International Trade Law: 2020 Year in Review & Outlook for

International Trade Law: 2020 Year in Review & Outlook for 2021


International Trade Law: 2020 Year in Review2020 was an extraordinary year in the world of international trade regulation and policy. With unprecedented

changes wrought by the global COVID-19 pandemic causing manufacturing operations worldwide to halt

amid global lockdowns, international trade and the sustainability of global supply chains continues to be the

primary issue for re-energizing the U.S. and global economy.

As clients and companies begin to strategize on what 2021 and the new Biden Administration will bring,

Husch Blackwell’s International Trade and Supply Chain team is taking stock of the past year’s events while

looking forward with guidance on what to expect in the coming year in order to ensure that your business

is maximizing potential cost savings and minimizing potential risks as enforcement actions increase.

Cortney Morgan, Partner

International Trade and Supply Chain Practice Group Leader

Cortney MorganPartner

Washington, DC

Stephen BrophySenior Counsel

Washington, DC

Julia BanegasAssociate

Washington, DC

Grant D. LeachPartner

Omaha, NE

Robert StangPartner

Washington, DC

Carlos RodriguezPartner

Washington, DC

Jeffrey S. NeeleyPartner

Washington, DC

Beau JacksonPartner

Kansas City, MO

Nithya NagarajanPartner

Washington, DC

A Note on Timing and Our International Trade Insights BlogThe information in this White Paper is current as of December 21, 2020. Several key policy changes occurred in real time as we were preparing this White Paper and additional changes are likely forthcoming in the com-ing weeks and months. To stay updated with these future international trade developments, please check in with us at https://www.internationaltradeinsights.com/.

© 2020 Husch Blackwell LLP. All rights reserved huschblackwell.com


Tariffs, Trade Remedies, and Trade Policy

2021 is likely to be a year of transition for U.S. trade policy, rather than a year of abrupt shifts. The actions

taken by the United States over the course of the last four years cannot and will not be reversed overnight.

President-elect Biden recently announced that he will nominate Katherine Tai as the United States Trade

Representative. Tai is currently the chief trade lawyer for the House Ways and Means Committee. During

her time on the committee, her work was instrumental to passage of the USMCA. Prior to Congress, she

worked for the Office of USTR as associate general counsel and chief counsel for China trade enforcement

prosecuting cases at the WTO on Chinese trade practices, including subsidies and export restraints. Ms. Tai

is fluent in Mandarin and many trade experts view her pick as an indication that the Biden Administration’s

trade policy will remain focused on China-enforcement issues. If confirmed, Tai would be the first woman

of color to serve as the USTR.

As discussed further below, some of the most significant changes have been in the use of specialized

provisions of the law, such as Section 301 and Section 232, to impose tariffs on a wide variety of goods

from many countries. Trade policy in the midst of a global pandemic involves the balancing of complex

foreign policy, as well as competing domestic interests that the new Administration must confront.

Tariffs For the past several years, the Trump Administration has made particularly aggressive use of legal

provisions under Section 301 of the Tariff Act of 1962 and Section 232 of the Tariff Act of 1930 to justify

the imposition of tariffs. Section 301 tariffs have been used against numerous products from China to

offset the alleged unfairness of the Chinese government actions regarding intellectual property issues

and requirements for investors in China. Section 232 has been used to increase tariffs on major steel

and aluminum products from many countries, including many allies of the United States, centered on the

premise that these imports pose a national security threat to the United States. The use of both types of

tariffs are currently being challenged in the U.S. Court of International Trade (CIT).

Section 301: China and Other Tariffs

2020 continued to be another “year of the tariff” with not only existing Section 301 tariffs being

increasingly and stringently enforced against imports from China, but there were several other Section

301 investigations conducted in 2020, including the continuation of the Airbus dispute with the European

Union and investigations on digital services taxes from multiple countries, timber products from Vietnam

and Vietnam’s currency policies.

With the November 2020 U.S. Presidential election and the forthcoming change in administration, the

wholesale removal of the existing Section 301 tariffs on China may prove to be problematic; however,

there is the possibility of changes which may ease some of the tariffs. There is widespread support

in the business community for maintaining an aggressive stance against China on intellectual property,

technology and investment issues, so it seems unlikely that all Section 301 tariffs will be removed quickly.

On the other hand, there have been numerous complaints from a wide spectrum of U.S. businesses that



the tariffs on covered products from China are injuring certain U.S businesses and that the exclusion

process has been applied in an arbitrary manner. Both Democratic and Republican members of Congress

have been hearing these complaints. Thus, there seems to be a real possibility of reopening the product

exclusion process in a manner that is more transparent, which could result in additional exclusions from

the tariffs being granted.

In addition, there are pending cases before the CIT challenging the application of Section 301 Lists 3 and

4A tariffs, which comprise a large percentage of the tariffs being imposed on China under Section 301.

Because these legal provisions allow for broader discretion to the new Administration than traditional

trade remedy actions such as antidumping and countervailing cases, we anticipate that there could be

major revisions of these Section 301 remedies by the Biden team. The ongoing litigation may provide a

pathway to scale back or eliminate some or all of these tariffs, but even without litigation, there could be

changes to current policies and existing tariffs. If those appeals are successful, it is possible that the Biden

Administration will refrain from vigorously appealing the case to the next level (the U.S. Court of Appeals

for the Federal Circuit) but will instead seek a negotiated settlement; however, those cases are in the early

stages, and there is no likelihood of a quick resolution at this date.

