We continue to collaborate with our foreign law firm partners to update our chart of COVID-19 measures taken by governments around the world. The government measures in the chart include economic, labor and employment, health and safety, and export and import measures. Below is a list of the updated countries and a summary of the changes we are seeing.

View/Download the Country Guide: Government Measures Taken in Response to COVID-19

This update includes new information as of the second week of July 2020 for Canada, Chile, Costa Rica, El Salvador, Germany, Guatemala, Honduras, India, Indonesia, Israel, Japan, Mexico, Netherlands, Panama, Turkey, United Kingdom and United States. The updates are in bold on the chart for ease of reference.

In the Americas and Europe, July’s changes involve the easing of stricter health and safety measures including curfews, stay-at-home orders and domestic travel restrictions. However, mandates to wear face masks in public indoor spaces have continued. In the United States, states like Florida and Texas have pulled back on reopening certain businesses. In Asia, governments continue to lift lockdown measures and to implement technology-based health measures such as temperature checks and contact tracing applications. Most governments have used a phased approach to reopening businesses previously closed due to the pandemic and continue to maintain new export controls and import facilitation measures involving COVID-19-related health and medical goods.

Please see our Trump and Trade Update of April 7 for a discussion of this initiative.

On July 14, 2020, President Donald Trump signed into law the “Hong Kong Autonomy Act” (H.R. 7440), which authorizes and imposes sanctions on foreign persons, entities and financial institutions contributing to China’s actions to remove autonomy from Hong Kong. Unanimously passed by both the House of Representatives and the Senate in early July, this new law addresses growing concerns over China’s crackdown on protests in Hong Kong and its continued efforts to remove Hong Kong’s economic and administrative autonomy. President Trump also issued an executive order directing all relevant agencies to amend any regulations “which provide different treatment for Hong Kong as compared to China,” including, but not limited to, various immigration and export control laws and regulations.

Key Notes:

  • President Trump has signed into law the Hong Kong Autonomy Act in response to China’s actions to suppress protests in Hong Kong and remove its economic and administrative autonomy.
  • The Act imposes sanctions on both persons and foreign financial institutions designated as contributing to China’s failure to adhere to its obligations in maintaining Hong Kong’s autonomy.
  • A related executive order suspends or eliminates different and preferential treatment for Hong Kong, including certain export controls, certain agreements and cooperation between the United States and Hong Kong, and affects the entry into the United States of designated persons.

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The U.S. Department of State issued updated public guidance on Section 232 of the Countering America’s Adversaries Through Sanctions Act (“CAATSA”), which authorizes the president to impose sanctions on persons engaged in certain investments or other activities with respect to Russian energy export pipelines.  Effective on July 15, 2020, the actions that are sanctionable under Section 232 of CAATSA will be expanded to include activities related to Nord Stream 2 and the second line of TurkStream.  Thus far, no sanctions have been imposed pursuant to this section.

Section 232 of CAATSA authorizes the President to impose sanctions on any person that on or after August 2, 2017, knowingly,:

  • Makes an investment that meets the fair market value thresholds in Section 232(a) and directly and significantly contributes to the enhancement of the ability of the Russian Federation to construct energy export pipeline(s) (“Section 232 Investments”); or
  • Sells, leases or provides Russia with any goods, services, technology, information or support that could directly and significantly facilitate the maintenance or expansion of the construction, modernization or repair of energy export pipelines by the Russian Federation (“Section 232 Activities”).

As of July 15, 2020, the State Department will focus its sanctions implementation efforts to Section 232 Investments and Sections 232 Activities involving the Nord Stream 2 and the second line of TurkStream.  According to the updated guidance, this will apply to “persons facilitating the construction or deployment of the pipelines such as financing partners, pipe-laying vessel operators, and related engineering service providers.”  The public guidance makes clear that Section 232’s implementation will be limited to “energy export pipelines that (1) originate in the Russian Federation, and (2) transport hydrocarbons across an international land or maritime border for delivery to another country.”   Thus, pipelines originating outside of Russia even if transiting through its territory do not seem to be the focus of the guidance.  Section 232 will not target activities related to the wind-down of Section 232 Investments and Section 232 Activities, or the standard repair and maintenance of pipelines in existence on, and capable of transporting commercial quantities of hydrocarbons, as of August 2, 2017.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it has issued General License (“GL”) 5D (Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After October 20, 2020), which continues to delay U.S. persons’ ability to enforce bondholder rights to the CITGO shares serving as collateral for the Petróleos de Venezuela, S.A. (PdVSA) 2020 8.5% bond until on or after October 20, 2020. Additionally, OFAC modified frequently asked question (FAQ) 595 to address the scope of GL 5D.

