From Rare Earth Controls to Responsible Supply Chain and Investment, China Undertakes Surgical Approach in Export Control & Business Implications
From Rare Earth Controls to Responsible Supply Chain and Investment, China Undertakes Surgical Approach in Export Control & Business Implications 从稀土管制到尽责供应链与投资：中国的精准出口管制及其商业影响 —————————————————————————————————— As a formal response to China-specific trade & investment controls and enforcement in the West, China has released significant countermeasures, before the new year holidays, with a conditional rare earth technology ban (with […]
Posted by Wang, Yi on February 8, 2024
Clarion Call Challenges Supply Chain Champions to Emerging Chinese Companies
Seagate, major hard disk drives (“HDDs”) producer, becomes the first major Western supplier of Huawei penalized for violation of the so-called FDP (foreign direct product) rule administered by US Department of Commerce (DOC) on April 19, 2023.[1] This unprecedented enforcement of the controversial FDP rule involves $1,104,732,205 “unlicensed” sales of HDDs produced outside of US, […]
Posted by Wang, Yi on April 20, 2023
Trade Diversion and Sanction Evasion No Longer Business As Usual
Trade Diversion and Sanction Evasion No Longer Business As Usual 贸易转移与制裁规避风光不再 Sanctions can and are weakened through trade diversion and evasion.[1] To “prevent corporate crime before it occurs,”[2] the anti-corruption and trade authorities are combining and revitalizing policy tools to shift financial penalties from non-participating shareholders onto wrongdoers directly accountable. This memo focuses on consequences […]
Posted by Wang, Yi on March 15, 2023
Surface or Hide It? Enforcement Policy Stresses Effective Compliance Programs Must Be Follow-through and Prevent Circumvention
Executive Summary 概要 US Department of Justice (DOJ) released critical policy change on corporate crime enforcement on September 15, 2022. This policy stresses voluntary self-disclosure (along with full cooperation and remediation) as the “clearest path” to avoid a guilty plea or an indictment against historical misconducts unaddressed. Moreover, it intends to assist committed business executives […]
Posted by Wang, Yi on January 1, 2023
Monaco Memo (Courtesy Translation) – Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group From Deputy Attorney General Lisa Monaco
The Deputy Attorney General Washington, D.C. 20530 副总检察长（美国司法部副部长） 华盛顿哥伦比亚特区 20530 September 15, 2022 2022年9月15日 MEMORANDUM FOR ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION PRINCIPAL DEPUTY ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION ASSISTANT ATTORNEY GENERAL, ANTITRUST DIVISION ASSISTANT ATTORNEY GENERAL, ENVIRONMENT AND NATURAL RESOURCES DIVISION DEPUTY ASSISTANT ATTORNEY GENERAL, TAX DIVISION ASSISTANT ATTORNEY GENERAL, NATIONAL SECURITY DIVISION DIRECTOR, FEDERAL […]
Posted by Wang, Yi on January 1, 2023
CFIUS Enforcement Guidelines & Impact on Transactions & Compliance Programs
美国外资国安审查执法指南及其对公司交易/合规影响 Editor’s Note 编者注 US Treasury Department released CFIUS enforcement and penalty guidelines, which presents a welcoming regulatory development for compliant, transparent MNCs. Meanwhile, it also presents compliance challenges to growing enterprises seeking or strengthening access to critical technology, infrastructure and data in international markets. Given the regulatory changes in trade and investment controls impactcross-border transactions and […]
Posted by Wang, Yi on December 7, 2022
Bilingual – CFIUS Enforcement and Penalty Guidelines
美国外国投资委员会执法和处罚指南（非正式中文译本） Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4565) (“Section 721”), authorizes the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) to impose monetary penalties and seek other remedies (e.g., directed notices, action plans) for violations of Section 721, the regulations promulgated thereunder, or […]
Posted by Wang, Yi on December 7, 2022
Ten questions and answers on China’s new Export Control Law
Our dialogue with export control practitioner Lauren Murton on ten technical questions on China’s new Export Control Law (ECL) is available at WorldECR with courtesy summary below: “ECL presents a positive development that will reduce the opagueness of export licensing procedures and intervention by national security bodies in China. The ECL has extra-territorial jurisdiction but […]
Posted by Wang, Yi on December 19, 2020
US Tightens Congressional Oversight on Sensitive Exports to China
Leading US national security senators raised “grave concerns” on October 5, 2020 to block the approval by US Department of Commerce (DOC), of “export of over 227 tons of sensitive material critical to building missiles to China.” The senators also stressed the lack of detailed justification and alleged deviation from both the spirits and mandates concerning missiles and […]
Posted by Wang, Yi on October 13, 2020
Congressional Oversight Intensifies on Military-Civil Fusion that Complicates US Export Licenses
Leading US national security senators raised “grave concerns” on October 5, 2020 to block the approval by US Department of Commerce (DOC) to “export over 227 tons of sensitive material critical to building missiles to China.” These senators also stress the lack of detailed justification and alleged deviation from both the spirits and mandates concerning […]
Posted by Wang, Yi on October 12, 2020
China’s Data Security Initiative: Universal Participation Under Digital Sovereignty
