Self-Assessment Tools

DOL launched four voluntary self-assessment tools that provide practical, user-friendly guidance to help companies map supply-chain risks and evaluate labor practices. The tools can also guide companies in taking steps to ensure alignment with U.S. forced labor laws and strengthen supply chains that support American workers and American industry.

The new tools are: 

• LaborShield: A mobile app that features information on egregious labor violations in over 145 countries (formerly the Sweat and Toil app).
• ImportWatch: A resource that brings together the department’s labor abuse research with U.S. import data from the U.S. Census Bureau to produce a red-flag list of all high-risk goods for U.S. importers.
• SourcingStrong: A tool to help U.S. businesses build strong labor due diligence systems to identify and manage risk in their supply chains.
  
• Supply Chain Traceability Portal: The portal provides visibility across supply chains and beyond the first tier to expose where exploitative labor hides.

Announcement Insights 

Diaz Trade Law was in attendance at the launch event in Washington, D.C. – hosted by the DOL and co-sponsored by the Responsible Business Alliance. The program featured remarks from Deputy Secretary of Labor Keith Sonderling, followed by a fireside chat with top executives from leading U.S. industries.

At the event, DOL representatives stated the department wants “good actors” to use these tools and to give feedback on them. Panelists highlighted that they have been engaging with DOL for years on the issues of forced labor in foreign supply chains. DOL’s stated goal is to level the playing field for U.S. businesses by making foreign actors play fair.

Forced Labor Enforcement Focus

DOL, among other government agencies, have made clear that enforcement of the U.S.’s forced labor laws is a priority. 

For importers, understanding who is supplying you with a product is not enough, you also need to know who is supplying them. You should have a comprehensive understanding of your supply chain that includes documentation of the various tiers of suppliers. Detailed documentation can help identify gaps and high-risk areas that may need to be revisited down the road.  

Diaz Trade Law has significant experience in a broad range of import compliance matters including forced labor compliance and enforcement mitigation. For assistance with developing or updating a forced labor compliance plan, forced labor compliance training, communicating with CBP regarding goods detained by CBP, or utilizing the new DOL tools contact us today at info@diaztradelaw.com or 305-456-3830.

Learn more:

• Webinar: Forced Labor – Practical Tips to Secure Your Supply Chain and Comply with Regulatory Requirements
• Breaking the Chains: Forced Labor in Mexico’s Supply Chains
• CBP Launches New Forced Labor Portal 
• Bloomberg Law: U.S. Customs Targets the Use of Forced Labor
• UFLPA Guidance: What Importers Need to Know
• Uyghur Forced Labor Prevention Act (UFLPA): What You Need to Know
• CBP’s Forced Labor Process Flowchart

Jennifer Diaz, President, Diaz Trade Law

Amber Pirson, Attorney, Diaz Trade Law

FinCEN’s March 30, 2026, Notice of Proposed Rulemaking (NPRM) marks a major step toward fully operationalizing the agency’s whistleblower program, designed to incentivize reporting of Bank Secrecy Act (BSA), sanctions, IEEPA, and other illicit finance violations. The proposal outlines how whistleblowers can securely submit information, how awards will be determined, and what protections will be available.  

This development reflects the Treasury Department’s broader strategy to strengthen financial system integrity and encourage actionable tips that support enforcement efforts. For financial institutions, compliance professionals, and potential whistleblowers, the NPRM provides long‑awaited clarity on program structure and expectations. 

Overview of the Proposed Rule 

FinCEN’s NPRM proposes a comprehensive framework for administering whistleblower submissions and awards. Key elements include: 

• Secure submission procedures for individuals reporting suspected violations of the BSA, OFAC sanctions, and related laws. 
• Eligibility criteria for whistleblower awards, including documentation requirements and timelines. 
• Award ranges of 10–30% of monetary penalties collected when a whistleblower’s information leads to a successful enforcement action. 
• Robust protections for individuals who provide information, including confidentiality and anti‑retaliation safeguards. 

These provisions aim to encourage early, detailed reporting while ensuring whistleblowers are shielded from adverse consequences. 

