International Regulatory Enforcement

Foreign Investment Control and COVID-19 in Germany
In June 2020, the German government tightened again the rules of screening of foreign direct investments by revising the Foreign Trade and Payments Ordinance ("AWV"). The initiative is a response to the COVID-19 pandemic emphasizing the importance of protecting critical technology and assets in the current crisis and extends the ability of the German Ministry for Economic Affairs and Energy to scrutinize, intervene in, and prohibit the acquisition of companies in critical sectors—with an emphasis on the health care sector—by non-EU investors. Moreover, the German Parliament is currently revising the Foreign Trade and Payments Act ("AWG") to streamline the screening of foreign direct investments and to implement the EU Regulation on the Screening of Foreign Direct Investments ("EU Screening Regulation").
More Clarity, More Complexity: New CFIUS Rules Put Spotlight on Mandatory Filings
The Department of the Treasury has issued proposed rules that, upon becoming final, will revise the conditions under which parties to a foreign investment in any U.S. business that produces “critical technologies” are required to provide notice to the Committee on Foreign Investment in the United States (“CFIUS”).
U.S. Department of Commerce Imposes Further Restrictions Directed at Huawei
On May 15, 2020, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued an interim final rule to expand the prohibitions on items that can be provided to Huawei and its Entity List-designated affiliates (collectively, “Huawei”). The long-expected move to amend the foreign direct product rule further restricts the ability of Huawei to use certain U.S. technology and software to design and manufacture its semiconductors, and is the latest in a succession of U.S. regulatory, law enforcement and diplomatic actions that may have the cumulative effect of significantly curtailing Huawei’s ability to operate around the world.
Commerce Department Increases Restrictions on Exports to China, Russia, and Venezuela
On Tuesday, April 28, the Bureau of Industry and Security (“BIS”) at the U.S. Department of Commerce published two final rules and one proposed rule significantly increasing export control requirements for a large variety of items exported to China, Russia, and Venezuela. All three rules were explicitly issued in furtherance of the Trump Administration’s National Security Strategy released in December 2017, as well as the Trump Administration’s National Defense Strategy released in January 2018. As stated in the rules, their issuance stems from the Administration’s focus on the integration of civilian and military technology development in countries that are of concern for national security reasons. These countries are included in Group D:1 (“D:1 Countries”) of the Country Groups of the EAR, found in Supplement No. 1 to Part 740. D:1 Countries include China, Russia, and Venezuela (among others).
The New CFIUS Regulations: How Will This Actually Work? FAQs We Wish Treasury Would Answer
Gallons of ink will be spilled explaining the new regulations published by the Department of the Treasury to implement the extensive changes to the national security review process undertaken by the Committee on Foreign Investment in the United States (“CFIUS"). The updated rules, which went into effect on February 13, 2020, were mandated by the 2018 Foreign Investment Risk Review Modernization Act (“FIRRMA").
New Rules for CFIUS: How Investment Funds Can React and Take Advantage
The Committee on Foreign Investment in the United States (“CFIUS”) has just implemented new rules effective February 13, 2020 under the Foreign Investment Risk Review Modernization Act (“FIRRMA”). The new regulations overhaul how CFIUS will review inbound investments into the U.S. for national security risks, and the changes have significant implications for U.S.-based investment funds.
New Export Regulations on AI Software Could Signal Narrow Approach to Pending “Emerging Technology” Controls
The U.S. Government has imposed new export controls over artificial intelligence software that is specially designed to analyze geospatial imagery. The classification took immediate effect and, as such, this software is now restricted from export to any country, or national thereof, other than Canada. Commerce intends to submit this software to the multilateral regime governing export controls, indicating a potential intent to restrict exports of this software permanently. This is the first major action by Commerce to control exports of AI technology since Congress empowered the agency to clamp down on transfers of so-called “emerging and foundational technologies.” While not technically an action under this new authority, Commerce’s initial step to rein in exports of AI could portend a more targeted, careful approach than has been anticipated.
New EU Anti-Money Laundering Laws Applicable to Cryptocurrency
Anti-money laundering and counter terrorist financing requirements to apply to cryptoasset businesses from 10 January 2020. Crypto-businesses will need to overcome obstacles to customer journeys and satisfy fit and proper threshold.
Financial Regulators Issue Joint Guidance to Snuff Out Reporting Requirement on Legal Hemp-Related Businesses
The Guidance was issued as a result of the Agriculture Improvement Act of 2018 (2018 Farm Bill), which directed the removing of hemp as a Schedule I controlled substance under the Controlled Substances Act.