Welcome to this month's issue of The BR International Trade Report, Blank Rome’s monthly digital newsletter highlighting international trade, cross-border investment, and geopolitical risk issues, trends, and laws impacting businesses domestically and abroad. 

Recent Developments

New U.S. sanctions / export controls against Russia. 
The Biden Administration imposed new restrictive measures to mark the two-year anniversary of Russia’s invasion of Ukraine, and in response to opposition leader Alexei Navalny’s death in prison. Altogether, the measures targeted over 600 individuals and entities identified as supporting Russia’s defense industrial base.

Executive order on data flows. 
A new executive order and proposed regulation aim to place limits on the transfer of U.S. data to foreign countries of concern. The proposed rule contemplates two regulated classes of data transactions, those that pose an unacceptable risk to national security and those will need to meet additional security requirements to mitigate risks. The public has until April 19, 2024, to comment on the proposed rules.

Upcoming regulation of connected vehicles. 
The U.S. Department of Commerce issued an Advanced Notice of Proposed Rulemaking (“ANPRM”) to initiate the process to regulate national security risks presented by certain foreign technology in connected vehicles (“CVs”). Specifically, the ANPRM focuses on CV-related “information and communications technology and services” supplied by persons with a nexus to designated “foreign adversaries,” such as China.

House passes TikTok bill. 
The U.S. House of Representatives approved legislation that would prohibit entities from providing services to distribute, maintain, or update TikTok in the United States within 180 days of enactment of the law, unless TikTok undergoes a “qualified divestiture” by ByteDance, its Chinese owner. The bill also would empower the President to designate other “foreign adversary controlled applications” that would be subject to the same restrictions unless there is a “qualified divestiture.” The bill will move on to the U.S. Senate for consideration.

Investigation of U.S. imports of fine denier polyester staple fiber.  
The U.S. International Trade Commission (“ITC”) is launching a global safeguard investigation into fine denier polyester staple fiber, which is used to make textiles, baby wipes, coffee filters, and more. The U.S. domestic industry alleges that rising imports have led to significant harm, including the closure of two facilities. If the ITC finds such harm, relief could include duties or tariff-rate quotas, among other measures. The ITC intends to hold a hearing on June 4, and make a determination by July 9.

U.S. strengthens port cybersecurity. 
The Biden Administration took a range of actions aimed at bolstering port security, including an executive order requiring the immediate reporting of cyber incidents to U.S. authorities and a Maritime Security Directive regarding ship-to-shore cranes manufactured in China.

Steel workers ask for probe of Chinese shipbuilding.  
The United Steelworkers (“USW”), leading a coalition of other unions, requested that the U.S. government initiate an investigation of Chinese shipbuilding practices. The government has 45 days to decide whether it will investigate the claims. If the government ultimately decides Chinese-made ships benefit from unfair practices, the USW has requested offsetting actions such as fees on Chinese-made ships that dock at U.S. ports, establishment of a shipbuilding revitalization fund, other measures to support demand for U.S.-made ships, and measures to address Chinese activities in port and logistics platforms and equipment. 

EU prepares to shift to “war economy mode.” 
Reports indicate that the European Union is considering recommendations to increase defense production and procurement, with European industry commissioner Thierry Breton highlighting the need to shift to “war economy mode.” The proposals include modeling the U.S. Foreign Military Sales program.

Foreign subsidies and EU government procurement. 
The European Union launched its first investigation into whether foreign subsidies provided unwarranted assistance to a bidder on a government contract. Specifically, the EU is looking into whether state assistance allowed CRRC Qingdao Sifang Locomotive Co. to submit an “unduly advantageous offer” for a Bulgarian government contract. Under the EU’s new subsidy rules, companies competing for contracts worth more than €250 million must disclose non-EU subsidies greater than €4 million.

USG advisory on foreign persons’ obligations under U.S. sanctions / export controls. 
The U.S. Department of Commerce, the U.S. Department of Justice, and the U.S. Department of the Treasury issued a “Tri-Seal Compliance Note” explaining how U.S. sanctions and export controls can be applicable to foreign persons. In particular, the note highlights risks for foreign persons that cause U.S. persons to violate sanctions, or that trade in items subject to U.S. export control jurisdiction, among other risk points.

EU deforestation measures. 
A World Trade Organization dispute panel approved the European Union’s biofuel measures that limit whether palm-oil based biofuels can be counted towards renewable energy goals. Malaysia had challenged the EU’s reasoning that providing benefits to palm-based biofuels created a high risk of additional deforestation, undermining the environmental benefits of the crop-based biofuel. Separately, according to reports (subscription required), the EU will delay implementation of some aspects of its new rules limiting imports of certain commodities that were sourced from recently deforested land. Rules requiring traceability for imports will come into force at the end of the year.

In Case You Missed It...

New Russia Sanctions: 7 Insights on the Latest Measures

On February 23, the Biden Administration issued major new sanctions against Russia to commemorate the two-year anniversary of Russia’s invasion of Ukraine, and in response to Russian opposition leader Alexei Navalny’s death in prison. Read More >>

Upcoming Events

• March 21, 2024: Blank Rome attorneys will be attending a conference presented by the International Bar Association’s International Commerce and Distribution Committee, being held at the Willard InterContinental in Washington, D.C. Read More >>
• March 27, 2024: Blank Rome attorneys will be attending the Bureau of Industry and Security’s Update Conference on Export Controls and Policy, being held at the Marriott Marquis hotel in Washington, D.C. Read More >>