Top Story

Cartels as FTOs Means Heightened Risks for Companies Operating in Latin America

Barrio de las Pe, Guayaquil, Ecuador
On January 20, 2025, President Trump issued Executive Order (E.O.) 14157, "Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists." Such designations will increase the penalties and other consequences for companies and individuals providing "material support" to the designated entities. This development will impact the legal and compliance risks companies face when doing business in Mexico, Central America, and other parts of Latin America where cartels are active.  The difference of an FTO designation is that it now implicates companies and individuals with new and specific criminal law provisions for material support of the designated entities that do not currently exist under an SDN designation. One should expect to see more criminal prosecutions in the U.S. against non-U.S. companies and individuals.
Navigating the Era of Heightened Sanctions Enforcement
In today's global business environment, companies must navigate a complex web of sanctions regulations. The stakes are high, and the consequences of non-compliance can be severe. This article outlines key considerations for companies navigating the era of heightened sanctions enforcement identified by Baker McKenzie's Global Sanctions Investigations Group from its involvement in many such investigations.
One billion Chinese represent an important market for many US firms.
US Firms in China: Keep PNTR, More Exclusions, Nix AI Diffusion Rule
The trade group representing 270 American companies operating in China, announced its policy priorities for US-China commercial relations. "With new US leadership, USCBC sees a fresh chance to address structural issues in China’s economy that disadvantage American businesses, workers, and farmers," states The US-China Business Council (USCBC) in announcing the report. The report calls for ensuring the enforcement of China’s “phase one” commitments, preserving China’s permanent normal trade relations status, and "recalibrating national security restrictions" Including reversing the AI Diffusion Rule introduced at the close of the prior administration.
Yantian Port Free Trade Zone, Shenzhen City, Guangdong Province, China
Insurance Coverage Options for Tariff-Related Risks
The Trump administration’s pledge of across-the-board tariffs have many U.S. companies concerned about higher-priced inputs and disrupted supply chains. This article explores the insurance coverage options, such as political risk insurance and trade credit insurance, that can offer coverage to protect against and mitigate trade-related risks. This article also provides advice on how policyholders can maximize coverage should a loss occur, and further discusses the impact that tariffs might have on the insurance market, including premiums for certain types of insurance lines.

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Our latest news

Never Mind...

What are we to make of the chaos being promulgated by the Trump White House as it settles in to governing?   Check back tomorrow; we'll have a new answer. From eliminating Valentine's Day roses, guacamole for the Super Bowl, the North American automotive industry, and America's compulsion for flimsy fast fashion, the Administration's "flood the zone" policy prescription has generated much heat and chatter, only to be walked back by weekend. Friday President Trump continued the drumbeat, promising more tariff announcements to come “I’ll be announcing that next week. Reciprocal trade so that we’re treated evenly with other countries. We don’t want any more or any less,”

Nippon, US Steel File Challenge to CFIUS

Japan’s Nippon Steel and the US Steel Corporation are continuing the fight against the Biden Administration’s decision to block their proposed $14.9 billion merger. The two companies filed their opening brief with the US Court of Appeals for the District of Colombia Circuit arguing that President Biden halted the merger for political reason and not because of a national security threat. The two companies said in a statement that the merger “will enhance, not threaten, United States’ national security, protect US Steel workers, revitalize jobs in communities that rely on American steel and make American Steel bigger and better.

Senators Warren and Hawley Agree on China Controls

Sens. Elizabeth Warren (D-Mass) and Josh Hawley (R-Mo) are calling on the Commerce Department to beef up export controls on China. In a letter to Commerce Secretary nominee Howard Lutnick, the two members of the Banking Committee said the Administration needs to strengthen export controls and close regulatory loopholes that are undercutting US technology leadership against challenges from China.

Beijing Parries White House Gambit

China has responded to Washington’s imposition of a 10 percent tariff on all Chinese imports with a mix of retaliatory measures, including targeted tariffs, World Trade Organization (WTO) challenges, and diplomatic overtures. After President Trump announced a blanket tariff on China Tuesday, China's Finance Ministry declared 15 percent levies on US Coal and LNG and 10 percent on crude oil, farm equipment and some autos.   Beijing also restricted exports of five critical minerals: tungsten, tellurium, bismuth, molybdenum, and indium.

EU Dual Use Export Controls Report

A European Commission report assessing patterns of Member-State exports of dual-use items shows that both authorisations and denials for the export of those most sensitive goods is on the rise as compared to 2021. The report includes, for the first time, extensive information on licensing data that will allow for a better understanding of how export controls are applied, and the risks identified relating to exports of sensitive items in the current geopolitical context.

