EU Imposes Asset Freeze Measures on Crimean Members of the Russian Parliament

The EU Council has added six members of the Russian Parliament, all were elected to the State Duma from the Crimea and Sevastopol region of Ukraine in September, to its sanctions adopted with respect to territorial integrity or sovereignty of Ukraine. Regulation (EU) 2016/1955 implementing Regulation 269/2014 and Decision 2016/1961 amending Decision 2014/145/CFSP.

EU De-Lists Two Syrian Firms After Successful Annulment Applications

The EU Council has de-listed Tri-Ocean Energy and its subsidiary Tri-Ocean Trading from its sanctions against Syria. The de-listings arose from their successful annulment applications in the General Court of the EU in September 2016. In annulling their listings, the Court said that the Council had not properly identified the two entities, and had not substantiated its allegation that the applicants were “providing support to the Syrian regime and benefitting from the regime by organising covert shipments of oil.” Council Implementing Regulation (EU) 2016/1996 implementing Regulation 36/2012 and Council Implementing Decision CFSP 2016/2000 implementing Decision 2013/255/CFSP.

EU Adds 18 Individuals to Its Sanctions Against Syria

The EU Council has imposed sanctions on 18 Syrian ministers, as well as the Governor of the Central Bank of Syria, for being “responsible for the violent repression against the civilian population” in Syria or benefitting from or supporting the Syrian regime. These new listings bring the total number of people and entities subject to an asset freeze and travel ban under the EU’s sanctions on Syria to 304. Current EU sanctions against Syria also include an oil embargo, arms embargo and restrictions on certain investments. The sanctions are set to run until 1 June 2017. The new listings are available in Implementing Regulation 2016/1984 implementing Regulation 36/2012 and Implementing Decision 2016/1985 implementing Decision 2013/255/CFSP.

CFIUS Clearance: ASML Holding NV and Hermes Microvision, Inc.

Status:  Clearance

Acquirer:  ASML Holding NV (The Netherlands)

Acquired:  Hermes Microvision, Inc. (Taiwan)

Value:  Approx. NT$100 billion (US$3.1 billion)

Industry:  Semiconductors

MicrochipASML Holdings NV, a Netherlands company that manufactures “chip-making equipment,” announced on October 26, 2016, that it received all necessary regulatory clearance, including from the Committee on Foreign Investment in the United States (CFIUS), for its acquisition of Taiwanese Hermes Microvision Inc., a supplier of “E-beam Inspection (EBI) tools and solutions for the leading semiconductor manufacturing fabs” according to its website. (ASML Press Release, Form 6-K, Ex-99.1, Oct. 31, 2016, SEC Filing.)   Reuters reported that the deal value for the acquisition of the Taiwanese semiconductor company is approximately US$3.1 billion. (See Reuters, ASML to buy Taiwan’s Hermes Microvision for $3.1 billion in chip sector shake-up, June 16, 2016.) ASML announced that it completed the acquisition on November 22, 2016. (See ASML Press Release, SML Completes Acquisition of HMI, Nov. 22, 2016.)

Pending CFIUS Clearance: Chongqing Casin Enterprise Group and Chicago Stock Exchange, Inc.

Status: Pending Clearance

 

Acquirer: Chongqing Casin Enterprise Group (China)

Acquired: Chicago Stock Exchange, Inc. (US)

Value: Unknown

Industry: Financial Services

 

financial concept, business and moneyOn February 5, 2016, The Chicago Stock Exchange, Inc. (“CHX”) announced that it has entered into a definitive agreement to be acquired by an investor group led by Chongqing, China based Chongqing Casin Enterprise Group (the “Casin Group”).   (See CHX Press Release, Investor Group to Acquire Chicago Stock Exchange, Feb. 5, 2016.)  The Casin Group is a “diversified holding company in China with investments in financial services, real estate and environmental services.”  (Id.) The announcement indicated that the acquisition was subjection to “regulatory approvals,” (id.), which includes approval by the Committee on Foreign Investment in the United States (CFIUS).  (See CHX Form 19b-4 Information, Nov. 23, 2016, SEC Filing.)  Shortly after the announcement, 45 members of the U.S. House of Representatives co-signed a letter urging CFIUS to conduct a “full and rigorous investigation” of the proposed acquisition.  (See Letter from Representatives to Assistant Secretary Lago of the Department of Treasury, February 16, 2106.)   According to a news report, the CFIUS review is pending but nearing completion.  (See Nikkei Asian Review, Ruling Nears on Chinese Bid for Chicago Exchange, Sept. 20, 2016.)

CFIUS Clearance: Beijing E-Town Chipone Technology Co. and Integrated Memory Logic Limited

Status:  Clearance

Acquirer:  Beijing E-Town Chipone Technology Co., Ltd. (China)

Acquired:  Integrated Memory Logic Limited (U.S.)