As part of China’s multilateral anti-decoupling advocacy efforts, the Chinese Foreign Minister and State Councillor Wang Yi released the Global Data Security Initiative on September 8, 2020 to encourage global rule-setting in digital supply chain. Key take-ways: Key Message from China’s Global Data Security Initiative Key take-away includes: Multilateral Consensus, Universal Access, Non-discrimination with Digital […]
Posted by Wang, Yi on September 9, 2020
China Cascades Corporate Governance Reform Fusing Party Leadership to Steer Modern Risk Controls
Chinese banking and insurance regulator released its action plan on August 17 to initiate corporate governance reform in the financial sector, with enforcement actions in parallel. This briefing highlights the policy direction and major regulatory focuses and likely enforcement scenarios. The action plan’s key idiosyncrasy is fusing the Chinese Communist Party Leadership with the modern […]
Posted by Wang, Yi on September 7, 2020
Controlled Technology Lists by MOFCOM & Business Implications on TikTok/ICT
The latest MOFCOM-driven export control regulation warrants that more robust regulatory clearance at both US and China is the prerequisite and critical to cross-border deals. We alerted the regulatory change whereby China may swiftly vet controllability of technology items and “reciprocate” foreign Sanctions as part of the draft 2020 Export Control Law. Real action is accelerated, […]
Posted by Wang, Yi on September 1, 2020
Constitutional Challenges Brought By TikTok and Implications for Businesses in Bifurcating Markets
This alert briefs TikTok’s constitutional challenge and regulatory implications. We highlight the desirable priorities for businesses concerned to enhance technological and legal inter-operability in both US and China, and robustly defend business freedom and customer interests in the bifurcating markets. 1. Executive Summary Against a serial of “pre-emptive” strikes especially by the executive order issued […]
Posted by Wang, Yi on August 29, 2020
China Signals Enforcement against Antitrust Violation in Pharmaceutical Sector
China signals potential enforcement against antitrust violations concerning imported pharmaceutical products and domestic companies doing APIs for big pharm. This policy signal is in tandem with the finalization of amendment to the current Anti-Monopoly Law (AML) with criminal liabilities and up to 1% revenue penalties. On July 23, 2020, the State Council released the Notice for […]
Posted by Wang, Yi on August 28, 2020
AML/FCPA Alert: Major SOEs Sanctioned & Risks in Civil-Military Fusion Programs
Thorough and life cycle regulatory counseling is critical for international businesses, in light of the ongoing sanctions under the reformed export control regime and beyond election outcomes. The latest enforcement priorities and focuses are no surprise but consistent with the statutory purpose as actions “necessary to effectively counteract” national security and foreign policy threats, under […]
Posted by Wang, Yi on August 27, 2020
Constitutional Challenges Brought by WeChat Users
A group of WeChat users, allegedly unaffiliated with Tencent/WeChat, are suing the Trump administration concerning the President’s executive order banning transactions with WeChat, as we briefed and continue to monitor closely. Interestingly, the plaintiffs include both non-profit representing certain WeChat users as well as Chinese Americans, and Chinese citizens with valid visas in the US. The complainants petition for injunctive relief […]
Posted by Wang, Yi on August 26, 2020
Import Substitution Measures and “Green Channels” at Both Local Customs and Stock Exchanges
Highlights below reflects pro-business measures fused with import substitution policies and measures at local government level and at stock exchanges. These business/financing-boosting measures are available to both domestic and international businesses legislatively. Prudence for ramifications to businesses either gaining from these local measures or disadvantaged, remain crucial for international businesses to navigate through these regulatory […]
Posted by Wang, Yi on August 26, 2020
No EAR-Free, No Circumventing US Law
To stem the alleged circumventing U.S. law by Huawei against pre-existing sanctions, the Bureau of Industry and Security (BIS) under the US Commerce Department announced on August 17 with further restriction against Huawei and designated non-U.S. affiliates on the Entity List, blocking their accessing to items produced domestically and abroad from U.S. technology and software. […]
Posted by Wang, Yi on August 19, 2020
SOEs Held Accountable to SMEs’ Account Receivables and Unfair Trade Practices in Public Procurement Reform
China steps up government procurement reform and issued regulations to govern SOE behaviors and safeguard the “account receivables” of SMEs from SOEs. 1. Executive Summary On July 15, 2020, China’s State Council releases the Regulation on Payment Protection for Small and Medium-sized Enterprises effective September 1, 2020 (“Pay SME Regulation”). Pay SME Regulation is part of a broader, ongoing government […]
Posted by Wang, Yi on August 14, 2020
WeChat Ban – an Opportunity for Tencent and Emerging Companies to Grow & Lead
On August 6, 2020, Trump administration issued Executive Order on Addressing the Threat Posed by WeChat to wind down any transactions with the Tencent Holding Company related to WeChat China. We highlight legal and strategic options available to Tencent, and emerging growth companies alike, from corporate and trade policy perspective to transform this challenge into […]
Posted by Wang, Yi on August 9, 2020
Draft Data Security Law With Enhanced Blocking Statute Against Both Criminal & Administrative Foreign Enforcement
