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McKinsey Africa to Pay $122 Million FCPA Settlement

McKinsey and Company Africa (Pty) Ltd, which operates in South Africa as a wholly owned and controlled subsidiary of international consulting firm McKinsey & Company Inc, will pay over $122 million to resolve an investigation by the Justice Department into a scheme to pay bribes to government officials in South Africa between 2012 and 2016.

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November 2024 Export Practitioner

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Russian Oligarch to Forfeit Music Studio Proceeds

The United States Department of Justice announced the filing of a civil forfeiture complaint to seize over $3.4 million in proceeds from the sale of a Southern California music studio owned by Russian oligarch Oleg Deripaska. Mr. Deripaska acquired the Burbank music studio in 2008 through shell companies. After his 2018 designation as a Specially Designated National (SDN), Deripaska’s associates facilitated the sale of the studio and its contents, generating proceeds that were allegedly funneled through a series of transactions designed to evade sanctions.

Treasury Steps Up Pressure on Iran's Shadow Fleet

The United States is imposing sanctions on 35 entities and vessels that play a critical role in transporting illicit Iranian petroleum to foreign markets. This action builds upon the sanctions issued …

Treasury Sanctions Russian Money Launderers

Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on five individuals and four entities linked to the TGR Group, an international network facilitating sanctions evasion for Russian elites. The TGR Group, known for leveraging digital assets such as U.S. dollar-backed stablecoins, has been instrumental in circumventing U.S. and international sanctions.

Angola Partnership Inked

The United States and Angola are launching a bilateral Commercial and Investment Partnership as part of President Biden’s trip to the country as part of an effort to provide an alternative to China. The partnership "seeks to enable meaningful engagement between business and governments as well as with other businesses to advance its goals."

USTR Section 301 Review 2025 Scheduled

The US Trade Representative’s Office is gearing up for its 2025 Section 301 review to identify countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access. USTR is seeking public comments on that identify acts, policies, or practices that may form the basis of a country’s identification as a Priority Foreign Country or placement on the Priority Watch List or Watch List.

China Hawks Target Online Stockbroker

Webull, a popular electronic stock trading platform has substantial ties to Chinese entities which "raise concerns about Webull’s independence, the security of U.S. investor data, and its ability to comply with U.S. financial regulations," according to Reps. John Moolenaar (R-MI) and Raja Krishnamoorthi (D-IL).

Crypto Contracts Not Property

The International Trade and Security group of Morgan Lewis brings to our attention the following: The Fifth Circuit Court of Appeals ruled that immutable smart contracts on Tornado Cash, a cryptocurrency transaction protocol, are not “property” under the jurisdiction of the Office of Foreign Assets Control (OFAC). This decision restricts OFAC’s ability to sanction Tornado Cash based on such contracts. The court relied on the Supreme Court’s Loper Bright Enterprises v. Raimondo decision, emphasizing that immutable smart contracts lack traditional characteristics of property, such as ownership and control.

U.S. Sanctions Venezuelan Officials for Repression and Electoral Fraud

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned 21 Venezuelan officials, including security and cabinet-level leaders aligned with Nicolás Maduro. These actions, pursuant to Executive Order 13692, target individuals for supporting Maduro’s repression of civil society and attempts to declare himself the winner of the July 28 presidential election, despite Edmundo González Urrutia being elected by a significant majority.

Gazprombank (finally) Sanctioned

Treasury’s Office of Foreign Assets Control (OFAC) has announced full blocking sanctions against 118 entities and individuals, including Gazprombank and fifty other banks. Thursday's actions bring it in alignment with allied sanctions on Gazprombank—the largest bank not previously sanctioned. OFAC’s action includes the designation of Gazprombank, more than 50 internationally connected Russian banks, more than 40 Russian securities registrars, and 15 Russian finance officials.

Read more of our coverage of Sanctions

Policy Briefs

Senate Takes Up China Tax Credit Ban

Senators Tom Cotton (R-AR) and Rick Scott (R-FL) have introduced legislation which blocks the recently finalized Treasury Department rule on 45X production tax credits from being implemented. The legislation was introduced in the House by Reps. John Moolenaar (R- MI) and Jared Golden (D-Maine). The 45X credit subsidizes the production of five types of goods: solar energy components, wind energy components, battery components, inverters, and critical minerals. The 45X credit is projected to cost taxpayers $72.7 billion between FY2023 and FY2027.

