Insights

On November 14, 2024, Rep. John Moolenaar (R-Mich.), chair of the House Select Committee on the Chinese Communist Party, introduced the Restoring Trade Fairness Act, seeking to suspend China’s Permanent Normal Trade Relations (“PNTR”) status.

On November 14, 2024, the U.S. Government Accountability Office (GAO) released its Annual Report on Bid Protests for Fiscal Year 2024, containing the full statistics shown below:

In Fortis Industries, Inc., CBCA 7967 (Sept. 18, 2024), the Civilian Board of Contract Appeals (CBCA) denied in part the government’s motion for partial summary judgment on the issue of whether the contractor released its claims by signing a modification terminating the contract for convenience. During contract performance, the General Services Administration (GSA) imposed monthly deductions to contract payments as a response to certain performance issues. GSA later proposed to terminate the contract for convenience and sent a contract modification stating that all obligations under the contract were concluded except payment for work performed in June 2022. The contractor signed the modification but stated in its transmittal email that it was owed payment for services in May 2022 as well. 

In a recent UK Court of Appeal judgment in what is known as “the motor finance cases” (see Johnson v FirstRand Bank, Wrench v FirstRand Bank and Hopcraft v Close Brothers Limited, which appeals were all heard together), the Court has shone a spotlight on the issue of commissions paid by financiers to brokers and determined that, in some cases, they may be considered “bribes” under UK law. 

On November 15, 2024, the Department of Defense (DoD) issued a Proposed Rule implementing Section 1655 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (P.L. 115-232), over six years after Congress enacted the requirement. 

On November 8, 2024 the SEC announced a settled enforcement action against Invesco Advisers, Inc. for making misleading statements about its integration of environmental, social, and governance (ESG) factors into the firm’s investment decisions. Invesco agreed to pay a $17.5 million civil penalty to settle the matter. This enforcement action makes it clear that, even though the SEC dissolved its ESG Task Force, the Commission continues to monitor firms’ statements and representations for misleading statements about ESG.

This news bulletin is provided by the International Trade Group of Crowell & Moring. If you have questions or need assistance on trade law matters, please contact Jana del-Cerro, Anand Sithian, or Simeon Yerokun or any member of the International Trade Group.

On October 22, 2024, the Department of Justice (DOJ) announced that Pennsylvania State University (Penn State) will pay $1.25 million to resolve allegations that it violated the False Claims Act (FCA) by failing to comply with contractually mandated cybersecurity requirements by the Department of Defense (DoD) and National Aeronautics and Space Administration (NASA).  The announcement marks the most recent settlement under DOJ’s Civil Cyber-Fraud Initiative although, unlike prior settlements, there is no allegation of a cybersecurity incident or breach that was related to or caused by the contractor’s alleged noncompliance.

 On November 12, 2024, the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) will issue an interim rule amending FAR 52.204-7 to clarify that an offeror’s failure to maintain System for Award Management (SAM) registration during the period between proposal submission and contract award does not render the offeror ineligible for award.  Providing welcome relief to agencies and contractors alike, the interim rule requires only that an offeror be registered in SAM at the time of offer submission and at the time of contract award.

The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued new guidance (“BIS Guidance”) for financial institutions (“FIs”) on October 9, 2024, recommending that FIs undertake specific compliance practices to minimize their risk of violating General Prohibition (“GP”) 10 of BIS’s Export Administration Regulations (“EAR”).  GP 10 prohibits any person (U.S. or otherwise) from selling, transferring, exporting, reexporting, financing, ordering, buying, removing, concealing, storing, using, loaning, disposing of, transporting, forwarding, or otherwise servicing an item “subject to the EAR” with knowledge that that item was, or will be, exported, reexported, or transferred in violation of the EAR.  Knowledge in this context goes beyond actual knowledge, and can be inferred from circumstances surrounding a transaction; in other words, a “known or should have known” standard.  Although BIS has published several joint alerts with FinCEN encouraging financial institutions to look for potential red flags of evasion of export controls, this guidance goes further in establishing specific export compliance best practices for financial institutions and suggests that financial institutions that finance or otherwise service prohibited exports risk liability under the EAR.

The term “bid protest” typically calls to mind challenges to an agency’s award of a contract.  But two recent GAO sustain decisions—Wilson 5 Service Company, Inc., B-422670, Sept. 25, 2024, 2024 CPD ¶ 230 and MAXIMUS Federal Services, Inc., B-422676, Sept. 16, 2024, 2024 CPD ¶ 222—highlight another impactful tool for protecting a contractor’s ability to compete fairly: pre-award challenges to ambiguous or unreasonably restrictive solicitation terms.

