A huge congratulations to our 15 International Trade attorneys who were named to the 2025 Capital Pro Bono Honor Roll for providing 50 or more hours of pro bono legal services last year. Of this number, five individuals achieved High Honor distinction for providing 100 hours or more. This accomplishment underscores our continued commitment to providing access to legal representation to those who would otherwise go without.

Below is a list of the International Trade attorneys who qualified for both the Honor Roll and High Honor Roll:

  • Rachel Richman nee Bogin*
  • Zhiwei Chen
  • Kelsey Clinton
  • Riley Delfeld
  • Rachel Ferns*
  • Sibilla Grenon
  • Jeremy Iloulian
  • Pierce Lee*
  • Chandler Leonard
  • Aaron Marx*
  • Jasmine Masri
  • Nimrah Najeeb
  • Laurel Saito
  • Neda Shaheen*
  • Simeon Yerokun

*Denotes High Honors

The EU has adopted its 20th package of sanctions in connection with Russia’s ongoing war against Ukraine, resolving a prolonged internal political deadlock that had been caused by vetoes from Hungary and Slovakia. The package amends Regulations 833/2014, 269/2014, and 765/2006 and the respective Council Decisions and Implementing Regulations. The texts entered into force on 24 April 2026.

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On April 14, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela General License 56, “Authorizing Commercial-Related Negotiations of Contingent Contracts with the Government of Venezuela” (GL 56), and Venezuela General License 57, “Authorizing Financial Services Transactions Involving Certain Venezuelan Banks and Government of Venezuela Individuals” (GL 57). OFAC also issued one Venezuela-related Frequently Asked Question (FAQ), FAQ 1248. 

These actions represent the latest steps in a continuing U.S. policy of progressively opening channels for commercial and financial engagement with Venezuela, extending the series of general licenses that OFAC has issued since early 2026 across the energy, petrochemical, minerals, and infrastructure sectors.

General License 56

GL 56 broadens the authorization for U.S. persons to conduct commercial-related negotiations of contingent contracts directly with the Government of Venezuela, covering sectors and transaction types that extend beyond those addressed in earlier licenses. Like predecessor licenses such as GL 49A and GL 55, GL 56 permits the negotiation and entry into contingent contracts, but requires that the performance of any such contract remain expressly contingent upon separate authorization from OFAC. GL 56 also incorporates limitations that mirror those in other recently issued GLs (e.g., requirement for commercially reasonable terms, no dealings with foreign adversaries or other sanctioned persons).

General License 57

GL 57 addresses the financial services dimension of Venezuela-related transactions, authorizing “financial services” transactions involving (1) certain Venezuelan banks, and (2) individuals who are blocked only because they deemed to be part of the “Government of Venezuela” as defined in Executive Order 13884.

The Venezuelan banks with which transactions are authorized by GL 57 are: (1) Banco Central de Venezuela; (2) Banco de Venezuela, S.A. Banco Universal (Banco de Venezuela); (3) Banco Digital de los Trabajadores Banco Universal C.A.; and (4) Banco del Tesoro, C.A. Banco Universal (Banco del Tesoro). The authorization also applies to entities owned 50% or more by one or more of these banks.

OFAC provides a broad definition of “financial services,” including nearly all standard banking-related activities, in particular: “maintaining, operating, or closing of accounts; loans; transfers; transfers of funds; banking services; money transfer services; collection; presentment; promise; order; consignment; the acceptance of deposits; insurance; guarantees; cash withdrawals; check services; Automated Clearing House (ACH) transfers; wire transfers; debit card, prepaid card, Automated Teller Machine transactions, and any other payments as defined under the Uniform Commercial Code Article 3-602; the issuance and use of payment cards and digital wallets; currency exchange; U.S. dollar-denominated banking, payment, and correspondent account services; services in connection with the collection, forwarding, processing, or receipt of funds or remittances; services in connection with the processing or receipt of salary, pension, annuity, payroll, and other employment-related payments or benefits; transfers of funds sent through mobile money, mobile wallets, digital bank accounts, credit cards, debit cards, online payments, or other digital technology; related safety, fraud-prevention, screening, authentication, cybersecurity, and security services and technologies; investments; securities; and commodity futures or options.”

