International Trade Law News

The Treasury Department yesterday issued the long-awaited proposed regulations to implement the changes in the Committee on Foreign Investment in the United States (CFIUS) review process as required by the Foreign Investment and National Security Act of 2007 (FINSA) (Public Law 110-49).

FINSA, which was passed by Congress in July 2007 and became effective on October 24, 2007, was passed after the furor over the proposed acquisition of certain U.S. port facilities by UAE-owned Dubai Ports World in early 2006.

The proposed regulations will be published in the Federal Register later this week, but in the meantime a copy of the document can be found here (this document is 90 pages).

Treasury is requesting comments on the proposed regulations and the public comment period will end 45 days after the notice is published in the Federal Register.

Treasury will be holding a public meeting on the proposed regulations on May 2, 2008 in Washington, DC. Details on the meeting can be found in the "Supplementary Information" section in the Federal Register notice.

UPDATE: The proposed changes to the Treasury Department's Regulations Pertaining to Mergers, Acquisitions, and Takeovers by Foreign Persons that was published in the Federal Register on April 23, 2008 can be found at the following link: edocket.access.gpo.gov/2008/08-1172.htm.

Labels: CFIUS, Treasury Department

The Treasury Department today unveiled a redesigned home page with a new look. The new site has direct links to OFAC's SDN List and summaries of OFAC's sanctions programs on the lower left hand side of the page. The URL and look of OFAC's website remains unchanged.

Labels: OFAC, Treasury Department

U.S. importers of beer, wine and distilled spirits should be aware that the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau (TTB) published a notice of proposed rulemaking (NPRM) in today's Federal Register that would require significant changes to the labeling and advertising of alcoholic beverages sold in the U.S.

The proposed rule would require a statement of alcohol content, expressed as a percentage of alcohol by volume, on all alcohol beverage products sold in the U.S. The NPRM would also require a "Serving Facts" panel to be included on alcohol beverage labels that is similar to the "Nutrition Facts" label required on food and beverage products. TTB proposes to have the "Serving Facts" label include information on the serving size, number of servings per container, statement of calories, carbohydrates, fat and protein. The proposed rule would also specify new reference serving sizes for wine, distilled spirits and malt beverages based on the amount of beverage customarily consumed as a single serving.

In order to minimize the cost of creating new labels, TTB proposes to have the new labeling requirements go into effect three years from the date the final rule is published in the Federal Register.

Public comments on the NPRM must be submitted to the TTB before October 29, 2007.

Labels: Labeling, Treasury Department

The Securities and Exchange Commission (SEC) today announced that it has added to its Web site a new software tool that permits investors to obtain information directly from company disclosure documents about their business interests in countries that have been designated as "State Sponsors of Terrorism" (currently Cuba, Iran, North Korea, Sudan and Syria).

The SEC's software tool, which can be found at www.sec.gov/edgar/edgartlistfilings.htm, contains a menu listing the countries on the State Sponsors of Terrorism list. Clicking on the country name brings up a list of the companies whose 2006 annual reports disclosed business activities in that country. Clicking on the name of a company will then bring up the pertinent portions of that company’s annual report.

A quick review of this new software reveals that this new tool is a work in progress and needs to be refined. For example, included on the list are companies that that have already wound up their operations in the countries in question or are legally doing business with such countries pursuant to licenses issued by OFAC. Thus, anyone using this information to base their investment decisions should carefully review the information contained in the SEC filings.

In addition, although the SEC's press release announcing the new software tool stated that the "existence of a disclosure by a company concerning activities in one of the listed countries does not, in itself, mean that the company directly or indirectly supports terrorism or is otherwise engaged in any improper activity", this disclaimer does not appear anywhere on the new software tool.

Labels: Sanctions, SEC, Treasury Department

In a speech today made at the Council on Foreign Relations in New York, U.S. Treasury Secretary Henry Paulson outlined the U.S. effort to cut off weapons proliferators, terrorists and money launderers from the global financial system. He also called on U.S. allies need to enact legislative and regulatory changes that would enable better targeting of financial sanctions in the fight against global threats and facilitate coordination of actions with related multilateral efforts. Specifically, he stated that:

Nations must implement the laws necessary to give their finance ministries the authority to access and use intelligence, and they must move to integrate financial and security functions. This will enable further cooperation and multilateral action, which is in the world's best interest. And, these authorities must be available for use against terrorist financing, money laundering and the dangerous, emerging practice of proliferation financing.

Labels: OFAC, Treasury Department

Former Under Secretary of Commerce for Export Administration David McCormick has been nominated by President Bush to be Under Secretary of the Treasury for International Affairs. Dr. McCormick currently serves as Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs.

Labels: BIS, Treasury Department

In a recent speech at the Washington Institute for Near East Policy, Deputy Treasury Secretary Robert M. Kimmitt said that efforts to encourage international support for public and private sector financial sanctions on Iran for pursuing nuclear and missile programs are working. He also called efforts by some members of Congress to impose sanctions on U.S. subsidiaries for doing business in Iran as counterproductive.

We have worked closely with our fellow finance ministries and central banks abroad to build consensus on these financial measures, and the effect has been striking: international partners who originally resisted the idea of applying sanctions on Iran have reversed this position and now support pressuring the Iranian regime to renounce its support for WMD proliferation and to comply with its international obligations.

We have learned that the Swiss bank UBS cut off all dealings with Iran, and Credit Suisse and HSBC have also significantly limited their exposure to Iranian business. A number of other foreign banks are refusing to issue new letters of credit to Iranian businesses. According to the banks, these were business decisions, pure and simple - handling Iran's accounts was no longer good business. Multinational corporations have also held back from investing in Iran, including limiting investment in Iran's oil field development.

Members of Congress are considering a number of legislative options, including application of U.S. sanctions to the business activities of foreign subsidiaries of American companies; mandatory divestment from companies doing business with Iran; and having the government "name and shame" firms – both domestic and foreign -- that do business with Iran. While these proposals are certainly well intended, they could have significant counter-productive policy implications. Our shared goal is to pressure the Iranian regime to change its behavior, and the best way to achieve this objective is to keep the focus on illicit conduct and maintain as broad an international coalition as possible. Yet many of these proposed measures may be seen by our allies as extraterritorial U.S. Government action and could affect our ability to obtain their cooperation on mutual action with respect to Iran.

Labels: Sanctions; Iran, Treasury Department

The January 8, 2007 edition of the Federal Register contains the Treasury Department's periodic "List of Countries Requiring Cooperation With an International Boycott." The list of countries includes: Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates, Republic of Yemen. The notice states that "Iraq is not included in this list, but its status with respect to future lists remains under review by the Department of the Treasury." This list is unchanged from the previous version published by Treasury in October 2006.

Labels: Boycotts, Treasury Department