Trade Shrinks in October

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced Thursday that the goods and services deficit was $73.8 billion in October, down $10.0 billion from $83.8 billion in September, revised. October exports were $265.7 billion, $4.3 billion less than September exports. October imports were $339.6 billion, $14.3 billion less than September imports.

DOJ Trade Enforcement Bill Passes House

The House passed legislation December 3rd creating a new structure within the US government to prosecute international trade crimes. The bill directs the Justice Department to stand up a new office, in order to enhance US capabilities for detecting, investigating and prosecuting trade fraud, duty evasion, transshipment and other trade-related crimes.

Supply Chain

Legacy Chip Study Released

Friday Bureau of Industry and Security (BIS) released a report on the use of mature-node semiconductor chips, or legacy chips, in supply chains that directly or indirectly support U.S. critical infrastructure. Nearly half of surveyed companies were unable to determine whether their products contained any chips manufactured by PRC-based foundries. The report notes that capacity expansion in China has begun to cause pricing pressure on U.S. chip suppliers.

CBP Keeps Trying with Aluminum Extrusions

A Chinese-owned producer and distributor of aluminum extrusions in the Dominican Republic has been determined to be employing convict, forced or indentured labor by US Customs and Border Protection. This comes on the heels of a successful appeal by Kingtom Aluminio SRL, of an Enforce and Protect Act (EAPA) case before the U.S. Court of International Trade (CIT), where an alleger asserted Kingtom Aluminio was evading antidumping and countervailing duty orders on aluminum extrusions from China.

Uniqlo Says No to Xinjiang Cotton

Tadashi Yanai, chairman and president of Fast Retailing, the parent company of Japanese fast fashion giant Uniqlo, said the company does not use Xinjiang cotton. Speaking in Tokyo about the firm's measures to be more transparent about where the materials in its clothes come from and how they are made, Yanai said: "We're not using [cotton from Xinjiang," BBC reported on Thursday. "Actually, it gets too political if I say anymore so let's stop here,"

DDTC Fee Increases Finalized

For the first time in fifteen years, the State Department proposes to revise and increase the registration fees charged to those required to register with DDTC. During the 45-day public comment period, the feedback, primarily from individuals and small businesses, raised concerns about the financial burden on small enterprises, barriers to entry, and the disproportionate impact on manufacturers who must register to meet private-sector contracting requirements.

Chemical Weapons Convention Impact on Industry

The Bureau of Industry and Security (BIS) is seeking public comments on the impact that implementation of the Chemical Weapons Convention (CWC), through the Chemical Weapons Convention Implementation Act of 1998 and the Chemical Weapons Convention Regulations (CWCR), has had on commercial activities involving “Schedule 1” chemicals during calendar year 2024. Schedule 1 chemicals are chemicals that are considered a high risk to the Chemical Weapons Convention (CWC) and have little to no peaceful use. They include chemicals that have been used as weapons, such as sarin, mustard, VX, and ricin, as well as precursor chemicals that can be used to produce these chemicals

Info and Comms Security Final Rule Issued

Bureau of Industry and Security (BIS) issued a final rule cementing the procedures it will follow in investigating foreign adversary threats to information and communications technology and services (ICTS) transactions that may harm U.S. national security

Read more of our Export Control coverage

Licensing

AES Update for new Chip Equipment Rules

Among other actions, the semiconductor equipment related controls announced Monday include amendments to the Temporary General Licenses (TGL) in the Export Administration Regulations (EAR). An update has been made to AES to revise License Code C65 “Temporary General License” (TGL) permitting certain parts, components or equipment. New controls on high-bandwidth memory units under ECCN 3A090.c, and also creates a License Exception High Bandwidth Memory (HBM). A new License Exception Restricted Fabrication Facility (RFF)

USML Modifications for Korea Tech Transfer Extended

On November 26, 2024, the Department extended the temporary modification of the Note to paragraph (h)(1) of USML Category VIII with regard to certain commodities used in the KF-21 aircraft or variants thereof.

Pakistan Proliferation Controls Update

Commerce’s Bureau of Industry and Security (BIS) published a final rule imposing new controls on exports, reexports, and transfers (in-country) involving six key categories of items – some of which were previously controlled for nuclear nonproliferation reasons – to Pakistan to address diversion concerns.