For companies doing business overseas, whether through direct import/export or through foreign subsidiaries, navigating the various laws and regulations governing international trade can be onerous. Noncompliance can not only be expensive but can land company personnel in jail. Parker Poe’s International Trade Compliance Team works with companies to proactively develop compliance procedures and training programs designed to enable the company and its employees, officers, and directors to manage and reduce these risks.
Committee on Foreign Investment in the United States (CFIUS)
CFIUS is a U.S. federal interagency group chaired by the Department of the Treasury with authority to review certain foreign investments in the United States and block, impose mitigation measures, or unwind those transactions that could impair U.S. national security. CFIUS previously only had jurisdiction over traditional M&A transactions involving a foreign person taking control of a U.S. business, but recent reforms expanded its jurisdiction to include a broader scope of minority investments in U.S. businesses, and real estate purchases or leases.
This expanded jurisdiction means that a wide variety of transactions involving foreign investors may fall under CFIUS jurisdiction – not just traditional M&A but also venture capital, real estate, and, in some cases, lending and bankruptcy. In certain cases involving investments in U.S. businesses engaged in critical technology, critical infrastructure or sensitive personal data, a filing with CFIUS may be mandatory and failing to do so could result in fines and penalties.
Our team helps clients understand the ways CFIUS review can be triggered, how to spot potential pitfalls, and how to ensure success when one of the parties in your transaction is a foreign person.
Anti-Corruption Compliance (FCPA, U.K. Bribery Act and Other Anti-Corruption Laws)
Governments around the world are taking action to eliminate or reduce bribery and corruption. In the United States, the Department of Justice and the Securities and Exchange Commission enforce the Foreign Corrupt Practices Act (FCPA), the main statute outlawing the bribery of foreign officials. Our attorneys can help your company address risks associated with doing business at home and abroad by helping you design and implement compliance policies and corresponding training to prevent violations of the various anti-corruption laws, such as the FCPA and the U.K. Bribery Act. By implementing an effective compliance plan, companies not only let employees and third parties know what is expected, but they also mitigate penalties in the event of an unexpected failure in compliance.
Should your company find itself subject to a potential violation, our attorneys have years of experience assisting in corruption investigations at home and abroad. We can perform an internal investigation to identify the scope of a potential violation, assist with the decision as to whether to self-report, and help deal with law enforcement investigations or prosecutions. We also have experience advising companies on anti-corruption risks associated with mergers and acquisitions and have helped on numerous M&A due diligence projects as well as third-party due diligence.
Export Controls & Anti-Boycott Compliance
The United States maintains a complicated network of laws and regulations governing the export of items and information from the United States and its citizens to foreign countries or non-U.S. citizens. The Export Administration Regulations (EAR) govern the export of commercial items and technology, including those commercial items with potential military applications (“dual-use” items). The International Traffic in Arms Regulations (ITAR) govern the export of items, technology, and services that are specifically designed for defense applications. Even the transfer of information inside the United States regarding a controlled item can require a license, depending on what the item is and who is receiving it. All companies should be aware of the export status of items they produce and the related technology, whether they ship those goods outside the United States or not. Our attorneys have vast experience guiding companies through these export laws, creating and implementing compliance policies and corresponding training, drafting voluntary disclosures, conducting internal investigations, and assisting with responses to law enforcement.
Additionally, the EAR prohibits U.S. companies from complying with unsanctioned boycotts, which includes prohibiting companies from even providing information requested by others regarding the company’s dealings with boycotted countries like Israel. Any requests for such information trigger a responsibility to report the request to the U.S. government. Our attorneys advise companies on their compliance requirements under these little known – but still enforced – regulations.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) maintains the approved U.S. sanctions and embargo programs against nations, entities, and individuals whom the U.S. considers detrimental to national security and/or foreign policy objectives. Through a variety of laws and regulations, OFAC is given the authority to maintain lists of such sanctioned parties and to investigate and seek administrative penalties or, in conjunction with the Department of Justice, to prosecute U.S. persons who do business with sanctioned parties in violation of the U.S. sanctions and embargoes. OFAC’s ability to investigate and seek penalties is not limited to activities taking place inside the United States. As a result, U.S. companies and individuals must remain vigilant in screening the international parties with which they do business. Parker Poe assists its clients with implementing proactive sanctions compliance, screening transactions, and acquisition due diligence. When companies are concerned they may have violated U.S. sanctions laws, Parker Poe stands ready to assist with internal investigations, drafting voluntary disclosures, and negotiating with the U.S. government to obtain an acceptable outcome.