On May 21, 2018, President Donald Trump issued Executive Order (E.O.) 13835 which, among other things, prohibits U.S. persons from engaging in transactions related to the sale, transfer, assignment or pledging as collateral by the Venezuelan government of any equity interest in an entity owned 50% or more by the Venezuelan government. Thereafter, on July 19, 2018, OFAC issued GL 5, which removed E.O. 13835 as an obstacle to holders of the PdVSA 2020 8.5% bond from gaining access to their collateral.

Starting in January 2019, however, Trump continued expanding the sanctions targeting PdVSA (see Trump and Trade Update of January 19, 2019). Eventually on October 29, 2019, GL 5 was replaced and superseded by GL 5A (and eventually 5B and 5C), which delayed the effective date of the GL 5’s authorizations relating until July 22, 2020 (see Trump and Trade Update of April 13, 2020). The most recent version, GL 5D again delays the effective date of the GL 5’s authorizations to October 20, 2020.

Between October 24, 2019 and October 20, 2020, U.S. persons are prohibited from engaging in any transactions related to the sale or transfer of CITGO shares in connection with the PdVSA 2020 8.5%, unless specifically authorized by OFAC. In the modified FAQ 595, OFAC notes a favorable licensing policy toward those seeking to apply for a specific license in an effort to reach an agreement on proposals to “restructure or refinance payments due to the holders of the PdVSA 2020 8.5 percent bond.”

On July 1, 2020, the U.S. Departments of State, Commerce, Homeland Security and the Treasury issued an advisory detailing the risk of exposure to businesses with supply chain entities that engage in human rights abuses, including forced labor in Xinjiang and elsewhere in China.

Key Notes:

  • The departments’ joint “Xinjiang Supply Chain Business Advisory” urges U.S. companies to monitor their activities in China, particularly in the Xinjiang region, where the Chinese government is repressing ethnic minorities and committing human rights abuses
  • U.S. businesses, individuals, academic institutions, service providers, investors and others operating in this region could face significant reputational, economic and legal risk if sufficient due diligence of supply chain activity in China is not conducted
  • U.S. agencies will increase enforcement against businesses in the United States who violate the law by contributing to human rights abuses in Xinjiang and elsewhere in China

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On July 14, 2020, a three-judge panel of the U.S. Court of International Trade (CIT) ruled in Slip Opinion 20-98 that a proclamation President Donald Trump issued increasing Section 232 duties on steel imports from Turkey beyond those previously implemented under a prior proclamation violates statutorily-mandated procedures and the Constitution’s guarantee of equal protection under law. Lead plaintiff Transpacific Steel LLC (Transpacific) argued that it should be refunded additional tariffs paid pursuant to Presidential Proclamation 9772 on certain imports of Turkish steel. This proclamation solely affected Turkish steel – raising the duty rate from 25 percent to 50 percent – and was issued well after the Section 232 national security investigation of steel imports had concluded and well after President Trump issued his initial Presidential Proclamation 9705 imposing a 25 percent tariff duty on steel products from several countries.