Why FinCEN Is Prioritizing Whistleblower Incentives 

The NPRM aligns with Treasury’s broader efforts to combat fraud, sanctions evasion, and illicit finance. On the same day, FinCEN issued an advisory highlighting how transnational criminal organizations exploit federal and state health care programs—underscoring the need for timely, credible tips from insiders. Treasury Secretary Scott Bessent emphasized that whistleblowers play a critical role in protecting U.S. national security and ensuring taxpayer funds are not diverted to criminal activity. 

By formalizing award structures and protections, FinCEN seeks to increase the volume and quality of reports that can lead to enforcement actions. 

What Financial Institutions Should Know 

Financial institutions should closely review the NPRM and consider how it may affect internal compliance programs. Key considerations include… 

• Enhanced reporting expectations: Institutions may see increased whistleblower activity and should ensure internal reporting channels are well‑defined. 
• Documentation and recordkeeping: Detailed records may become even more important as whistleblower tips could trigger investigations. 
• Training and awareness: Employees should understand both internal reporting options and the existence of FinCEN’s external whistleblower portal. 

FinCEN encourages public comments within 60 days of the NPRM’s publication in the Federal Register. The official notice is available here. 

Whistleblowing and IEEPA 

While the proposed rule offers rewards for reporting fraud-related violations of IEEPA, it is unclear whether FinCEN will consider reports of unpaid IEEPA duties to be valid claims of fraud. Given the U.S. Supreme Court’s ruling, which determined that President Trump’s use of IEEPA to impose tariffs was unlawful, companies subject to such whistleblowing reports may have a strong claim of defense.   

Final Thoughts: Take Action Today! 

FinCEN’s proposed whistleblower framework represents a significant shift in how illicit finance violations may come to light. Financial institutions, compliance officers, and legal practitioners should proactively assess the NPRM’s implications and prepare for increased scrutiny and reporting activity. If your organization needs guidance navigating BSA/AML obligations, whistleblower‑related risks, or comment submission strategies, Diaz Trade Law is ready to assist with FinCEN compliance. 

Learn more: 

• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement 
• Bloomberg Law: Voluntary Self-Disclosures: Recent Guidance From BIS, OFAC & DOJ 
• BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations 

What is the NDC?

The NDC is an FDA standard for uniquely identifying drugs marketed in the U.S. Currently, the NDC assigned by the FDA for each listed drug marketed in the U.S. is a unique 10-digit number and can be in several different formats.

Current formats:

10-digit identifier

The FDA’s standard NDC is a 10-digit numerical identifier that includes a labeler code, product code, and package code.

There are 3 FDA-assigned formats for the standard NDC:

• 4-4-2
• 5-3-2
• 5-4-1

HIPAA Format

The Health Insurance Portability and Accountability Act (HIPAA) adopted a uniform 11-digit NDC format that must be used when a HIPAA-covered transaction includes an NDC. This 11-digit format is standardized into a 5-4-2 format and created by adding a leading zero to either the labeler, product, or package code.

Upcoming 6-Digit Format

The FDA will run out of 5-digit labeler codes in 10-15 years. Per FDA regulations (21 CFR 207.33), once the FDA runs out of 5-digit labeler codes, it will start assigning 6-digit labeler codes. Without this proposed change, there would be five NDC formats, 3 in 10- digits and 2 in 11-digits. There may be confusion between an FDA-assigned 11-digit NDC and a HIPAA converted 11-digit NDC.

The New NDC Standard

The Final Rule modifies existing regulations to establish a uniform, 12-digit format that can accommodate longer NDCs once the FDA begins issuing 6-digit labeler codes.

The change will impact a variety of industries and stakeholders, including:

• Human and animal drug manufacturers and distributors
• Drug importers
• Federal agencies using the NDC
• Drug databanks
• Pharmacies
• Hospitals, clinics, labs, healthcare practitioners
• Nursing care facilities
• Electronic health record vendors
• State and local governments
• Various supply chain stakeholders

The rule change standardizes the NDC format across all sectors and minimizes confusion and medication errors.

During the seven years before the rule takes effect (March 5, 2026 – March 6, 2033), the FDA will continue to assign 10-digit NDCs in the current formats. Manufacturers, distributors, repackagers, relabelers, pharmacies, health care providers, payors, and other supply chain partners should use this time to update their systems, processes, and infrastructure to handle the 12-digit NDC format by March 7, 2033.

