Potential changes to the Foreign Direct Product Rule may hinder Huawei supply chain.

board-printed-circuit-board-computer-electronics-163125

Photo by Pixabay on Pexels.com

The Trump administration has agreed to changes to the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to comply with U.S. regulations.  The proposed rule change requires foreign companies that use U.S. chip making equipment to obtain a license before they can supply certain semiconductor chips to Huawei.

The proposed rule change is to limit the number of foreign suppliers who continue to supply chips to Huawei. The new rule will greatly impact Huawei as most chip manufacturers use equipment produc Multiple articles on this subject cite the Taiwan-based “Taiwan Semiconductor Manufacturing Company” (TSMC). TSMC is Taiwan’s largest semiconductor manufacturer with over 15 fabs located throughout Taiwan.

If you have any questions whether you are subject to export controls or if you want to know how you are impacted, contact experienced export controls attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Taiwan customs officers seize exports of face masks.

pexels-photo-1933566

Photo by Timo Volz on Pexels.com

According to the Focus Taiwan website, airport officials seized 3,020 surgical face masks from a Taiwanese citizen heading to Singapore in late February – the largest seizure since export restrictions on face masks were put in plate in late January due to the corona virus.

Each Taiwanese citizen is permitted to export 250 masks per trip. After seizing the face masks, Customs returned 250 to the passenger. The seized masks will be sent for use by the government in their efforts to prevent the spread of the corona virus.

I usually don’t post about non-US customs seizures, but found this article interesting for several reasons:

  1. No mention of secondary inspections, no seizures followed by a letter from CBP with threats of a civil penalty, etc.
  2. Sounds like the seizure process in Taiwan is slightly more painful than in the US and it appears the traveler didn’t miss her flight. If this happened in the US and there was a restriction on the export of face masks, I’m sure she would have been detained, all her belongings searched and then held in detention until they missed their flight.
  3. While it seems like this would never happen in the US since it appears to lack due process for a taking by the government, and while I am usually very supportive of individuals who have their goods (especially currency) seized, this time I am siding with the Taiwanese government on this one.

Interesting to note, the Taiwan customs reported confiscating over 171,450 face masks over 851 seizures since the rule was passed on January 24th. Besides export control efforts at the airport, Taiwan Post (equivalent to our USPS), has also seized outbound shipments of surgical masks destined for overseas. The ban on exports ends on April 30th unless extended. I also read another article from Focus Taiwan that Taiwan is expected to ramp up production of face masks to about 13 million per day.

Anyways, interesting read and the first time I’ve heard of a customs seizure at an airport in a foreign country.

Questions about customs seizures? Give me a call or text, David Hsu at 832.896.6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US investigating Chinese telecom giant ZTE for alleged bribery.

pexels-photo-745243

Photo by Wolfram K on Pexels.com

While the news is dominated by the corona virus coverage, the US is investigating whether ZTE paid bribes to foreign officials to gain advantage in ZTE’s operations. ZTE is one of the largest Chinese telecommunications companies and are believed to be closely related to the Chinese Communist Party.

The bribes include allegations of bribery by ZTE in over 12 countries, including but not limited to Algeria, Liberia, Kenya and Zimbabwe.

These new legal issues come right after ZTE plead guilty 3 years ago for violating U.S. sanctions against Iran and North Korea. In 2017, ZTE plead guilty to violating U.S. sanctions, and resulted in ZTE paying a civil and criminal penalty and forfeiture of assets – a settlement costing ZTE over $1.19 billion dollars. ZTE’s probation ended

ZTE’s US headquarters are based in Richardson Texas with the company’s headquarters located in Shenzhen, Guangdong, China.

Port Houston closing two terminals due to corona virus.

pexels-photo-1314567

Photo by Nick Bee on Pexels.com

An employee working at two Port Houston terminals tested positive for the coronaviorus. The Port of Houston Authority reported an employee working at the Barbours Cut and Bayport container terminals tested positive for COVID-19 and as a result the public terminals are closed with operations temporarily suspended. The Port of Houston Authority owns and operates the Barbours Cut Container Terminal and the Bayport Container Terminal.

The Houston ship channel and the other private terminals are still in operation. The Port Houston is one of the largest container ports in the Gulf of Mexico and handle approximately 70% of the containers moving through the gulf.

Huawei’s latest license extension cut in half by US government, 45 instead of 90 days.

black huawei android smartphone

Photo by Alex Fu on Pexels.com

Since May of 2019, Huawei has been placed on the US entity list and therefore unable to conduct business with US companies. However, the Trump administration did permit companies to do business with Huawei through license extensions.