GL 57 contains a “Note 2” explaining that U.S. financial institutions that process GL 57-authorized transactions may rely on the originator or beneficiary of a funds transfer with regard to compliance with GL 57, provided that the processing financial institution does not know or have reason to know that the transaction is not in compliance with GL 57.  This appears to reduce compliance burden on correspondent and intermediary banks involved in transactions with these entities.

GL 57 also contains a “Note 3” explaining that nothing in GL 57 excuses compliance with obligations under the Bank Secrecy Act (BSA) and related FinCEN regulations, signaling that OFAC is aware of FinTech and other novel forms of payment activities in Venezuela, and seeks to ensure that such market participants are properly assessing whether such activities separately comply with the U.S. Bank Secrecy Act (BSA) and related laws, and perhaps in particular that BSA-regulated institutions continue to determine if any Venezuela-activity warrants the filing of a Suspicious Activity Report (SAR).

FAQ 1248

OFAC issued FAQ 1248 to clarify the reporting requirements in General Licenses 46B-48A, 50A-52, and 54 should be completed by the parties engaged in the primary authorized activity. Parties that are only indirectly involved or providing services ancillary to the primary authorized activity are not required to file reports. For example, a company providing services for the generation of electricity in Venezuela under GL 48A would need to report such activities pursuant to that license, but a bank processing payments related to those services does not also need to provide a report.

Practical Implications

The practical implications of these new actions are significant.

For commercial sector participants, including trading companies, logistics providers, and project developers, GL 56 widens the gateway for preliminary engagement with the Government of Venezuela, permitting structured negotiations and the entry into contingent investment or commercial arrangements without requiring a specific license at the outset.

For GL 57, this authorization is particularly significant for U.S. banks, FinTechs, digital asset companies, and other financial intermediaries that process payments, maintain correspondent accounts, or provide other financial services in connection with Venezuela-related activity authorized under the broader suite of Venezuela general licenses.

Additionally, many entities interested in new opportunities in Venezuela pursuant to the other OFAC-issued general licenses found themselves limited by which financial institutions would process their payments. OFAC’s issuance of GL 57 provides significantly more assurance to U.S. and other financial institutions that there are at least four banks in Venezuela with whom they can legally transact and it establishes a clearer legal basis needed to support the expanding scope of authorized commercial activity in Venezuela.

FAQ 1248 reinforces this distinction as well: parties conducting the primary authorized activity bear the reporting obligations under the applicable general license, while banks and other service providers processing related payments do not. This clarification reduces compliance friction for financial institutions supporting the growing range of permitted Venezuela dealings.

Crowell will continue to monitor for new and updated OFAC guidance on Venezuela.

Key Takeaways 

  • The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated six individuals and entities tied to Cartel del Noreste (CDN)—one of Mexico’s most violent drug trafficking organizations—including two CDN-affiliated casinos used for money laundering and drug operations near the U.S.-Mexico border. 
  • OFAC’s actions are the latest examples of a broader national security strategy to use sanctions, AML authorities, criminal prosecutions, and other tools to counter cartels on the U.S.-Mexico border. These efforts have targeted in particular non-traditional financial institutions such as casinos, public-facing professionals, and disinformation actors. 
  • The State Department designated CDN as a foreign terrorist organization (FTO) on February 20, 2026, and today’s designations were issued under both Executive Order 14059 (narcotics trafficking) and Executive Order 13224 (terrorism), underscoring the U.S. government’s treatment of major cartels as hybrid criminal-terrorist threats.

Overview of the Designations

On April 14, 2026, the U.S. Department of the Treasury announced OFAC sanctions targeting a money laundering and cash smuggling network operated by CDN, a U.S.-designated Foreign Terrorist Organization (FTO) with significant influence in Nuevo Laredo, located on the U.S.-Mexico border. Key designation targets include:

  • Casino Centenario and Diamante Casino, identified as vehicles for laundering illicit proceeds and facilitating cartel operations. The announcement notes that Casino Centenario is only two miles from the U.S. border and is known to have U.S. patrons;
  • Comercializadora y Arrendadora de Mexico (CAMSA), the operator of the casinos;
  • Senior cartel-linked individuals, including:
    • Eduardo Javier Islas Valdez (Islas), a coordinator of human smuggling operations along the Rio Grande;
    • Juan Pablo Penilla Rodriguez (Penilla), a defense attorney acting as an intermediary for imprisoned CDN member to current CDN leadership; and
    • Jesus Reymundo Ramos Vazquez (Ramos), a CDN associate purported who leads CDN disinformation campaigns supporting cartel interests while purporting to be a “human rights activist.” enTreasury also issued General License (GL) 35, authorizing wind-down transactions through May 13, 2026, involving Casino Centenario, Diamante Casino, or CAMSA, or any entity in which one or more of the foregoing three designated entities owns a 50 percent or greater interest.

