Tekapult
FEDERAL LAW DESK REFERENCE FOR CORPORATE COMPLIANCE
Federal Regulations and Agency Guidance Organized by Risk-Specific tPrimers
Global Sanctions
Secondary Sanctions Imposed on U.S. and Foreign Persons
for Non-Compliance with U.S. Sanctions Regulations
This tPrimer is derived from the U.S. government’s publications of Sanctions Programs and hundreds of Frequently Asked Questions. advisories, statutes, regulations, executive orders and directives. U.S. and non-U.S. persons may be exposed to secondary sanctions risk and could be designated for property-blocking sanctions for assisting, sponsoring, or providing financial, material, or technological support for, or goods or services to or in support of persons blocked. The Office of Foreign Assets Control (“OFAC”) enforces these sanctions and publishes its ever expanding Specially Designated Nationals List (“SDN” List) and other lists but it still does not identify all of the blocked entities, like the entities that are owned 50% or more, directly or indirectly, by one or more SDNs.
CFIUS – U.S. Government Clearance of Foreign Investments
The Committee on Foreign Investment in the United States (“CFIUS”), an interagency body of the U.S. federal government reviews foreign investments in U.S. businesses to determine their potential impact on national security where a foreign person acquires control over a U.S. business possessing material nonpublic technical information about critical technologies, infrastructure, or sensitive personal data of U.S. citizens. The parties must assess risk of such transactions to determine if filing of a mandatory declaration is needed and a deal may be structured to avoid national security concerns (e.g., limiting access to sensitive information) to get CFIUS clearance and avoid blocking or unwinding the transaction. Civil penalties for failure to file mandatory declarations may reach up to $250,000 or the value of the transaction, whichever is greater.
FTZ – Importers/Exporters' and Manufacturers' Use of U.S.
Foreign/Free Trade Zones According to U.S. Regulations
U.S. Foreign-Trade Zones (“FTZ”) were created to support U.S. international trade companies, but foreign manufacturers, processors and distributors also use and benefit from American FTZs which provide the cost-efficient way to bring foreign-origin product components, materials, commodities, and goods into the United States for their distribution, processing, assembly, unlimited storage and manufacturing, or re-export to other countries. FTZs physically located on the U.S. soil are legally deemed to be outside the U.S. commerce and customs territory. Manufacturers use FTZs to assemble, re-label, exhibit, mix, store, clean, re-package, examine, sample, repair, destroy rejects/waste, produce and process their goods duty-free. Foreign and domestic goods warehoused, manipulated, or processed in FTZs may be infinitely kept in FTZs bond-free and duty-free.
Importers' Clearances with U.S. Government Agencies
America is a huge global marketplace for foreign products sales, product components’ assembly, capital, and financial, travel, consulting and other services. Imports include industrial machinery and equipment, such as chemicals, fuel oil, industrial supplies, and consumer goods such as computers, clothing, pharmaceuticals, food, and automobiles. To avoid goods’ loss, confiscation, detention and delivery delay, and possible criminal/civil penalties, importers must comply with hundreds of U.S. laws, rules, and government regulations. A technology and goods’ import process involves approvals from governmental agencies
including U.S. Customs and Border Protection Agency (‘CBP”) which enforces anti-trust, intellectual property, consumer protection, environmental pollution, and other U.S. laws by seizure, confiscation and destruction of illegal goods; assessment and collection of duties/tariffs, taxes, penalties; and granting cargo clearances from about 40 government agencies.