On December 9, 2022, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Chinese individuals and a vast network fishing vessels they control, including Pingtan Marine Enterprise Ltd. (PME) and Dalian Ocean Fishing Co., Ltd. (Dalian), for perpetrating serious human rights abuses and corruption via illegal, unreported, and unregulated (IUU) fishing. Although this is not the first time Dalian has been adversely identified by a U.S. agency (see Update of June 2, 2021), OFAC’s action does mark the first time an entity listed on the NASDAQ stock exchange, PME, has been designated.

IUU fishing refers to fishing that: (i) contravenes applicable laws and regulations, including fishing in unregulated areas, other countries’ waters, or international waters, (ii) goes unreported or misreported to relevant authorities, or (iii) targets unregulated species contrary to countries’ conservation responsibilities. Although often associated with harmful environmental effects, IUU fishing also has a strong nexus with human rights abuses, especially related to human trafficking and inadequate labor standards. The International Labor Organization, for example, has identified instances of crewmember abuse and forced labor (or conditions of forced labor) aboard vessels engaged in IUU fishing. President Biden also emphasized the negative consequences of leaving IUU fishing unchecked in his recent Memorandum on Combatting Illegal, Unreported and Unregulated Fishing and Associated Labor Abuses (June 27, 2022).

OFAC’s designation of the two Chinese individuals includes designations of 157 fishing vessels reportedly owned by these individuals and flying the flag of the People’s Republic of China. Additional identifying information and details on the entities sanctioned are available here. All property and interests in property of these newly designated Specially Designated Nationals (SDN) List entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt.

As a result of these designations, OFAC has issued two general licenses (GL) under the Global Magnitsky Sanctions Regulations – GL 3 and GL 4 – authorizing U.S. persons to engage in “certain transactions ordinarily incident and necessary to the wind down of financial contracts and other agreements” with PME and Dalian by March 9, 2023.

On May 28, 2021, the U.S. Customs and Border Protection (CBP) issued a press release announcing that the CBP had issued a Withhold Release Order (WRO) for imports of seafood products from Dalian Ocean Fishing Co., Ltd., a Chinese entity, “based on information that reasonably indicates the use of forced labor in the entity’s fishing operations.” The WRO will be effective immediately.

The CBP’s press release notes that, during the course of the investigation, the CBP identified 11 of the International Labor Organization’s indicators of forced labor, including physical violence, withholding of wages, and abusive working and living conditions. The WRO instructs all CBP personnel to detain at all U.S. ports of entry all entries of tuna, swordfish, and other seafood harvested by vessels owned or operated by Dalian Ocean Fishing Co. Ltd.

While the CBP issued WROs on individual distinct water fishing vessels in the past (e.g., Lien Yi Hsing No. 12, the Da Wang, and the Yu Long No. 2), this is the first WRO issued against an entire fleet of fishing vessels. Importers of detained shipments will have the opportunity to either export their shipments or demonstrate that the merchandise was not produced with forced labor.

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.

The Office of the U.S. Trade Representative (USTR) has issued a Federal Register notice exempting Section 301 tariffs for certain List 3 (imports from China with an annual trade value of $200 billion) products. The exemptions cover one 10-digit Harmonized Tariff System (HTS) subheading and 176 specially-prepared product descriptions, which combined cover 202 separately submitted exclusion requests.

The excluded HTS subheading is 7002.10.2000, which covers “Glass in balls (other than microspheres of heading 7018), rods or tubes, unworked: Balls: Other. The exclusions with specially-prepared product descriptions include but are not limited to: certain frozen fish; oyster shells; certain fruit and vegetable seeds; certain synthetic silica gel; multiple different chemicals and materials (CAS numbers are provided); certain parts of fences; certain types of gaskets, hoses, washers, and other seals; certain new tubeless, bias-ply pneumatic and radial pneumatic tires; certain backpacks, tote, duffel bags, and other bags; certain fishing tackle bags; certain surfboard covers; various types of paper products; yarn of cashmere or camel hair; certain polyester fabrics; certain types of bathtubs, sinks, certain faucet and shower parts; certain ceramic articles; types of tempered safety glass; certain types of rear-view mirrors; certain bird feeders; various steel articles covered in Chapter 73 of the HTS; certain kits of bits for woodworking and drilling; certain screen door cross bars; certain pistons and cylinder heads for engines; certain hydraulic and screw jacks; certain bandsaws for working wood; certain camshafts and crankshafts; certain single-phase AC electric motors; certain inductors; certain color TV cameras; certain radiobroadcast receiver kits; various types of printed circuit boards; certain digital sound processing equipment; certain steel or aluminum bumpers for off-road vehicles; certain RV vent insulators; certain aluminum radiators; certain steering gears and other steering cylinder parts for motor vehicles; certain bicycles; certain single-axle trailers with steel or aluminum frames; certain automobile seats and seat covers; certain shelving units and cabinets; and certain lamps, LED lamps and LED backlight modules.