As part and parcel of a comprehensive security-driven regulatory regime from trade, data/cyber to national security, China speeds up the legislation of Data Security Law. Once enacted, China’s blocking statute relating to data security will extend from criminal proceedings to any foreign enforcement proceedings, among other nuances that we will provide separately upon request. China […]
Posted by Wang, Yi on August 5, 2020
Upcoming Shanghai FDI Deregulation & Accountability at Individual Level for Local Officials
Shanghai pioneers the pilot role of the Chinese central government’s spearheading China’s fulfillment of its pre-COVID10 trade/investment-liberalizing commitments at local level. Below we feature the draft uniform Shanghai FDI regulation, and the underlying nuance-focused public private partnership spearheaded by Shanghai to serve foreign investors better, and potentially scale up Shanghai’s best practice China-wide, for companies to […]
Posted by Wang, Yi on August 5, 2020
Public Procurement Ban by US to Cut Off Chinese ICT Products/Services
Below please find the regulatory update on impending ban against Chinese information and communication technologies (ICT) in US federal procurement. 1. Executive Summary August 13, 2020 will be the significant date witnessing the full implementation of the controversial yet bi-partisan John McCain National Defense Authorization Act for Fiscal Year 2019 (“NDAA”) to cut off access to US […]
Posted by Wang, Yi on July 31, 2020
China’s Export Control Law Taking Shape & Readiness for Enforcement
China released on June 28, 2020 the “second-reading” version of the draft 2020 Export Control Law, along with the draft Data Security Law. This validates the pre-existing momentum and newly-reinforced policy tools to potentially retaliate / reciprocate ongoing US extra-territorial enforcement against China. (Author’s note: the Export Control Law became law on October 17, 2020.) […]
Posted by Wang, Yi on July 29, 2020
China Opens with More Market Access & Tax Holidays
Continuous trade liberalization and deregulation of foreign investment by China’s clear-minded decision-makers and at major municipalities deepens, despite of inward-looking noises and maneuvers across the Pacific. 1. Executive Summary The continuity of conflicts, on national security and various regulatory regimes and on technology leadership races, continues to fluctuate, reminding the existence and renewal of deep-rooted […]
Posted by Wang, Yi on July 28, 2020
Prospect of US-China Cross-jurisdictional Enforcement against Financial Fraud of China-based Overseas-listed Companies
Potential violations of reporting, internal control, books & records and anti-fraud regulations of certain overseas-listed China-based companies emerge initially with the self-disclosure by Luckin Coffee on April 2, 2020. As of April 30, the alleged financial fraud scheme in Luckin Coffee case has led to investigations by China’s CSRC and then SEC in tandem, for […]
Posted by Wang, Yi on May 1, 2020
From Serial A Financing to Prohibited Transaction: First CFIUS Divestment Order Against Closed Deal by Chinese Investor
On March 6, 2020, US imposed a divestment order against a closed deal by Chinese investor, under national security review steered by CFIUS (Committee on Foreign Investment in United States), and enforceable by the Department of Justice. Set forth below briefs significant enforcement development, which is natural progression from the enforcement initiatives under the “whole-of-government” […]
Effective Compliance Program Crucial In Light of Whole-of-Government Approach in US Export/Investment Control and FCPA Enforcement
Despite the fruitful US-China trade agreement, we alert resilient head-winds decoupling US with China, from cutting off access to federal procurement (see previous alert), to stemming outflow of military/intelligence-sensitive technologies. This alert highlights the urgency to tailor compliance programs to monitor and comply with US-driven trade, national security, and FCPA (Foreign Corrupt Practice Act) enforcements […]
BIS-proposed Representative Category of “Emerging Technologies”
The Bureau of Industry and Security (BIS) under U.S. Commerce Department (through an interagency process), on an on-going basis, will identify and control novel “emerging/foundational” technology not yet on pre-existing export control lists (USML/CCL). Once identified, CFIUS’s jurisdiction (with respect to either controlling or non-controlling investments) will synchronically expand to cover such item, on a […]
Posted by Wang, Yi on February 22, 2020
Dealer or Financiers Be Aware: Don’t Conceal or Obfuscate Iranian Origin Risking Sanction Exposure
As the businesses are occupied with media coverage and contingency plans concerning coronavirus (2019-nCoV) outbreak (which China will take it under control with better-than-SARS outcome as a matter of time), international businesses must dedicate sufficient resources to strengthen their international trade compliance in light of the latest sanction developments that target more precisely egregious “bad […]
Posted by Wang, Yi on February 12, 2020
Stay Compliant in Light of John McCain Legacy and China’s Self-initiated New Opening Up with Socialist Characters
On and by December 24, 2019, China announced a number of significant market liberalization and trade barrier removal measures (below) after the joint announcement of “Phase-1” US-China Trade Agreement on December 14, 2019. China also stresses the unequivocal policy priorities to strengthen and deepen Chinese Communist Party (CPC) leadership to steer and materialize these regulatory reform and […]
Posted by Wang, Yi on February 11, 2020
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