China plans to impose sanctions on U.S. companies that sell defense products to Taiwan, China’s Foreign Ministry spokesperson Geng Shuang said July 12.

A group of U.S. venture capital funds is suing the Treasury Department’s Office of Foreign Assets Control, alleging that OFAC’s 50 percent rule is unconstitutional, court records show. The lawsuit says the rule -- which bans companies and people from dealing with entities owned 50 percent or more by a sanctioned party -- unlawfully prevented the plaintiffs from accessing their money, property and investments, violating unreasonable seizure and due process laws under the Fourth and Fifth amendments to the Constitution, respectively.

Plans to reorganize International Traffic in Arms Regulations are ongoing despite what has been a lengthy legal review of the draft rules, a Directorate of Defense Trade Controls official said while speaking July 9 at the Bureau of Industry and Security annual export controls conference. Through a "series of rules we are trying to make the content of the ITAR more linear and more discernable," said Rob Hart, regulatory and multilateral affairs division chief in the Office of Defense Trade Controls Policy.

Wayne Wagner, senior manager for Brokerage Services at FedEx Logistics, died unexpectedly on July 8, the National Customs Brokers & Forwarders Association of America said in an email. Wagner was heavily involved in numerous industry groups and was a current board member of the NCBFAA. The NCBFAA said it will send out information about services for Wagner once finalized.

Bradley Hayes, executive director of CBP's Office of Trade Relations, is now acting assistant commissioner for CBP’s Office of Congressional Affairs, according to the July 10 issue of OCA's monthly newsletter.

The World Customs Organization issued the following releases on commercial trade and related matters:​​

Legislation aimed an increasing Canada's ability to use safeguard measures to limit import surges "recently cleared the House of Commons and the Senate, and received Royal Assent," said Daniel Kiselbach, a lawyer at Miller Thomson, in a blog post. "The provisions in the enactment lift a two-year moratorium on the imposition of safeguard measures on imports that have previously been subject to safeguard measures," he said. Part of a recent agreement between the U.S. and Canada that led to to lifting of tariffs on steel and aluminum was that the countries may impose tariffs in response to import surges of the metals (see 1905170031).

The U.S. is working with Hong Kong to increase audits of imports and exports, said Kevin Kurland, director of Commerce’s Office of Enforcement Analysis, at the Bureau of Industry and Security annual export controls conference July 10. Kurland said the cooperation has led to a “record number of detentions” in the past year as both sides have more strictly enforced and audited export and import controls. “We’re working with them,” Kurland said, adding that Commerce wants to make sure “our systems are complementary.”

A recent Supreme Court case on courts' deference to federal agencies will likely result in tougher legal scrutiny of trade policies made by the Commerce Department, CBP and other agencies that affect trade, said Devin Sikes, a lawyer at Akin Gump. Sikes wrote that the U.S. Court of International Trade and federal appeals courts will be doing deeper reviews of federal agencies' trade regulations that could have ambiguity. "Federal agencies operating in the international trade arena likewise will need to more fully explain their reasons for interpreting a regulation in a particular way," Sikes wrote. "These agencies may no longer assert ambiguity based on the regulation’s terms and expect deference from the courts. Expect an increase in the number of challenges filed contesting an agency’s interpretation of its own regulations."

Rep. Jan Schakowsky, a member of the House working group negotiating with U.S. Trade Representative Robert Lighthizer on the U.S.-Mexico-Canada Agreement, said the second meeting, held the morning of July 11, was interesting, like the first. Schakowsky, D-Ill., whose area of interest in the group is the provision for biologic drug makers, said that topic was covered at the first meeting, before the Fourth of July break.