While OFAC has long targeted cartel leadership and trafficking networks, this action is notable for its focus on professional enablers — an attorney and disinformation “influence” for the cartel — and on specific vehicles for the laundering of funds, in the form of the sanctioned casinos.

Broader Enforcement Trend

This action is the latest in a series of coordinated U.S. Government measures targeting cartels and their financial infrastructure. For example:

  • On November 13, 2025, FinCEN issued a finding and notice of proposed rulemaking (NPRM) that identified transactions involving ten identified Mexico-based gambling establishments to be of “primary money laundering concern. This action was taken concurrently with OFAC designations that sanctioned members of a criminal group that used the establishments to launder the proceeds of narcotics trafficking in collaboration with the Sinaloa Cartel.
  • On July 3, 2025, FinCEN issued orders pursuant to the Fentanyl Sanctions Act and FEND Off Fentanyl Act determining that three Mexican financial institutions are “of primary money laundering concern in connection with illicit opioid trafficking,” which orders effectively excluded the three financial institutions from the U.S. financial system.
  • On March 10, 2025, FinCEN issued an expanded Geographic Targeting Order (GTO) that requires money services businesses (MSBs) to file Currency Transaction Reports with FinCEN for cash transactions between $1,000 and $10,000 occurring in specific U.S. counties and ZIP codes located near the U.S-Mexico border, intended to help law enforcement identify efforts to structure transactions to evade existing currency reporting requirements
  • On February 20, 2025, the U.S. State Department designated eight international criminal organizations as Foreign Terrorist Organizations (FTOs), including several entities operating in Mexico. See more on this development from Crowell’s past client alert here. The State Department has identified several other cartels and international criminal organizations as FTOs since then. The use of terrorism authorities expands potential criminal liability associated with support for these groups, and also can give rise to civil liability in suits by private plaintiffs against persons that aid them.

Practical Considerations

Financial institutions, FinTechs, and companies with operations or transactions involving Mexico or with other cross-border exposure may wish to consider:

  • Enhanced screening and Customer Due Diligence (CDD) for gaming companies and non-traditional financial institution counterparties in Mexico, particularly near border regions.
  • Reviewing customer profiles tied to pro-cartel legal, media, or advocacy roles in high-risk jurisdictions, and conducting Enhanced Due Diligence (EDD) for high-risk customers.
  • Reassessing exposure to cash-intensive businesses that may serve as laundering conduits.

The UK’s Office of Financial Sanctions Implementation (OFSI) has published details of a £390,000 penalty it imposed on ADI, an Irish subsidiary of Apple Inc., on 19 March 2026. The penalty relates to two payments totalling approximately £635,000 made in 2022 to Okko LLC, a sanctioned Russian app developer, for App Store revenue. Although the underlying facts are relatively simple, there are several interesting takeaways from OFSI’s penalty notice.

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On 7 April 2026, the Commission published the first quarterly CBAM price at EUR 75.36 per certificate for the first quarter of 2026. The prices for the remaining quarters will be released on 6 July 2026, 5 October 2026, and 4 January 2027, respectively. Each quarterly price will apply to the sale of CBAM certificates for emissions from CBAM goods imported into the Union during that quarter. From 2027 onwards, the price will be published weekly.

How Many Certificates Must Be Surrendered?

The number of CBAM certificates to surrender is determined by the amount of imported CBAM goods and their specific embedded emissions. This amount is reduced by the emissions covered by EU ETS free allocation, and—where relevant—further reduced by emissions already covered by a carbon price that has been effectively paid in the country of origin or a third country. One CBAM certificate equals one tonne of CO₂ equivalent.

How and When Are Certificates Purchased?

There is no obligation to hold CBAM certificates during 2026. As certificate sales on the common central platform begin only from February 2027, there is no legal obligation to hold certificates during 2026.

From 1 February 2027, Member States will sell CBAM certificates to authorised CBAM declarants on a common central platform managed by the Commission. Certificates are sold at the applicable price, each has a unique identification number, and sale details are recorded daily in the CBAM Registry. Authorised CBAM declarants may purchase certificates at any time throughout the year.