There is currently a deluge of new EU law being finalized and adopted – particularly on environmental and sustainability issues. At times it may seem overwhelming – with certain new EU laws being overlooked.  However, when serious environmental problems come to light within companies – the first major concern is normally criminal liability. That includes potential criminal liability of the company itself, but also of the CEO, Board Members and other persons leading it. With that in mind – top of a company’s ‘to-do’ list should be ensuring compliance with the new EU Environmental Crime Directive.

As the popularity of electric bikes grows, so does the legal and trade obstacles here and abroad. In 2022, over a million e-bikes were in sold in the US. China is a large part of the bike supply chain as about 85 percent of bikes purchased in the US are manufactured in China, and many bike manufacturers rely on China for most, if not all, of their components. And while this figure is staggering, many overlook details regarding the most important component for e-bikes, the battery. With the increased focus on electric vehicles and the escalating trade war, e-bike batteries are often caught up in the mix.

On October 29, 2024, the Department of Justice (DOJ) published a Notice of Proposed Rulemaking (NPRM) to implement Executive Order 14117 “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern” (the E.O.).  The E.O. addresses the national security threat posed by the continued effort of certain countries of concern to access and exploit certain kinds of Americans’ sensitive personal data, which includes health data and genetic data. This builds on DOJ’s Advance Notice of Proposed Rulemaking (ANPRM) published on March 5.  Comments are due on November 29, 2024.

On September 3, 2024, the EU Court of Justice overturned the first-instance judgment of the EU General Court, which had held that the European Commission could review transactions that fall below EU and Member States' merger control thresholds through referrals by national competition authorities under Article 22 of the EU Merger Regulation (Case C-611/22 P, Illumina v Commission).

On October 29, 2024, the Office of Federal Contract Compliance Programs (“OFCCP”) published a notice in the Federal Register that it received two requests under the Freedom of Information Act (“FOIA”) for 2021 Type 2 EEO-1 Reports filed by federal contractors.  The two requests came from the University of Utah and a non-profit organization named “As You Sow.”  The OFCCP notified federal contractors that the information might be protected from disclosure under FOIA Exemption 4, which protects disclosure of confidential commercial information, and requested that any entities that filed these reports and object to their disclosure submit objections by December 9, 2024.  Objectors are strongly encouraged to use the OFCCP portal.  Alternatively, contractors may also submit written objections via email at OFCCPSubmitterResponse@dol.gov, or by mail. 

Regardless of what happens in the U.S. elections on November 5, one theme is clear – protectionist policies in international trade are here to stay. To some extent, the key difference between the trade policies of a Harris administration and a second Trump Administration may be one of degree. Vice President Harris is expected to continue the more cautious, incremental approach to trade policy favored by the Biden Administration. A second Trump administration, on the other hand, is expected to pick up where it left off and aggressively use the trade tools at its disposal to try to reset and renegotiate trade relationships with many of the U.S.’s trading partners—particularly those countries with whom the U.S. has a trade deficit.

Digital health companies, investors, and other healthcare organizations should follow policy developments with a strategic lens towards their market opportunities for key potential growth and risk mitigation. On a quarterly basis, we provide relevant legislative and regulatory updates on artificial intelligence (AI) and digital health policy developments.

Cattle, cocoa, coffee, oil palm, soya, wood, rubber?  Do you sell any of these commodities? Do you sell any products derived, containing or using any of these commodities? Are there any companies in your supply chain which sell or use these commodities, or derivative products?  Do you (or others in your supply chain) sell products in the EU/EEA, or export products from the EU/EEA?  If so, you – and your supply chain – must likely comply with the Deforestation Regulation.[1] And getting ready is no easy feat – even despite the recent actions to postpone some of the application deadlines of concern. 

On Wednesday, October 16, 2024, New York’s Department of Financial Services (DFS) announced new guidance aimed at identifying and providing a blueprint for protecting against AI-specific cybersecurity risks.  Motivated primarily by advancements in AI that substantially impact cybersecurity—including facilitating new ways to commit cybercrime—DFS’s guidance aims to specifically protect New York businesses but applies to all companies concerned with increasing their cybersecurity and managing risks posed by emerging technologies. The guidance addresses “most significant” AI-related threats to cybersecurity that organizations should consider when they are developing a cybersecurity program, internal protocols, or implementing cybersecurity controls—as well as recommendations for those cybersecurity programs.