Section 232: Steel and Derivative Tariffs

Tariffs under Section 232 of the Tariff Act of 1930 against imports of steel and aluminum remained in place

in 2020. These tariffs were originally instituted in March 2018 and have been subject to several appeals.

Section 232 tariffs may be easier than Section 301 tariffs for the incoming President to change in order to

deescalate the tensions between the United States and the rest of the world. The Section 232 tariffs apply

to all countries of origin, except Argentina, Australia, Canada and Mexico (both aluminum and steel), as

well as Brazil and South Korea (excluded from steel duties only).

One such challenge to Section 232 tariffs focused on a sudden increase of Section 232 tariffs on steel from

Turkey. The Court in Transpacific Steel, LLC, v. United States found that the 2018 proclamation which doubled

the tariffs on steel from Turkey violated “the animating statute and constitutional guarantees.” The judges

found that the proclamation increasing the tariffs were issued outside the required time limits for making

changes and Trump “acted without a proper report and recommendation by the [Commerce] Secretary on the

national security threat posed by imports of steel products from Turkey.” This ruling will likely be a touchpoint

for the new Administration given the pending challenges to other Section 232 steel tariffs.

If the Biden Administration pursues a multilateral approach and seeks cooperation with the traditional allies

of the United States, as expected, then an easing of such tariffs may be in the works. Of course, we cannot

underestimate the opposition from some U.S. steel and aluminum interests, but there nevertheless may be

some easing on the horizon. In addition, if the United States government is defeated in the pending CIT

cases challenging the modifications to the list of covered products, this defeat could provide a mechanism

for importers to negotiate an easing of at least some of the steel or aluminum tariffs.



Antidumping/Countervailing Duties

We anticipate there will continue to be an uptick in enforcement

actions concerning goods possibly subject to AD/CVD. In addition to

new AD/CVD petitions, this includes actions against alleged evasion

of existing AD/CVD orders by U.S. Customs and Border Protection

(CBP) under the Enforce and Protect Act (EAPA) and actions against

alleged circumvention of AD/CVD orders by the U.S. Department of

Commerce. Coupled with new actions, CBP continues to issue an

increasing number of Requests for Information (Customs Form 28)

and Notices of Action (Customs Form 29) to importers alleging that

entries should have been declared as Type 3 entries subject to AD/

CVD duties. We do not anticipate changes to these trends under a

Biden Administration as most actions are initiated based on allegations

filed by private parties. In addition, the Biden Administration may be

inclined to rely on more traditional trade remedies such as AD/CVD

to protect U.S. industry, rather than pursuing the more controversial

remedies relied on by the Trump Administration, such as Section 301.

Since the beginning of 2020, at least 119 new AD/CVD investigations

have been initiated covering a variety of products from 40 different

countries. In several cases, allegations were filed against additional

countries where there was already an AD/CVD order in place on

imports of the product from China. For example, with AD/CVD orders

already in place on Common Alloy Aluminum Sheet from China, U.S.

producers filed allegations against imports of the product from 18

additional countries (Bahrain, Brazil, Croatia, Egypt, Germany, Greece,

India, Indonesia, Italy, Korea, Oman, Romania, Serbia, Slovenia, South

Africa, Spain, Taiwan and Turkey).

In 2021, we expect to see significantly more AD/CVD cases filed,

including more petitions against China and products such as steel

and aluminum especially if Section 232 and Section 301 tariffs are

removed. In addition, we anticipate more petitions against products

from various countries to which importers switched sourcing as a

result of the imposition of the Section 301 or as a result of existing

AD/CVD orders on China, countries such as India and Vietnam, as well

as countries in Southeast Asia and Eastern Europe.

ANTIDUMPING/ COUNTERVAILING DUTIESThe Basics

Dumping is defined as selling at

prices in the United States at less

than the price charged in the home

market (i.e., the domestic market

of the producer). These “dumped”

imports cause—or threaten to

cause—material injury to the U.S.

domestic industry filing the com-

plaint. A subsidy is a financial con-

tribution by a foreign government

authority which confers a bene-

fit to a manufacturing entity in a

manner that enables that entity

to either produce more goods or

export more goods to gain foreign

market share.



We also expect an increased number of allegations that products should be subject to countervailing

duties due to currency manipulation by the government of the exporting country. On November 4, 2020,

the U.S. Department of Commerce announced that it was preliminarily imposing countervailing duties

on imports of passenger vehicles and light truck tires from Vietnam and on twist ties from China due to

alleged currency manipulation by those governments. These were the first cases in which Commerce

treated currency undervaluation as a countervailable subsidy. More allegations of currency manipulation

are likely to follow given that Commerce is now actively analyzing this issue in the context of traditional

trade remedy actions. Furthermore, the concerns associated with currency manipulation have been a

concern for both Republican and Democratic members of Congress for several years including the latter

part of the Obama Administration.

More importantly, in a shift from over 20 years of existing practice, Commerce has also proposed revisions to

its regulations regarding new shipper reviews, scope inquiries and anticircumvention inquiries. According to

Commerce, these proposed regulations are intended to “strengthen the administration and enforcement

of AD/CVD laws” and “create new enforcement tools for Commerce to address circumvention and evasion

of trade remedies.” If adopted as a final rule, these changes will likely make it more difficult for new

exporters to obtain individual AD/CVD rates, make it more difficult for importers to obtain timely scope

rulings and subject additional imports to the retroactive application of AD/CVD duties as a result of scope

and anticircumvention proceedings.

