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Clifford Chance

Clifford Chance


U.S. Raises the Stakes for Doing Business in China

July 7, 2020

How companies can avoid getting caught in the middle of the U.S.-China trade war

What a week it has been for the export control world. First, the Bureau of Industry and Security of the U.S. Department of Commerce finalized two major amendments to the Export Administration Regulations that significantly tighten export controls to China. Second, the Commerce Department and the U.S. State Department suspended regulations that provided preferential treatment to Hong Kong concerning export controls, including access to certain export license exceptions. These game changing developments significantly increase the level of expected counterparty due diligence for companies and related risks of non-compliance, particularly those currently doing business in Hong Kong or mainland China. Pending receipt of further guidance on the practical impact of these changes from U.S. authorities, companies should take steps now to assess how these changes impact their compliance risk and overall risk tolerance.

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