Diaz Trade Law will continue to monitor developments concerning this proposed rule. We provide guidance on a variety of FDA matters, including food, cosmetics, drugs, alcohol, medical devices, and more.

Learn more about FDA compliance:

• Webinar: Tips on FDA’s Medical Device Registration Process
• FDA Begins Enforcement of DUNS Number Requirement for Food Facility Registrations
• Webinar: Importing Medical Devices in Compliance with U.S. FDA
• Webinar: FDA – Is it a Cosmetic, a Drug, or Both? Mitigating FDA Enforcement Actions
• Webinar: Detentions, Warning Letters, and Import Alerts: How to Use FDA’s Databases to Perform Due Diligence
• Webinar: Getting MoCRA Compliant

When Customs Issues Cross the Line

Most customs violations start as a civil enforcement matter. Errors involving classification, valuation, country of origin, or admissibility are often addressed through a request for information (CBP 28), notice of action (CBP 29), protest, prior disclosure, or penalty proceeding. However, when patterns emerge or when agencies believe false statements or deliberate schemes are involved, the enforcement posture can change dramatically.

Federal agencies, including U.S. Customs and Border Protection (CBP), Homeland Security Investigations (HSI), and the Department of Justice (DOJ), routinely collaborate to investigate potential criminal violations tied to import activity. These investigations may focus on:

• Undervaluation or misclassification to avoid duties
• False statements or omissions in entry documentation
• Evasion of import restrictions or regulatory requirements
• Coordinated schemes involving suppliers, brokers, or intermediaries

Once criminal intent is suspected, importers may face subpoenas, search warrants, asset seizures, or even criminal charges.

Increased Focus on Enforcement

The recent volatile tariff environment has created increased incentives to cheat the system. The U.S. government has made clear that it is watching closely.

In a May 2025 memo, Matthew Galeotti, head of the DOJ’s Criminal Division, named trade and customs fraud as one of the top enforcement priorities in white-collar crime. The DOJ also expanded its Corporate Whistleblower Awards Pilot Program to include customs fraud.

DOJ has repeatedly demonstrated a willingness to criminally charge bad actors with customs fraud and has secured indictments and convictions against several importers.

While CBP hasn’t issued a formal enforcement priorities memo like the DOJ, its recent public messaging leaves no room for doubt. In May 2025, the agency warned the pharmaceutical industry that undervaluing goods amounts to trade evasion. Additionally, a LinkedIn post from the agency stated: “CBP targets and combats duty evasion at every level. Make no mistake – bad actors violating U.S. trade law will be identified, investigated, and punished to the fullest extent of the law.”

Learn More: Upcoming Webinar on Customs Enforcement and Criminal Risk

DTL President Jennifer Diaz and Of Counsel Rick Quinn will explore these issues in an upcoming webinar. Join us on February 25 for a live webinar, “Customs & Criminal Law – Case Study: Tobacco.”

This webinar takes a deep dive into the intersection of customs enforcement and criminal law through the lens of a real-world tobacco-related case study. Tobacco imports are subject to some of the most complex, highly regulated, and heavily enforced rules in international trade.

Presenters will discuss:

• Overview of tobacco import regulations and why the product category carries heightened enforcement risk
• How CBP identifies irregularities and the roles of key agencies in enforcement actions
• The escalation pathway from civil customs violations to criminal investigations
• Common compliance failures in tobacco imports and how importers can avoid them
• Strategies for mitigating exposure
• Practical lessons learned for importers and trade professionals handling high-risk commodities

Who should attend?

• Importers
• Manufacturers
• Customs Brokers
• Regulatory Affairs Professionals
• In-house Legal Counsel
• Product Development Managers
• Others interested in FDA

REGISTER HERE.