These exclusions will apply from September 24, 2018, through August 7, 2020. These exclusions 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. 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.

The U.S. Trade Representative (USTR) released a press statement announcing the list of imports from China that will face a Section 301 10 percent tariff (see also Trump and Trade Update of May 14, 2019). Implementation of the tariff on approximately $300 billion worth of Chinese products will occur in two phases. For most products, the tariff will go into effect on September 1, 2019, as announced by President Donald Trump on August 1, 2019 (see Trump and Trade Update of August 1, 2019). The USTR determined, however, that certain products should be spared the tariff until December 15, 2019. In its statement, the USTR announced that certain products have been removed from the tariff list based on health, safety, national security and other factors and will not be assessed the 10 percent tariff.

List 4A (additional tariffs as of September 1, 2019) includes but is not limited to the following broad categories of products imported from China: certain live animals; various forms of animal carcasses and meat cuts; certain milk, butter, yogurt and creams; certain fats and oils; certain cheeses; certain flower bulbs, trees, plants and shrubs; certain vegetables, fruits and nuts; certain coffee and teas; certain spices and extracts; certain prepared meats; certain sugars, powders and syrups; certain mixes for bakers wares; certain pastas and cereals; certain forms of ice cream and edible ice; certain forms of wine, brandy, whiskies, rum and other alcoholic beverages; certain tobacco products; various organic chemicals and essential oils; certain plastic and rubber articles; certain rawhides and animal skins; certain printed books, newspapers, pictures and other products of the printing industry; various woven and knitted fabrics; certain items of men’s/boys’ and women’s/girls’ and baby clothing; numerous types of gloves, mittens, shawls and scarves; certain bed linens and bedspreads; certain items of footwear; certain cutlery, ceramic and glassware items for household table or kitchen purposes; certain natural or cultured pearls, precious or semi-precious stones, precious metals; certain articles made of iron or steel; certain alloy or nonalloy steel; certain items made from aluminum, and other articles made of base metal; certain boilers, machinery and mechanical appliances; certain electrical machinery and equipment; certain sound recorders, loudspeakers and recording and video devices; certain televisions, video monitors and projectors; certain motorcycles; tanks and warships; contact lenses and certain corrective eyewear and sunglasses; certain cameras; various wristwatches and clocks; certain wind, stringed, keyboard, percussion and other musical instruments; military weapons; certain sporting good articles for hockey, lacrosse, baseball, badminton and fishing; and certain pens and pencils.

List 4B (additional tariffs as of December 15, 2019) includes but is not limited to the following broad categories of products imported from China: certain food products; certain organic chemicals; cell phones, laptop computers, video game consoles; certain toys; computer monitors; certain items of footwear; certain items of men’s/boys’ and women’s/girls’ clothing; certain pet toys; certain paper products; certain woven and knitted fabrics; numerous types of gloves, mittens, shawls and scarves; fireworks; certain bed linens and bedspreads; various umbrellas; certain cutlery, ceramic and glassware items for household table or kitchen purposes; copying machines; flashlights; certain radio broadcast receivers; certain cameras and projectors; various types of clocks and watches; certain string musical instruments; certain infant chairs and booster seats; certain play yards for children; certain articles for Christmas festivities; certain sporting good articles for hockey, baseball, badminton and fishing; and certain toiletry and hair products.

There are products with similar descriptions covered under each list. Only by reviewing and comparing the appropriate HTS subheading and product description will U.S. importers be able to determine which list covers an imported Chinese product.

The USTR will soon publish in the Federal Register additional details and lists of the tariff lines affected by today’s announcement. The USTR confirmed that it intends to conduct an exclusion request process for products subject to this 10 percent tariff but has not announced when it will begin.

