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Critical Minerals: National Security, Trade, and Environmental Law Nexus

Against the Trump Administration's ideological backdrop, a range of conventional and unconventional trade, economic and other measures have been and likely will continue to be taken on "national security" grounds, including domestically. These include measures to increase domestic production of "critical minerals" (among them rare earth elements)--essential to the production of consumer electronics, electric vehicles, defense articles, medical devices, and other manufactured articles. Such actions can be seen on the horizon, if one connects the dots between national security authorities under trade laws, the Administration’s stated goals and actions favoring increased domestic mining of critical minerals, and environmental laws that contain national security/national defense exceptions and are viewed by the Administration and extractives industry interests as prohibitive to domestic production of critical minerals and commercially viable terms.

Critical Resources

Critical Resources Law and Risk Management: Minerals, Agriculture, Water Food, Agriculture & Water and Critical Raw Materials DOWNLOAD CRITICAL RESOURCES SERVICE DESCRIPTION Critical minerals, rare earth elements, agriculture, and water…

A Localized Approach to Anti-corruption in Afghanistan’s Mining Sector

Thinking beyond the parameters of standard "international development" and industry playbooks, the lack of progress (or, in some cases, regression) in developing Afghanistan's mining sector should induce interested government, industry and nongovernmental actors to consider if and how laws, policies and technical assistance can be formulated, modified and implemented in ways that might enhance their effectiveness in practice, rather than just on paper. Afghanistan, as is well known, is a Muslim majority nation in which Islamic law (as locally interpreted and implemented formally and informally) plays a significant role. Islamic law (Shari'ah), provides rules and precedents applicable not only to family matters and ritual worship, but also to business transactions, public governance, market regulation, and limitations on government dominion over private property. in these areas, and others, Islamic law and historical practices provide rules and precedents applicable to the regulation, administration and conduct of mining and other extractives businesses. These laws and precedents are just as robust, and more so in some cases, as international and foreign laws and standards.

Canary in the Cobalt Mine: Glencore Corruption Probe May Not Be a One Off

The U.S. arm of Glencore, the global commodities trading and mining giant, has been served a subpoena by the U.S. Department of Justice, according to news accounts. The DOJ's subpoena reportedly seeks documents and information pertaining Glencore's business in the Democratic Republic of Congo (DRC), Nigeria and Venezuela to assess potential violations of U.S. anti-money laundering laws and the Foreign Corrupt Practices Act (FCPA), the principal U.S. law essentially prohibiting the bribery of foreign officials for business gain by U.S. companies and others subject to United States' jurisdiction (broadly construed and applied).The Glencore subpoena may not be a one-off and it should be viewed-- at least for risk assessment and compliance improvement purposes-- as potentially part of a larger U.S. strategy to proactively target corruption and, by extension, money laundering, in Africa and Africa's extractives industries. (The wider context is that the Trump Administration views U.S. anti-corruption, anti-money laundering and sanctions laws and their enforcement as "tools of economic diplomacy", including to advance trade and other policy objectives).

ZTE: Was the Export Ban the Right Penalty?

The sentiments expressed by Senator Rubio and others reflect commercial, competition, policy, and strategic concerns held by business, policy makers, defense and national security officials, and others about China and Chinese firms like ZTE and Huawei. But when raised in the context of and as a justification for a specific legal enforcement action, the sentiments blur the lines between what should primarily be an enforcement based on facts and applicable laws, rather than an instrument for advancing wider policy objectives that are not specifically advanced by the laws applicable to the conduct for which ZTE was penalized. And, while Secretary Ross' stated rationale to impose the harsher penalty to change ZTE's behavior may have been sound, the recommendation of the career professionals with expertise in sanctions and export controls enforcement should, perhaps, have carried the day. Secretary Ross' description of the process leading to the export ban and the mess that has followed it give more reason to ask whether, in the first place, the export ban was the appropriate remedy as a matter of applicable laws and the objectives served by them.

China’s One Belt One Road Could Disrupt U.S. Legal Dominance

The OBOR, even if partially successful, would, as many analysts and commentators have noted, alter the global trade landscape, if not “shake up” the global economic order in place since the end of World War II. Less discussed (except, for example, in this 2015 MassPoint Occasional Note) is one likely secondary effect of the OBOR and other trade and finance initiatives that are not centered on the U.S. dollar or the Bretton Woods system: the likely curtailment of the global reach of U.S. law.

Congressional Hearing on Terrorism Financing Probes Bank Secrecy Act Data Effectiveness, Potential BSA Amendments

On April 27, 2017, I attended a Congressional hearing on “Safeguarding the Financial System from Terrorist Financing,” held by the House Committee on Financial Services’ Subcommittee on Terrorism and Illicit Finance (the “Subcommittee”). The sole witness was Mr. Jamal El-Hindi, Acting Director of the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury charged with protecting the financial system from money laundering, terrorism financing and other illicit activities. The hearing’s purposes were to examine the methods and efficacy of FinCEN data collection, processing and information sharing and whether the Bank Secrecy Act (BSA) and USA PATRIOT Act should be amended to improve FinCEN’s anti-money laundering (AML) and counter-terrorism financing (CFT) capacities and performance. In this brief MassPoint update, I highlight BSA data collection and usage numbers and some of the questions and issues that appeared to be of particular interest and/or concern to Congress members in attendance, taking into account the nature and frequency of the questions asked, the tone of questions, and related requests for additional or clarifying information from FinCEN.

Senate Bill to Combat ISIS Targets “Jurisdictions of Terrorism Financing Concern”

On February 13, 2017, Senator Bob Casey (D-PA) introduced in the Senate the “Stop Terrorist Operational Resources and Money Act” (the “STORM Act”). The purpose of the STORM Act…

Compliance, Governance, and Investment Updates

March 14, 2017 A compilation of recent and topical MassPoint publications and updates on compliance, governance, and the climate around foreign investment in the United States.