Another PdVSA Aircraft Seized

The Justice Department announced Thursday that Dominican Republic authorities seized a Dassault Falcon 2000EX aircraft used by Petroleos de Venezuela, S.A. (PdVSA), the sanctioned Venezuelan state-owned oil and natural-gas company, at the request of the U.S. government based on violations of U.S. export control and sanctions laws. The Justice Department previously announced in September 2024 the seizure of a Dassault Falcon 900EX aircraft in the Dominican Republic that was owned and operated for the benefit of Nicolás Maduro Moros and persons affiliated with him in Venezuela.
Enforcement
A federal grand jury returned a superseding indictment February 4,  charging a Chinese national with seven counts of economic espionage and seven counts of theft of trade secrets in connection with an alleged plan to steal from Google LLC  proprietary information related to AI technology. Linwei Ding, also known as Leon Ding, 38 was initially indicted in March 2024 on four counts of theft of trade secrets. The superseding indictment describes seven categories of trade secrets stolen by Ding and charges Ding with seven counts of economic espionage and seven counts of theft of trade secrets.
The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) assessed a $37,000,000 civil money penalty against Brink’s Global Services USA, Inc. for willful violations of the Bank Secrecy Act (BSA). As a result of Brink’s failures, hundreds of millions of dollars in bulk currency shipments were transmitted across the Southwest Border on behalf of high-risk entities—including a Mexican currency exchanger that later pleaded guilty to violating the BSA. This is FinCEN’s first enforcement action against an armored car company.
Her first full day as Attorney General, Pam Bondi issued a raft of policy changes, including a memorandum outlining the new administration's policies on charging, plea negotiations and sentencing.     Tacked onto the end of the five-page memo, Ms. Bondi continued the purge of the National Security Division, disbanding the Foreign Influence Task Force and the National Security Division's Corporate Enforcement Unit, and instructing the Counterintelligence and Export Control Section to "focus on civil enforcement, regulatory initiatives, and public guidance." Another memo directs FCPA directs prosecutors to prioritize the investigation drug cartels and transnational criminal organizations (TCOs) and to “shift focus away from cases that do not involve such a connection.”
Sanctions

Fresh Iran Oil Sanctions

Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on an international oil smuggling network that has facilitated the shipment of millions of barrels of Iranian crude oil, worth hundreds of millions of dollars, to the People’s Republic of China (PRC). This action aligns with the February 4 National Security Presidential Memorandum, which mandates maximum economic pressure on Iran to prevent its nuclear advancement and regional destabilization.

"Maximum Pressure" Back for Iran

Tuesday February 4th the White House  issued a National Security Memorandum (NSM) directing multiple federal agencies to impose maximum pressure on the Government of the Islamic Republic of Iran. The memorandum outlines aggressive measures aimed at denying Iran all paths to a nuclear weapon, countering its regional influence, and disrupting its financial and military networks. The document, addressed to senior U.S. officials including the Secretaries of State, Treasury, Defense, and Homeland Security, mandates immediate actions to intensify economic, diplomatic, and law enforcement measures against Iran.

Canada & UK Impose Belarus Sanctions, US Absent

January 27, Canada announced it is imposing new sanctions against 10 individuals and 12 entities under the Special Economic Measures (Belarus) Regulations in response to ongoing gross and systematic human rights violations committed by the Lukashenko regime in Belarus, as well as its support of Russia’s violation of Ukraine’s sovereignty and territorial integrity. These sanctions are being announced in coordination with the United Kingdom.  Customarily, such announcements are coordinated with US sanctions authorities in the Departments of State and Treasury., but action in Washington was lacking
Policy Briefs
House China hawks called for the National Security Advisor  to review the potential national security benefits of placing export controls on semiconductor chips critical to the AI infrastructure of People's Republic of China (PRC) company, DeepSeek. As part of the review, the lawmakers also asked to strengthen controls on shipments through third countries that pose a high risk of diversion to the PRC. The lawmakers further requested that  Mr. Waltz consider updating Federal Acquisition Regulations to prohibit the federal government from acquiring AI systems based on PRC models such as DeepSeek, except for appropriate intelligence and research purposes.
Shippers were whipsawed by the news cycle as the White House rolled out its America First Trade Policy, with Presidential actions caroming from Colombia to Canada and Mexico, finally settling on China.  More fulsome in scope than previous actions, included are measures ensuring e-commerce heavyweights Temu, Shein and Amazon will no longer be able to take advantage of what House Ways and Means Committee Chair Jason Smith has described as a “free trade agreement with China.” 
The Commerce Department, International Trade Administration (ITA) released their The Defense Export Handbook, a toolkit for U.S. defense exporters, particularly those who are new-to-market or new-to-export. This handbook provides an overview of U.S. defense trade policies, rules, regulations, and national laws governing the sale of U.S. defense products; tips to navigate these policies and processes that help carry out defense trade opportunities; and general things to consider as a U.S. exporter when evaluating international markets.
Supply Chain
The U.S. Trade Representative has issued findings in the Section 301 investigation of the People’s Republic of China’s (PRC) targeting the maritime, logistics, and shipbuilding sectors for dominance, concluding that the PRC’s targeted dominance in these sectors is unreasonable and burdens or restricts U.S. commerce, and is therefore “actionable” under Section 301. As the petitioner U.S. unions have highlighted, the entrenchment of the PRC’s dominance means that U.S. international trade is “carried out on vessels made in China, financed by state-owned Chinese institutions, owned by Chinese shipping companies, and reliant on a global maritime and logistics infrastructure increasingly dominated by China.”
CBP proposes to make merchandise that is subject to specified trade or national security actions (Section 301, Section 232, or Section 201 trade measures) ineligible for the $800 de minimis administrative exemption.   They propose to require that certain shipments claiming this exemption provide the 10-digit Harmonized Tariff Schedule of the United States (HTSUS) classification of the merchandise.
Legislation to prohibit companies affiliated with the Chinese Communist Party from qualifying for green energy production tax credits implemented by the Biden administration through the Inflation Reduction Act has been reintroduced in the 119th Congress. If signed into law, the bill would prevent any company based in China, Russia, Iran or North Korea, and the subsidiaries of those companies from benefiting from these tax credits.
Export Controls

