Commerce Department to Add Two Dozen Chinese Companies with Ties to WMD and Military Activities to the Entity List

WASHINGTON (May 22, 2020) – The Department of Commerce’s Bureau of Industry and Security (BIS) announced it will add 24 governmental and commercial organizations to the Entity List for engaging in activities contrary to the national security or foreign policy interests of the United States. The entities, based in China, Hong Kong, and the Cayman Islands, represent a significant risk of supporting procurement of items for military end-use in China.

USDA and USTR Announce Continued Progress on Implementation of U.S.-China Phase One Agreement

WASHINGTON, DC – The U.S. Department of Agriculture (USDA) and the Office of the U.S. Trade Representative (USTR) today announced additional progress in the implementation of the agriculture-related provisions of the U.S.-China Phase One Economic and Trade Agreement (The Agreement), which entered into force on February 14, 2020. Recent actions described below build upon the actions announced by USDA and USTR on February 25, March 10, and March 24.  These are difficult times for both our countries.  It is important that we each continue to work to make our agreement a success.  Because of this continued progress due to the Agreement:

  • U.S. blueberries and California Hass avocados can now be exported to China.  This new market access will provide California avocado growers and blueberry growers from around the United States with new opportunities to market their products to Chinese consumers in the coming years.  In 2019, China imported a record volume of fresh fruits and vegetables exceeding $8.6 billion.   
  • U.S. barley for processing, along with the forage products Timothy hay, alfalfa hay pellets and cubes, and almond meal pellets and cubes can now be exported to China.  In 2019, China imported $1.5 billion of barley used as feed and for malt beverage production, and a record $500 million of forage products.  
  • In recent weeks, China updated its lists of U.S. facilities eligible to export beef, pork, poultry, seafood, dairy, and infant formula products to China. China’s lists now include 499 beef, 457 pork, 470 poultry, 397 seafood, and 253 dairy and 9 infant formula facilities. As a result of these actions, more U.S. facilities are eligible to export U.S. food and agricultural products to China than ever before.  USDA’s Food Safety and Inspection Service continues to update its export library, which provides additional guidance for U.S. meat and poultry meat exporters, including information related to the scope of products that may be exported to China, China’s labeling requirements, and other guidance.
  • China published on May 15 a new domestic standard for dairy permeate powder for human consumption that will allow imports of this product from the United States in the future.  In 2019, China imported nearly $12 billion of dairy products from around the world.

China continues to implement its tariff exclusion process in an attempt to facilitate imports of U.S. commodities.  USDA continues to publish guidance for U.S. exporters seeking to participate in this process (USDA Global Agricultural Information Network).  USTR is continuing to process and where appropriate grant exclusions of products from China. USDA also is implementing its obligations under the agreement.

Secretary of Agriculture Sonny Perdue said, “China is a market of tremendous potential for U.S. agriculture and these actions will help U.S. exporters expand their sales there.  We look forward to continued cooperative work with China on implementation of Phase One commitments, and immediate increases in U.S. exports of all manner of agricultural products.”

United States Trade Representative Robert Lighthizer said, “China has worked with the United States to implement measures that will provide greater access for U.S. producers and exporters to China’s growing food and agricultural markets. Under President Trump’s leadership, we fully expect this agreement to be a success.”

DOL ISSUES FINAL RULE TO SIMPLIFY RETAIL OR SERVICE ESTABLISHMENT EXEMPTION

WASHINGTON, DC – The U.S. Department of Labor today announced a final rule to provide greater simplicity and flexibility to retail industry employers.

Provisions in the Fair Labor Standards Act (FLSA) allow employers in retail and service industries to exempt certain employees paid primarily on a commission basis from overtime.

Today’s rule withdraws two provisions from the Department’s Wage and Hour Division regulations. The first listed industries that the Department previously viewed as having “no retail concept,” which made them ineligible to claim the exemption. The second listed industries that, in the Department’s view, “may be recognized as retail,” and were potentially eligible for the exemption. As the rule explains, some courts have questioned whether these lists lack any rational basis.

By withdrawing these two lists, establishments in industries that had been on the non-retail list may now assert that they have a retail concept and—if they meet the existing definition of retail and other criteria—may now qualify for the exemption. Insofar as these establishments were deterred from availing themselves of the exemption and its flexibilities, they may now do so if they qualify—including by having more flexibility to work with workers on commission-based pay arrangements. For these employers and workers, they could consider whether, for instance, more commission-based pay is sensible.

Establishments in industries that were on the “may be” retail list may continue to assert they have a retail concept.

Moving forward, the Department will apply the same analysis to all establishments to determine whether they have a retail concept and qualify as retail or service establishments, promoting greater simplicity and flexibility for employers and workers alike.

“This final rule unshackles job creators in the retail space who had previously been categorically excluded from the exemption without notice and comment,” said Wage and Hour Division Administrator Cheryl Stanton. “Permitting all retail employers to potentially qualify for this exemption can increase flexibility for businesses and workers. Eliminating confusion empowers job creators to grow their businesses, comply with the law and provide even more good jobs for American workers.”

