The Trans-Pacific Partnership Series: Senator Bernie Sanders

Part 2

Francisco A. Laguna & Amy Turner

The Trans Pacific Partnership (TPP) faces significant opposition from the remaining Democratic and Republican 2016 presidential candidates. The TPP has increasingly become a talking point in the presidential campaign. Hillary Clinton, Bernie Sanders and Donald Trump all oppose the deal. This week, we continue our series on the TPP, focusing on the comments of presidential candidate, Bernie Sanders, on whether the trade agreement benefits the United States.  The information provided in the post is not meant to be political in nature, or an endorsement or critique of the position of Senator Sanders.

By Jonathunder - Own work, GFDL 1.2,

By Jonathunder – Own work, GFDL 1.2,

According to Senator Sanders’s website, the TPP is a “disastrous trade agreement designed to protect the interests of the largest multi-national corporations at the expense of workers, consumers, the environment and the foundations of American democracy.”  Sanders asserts that under existing free trade treaties, American workers have been forced to compete against low-wage labor from around the world. This has resulted in the closing of thousands of factories and massive job losses in the United States.  Sanders claims that TPP is “part of a global race to the bottom to boost the profits of large corporations and Wall Street by outsourcing jobs; undercutting worker rights; dismantling labor, environmental, health, food safety and financial laws; and allowing corporations to challenge our laws in international tribunals rather than our own court system.”

Sanders states that the TPP “has been written behind closed doors by the corporate world.” He claims that Wall Street, the pharmaceutical industry and major media companies have full knowledge as to what is in the treaty, but the American people and members of Congress do not.

Sanders has outlined 10 Ways the TPP would hurt working families

1. TPP will allow corporations to outsource even more jobs overseas

The US will lose more than 130,000 jobs to Vietnam and Japan, based on an assessment by the Economic Policy Institute.   Service sector jobs will be affected.  Corporations have already outsourced over 3 million service sector jobs from the US. The TPP allows corporations to more easily outsource call centers, computer programming, engineering, accounting and medical diagnostic jobs. In addition, manufacturing jobs will be lost. The TPP reduces the risks associated with operating in low-wage countries.

2. Sovereignty will be undermined by giving corporations the right to challenge our laws before international tribunals

The TPP establishes a process that gives corporations the right to challenge domestic laws before the United Nations and World Bank that could adversely impact their “expected future profits”. These could allow corporations to be compensated by taxpayers. This process bypasses laws dealing with labor, health, and environment, therefore weakening American sovereignty.

3. Wages, benefits, and collective bargaining will be threatened

Sanders’s website states:  “The TPP will force American workers to compete with desperate workers in Vietnam where the minimum wage is just 56 cents an hour.”

By United States Congress -, Public Domain,

By United States Congress –, Public Domain,

4. Our ability to protect the environment will be undermined

Under the TPP, corporations are allowed to challenge laws that would “adversely impact their future profits”.  Any nation that becomes a party to the TPP can be sued by corporations.  The TPP bypasses domestic courts by allowing corporations to sue directly any nation that signs the agreement in an international tribunal.

5. Food Safety Standards will be threatened

Only 1-2 percent of food imports is inspected.  The TPP will greatly expand these imports, thereby further overwhelming the system. This would make it easier for countries to export contaminated foods into the US, including fish and seafood.

6. Buy America laws could come to an end

Under the TPP, although there are laws that require the US government agencies to buy goods and services made in America, foreign corporations would be given equal access to compete for government contracts with companies that make products in America.   The US would not be allowed to prevent companies that have bad human rights records from being awarded government contracts paid by US taxpayers.

7. Prescription drug prices will increase, access to life saving drugs will decrease, and the profits of drug companies will go up

Pharmaceutical companies are lobbying to assure that the TPP recognize extensions of their patents (which currently exists 20 years or more).  This would expand the profits of big drug companies.

8. Wall Street would benefit at the expense of everyone else

The TPP would impose restrictions on governments from imposing “capital controls”.  Governments would be barred from creating controls that include financial speculation taxes to curbing massive flows of speculative capital flowing into and out of countries.

9. TPP would reward authoritarian regimes that systematically violate human rights

Authoritarian regimes would be granted duty free access to the U.S. market under the TPP.

10. The TPP has no expiration date, making it virtually impossible to repeal

There is no sunset provision in the TPP.  After it is signed into agreement, a consensus of all member countries is required to amend it.  Other countries, like China, could be allowed to join in the future.

Senator Sanders is clearly opposed to the TPP.

Call TransLegal with your questions concerning the TPP or trade agreements in general.


The Trans-Pacific Partnership Series

Part 1

Francisco A. Laguna & Amy Turner

The recent passage of the Trans-Pacific Partnership (TPP) has only resulted in additional questions and much political discussion.  What were the negotiations like? What happens now? What does the TPP contain? How does this affect the passage of Transatlantic Trade & Investment Partnership (TTIP)?