Examples of new cases include:

Mattresses

Common Alloy

Aluminum Sheet

Lawn Mowers

Vertical Shaft Engines

Phosphate Fertilizers

Wind Towers



Antidumping and Countervailing Duty Orders in PlaceAS OF NOVEMBER 23, 2020

TOTAL ACTIVE ORDERS

Antidumping

Countervailing Duty

ORDERS BY PRODUCT GROUP

Iron and steel: Mill products

Agricultural, forest and processed food products

Iron and steel: Other products and castings

Metals and minerals

Chemicals and pharmaceuticals

Plastics, rubber, stone and glass products

Textiles and apparel

Machinery and electronic/scientific equipment

Other

Miscellaneous manufactured products

Iron and steel: Pipe products

73.5% 26.5%

22.1%

14.3%

14.3%

13.5%

8.8%

6%

4.9%

4.8%

4.2%4% 3.1%



China

India

Korea

Taiwan

Turkey

Japan

Vietnam

Indonesia

Mexico

Brazil

Italy

Thailand

South Africa

Germany

Ukraine

20

Total

40 60 80 100 120 140 160 180 200

TOP 15 COUNTRIES WITH ACTIVE ORDERS

134

26

26

12

11

10

10

10

9

6

6

5

13

19

28

71

21

7

1

10

4

5

4

3

1

1

1

205

35

47

27

22

19

15

15

14

13

10

7

6

5

14

Antidumping

Countervailing Duty



Key Decisions by the Court of International Trade/Court of Appeals for the Federal Circuit

2020 was an active year for litigation associated with the use of the AD/CVD trade laws. Key decisions

that go beyond case-specific concerns, and that have an overarching impact on the conduct of these

proceedings, include:

Husteel Co. Ltd. v. United States, where the CIT addressed the use of the particular market situation (PMS)

provision of the statute and found that this provision cannot be used to adjust a respondent’s reported

costs of production. This was an important case because of the increased use of the PMS provision by

Commerce in its antidumping analyses to find the existence of dumping and will continue to have an impact

on ongoing investigations and reviews in 2021.

United Steel and Fasteners, Inc. v. United States, where the Court of Appeals for the Federal Circuit

stated that Commerce cannot suspend liquidation retroactively prior to the initiation of a scope inquiry

because Commerce’s regulations prevent it from doing so. This case may become moot in 2021 given

that Commerce is now specifically revising its regulations to address the issue of retroactive suspension

of duties in scope rulings.

Star Pipe Products v. United States, then gave wide discretion to Commerce to determine how subject

goods packaged along with non-subject merchandise should be treated. In a decision that drew a vocal

dissent, the Federal Circuit said that if the existing scope of an AD/CVD order does not specifically exclude

mixed media packaging from the scope then the product is subject to AD/CVD. As the dissent itself stated,

“this precedential opinion causes further confusion on an area of trade law that we . . . have bemoaned

to lack clarity and predictability.” What this means is that 2021 will likely be a year in which there will be

increased scrutiny both at the border and at the agencies on products entering the United States which

are subject or could be subject to AD/CVD.

Royal Brush Manufacturing Inc. v. United States addressed the need for the protection of due process in

EAPA investigations and found that CBP failed to properly disclose information to the accused parties in

accordance with the current regulations. It remains to be seen how CBP will address these procedural

steps in ongoing and future EAPA investigations which may enable importers to better defend themselves

in these actions once they have access to the information examined by CBP.



2020 IN REVIEW

Customs and Trade Agreements

Customs As 2020 winds down, we have seen increased enforcement, not just in the standard areas, but in reviews

and enforcement activities involving companies claiming the benefits of various Section 301 and 232 tariff

exclusions, anticircumvention proceedings in the AD/CVD arenas, and certain audit-type activities by CBP;

for example, Risk Analysis and Survey Assessments (RASAs) allowing CBP to evaluate companies with

respect to a specific area or issue of special interest. The Section 301 and 232 exclusion processes have

also required increased compliance efforts by importers in traditional areas of concern (classification,

valuation, country of origin) in order to avoid heightened CBP scrutiny and enforcement actions.

Furthermore, forced labor has played an increasingly important role within the past several years as evidenced

by the current Administration’s Withhold Release Orders involving forced labor concerns and particular

regions and companies in China. Labor will continue to play a prominent role in the Biden Administration’s

trade policy. As a result, companies should take care to audit their supply chains for compliance, in particular

forced labor standards to the International Labor Organization standards and requirements.

Multilateralism and Trade Agreements

Trade agreements under the early Biden Administration will be shaped by a shift to a greater multilateral

approach to international trade and the timeline of Trade Promotion Authority (TPA). Initial indicators are

that trade concerns in the new Administration will focus on reestablishing a U.S. presence internationally,

whether in the WTO or through other multilateral bodies or treaties; however, the Biden Administration

also finds itself involved in bilateral negotiations with several economically and strategically important

trade partners and will likely continue those negotiations at some level.

TPA expires on July 1, 2021, and it may not get reauthorized in time to remain continuous. While trade

agreements can still be pursued without TPA, they are more difficult to get through Congress and will

face more hurdles during ratification. Although the Biden Administration will likely revert to negotiating

multilateral trade agreements, as opposed to pursuing the Trump strategy of bilateral agreements, some

deals may be delayed without TPA reauthorization and with the new Administration’s domestic COVID-19

policy focus.

.



