In collaboration with our foreign law firm partners, we continue 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.

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

Today’s update includes new information as of June 1, 2020 for Canada, Chile, China, Germany, India, Indonesia, Israel, Japan, Mexico, Spain, Thailand, Turkey, United Kingdom and Vietnam. The updates are bolded in the chart for ease of reference.

Most of the recent changes are extensions of certain deadlines relating to economic and labor and employment measures. More and more we are seeing that countries in Europe and many in Asia have lifted or eased quarantine and lockdown measures or have established plans to reopen the economy. Generally, export controls and import facilitation measures involving COVID-19-related health and medical goods remain the same with a few exceptions. However, we expect the export measures may change in the coming weeks.

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

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued four new Frequently Asked Questions​​ (FAQs) related to Executive Order (E.O.) 13902, “Imposing Sanctions With Respect to Additional Sectors of Iran.”  The FAQs address the manufacture of medicines, medical equipment and sanitation products in Iran, the scope of sectors targeted in Iran, the definition of “goods or services used in connection with” those sectors, and how the terms “knowingly” and “significant” will be interpreted.  OFAC expects regulations to be promulgated consistent with these FAQs.

In January 2020, President Trump issued E.O. 13902, which, among other things, authorizes the Secretary of Treasury in consultation with the Secretary of State to block all property and interests in property of all persons:

  • Operating in the construction, mining, manufacturing or textile sectors of the Iranian economy (“Sectors”); and
  • Knowingly engaged in a significant transaction for the sale, supply or transfer to or from Iran of significant goods or services in connection with the Sectors.

The E.O. also authorizes the Secretary of Treasury to impose sanctions on foreign financial institutions (FFI) determined to have “knowingly” conducted or facilitated any “significant” financial transaction for the sale, supply, or transfer to or from Iran of significant “goods or services used in connection with” the Sectors covered by the E.O.

In sum, the four OFAC FAQs numbered 831, 832, 833, and 834 clarify the scope of potential sanctions under the E.O. as follows:

  • 831: OFAC will not target Iranian manufacturers of medicines, medical devices, or products used for sanitation, hygiene, medical care, medical safety, and manufacturing safety, including soap, hand sanitizer, ventilators, respirators, personal hygiene products, diapers, infant and childcare items, personal protective equipment, and manufacturing safety systems, solely for use in Iran;
  • 832: OFAC defines the terms “construction sector of the Iranian economy,” “mining sector of the Iranian economy,” “manufacturing sector of the Iranian economy,” and “textiles sector of the Iranian economy;”
  • 833: OFAC defines the scope of “goods and services used in connection with” as to each of the Sectors; and
  • 834: OFAC interprets the term “knowingly” as it is defined in the Iranian Financial Sanctions Regulations at 31 C.F.R. § 561.314, and “significant” through a “totality of the circumstances” analysis of certain enumerated broad factors.

While OFAC’s guidance does indicate that the sanctions will not target certain activity related to health and safety of persons in Iran, the scope of the potential sanctions remains very broad.

 

On June 3, 2020, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) issued new regulations under 31 CFR Part 569 to implement Executive Order (E.O.) 13894 issued by President Trump on October 14, 2019.  The President issued E.O. 13894 in response to the situation in and around Syria, in particular, the military action taken by Turkey against Kurds in Syria.  OFAC stated that it expects to supplement these regulations with further, more detailed regulations.  The notice was published in the Federal Register and the regulations are effective on June 5, 2020.

When it was issued, E.O. 13894 added some persons to the Specially Designated Nationals and Blocked Entities (“SDN”) list.  The E.O. authorizes the Secretary of Treasury, upon findings by the Secretary of State to impose a number of sanctions against additional persons meeting the criteria in the E.O.  Critically, the E.O. also authorized the Secretary of Treasury to impose secondary sanctions against foreign financial institutions, in the form of prohibitions or restrictions on correspondent accounts or payable-through accounts, that engaged in significant financial transactions with persons sanctioned under this E.O.