This week, TransLegal begins a 5-part series on the TPP that explores what the TPP is (according to the Obama Administration), the approaches each of the presidential candidates to the TPP and trade in general, and the reactions of the international community to the agreement.

On October 4, 2015, negotiations for the TPP came to a successful conclusion.  After five years of negotiations, twelve nations including Australia and the US reached agreement on how trade among the member states would be governed under the Trans-Pacific Partnership. The agreement was signed February 6, 2016.

What benefits does the TPP offer?

According to the United States Trade Representative, the TPP offers:

  1. “Comprehensive market access”. The elimination or reduction of tariffs. This includes goods and services and trade and investment.
  2. “Regional approach to commitments”. The development of production and supply chains, uniform trade, and the opening of domestic markets.
  3. “New trade challenges”. The support for the development of the global economy through the digital sector and state owned businesses.
  4. “Inclusive trade”. The commitment that small and medium businesses should have the understanding and ability to use the opportunities provided by the TTP.
  5. “A regional integration platform”. The intention is to use the TTP as a template and forerunner to design an economic plan for other non-included economies across Asia-Pacific.

What were the negotiations like?

The TPP involved negotiations in five major areas.

  1. The United States agreed to shorter patent terms for biologic drugs. Drug companies now have 5 to 7 years to keep secret their formulas as opposed to the original 12 years.
  2. Every state-owned company is required to adhere to the global trade standards.
  3. The reduction of diary, beef and poultry tariffs for the United States, Canada and Japan.
  4. Lower tariffs for cars and trucks in the United States, Canada and Japan.
  5. The Investor-State Dispute Settlement Mechanism makes it as easy (or difficult) for foreign companies to bring suit as domestic companies. In return, the United States will allow restrictions on tobacco companies who attempt to use arbitration panels in lawsuits on countries that tax cigarette advertising.

Now that the Trans-Pacific Partnership is a done deal, what’s next?

Each country’s legislature must ratify the agreement before it can go into effect. The US Congress had 90 days to review and debate the agreement.  Since Congress gave the President the fast-track trade promotion authority on June 29, 2015, it can only vote “yes or “no”.  No changes can be made to any of the terms of the agreement.

How does the TPP agreement affect the TTIP?

That is a hard question to answer.  Trade deals are political documents and therefore need to be viewed in the context of the election season. Each party has candidates that approach trade differently. The next President will bring his or her own view on where the US stands on trade and how trade agreements are negotiated.  We’ll discuss the views of each of the candidates on trade as part of this series.

Call TransLegal with your questions concerning the TPP or trade in general.

The Challenges Facing Brazil’s Temer Administration

This week, we continue our two-part series on current political situation in Brazil.  Many thanks to our correspondent, Rodrigo Correia da Silva, for contributing these articles.

The current political scenario in Brazil is quite similar to that of 1992, after the resignation of President Fernando Collor de Mello, when then Vice President, Itamar Franco, assumed the leadership position. Some view this as a positive harbinger for the success of Michel Temer’s interim government to overcome the existing political-institutional and economic crisis.

By User:Jurema Oliveira -, Copyrighted free use

By User:Jurema Oliveira –, Copyrighted free use

The Itamar government was faced with an equal crisis, and it was able to lead the country into a period of economic growth and fiscal and social prosperity.  The Temer government must address a domestic and global downturn in the economy; it needs to overhaul the government, grappling with corruption and cronyism; and it needs to implement realistic and effective austerity measures.  Some of these actions, especially the overhaul of the country’s ministries, discussed in our post last week, are likely to wreak short-term havoc, especially for the regulatory sector.  Temer will need both popular support and the support of the 3 major political parties to succeed.  Ordinary Brazilians, many of whom opposed the large expenditures on hosting the 2015 World Cup and the upcoming Olympics, are hopeful that Temer’s reforms will, indeed, alleviate some of the economic issues they have been confronting.

The main similarity between Itamar and the current Temer government is certainly the economic crisis. During Itamar, Brazil was experiencing a troubled period when hyperinflation was at 1,100 % in 1992, reaching 2,708.55 % the following year, not to mention the total stagnation of the GDP. Temer, too, is facing challenges in the economic arena, while having to overhaul the political system.

Favela Vidigal in Rio de Janiero By Jeff Belmonte - Flickr, CC BY 2.0

Favela Vidigal in Rio de Janiero By Jeff Belmonte – Flickr, CC BY 2.0

It is noteworthy that both Franco and Temer are both members of the Brazilian Democratic Movement Party (PMDB), and the impeachment of Presidents Collor and Dilma were motivated or influenced by allegations of corruption and the inability / unwillingness to work with the National Congress.

At the end of Franco’s term, Brazil was on a path of economic recovery, which earned the country a deserved spot on the international stage.  Now, it is Temer’s turn to push the reforms required to regain the investment-trust of the international community.