Potential Trade Agreements and Agreements Under Negotiation:

The initial question is whether bilateral agreements will take a backseat to a multilateral trade policy

highlighted by reinvigorating several agreements and forums sidelined under the prior Administration.

Examples of agreements which may be renewed or renegotiated in 2021 include:

• Trans-Pacific Partnership (TPP). While President Trump withdrew from the TPP in January 2017,

President-Elect Biden (prior to the election) is on record stating that he would be in favor of a

renegotiated TPP with the 11 countries that went ahead without the United States. Nevertheless,

reengaging with the TPP countries would be difficult. There is no indication that the 11 countries

that went forward with the TPP would be willing to reopen negotiations on issues signed off on and

approved of under the Obama Administration.

• Transatlantic Trade and Investment Partnership (TTIP). TTIP negotiations were halted between

2018 and 2019. While the negotiations stalled for political and substantive reasons, a new Biden

Administration could take up the mantle, especially as the Biden Administration aims to re-engage

allies, including the EU.

• UK. Bilateral U.S. — UK free trade negotiations are well underway. It is possible that the Biden

Administration would want to put its stamp on the agreement, which would aid a prominent ally early

in the Administration. Significantly, the president-elect has stated that the UK must honor the Good

Friday Agreement reached in 1988 to bring an end to the conflict in Northern Ireland or there will be

no separate trade deal with the United States.

• Japan. In October 2019, the United States and Japan reached an agreement on market access for

certain agriculture and industrial goods with plans to pursue subsequent negotiations for an expanded

free trade agreement (FTA). The question, though, is whether the U.S. will pursue the previous

Administration’s bilateral approach to Japan or approach Japan on a multilateral basis; for example,

through a renegotiated TPP. Additionally, the Regional Comprehensive Economic Partnership (RCEP)

FTA was recently signed among 15 Asia-Pacific nations including Japan, China and South Korea. This

agreement contains a number of provisions — including those affecting the environment, labor and

intellectual property — that would likely garner criticism in the U.S. Nevertheless, the RCEP demonstrates

that the U.S. needs to engage with Japan and other key trading partners (individually or multilaterally)

or forego leadership, including the ability to set key rules in the international trade arena.

• Kenya. The United States and Kenya began talks on a FTA in July 2020. The U.S. already extends

a number of significant trade benefits to Kenya through the African Growth and Opportunity Act

(AGOA). However, AGOA is set to expire in 2025. As such, a U.S. FTA could offer longer and more

permanent benefits than AGOA. Additionally, the U.S. sees Kenya as a strategic partner in East Africa

and a U.S. — Kenya FTA could help cement that relationship while offering a counterbalance to China’s

political and economic inroads in the region.



2020 IN REVIEW

Section 337 Litigation

2020 was an active year for Section 337 litigation, despite a slight

decline in new complaints filed and fewer high-profile, precedential

decisions issued by the International Trade Commission (ITC or

Commission), both of which were likely results of the pandemic.

Perhaps most noteworthy in 2020 were certain Federal Circuit opinions

that, in upholding Commission decisions, reaffirmed the breadth and

commercial significance of Section 337.

Notable Federal Circuit Decisions this year include:

• In Comcast v. ITC, the Federal Circuit examined the Commission’s

conclusion that, although Comcast was not the importer of

record, it was “sufficiently involved with the design, manufacture,

and importation of the accused product” via its relationship with

suppliers and, accordingly, could be held in violation of Section

337 for selling those products domestically. The Federal Circuit

affirmed, thus solidifying that Section 337 applies to articles that

only infringe well after importation and even if the seller was not

directly involved in the importation. Importantly, the U.S. Supreme

Court later denied Comcast’s petition for certiorari on those issues.

• In Mayborn Group v. ITC, Mayborn appealed the Commission’s

denial of its petition for rescission of the general exclusion order

(GEO). The complainant had notified Mayborn that its products

could be covered by the investigation, but Mayborn took no steps

to intervene until after the GEO had issued. The Federal Circuit

upheld the Commission’s denial of the petition for rescission of

the GEO, holding that alleged invalidity of the asserted patent (the

crux of Mayborn’s argument for rescission) can only be adjudicated

when raised by a respondent in the course of an investigation or

enforcement proceeding. The practical lesson is that companies

not named in an ITC case, but whose products could be swept up

in a GEO, should consider intervening to preserve their rights to

present all available defenses.

• In Swagway, LLC v. ITC, the Federal Circuit originally held that

ITC decisions regarding infringement and validity of a trademark

are not entitled to preclusive effect in a subsequent district court

action. Soon thereafter, however, the Federal Circuit withdrew that

portion of its decision, thus leaving that question for another day.

§ 337 LITIGATIONTHE BASICS

Section 337 (19 U.S.C. § 337) is ad-

ministered by the U.S. Internation-

al Trade Commission (ITC). This

trade statute makes it unlawful to

import or sell in the United States

any article that: (a) infringes a val-

id and enforceable U.S. intellectual

property right, or (b) is otherwise

connected to unfair methods of

competition. A successful com-

plainant is typically awarded an ex-

clusion order blocking the impor-

tation of the offending goods and

a cease-and-desist order prohibit-

ing the respondents from distrib-

uting or selling such articles in U.S.

inventory. These remedies, along

with numerous procedural advan-

tages of litigating at the ITC, have

made Section 337 a powerful tool

for companies seeking to chal-

lenge foreign competition.