Read more:

• High Tariffs, High Stakes: The Rise in Customs Fraud and Enforcement Risk
• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement
• Bloomberg Law: What is an Importer’s Reasonable Care Standard?
• Bloomberg Law:  Submitting a Prior Disclosure to CBP
• Webinar: The False Claims Act
• Webinar: Building and Maintaining an Effective Import Compliance Plan

Effective, January 21, 2026, importers MUST use the portal to submit the following for review:

• Withhold Release Order/Finding admissibility reviews.
• Uyghur Forced Labor Prevention Act applicability reviews.
• Uyghur Forced Labor Prevention Act requests for exception; and
• Countering America’s Adversaries Through Sanctions Act exception requests.

All detained or excluded shipments requiring review must be submitted through this Portal, and users must have a login.gov account to access it. Depending on the type of review submitted, submission will be reviewed by CBP personnel in Forced Labor Division, or Port of Entry, or the Center of Excellence and Expertise.

Diaz Trade Law has confirmed with CBP that responses to CBP Form 28 (Request for Information) and CBP Form 29 (Notice of Action) should not be submitted through the Forced Labor Portal.

The Portal is available at https://flportal.cbp.gov/s/login/ and CBP has provided an instructional video on how to submit a request here.

This change reflects another step forward in how CBP interacts with the trade community, transitioning from multiple submission pathways to a more centralized, digital platform.

Diaz Trade Law has significant experience in a broad range of import compliance matters including forced labor compliance and enforcement mitigation. For assistance with developing or updating a forced labor compliance plan, forced labor compliance training, or communicating with CBP regarding goods detained by CBP, contact us today at info@diaztradelaw.com or 305-456-3830.

Learn more:

• Webinar: Forced Labor – Practical Tips to Secure Your Supply Chain and Comply with Regulatory Requirements
• Bloomberg Law: U.S. Customs Targets the Use of Forced Labor
• UFLPA Guidance: What Importers Need to Know
• Uyghur Forced Labor Prevention Act (UFLPA): What You Need to Know
• CBP’s Forced Labor Process Flowchart

What Happened

On November 18, 2025, CBP issued the WRO against garments, apparel, and textiles manufactured in Mauritius by Firemount. CBP will immediately detain imports subject to the Order. The WRO was issued based on information that reasonably indicates forced labor was used in violation of 19 U.S.C. §1307.

In making this determination, CBP conducted an investigation and analyzed supporting evidence, including interview questionnaires, audio recordings and transcripts, open-source reports from nongovernmental organizations, news media, and academic research.  

The evidence demonstrated that Firemount workers are subject to four International Labour Organization indicators of forced labor: abuse of vulnerability, debt bondage, deception, intimidation, and threats. 

WRO Background 

The strategic use of WROs by CBP has been especially effective at identifying certain nations, industries, and companies that employ forced labor. CBP issues WROs after receiving information that reasonably indicates the use of prison or forced labor at any point in an imported product’s supply chain. Before the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), the United States had only implemented 30 WROs in the previous five decades. Since 2016, however, the agency has now overseen more than 50 active WROs.

CBP provides the public with a list of all WROs and the conclusions of their forced labor investigations.

CBP carries out a number of steps prior to issuing a WRO and detaining merchandise if it is linked to forced labor. 

Below is a chart categorizing CBP’s detention process for merchandise-related forced labor:

What Importers Should Do to Address Forced Labor

CBP published a forced labor Reasonable Care Checklist that includes 12 questions importers must be able to answer in order to demonstrate they have used reasonable care. Key to this checklist is knowing “how your goods are made, from raw materials to finished goods, by whom, where, and under what labor conditions.” Understanding who is supplying you with a product is not enough; you also need to know who is supplying them. 

At a minimum, you should maintain the following information: 

• Detailed description of your supply chain, including all stages of production 
• A list of suppliers involved in each step of the production process 
• Contact information for all suppliers 
• Documentation that can be used to trace raw materials to merchandise 
• Manufacturing or production records 
• Reports on factory conditions, including reports on site visits  
• Reports showing that the volume of inputs matches the volume of outputs for merchandise produced 

The documentation process can also help you defend your reasonable care duty down the road should you face a CBP enforcement action. Importers should also write standards into their contracts, set up screening for partners, utilize technology, and conduct regular audits.

Read more about the steps importers can take to understand and protect their supply chains here.