To be successful, Temer will have to work closely with the National Congress as well as the members of his administration and cabinet.  His past political experience bodes well for Temer as does the fact that his choices for ministers are experts in their fields as well as politicians.

TransLegal will keep you updated on how the interim government fares.


How Will the Temer Adminstration Affect Brazil

This week, we begin a two-part series on current political situation in Brazil.  Many thanks to our correspondent, Rodrigo Correia da Silva, for contributing these articles.

Brazil’s President Dilma Rousseff attends the opening ceremony of the National Policy Conference for Women in Brasilia, Brazil, May 10, 2016. (Reuters/Ueslei Marcelino)

Brazil’s President Dilma Rousseff attends the opening ceremony of the National Policy Conference for Women in Brasilia, Brazil, May 10, 2016. (Reuters/Ueslei Marcelino)

Brazil has entered a tenuous political reality with the Senate’s impeachment of former President Dilma Rousseff, ending the 13-year rule of the left-wing Worker’s Party (PT).  The Senate’s final decision will be issued in 180 days, but it is highly anticipated that the Senate will uphold its initial impeachment decision.  In the interim, former Vice President Michel Temer will assume the presidency, and expectations are high for his administration. Economic recovery, combatting the Zika virus, maintaining security at the Summer Olympics and restoring “political face” are a few of the challenges confronting the Temer, and indeed, any successor administration.

Michel Temer is a skilled politician who, throughout his political career, has demonstrated an ability to reconcile varying interests, a much needed skill to confront the current political moment. His political dexterity arose from being a three-time President of the House of Representatives combined with the technical and legal knowledge he brings as a preminent Constitutional Law Professor and the fact that he has led Brazil’s largest political party, the Brazilian Democratic Movement Party (PMDB), for the past 15 years.

Brazilian President Michel  Temer (Wikipedia)

Brazilian President Michel Temer (Wikipedia)

The Temer administration will seek solutions to increase domestic and foreign investment to revitalize the stagnant economy, including resuming productive dialogue with the private sector. Concurrently, the new government will attempt to balance the national budget, and implement meaningful reform in such broad categories as taxes, social security, labor and political corruption. Temer will need to demonstrate concrete steps and successes, even limited, to fuel future investments.

The outlook, initially, is positive. Michel Temer, who does not intend to run for reelection in 2018, is likely to promote privatization and public-private partnerships and pave the way for major structural reforms for the country.

Temer will face challenges and on-going investigations alleging wrong-doing and financial improprieties, including Operation Car-Wash (Lava-Jato), operation Zelotes, and the Parliamentary Inquiry Committee investigation of deviations of monies from the National Bank for Economic and Social Development (BNDES) and state pension funds.  In addition, the State Accounts Tribunal is reviewing the management of the accounts of the Rousseff / Temer political campaign.  A negative ruling by the Tribunal could disqualify Temer from office and result in new elections.  On a practical basis, however, it is likely that the court will review the accounts of Rousseff and Temer separately, and a ruling is not expected before the end of Temer’s term.

With regards to foreign policy and international trade, Temer seems to understand that Argentina is back as a player on the world stage.  Argentina’s absence from meaningful participation during the Fernandez de Kirchner administration greatly benefitted Brazil; now, the two countries will be vying for the same foreign direct investments.  To be competitive, Brazil will have to demonstrate that it is capable of making true reforms.

Local elections will be held in October 2016, and it is expected that the Workers Party will lose ground.  This will affect the 2018 presidential elections, and political parties and forces will have to realign. The question is whether Brazil is ready to emerge as a stronger democracy and fight cronyism.

Restructuring Federal Government Ministries

Before assuming the presidency, Temer suggested changes to the structure of the federal government. These changes will now be immediate. Functions will be reassigned among existing ministries, some ministries will be downsized, and others will be combined.  Plans call for scaling down from 32 ministries to 22.

This restructuring will result in changes to the vast system of public employment and the at times overwhelming nature of the Brazilian bureaucracy.  As of yet, it is unclear how top tier and career government officials will be affected.  What is clear is that during the restructuring process, regulatory issues may become quite a nightmare.

By Mario Roberto Duran Ortiz - Own work, Public Domain,

By Mario Roberto Duran Ortiz – Own work, Public Domain,

Temer’s restructuring plans purport to prioritize the creation of ministries capable of implementing the changes to reorganize the country.  Temer’s cabinet is composed of experienced politicians with expertise in their fields, who (we hope) will make sound decisions and changes that are not based on political motivations.

Ministers will be selected from the political parties with the greatest number of seats in the National Congress. The PT, PMDB and Brazilian Social Democratic Party (PSDB) are the largest parties, which suggests that the chances of adopting new legislation, especially those that may be unpopular, are significant.

Most ministers are lawyers, economists and company administrators and also have political experience.  It is expected that they will play an important role in bridging the government’s current contentious relationship with many sectors of society and the National Congress, allowing for the construction of a positive agenda for the country.