Stay of Remedies In Certain Unmanned Aerial Vehicles and Components Thereof, Inv. No. 337-TA-1133, the ITC found a

violation and issued an exclusion order and cease-and-desist orders. However, the ITC immediately

suspended those orders in light of a decision a few months earlier by the U.S. Patent Trial and Appeal

Board (PTAB) that found the relevant patent claims invalid. While it is extremely unusual for the ITC

to suspend its remedies in this manner, the facts were unique in that PTAB’s decision was already on

appeal to the Federal Circuit. As a practical matter, future ITC respondents may seek to leverage this new

“precedent” by seeking to launch a PTAB proceeding as soon as possible after being accused of patent

infringement in a Section 337 complaint.

Continued Diversification of CaseloadJust a few years ago, it seemed as if almost all Section 337 cases were patent-focused and involved

consumer electronic devices. This year, however, the trend of diversification continued, with complainants

raising a variety of non-patent issues (e.g., trade secrets, Lanham Act claims) and targeting products such

as massage devices, chocolate milk powder, wood-pellet grills, vinyl tile, drones, orthodontic scanners and

pocket lighters. While the 2020 caseload is slightly down, it’s clear that more types of companies—not

just patent-heavy technology companies—are discovering the relevance of Section 337.

Domestic IndustryIn Certain Carburetors and Products Containing Such Carburetors, Inv.No. 337-TA-1123, the Commission

reiterated that there is no minimum monetary threshold that must be expended to satisfy the domestic-

industry requirement. While once again emphasizing the importance of contextual factors, the Commission

vacated the portion of the administrative law judge’s decision which had seemed to impose a requirement

that a complainant’s proffered investments must represent a certain percentage of its sales in order to be

deemed “significant” under the statute.

ImportationGetting clear, verifiable data on imports that compete with a client’s products has long been a challenge

for ITC practitioners, as such information helps assess the viability and usefulness of a potential Section

337 action. This challenge will not go away, in part due to the Third Circuit’s decision in Panjiva, Inc. v.

CBP. In that case, Panjiva and Import Genius had argued that manifests from aircraft entering the U.S.

must be made available by CBP for public disclosure. The court disagreed, which means it will continue

to be difficult to track imports arriving by air rather than maritime vessel.



2020 IN REVIEW

Export Controls & Trade SanctionsThe U.S. imposes a complex system of laws, regulations and executive orders (EO) which can restrict and

sometimes prohibit both U.S. and non-U.S. persons from engaging in transactions with certain embargoed

countries and denied persons. These export controls and trade sanctions are primarily administered

through the Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR)

and trade sanctions administered by the Office of Foreign Assets Control (OFAC).

During 2020, the Trump Administration continued to aggressively use export controls under the EAR and

trade sanctions administered by OFAC to further its foreign policy objectives. Key developments during

2020 included (but were not limited to) the following.

OFAC ENFORCEMENT ACTIONS BY VOLUME AND VALUE

20

25

30

15

10

5

0

2013 2014 2015 2016 2017 2018 2019

1 ,500

1,250

1,000

750

500

250

AG

GR

EG

ATE

NU

MB

ER

OF

PE

NA

LTIE

S A

ND

SE

TTLE

ME

NTS

AN

NU

AL P

EN

ALTIE

S/SETTLE

ME

NT

(IN

MILLIO

NS O

F DO

LLAR

S)

*December 9, 2020

Source: U.S. Department of Treasury

0

IranIn January 2020, President Trump issued (EO) 13902 which imposed potential secondary sanctions on

non-U.S. persons who supply support to the construction, mining, manufacturing and textile sectors of

the Iranian economy. Throughout all of 2020, the Trump Administration was especially aggressive in

using OFAC’s Iran sanctions programs to add various persons and entities to OFAC’s Specially Designated

Nationals and Blocked Persons List (SDN List). These SDN List additions included non-U.S. persons

engaged in sanctionable transactions with Iran and Iranian SDN List designees as well as Iranian persons

and entities connected to Iran’s Islamic Revolutionary Guard Corps. In the last quarter of 2020, the Trump

Administration extended EO 13902’s sanctions to cover the financial sector of the Iranian economy and

upgraded the SDN List designations for 16 different Iranian banks in order to impose enhanced sanctions.

2020



Despite these expanded sanctions, the Trump Administration continued to offer existing authorizations

to allow various forms of humanitarian support transactions with Iran. In February 2020, the Trump

Administration established the Swiss Humanitarian Trade Arrangement (SHTA) which authorizes persons

to provide agricultural commodities, food, medicine or medical devices to Iran in compliance with SHTA’s

terms. Although the SHTA is not the only way for interested persons to permissibly provide humanitarian

support to Iran, it does provide guaranteed safe harbor protection for anyone who complies with its terms.

RussiaThe National Defense Authorization Act for 2020 (2020 NDAA) was enacted December 20, 2019, and

sought to prohibit completion of Russia’s Nord Stream 2 and TurkStream pipeline projects by imposing

sanctions on any vessels engaged in pipe-laying construction activities for either project. Although

separate provisions in Section 232 of the Countering America’s Adversaries Through Sanctions Act

(CAATSA) authorized the Trump Administration to impose discretionary sanctions on persons making

qualifying investments in Russian energy export pipelines, the Trump Administration initially issued

guidance through the State Department stating that it would not seek to impose these sanctions on

projects that were covered under contracts signed on or after August 2, 2017. This exempted investments

in the Nord Stream 2 and TurkStream pipelines from CAATSA Section 232 sanctions because both

pipelines were covered under contracts signed prior to that date. However, on July 15, 2020, the Trump

Administration reversed this policy and indicated that it would seek to impose discretionary CAATSA

Section 232 sanctions on persons making investments in the Nord Stream 2 and TurkStream pipelines in

excess of CAATSA Section 232’s permitted thresholds.