The Quarterly Holding Obligation — From 2027

From 2027, authorised CBAM declarants must ensure that, by the end of each quarter, they hold CBAM certificates covering at least 50% of embedded emissions in all goods imported since the beginning of the calendar year. This is determined by either default values (without the mark-up) or by the number of certificates surrendered for the preceding year for the same goods by CN code and country of origin. The quarterly holding obligation takes account of the free allocation adjustment. This obligation is assessed at the end of each quarter: 31 March, 30 June, 30 September, and 31 December.

Annual Surrender and Key Deadlines The deadline for both the first CBAM declaration and the first certificate surrender is 30 September 2027, covering the year 2026. These two obligations must be met at the same time. After certificates are surrendered, any excess certificates may be repurchased at the original purchase price, provided a request is made by 31 October of the year of surrender. On 1 November 2027, any certificates purchased for 2026 embedded emissions that remain in accounts will be cancelled by the Commission without compensation. If the required certificates are not surrendered, a significant penalty applies. The penalty for uncompensated emissions is EUR 100 per tonne, indexed to the European consumer price index. Importantly, paying the penalty does not release the declarant from the obligation to surrender the outstanding certificates.

In March 2026, the Office of the United States Trade Representative (USTR) launched two parallel Section 301 investigations: one targeting manufacturing overcapacity across 16 countries (including China, the EU, Japan, India, Mexico, Vietnam, and other major manufactures), and one targeting forced labor enforcement failures across 60 countries. Here are the top seven questions Crowell & Moring’s International Trade team is getting regarding pending Section 301 comment deadlines from our clients and how to address them.

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On April 2, 2026, President Trump signed two presidential proclamations invoking Section 232 of the Trade Expansion Act of 1962 and Section 604 of the Trade Act of 1974 to impose significant new tariffs on imports of patented pharmaceuticals and pharmaceutical ingredients, and to restructure the existing tariff regime for aluminum, steel, and copper articles and their derivatives. The pharmaceutical proclamation targets patented drugs and active pharmaceutical ingredients (APIs), citing the Secretary of Commerce’s finding that approximately 53 percent of patented pharmaceutical products distributed domestically are produced outside the country, and only 15 percent of patented APIs by volume are domestically produced for the U.S. market. The metals proclamation amends three prior Section 232 actions — Proclamation 9704 of March 8, 2018 (aluminum), Proclamation 9705 of March 8, 2018 (steel), and Proclamation 10962 of July 30, 2025 (copper) — to restructure how tariffs are calculated and which derivative articles are covered.  The administration also issued two separate fact sheets for these actions.

Pharmaceuticals Proclamation: Key Points

  • A 100 percent ad valorem duty rate applies to imports of patented pharmaceuticals and associated pharmaceutical ingredients, as listed in Annex I to the proclamation, except as otherwise provided.
  • Effective with respect to goods entered for consumption on or after 12:01 a.m. eastern time on July 31, 2026, new HTSUS headings 9903.04.60 through 9903.04.69 in subchapter III of chapter 99 provide the customs duty treatment of imported articles classifiable in the provisions enumerated in U.S. Note 40.
  • “Patented pharmaceutical articles” are pharmaceutical articles subject to a valid, unexpired U.S. patent and listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) or the FDA’s Lists of Licensed Biological Products (Purple Book), and associated APIs and key starting materials.
  • The rate is 15 percent for products of Japan, the European Union, the Republic of Korea, and Switzerland and Liechtenstein, and 10 percent for products of the United Kingdom, reducible to zero to the extent required by any future U.S.–UK pharmaceutical pricing agreement.
  • Companies with onshoring plans approved by the Secretary are subject to a reduced 20 percent rate, which increases to 100 percent on April 2, 2030.
  • For companies with approved onshoring plans that have also entered into Most-Favored-Nation (MFN) pharmaceutical pricing agreements with the Secretary of Health and Human Services (HHS), the applicable ad valorem rate is zero until January 20, 2029.
  • A zero rate applies to orphan drugs (21 U.S.C. § 360aa et seq.), nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody drug conjugates, medical countermeasures for chemical, biological, radiological, and nuclear (CBRN) threats, and certain animal health pharmaceutical products, subject to a Secretary determination that they are products of a jurisdiction with a current or forthcoming trade and security framework agreement or meet an urgent U.S. health need.
  • Generic pharmaceuticals and their associated ingredients, including biosimilars, are not subject to Section 232 tariffs at this time.
  • Annex III lists 17 named companies whose tariff treatment is effective 120 days from the date of the proclamation (i.e., July 31, 2026), including AbbVie, Amgen, AstraZeneca, Bristol Myers Squibb, Boehringer Ingelheim, Eli Lilly, EMD Serono, Genentech, Gilead Sciences, GlaxoSmithKline/ViiV Healthcare, Johnson & Johnson, Merck Sharp & Dohme, Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi.
  • Annex II ratifies 13 pre-existing company-specific tariff agreements entered into by the Secretary prior to the proclamation.
  • Drawback is available with respect to duties imposed pursuant to the pharmaceutical proclamation.
  • Products subject to the pharmaceutical tariff admitted into a U.S. foreign trade zone (FTZ) on or after the effective date must be admitted under “privileged foreign status” as described in 19 CFR § 146.41, and will be subject upon entry for consumption to ad valorem rates applicable at the time of the HTSUS classification.