The States with most ministers are Rio Grande do Sul and Pernambuco, each with 3 ministers, followed by Rio de Janeiro, with two.  Rio de Janeiro, which will host the Olympics in 2016, heads the Ministry of Sport.

Next week, we will compare the proposed agenda of the Temer administration with that of Itamar Franco, who took over after the resignation of President Fernando Collor de Mello.

TransLegal represents companies doing business in Brazil, including the establishment of foreign subsidiaries, the approval of genetically modified organisms for industry and food use and other regulatory issues.  Call us with your questions concerning Brazil and how the Temer administrations planned changes will affect your business.

United Nations Offers Countless Global Business Opportunities

Francisco A. Laguna & Wojciech Kornacki

Each year, the United Nations Organization (“UN”) spends billions of dollars to support various missions and development projects around the world.  This creates numerous and ongoing international business opportunities for entrepreneurs willing to understand and operate within the UN procurement system.  The last decade shows that UN spending is only going to increase.

United Nations Basics

The UN is an international organization consisting of 193 member states.  It is organized into approximately 30 different specialized agencies, funds and programs, and each entity has its own procurement needs.

One of the four U.N. headquarters located in New York City.  Recent additions include to the U.N. complex include DC-1 and DC-2 located in the center of the picture.  Courtesy of http://

One of the four U.N. headquarters located in New York City. Recent additions include to the U.N. complex include DC-1 and DC-2 located in the center of the picture. Courtesy of http://

The mission of the UN is to preserve international peace and security, promote human rights and disarmament, and to take action to address health and humanitarian emergencies, terrorism, climate change, and sustainable development, among others.  This is primarily done by humanitarian missions, peacekeeping operations and various development projects, all of which require billions of dollars in annual expenditures on services and supplies.  The UN and its entities operate around the world.  Its four headquarters are located in New York, Vienna, Geneva and Nairobi.

United Nations Procurement of Goods and Services

According to the 2014 Annual Statistical Report on United Nations Procurement, the overall procurement needs of the UN exceeded to $17 billion in 2014.  The United Nations Office for Project Services (“UNOPS”) reports that between 2004 and 2014, UN procurement needs increased by about $10 billion.  This shows that UN expenditures are likely to grow in the future.

UN humanitarian mission in progress. UN troops are securing an airdrop of supplies in Haiti.  In the wake of the 2010 earthquake, multiple cargo planes flew missions to deliver food and supplies to Haiti.  Several years later, the UN mission still continues in Haiti.   Courtesy of http://

UN humanitarian mission in progress. UN troops are securing an airdrop of supplies in Haiti. In the wake of the 2010 earthquake, multiple cargo planes flew missions to deliver food and supplies to Haiti. Several years later, the UN mission still continues in Haiti. Courtesy of http://

In 2014, the UN spent approximately 52 % of its total expenditures on services and 48 % on goods.  The three most active organizations with the greatest procurement needs were the UN Children’s Fund (“UNICEF”), the UN Procurement Division (“UN/PD”) and the UN World Food Programme (“WFP”)   The United States is the greatest supplier of goods and services to the UN covering approximately 9% of all of UN needs.  India, Afghanistan, Belgium, and Switzerland follow.  Currently, there is a movement within the UN to procure more goods from the developing countries.

UN procurement in developed and developing countries is different.  In the developed countries, UN entities primarily focus on procuring information technology and telecommunications, financial and insurance, testing equipment, motor vehicles and parts.  In the developing countries, the UN procures personal care goods, domestic appliances, educational equipment, fuels, humanitarian aid services, and rural development services.  It is important to note that each UN entity has its own specific needs in different countries.

UN Procurement Opportunities

The UN Procurement Division divides business opportunities into Expressions of Interests (“EOI”), Requests for Information, (“RFI”) and Tender Opening Schedule.  Expressions of Interests are company responses to UN planned solicitations.  Requests for Information allow the UN to assess vendor capabilities and assist companies in preparing them for the planned procurements.  Tender openings mean formal openings of sealed bids or proposals.  The first step in taking advantage of the opportunities is to register.

Being successful in UN procurement necessitates careful attention to detail and a clear understanding of the organization’s requirements. Call TransLegal with your questions concerning UN procurement opportunities.

Foreign Workers Guide to Avoiding Disaster during a Corporate Merger

United States Immigration Series Post No. 12

 Francisco A. Laguna & Rolanzo White

Picture this: you are a skilled Mexican citizen who is working for a United States company. For the holiday season, you and your family go to Mexico City, to spend time with your parents and upon return to the US, you are denied access because your H-1B visa has been invalidated because the employer that originally sponsored your visa is no longer in existence due to a merger. You work for the new, merged company, but the company that sponsored you is no longer your employer.