The Department is issuing this rule without notice and comment, and it will take immediate effect. Neither notice and comment nor a delayed effective date are needed because both lists being withdrawn were interpretive regulations originally issued in 1961 without notice and comment or a delay.

DOC Issues Expected Final 90-Day Extension of Temporary General License Authorizations

The U.S. Department of Commerce announced today it is extending the terms of the existing Temporary General License (TGL) authorizations for Huawei Technologies Co. Ltd. and its non-U.S. affiliates (Huawei) on the Entity List for 90 days. The terms and duration of any future general licenses will be announced prior to the expiration of this 90-day time period.

This announcement follows public comments received from numerous companies, associations, and individuals about the TGL. The Department continues to assess the national security and foreign policy implications of companies and individuals that have not yet transitioned from Huawei equipment.

The 90-day extension provides an opportunity for users of Huawei devices and telecommunication providers—particularly those in rural U.S. communities—to continue to temporarily operate such devices and existing networks while hastening the transition to alternative suppliers.

In announcing this extension, the Department is also notifying the public that activities authorized in the TGL may be revised and possibly eliminated after August 13, 2020. Companies and persons relying on TGL authorizations should begin preparations to determine the specific, quantifiable impact of elimination if they have not done so already. Those companies and persons should be prepared to submit license applications to the Department to determine which, if any, activities will be authorized in the event that their TGL authorization is eliminated. The Department will provide prior notice via the Federal Register of a need to submit such applications.

The Bureau of Industry and Security (BIS) in the Department of Commerce is responsible for overseeing these export control activities. BIS’s mission is to advance U.S. national security and foreign policy objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership. BIS is committed to restricting U.S.-origin commodities and technology from use in support of Weapons of Mass Destruction projects, terrorism, or destabilizing military modernization programs.

Treasury, IRS Deliver Economic Impact Payments to 130 Million Americans in Record Time

WASHINGTON—The U.S. Department of the Treasury and IRS today announced that nearly 130 million Americans have received Economic Impact Payments, worth more than $218 billion, in less than five weeks. These totals do not include the more than $2.5 billion delivered to U.S. territories for payment to territory residents.

“This Administration has delivered Economic Impact Payments to Americans in record time,” said Secretary Steven T. Mnuchin. “More payments are on their way as we continue to deliver this much-needed relief to the American people.”

Treasury expects to deliver more than 150 million Economic Impact Payments in total.

USTR and Treasury Statement on Call With China

Vice Premier Liu He, U.S. Treasury Secretary Steven T. Mnuchin, and Ambassador Robert Lighthizer participated in a conference call today.  They discussed economic and trade issues, including the recently concluded Phase One agreement.  The parties shared updates on COVID-19 and their assessments of its effects on economic growth as well as the measures their countries are taking to provide support to their economies. 

The parties discussed the ongoing process of implementing the Phase One agreement between the two countries that went into effect February 14.  Both sides agreed that good progress is being made on creating the governmental infrastructures necessary to make the agreement a success.  They also agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner.  Meetings required by the agreement have been conducted via conference call and will continue on a regular basis.

Secretary of Commerce allocates $300 million in CARES Act aid to U.S. fishermen and seafood industries impacted by COVID-19

WASHINGTON – Today, Secretary of Commerce Wilbur Ross announced the allocation of $300 million in economic relief to U.S. fishermen and seafood industries impacted by the COVID-19 pandemic. The funds were allocated as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law on March 27 by President Trump.

Commercial fishing, charter/for-hire businesses, qualified aquaculture operations, processors, and parts of the seafood sector in coastal states and territories are among those eligible to apply for funds. Tribes are also eligible for funding including for any negative impacts to subsistence, cultural, or ceremonial fisheries. The Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) will work with the three Interstate Marine Fishery Commissions, organizations with a demonstrated track record of success in disbursing funds, to quickly deliver financial assistance into the hands of those who need it.

“This relief package will support America’s fishermen and our seafood sector’s recovery,” said U.S. Department of Commerce Secretary Wilbur Ross. “Thank you President Trump, Secretary Mnuchin, and our Congressional leaders of both parties for your work to pass the historic legislation that is bringing much needed relief to America’s fishermen. This Administration stands with the men and women working to provide healthy and safe seafood during this uniquely challenging time, while our U.S. fisheries work to continue to support 1.7 million jobs and to generate $200 billion in annual sales. The Nation is grateful to our fishermen for their commitment.”

Acting NOAA Administrator Neil Jacobs, Ph.D., lauded today’s announcement.

“For generations, our coastal communities have taken great pride in delivering protein-rich seafood to dinner tables across the country and enabling access to our world class recreational fisheries,” said Jacobs. “NOAA thanks our partners in the interstate marine fisheries commissions, states, territories, and tribes for their assistance. Together, we will work to distribute these funds as quickly as possible.”

In addition to these funds, the President recently signed into law other Federal financial assistance programs, including several programs at the Small Business Administration and U.S. Department of Agriculture, that can provide help to fishermen and related businesses.