International Regulation and Compliance

On October 9, 2024, the U.S. Department of the Commerce’s Bureau of Industry and Security ("BIS") published guidance to financial institutions (“FIs”) on best practices for compliance with the Export Administration Regulations (“EAR”). The guidance reflects BIS’s increasing focus on EAR compliance by FIs and follows several joint alerts published by BIS and the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) in May, June, and November 2023 that provided FIs with “red flag” indicators for export control evasion and key terms to use in export control evasion-related Suspicious Activity Reports (“SARs”). Steptoe's Ryan Pereira, Meredith Rathbone, Ali Burney, Wendy Wysong, and Peter Jeydel cover BIS's recent guidance and its implications for both U.S. and non-U.S. FIs in a new blog post: https://lnkd.in/ep4RBN7y

On September 27, 2024, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”), announced that a civil monetary penalty of £15,000 was imposed on August 29, 2024, against Integral Concierge Services Limited (“ICSL”) for breaches of The Russia (Sanctions) (EU Exit) Regulations 2019 (the “Russia Regulations”). The ICSL case represents the tenth use of OFSI’s civil monetary penalty powers since they were introduced under Part 8 of the Policing and Crime Act 2017 (“PACA”), and the second penalty to be imposed by OFSI in relation to Russia’s February 2022 invasion of Ukraine. Steptoe's Alex Melia and Elliot Letts discuss the ICSL case and the insights it provides into OFSI's enforcement approach in a new blog post: https://lnkd.in/eqaydFTS

On September 26, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a Notice of Proposed Rulemaking (NPRM) aimed at securing the automotive supply chain from foreign adversaries. The rule seeks to address national security concerns by prohibiting the import and sale of connected vehicles and key components, including Vehicle Connectivity Systems (VCS) and Automated Driving Systems (ADS), that have ties to entities subject to the jurisdiction or direction of, or otherwise linked to, certain foreign adversary jurisdictions, currently identified as China and Russia. Steptoe's Chris Forsgren, Jack Hayes, Evan Abrams, Meredith Rathbone, and Brian Fleming discuss the NPRM and its implications for the automotive industry in a new blog post: https://lnkd.in/eYH2ccup

On September 24, 2024, for the first time, the United States, Canada, France, Germany, Italy, Japan, the United Kingdom, and the European Union (collectively, the G7) published joint guidance for industry on preventing the evasion of export controls and sanctions imposed on Russia. The guidance reflects the G7’s continued emphasis on preventing diversion of Common High Priority List (CHPL) items to Russia. Accordingly, parties involved in the export, reexport, or transfer (in-country) of CHPL items should be aware that these items are an enforcement priority in these jurisdictions. Steptoe attorneys Ryan Pereira and Alexandra Baj summarize the G7's joint guidance in a new blog post: https://lnkd.in/gccWYAz4

On September 11, 2024, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an Interim Final Rule (the IFR), effective March 12, 2025, that extends OFAC’s general recordkeeping requirement from five years to 10 years. The IFR aligns OFAC’s recordkeeping requirement with the recent extension of the statute of limitations (SOL) period for civil and criminal violations of the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA), which took effect on April 24, 2024, when President Biden signed into law HR 815 (the National Security Supplemental). Steptoe attorneys Peter Jeydel, Dave Stetson, Edward Krauland, Jack Hayes, Brian Fleming, and Wendy Wysong, along with Pre-Law Fellow Jonathan Eaton, assess the IFR and its implications for the enforcement landscape in a new blog post: https://lnkd.in/eeb7fzBa

On September 11, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a Notice of Proposed Rulemaking (NPRM) that would impose new reporting requirements on entities developing advanced artificial intelligence (AI) models and acquiring or possessing large-scale computing clusters. The NPRM, issued principally pursuant to Executive Order 14110 on “Safe, Secure, and Trustworthy Artificial Intelligence” and the Defense Production Act (DPA), aims to protect U.S. national security by collecting data on dual-use foundation AI models and computing resources that may have national security implications. Steptoe's Chris Forsgren, Evan Abrams, and Brian Fleming discuss the NPRM in a new blog post: https://lnkd.in/eDvS2e5K

On September 16, 2024, the US Department of Commerce’s Bureau of Industry and Security (BIS) promulgated a Final Rule to amend immediately its enforcement and voluntary self-disclosure (VSD) policies set forth in the Export Administration Regulations (EAR). These amendments principally formalize through regulatory rules certain BIS Office of Export Enforcement (OEE) policy memoranda issued in 2022, 2023, and 2024 under the Biden Administration. Steptoe's Jack Hayes, Wendy Wysong, Meredith Rathbone, Edward Krauland, and Brian Fleming discuss the Final Rule and its implications for exporters, reexporters, and retransferors of items subject to the EAR in a new blog post: https://lnkd.in/ebH3qaas

On September 12, 2024, the UK government laid a new statutory instrument before parliament, The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (the “Regulations”), which creates new strict liability civil enforcement powers for breaches of UK trade sanctions, as well as aircraft and shipping sanctions. Statutory guidance has been published alongside the Regulations. These new powers will come into effect on October 10, 2024, following a 28 day period for businesses to familiarize themselves with the new civil enforcement regime. The new trade sanctions civil enforcement regime will be administered by a new sanctions agency, the Office of Trade Sanctions Implementation (“OTSI”). The Department for Transport (“DFT”) will be responsible for administering the new aircraft and shipping sanctions enforcement powers. Steptoe's Alex Melia explores this significant development and its potential impact on the UK enforcement landscape in a new blog post: https://lnkd.in/e-twj9Ws

On September 2, 2024, the UK government announced its decision to suspend with immediate effect arms export licences to Israel for use in military operations in Gaza. The decision affects around 30 extant export licences out of a total of approximately 350 export licences to Israel. Amendments also have been made to several open general licences (“OGLs”) to give effect to the UK government’s decision by removing Israel as a permitted destination under those OGLs. Steptoe's Alex Melia discusses the details and implications of the UK government's recent decision in a new blog post: https://lnkd.in/gvm874iG

On July 23, 2024, the Committee on Foreign Investment in the United States (CFIUS) released its Annual Report to Congress for 2023. CFIUS is the inter-agency body that conducts national security reviews of certain foreign investments in the United States. The annual report provides aggregate data on CFIUS activities and provides valuable insight into the Committee’s activities and key trends. Steptoe attorneys Quentin Johnson, Brian Fleming, and Evan Abrams analyze the report in a new blog post: https://lnkd.in/eXm8w5Xh