By Gulbenk - Own work, CC BY-SA 3.0,

By Gulbenk – Own work, CC BY-SA 3.0,

This denial of entry results from the fact that most work visas are employer-specific.  Therefore, changes in a company’s structure could affect the validity of a foreign national employee’s nonimmigrant visa status or a pending green card application. Determining whether a corporate restructuring affects the employer that filed the visa petition with the U.S. Citizenship and Immigration Services (USCIS) or Department of State (DOS) is essential. The consequences of a merger or acquisition depend upon the type of nonimmigrant visa the company’s employees hold. In this post, we focus on the H-1B visa because it is the most common temporary work visa and the rules applicable to H-1Bs are echoed by many of the other forms of visas. For the sake of comprehensiveness, non-immigrant workers normally fall within the H-1B, L, E and TN visa categories as well as on training tied to J-1 and F-1 visas.

H-1B Visa

The problem arises because an employee must have a valid H-1B visa annotated with the petitioning employer’s name.  In the event a company is absorbed by another entity during a merger, the petitioning employer, essentially, no longer exists.

By United States Department of Labor (DOL) -, Public Domain

By United States Department of Labor (DOL) –, Public Domain

H-1B visas are the most common temporary visa for U.S. companies that hire foreign national workers for specialty jobs. Workers are required to have at least a bachelor’s degree, and they must work in a specific geographic location in a specific position for a specific salary. When a company hires an H-1B worker, it is required to make an attestation to the U.S. Department of Labor (DOL) they will comply with the H-1B requirements. This attestation is made as part of a Labor Condition Application (LCA).

The USCIS requires an amended H-1B visa petition to be filed if there are any “material changes” in the terms and conditions of an H-1B worker’s employment or eligibility. However, USCIS does not automatically require the filing of a new LCA and amended H-1B petition where a new corporate entity keeps the employee on in the same position and accepts the LCA and H-1B requirements and obligations, in other words, becomes a “successor-in-interest.” Here, the successor-in-interest, must make available for public inspection a sworn statement that it accepts all the obligations and liabilities of the LCAs filed by the predecessor entity, a list of affected LCAs, their dates of certification by DOL, a description of the new entity’s actual wage system and the federal employer identification number (EIN).

By AgnosticPreachersKid - Own work, CC BY-SA 3.0

By AgnosticPreachersKid – Own work, CC BY-SA 3.0

The filing of the new LCA and must be done before the H-1B workers can work for the new company, or, in our example, return to the country legally. When there is a material change, like location change, then a new LCA or amended H-1B petition must be filed with DOL prior to the relocation of the employee in order to avoid filing an amended H-1B visa petition. Similar rules apply for L-1 (executives, managers and specialized knowledge employees), E-1 (treaty traders) and E-2 (investor) visas.

There are now expensive consequences for non-compliance with the requirement to notify USCIS of material changes, including:

  • At the federal level, the Department of Homeland Security is aggressively targeting employers for I-9 and work visa compliance audits; failed audits can result in significant fines and even jail time.
  • At the state level, new laws in dozens of states allow authorities to fine employers, revoke business licenses and eliminate access to state contracts for immigration law violations.
  • Employees on work visas are suing companies for negligence when employees fall out of legal status, have problems pursuing permanent residency, and face bars on coming back to the United States as a result of the companies’ actions.
  • Major companies now include strong immigration compliance provisions in their vendor contracts, violations of which can result in the termination of the contract in question.
  • Bad press that can impact the company’s economic performance and stock price.

These matters are often complicated, and there are strong laws protecting employees, even foreign workers. Call TransLegal with your questions concerning immigration filing requirements in the event of corporate mergers and acquisitions.

Exciting Business Opportunities in Jordan

Francisco A. Laguna & Wojciech Kornacki

Jordan has a stable government, strategic location, and one of the most open economies in the region.  Jordan is an active trading partner with the European Union and the United States, and it has a well-educated and skilled labor force.  In addition, English is widely spoken, and Jordan is safe and very popular with tourists and students.  These attributes make Jordan one of the best places for foreign direct investment in the Middle East.

Country Background

Jordan is located between Israel, Palestinian Authority, Saudi Arabia and Iraq.  Its population is 8,117,564.  Jordan’s economy is one of the smallest in the region, but it is also one of the fastest growing.  While other developing economies in the region are declining, Jordan’s economy is forecasted to grow.

Zahran district in the capital city of Amman.  Courtesy of http://

Zahran district in the capital city of Amman. Courtesy of http://

International Trade

Jordan is very pro international trade.  The largest exporters to Jordan include the EU, Saudi Arabia, China and the United States.  Since Jordan has signed a Free Trade Agreement with the United States, bilateral trade between both countries has surged ten-fold in the last 13 years.