Transpacific argued that the statute requires the President to make a decision within 90 days of receipt of the Secretary of Commerce’s report and recommendation and to implement any chosen action within 15 days of that decision. The first proclamation was issued on March 8, 2018. The second proclamation was issued on August 10, 2018, which was outside of the statutory time period and was not the result of any formal Department of Commerce report. Attorneys for the U.S. government argued that Congress “inten[ded] to confer continuing authority and flexibility on the President to counter the threat identified” as confirmed by the “language, long-standing congressional understanding, and the purpose of the statute . . .” The three-judge panel agreed with the plaintiffs that the statutory language is clear and that Proclamation 9772 “was issued far beyond this temporal window.” The opinion notes that there is nothing in the statute to support the continuing authority to modify proclamations outside of the stated timelines and that the government offered “no citation to the statute nor to the recent legislative history to support” its theory that the President is permitted to modify his previous proclamation under the provisions of Section 232 of the Trade Expansion Act of 1962, as amended. The CIT also found that, in addition to acting outside of the statutory time limitations, President Trump acted “without a proper report and recommendation by the Secretary on the national security threat posed by imports of steel products from Turkey.”

The plaintiffs also raised a Fifth Amendment equal protection challenge to Proclamation 9772, arguing that the second proclamation discriminates between similarly situated importers based on the origin of their imports “without rational justification” and “that the government has offered no sensible reason for targeting imports from Turkey and that no reasonable rationale is apparent.” While the ruling found that national security is a legitimate purpose, it concluded that “[s]ingling out steel products from Turkey is not a rational means of addressing that concern. Section 232 does not ban the President from addressing concerns by focusing on particular exporters, but the decision to increase the tariffs on imported steel products from Turkey, and Turkey alone, without any justification, is arbitrary and irrational.” As a result, the CIT determined, Proclamation 9772 denied the plaintiffs equal protection under law.

On July 10, 2020, The Office of the U.S. Trade Representative (USTR) announced the imposition of a 25 percent import duty on French products in response to France’s Digital Services Tax (DST).  This action is the result of a Section 301 investigation initiated on July 10, 2019, after the French government passed a tax on revenues generated by certain companies involved in the digital services industry (see Trump and Trade Update of July 11, 2019).  According to the USTR, France’s 3 percent DST covers transactions of U.S. companies with estimated revenues of approximately $15 billion in 2020, with expected collections of approximately $450 million in taxes from U.S. companies for activities during 2020 and over $500 million for activities during 2021. On December 6, 2019, based on the information obtained during the investigation, and as reflected in its December 2, 2019 investigation report, the USTR determined that France’s DST is unreasonable or discriminatory, burdens or restricts U.S. commerce and is actionable under Section 301 of the Trade Act of 1974.  See Trump and Trade Update of December 3, 2019.

As a result, beginning on January 6, 2021, the USTR will take retaliatory action in the form of additional duties of 25 percent on items covered by 21 Harmonized Tariff Schedule (HTS) subheadings listed in Annex A to the July 10, 2020 announcement.  The products are contained in HTS Chapters 33 (Essential oils and resinoids; perfumery, cosmetic or toilet preparations), 34 (Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modeling pastes, “dental waxes” and dental preparations with a basis of plaster), and 42 (Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut).  The announcement provides an illustrative and informational product list in Annex B but notes that the formal language of Annex A governs any tariff treatment.  Examples of affected French products include: lip and eye-make-up; certain soaps and skin wash products; and certain French handbags.  Specified products will be subject upon entry for consumption to an additional ad valorem duty of 25 percent. The additional duties will apply in addition to all other applicable duties, fees, exactions and charges.

The USTR has stated that it will continue to monitor the effects of this trade action and progress with France toward resolution of this dispute.  President Donald Trump and French President Emmanuel Macron agreed to a delay in the imposition of U.S. tariffs while France deferred collection of the tax.  Notably, the USTR announced in early June 2020 that it was also initiating a Section 301 investigation into DST of European Union (EU) member countries and other nations (see Trump and Trade Update of June 4, 2020).  That investigation is ongoing, and the USTR is accepting public comments on it until July 15, 2020.  USTR Robert Lighthizer has indicated in recent press reports a desire to negotiate a settlement not only with France but also with the rest of the EU on this international tax structure.

 

On July 8, 2020, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) published guidance relating to the U.S. Department of State’s final rule amending the International Traffic in Arms Regulations (“ITAR”) and related BIS final rule, to transfer export controls of certain firearms, armament and ammunition from the U.S. Munitions List (“USML”) to the Commerce Control List (“CCL”).  Through 107 Frequently Asked Questions, the guidance outlines Commerce’s approach to the controls including, recordkeeping, registering and applying for licenses, brokering controls, license exceptions, and clearance requirements.  It also defines certain key terms to distinguish, among other things, additive manufacturing and 3D printing.

