On December 29, 2020, the Office of the United States Trade Representative (“USTR”) announced long-awaited extensions to a limited set of previously granted exclusions (for COVID-related products), that were set to expire on December 31, 2020. Meanwhile, importers across non-COVID industries are continuing to await guidance on their tariff exclusion extensions that are set to expire on December 31, 2020.
Co-Authored by Sharath Patil
National Space Policy Unveiled
On December 9, 2020, the White House released the National Space Policy of the United States of America. Among other objectives, the policy seeks to drive U.S. leadership in space commerce by encouraging the cultivation of U.S. industrial capacity in space innovation.
2020 has been a difficult year filled with immense challenge and change (to say the least). From all of us at Diaz Trade Law, we are incredibly thankful and grateful for your support. Despite a pandemic, Diaz Trade Law still managed to save our clients MILLIONS of dollars in 2020. It is with great joy that we finish off 2020 filled with numerous achievements and accomplishments. We look forward to assisting you in what we envision will be a better and brighter 2021!
We want to make sure you stay up to date with the hottest trade blogs from 2020. Below is a summary of what you missed by category. Enjoy!
Co-Authored by Sharath Patil
Largest FCPA Settlement to Date
The U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) announced in October that Goldman Sachs Group, Inc. (“Goldman Sachs”) agreed to pay $2.9 billion as part of a settlement agreement. The settlement was a result of the agencies’ enforcement action after they learned that Goldman Sachs had allegedly paid $1.6 billion in bribes to officials in Malaysia and the United Arab Emirates (“UAE”) to secure its position as the underwriter of $6.5 billion in three bond deals with 1Malaysia Development Berhad. The settlement constitutes the largest Foreign Corrupt Practices Act (“FCPA”) settlement ever recorded.
Co-Authored by Sharath Patil
USMCA Background
The U.S.-Mexico-Canada Agreement (“USMCA”) is a free trade agreement that replaced the North American Free Trade Agreement (“NAFTA”) and entered into force on July 1, 2020. The USMCA enjoyed significant bipartisan support and was widely considered a successful effort at “modernizing” NAFTA.
From a labor perspective, the USMCA contains much stronger provisions than its predecessor. Rather than comprising enforceable labor provisions, NAFTA was accompanied by a labor side agreement which only listed guiding principles pertaining to workers’ rights. On the other hand, the USMCA comprises an enforceable chapter dedicated to labor containing strong provisions in favor of workers rights.
Co-Authored by Sharath Patil
Background
Section 641 of the Tariff Act of 1930 provides that individuals and business entities must hold a valid customs broker’s license and permit to transact customs business on behalf of others. The statute also sets forth standards for the issuance of broker licenses and permits; provides for disciplinary action against brokers in the form of suspension or revocation of such licenses and permits; and provides for the assessment of monetary penalties against other persons for conducting customs business without the required broker’s license. Section 641 also authorized the Secretary of the Treasury to prescribe rules and regulations relating to the customs business of brokers as may be necessary to protect importers and the revenue of the United States.
Co-Authored by Sharath Patil
Weaknesses in the Public Health Industrial Base
Critical technology shortages have been a focus of President Trump’s trade and industrial policies. In an October 2020 report on the topic, the Trump administration identified medical and public health technologies as a key sector in which the U.S. needs to do more to protect and cultivate its technological advantage. According to some analysts, the COVID-19 pandemic has demonstrated that the United States’ public health industrial base is overly reliant on imports for critical medical and pharmaceutical needs. The first few months of the pandemic were characterized by significant shortages of key medical supplies such as ventilators and personal protective equipment. However, this overreliance pre-dated the pandemic. For example, in October 2019, the U.S. Food and Drug Administration (“FDA”) estimated that the United States accounts for only 28 percent of global active pharmaceutical ingredient (“API”) manufacturing facilities and that 80 percent of APIs consumed in the United States are produced abroad, the majority in China and India.
Co-Authored by Sharath Patil
Trump’s Trade Legacy
To fully understand the Biden administration’s trade priorities, it’s essential to understand Trump’s U.S. trade actions and the trade environment Biden will inherit. Trump made trade policy a center-stage issue. The administration enacted policies that counter several decades of neoliberal trade policies. The administration also questioned fundamental tenets of the global trading system and the function and purpose of the World Trade Organization. Furthermore, Trump followed through on many trade-related campaign promises by utilizing an array of tools.
Co-Authored by Sharath Patil
White House Releases Critical Technologies Report
Last month, the White House released a landmark report titled the “National Strategy for Critical and Emerging Technologies.” The report outlines how the United States will promote and protect our competitive edge in fields such as artificial intelligence, energy, quantum information science, communication and networking technologies, semiconductors, military, and space technologies.