Jordan’s Priority Sectors for Economic Development


Jordan spends approximately 15 % or US$  5.4 billion of its Gross Domestic Product on energy.  To increase its energy independence, Jordan is likely to invest in energy-efficient projects, renewable energy, rooftop solar panels and sun-powered water heaters.  The EU and Jordan are going to invest US$ 100 million in solar energy.  This sector of Jordan’s economy offers significant potential growth in the future.  The investment into the energy market is also likely to benefit many refugees which are currently living in Jordan.

Information and Communications Technology (ICT):

The information and communications technology sector is one of the best sectors to invest for US companies.  The number of mobile subscribers in Jordan is expected to grow.  It is estimated that on average, the mobile sector grows 10% annually.  While weak consumer purchasing power could be a concern, it has not stopped the market from growing.

A solar powered charging station in King Hussein Business Park allows a driver to recharge his / her car.

A solar powered charging station in King Hussein Business Park allows a driver to recharge his / her car.

Defense and Security:

Jordan is in the process of rearming its armed forces in order to better support its regional missions.  This means significant spending to obtain new military equipment and improve capacity.  Currently, Jordan possesses a highly trained but rather small military force.  To highlight its Western ties and military needs, Jordan is a host to the XI Special Operations Forces Exhibition and Conference which will be held in May 2016.

Other industry sectors that also receive significant attention are healthcare, education and business services.  If you are interested in learning more about future business opportunities in Iran and how to increase your chances of harnessing them, contact TransLegal or call 703-566-9427.

Cyber Security is the New Business Opportunity

Francisco A. Laguna & Wojciech Kornacki

Recent massive and coordinated cyber-attacks on governments and businesses alike reveal the urgent need for global cyber security.  As digital transformation and technical advances have changed the way we communicate and do business, cyber threats and cyber-attacks have become more common.  In order to respond to the ever increasing demand for cyber security, in the next several decades billions of dollars will be spent around the world to combat the new and emerging cyber threats and prevent attacks.  This creates new business opportunities for information technology entrepreneurs.

Air Force First Lieutenant responds to potential threats in the Incident Response Team Net Forensics Lab. Members of the team have two minutes to evaluate incoming threats. (USAF photo)

Air Force First Lieutenant responds to potential threats in the Incident Response Team Net Forensics Lab. Members of the team have two minutes to evaluate incoming threats. (USAF photo)

What is Cyber Security?

Cyber security is the activity or process, ability or capability, or state whereby information and communications systems and the information contained therein are protected from and / or defended against damage, unauthorized use or modification, or exploitation.

Chances are that most of us received an email from an unknown source asking us for personal information, and we did not know that we were under a cyber-attack.  However, this is actually called “phishing”, and phishing is considered a form of a cyber-attack.  Other forms of cyber-attacks include:

  • “pharming”: fraudulently redirecting a website’s traffic to another, fake website
  • “malware”: software that performs unauthorized functions without your knowledge
  • “Trojan horse”: software that appears to have a useful function, but also it has hidden and potentially malicious functions, or
  • “spyware”: software that enables a user to obtain covert information about another’s computer activities by transmitting data covertly.

The particular challenge with cyber security is that most governments and businesses are completely unprepared for these new types of constantly evolving attacks and threats.  In addition, some businesses and governments are not even aware that they are being attacked.  This means that they may lose critical operational information, trade secrets and business information, without even knowing.

Domestic Cyber Security Opportunities 

The U.S. Government requested US$ 19 Billion to improve cyber security defenses in the 2017 budget.  In addition, the U.S. Department of Defense plans on spending an additional US$ 5 Billion on cyber security.  Most likely a significant portion of these amounts will be awarded to private businesses specializing in cyber security, and many of the large defense contractors are rapidly developing their cyber security capabilities.  However, even the biggest cyber security contractors will require a number of subcontractors to meet the demand.

While the U.S. Government is attempting to counter cyber threats for itself, it cannot protect private businesses from similar attacks.  It is likely that private businesses will also have to improve their cyber security.  Thus, many private businesses will have to develop their own cyber-attack detection and prevention safeguards and protocols.


Tallinn, Estonia. In the past, Estonia has been a subject to multiple well-coordinated cyber-attacks. The attacks have taken down many official and private websites including webpages of the Estonian parliament, and many Estonian newspapers. The attacks coincided with the heavy Russian criticism over the removal of the Bronze Soldier Statute from Tallinn. Courtesy of http://

International Cyber Security Opportunities

The cyber security market is expected to grow from US$ 77 Billion in 2015 to US$ 170 Billion by 2020.  While North America and Europe greatly contribute to the growth of the international cyber security market, the Asian and South East Asian markets are quickly developing.

Similarly, many Arab governments have experienced cyber-attacks in the energy sector.  Increasing their defenses will result in spending of approximately US$ 9.5 Billion by 2019.

Cyber Security Stocks are Increasing in Value

Many companies that specialize in cyber security are seeing their stocks increase.  This rise is largely due to the perception that cyber-attacks benefit private cyber security companies.  Close analysis of the ISE Cyber Security Index reveals that this index has gone up by 22% in 2015 alone.  There seems to be a correlation between the number of cyber-attacks and the rise of stocks of companies specializing in cyber security.