Metals Proclamation: Key Points

  • Effective for goods entered for consumption on or after 12:01 a.m. eastern daylight time on April 6, 2026, the additional ad valorem Section 232 duty on aluminum, steel, and copper articles and their derivatives applies to the full customs value of the imported product, regardless of metal content.
  • Annex I-A articles — covering primary steel mill products, aluminum articles, and most copper articles and certain steel and aluminum derivatives — are subject to a 50 percent ad valorem rate on their full value.
  • For Annex I-A articles, a reduced rate of 25 percent applies to United Kingdom products the aluminum content of which is composed entirely of aluminum smelted or most recently cast in the UK, or the steel content of which is composed entirely of steel melted and poured in the UK.
  • A further reduced rate of 10 percent applies to Annex I-A derivative articles the aluminum, steel, or copper content of which is composed entirely of metals smelted/cast or melted/poured in the United States.
  • Annex I-B articles — covering certain copper articles and certain aluminum and steel derivative articles — are subject to a 25 percent ad valorem rate on their full value.
  • Annex II articles are removed from the scope of the aluminum and steel Section 232 duties; additionally, any motorcycle part classifiable in Chapters 84, 85, or 87 and listed in Annex I-B shall not be subject to Section 232 tariffs when imported exclusively for use in manufacturing motorcycles.
  • Annex III provides a temporary rate reduction for certain steel and aluminum derivative articles through December 31, 2027. For Annex III products with a Column 1 duty rate below 15 percent, the combined rate shall total 15 percent; for products with a Column 1 duty rate of 15 percent or above, no additional Section 232 duty applies.
  • Effective January 1, 2028, Annex III products revert to the Annex I-B rates prescribed in clause (3) of the proclamation.
  • All imports of aluminum articles and derivatives in Annex I-A, I-B, or III that are the product of Russia, or where any amount of primary aluminum was smelted or cast in Russia, remain subject to the 200 percent ad valorem rate established in Proclamation 10522 of February 24, 2023.
  • Products made of 15 percent or less steel, aluminum, or copper will no longer be subject to Section 232 metals tariffs.
  • The prior BIS derivative inclusions processes established under Proclamation 10895, Proclamation 10896, and Proclamation 10962 are terminated; the Secretary and the U.S. Trade Representative (USTR) are authorized jointly to include additional derivative articles on a rolling basis, without a formal notice-and-comment window, when they determine that imports threaten to undermine the national security objectives of the prior proclamations.
  • Manufacturing drawback under 19 U.S.C. § 1313(a)–(b) is available for Annex I-B and Annex III articles, subject to conditions: the article must not be subject to an antidumping or countervailing duty order; it must be a product of a Trade Agreement Partner (the UK, EU, Japan, South Korea, Mexico, Canada, or any country with a final Reciprocal Trade Agreement); and its metal content must be composed entirely of metals smelted/cast or melted/poured in a Trade Agreement Partner country.
  • U.S. Customs and Border Patrol (CBP) is authorized to issue rules, regulations, and guidance to address illegal transshipment, undervaluation, and tariff evasion; importers of copper articles must provide CBP with information identifying the countries where copper used in covered imports was smelted and cast.
  • Products covered by the metals proclamation admitted into an FTZ on or after April 6, 2026 may be admitted only under “privileged foreign status” under 19 CFR § 146.41.