Value:  Approx. US$144.5 million

Industry:  Integrated Circuits; Semiconductors

macro-view-central-processor-unit-on-mainboardOn November 2, 2016, Exar Corporation announced that it received clearance from the Committee on Foreign Investment in the United States (CFIUS) concerning the sale of its fabless semiconductor subsidiary, Integrated Memory Logic Limited (“IML”) to Beijing E-Town Chipone Technology Co., Ltd., a Chinese consortium comprised of Beijing-based integrated circuit design and solutions manufacturer Chipone Technology Co., Ltd. and its financial partner Beijing E-Town International Investment & Development Co., Ltd.  (See Exar Corp. Second Quarter Fiscal Year 2017 Earnings Announcement, Prepared Conference Call Remarks, Form 8-K, Ex-99.2, Nov. 2, 2016, SEC Filing.)  The parties closed the transaction on November 9.  (See Exar Corp. Press Release, Exar Completes Divestiture of iML Subsidiary to Beijing E-Town Chipone, Nov. 9, 2016.)

Trade Talk: Week in Review (28 November – 4 December 2016)

Business People Meeting Growth Success Target Economic ConceptIran – Sanctions Measure Advances.  Last week, the Senate passed the Iran Sanctions Extension Act (H.R. 6297) by a vote of 99-0, sending the measure to President Obama’s desk. Members of Congress and Administration officials have said they do not believe renewal of the Iran Sanctions Act (ISA) would violate terms of the nuclear agreement with Iran that went into effect early this year.  A senior Administration official said, “While we do not think that an extension of ISA is necessary, we do not believe that a clean extension would be a violation of the JCPOA [Iran deal].”  The White House has confirmed that President Obama is expected to sign the measure. 

Trump Transition News.  Last week, President-Elect Donald Trump announced his intention to nominate Wilbur Ross as the Secretary of Commerce and Steven Mnuchin as the next Secretary of the Treasury.  The President-Elect announced at a rally on Thursday night that he had selected Gen. James Mattis to serve as Secretary of Defense.

Taiwan – Trump’s Call.  On Friday, President-Elect Trump spoke with the leader of Taiwan, a shift from the nearly 40-year-old “one-China” policy’s diplomatic protocol.  Vice President-Elect Mike Pence said Sunday that the phone call was a “courtesy call” and should not necessarily be interpreted as a shift in U.S. policy.

Trans-Pacific Partnership (TPP) – Brady Talking to Trump Transition Team.  House Ways & Means (W&M) Committee Chairman Kevin Brady (R-Texas) told Inside U.S. Trade last week that he has engaged President-Elect Trump’s Transition Team in order to establish what he hopes will be a regular and ongoing dialogue on trade issues that would include advocating to President-Elect Trump that a trade agreement in the Asia-Pacific is crucial to growing the U.S. economy.  Senate Finance Committee Chairman Orrin Hatch (R-Utah) said on 1 December that he believes President-Elect Trump may eventually support TPP once he realizes the consequences of withdrawal, even if the United States begins with a bilateral trade agreement with Japan.

Representative Richard Neal (D-Massachusetts) will serve as Ranking Member of the W&M Committee during the 115th Congress following Rep. Sander Levin’s (D-Michigan) unexpected move to step down from the leadership role last week.  Representative Neal has reportedly said that U.S. trade policy must be revamped before Congress and the general public will be open to supporting any large trade deals.

If you have questions regarding any of the above information, or would like to be added to the distribution list to receive the full version of Trade Talk, please contact Stacy Swanson at Stacy.Swanson@SquirePB.com or at TradeTalk@SquirePB.com

CFIUS Presidential Order: Fujian Grand Chip Investment Fund LP/Zhendong Liu and Aixtron SE

Status:  Presidential Order

Acquirer:  Fujian Grand Chip Investment Fund LP (China); Zhendong Liu (China)

Acquired:  Aixtron SE (Germany)

Value:  Approximately €670 million

Industry:  Semiconductors

macro-view-central-processor-unit-on-mainboardLate in the evening on Friday, December 2, the White House published the text of a “Presidential Order – Regarding the Proposed Acquisition of a Controlling Interest in Aixtron SE by Grand Chip Investment GMBH.”  (The White House, Press Release and Text of Presidential Order, Dec. 2, 2016.)  According to the Presidential Order, the President blocked the transaction as it relates to the U.S. business of Aixtron SE (defined as “Aixtron US” in the Order).  (See id.)   Aixtron SE is a German technology company that has a pending takeover offer by a subsidiary of Grand Chip Investment GMBH, a Chinese owned entity. The Presidential Order requires the parties to “permanently abandon the proposed acquisition of Aixtron US not later than 30 days after the date of this order” and to “certify in writing to CFIUS that such termination has been effected in accordance with this order and that all steps necessary to fully and permanently abandon the proposed acquisition of Aixtron US have been completed.” (Presidential Order.)  The parties earlier reported that the CFIUS would “recommend to the U.S. President that the transaction be prohibited.” (See our above-referenced blog post on Aixtron Presidential Review, Nov. 21, 2016.) Continue Reading

Trade Talk: Week in Review (21-27 November 2016)

Cuba – Fidel Castro Passes Away.  In the statement released on 26 November, President Barack Obama said of the former Cuban leader:

Flag of Cuba[W]e extend a hand of friendship to the Cuban people. We know that this moment fills Cubans – in Cuba and in the United States – with powerful emotions, recalling the countless ways in which Fidel Castro altered the course of individual lives, families, and of the Cuban nation. History will record and judge the enormous impact of this singular figure on the people and world around him.”