Cyber Security Insurance gains Importance

Cyber security insurance has also seen rapid growth.  Many insurance companies have begun to offer it to private business.  These new policies also cover third-party loss resulting from the cyber-attack, all costs associated with the cyber-attack, extortion, and on-line trade secret protection.

Cyber security is here to stay.  The domestic and international markets show tremendous opportunities for growth.  If you are interested in learning more about future business opportunities involving cyber security, contact TransLegal or call 703-566-9427.

US Customs Reauthorization Bill Signed into Law

Francisco A. Laguna

On February 24, 2016, President Obama signed the Trade Facilitation and Trade Enforcement Act of 2015, H.R. 644 (Customs Reauthorization Bill), into law.

The law, which we summarized over the past two weeks, contains the most far reaching set of changes since the Customs Modernization (MOD) Act, including significant changes to the operations and programs of US Customs and Border Protection (CBP), new provisions for combating evasion of the antidumping (AD) and countervailing duty (CVD) laws, and the inclusion of brand new measures to protect intellectual property rights (IPR).

A CBP Officer directs a truck with a seaport container to an inspection area at a port.

A CBP Officer directs a truck with a seaport container to an inspection area at a port.

CBP officials have indicated the agency will be busy developing and implementing regulations for the law. Some key dates laid out in the law include:

Section 901 – De Minimis Level

This section amends 19 U.S.C. § 1321(a)(2)(C) to raise the de minimis threshold from $200 to $800. This amendment shall apply to merchandise imported or withdrawn from the warehouse for consumption on or after March 10, 2016.

Section 304 – Copyright Enforcement while Application Pending

Section 304 calls for a process to enforce copyright protection for marks after the filing of a registration application, but before the application has been approved and the registration is in full force and effect. These steps are to take effect by August 2016.

US Commerce Department.  www.commerce.govSection 421 – Enforcement of AD/CVD Orders

The Department of Commerce has been authorized to administratively investigate AD/CVD evasion and requires CBP to collect or preserve for collection AD/CVD duties owed on evading imports. These amendments are effective August 2016. Regulations to put the changes into effect are also called for by August 2016.

Section 303 – IPR Enforcement – Circumvention Devices

Section 303(a) expands CBP’s seizure and forfeiture authority to explicitly include unlawful circumvention devices, as defined under 17 U.S.C. § 1201(a)(2) or (b)(1).  CBP has to prescribe regulations implementing this process by February 2017.

Section 116 – Importer of Record (“Known Importer”) Program

Section 116(b) requires the Commissioner to submit a report to Congress no later than August 2016 containing recommendations for determining the most timely and effective way to require foreign nationals to provide customs brokers with appropriate and accurate information (comparable to that which is required of United States nationals concerning the identity, address and other related information), and for establishing a system for customs brokers to review information maintained by relevant Federal agencies for purposes of verifying the identities of importers, including nonresident importers, seeking to import merchandise into the United States.

As with all landmark legislation, the regulatory process is where the details will be provided.  While regulations may not be issued immediately, importers may still feel the effects of this law sooner rather than later. For example, CBP has been taking steps to increase enforcement of AD/CVD and IPR provisions in anticipation of the passage of the law using existing processes. Importers are likely to see the effects of CBP enforcement under current processes.

Contact TransLegal with your questions concerning the Trade Facilitation and Enforcement Act of 2015 / Customs Reorganization Bill.

US Passes Trade Facilitation and Enforcement Act

Francisco A. Laguna

 This week, we continue our summary of the changes to US trade law to be implemented by Trade Facilitation and Enforcement Act of 2015 (2015 Trade Enforcement Act) which passed earlier this month by the Senate.

Small Business and State Trade Promotion Programs (Title V)

Title V contains various provisions aimed at aiding small businesses in export promotion activities. For example, it requires further outreach to small businesses on the potential impact of new trade agreements. It also establishes a grant program to states to carry out programs such as foreign trade missions, trade shows, and other forms of marketing and training for small businesses. States will undoubtedly take advantage of this program, and smaller companies should look into it if interested in international sales.

Other Enforcement Measures (Title VI)

Title VI establishes a Trade Enforcement Trust Fund to be used by the United States Trade Representative (USTR) and other agencies to enforce US trade agreements and trade rights under the World Trade Organization (WTO) and US free trade agreements (FTAs). The trust fund could also be used for trade capacity building efforts.

By Kevin McCoy, CC BY-SA 2.0

By Kevin McCoy, CC BY-SA 2.0

Title VI also requires US Customs and Border Protection (CBP) and Immigration and Citizenship Enforcement (ICE) to institute certain measures to stop illegal honey transshipment; and requires that the two agencies train and employ sufficient personnel to detect, identify, and seize cultural property, archeological or ethnological materials, and other fish, wildlife or plants that violate US laws. Title VI also codifies the establishment of the Interagency Trade Enforcement Center (ITEC).

