The U.S. Department of State (“State”) has decided to lift the defense trade embargo against Cambodia.  Accordingly, the Directorate of Defense Trade Controls (“DDTC”) will publish on November 7, 2025, a final rule amending the International Traffic in Arms Regulations (ITAR) at § 126.1 to remove Cambodia from the proscribed countries list. 

For countries included on the proscribed countries list in § 126.1 (“126.1 countries”) DDTC’s policy is to generally prohibit all exports or imports of defense articles and defense services destined for or originating in these countries; certain exemptions are not available for 126.1 countries and any involvement of 126.1 countries in ITAR regulated activity without authorization trigger mandatory notification requirements to DDTC.   

As a result of this rule, license requests for defense articles and defense services to Cambodia will now be evaluated individually, and exemptions previously unavailable under ITAR § 126.1 will be accessible for Cambodia (provided exemption criteria are met).   

Justifying the shift in policy, State cited Cambodia’s “diligent pursuit of peace and security, including through renewed engagement with the United States on defense cooperation and combating transnational crime.”  The decision to remove prohibitions on Cambodia follows a series of meetings and trade deals President Trump made during his trip to the region at the end of October.  In a fact sheet, the White House explained that the United States and Cambodia agreed to provide U.S. exporters “unprecedented access” to Cambodia’s market, including ending the “competitive disadvantages” U.S. exporters face compared with other trading partners with Cambodia; though no specific mention was made about defense trade.  China has historically been the main supplier of arms to Cambodia, according to the Stockholm International Peace Research Institute (SIPRI).

Crowell & Moring LLP will continue to monitor defense trade developments and the potential impact to industry.

Yesterday, the Supreme Court of the United States heard oral argument in the consolidated case challenging the use of the International Emergency Economic Powers Act (“IEEPA”) to justify sweeping import tariffs. At issue is whether IEEPA authorizes the President, upon declaring a national emergency, to impose tariffs and, if so, whether that delegation is constitutionally permissible.

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Camel Energy, a Michigan-based importer of lead-acid batteries, has recently filed a complaint at the Court of International Trade (CIT) contesting U.S. Customs and Border Protection’s (CBP) two recent exclusions of its shipments. CBP excluded these entries due to “suspicion of being made with forced labor and subject to the UFLPA.” Camel Energy maintains that these exclusions were unlawful.

The Uyghur Forced Labor Prevention Act (UFLPA) authorizes CBP to detain or exclude products made wholly or in part in Xinjiang or linked to entities included on the UFLPA Entity List. Camel Energy asserts that it is not on the Entity List, and its batteries are not produced with forced labor. Camel Energy’s parent, Camel Group, is included in the UFLPA Entity List and is challenging its designation at the Court of International Trade separately.

In its complaint, Camel Energy notes that CBP:

  • Excluded Entries Without Proper Evidence: CBP excluded two shipments “on suspicion” of forced labor, however Camel Energy claims CBP did not substantiate this suspicion or provide evidence.
  • Provided No Admissibility Determination: Camel Energy states CBP never made a formal admissibility determination for its entries, causing its protests to be denied by default after months with no decision.
  • Failed to Observe Response Deadlines: CBP allegedly did not give Camel Energy the required 30-day window to respond and prove the goods weren’t linked to forced labor or the UFLPA Entity List.
  • Lacked Notice and Transparency: Notices of detention and exclusion were sent days apart, with no explanation for this timeline. Camel Energy maintains that CBP failed to respond to its repeated requests for the evidence used against it.

The complaint highlights the broader issue of CBP’ s detention or exclusion of 95 separate shipments of Camel Energy’s batteries across multiple U.S. ports since August 21. Despite submitting responses and protests regarding most of these shipments, Camel Energy reportedly received no determination from the agency.

Camel Energy emphasized in its complaint that it has a “history of successful protests” against forced labor accusations in the past. The current lack of transparency and timely action by CBP, the company says, is deeply troubling, particularly due to the sudden exclusion notices and the absence of meaningful opportunity to respond.

This complaint highlights the challenges importers face under the UFLPA regime, especially pertaining to due process and evidence-sharing. Stakeholders in global supply chains, notably those dealing with products scrutinized under UFLPA, are watching the case closely for signals about future CBP enforcement practices and transparency.