The June 3 iteration essentially implements the prohibitions stated in the E.O., adding definitions and standard interpretive guidance.  For example, the regulations stated that a transfer of property in violation of the E.O. is null and void, except in certain specified circumstances.  The regulations also add OFAC reporting requirement for those holding property blocked pursuant to this order.  In addition, they provide certain standard limited exceptions related to personal communications, information or informational materials, and travel.  Finally, the regulations also authorize the provision of certain legal services and emergency medical services to persons listed under the order.

The Office of the United States Trade Representative has announced it will begin investigations under Section 301 of the 1974 Trade Act into digital services taxes that have been adopted or are being considered by Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom. According to the Federal Register notice, it is accepting public comments until July 15, 2020.

Digital services taxes (DSTs) are taxes on revenue that certain companies generate from providing covered digital services to, or aimed at, users in that particular jurisdiction. For example, DSTs may impact multinational businesses providing online advertising services, selling consumer data, or running online intermediary platforms.

According to a statement by USTR Robert Lighthizer, “President Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies.” The Federal Register notice indicates the investigation will focus on how the DSTs diverge from policies set forth in the U.S. and international tax systems. Specifically, the USTR is concerned with the DSTs extraterritoriality, taxing revenue not income, and “penalizing certain technology companies for their commercial success.”

The USTR is seeking public comment on the following:

  • Concerns with one or more of the DSTs adopted or under consideration by the jurisdictions covered in these investigations;
  • Whether one or more of the covered DSTs is unreasonable or discriminatory;
  • The extent to which one or more of the covered DSTs burdens or restricts U.S. commerce;
  • Whether one or more of the covered DSTs is inconsistent with obligations under the WTO Agreement or any other international agreement; and /or
  • The determinations required under section 304 of the Trade Act, including what action, if any, should be taken.

Written comments should be submitted through the Federal eRulemaking Portal at http://www.regulations.gov  under docket number USTR-2020-0022.

These new investigations may result in additional tariffs on imports from these countries, but that remains to be seen. A similar investigation was completed on DSTs to be levied by France, and while the USTR threatened tariffs on certain French imports, implementation was deferred when France delayed collection of the tax. We will continue to monitor the DST investigations and provide information as it becomes available.

On July 1, 2020, the United States-Mexico-Canada Agreement (USMCA) will replace the North American Free Trade Agreement (NAFTA). This trilateral free trade agreement will affect many facets of the North American economy.

Please join us weekly for our four-part virtual roundtable series as we help you navigate the USMCA provisions affecting companies and understand the rights and obligations of the member countries. Our discussions will include counsel from law firms in the United States, Mexico and Canada and representatives from companies addressing these issues firsthand.

Wednesdays, 2:00 – 2:45 p.m. ET

  • June 10 – Labor & Environmental Protections
  • June 17 – USMCA’s New Government Procurement Commitments
  • June 24 – What Happens at the Border: Trade Facilitation and Practical Questions
  • July 1 – Supply Chains: Issue-Spotting, Tips and Best Practices for Maximizing USMCA Benefits

For more information about the topics and speakers, and to register, please see the Events page.

On June 2, 2020, Secretary Wilbur Ross announced that the Department of Commerce will initiate an investigation into whether the quantities or circumstances of imports of vanadium into the United States threaten to impair U.S. national security. This investigation is the result of a petition filed by U.S. producers AMG Vanadium LLC (Cambridge, Ohio) and U.S. Vanadium LLC (Hot Springs, Arkansas).