FY24 Defense Trade Results

TUAF F-16C Block 50s Türkiye

The State Department released an update on the prior year's arms trade, with Foreign Military Sales at their highest levels in history and Direct Commercial Sales up smartly from the prior period. In FY2024 the total value of transferred defense articles and services and security cooperation activities conducted under the Foreign Military Sales system was $117.9 billion.  This represents a 45.7% increase, up from $80.9 billion in FY2023. 

Munitions List Cleanup Rule

The Department of State amends the International Traffic in Arms Regulations (ITAR) to remove from the U.S. Munitions List (USML) items that no longer warrant inclusion, add to the USML items that warrant inclusion, and clarify certain entries. With these amendments, the Department also supersedes and thus terminates the temporary modification to USML Category VIII that was published on December 4, 2023, and extended on November 26, 2024.

Entity List Updates Target Chinese AI & Chipmaking

BIS added 11 Chinese entities to the Entity List, 10 for advanced artificial intelligence research and one for development of lithography technology for advanced-node fabrication facilities. The committee also removed three Indian nuclear research entities after diplomatic considerations. In another filing the same day, BIS added 16 entities to the Entity List, under the destinations of China, People's Republic of (China) (14) and Singapore (2) due to their involvement in supporting or directly contributing to the development of advanced computing integrated circuits (ICs) that further China's development of advanced weapons systems, weapons of mass destruction, and high-tech surveillance applications, and because these entities supply Chinese public security end users and pose a risk of diversion to Huawei, an entity on the Entity List. …

Licensing
Alan Estevez, Undersecretary of Commerce for Industry and Security, delivered remarks January 14th at Washington's CSIS Wadhwani AI Center, focusing on the evolving role of export controls in safeguarding U.S. national security and addressing technological threats. The conversation, moderated by Greg Allen, Director of CSIS's Wadhwani AI Center, covered key achievements, challenges, and future priorities for the Bureau of Industry and Security (BIS).
The Bureau of Industry and Security (BIS) is revising the Export Administration Regulations (EAR) to provide additional due diligence procedures for advanced computing integrated circuits (ICs). This interim final rule (IFR) aims to safeguard U.S. national security and support foundries and Outsourced Semiconductor Assembly and Test (OSAT) companies in complying with EAR provisions related to advanced computing ICs in the supply chain. Additionally, the IFR updates and clarifies changes introduced in BIS’s December 2, 2024, IFR, titled “Foreign-Produced Direct Product Rule Additions, and Refinements to Controls for Advanced Computing and Semiconductor Manufacturing Items” (FDP IFR).
The Biden Administration released its proposed  "AI Diffusion Rule" Monday morning, aiming to control exports of chips used for artificial intelligence.  Quotas will restrict the number of chips to be exported to about 120 countries, while a short list of G-7 and other allied countries are exempt from restrictions.    Sales to China, Iran, Russia & North Korea are blocked. The limits focus on Advanced Graphics Processing Units (GPUs) used to train AI models.   Cloud services providers like AWS and Microsoft will enjoy some waivers from the rules, in a material concession to the data center industry.  Cloud providers will have geographic limits, ensuring no more than half their computing power resides offshore.