The most recent 90-day extension was granted in November 2019, allowing companies to do business with Huawei until the expiration of 90 days.

Last week, an 45-day extension was granted. After 45 days, and if no further extensions are granted, then American companies can no longer do business with Huawei.

Contact experienced export compliance attorney David Hsu by phone/text if you have any questions how the current prohibitions against Huawei and ZTE will impact your business. Email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

NY-titled vehicles cannot be exported.

pexels-photo-296492

Photo by Ibrahim Boran on Pexels.com

As of February 7, 2020, U.S. Customs and Border Protection (CBP) will no longer allow vehicles titled in New York state for export because CBP and NY’s Department of Motor Vehicles can no longer share information.

New York no longer allows CBP (or any federal agency) to access their DMW records in order to prevent federal agencies from accessing the identity of illegal aliens who have a New York driver’s license.

If you are a vehicle exporter, do not purchase any New York titled vehicles.

Huawei’s Google maps alternative.

pexels-photo

Photo by Ingo Joseph on Pexels.com

As you are aware, Huawei’s inclusion on the US entity list means no access Android and the Google Play Store. As a result Huawei has been looking at alternative companies to replace the Google Maps application – and last week, found their replacement.

According to Reuters, Huawei reached a deal with Dutch mapping company, TomTom which will see TomTom providing Huawei access to their navigation, mapping and traffic information.

With the TomTom information, Huawei will create their own proprietary apps for their own Harmony Operating System.

If you have any questions how Huawei’s inclusion on the BIS entity list will impact your business or if you are in need of export compliance, contact experienced trade attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Trump administration eases regulations on exportation of small arms and ammunition.

pexels-photo-864987

Photo by Alex Andrews on Pexels.com

The Trump administration issued new rules related to the export licensing of firearms and ammunition products. Firearms and ammunition exports will now be managed by the Commerce Department and not the State Department.

In other words, small arms and ammunition shifts from the Department of State’s International Traffic in Arm’s Regulations US Munitions List to the US Department of Commerce’s Export Administration regulations.

ITAR concerns defense-related exports whereas EAR is “dual use” for commercial or military use, and therefore less strict export rules versus the State Department.

The new Trump administration rules also eliminates the $2,250 registration fee for gunsmiths and small companies who do not manufacture, or export firearms or ammunition.

The final rule will be published on January 23 rd and implemented 45 days later after formal publication.

If you have any questions how these new rules will impact your small arms or ammunition export business, contact experienced export compliance attorney David Hsu by phone/text at attorney.dave@yahoo.com or dh@gjatradelaw.com.

US lawmaker wants to ban US intelligence sharing with countries that use Huawei 5G.

satellite antenna tower

Photo by Andre Moura on Pexels.com

According to a Reuters article, U.S. Senator Tom Cotton introduced a bill last Wednesday that would stop the United States from sharing intelligence with countries that allow Huawei Technologies to operate 5G network technology.

The Sen. Cotton bill is just one of several legislative efforts against Huawei for potential national security concerns – last year Huawei was placed on the entity list.

The countries and companies that are considering Huawei’s 5G equipment include: Bahrain, Belgium, Britain Telecom, France, Hungary, Norway, Thailand and more.

The countries and companies that ban Huawei’s 5G equipment include: the United States, Australia, Facebook, Google, Japan, Microsoft, New Zealand, Softbank, Sophos, South Korea, University of Oxford, UAE, Verizon Communications and Vodafone.

If you have any questions about the Huawei ban, or want to ensure your exports are in compliance, contact experienced export attorney, David Hsu by phone at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Department of Justice charges Indonesian citizen and companies with exporting goods to Iranian airline Mahan Air.

brown pagoda near body of water

Photo by Aron Visuals on Pexels.com

According to a Department of Justice (DOJ) filing found here, the DOJ charged an individual Indonesian citizen and several Indonesian based companies for violating US export control of goods to Iran. Specifically, the charged individual and companies worked together to export goods originating from the US to Iranian airline Mahan Air. The complaint says the Indonesian national and companies shipped goods owned by Mahan Air through the following Indonesian companies: PT MS Aero Support (“PTMS”), PT Kandiyasa Energi Utama (“PTKEU”) and PT Antasena Kreasi (“PTAK”) .

The charge against the defendants include (i) unlawful and attempted export to an embargoed country, (ii) conspiracy to launder monetary instruments and (iii) false statements.

If you do not want to be the subject of DOJ investigation, call experienced trade controls attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com. Initial consultations are free, contact us to figure out how to protect you and your company from the many hazards of exporting US goods overseas.