Implications

Importers of pharmaceutical products should immediately determine whether their products qualify as “patented pharmaceutical articles” under HTSUS headings 9903.04.60 through 9903.04.69, as the applicable rate ranges from zero to 100 percent depending on company agreement status and country of origin. Companies with qualifying onshoring plans must submit periodic progress reports to the Secretary, subject to potential external audit, and face prospective and retroactive tariff reimposition in cases of fraud or deliberate misrepresentation. The Secretary must also, within one year of the date of the proclamation, report to the President on any circumstances that might indicate the need to adjust imports of generic pharmaceuticals and their associated ingredients — confirming that the current generic carve-out is subject to review.

For metals importers, the proclamation clarifies that tariffs are assessed on the full value of imported steel, aluminum, and copper products — not an artificially low foreign price based solely on metal content. This represents a material change in landed cost calculations for all derivative articles in Annex I-A, Annex I-B, and Annex III, and requires immediate re-benchmarking of duty exposure across all affected product lines. Compliance teams should also establish robust supply-chain documentation for copper articles, as importers are required to identify the countries of smelting and casting to CBP, with CBP authorized to implement those requirements as soon as practicable. For UK-origin articles to qualify for the reduced 25 percent Annex I-A rate or the 15 percent Annex I-B rate, at least 95 percent of the aluminum must have been smelted or most recently cast in the UK, or at least 95 percent of the steel must have been melted and poured in the UK.

The termination of the prior BIS inclusions process and its replacement with a joint Secretary/USTR rolling-inclusion authority — without a formal notice-and-comment window — narrows the window for interested parties to oppose or challenge the addition of new derivative articles. The Secretary and USTR are required to provide a joint 90-day update on the metals regime, covering the national security status of imports, U.S. production of aluminum, steel, and copper, any actions taken by foreign trading partners, and any other relevant recommendations. Similarly, the Secretary and HHS are directed to report within 90 days on the progress of pharmaceutical negotiations under Section 232(c)(3)(A)(i), (19 U.S.C. § 1862(c)(3)(A)(i)).

Procedural Deadlines and Rolling-Scope Considerations

  • April 6, 2026: Metals proclamation effective date for entries for consumption. Tariffs apply to the full customs value of aluminum, steel, and copper articles and their derivatives.
  • July 31, 2026: Pharmaceutical tariffs take effect for companies listed in Annex III.
  • September 29, 2026: Pharmaceutical tariffs take effect for all other companies not party to Annex III or Annex II agreements.
  • April 2, 2030: Pharmaceutical rate for companies with approved onshoring plans escalates from 20 percent to 100 percent.
  • January 20, 2029: Zero tariff rate for companies with both an approved onshoring plan and an MFN pricing agreement expires.
  • December 31, 2027: Annex III temporary reduced rate period ends. Effective January 1, 2028, Annex III products revert to Annex I-B rates.
  • Rolling BIS Inclusions Cycle: Inclusion requests can be submitted to BIS during a two-week period at the beginning of May, September, and January. Clients should calendar these windows and monitor Federal Register notices for newly added derivative products that may affect their import profiles.
  • 90-Day Reporting Obligations: Both proclamations require the Secretary of Commerce (and, for metals, USTR; for pharmaceuticals, HHS) to submit joint reports within 90 days, which may include scope adjustments, new annexes, or updated guidance. The Secretary of Commerce and, where applicable, the USTR may expand or revoke coverage through Federal Register notices without further Presidential action, meaning the scope of both regimes may shift on a rolling basis.

Crowell will continue to monitor developments under both proclamations, including CBP implementation guidance, Federal Register notices expanding or modifying annex scope, and further agency action by the Secretary of Commerce, HHS, and the USTR, and will provide updates as the compliance landscape evolves.

The Council of the European Union (EU) and the European Parliament have reached a long-awaited political agreement to reform the Union Customs Code (UCC). The European Commission presented the UCC reform proposal in May 2023, and the European Parliament adopted its position at first reading in March 2024. The text has since been pending the Council’s first reading for two years.