During 2020, the Trump Administration also added various Russian persons and businesses to OFAC’s SDN List.

The Trump Administration’s Russia-related SDN designations included various government officials involved

in malicious Russian cyber activities and Russia’s continuing occupation of the Crimea region of Ukraine.

In December 2020, the Trump Administration imposed enhanced export licensing requirements and limited

financial sanctions on Turkey’s Presidency of Defense Industries (SSB) after determining that SSB violated

CAATSA Section 231 by purchasing a S-400 surface-to-air missile system from Russia’s Rosoboronexport

(a vendor who the State Department has recognized as being a part of the defense sector of the

Russian government).

VenezuelaThroughout 2020, the Trump Administration continued to impose blocking sanctions to prohibit U.S.

persons from transacting with the Government of Venezuela. The Trump Administration was very active

in adding many additional Venezuelan persons, entities and aircraft to OFAC’s SDN List and also imposing

SDN List sanctions on persons from Russia, China, Greece and the Marshall Islands for various support

they provided to the Government of Venezuela and sanctioned Venezuelans.

Nynas AB, a Swedish specialty oil manufacturer, began 2020 listed on the SDN List because it was over

50 percent owned by Petroleos de Venezuela, SA (PdVSA) which, in turn, is owned by the Government

of Venezuela. However, OFAC delisted Nynas AB from the SDN List in May of 2020 when Nynas AB

completed a reorganization transaction which severed PdVSA’s control of Nynas AB and reduced PdVSA’s

ownership interest in Nynas AB below 50 percent.



SudanOn December 14, 2020 the U.S. State Department officially rescinded Sudan’s designation as a “State

Sponsor of Terrorism”. This rescission was predated almost four years by OFAC’s decision to lift its

sanctions embargo against Sudan. As a result, U.S. persons have generally been able to transact with

Sudan for the entirety of President Trump’s presidency despite Sudan’s “State Sponsor of Terrorism”

designation. As a result of this rescission, the Department of Commerce’s Bureau of Industry and Security

(BIS) will now need to adopt amendments to the EAR to remove licensing requirements for certain goods,

software and technology that were subject to anti-terrorism export controls under the EAR. BIS has not

yet published those amendments as of this White Paper’s publication date.

CubaThe Trump Administration adopted several amendments to OFAC’s Cuban Assets Control Regulations

(CACR) during 2020. These CACR amendments further restricted U.S. persons’ ability to travel to Cuba,

following the Trump Administration’s 2019 decision to completely eliminate the Cuban “people-to-

people” travel program. Effective September 24, 2020, the Trump Administration terminated preexisting

CACR general authorizations which had previously authorized U.S. persons to travel to Cuba for public

performances, clinics, workshops, other athletic or non-athletic competitions, exhibitions, professional

meetings and conferences. U.S. persons seeking to travel to Cuba for those activities may now apply to

OFAC for a specific license to do so, however OFAC will evaluate those applications on a case-by-case basis.

If U.S. persons do travel to Cuba under any of the remaining authorized travel programs, the Trump

Administration’s 2020 CACR amendments will prohibit them from staying at any property listed on the

U.S. State Department’s Cuba Prohibited Accommodations List, which the State Department created

to coincide with the 2020 CACR amendments and which lists properties determined to be owned by

the Cuban government or persons affiliated with the Cuban government. The Trump Administration’s

2020 CACR amendments also now prohibit authorized travelers from bringing Cuban-origin alcohol and

tobacco products into the U.S. with them upon their return from Cuba.

Hong KongIn early 2020, the Trump Administration took steps targeted at the People’s Republic of China’s (China)

continued efforts to undermine the autonomy of the Special Administrative Region of Hong Kong. On

July 14, 2020, President Trump issued EO 13936 eliminating Hong Kong’s preferential status under U.S.

export controls and authorizing sanctions against certain individuals and entities involved in implementing

the Hong Kong National Security Law or undermining the democratic process in Hong Kong. In addition,

EO 13936 authorized secondary sanctions against those non-US persons who materially assist, sponsor

or provide financial or other support to designated parties. On August 7, 2020, OFAC designated 11 Hong

Kong senior government officials, including Hong Kong Chief Executive Carrie Lam and Hong Kong Police

Commissioner Chris Tang. In September 2020, OFAC issued guidance clarifying that the designation of

individual government officials did not subject the official’s government ministry to sanctions, although

direct engagement with the designated officials is restricted.



As a result of EO 13936, BIS and the State Department’s Directorate of Defense Trade Controls (DDTC) amended

their respective regulations and policies to strengthen controls on exports of sensitive items to Hong Kong

and prevent diversion of such items to mainland China. DDTC implemented the restrictions through policy

notice issued on its website on July 14, 2020, stating that DDTC now considers Hong Kong to be part of China

and all sales, exports, reexports and retransfers of defense articles and services are prohibited to Hong Kong

without a license (with a presumption of denial). BIS suspended certain EAR preferences previously available

for exports, reexports or transfers (in-country) involving Hong Kong. BIS kept Hong Kong separately listed

on the Commerce Country Chart, but as directed by the EO, suspended Hong Kong’s eligibility for certain

licensing exceptions.