Crowell & Moring will continue to monitor Camel Energy’s challenge at the Court of International Trade (Camel Energy v. United States, CIT # 25-00230)

On October 30, 2025, President Trump and Chinese President Xi Jinping met in Busan, South Korea – this marks the first time the two leaders have engaged in face-to-face talks since 2019, during Trump’s first term.

According to a statement from China’s Ministry of Commerce (MOFCOM) issued during a press briefing following the meeting, the U.S. and China have reached an agreement in recent negotiations in Kuala Lumpur to suspend certain tariff and export control measures on both sides.

Under the reported agreement, the U.S. will reduce the fentanyl-related tariffs imposed on Chinese goods (including those from Hong Kong and Macao) to 10 percent and suspend for one year the 24 percent reciprocal tariff on China. In turn, China will make corresponding adjustments to its countermeasures against these U.S. tariffs. China’s countermeasures included multiple rounds of retaliatory tariffs that went into effect February 10, 2025 and March 10, 2025 in response to the fentanyl-related tariffs. Both sides also agreed to extend certain tariff exclusion measures.

Additionally, the U.S. will implement a one-year suspension of its recent expansion of export controls, which includes the BIS  “Affiliates Rule” announced on September 29, 2025. China will implement a one-year suspension of its new export control measures announced on October 9, 2025.

The U.S. also agreed to suspend the Section 301 vessel fees targeting China’s maritime, logistics, and shipbuilding sectors for one year, and China agreed to suspend its special port charges on U.S.-owned, operated, built or flagged vessels related to the investigation.

Other measures of the agreement include commitments to expand agricultural trade and cooperation efforts in fentanyl control.

As of publication, neither the U.S. nor China has issued an official release confirming the details and effective dates of the measures.  Crowell & Moring, LLP will continue to monitor developments and the potential impact to businesses and consumers moving forward.

The United States, European Union, and United Kingdom have significantly escalated Russia-related sanctions the past month, including the Trump Administration’s first sanctions directly imposed on Russia. These coordinated actions—which particularly target the Russian energy sector—indicate that Russia sanctions remain on the geopolitical agenda and require multinational companies to remain vigilant in their compliance with those sanctions.

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On 23 October 2025, the EU adopted a further sanctions package, its “19th Round”, against Russia in connection with its ongoing war in Ukraine. We summarise the key measures below.

Energy

  • LNG Import Ban: The EU will prohibit the purchase, import, or transfer, directly or indirectly, of Russian liquified natural gas (LNG) from 25 April 2026, except for any contracts entered into before 17 June 2025 and lasting more than a year. For these historic contracts, the prohibition comes into effect on 1 January 2027 (provided the contract is not amended post-June 17, subject to certain limited exemptions).
  • Vessel Sanctions: An additional 117 vessels have been added to the list of vessels subject to an EU port access ban and other services restrictions.

Asset-Freezing Sanctions

  • Ownership and Control Test: The EU has codified in legislation the terms “owning” and “controlling” for the purposes of determining whether a non-designated entity is subject to EU asset freezing sanctions under Regulation (EU) No 269/2014. These terms were previously specified in guidance, but the EU has pulled them formally into the regulation to drive consistency in interpretation against the Union.  In particular, “owning” means being in possession of 50 % or more of the proprietary rights of a legal person, entity or body, or having a majority interest therein. “Controlling” includes, but is not limited to, a range of factors, all of which were previously included in the guidance (e.g., having the right to appoint or remove a majority of board members or having the right to exercise a dominant influence).
  • Expanded Criteria: The EU expanded its asset freezing designation criteria to include persons that are responsible for, supporting or implementing actions or policies contributing to the deportation, forced transfer, forced assimilation, including indoctrination, or militarised education of Ukrainian minors.
  • New designations: The EU designated an additional 22 persons and 42 entities as asset-freeze targets, including Litasco Middle East DMCC.  Despite an earlier action by the UK and U.S. sanctions issued on the 22nd, the EU did not designate either the Lukoil or Rosneft parent companies (it did, however, expand the scope of the “transaction” ban applicable to the latter).