How to Modify a WRO

WROs and Findings can be modified. On June 2, 2025, CBP issued a comprehensive WRO and Finding Modification Guide that provides a roadmap for importers facing allegations of forced labor. The guide outlines a “Identify, Correct, and Prevent” framework to remediate forced labor claims.

Identify: An entity subject to a WRO or Finding should conduct a comprehensive review of its supply chains to identify forced labor risks.

Correct: Entities should develop a “Corrective Action Plan” to address forced labor issues and prevent additional issues in the future.

Prevent: Entities should address the causes of forced labor and implement remedies, including strengthening internal controls and ensuring workers can easily report violations.

The guide makes clear that the bar is high to prove that an importer has taken the proper steps to warrant a modification. However, it has happened; for example, in 2023, CBP modified a WRO against a group of companies known collectively as Smart Glove in response to the companies’ remedial efforts, which included payment of back wages.

Forced labor remains a priority for CBP. Importers should seek counsel for assistance with audits and compliance. For assistance with due diligence, re-exporting your detained merchandise, submitting documents to dispute the use of forced labor, or for assistance with the revocation request process, contact Diaz Trade Law at info@diaztradelaw.com or 305-456-3830.

Learn more:

• Webinar: Forced Labor – Practical Tips to Secure Your Supply Chain and Comply with Regulatory Requirements
• Using WROs to Fight Forced Labor
• Know Your Supply Chain: Forced Labor
• UFLPA Guidance: What Importers Need to Know 
• Uyghur Forced Labor Prevention Act (UFLPA): What You Need to Know 
• Bloomberg Law: U.S. Customs Targets the Use of Forced Labor 
• CBP Publishes Additional Guidance On Responding to Cargo Detentions Made Under the Uyghur Forced Labor Prevention Act 
• Summary of CBP’s March 2023 Forced Labor Technical Expo
• UFLPA DHS Forced Labor Guidance – What Importers Need to Know

There’s been a lot of back and forth among trade lawyers about how the court will rule. 

Here are our predictions:

After today’s hearing, we’re confident that the Supreme Court will side with the importers and uphold the lower court’s ruling. 

Several justices asked very pointed questions and seemed to express skepticism that IEEPA grants the President broad authority to impose tariffs. At one point, Justice Roberts, a key vote, even called the Administration’s reading of the law a “misfit.”

Importantly, Justice Coney Barrett discussed recovery and questioned whether relief for importers would be a “complete mess”. It is critical that importers file a lawsuit with the CIT to preserve their ability to recover tariff refunds if and when the court overturns the tariffs. Get in touch with Diaz Trade Law for assistance – 305-456-3830 or info@diaztradelaw.com.

Keep up with the latest tariff and trade deal news here.

Learn more:

• Courts Say Trump Tariffs are Unlawful, Now What?
• Bloomberg Law: Tariff Classification Basics
• ICYMI: Trump Administration Imposes 25% Steel and Aluminum Tariff
• ICYMI: President Trump Signs America First Trade Policy
• Trump Administration Announces Plan for Reciprocal Tariffs
• New Tariffs on Mexico, Canada, and China: Key Updates for Importers
• Navigating Tariff Increases: Strategies to Minimize Tariff Costs Under the Trump Administration
• Webinar: Navigating Tariff Challenges: Mitigation Tools & Tactics
• Breaking Trade News: 10% Tariff, NTE Report, CIT Settlement
• Trump Administration Announces Reciprocal Tariffs
• The Latest on Tariffs, Key Information for Importers – Automobile and Venezuela Oil Update

Heavy-Duty Vehicles and Vehicle Parts

On September 25, 2025, President Trump, via Truth Social, announced his intention to impose a 25% tariff on heavy trucks. On October 17, 2025, he issued a Presidential Proclamation formalizing and clarifying these tariffs. The proclamation imposes a 25% tariff on imports of medium- and heavy-duty trucks and truck parts. This includes Class 3 to Class 8 vehicles, like large pick-up trucks, moving trucks, cargo trucks, dump trucks, and tractors for eighteen-wheelers. 

The Proclamation also imposes a 10% tariff on imports of buses, including school buses, transit buses, and motor coaches. The tariffs are set to take effect on November 1, 2025.