HuaweiIn August 2020, the Trump Administration directed BIS to add an additional 38 affiliates of Chinese

telecommunications giant Huawei Technologies Co. Ltd. (Huawei) to the EAR’s Entity List. As a result, a

total of 152 Huawei subsidiaries and affiliates are now named on the Entity List, which generally prohibits

U.S. persons and non-U.S. persons from exporting or reexporting U.S. origin goods and technology to those

sanctioned Huawei companies. When BIS first named Huawei to the Entity List, it also issued a Temporary

General License which permitted limited transactions to support Huawei networks, equipment and handsets

that were in existence prior to Huawei’s initial Entity List designation on May 16, 2019. BIS subsequently

made multiple extensions of that Temporary General License, but finally allowed the Huawei Temporary

General License to expire effective August 13, 2020.

During 2020, the Trump Administration also significantly expanded the EAR’s “Foreign-Produced Direct

Product Rule” to extend the EAR’s Huawei-related export control restrictions to equipment produced overseas

with the use of certain U.S. origin equipment, software or technology controlled under specific Export Control

Classification Numbers (ECCNs). As a result, when foreign items are produced from equipment, software or

technology classified under the specific ECCNs identified in the Huawei Foreign-Produced Direct Product

Rule, the EAR will now require BIS licensing in order to export, reexport or make an in-country transfer of

those items to any Huawei company named on the Entity List, regardless on the amount or type of U.S. origin

content otherwise incorporated into those items. BIS will generally evaluate those license applications with a

presumption of denial, unless the application involves telecom systems, equipment or devices below the 5G

level, in which case BIS will review the applications on a case-by-case basis.

Semiconductor Manufacturing International Corporation (SMIC)

On December 18, 2020, the Trump Administration added China’s Semiconductor Manufacturing International

Corporation (SMIC) to BIS’s Entity List due to what Commerce Secretary Wilbur Ross described as

“relationships of concern with the [Chinese] military industrial complex.” SMIC is China’s largest semiconductor

manufacturer and this designation will require BIS licensing in order to export or reexport U.S.-origin goods,

software or technology to SMIC. SMIC’s Entity List designation requires BIS to apply a presumption of denial

when reviewing SMIC license applications involving items uniquely required to produce semiconductors at

advanced technology nodes of 10 nanometers or below and to review all other license applications on a

case-by-case basis.



EAR Licensing Restrictions Applicable to Chinese, Russian and Venezuelan“Military End Users” and “Military End Uses”

Effective June 29, 2020, the Trump Administration amended the EAR in order to significantly expand the

EAR’s licensing requirements for exports, reexports and in-country transfers of various controlled items to

“military end users” and for “military end uses” in China, Russia and Venezuela. This expanded licensing

requirement only applies to a specific list of items controlled under certain ECCNs provided in Supplement

No. 2 to Part 744 of the EAR, however the amendments have broadened the defined term “military end

user” to also potentially include entities that would otherwise be considered to be civilian in nature such

as contracting firms, medical facilities or universities that perform work on behalf of Chinese, Russian and

Venezuelan military entities. For China, these rules previously only applied to transactions involving an

actual “military end use,” however the new amendments now capture any transaction involving a Chinese

“military end user” regardless of whether a “military end use” is also involved. These amendments also

changed BIS’s licensing review standard for these transactions to a “presumption of denial.”

The Trump Administration followed its amendments to the EAR’s “military end user” and “military end use”

rules by enacting additional amendments to impose a “presumption of denial standard” when BIS reviews

license applications for exports, reexports or in-country transfers of items to China, Russia or Venezuela when

those items are controlled under a ECCN subject to National Security controls and the transaction presents a

risk of diversion to a “military end user” or for a “military end use.” These amendments took effect on October

29, 2020, and they apply to all ECCN items subject to National Security controls, which is a significantly

broader list than the items covered by the above-discussed June 2020 “military end use” and “military end

user” amendments; however, to the extent that license applications involve exports, reexports or in-country

transfers of National Security-controlled items to China, Russia or Venezuela to purely civilian users for purely

civilian uses, BIS will continue to review those applications on a “presumption of approval” basis.



What to expect in 2021

While it is impossible to predict exactly what will happen with tariffs, trade policy, export controls and trade sanctions, we anticipate some combination of the following developments will take place in 2021.

Tariffs and Trade Policy

• The Biden transition team has been clear that it will take a multilateral approach to addressing trade

issues associated with China. We anticipate that any de-escalation and/or removal of Section 301 or

Section 232 tariffs will be implemented on a phase-specific basis.

• U.S. companies importing goods from China should be prepared for increased scrutiny and enforcement

by U.S. CBP. Specifically, companies should study and understand the test for “substantial transformation”

and ensure that their imported goods are marked and reported properly for country-of-origin purposes.

Trade Litigation

• We anticipate increased focus on traditional trade remedies such as antidumping/countervailing

measures to address financial impacts to U.S. domestic manufacturers in all sectors due to the current

economic climate coupled with increased use of the circumvention inquiries.

• 2021 should be another busy year for Section 337 litigation. With more companies prioritizing the

protection of their intellectual property—and with increasing awareness of how ITC remedies provide

enormous competitive leverage—filings may increase again. Relatedly, the trend of more non-patent

cases is expected to continue. While approximately 90 percent of Section 337 cases used to involve

assertion of a patent, there is increasing diversity in the caseload, with more complaints alleging

misappropriation of trade secrets, trademark infringement, or other “unfair acts” related to the

importation of products. In sum, the ITC will remain a crucial venue for high-stakes litigation at the

intersection of trade and intellectual property.