The agreed text has not yet been published. However, the following changes are expected:

1. The EU Customs Data Hub

One of the pillars of the reform is the creation of the EU Customs Data Hub, a centralized digital platform that will serve as the sole point of interaction between businesses and customs authorities across the EU. It aims to eliminate the current IT fragmentation across the 27 EU member states. Businesses will submit their customs data to the Data Hub, and that information may cover multiple consignments and be accessible to all relevant national authorities. The rollout will be phased: the EU Customs Data Hub will become operational for e-commerce goods on July 1, 2028, with full expansion covering all movements of goods by March 1, 2034.

2. The EU Customs Authority

Alongside the EU Customs Data Hub, the reform establishes a new decentralized EU agency: the EU Customs Authority. The agency’s headquarters will be in Lille, France.

For the first time, the EU will have a dedicated agency responsible for coordinating and strengthening the Customs Union. The authority’s mandate covers several functions:

  • Oversight of the EU Customs Data Hub, ensuring that the platform operates effectively and that data is used to its full potential.
  • Risk analysis and management, by continuously analyzing import and export data flowing through the hub to identify the highest-risk cargoes entering the EU and prioritize them for inspection.
  • Establishment of priority control areas and risk criteria, giving national customs offices consistent, EU-wide guidance on where to focus enforcement efforts.
  • EU-level crisis management, coordinating responses to customs-related emergencies or disruptions that cross national borders.

The authority will be established on the date the overarching regulation enters into force, ensuring it is ready to begin operations as the new system rolls out in phases.

3. Trust and Check Traders

The reform introduces a new category of trader status: Trust and Check Traders (TCT). To qualify, companies must provide comprehensive information on the movement and compliance of their goods and meet a range of stringent criteria. In return, they receive meaningful operational benefits, including simplified procedures for temporary storage and transit and the ability to release goods into free circulation without active customs intervention.

However, the existing Authorised Economic Operator (AEO) scheme will not be discontinued. Rather, TCT status represents a more advanced tier for economic operators. In exchange, TCT holders will grant customs authorities access to their electronic systems recording their compliance and the movement of their goods.

4. E-Commerce: Managing Small Parcels

Due to the massive influx of low-value packages into the EU — largely driven by platforms selling directly from third countries after the COVID-19 crisis — the e-commerce area will be reconsidered. First, an EU-wide handling fee and national handling fees in several EU member states have already been discussed. The fee is intended to help cover the rising costs of monitoring and processing the exponential growth in small-parcel volume. Second, the reform makes clear that e-commerce platforms and distance sellers are themselves importers. This means that these operators — rather than individual buyers — will be responsible for ensuring compliance with all customs formalities and payment of all applicable duties and fees. Third, a new system of financial penalties will apply to e-commerce operators that systematically fail to comply with their customs obligations, providing meaningful enforcement teeth behind the new regulatory framework.

The exact details still need to be reviewed and analyzed, as the politically agreed text is not yet available. However, the UCC reform legislative process is nearing completion and — barring surprises — is expected to be formally adopted by the end of 2026. Once published in the EU’s Official Journal, the regulation will become applicable 12 months later. Some provisions will enter into force at varied times, such as those relating to the establishment of the EU Customs Authority or the EU Customs Data Hub. Additional delegated and implementing acts remain in the EU’s legislative pipeline to complete the implementation and enforcement of this ambitious and much-needed EU customs reform.

On March 26, 2026, the Senate Judiciary Committee advanced S.2934, the Protecting Americans from Russian Litigation Act of 2025 (the Bill), introduced by Senators John Cornyn (R-TX) and Alex Padilla (D-CA) in September 2025. The Bill is intended to address situations where U.S. companies that exited Russia to comply with U.S. sanctions following Russia’s 2022 invasion of Ukraine faced retaliatory litigation in Russian courts resulting in adverse judgments, which judgments have then been enforced abroad.

If enacted, the Bill would add a new statute, Section 1660, to Title 28, and would bar any non-governmental party from filing a civil action in federal or state court to recognize or enforce a foreign judgment or foreign arbitral award in the United States where: (i) the underlying dispute arose from a party’s actions to comply with U.S. sanctions that impeded contract performance, or (ii) the foreign court or tribunal asserted jurisdiction based, in whole or in part, on the imposition of U.S. sanctions or export controls– or foreign countermeasures responding to them (e.g., blocking statutes) ((i) and (ii) together, Covered Actions).

For actions filed in state court, defendants may remove Covered Actions to federal district court, and the Bill directs federal courts to dismiss the Covered Action. The Bill would also apply to Covered Actions pending on or after the date of enactment.

