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Negotiating Supply Chain Agreements Under the New U.S.-China Trade Sanctions

Conducting Due Diligence, Certifying Regions of Origin, Limiting Financial Risks and Delivery Delays

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, May 16, 2023

Recorded event now available

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This CLE webinar will examine how counsel negotiating current supply chain agreements should address the restrictions imposed by the recent U.S.-China trade law restrictions. The panel will focus on how the U.S. government's forced labor import ban affects companies from apparel vendors to solar panel makers; the newest rules expanding U.S. export controls targeting China; and new limits on the use of goods and services from China for U.S. Government contracts.


As tensions in U.S.-China relations continue to affect the trade dimension, companies must proactively manage their supply chains. In light of fast moving legal developments, risk mitigation measures are more important than ever. Several U.S. laws and regulations in recent years highlight these challenges.

The Uyghur Forced Labor Prevention Act (UFLPA) created a rebuttable presumption that "any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People's Republic of China" or produced by a "UFLPA entity" will be prohibited from entry into the United States. U.S. Customs and Border Protection (CBP) has significantly increased its tools available under the ULFPA and Section 307 of the Tariff Act of 1930 to enforce the forced labor import ban. These developments have wide-ranging effects on the way supply chain management and due diligence should be conducted.

In addition, on Oct. 7, 2022, the U.S. Commerce Department's Bureau of Industry and Security (BIS) issued the much anticipated rules aimed at restricting China's ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors. This new rule imposed a wide range of new and enhanced restrictions targeting China's advanced computing and semiconductor sectors by, among other things: (1) adding certain semiconductor manufacturing equipment, advanced chips, and commodities containing such chips to the Commerce Control List of the Export Administration Regulations (EAR); (2) adding new license requirements for certain items destined for China, including certain items for use in supercomputers, the development or production of semiconductors or semiconductor manufacturing equipment, and destined for semiconductor fabrication facilities (fabs) in China that produce certain advanced chips; (3) restricting U.S. persons from engaging in or facilitating activities supporting the development or production of certain integrated circuits at fabs in China; and (4) substantially expanding the scope of items that are "subject to the EAR" under the foreign direct product (FDP) rules to cover additional items in the advanced computing and semiconductor sector produced outside the U.S. This has caused, and continues to cause, a major supply chain disruption in advanced semiconductors and related fields.

BIS also has continued to target Chinese entities for trade restrictions under its Entity List for a variety of reasons. Notably, BIS recently designated several Chinese entities for their role in supporting Russia's invasion of Ukraine, identifying them as Belarusian or Russian "military end users." Given the recently expanded scope of FDP rules for Belarus and Russia, and widely reported concerns that Chinese entities may send items to support the Russian military, companies should be on guard against such potential diversion risks.

Lastly, the National Defense Authorization Act for Fiscal Year 2023 (NDAA) enacted in December 2022 includes provisions that target certain goods and services from China for U.S. government contracts. In particular, Chinese-origin semiconductor products and services will become subject to these restrictions. Federal contractors should begin reviewing their agreements and sourcing strategies to stay ahead of the new NDAA restrictions.

Listen as our expert panel discusses these regulations and what companies with contracts for goods produced in restricted Chinese regions can do to overcome the presumption against them, what suppliers of goods subject to the EAR's export controls can do to ensure compliance, what goods and services may become off-limits for U.S. government contracts, and what documentation is needed to reduce the risk of delay in continued international trade between the countries.



  1. UFLPA and Forced Labor Import Ban
    1. Common pitfalls and challenges
    2. Due diligence and compliance measure best practices
  2. Semiconductor and supercomputer rules targeting China
    1. Identification of items subject to new rule
    2. EAR licensing strategies
    3. Documentation for continued trade
  3. Supply chain agreements with Chinese companies
    1. Key risk areas that should be proactively addressed
    2. Other end-user risks (Entity List/Military End Use Rule)
  4. NDAA
    1. New restrictions for sourcing goods and services from China for U.S. government contracts
    2. Timeline for implementation and context


The panel will address these and other key issues:

  • What are the immediate due diligence steps and compliance measures that every company should consider in light of the UFLPA?
  • What are key risk areas that should be proactively addressed when entering into a supply agreement with a Chinese party?
  • How should companies manage U.S. export controls targeting the semiconductor and supercomputer sections in China, including potential licensing strategies?
  • What are some other restrictions that are on the horizon, particularly for U.S. government contracts?


Lo, T. Augustine
T. Augustine Lo

Senior Attorney
Dorsey & Whitney

Mr. Lo practices in the firm’s National Security Law Practice Group. He advises clients on U.S. customs and...  |  Read More

Shin, Eunkyung
Eunkyung Kim Shin

Baker & McKenzie

Ms. Shin regularly advises multinational companies on complex international trade, regulatory compliance, and customs...  |  Read More

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