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Takeaways

  • Sanctions operate prospectively and do not affect payment obligations to a non-sanctioned party accruing before sanctions became effective.
  • Payment obligations under standby letters of credit at issue were autonomous and unconnected with the underlying transaction.
  • The fulfilment of an independent obligation owed by a German bank to Irish-incorporated aircraft lessors was found not to have intended to benefit the Russian entities involved in other elements of the transaction.

The English Court recently confirmed that sanctions do not excuse non-payment to a non-sanctioned party where the aircraft lease arrangements and related letters of credit were created before sanctions came into effect: Celestial Aviation Services Limited, Constitution Aircraft Leasing (Ireland) 3 Limited and another v UniCredit Bank AG (London Branch) [2023] EWHC 663 (Comm).

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On March 22, 2023, the Department of Defense (DoD) published a proposed rule to amend Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.225-7048. This amendment would implement an additional export control requirement for certain contractors. Specifically, the amendment would require contractors to provide the Defense Contract Management Agency (DCMA) certain information concerning export authorizations obtained or relied upon to perform contracts requiring both (1) delivery to, or production or performance in, “government quality assurance countries” and (2) “government quality assurance surveillance oversight.”

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On March 21, 2023, the U.S. Department of Commerce released a Notice of Proposed Rulemaking (NPRM) imposing guardrails preventing the “improper use of funds” made available under the CHIPS Act of 2022. In “Commerce Releases New Proposed Rule Governing Restrictions on Chinese Investments by CHIPS Act Applicants,” members of our International Trade team break down the proposed rule, which tightens restrictions on activities by “affiliates” and clarifies scope of statutory clawbacks.

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Many application windows for grants, loans and other incentives have opened since the passage of the Inflation Reduction Act, the CHIPS and Science Act (CHIPS) and the Infrastructure Investment and Jobs Act (IIJA), which provide about $2 trillion in federal funding and offers businesses and organizations a rare opportunity to apply for federal grants or take advantage of other federal incentive benefits.

In “Application Windows Opening for New Federal Funding,” colleagues Nancy Fischer, Elizabeth Vella Moeller and Aimee Ghosh examine these opportunities, along with compliance and eligibility obligations.

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The Cyberspace Administration of China (CAC) issued the final version of the Measures on the Standard Contract for the Cross-Border Transfer of Personal Information (Standard Contract Measures) on February 24, 2023, which includes a template standard contract (Standard Contract). The Measures will take effect on June 1, 2023, but set forth a six-month grace period until December 1, 2023, to provide companies with time to take actions for compliance.

In their recent client alert, “China Publishes Measures on Standard Contract for Cross-Border Transfer of Personal Information,” colleagues Jenny (Jia) Sheng, Chunbin Xu and Wenjun Cai break down the details of this final version, including a discussion of when Standard Contract Measures apply, the Personal Information Protection Impact Assessment (PIPIA) and notable compliance obligations.

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On February 24, 2023, the one-year anniversary of the Russia-Ukraine conflict, the United States released extensive new measures designed to impose additional sanctions on Russia for its aggression against Ukraine. These new measures are summarized below.

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On February 24 and 25, 2023, the United Kingdom and European Union each adopted additional sanctions against Russia due to the ongoing conflict in Ukraine. These new measures are summarized below.

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This post marks the third entry in our Year-in-Review series. For prior posts, click here.

Many of the first measures that the United States, European Union and United Kingdom collectively took against Russia in 2022 related to aircraft and international air travel. As the conflict broke out, each jurisdiction quickly prevented Russian actors from entering their airspace. Over the past year, export controls on the aviation industry and sanctions on companies that support the Russian aviation sector have grown increasingly complex. Those rules have also been applied to Russia’s ally, Belarus. Meanwhile, Russia has imposed a number of significant countermeasures in order to keep aircraft within Russia. Below, we explore how key sanctions on Russia have affected the aviation industry. 

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This post marks the second entry in our Year-in-Review series. For prior posts, click here.

Few sectors have been more affected by the sanctions on Russia than the energy industry. As Russia’s largest industry, it has been a focus of sanctions designed to deter the continuation and escalation of the conflict in Ukraine, with policies targeting the trade in oil and gas, new equity and debt, investment in energy projects, and export to Russia of equipment and parts, as well as designations of specific companies and individuals in the sector.

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On February 24, 2022, the United States (U.S.), European Union (EU), United Kingdom (UK), and other countries issued a barrage of sanctions against the Russian financial sector, cutting off many major banks from the global financial system. These initial measures were coordinated among the US, EU, UK and other G7 countries and largely mirrored one another. As the year progressed, the U.S., EU and UK each imposed new and distinct measures to restrict Russia’s ability to raise capital. Over time, important deviations between jurisdictions began to emerge, creating a vast and multijurisdictional impact on Russia’s financial sector. Russia, in turn, imposed its own measures in an attempt to mitigate that impact. In order for companies to operate in global markets, it became increasingly necessary to understand how to navigate multiple sanctions regimes. Below, we describe several of the key measures levied against the Russian financial sector over the past year.

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