Military and industrial capabilities

  • Additional Goods Subject to Export and Import Restrictions: New items have been subject to export restrictions on Russia and Belarus, including electronic components, rangefinders, and additional chemicals, metals, oxides and alloys, salts and ores, and articles made of rubber, tubes, tyres, millstones and construction materials. Import-related prohibitions have been extended to cover all acyclic hydrocarbons.
  • Investment Prohibition: The package introduces a prohibition on acquiring any new or extending any existing participation in ownership or control, creating any new JV, branch, or representative office, entering into any new contract or arrangement for the supply of goods or services, or of related intellectual property rights or trade secrets to, from or for use in listed Russian special economic, innovation or preferential zones. Financing of companies located in these zones is also prohibited. As of 25 January 2026, it will be prohibited to maintain the same in the zones. The restriction provides for certain exemptions and derogations, e.g., for the purchase, import or transport of natural gas, titanium, aluminium, copper, nickel, palladium or iron ore to the EU or for humanitarian purposes.
  • Export Restricted Entities: An additional 45 entities are subject to a restriction on selling or exporting dual-use goods or other advanced goods and technologies, i.e., EU persons cannot export or sell such items to them. This list includes entities in Russia and third countries (China, Hong Kong, India, and Thailand).

Financial services

  • Transaction Ban: The following banks and oil traders have been added to an EU transaction ban:
    • CJSC Alfa-Bank (Belarus), OJSC Sber Bank (Belarus), VTB Bank (Belarus) and VTB Bank (Kazakhstan) (effective 2 December 2025)
    • Payeer, CJSB JSCB Tolubay, OJSC Eurasian Savings Bank, CJSC Dushanbe City Bank, CJSC Spitamen Bank (Tajikistan), OJSC Commerce Bank of Tajikistan (effective 25 November 2025)
    • Blackford Corporation Limited and Fuel and Oil Dynamics FZE (effective 12 November 2025).
  • Russian Payment Systems: It will be prohibited, from 25 January 2026, to connect to any systems of the Central Bank of Russia or to systems provided by any other legal person, entity or body incorporated or constituted under the law of Russia that include a financial messaging functionality, including the Fast Payment System (SBP) and the Russian National Payment Card System (Mir).
  • Crypto: Existing crypto prohibitions have been expanded to prohibit directly or indirectly providing the following to Russian entities or residents: crypto-asset services; issuing of payment instruments, acquiring of payment transactions, or payment initiation services; and issuing of electronic money. EU persons are also prohibited from engaging in transactions involving A7A5 (a stablecoin created with Russian state support) as of 25 November 2025.

Other services

  • Additional Services: The EU has restricted the provision of the following additional services to the Russian government or Russian entities: (i) commercial space-based services consisting of Earth observation or satellite navigation, (ii) artificial intelligence services consisting of access to models or platforms for their training, fine-tuning and inference, and (iii) high-performance computing, including access to graphic processing unit-accelerated computing, or quantum computing services. These restrictions are effective as from 25 November 2025.
  • Tourism: In addition, services directly related to tourism activities in Russia are prohibited (subject to a wind-down derogation until 1 January 2026 for contracts concluded before 24 October 2025).
  • Reinsurance: It will be prohibited to provide reinsurance for any aircraft or vessels operated by the Russian Government or Russian entities for a period of five years following the sale or lease arrangement of those aircraft or vessels.

Diplomats

Russian diplomatic or consular personnel, including administrative and technical staff, and their family members, will be obliged to provide a 24-hour prior notification of their arrival in or transit through the EU. An EU Member State may impose an authorisation requirement on the travel to or transit through its territory. The measures are applicable as from 25 January 2026.

On October 15, 2025, the UK announced a significant expansion of its Russia-related sanctions regime, designating Lukoil and Rosneft—Russia’s two largest oil companies—as asset freeze targets.

This is the first time Lukoil and Rosneft have been subjected to full asset freezing sanctions by any of the UK, U.S., or EU, and follows earlier UK measures against Gazprom Neft and Surgutneftegas in January 2025, Russia’s third and fourth largest oil companies. By targeting the parent companies, the UK sanctions will also extend to any companies that Lukoil or Rosneft majority own or otherwise control.

The new package also notably sanctions:

  • Nayara Energy Limited (an Indian refinery, 49% owned by Rosneft). This follows the EU’s sanctions on Nayara in July.  In contrast to the EU’s action against Nayara, the UK issued a wind-down license for Nayara and the Chinese energy companies mentioned below), which expires on November 13, 2025;
  • an UAE commodity trading house (Wissol Commodities), several Chinese oil refineries and the Beihai LNG terminal (which had been importing LNG from the sanctioned Arctic LNG 2 project);
  • an additional five Russian banks; and
  • companies that have been supplying electronics critical for Russian drones and missiles, including companies based in Thailand, Singapore, Turkey and China.

