On October 28, 2024, the Department of the Treasury’s (Treasury) Office of Investment Security issued a final rule[1] (“Final Rule” or “Outbound Investment Regulations”) containing the regulations that will implement, effective on January 2, 2025, an outbound investment regulatory regime that captures certain types of US person-involved investments in, or with, Chinese interests if the investment involves any of three key technology areas: quantum information technologies, semiconductors and microelectronics, and certain artificial intelligence (AI) technologies. US and non-US companies involved in or planning to participate in one or more of the key technology areas must be intimately familiar with the scope and application of these regulations to avoid liability. The regulations create new due diligence obligations on such businesses, and non-compliance is subject to the same severe penalties as Office of Foreign Asset Control (OFAC) sanctions violations. This publication provides a summary of the Outbound Investment Regulations established by the Final Rule, and offers considerations for enterprises potentially affected by the new regulatory program.
New Antidumping and Countervailing Duty Petitions on Overhead Door Springs from China and India
On October 29, 2024, IDC Group, Inc., Iowa Spring Manufacturing, Inc., and Service Spring Corp. (Petitioners), domestic producers of overhead door counterbalance torsion springs (overhead door springs), filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) seeking the imposition of antidumping duties (AD) and countervailing duties (CVD) on imports of overhead door springs from China and India. Overhead door springs are typically used to raise and lower overhead doors such as garage doors, warehouse doors, and gates.
New Antidumping and Countervailing Duty Petitions on Hard Empty Capsules from Brazil, China, India, and Vietnam
On October 24, 2024, Lonza Greenwood LLC (Petitioner or Lonza), domestic producer of hard empty capsules (HECs), filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) seeking the imposition of antidumping duties (AD) and countervailing duties (CVD) on imports of HECs from Brazil, China, India, and Vietnam. HECs refer to two-piece unfilled cylindrical shells that are composed primarily of a non-toxic, biodegradable, biocompatible, and water soluble polymer material, used by the pharmaceutical and nutraceutical industries.
The stony road to de-fragmentation of EU Foreign Direct Investment Control (FDI)
On 9 September, Mario Draghi published a report on ‘The Future of European Competitiveness’ highlighting the need for the EU to strengthen its Investment Screening Mechanism. The report was part of a broader effort to assess and strengthen the EU’s economic and strategic resilience in response to rising global competition and geopolitical challenges. Draghi’s report emphasized the EU’s vulnerability in key sectors such as technology, energy, and critical infrastructure. Draghi’s report underscores the importance of national security screening and the EU’s need for resilience with several key statements. At present, FDI screening is a national competence, with Member States only required to exchange notifications and information.
Navigating DoD’s CMMC Program Final Rule
On October 15, 2024, the U.S. Department of Defense (DoD) released its final rule to establish the Cybersecurity Maturity Model Certification (CMMC) Program (Final CMMC Program Rule). The CMMC Program allows the DoD to verify that defense prime contractors and subcontractors (defense contractors) have implemented security safeguards for Federal Contract Information (FCI) and Controlled Unclassified Information (CUI) and are maintaining required safeguards during the contract period of performance. The CMMC requirements apply to defense contractors that process, store or transmit FCI or CUI in the performance of a DoD contract or subcontract.
New Antidumping and Countervailing Duty Petitions on Paper File Folders from Cambodia and Sri Lanka
On October 21, 2024, Smead Manufacturing Company, Inc. and TOPS Products LLC, collectively, the Coalition of Domestic Folder Manufacturers (Petitioner or Coalition) filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) seeking the imposition of antidumping duties (AD) on imports of paper file folders from Cambodia and Sri Lanka, and countervailing duties (CVD) on imports of paper file folders from Cambodia. The Coalition members are both domestic producers of paper file folders.
PVH Facing the Risk of Being Placed on China’s Unreliable Entities List
On September 24, 2024, China’s Ministry of Commerce (MOFCOM) announced that the Working Mechanism of the Unreliable Entities List (the “Working Mechanism”) had initiated an investigation of the PVH Group, a global clothing company and owner of brands such as Tommy Hilfiger, Calvin Klein, Warner’s, Olga and True & Co. The action was taken pursuant to the Provisions on the Unreliable Entities List (UEL), a relatively new law in China that allows the Chinese government to impose countersanctions against foreign entities, including companies, organizations or individuals. The Working Mechanism indicated that PVH Group is being investigated for suspected violation of normal market transaction principles, suspension of normal transactions with Chinese enterprises, organizations or individuals, and adoption of discriminatory measures with respect to products from the Xinjiang Uygur Autonomous Region.
New Antidumping and Countervailing Duty Petitions on Thermoformed Molded Fiber Products from China and Vietnam
On October 8, 2024, Genera, Tellus Products LLC, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO (USW), collectively, “American Molded Fiber Coalition” (Petitioner or Coalition), filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) seeking the imposition of antidumping duties (AD) and countervailing duties (CVD) on imports of thermoformed molded fiber products from China and Vietnam. Genera and Tellus Products LLC are both domestic producers of thermoformed molded fiber products. USW is a certified labor union representative of the industry producing such products within the U.S.
G7 Issues New Recommendations to Prevent Circumvention of Sanctions Against Russia
The primary objective of this guidance is to ensure industry compliance with export controls and help businesses identify risks associated with circumvention of export restrictions directed against the Russian military-industrial complex. The joint guidance identifies the following priority areas: (i)products posing an increased risk of reexport to Russia; (ii) red flag indicators of potential export control and/or sanctions evasion; and (iii) best practices for industry to use to address these red flags and conduct enhanced due diligence. On 24 September 2024, for the first time, the US, Canada, France, Germany, Italy, Japan, the UK and the European Union (collectively, the G7) issued joint guidance aimed at preventing the evasion of export controls and sanctions imposed on Russia. The guidance highlights several key focus areas, particularly the identification of items that are at a heightened risk of diversion to Russia. These items are included on the Common High Priority List (CHPL). The primary goals of this guidance are to safeguard these items from misappropriation, prevent reputational damage and reduce liability risks, all while maintaining the effectiveness of coordinated export controls and sanctions. The CHPL categorises these items into four tiers:
New Antidumping and Countervailing Duty Petitions on Hexamine from China, Germany, India, and Saudi Arabia
On September 29, 2024, Bakelite LLC (Petitioner or Bakelite), domestic producer of granular hexamethylenetetramine (hexamine), filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) seeking the imposition of antidumping duties (AD) on imports of hexamine from China, Germany, India, and Saudi Arabia, and countervailing duties (CVD) on imports of hexamine from China and India.