Vanadium is a chemical element that occurs naturally in 65 minerals and in fossil fuel deposits. Approximately 85% of the vanadium produced is used as ferrovanadium or as a steel additive. It is used in the production of metal alloys and as a catalyst for chemicals across the aerospace, defense, energy, and infrastructure sectors. It is incorporated into end products such as aircraft, jet engines, ballistic missiles, energy storage, bridges, buildings and pipelines. According to Secretary Ross, “Vanadium is utilized in our national defense and critical infrastructure, and is integral to certain aerospace applications.” The petitioning U.S. producers assert that their industry is adversely affected by unfairly traded, low-priced imports, limited export markets due to value-added tax regimes in other vanadium-producing countries, and the impact of Chinese and Russian industrial policies.

As required by the statute, Secretary Ross has sent a letter to the Secretary of Defense seeking input into the investigation and will also notify other relevant executive branch officials. The investigation will be conducted by the Department’s Bureau of Industry and Security (BIS), which is seeking public comment until July 20, 2020. In a Federal Register notice requesting comments, BIS stated that it is particularly interested in comments and information on these issues:

  1. Quantity of, or other circumstances related to, the importation of vanadium;
  2. Domestic production and productive capacity needed for vanadium to meet projected national defense requirements;
  3. Existing and anticipated availability of human resources, products, raw materials, production equipment, and facilities to produce vanadium;
  4. Growth requirements of the vanadium industry to meet national defense requirements and/or requirements for supplies and services necessary to assure such growth including investment, exploration, and development;
  5. The impact of foreign competition on the economic welfare of the vanadium industry;
  6. The displacement of any domestic vanadium production causing substantial unemployment, decrease in the revenues of government, loss of investment or specialized skills and productive capacity, or other serious effects;
  7. Relevant factors that are causing or will cause a weakening of our national economy; and
  8. Any other relevant factors, including the use and importance of vanadium in critical infrastructure sectors identified in Presidential Policy Directive 21 (Feb. 12, 2013) (for a listing of those sectors see https://www.dhs.gov/cisa/critical-infrastructure-sectors).

Written Submissions and Public Hearing

All comments must be addressed to “Section 232 Vanadium Investigation” and filed through the Federal eRulemaking Portal: http://www.regulations.gov on Docket No. BIS-2020-0002. While the docket will allow users to provide comments by filling in the “Comment” field, submitters are encouraged to provide comments in an attached document, including any exhibits, annexes, or other attachments, which can be uploaded and filed as part of the submission. Submitted comments will be made available for public inspection, except information determined to be confidential. Anyone submitting business confidential information should clearly identify the business confidential portion at the time of submission, file a statement justifying nondisclosure, and file a public version.

After public comments are filed by the July 20, 2020 deadline, rebuttal comments are due no later than August 17, 2020, and must be limited to issues raised in comments filed by the July 20 deadline.

Commerce has not yet announced whether a public hearing will be held for this investigation. If such a hearing is held, a separate Federal Register notice will be issued.

On May 29, 2020, the Office of the U.S. Trade Representative (USTR) released a Federal Register notice seeking public comment on whether extensions for up to 12 months should be granted for particular products that have received exclusions in the China Section 301 process from the 25 percent tariff on imports from China with an annual trade value of $200 billion (List/Tranche 3). These product exclusions were listed in three of the most recent Federal Register notices for List 3 products and, while retroactive to September 24, 2018, are set to expire on August 7, 2020:

The USTR states that it will evaluate the possible extension of each exclusion on a case-by-case basis. The focus of the evaluation will be “whether, despite the first imposition of these additional duties in July 2018, the particular product remains available only from China.” These issues should be addressed in any comments:

  • Whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
  • Whether there have been any changes in the global supply chain since August 2018 as to the particular product or any other relevant industry developments.
  • The efforts, if any, that importers or U.S. purchasers have undertaken since August 2018 to source the product from the United States or third countries.
  • Whether the imposition of additional duties on the products covered by the exclusion will result in severe economic harm to the commenter or other U.S. interests.

As with past extension requests, the USTR also requests certain financial data (where appropriate), including the value and quantity of the product covered by the exclusion purchased from China, from domestic and from third-country sources in 2018 and 2019.