• We expect increased enforcement at U.S. borders including the use of RASA investigations, detentions,

requests for information and EAPA investigations.



Export Controls and Trade Sanctions

• President Trump will leave office with several export controls and trade sanctions initiatives in flux and

it is unclear whether the Biden Administration will continue those initiatives, modify those initiatives

or reverse course completely. We anticipate that some of President-Elect Biden’s export regulatory

policies will be similar to those enacted when he served as Vice President in the Obama Administration;

however, that might not be possible at the outset because international relations have undergone

significant change in the past four years. President Trump might also attempt to preserve his foreign

policy agenda by imposing additional export controls and trade sanctions during his last few weeks in

office. Although President Biden would generally enjoy authority to repeal any such initiatives, they

could still complicate the early stages of his presidency.

• On the campaign trail, President-Elect Biden indicated that he would support the United States rejoining

the Joint Comprehensive Plan of Action (JCPOA) if Iran would recommit to its terms; however, the

JCPOA imposed limits on Iran’s enriched uranium inventory levels and Iran chose to disregard those

limits when the United States exited the JCPOA. According to reports from the International Atomic

Energy Agency, Iran now possesses more than 12 times the amount of enriched uranium that was

previously permitted under the JCPOA. As a result, any negotiations for a United States reentry to the

JCPOA would likely be very difficult. It is also possible that Congress could seek to block the United

States from reentering the JCPOA, as it attempted to do when the United States originally joined in

2015. To further complicate matters, the Iranian government’s leading nuclear scientist was recently

killed in an apparent assassination on November 27, 2020, and it is too early to speculate how that

might affect relations between the United States, Iran and the rest of the JCPOA signatories.

• Russia will present a host of sanctions challenges to President Biden. We expect that the Biden

Administration will take early action to impose additional sanctions on Russia in response to its

cyberattacks against various U.S. government agencies. Additionally, Congress recently enacted

the pending National Defense Authorization Act for Fiscal Year 2021 (2021 NDAA) which seeks to

continue blocking Russia’s completion of the Nord Stream 2 and TurkStream pipelines by imposing

additional sanctions on insurance and technical certification services provided to the pipelines.

President-Elect Biden has indicated that he will seek to establish consensus among the United

States’ allies in order to support his Administration’s sanctions agenda, however many of those allies

would likely benefit from the pipelines and would support their completion. We should receive an

early indication of the Biden Administration’s Russian sanctions strategy based on how it responds

to the aforementioned cyberattacks and how it chooses to enforce the 2021 NDAA sanctions against

the Nord Stream 2 and TurkStream pipelines.

• We anticipate that President-Elect Biden will continue to impose sanctions against the Government of

Venezuela. The Trump Administration had previously indicated that it would lift sanctions against the

Government of Venezuela upon a peaceful transition of power from acting President Nicolas Maduro

to Juan Guaido, whom the Trump Administration recognizes as the properly elected President of



Venezuela. President-Elect Biden has stated that he also recognizes Juan Guaido as Venezuela’s

rightful President; however, as a practical matter, it seems unlikely that the Maduro regime will be

willing to relinquish power, which means that these sanctions will likely continue.

• The Trump Administration moved to severely restrict preexisting Cuba travel authorizations under

OFAC’s Cuban Assets Control Regulations (CACR) and generally adopted a negative view towards

U.S.-Cuba relations, but did not go so far as to entirely eliminate the CACR’s Cuba licensing programs.

Because those licensing programs remain in place, it would be possible for the Biden Administration

to use those existing authorizations to more actively issue licenses authorizing more United States

persons to transact with Cuba. This would allow the Biden Administration to establish friendlier U.S.-

Cuba relations without repealing any of its predecessor Administration’s policies.

• President-Elect Biden has not provided specific details on his plans for Huawei, but he is generally

expected to keep Huawei and its affiliate companies on the Entity List. The Biden Administration could

theoretically expand on the Trump Administration’s favorable Huawei licensing policy for equipment

rated below the 5G level and attempt to strike a compromise by continuing to generally sanction

Huawei while broadening available license exceptions and licensing opportunities for lower technology

items. Huawei also remains the subject of a pending indictment filed by the U.S. Department of Justice

in January of 2019 which charges Huawei with money laundering, conspiracy to defraud the United

States, and a violation of United States sanctions against Iran. The outcome of those proceedings will

also undoubtedly influence the Biden Administration’s policy decisions regarding Huawei.

• The Export Control Reform Act of 2018 (ECRA) authorized the Commerce Department to adopt

new regulations to restrict exports of certain “emerging and foundational technologies.” The Trump

Administration has created a handful of new ECCNs to impose export controls on new categories of

discrete technologies, but it has not otherwise established significant precedent for the incoming

Biden Administration to follow. As a result, the incoming Biden Administration will enjoy fairly wide

latitude in determining if or how to regulate exports of “emerging and foundational technologies” as

required under ECRA.

At Husch Blackwell, we have built our law firm around one idea: to guide our clients from where they are

to where they want to be. Our industry-centric approach gives us a deep understanding of what our

clients face every day. But more than that, it creates a shared vision that moves our clients forward.

Business is no longer usual. Neither are our solutions.

Documents

International Trade Law: 2020 Year in Review & Outlook for