International Trade Update with Dan Minutillo

The most obvious and far-reaching change to US policy regarding international trade law is the recent imposition of US sanctions on Russia, many Russian-controlled banks, and Russian citizens for Russia’s aggression against Ukraine. These changes happened by US Presidential “Executive Orders” followed by many related exceptions to these Orders as embodied in US “General Licenses.” An Executive Order thrusts obligations on US companies and US citizens anywhere in the world. General Licenses provide legal outlets to avoid these obligations.

If a US company only focuses on the prohibitions and sanctions related to a US Executive Order and not on the related General Licenses applicable to that Order, an opportunity to legally avoid the restrictions in the Order will be missed.

Global news media extensively covered the potent effect and broad applicability of these US Executive Orders, which include blocking the use of certain Russian banks, blocking investment in Russia, blocking certain exports to Russia, limiting US companies and US citizens from helping Russian companies with corporate formation, management, and accounting services. Generally see EO 14071, 14068, and 14066, among others. But, the news media rarely covered or analyzed related US General License exceptions.

A General License is created by the US Government if the sanction imposed by an Executive Order has an unforeseen contrary consequence or an unreasonable adverse effect on a US company or citizen. To illustrate, if an Order immediately prevented all US companies from doing business in Russia, a General License might follow allowing US enterprises in Russia to continue doing business but only to wind down, pay their employees, and even use a sanctioned Russian bank to do so. A General License relieves a US company or US citizen of a specific burden imposed by the Order and related sanction. A US company or US citizen can use a General License to its benefit without applying to the US Government for the License.

One of the most wide-reaching Orders imposing sanctions on Russia is US Executive Order 14071, which banned specific corporate formation, management, and accounting activities by US companies and US citizens aiding Russian companies. An activity as simple as being an agent for service of process as a potential litigant or as complicated as accounting services required to effect a reverse triangular merger may be prohibited under 14071. But, various General Licenses have eroded the effect and applicability of 14071, allowing certain services by US companies and citizens as defined in the License, otherwise prohibited by the Order.

If a US Executive Order appears applicable to a company, understand the Order but apply the terms of the General License to relieve the burden of compliance.

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Meet Dan, Centre’s Newest Partner!

Dan Minutillo, a Partner with over 30 years of experience, leads Centre’s international trade practice. He has handled legal matters regarding the worldwide export of commercial and non-commercial products from the United States to most continents in the world, the classification of products and technology (ECCN) prior to export, CBP customs issues, the export of products that use or contain encryption, ITAR (International Traffic in Arms Regulations) matters, and related CFIUS, Anti-Dumping, FOCI, OFAC, HTS, sanctions and VSD’s (voluntary disclosures) to government agencies.  Minutillo is handling all the issues that have arisen with the Russian sanctions.  Minutillo represents some of the largest and most influential corporations in Silicon Valley.