The USTR is seeking public comments from interested parties on whether to extend any particular exclusion for up to 12 months. The period for comment runs from June 8, 2020 until July 7, 2020.  Comments must be submitted on the public docket on USTR’s web portal at https://comments.USTR.gov under Docket No. USTR-2020-0016 – “Section 301 – China $200 Billion Trade Action (List 3).” New users will first have to create an account in order to submit comments. For parties wishing to include Business Confidential Information (BCI), the USTR notes that such information will not be publicly available when comments are posted on the docket. Parties may also upload supporting documents that can also be marked as public or BCI.

On May 29, 2020, the Office of the U.S. Trade Representative (USTR) released a Federal Register notice seeking public comment on whether extensions for up to 12 months should be granted for particular products receiving exclusions in the China Section 301 process from the 25 percent tariff on imports from China with an annual trade value of $34 billion (List/Tranche 1).   These product exclusions were listed in a September 20, 2019 Federal Register notice and included 310 specially prepared product descriptions covering 724 separate exclusion requests.

As noted in our Trump and Trade update of October 3, 2019, many of these exclusions are for products in Chapter 84 (Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof) and Chapter 85 (Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles) of the Harmonized Tariff Schedule (HTS). Additional product exclusions were granted for products in Chapter 87 (Vehicles other than railway or tramway rolling stock, and parts and accessories thereof), Chapter 88 (Aircraft, spacecraft and parts thereof) and Chapter 90 (Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof).  The list of excluded products also covers certain heat exchangers, certain centrifugal pumps, pet water drinking fountains, certain compressors, certain chilling units and freezers, certain filtration devices, certain swimming pool filter cartridges, certain electric operator-riding pallet trucks and forklift trucks, certain milling machines, certain woodworking equipment, certain types of valves and bearings, numerous types of AC/DC motors, certain GPS apparatus, numerous types of switches and circuit connectors, certain transistors and certain thermostats.

The USTR states that it will evaluate the possible extension of each exclusion on a case-by-case basis. The focus of the evaluation will be “whether, despite the first imposition of these additional duties in July 2018, the particular product remains available only from China.” These issues should be addressed in any comments:

  • Whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
  • Any changes in the global supply chain since August 2018 as to the particular product or any other relevant industry developments.
  • The efforts, if any, the importers or U.S. purchasers have undertaken since August 2018 to source the product from the United States or third countries.
  • Whether the imposition of additional duties on the products covered by the exclusion will result in severe economic harm to the commenter or other U.S. interests.

As with past extension requests, the USTR also requests certain financial data (where appropriate), including the value and quantity of the product covered by the exclusion purchased from China, from domestic and from third country sources in 2018 and 2019.

The USTR is seeking public comments from interested parties on whether to extend any particular exclusion for up to 12 months. The period for comment runs from June 8, 2020 until July 7, 2020.  Comments must be submitted on the public docket on USTR’s web portal at https://comments.USTR.gov under Docket No. USTR-2020-0021 – Section 301 – China $34 Billion Trade Action (List 1).  New users will first have to create an account in order to submit comments.  For parties wishing to include Business Confidential Information (BCI), the USTR notes that such information will not be publicly available when comments are posted on the docket.  Parties may also upload supporting documents that can also be marked as public or BCI.

On May 26, 2020, as required under the FY2019 National Defense Authorization Act, the White House released its report, “United States Strategic Approach to the People’s Republic of China,” detailing a government-wide strategy concerning the People’s Republic of China (China or PRC). Recognizing that 40 years of direct engagement with China has not resulted in any fundamental economic or political openings there, the report states that reforms have “slowed, stalled or reversed.” In response, the Trump administration has “adopted a competitive approach to the PRC, based on a clear-eyed assessment of the CCP’s [Chinese Communist Party’s] intentions and actions, a reappraisal of the United States’ many strategic advantages and shortfalls, and a tolerance of greater bilateral friction.” Referencing the 2017 National Security Strategy of the United States document (see Trump and Trade Update of December 18, 2017), the report states that the competitive approach to China has two objectives:

  • To improve the resiliency of U.S. institutions, alliances, and partnerships to prevail against the challenges China presents; and
  • To compel Beijing to cease or reduce actions harmful to the United States’ vital, national interests and those of U.S. allies and partners.