The UK has continued its focus on vessels by specifying an additional 51 ships, including 44 identified as part of the “shadow fleet” used to transport Russian oil. These vessels are now prohibited from accessing UK ports and have any UK registration revoked.

In parallel, the UK issued a wind-down licence for transactions involving Rosneft, Lukoil and their subsidiaries (which expires on November 28, 2025) and amended two existing licences to allow transactions with Lukoil and Rosneft to continue in relation to 6 specified oil projects and to allow petrol station payments in Kyrgyzstan and Tajikistan.

The UK has also announced that it will introduce a ban on the import of oil products refined in third countries from Russian-origin crude, aiming to address indirect flows of Russian oil into global markets. This will require amending regulations to be passed and follows the EU’s similar announced prohibition which comes into effect on 21 January 2026. Overall, these developments represent a notable escalation in UK sanctions on Russia and its oil revenues, especially by sanctioning Lukoil and Rosneft, energy companies that remain integrated into global markets and with operations and activity today in countries allied with the UK.  It remains to be seen whether the EU will follow suit and target Lukoil and Rosneft as part of its 19th sanctions package, which is due imminently and similarly expected to focus on placing continuing pressure on Russian energy.

The European Commission recently adopted its first-ever measures under the International Procurement Instrument Regulation (IPI), restricting Chinese access to the EU public procurement market for medical devices. In this client alert, we take a closer look at the IPI and the measures that the Commission decided to adopt with regard to China, and we consider how the Commission is likely to use the IPI in the future.

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On Thursday, October 9, 2025, China issued a series of new export control measures and designations on China’s Unreliable Entity List (UEL).

The new controls significantly expand the scope of China’s oversight over its rare earth materials by comprehensively regulating the entire supply chain of Chinese-origin rare earths, from specified raw materials to mining and manufacturing technologies, production equipment, and downstream products. Announcement No. 61 is especially significant because it broadens China’s extraterritorial jurisdiction to the re-export of goods. It also introduced its versions of de minimis rule and the Foreign Direct Product Rule (FDPR), by regulating foreign-made products that contain a de minimis amount of Chinese rare earths content or manufactured with Chinese rare earths technologies.

The 14 newly designated parties added to the UEL primarily include U.S. firms in the defense and intelligence sectors and entities linked to Taiwan’s defense sector.

Below is a summary of key provisions in the series of announcements:

1. Export Controls on Rare Earths: A Dual Prong Approach

China’s exports controls on rare earth metals and permanent magnets date back to April 4, 2025.

Announcement No. 61 further expands such exports controls extraterritorially by regulating the export of the following items by foreign entities or individuals to third countries, no longer limited to direct exports from China:

  • Chinese-origin rare earths listed in Annex 1 of the Announcement No. 61 (re-export);
  • Foreign-made permanent magnet materials and target materials listed in Part 2 of Annex 1, that contain, are integrated or commingled with Chinese-origin rare earth metals listed in Part 1 of Annex 1 where the Chinese content value reaches 0.1% or more (de minimis rule); and
  • Foreign-made items listed in Annex 1 that are manufactured using Chinese rare earth mining, separation, smelting, magnet manufacturing, or recycling technology (FDPR).

This announcement is China’s first application of the re-export, de minimis rule and FDPR rules that have been largely used by the U.S. to regulate semiconductor exports. Most of the export control requirements in Announcement No. 61 are effective December 1, 2025, except for controls on the re-export of Chinese-origin rare earth materials, which are effective immediately.

Additionally, Announcements Nos. 56, 57 and 62 introduce comprehensive controls on the entire rare earths supply chain—from raw materials and new rare earth elements, manufacturing equipment, and mining and manufacturing technologies. Announcement No. 56 imposes export controls on certain rare earth equipment and raw/auxiliary materials. Announcement No. 57 adds five new rare earth elements to China’s export controls measures: holmium, erbium, thulium, europium, and ytterbium. These controls are effective November 8, 2025. Finally, Announcement No. 62 imposes export controls on technologies related to rare earth mining, smelting and separation, metal refining, magnetic material manufacturing, recycling, and related production line assembly, calibration, maintenance repair, and upgrading technologies.

