1. CFIUS Penalties Will Increase Maximum Civil Penalty to $5 Million or the Value of the Transaction

As we wrote previously, the U.S. Department of the Treasury has issued a final rule that takes effect on December 26 that will dramatically raise the Committee on Foreign Investment in the United States (CFIUS) penalties from $250,000 to the greater of $5 million or the value of the transaction per violation. CFIUS also will have increased investigative powers to investigate non-notified transactions. Please consider an initial CFIUS review early in any new transaction planning if you have foreign investors, even if they are limited partners.

2. $14.6 Million OFAC Penalty for Foreign Supplier That Caused a US Company to Violate Iran Sanctions

On December 3, the Office of Foreign Assets Control (OFAC) announced a $14.6 million settlement with Aiotec GmbH, a Germany energy equipment company, for one apparent violation of OFAC sanctions on Iran. From 2015 to 2019, Aiotec participated in a conspiracy to cause an unnamed U.S. company to indirectly and unwittingly sell and supply an Australian polypropylene plant to Iran. While the U.S. company repeatedly took steps to verify the destination of the plant, Aiotec falsified documents and made repeated false statements to conceal the true end purchaser and destination of the plant in willful violation of U.S. sanctions laws and regulations. This case demonstrates the risks and potential costs when non-U.S. persons conduct transactions with sanctioned parties that indirectly involve U.S. persons.

3. International Traffic in Arms Regulation Registration Fees Increase 

For the first time in 15 years, the Directorate of Defense Trade Controls (DDTC) will raise fees for registration, as announced in a final rule published December 10. Effective January 9, 2025, fees for Tier 1 registration will increase from $2,250 to $3,000 per year, and the Tier 2 registration fee will rise from $2,750 to $4,000. The largest increase affects Tier 3 registrants, with the baseline Tier 3 registration fee increasing from $2,750 to $4,000. In addition, Tier 3 registrants will face additional fees of $1,100 for each favorable licensing determination above five in the 12-month period preceding their registration.

4.  Interim Final Rule on AI Export Controls Pending Interagency Review

The Bureau of Industry and Security (BIS) is working on a new artificial intelligence (AI) export control rule. The interim final rule is under interagency review. At this time, there are no specifics on the details of the rule, and there will not be a preliminary rule providing notice and seeking public comment. 

5.  Guidance Regarding New Outbound Investment Program

With the new outbound investment program taking effect on January 2, 2025, U.S. companies making investments in China, Macao, and Hong Kong should ensure they understand the new rules when investing in sensitive industries related to U.S. national security (think integrated circuits, robotics, and cybersecurity as three examples). Additionally, U.S. investors should ensure that their investment guidelines are updated and that contracts are revised to protect against inadvertent violations. The rules prohibit investments in certain industry sectors and require notification to the Treasury Department for others. 

6. Further Tightening of Controls on Russia with Gazprombank Designation

On November 21, OFAC designated Gazprombank, the largest Russian financial institution that remained unsanctioned, along with 50 small-to-medium Russian banks, 40 Russian securities registrars, and 15 Russian finance officials as Specially Designated Nationals. OFAC designated Gazprombank for operating or having operated in the financial services sector of the Russian Federation economy. 

TRADE TIP OF THE MONTH: Things To Do ASAP if You Import Into the United States

  • Calculate your possible maximum tariff increases based on Trump’s current plan to raise tariffs:
    • Estimate the maximum tariff for China at 60 percent.
    • Estimate the maximum tariff for Canada and Mexico at 25 percent.
    • Estimate the maximum additional tariff for the rest of the world at 20 percent.
  • Verify that you have the correct tariff classification and country of origin.
  • Review your supplier contracts; add new provisions now to protect against tariff changes in 2025.
  • Consider these options:
    • Changing production to meet different classification criteria
    • Changing inputs to alter your country of origin
    • Changing suppliers
    • What is your current international commercial term?
    • Would it help to use bonded warehouses or a foreign trade zone?
    • Does duty drawback apply?
    • How about the 9802 program for assembly abroad?
    • Can you still benefit from free trade agreements?


Reviewing these ideas is not a waste of time. Tariff planning can save you millions of dollars on import duties.

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