President Trump is imposing the new tariffs under section 232 of the Trade Expansion Act of 1962, citing national security concerns.

If medium and heavy-duty vehicles qualify for USMCA treatment, the importer may submit documentation to identify the amount of U.S. content, and, after the Department of Commerce’s approval, the 25% Section 232 Tariff will only apply to non-U.S. content.  

Timber & Lumber

On September 29, 2025, President Trump issued a proclamation imposing a Section 232 Tariff on timber and lumber and their derivative products. Effective October 14, 2025, timber and lumber are subject to a 10% duty, upholstered wooden products are subject to a 25% duty, and kitchen cabinets and vanities are subject to a 25% duty. 

If no agreement can be reached between the U.S. and foreign governments, beginning January 1, 2026, the duty for upholstered wooden products and kitchen cabinets and vanities will increase to  30% and 50%, respectively.  

The proclamation specifically included that goods subject to (1) IEEPA reciprocal tariffs, (2) IEEPA additional tariff on Brazil, and (3) IEEPA Russian oil tariff are not subject to this Section 232 Tariff. Unlike the other Section 232 Tariffs, duty drawback is available for this tariff.  

232 Exclusions – Steel & Aluminum

On October 7, the Bureau of Industry and Security  (BIS) of the U.S. Department of Commerce released 95 inclusion requests for the Section 232 Tariff on Steel and Aluminum and their Derivative Products. Interested parties filed the inclusion requests in response to BIS’s Notice of the Opening of the Section 232 Inclusions Process published on September 17, 2025. 

The release of the 95 inclusion requests started a two-week comment period for the potential inclusions that closed October 21, 2025. BIS will now consider the comments filed and make a final determination in the coming weeks. During the last inclusion process, BIS added 407 of the 467 requested HTS to the Section 232 Tariff on Steel and Aluminum.  

Vessel Fees

On October 3, 2025, CBP published guidance implementing the Section 301 Investigation of China’s Targeting the Maritime, Logistics, and Shipbuilding Sectors, which was published on April 12, 2025, and amended on June 12, 2025. This Section 301 Investigation imposes new fees for vessels owned, operated, or built in China and for all foreign-built vehicle carrier vessels. 

Service fees on Chinese vessel operators and owners began on October 14, 2025, at $50 per net ton. There will be three subsequent fee increases: $80 beginning April 17, 2026; $110 beginning April 17, 2027; and $140 beginning April 17, 2028.

The fee will be charged up to five times per year, per vessel. 

CBP noted that the determination of whether the new fees apply to a vessel relies on the operator, not CBP.  

Tariffs and import, and export regulations are changing overnight, literally! Diaz Trade Law can help you keep up. For assistance in understanding how these tariffs may impact your business, get in touch with us today at 305-456-3830 or info@diaztradelaw.com.

Learn more:

• Courts Say Trump Tariffs are Unlawful, Now What?
• Bloomberg Law: Tariff Classification Basics
• ICYMI: Trump Administration Imposes 25% Steel and Aluminum Tariff
• ICYMI: President Trump Signs America First Trade Policy
• Trump Administration Announces Plan for Reciprocal Tariffs
• New Tariffs on Mexico, Canada, and China: Key Updates for Importers
• Navigating Tariff Increases: Strategies to Minimize Tariff Costs Under the Trump Administration
• Webinar: Navigating Tariff Challenges: Mitigation Tools & Tactics
• Breaking Trade News: 10% Tariff, NTE Report, CIT Settlement
• Trump Administration Announces Reciprocal Tariffs
• The Latest on Tariffs, Key Information for Importers – Automobile and Venezuela Oil Update

On September 30, 2025, the Bureau of Industry and Security (BIS) released an interim rule regarding “Affiliates.” Under the rule, any entity that is at least 50% owned by one or more entities on the Entity List or the Military End-User (MEU) List will itself automatically be subject to Entity List/MEU restrictions. This is a significant change from the current standard, which excludes entities that are not specifically included on the Entity List or MEU List, regardless of any affiliation with Entity List or MEU List organizations. 

This rule is effective September 29, 2025.