Currency Manipulation (Title VII)

Title VII addresses issues regarding currency undervaluation, a main thorn in the recent trade promotion efforts. Among other things, Title VII:

  • requires the International Trade Administration (ITA) to investigate alleged currency undervaluation in countervailing and antidumping duty investigations and provides a method for calculating the amount of undervaluation;
  • requires the administration to actively engage with those countries found to manipulate exchange rates in order to urge implementation of monetary policies that would address the issue;
  • sets criteria on what constitutes currency manipulation similar to existing International Monetary Fund standards;
  • creates an advisory committee for the US Treasury Department on currency issues; and
  • directs Treasury to take certain steps if it believes currency manipulation has occurred.
By Project Manhattan - Own work, CC BY-SA 3.0,

By Project Manhattan – Own work, CC BY-SA 3.0

The most contentious dispute involved competing proposals on currency manipulation that were not enacted in the final legislation, with the original Senate bill including a strict provision that would have enabled the US Department of Commerce to treat undervalued foreign currency as a prohibited government subsidy in countervailing duty investigations.



Renewal and Expansion of CBP Operations/Programs (Title VIII)

Title VIII of the Act consists of two parts. First is the US Customs and Border Protection Authorization Act, which formally establishes the US Customs and Border Protection, along with operational offices within CBP and the positions of the Commissioner and Deputy Commissioner. Although the Act provides for a number of name changes to the internal offices within CBP and structure of their leadership, it is largely a formal codification of the existing structure and role of the agency. In fact, Section 802 specifically affirms that CBP shall continue to carry out the functions, missions, duties, and authorities previously vested within CBP prior to the passage of this legislation, and all rules regulations and policies issued by CBP remain in effect.

The second part of Title VIII is the Preclearance Authorization Act of 2015, which authorizes CBP to operate preclearance locations in foreign countries, provided an aviation security preclearance agreement is in effect. The provisions of Preclearance Authorization Act of 2015:

  • set forth various reporting requirements to Congress prior to entering into a preclearance agreement with a foreign country to enable Congress to comprehensively assess the appropriateness of commencing the preclearance operations and monitor the resources allocated to preclearance locations;
  • incorporate certain security measures, including requiring Transportation Safety Administration (TSA) to prescreen passengers and their baggage if the foreign government has not maintained security standards comparable to the US, and prohibiting preclearance locations in foreign countries that do not routinely provide stolen passport information to INTERPOL or the United States; and
  • allow CBP to enter into cost-sharing agreements with the airport authorities (where preclearance locations are established) in foreign countries for preclearance operations costs, immigration services, and agricultural inspection services, enabling CBP to receive payments in advance of the incurrence of the costs or on a reimbursable basis.

Miscellaneous (Title IX)

Title IX covers a broad array of miscellaneous provisions, though “miscellaneous” may be a misleading description as some of the provisions were the most sought after changes advocated by the trade community. Among the changes provided for in this Title are the following:

  • By Henryvb at German Wikipedia, CC BY-SA 3.0

    By Henryvb at German Wikipedia, CC BY-SA 3.0

    raises the amount allowed to be entered on a “manifest entry” as de minimis from $200 – $800 (Sec. 901);

  • increases the time required for consultations with Congress on certain administrative actions involving international trade and requiring certain minimum time periods for consulting with business on such actions (Sec. 902);
  • enhances certain provisions of Chapter 98 regarding goods returned to the United States to both enlarge the scope and make them more user friendly (Sec. 904);
  • removes the entry requirement for certain bulk cargo residue returning to the United States in Instruments of International Traffic after export from the US (Sec. 905);
  • provides for numerous changes to the current duty drawback statute, including requiring certain substitution drawback determinations to be based on classification in the same 8-digit tariff heading, amending the requirements for establishing “proof of export” and certain time periods for filing claims, and providing for joint liability for the claimant and the importer (Sec. 906);
  • makes technical corrections to certain tariff classifications for recreational performance outerwear and to Additional US Note for Chapter 64 relating to certain protective active footwear (Sec. 912 and 913);
  • creates a trade preference for Nepal similar to African Growth and Opportunity Act (Sec. 915);
  • Allows for the implementation of Aisa-Pacific Economic Cooperation Agreement providing for duty reductions on certain environmental goods (Sec. 916);
  • adopts specific country of origin marking requirement for certain steel castings (Sec. 917);
  • extends the period for which certain customs fees may be charged and the rate charged (Sec. 920);
  • increases the penalty for the failure to file certain tax returns (Sec. 921); and
  • imposes a moratorium on certain internet taxes being imposed by the States or other localities (Sec. 922).

Contact TransLegal with your questions concerning the Trade Facilitation and Enforcement Act of 2015.