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Companies wishing to take advantage of the efficiencies of cloud computing face a dilemma—how to do so without running afoul of export controls? In a recent client alert, authors Christopher Wall and Sanjay Mullick examine how newly proposed regulations from the Directorate of Defense Trade Control (DDTC) and the Bureau of Industry and Security (BIS) could potentially solve this problem, allowing companies to store information on servers in foreign countries if that information is sufficiently encrypted. (And that’s an important “if.”)

Client Alert: Proposed Change to Export Controls Would Allow Use of the Cloud for Encrypted Data

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On 19 June, the European Council extended EU sanctions against Russia pursuant to Council Decision (CFSP 2015/959).  This follows a series of increasingly coordinated actions by the US and EU, such as the joint statement produced at the G7 meeting two weeks ago, to show a united front against continued Russian activity related to Ukraine.  With this extension, EU sanctions will remain in place until January 31, 2016 unless there is a complete implementation of the Minsk Agreements before then.

However, looking forward, US and EU policymakers recently leaked to the media that they are pre-planning a series of coordinated sanctions against Russia should the situation deteriorate. These new measures could include new travel bans on Russian government officials and business leaders, but could escalate significantly to more broad-based sanctions against the Russian energy and financial sectors. In particular, these sanctions could target the sale of petroleum products from Russia and Russia-related financial transactions. Some western leaders are also supportive of utilizing these new sanctions should the status quo remain unchanged for much longer. Continue reading →

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This afternoon the House of Representatives approved a rule that extends time for a second vote on Trade Adjustment Assistance legislation which the House failed to pass on Friday.  By a vote of 236-189, the House voted to allow for reconsideration of the trade legislation before July 30th.  The next six weeks promise to be full of interesting legislative twists and turns as supporters of the trade agenda seek a path forward.

 

 

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As previously reported, the Obama Administration is actively continuing its rapprochement with Cuba, most recently removing Cuba from the list of state sponsors of terrorism. However, despite this consistent push from the Administration and the strong interest of the U.S. business community to enter the Cuba market as quickly as possible, Congress remains divided on how best to approach Cuba. In recent days, powerful Members of Congress has taken divergent steps to either expand the relationship or put the brakes on the momentum. Continue reading →

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President Obama and Republican House leaders are regrouping in an effort to put key trade legislation back on track after House Democrats voted against Trade Adjustment Assistance (TAA) for workers displaced by global trade, a key part of the President’s trade agenda.

The development threatens ultimate passage of the Trans-Pacific Partnership (TPP), a proposed trade agreement with 12 nations along the Pacific Ocean.  A legacy priority for the Obama Administration, the TPP would eliminate Non-Tariff Barriers (NTBs) to trade, lower tariffs, and harmonize regulations in countries representing 40 percent of the global economy.  Continue reading →

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On Tuesday, June 8 in Pillsbury’s London office, Pillsbury and the Eurasia Group hosted the first event in their Sanctions & Market Opportunities Series entitled “Iran Sanctions, Investment and Trade: Preparing for Divergent Outcomes.”

During the event, panelists discussed the likelihood for a final agreement related to Iran’s nuclear program and the eventual easing of international sanctions.  Panel members also discussed the current U.S. and EU sanctions regime and what may change in the event of an agreement or if talks fall apart.  As part of these discussions, the panel detailed the U.S. congressional review process that will occur in event of an agreement and how this process is impacting the negotiations and may hinder sanctions relief.

The audience of senior European business leaders received several key takeaways, including: Continue reading →

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[Originally appeared in Bloomberg BNA]

Envelopes of cash. Vote rigging. Wiretapped recordings in 5-star hotel rooms. A dramatic early morning police raid coordinated between the FBI and Swiss law enforcement. An episode of the Sopranos? No, but it is a day in the life of FIFA.

Last week’s revelation of widespread corruption in the world of international soccer was shocking on many levels, but it should serve as a stark reminder to those engaged in international business that the U.S. government will prosecute crimes that occur largely outside the United States and will build a case over decades to do it.

For more, click here.

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The leaders of the G7 met for two days of discussions in Elmau, Southern Germany on 7 and 8 June 2015.

High on the agenda was the issue of Russian targeted EU and US sanctions over Moscow’s role in support of Ukrainian rebels.

Russia has already been excluded from what was formerly known as G8 following its annexation of Crimea in 2014.

Following talks between President Obama and German Chancellor Merkel in Elmau, reportedly over a traditional Bavarian meal of sausages and beer, the White House issued a statement confirming: “The duration of sanctions should be clearly linked to Russia’s full implementation of the Minsk agreements and respect for Ukraine’s sovereignty”. Continue reading →

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Today the State Department issued a press release announcing that the Secretary of State has finalized the removal of Cuba from the official U.S. list of state sponsors of terrorism, effective May 29:  http://www.state.gov/r/pa/prs/ps/2015/05/242986.htm.

Although this is an important step forward, it does not automatically eliminate any of the current U.S. sanctions.  Many of the sanctions, in fact, were “codified” (that is, converted from regulations to statute) by Congress through the Cuban Liberty and Democratic Solidarity Act of 1996.  Moreover, the export control restrictions for Cuba are in part maintained under an older law – the Trading with the Enemy Act of 1917 – that is unrelated to the requirements for countries designated as state sponsors of terrorism.  The President has authority to relax some aspects of the embargo without Congressional approval – as demonstrated by his prior liberalizing measures – but there are a number of ambiguities in the relevant statutes and it is difficult to predict how aggressive the President will be in moving forward without seeking legislation.

The situation requires careful monitoring, and companies should not assume that any existing sanctions will be quickly repealed.

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Companies legitimately employing tools to test how vulnerable their computers and networks may be to cyber-attacks should take note of strict new export controls that may be on the horizon.  Specifically, on May 20, 2015, the Commerce Department Bureau of Industry and Security (BIS) proposed to establish controls on the export of cybersecurity items, which would require a license for all countries except Canada and generally make license exceptions unavailable.  Currently, certain of these items are controlled as encryption items because of their information security functionality, but exporters who believe their items are subject to the encryption controls should exercise caution, to avoid a situation in which they export and then learn after the fact that BIS actually believes the items are subject to the new cybersecurity controls.  Comments to the proposed rule are due by July 2015, but it may prove difficult to strike the right balance between preventing cybersecurity items from falling into the wrong hands to conduct cyberattacks and allowing companies legitimate access to them so they can test their cyber defenses.

For more details on the proposed rule and its potential impacts, please see our recent cybersecurity client alert.