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Legislative Update: Digital Trade, North Korea Sanctions, Drug Imports, IPR

Friday, May 05, 2017
Sandler, Travis & Rosenberg Trade Report

Digital Trade. Reps. Suzan DelBene, D-Wash., and Erik Paulsen, R-Minn., have launched the congressional Digital Trade Caucus to promote a U.S. trade policy that reflects the modern digital economy. Noting that digital trade accounts for more than half of U.S. service exports and that the U.S. runs a $159 billion trade surplus in digitally-deliverable services, the two lawmakers said the new caucus will seek to (1) promote a free and open Internet to support the digital needs of manufacturers and service providers, (2) promote free cross-border data flows, (3) eliminate data localization requirements, (4) ensure that trading partners allow open online and cloud platforms by not requiring them to filter speech, (5) eliminate requirements that businesses transfer technology, source code, or encryption keys, and (6) address customs and trade facilitation barriers for e-commerce. Twenty House members have reportedly joined the caucus to date, including Ways and Means Trade Subcommittee Chairman Dave Reichert, R-Wash.

North Korea. The House of Representatives approved May 4 the Korean Interdiction and Modernization of Sanctions Act (H.R. 1644), which includes the following provisions.

- prohibits goods produced in whole or part by North Korean forced labor from entering the U.S. and sanctions foreign persons who employ North Koreans who are forced to labor in inhumane conditions and denied access to wages and benefits

- authorizes enhanced screening of inbound cargo that has transited any foreign seaports or airports found to have failed to inspect or seize the cargo of North Korean ships or aircraft as required by United Nations Security Council resolutions

- mandates sanctions against any foreign person who buys certain metals or minerals from North Korea or provides certain types of military-use fuel or insurance or reinsurance to vessels sanctioned under a UNSC resolution for engaging in illicit trade with North Korea

- expands the ability to sanction those who import North Korean coal, iron, or iron ore above the limits imposed by UNSC resolutions, buy textiles or fishing rights from North Korea, facilitate the online business activities of the North Korean regime, or fail to comply with UNSC resolutions targeting North Korea

- prohibits any ships owned by the government of North Korea or owned or operated on behalf of any country not complying with UNSC resolutions from operating in U.S. waters or landing at any U.S. port

- includes sanctions that can be used against those who import food or agricultural products from North Korea

- bans foreign governments that import or export conventional weapons from or to North Korea from receiving certain types of U.S. foreign aid


Drug Imports. The International Narcotics Trafficking Emergency Response by Detecting Incoming Contraband with Technology Act (H.R. 2142, introduced April 5 by Rep. Tsongas, D-Mass.) would provide U.S. Customs and Border Protection with $15 million to buy hundreds of new portable chemical screening devices that can detect fentanyl and other synthetic opioids at ports of entry and mail and express consignment facilities. It would also provide CBP with additional personnel, facilities, and scientists to process and interpret testing results at all hours.

IPR. The Trade Protection Not Troll Protection Act (H.R. 2189, introduced April 27 by Rep. Cardenas, D-Calif.) would close loopholes allowing companies that do not manufacture goods in the U.S. to sue U.S. manufacturers for intellectual property violations. It would also make permanent a 2013 pilot program to expedite IPR cases at the International Trade Commission and ensure that the ITC prioritizes in its rulings the impact on consumers.

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