Of note, the Bill would not apply to U.S. Government enforcement authority, including that enforcement brought by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), nor would it apply to certain other classes of plaintiffs including, among others: (i) victims of terrorism; (ii) litigation filed in the U.S. to assert contractual rights (other than to enforce a foreign judgment or foreign arbitral award that is a Covered Action) where the parties agreed to resolve their disputes in state or federal court; or (iii) any action arising under state or federal law (other than to enforce a foreign judgment or foreign arbitral award that is a Covered Action) premised on sanctions or export controls – as compared to a party’s actions to comply with U.S. sanctions.

The Bill’s definition of “United States sanctions” expressly refers to International Emergency Economic Powers Act (IEEPA), 50 U.S.C. § 1702, the statute under which U.S. sanctions have been imposed relating to Russia, and extends to export-control authorities, capturing compliance obligations under OFAC regulations including the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR).  While the Trading With the Enemy Act (TWEA) is not expressly included, the broad definition of “United States sanctions” suggests that TWEA-related judgments may constitute Covered Actions.

Notably, the Bill expressly excludes duties on imported goods, limiting the Bill’s applicability to purely tariff-based disputes which may have been based on IEEPA.

EU Considerations

The Bill mirrors similar protections offered under EU and UK sanctions regimes. For instance:

  • Council Regulations establishing EU restrictive measures (sanctions) typically include as a standard provision, known as the ‘no-claims clause’, that protects operators required to comply with EU sanctions from having to satisfy claims asserted by certain third parties (e.g., EU sanctioned persons/entities or Russian entities with respect to EU sectoral sanctions on Russia) when such claims are connected to the performance of a contract or transaction affected by EU sanctions.
  • The UK has not replicated the EU ‘no claims’ language as part of its post-Brexit sanctions regime.  Rather, section 44 of the UK’s Sanctions and Anti-Money Laundering Act 2018 provides a statutory defence to civil claims where a party reasonably believes that they were acting in compliance with UK sanctions. 

The EU and UK provisions have given rise to various interpretative questions, especially in the context of Russia-related sanctions litigation and arbitration. For instance, the UK’s s. 44 was addressed in a recent UK Supreme Court (the Court) decision UniCredit Bank v Celestial Aviation Service, in which the Court confirmed that s. 44 provides protection against an action to recover debt, an award of interest on the debt and an award of associated costs, where a failure to pay was due to a reasonable belief that the non-paying party was required to comply with UK sanctions.

From an EU perspective, a series of no claims-related questions have been submitted to the Court of Justice of the European Union (CJEU), for example, regarding the recognition and enforcement of arbitration awards in EU Member States and whether the no-claims provision prohibits (1) parties from reaching an out-of-court agreement to settle claims where the dispute relates to contracts not performed due to EU sanctions or (2) the repayment of an advance for goods or services that were not provided owing to sanctions. These cases are still pending.

Implications

If the Bill is enacted, it would provide a significant legal defense in the United States for companies that ceased Russian market activities as part of efforts to comply with U.S. sanctions and export controls. This is especially relevant for firms in sectors like aeronautics, shipping, energy, finance, logistics, construction, defense, and commodities. Companies with pending or potential exposure to Russian civil litigation may wish to consider this development if they are actively litigating such issues or are considering exiting the Russia market.

More significantly, given the Bill does not expressly limit itself to Russia-related litigation, it is possible that U.S. defendants facing Covered Actions may be able to assert the Bill as a defense relating to other jurisdictions or U.S. sanctions programs, such as Iran, Cuba, or blocked persons.

In light of the Bill, which has bipartisan sponsorship, companies that exited Russia or are considering exiting Russia may wish to consider:

  • Assessing any existing or threatened Russian litigation or arbitral proceedings connected to U.S. sanctions or export-control compliance decisions;
  • Documenting the good-faith compliance basis for Russia-related wind-downs or contract exits undertaken after February 2022;
  • Assessing whether pending civil enforcement actions in U.S. courts may be considered Covered Actions within the scope of proposed 28 U.S.C. § 1660; and
  • Monitoring the Senate Judiciary Committee’s consideration of S.2934 for further procedural developments, as well as potential foreign legislation which may be “reciprocal” or “retaliatory” and may restrict enforcement of US judgments in foreign countries.

Crowell will continue to monitor legislative and enforcement developments related to U.S. sanctions and export-control compliance obligations and their implications for affected industries.