On June 5, 2019, the Department of Commerce’s Bureau of Industry and Security (BIS) and the Department of the Treasury’s Office of Foreign Assets Control (OFAC) undertook coordinated actions to further restrict travel to Cuba “in order to hold the Cuban regime accountable for its repression of the Cuban people and its support of the Maduro regime in Venezuela.” Stating that “Cuba remains communist, and the United States, under the previous administration, made too many concessions to one of our historically most aggressive adversaries,” Commerce Secretary Wilbur Ross said the Trump administration “recognizes the threat Cuba’s government poses in the region, and … is acting to limit commercial activity that provides revenue for the Cuban regime.” These actions include:

Ending Group People-to-People Travel

  • OFAC amended its Cuba regulations to remove the authorization for group people-to-people educational travel. OFAC’s regulatory changes include a “grandfathering” provision, which provides that certain group people-to-people educational travel that previously was authorized will continue to be authorized where the traveler had already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to June 4, 2019.
  • OFAC updated its FAQs pertaining to Cuba.

Ending Exports of Passenger Vessels, Recreational Vessels and Private Aircraft

  • BIS amended certain Cuba-related provisions under the Export Administration Regulations (EAR) to make passenger and recreational vessels and private and corporate aircraft ineligible for license exception and to establish a general policy of denial for license applications involving those vessels and aircraft. License exception Aircraft, Vessels, and Spacecraft (AVS) has been amended to remove the authorization for the export or reexport to Cuba of most non-commercial aircraft and all passenger and recreational vessels on temporary sojourn. As of June 5, 2019, private and corporate aircraft, cruise ships, sailboats, fishing boats and other similar aircraft and vessels generally will be prohibited from going to Cuba.
  • BIS updated its FAQs pertaining to Cuba.

The State Department also issued a statement that “These actions are directly linked to the tourism industry, which has strong economic ties to the Cuban security, military, and intelligence sectors in Cuba. Veiled tourism has served to line the pockets of the Cuban military, the very same people supporting Nicolas Maduro in Venezuela and repressing the Cuban people on the island. In Cuba, the regime continues to harass, intimidate, and jail Cubans who dare to voice an opinion different from the one the regime wants them to have. The United States calls on the regime to abandon its repression of Cubans, cease its interference in Venezuela, and work toward building a stable, prosperous, and free country for the Cuban people.”

President Trump has issued a new executive order implementing further sanctions in response to North Korea’s “provocative, destabilizing, and repressive actions,” particularly its recent intercontinental ballistic missile launches and its nuclear test of September 2, 2017. The new sanctions, to be implemented by the Department of the Treasury’s Office of Foreign Assets Control (OFAC), target individuals and entities that engage in trade with North Korea as well as the financial institutions that facilitate such trade. The executive order also authorizes the secretary of the treasury, in consultation with the secretary of state, to impose sanctions on certain persons:

  • Industries: those who operate in the construction, energy, financial services, fishing, information technology, manufacturing, medical, mining, textiles or transportation industries in North Korea;
  • Ports: those who own, control or operate any port in North Korea, including any seaport, airport, or land port of entry; and
  • Imports/Exports: those who have engaged in at least one significant importation from or exportation to North Korea of any goods, services or technology.

These sanctions also target and allow OFAC to block property and interests in property of persons determined to be a North Korean person, including a North Korean person that has engaged in commercial activity that generates revenue for the government of North Korea or the Workers’ Party of Korea.

Further, the new sanctions state that (1) no aircraft in which a foreign person has an interest that has landed at a place in North Korea may land at a place in the United States within 180 days of departure from North Korea, and (2) no vessel in which a foreign person has an interest that has called at a port in North Korea within the previous 180 days, and no vessel in which a foreign person has an interest that has engaged in a ship-to-ship transfer with such a vessel within the previous 180 days, may call at a port in the United States. See new General License 10 for limited exceptions to these shipping prohibitions.

The executive order also provides the authority for OFAC to impose sanctions on any foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of certain designated North Korean individuals and entities or any significant transaction in connection with trade with North Korea. Under this new authority, the sanctions measures can be either restrictions on correspondent or payable-through accounts or blocking sanctions. The secretary of the treasury will also have the authority to block any funds originating from, destined for or passing through accounts linked to North Korea that come into the United States or possession of a U.S. person. See updated General License 3-A for limited exceptions to these prohibitions.

The White House indicated that these sanctions are specifically targeted towards the shipping and financial industries, noting that North Korea is dependent on these networks to facilitate international trade. Separately, Treasury Secretary Mnuchin stated that “[f]oreign financial institutions are now on notice that, going forward, they can choose to do business with the United States or with North Korea, but not both.” These additional sanctions towards North Korea are effective as of September 21, 2017.