Combined, these announcements regulate the export and re-export of any products that directly or indirectly contain Chinese-origin rare earth materials and technologies at any point in their supply chain. These controls severely limit the use of Chinese-origin rare earths materials and technologies in any foreign defense supply chains and military end use applications.

2. Export Controls on Other Strategic Materials

In addition to expanded controls on rare earths, China also introduced controls on other strategic materials. Announcement No. 55, imposes export controls on superhard materials, including specific synthetic diamond powders, single crystals, ultra-thin diamond wire saws, high-speed grinding wheels, and related production equipment and technology. Announcement No. 58 imposes export controls on dual-use products related to lithium batteries and synthetic graphite anode materials, including high-performance batteries and their manufacturing equipment and technology. Both announcements are effective November 8, 2025.

3. New Designations on the Unreliable Entity List

Lastly, China announced the addition of14 entities to China’s Unreliable Entity List (UEL). These entities are mostly U.S.-based and in the defense and intelligence sectors. Effective October 9, 2025, these entities are prohibited from making new investments in China and engaging in import and export activities related to China. Any transactions and the transfer of data and information between these entities and persons/organizations in China are also prohibited.

Given that China leads the production of rare earths minerals globally, accounting for 70% of the world’s supply and 90% of global rare earth ore processing, China’s tightening of export controls on rare minerals and other strategic materials will have far-reaching effects on high-tech industries and supply chains. The impacted industries include defense (including products such as jet fighters, drones, and nuclear submarines), renewable energy (wind turbine generators and energy storage systems), electric vehicles, semiconductors, and consumer electronics.

For additional questions and guidance, please contact Crowell’s Export Controls Practice.

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a Final Rule on October 9, 2025 that will add 26 entities and three addresses to the Entity List for a total of 29 new entries (effective immediately).  BIS’ Entity Review Committee (ERC)—composed mainly of the Departments of Commerce, State, Defense, Energy, and Treasury—targeted these entities for their alleged role in illegally supplying Iran with unmanned aircraft systems (UAS) parts and components, electronic and chemical manufacturing items (including of U.S.-origin), as well as links to an illicit procurement network. 

The entities and addresses are located in the People’s Republic of China (19), Turkey (9), and the United Arab Emirates (1).  All exports, reexports, and transfers (in country) of items (subject to the U.S. Export Administration Regulations) to these entities, as well as their “affiliates” caught under the new BIS Affiliates Rule, will now require BIS authorization, even if the exporter is a non-U.S. person.  License applications will be reviewed under a “presumption of denial” policy.

BIS highlighted that since 2017, countries in the Middle East have found “weaponized” UAS—including aircraft containing U.S.-origin electronic components—operated by Iranian proxies, such as Houthi and Hamas militants.

Of the 19 Chinese entries added, the BIS determined the following:

  • One (1) entity was part of an illicit procurement network that supplies UAS components to Iran.
  • Ten (10) facilitated Iran’s purchase of electronic components (including U.S.-origin items) used in UAS.
  • Five (5) helped Iranian proxies (including Hamas) buy and procure electronic components found in Iranian-made weaponized drones recovered by Israel Defense Forces following the October 7, 2023, attack on Israel.
  • Three (3) addresses were associated with providing or attempting to provide a sanctioned Iranian entity tied with Iran’s Ministry of Defense.

In addition to the China destinations, BIS noted seven (7) Turkish entities diverted U.S.-origin items to Iran; one Turkish entity was involved in transshipment of U.S.-origin aircraft components into Iran; while another Turkish company, along with a UAE one, diverted U.S.-origin chemical manufacturing equipment to Iran. 

This means there are now a total of 19 address-only entries: 18 in China and one in Turkey, unassociated with a specific entity. BIS has guidance in its Entity List FAQs for conducting diligence on address-only entries.

Combined with the recent “Affiliates Rule,” this new rule is a significant development as it expands the number of entities subject to BIS restrictions, targeting not just these 26 entities but potentially many more involved in aiding Iran and its proxies in securing U.S.-origin electronic components for Iranian drones and other weapon systems.  These drones have been playing an increasingly pivotal role in Russia’s war against Ukraine as well as in conflicts across the Middle East.