The final rules, which became effective on March 9, 2020, are based on an interagency review and determination by President Trump that certain articles no longer warrant control under USML Category I (Firearms, Close Assault Weapons and Combat Shotguns), Category II (Guns and Armament) and Category III (Ammunition/Ordnance), as they do not provide a “critical military or intelligence advantage to the United States and, in the case of firearms, do not have an inherently military function.”   Further, since there is a “significant worldwide market for items in connection with civil and recreational activities such as hunting, marksmanship, competitive shooting, and other non-military activities,” the CCL of the Export Administration Regulations (“EAR”) “is the appropriate source of authority to control these firearms, ammunition, and other articles.”

The Office of the U.S. Trade Representative (USTR) has published a Federal Register notice granting a limited number of product exclusion extensions from the Section 301 tariff for four imported Chinese products appearing on the first list/tranche of goods valued at $34 billion. In July 2019, the USTR granted 110 specially-prepared exclusion requests with an expiration date of July 9, 2020. See Trump and Trade Update of July 9, 2019. In April 2020, interested parties were invited to comment on whether to extend by up to 12 months any of these exclusions that had been granted. See Trump and Trade Update of April 29, 2020.

For the July 2019 exclusions, USTR has granted only 12 extensions. The product descriptions are: certain direct acting and spring return pneumatic actuators; certain pump casings and bodies; certain pump covers and parts; certain compressors; structural components for industrial furnaces; certain aluminum electrolytic capacitors; certain rotary switches; zinc anodes for use with machines and apparatus for electroplating, electrolysis or electrophoresis; certain weather station sets; and multi-leaf collimators of radiotherapy systems based on the use of X-ray. All other product exclusions granted in July 2019 will expire as of July 9, 2020.

These product exclusion extensions will apply as of July 9, 2020, and extend through December 31, 2020. U.S. Customs and Border Protection will soon issue instructions on entry guidance and implementation.

Each exclusion continues to be governed by the scope of the HTS heading and the product description appearing in the annex of the exclusion extension notice; it is not governed by the product description set out in any particular exclusion request. U.S. Customs and Border Protection will soon issue instructions on entry guidance and implementation.

The U.S. Trade Representative (USTR) has issued a Federal Register notice exempting Section 301 tariffs for certain List 4A products (imports from China with an annual trade value of $300 billion). The exemptions cover 61 specially prepared product descriptions, covering a total of 86 separate exclusion requests. These exclusions will apply from September 1, 2019, through September 1, 2020, and apply to any product that satisfies the description in the annex of the Federal Register notice, regardless of whether the company using the exclusion filed the request. Each exclusion is governed by the scope of the HTS heading and the product description appearing in the annex of the exclusion notice; it is not governed by the product description set out in any particular exclusion request.

The product exclusions include: cynomolgus macaques; certain feathers used for stuffing; silicone baby bottle nipples; certain compressive eye masks; certain plastic shower heads; certain A-frame or sandwich board signs; certain tapered sound-dampening ear plugs; certain types of wallpaper; certain printed art or pictorial books of limited value; certain dust, pillow, comforter or other fabric covers or shells; certain bike helmets; certain bars, rods, tubes of stainless steel; certain household sewing machines; certain gas- or propane-powered augers; certain digital cameras; certain protective eyeglasses or other non-prescription spectacles; certain prism binoculars; rotary microtomes; certain acoustic upright and grand pianos; certain acoustic guitars with soundboards; harp sharping levers of steel; certain parts of child safety seats; pillow shells and quilted pillow shells of cotton or man-made fibers; arrowheads of metal; certain spinning, spincast or baitcast fishing reels; certain hand paintings or drawings; certain original engravings, prints and lithographs; certain sculptures and statuary; postage stamps; certain collections of historical or mineralogical interest; and antique silverware and furniture of an age exceeding 100 years.

U.S. Customs and Border Protection will soon issue instructions on entry guidance and implementation. The USTR will continue to issue determinations on pending requests on a periodic basis.