Entity, MEU List Background

The Entity List identifies persons (including businesses, research institutions, government and private organizations, individuals, and other types of legal persons) reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States. These persons are subject to specific license requirements for the export, reexport, and/or transfer (in-country) of specified items.  

BIS first published the Entity List in 1997. Since its initial publication, grounds for inclusion on the Entity List have expanded to activities sanctioned by the State Department and activities contrary to U.S. national security and/or foreign policy interests.

The current Entity List can be found in Supplement No. 4 to Part 744 of the Export Administration Regulations (EAR) here.

Military End-User List is a list of foreign entities, including military services, intelligence organizations, and other entities supporting military uses, for which a license is required to export, reexport, or transfer U.S. goods and technology.

The current MEU list can be found in Supplement No. 7 to Part 744 of the EAR here.

The New Affiliates Rule

The new rule aims to crack down on listed parties acquiring U.S. goods through unlisted subsidiaries. The rule follows the same parameters as the Office of Foreign Assets Control’s (OFAC) 50% rule. Both direct and indirect ownership count toward the 50% threshold. In addition, the threshold applies in the aggregate; if an entity has multiple parent companies on the Entity List or MEU List, the ownership stakes will be added together. 

Red Flag 29

In addition to establishing the 50% affiliate threshold, the rule also establishes a new red flag. Going forward, if an exporter knows that a foreign entity is owned in part by listed parties, they must determine the ownership percentage. Where ownership cannot be verified, exporters have an affirmative duty to secure a BIS license before moving forward with a transaction.

Impact

According to a recent analysis by Kharon, the rule will cover thousands of additional subsidiaries. Russia and China account for the majority of these new subsidiaries. However, entities in the EU, UK, Singapore, Australia, and India will also be impacted. 

Exporters will face immediate restrictions or licensing as a result of this rule and have significant new due diligence and compliance obligations. 

In the notice, BIS emphasized that the new rule creates an “affirmative duty” to determine the ownership of parties in a transaction. Many exporters will need to develop new ownership screening to comply with this requirement.

A key foundation of proactive and effective export compliance requires the development of an export compliance plan. Diaz Trade Law can help exporters develop and refine their compliance plans to minimize the risk of violations. We assist with export compliance training, transaction vetting, requesting licensing, voluntary self-disclosures, and more. Get in touch with us today to learn more about how these new requirements may impact your business – 305-456-3830 or info@diaztradelaw.com.

Read more:

• Webinar: Introduction to Export Controls 
• The Importance of Regular Export Compliance Training for Your Business
• Bloomberg Law: Submitting Voluntary Self-Disclosures to Bureau of Industry & Security
• Bloomberg Law: Building & Maintaining an Export Compliance Plan
• Bloomberg Law: Export Licensing Under EAR
• Bloomberg Law: Introduction to U.S. Export Controls

The dashboard includes serious adverse event reports submitted by responsible persons for cosmetic products under requirements established by the Modernization of Cosmetics Regulation Act of 2022 (MoCRA), as well as voluntary adverse event reports submitted to the FDA by healthcare professionals, consumers, salon professionals, cosmetologists, and others. 

This announcement follows a recent launch of real-time reporting of adverse event and medication errors data for drugs and therapeutic biologics. 

In the announcement, the FDA stated these real-time reporting tools are part of the agency’s commitment to transparency and providing greater insight into the safety and regulation of the products consumers use every day.

Note: Reports in this dashboard have not been verified by the FDA, and their publication does not indicate that the FDA has concluded the product caused the adverse event. 

Diaz Trade Law provides assistance with FDA pre-compliance as well as assistance in successfully navigating FDA enforcement actions. For assistance with cosmetics compliance requirements, required registration, reporting, or other FDA matters, contact us at 305-456-3830 or info@diaztradelaw.com.

Learn more:

• A New Era in Cosmetics Regulation: The Modernization of Cosmetic Regulations Act
• FDA – Is it a Cosmetic, a Drug, or Both? Mitigating FDA Enforcement Actions
• Webinar: Getting MoCRA Compliant
• FDA Issues New Rules on Use of the Term “Healthy” on Food Labeling
• FDA Issues Proposed Rule on Front-of-Package Nutrition Labeling