The report provides summaries of the challenges facing the United States in its relationship with China, including economic challenges, challenges to U.S. values, and security challenges. “Guided by a return to principled realism,” the report states, “the United States is responding to the CCP’s direct challenge by acknowledging that we are in a strategic competition and protecting our interests appropriately,” and the United States holds the Chinese government “to the same standards and principles that apply to all nations.” The report describes the Trump administration’s actions the past three years to implement a new strategy toward China. It concludes by stating that this new approach “reflects a fundamental reevaluation of how the United States understands and responds to the leaders of the world’s most populous country and second largest national economy.” Nevertheless, “[e]ven as we compete with the PRC, we welcome cooperation where our interests align. Competition need not lead to confrontation or conflict.”

The report was compiled by the White House and coordinated across many agencies in the executive branch.

Hong Kong currently enjoys special trade status with the United States in comparison to China, as a result of China’s agreement in 1997 to allow Hong Kong continued autonomy in many economic and administrative ways. As recent press articles have indicated, the People’s Republic of China (PRC) has increasingly cracked down on the Hong Kong protests, which began in June 2019, over – among other things – judicial independence, limits on democracy, and increasingly harsh police actions. Consequently, the United States has pressed China to deescalate the situation and abide by its commitments to maintain Hong Kong as a special autonomous administrative region. The situation has instead only intensified, resulting in significant actions last week by China, the United States and other world leaders.

In November 2019, President Trump signed the Hong Kong Human Rights and Democracy Act of 2019, which requires the Secretary of State to make an annual certification about whether Hong Kong continues to merit special treatment under U.S. law. On May 27, Secretary of State Mike Pompeo announced that he would certify to Congress that Hong Kong no longer warrants such treatment, stating that, “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.”

On May 28, 2020, the governments of the United States, Australia, Canada, and the United Kingdom released a formal statement noting “deep concern regarding Beijing’s decision to impose a national security law in Hong Kong,” which jeopardizes Hong Kong’s stability and prosperity.

On May 29, 2020, in remarks to the press, Trump cited the PRC’s pattern of conduct and announced several measures, including:

  • Beginning the process of eliminating policy exemptions that give Hong Kong different and special treatment;
  • Issuing a proclamation to better secure vital university research and to suspend the entry of certain foreign nationals from China;
  • Taking necessary steps to sanction PRC and Hong Kong officials directly or indirectly involved in eroding Hong Kong’s autonomy; and
  • Revising the State Department’s travel advisory for Hong Kong to reflect the increased danger of surveillance by the Chinese state security apparatus.

In response, the Chinese Embassy in the United States issued a statement noting that it would “take necessary countermeasures in response” to any foreign meddling in Hong Kong affairs.

These developments may have a significant impact on companies that engage in business with Hong Kong. Although these measures have not yet been taken, companies should be aware that the United States may implement the following measures:

  • Removing Hong Kong’s special customs status, and making imports of Hong Kong origin subject to the same duties as China, which may also lead to the imposition of Section 301 tariffs on products originating in Hong Kong that have been exempt so far;
  • Export controls currently in place for China may be extended to Hong Kong;
  • Further sanctions against persons determined to be facilitating the PRC actions in Hong Kong; and/or
  • Further visa and immigration restrictions on individuals from the PRC or Hong Kong.

Trump and Trade will continue to closely monitor these developments and provide updates as more official actions and policy shifts are undertaken in the coming weeks.