, Wiley Rein LLP has been named “Legal Services Provider of the Year” by American Metal Market (AMM) as part of the publication’s annual Awards for Steel Excellence. The award was presented yesterday evening to Alan H. Price, chair of the firm’s International Trade Practice, at a ceremony in New York City. The awards dinner honored winners in 15 categories selected from 53 finalists spanning the steel industry chain.

The awards program recognizes companies that have demonstrated best-in-class performance in their respective segments of the steel industry. The awards dinner was held in conjunction with Steel Survival Strategies XXXIII, North America’s largest steel conference, which is presented by AMM and World Steel Dynamics Inc.

Mr. Price also was a featured speaker at the conference, participating in yesterday’s panel discussion on “Steel Marketplace: Winning Strategies.”

Wiley Rein has one of the nation’s largest and most diverse international trade groups, advocating for U.S. steel companies that find their very existence threatened by foreign governments’ unfair trade practices. The firm’s International Trade Practice provides solutions for its clients through a blend of legal expertise, trade policy, thought leadership, and public relations capabilities. Wiley Rein is one of the leading firms in trade remedy proceedings representing U.S. producers, and is among a limited number of practices that regularly serve as principal counsel for major unfair trade investigations.

OFAC Revokes JCPOA-Related General Licenses and Issues Wind-Down Authorizations

Posted in Announcements

Following the President’s May 8, 2018 withdrawal from the Joint Comprehensive Plan of Action (JCPOA), today, the Office of Foreign Assets Control (OFAC) revoked General License H (GL H), which authorized U.S.-owned or -controlled foreign entities to engage in business with Iran, and General License I (GL I), which authorized U.S. persons to negotiate and enter into contingent contracts related to activities subject to OFAC’s (since revoked) favorable licensing policy for commercial passenger aircraft and related parts and services.

In conjunction with these changes, OFAC authorized the following wind-down activities:

  • All transactions and activities that are ordinarily incident and necessary to the wind-down of transactions relating to foreign entities owned or controlled by U.S. persons that were previously authorized under GL H, including transactions by U.S. parent companies and other U.S. persons related to necessary modifications of operating policies and procedures and continued use of automated and globally integrated business support systems to facilitate wind-down activities. Such wind-down transactions are authorized through November 4, 2018.
  • All transactions and activities ordinarily incident and necessary to the wind-down of transactions related to the negotiation of contingent contracts for the export/reexport to Iran of commercial passenger aircraft and related parts and services previously authorized under GL I. These wind-down transactions are authorized through August 6, 2018.
  • All transactions and activities ordinarily incident and necessary to the wind-down of transactions related to the importation into the United States of, and dealings in, certain Iranian-origin carpets and foodstuffs, such as pistachios and caviar. Such wind-down transactions are authorized through August 6, 2018.

Typically, wind-down activities do not cover “new” transactions. OFAC has stated that any activities involving Iran that continue after the wind-down periods conclude could be subject to enforcement actions, and that in evaluating potential enforcement or sanctions actions to take, OFAC will consider the efforts made to wind down activities prior to the conclusion of the applicable wind-down period. In other words, without explicitly stating as much, the U.S. government appears to be putting companies on notice that if they engage in new business with Iran during the wind-down periods, they do so at their own peril.