President-Elect Donald Trump, who is critical of the Castro regime in Cuba and changed his position from supporting rapprochement to sustaining U.S. sanctions during the election campaign, also issued a statement on Saturday morning, saying:

Today, the world marks the passing of a brutal dictator who oppressed his own people for nearly six decades.”  He added:  “While Cuba remains a totalitarian island, it is my hope that today marks a move away from the horrors endured for too long, and toward a future in which the wonderful Cuban people finally live in the freedom they so richly deserve.”

Members of the U.S. Congress also responded to the news of Fidel Castro’s death, including those Members who oppose the Obama Administration’s rapprochement efforts.  Cuban-born Representative Ileana Ros-Lehtinen (D-Florida) said:

The day that the people, both inside the island and out, have waited for has arrived: A tyrant is dead and a new beginning can dawn on the last remaining communist bastion of the Western hemisphere.”  She added: “Those who still rule Cuba with an iron grip may attempt to delay the island’s liberation, but they cannot stop it.  Castro’s successors cannot hide and must not be allowed to hide beneath cosmetic changes that will only lengthen the malaise of the Cuban nation. No regime, no matter who leads it, will have a shred of legitimacy if it has not been chosen by the people of Cuba in free and fair elections.”

Florida Senator Marco Rubio, another Cuban-American, also issued a statement on Fidel Castro’s death, characterizing the former leader as an “an evil, murderous dictator who inflicted misery and suffering on his own people” and adding:

The future of Cuba ultimately remains in the hands of the Cuban people, and now more than ever Congress and the new administration must stand with them against their brutal rulers and support their struggle for freedom and basic human rights.”

Representative Ed Royce (R-California), Chairman of the House Foreign Affairs Committee, said:

For more than half a century, the Cuban people have suffered under the brutal dictatorship of the Castro clan.  No one should rule anywhere near as long as Fidel Castro did.  His legacy is one of repression at home, and support for terrorism abroad.  Sadly, Raul Castro is no better for Cubans who yearn for freedom.”

Senator Bob Corker (R-Tennessee), Chairman of the Senate Foreign Relations Committee, issued a more moderate statement, commenting on possible changes ahead in Cuba:

Under Fidel Castro’s brutal and oppressive dictatorship, the Cuban people have suffered politically and economically for decades, and it is my hope that his passing might turn the page toward a better way of life for the many who have dreamed of a brighter future for their country.”

TPP – Trump Vows To Withdraw.  On 21 November, President-Elect Trump said in a video that he would withdraw the United States from the Trans-Pacific Partnership (TPP) deal on his first day in office.  The President-Elect has instead voiced support for bilateral agreements over mega-regional deals like the TPP agreement.

The day before President-Elect Trump’s announcement, Ambassador Froman was asked what would happen if the United States withdraws from TPP.  He acknowledged that new ground is being broken, offering:

It’s possible the other countries will find a way to move on without us with the hope that we would join some time in the future. It’s possible they’ll pursue other trade agreements.”

House Ways and Means Committee Chairman Kevin Brady (R-Texas) responded to President-Elect Trump’s TPP announcement, saying:

I respect President-Elect Trump for fulfilling his campaign promise to withdraw from TPP, but I am convinced that we have to reach these customers if we want to get America’s economy moving again.”  He added:  “We can’t abandon these markets to China and other competitors because American businesses and customers will lose out.”

Senate Finance Committee Chairman Orrin Hatch (R-Utah) also responded, saying:

While it appears that there is no viable path forward for the [TPP] this year, I remain committed to working with my colleagues in Congress and the new administration to advance strong trade policies that will enhance America’s global competitiveness, increase access to new, international markets, and ensure we secure the best possible trade deals for American workers and entrepreneurs.”

If you have questions regarding any of the above information, or would like to be added to the distribution list to receive the full version of Trade Talk, please contact Stacy Swanson at Stacy.Swanson@SquirePB.com or at TradeTalk@SquirePB.com.

ALJ Lord Dismisses Antitrust-Based Claims In Carbon And Alloy Steel Products Investigation

SteelIn May, the ITC instituted its investigation of Certain Carbon and Alloy Steel Products, Inv. No. 337-TA-1002, based on alleged violations of Section 337 by the Chinese steel industry, including antitrust, false designation of origin, and trade secret claims.  On November 14, however, the presiding administrative law judge (ALJ Lord) granted respondents’ motion to dismiss the antitrust claims for failing to state a claim on which relief could be granted under the statute.

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