This week the World Health Organization (WHO) declared COVID-19, otherwise known as the coronavirus, a pandemic, and President Trump declared a national emergency. Rising concerns over the spread of the disease and resulting uncertainty, supply chain disruptions, and changes in consumer behavior dominated the news and social media and resulted in sharp declines in the financial markets and the suspension or cancellation of numerous events. As the world scrambles to respond to the coronavirus, businesses are considering what rights and remedies their existing agreements provide.

Many agreements contain a force majeure clause, which “allocate[es] the risk of loss if performance becomes impossible or impracticable, [especially] as a result of an event or effect that the parties could not have anticipated or controlled.” Evaluating the application of a force majeure clause requires assessing:

  1. How “force majeure” is defined (if at all) in the agreement.
  2. If a force majeure event has occurred, what rights or remedies are available?

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As the number of confirmed 2019 novel coronavirus (COVID-19) cases continues to rise across the country and around the world, employers are looking for guidance regarding how they should react to the potential for spread of the virus. Several government agencies have responded to this demand. Bass, Berry & Sims’ labor & employment attorneys have compiled the latest guidance in an effort to address many of the common questions employers currently face.

Follow the link below to review a summary of:

  • The CDC’s Interim Guidance for Businesses and Employers
  • The CDC’s Risk Assessment guidelines
  • The EEOC’s guidance on “pandemic preparedness” and compliance with the ADA
  • OSHA’s information on employers’ obligations with respect to COVID-19

We are closely monitoring the government’s response to this developing situation and will update our website with further guidance as it unfolds.

A bill was recently introduced by U.S. Representative Bryan Steil (R-Wisconsin) that would allow the U.S. Treasury Department to target European financial intuitions conducting business with Iran through the Instrument in Support of Trade Exchanges (INSTEX) vehicle in order to avoid U.S. sanctions.

While there have been a low number of actions against European institutions, I recently explained to Payments Compliance that “arguably that is because many major non-U.S. financial institutions, particularly in Europe, have decided to halt business with Iran and thereby have eliminated the U.S. government’s basis for potentially imposing secondary sanctions. But I also think that the limited use of secondary sanctions against non-U.S. financial institutions is in part because even this U.S. administration understands that imposing secondary sanctions against major non-U.S. banks is a very significant step.”

Check out the full article, “U.S. Lawmaker Launches Legislative Assault on INSTEX.” It was published on March 4 and is available online (subscription required).

  • Actions underscore long arm of U.S. sanctions jurisdiction
  • Voluntary disclosures and cooperation can lead to significant penalty reductions
  • Facilitation of a violation is treated the same as a direct violation

In two recent enforcement actions, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) demonstrated the long-arm of U.S. economic sanctions jurisdiction.  One matter involved Société Internationale de Télécommunications Aéronautiques SCRL (SITA), a Swiss firm that provides commercial telecommunications network and information technology services to the civilian air transport industry.  The other involved Eagle Shipping International (Eagle), a U.S.-based shipping and logistics company.

Each action serves as a reminder of the U.S. government’s willingness to enforce U.S. sanctions in the context of what is primarily non-U.S. conduct.  The resolutions also illustrate the potential benefits of voluntarily disclosing sanctions violations to OFAC.

Continue Reading Sanctions Enforcement Update: Penalties for Logistics, Telecom Companies

The Department of Veteran Affairs (VA) manages nine healthcare related ‘schedules,’ groups of umbrella contracts used to order medical supplies and services, under the Federal Supply Schedules (FSS) program. These schedules allow VA medical centers to more easily obtain goods and services to support veterans.

The VA requested the Government Accountability Office (GAO) to produce a report focusing on the following:

  • Program challenges.
  • The timeliness of contract awards.
  • The extent to which the schedules and the Medical Surgical Prime Vendor-Next Generation (MSPV-NG) program provide overlapping or duplicative offerings.

In addition to analyzing the requested issues, the report also contains a series of corrective recommendations to which the VA has largely agreed.

Continue Reading GAO Recommends Steps to Ensure VA FSS Program Remains Useful

By failing to object to solicitation terms before the close of bidding, a protester typically waives those objections in a post-award bid before the Court of Federal Claims (COFC). An exception exists, however, where a protester filed a timely pre-award agency-level protest challenging patent errors or ambiguities.

But, as powerfully illustrated by the COFC’s decision in Harmonia Holdings Group, LLC v. United States, this exception is limited. In that case, Harmonia, one of the offerors on the procurement, initially brought an agency-level protest to challenge the U.S. Customs and Border Protection’s (CBP) issuance of two amendments to the solicitation, arguing that the agency improperly denied offerors the opportunity to revise their proposals in response to these amendments. CBP denied the protest.

Continue Reading The Importance of Being Timely: Protester Waives Protest Ground by Unduly Delaying Protest

In case you missed it, I provided insight on U.S. sanctions risks in the context of international supply chains to Supply Chain Management Now last month.

Citing examples, such as e.l.f. Cosmetics’s 2019 settlement for nearly $1 million for sanctions violations, I asserted in the article that both U.S. and non-U.S. companies need to understand how broadly U.S. sanctions are enforced.

In the article, I provided an overview of the current sanctions landscape in the U.S. and highlights particular challenges such as avoiding dealing with specially designated nationals (SDNs). The SDN list is vast and includes parties that reside nearly everywhere in the world. As I said in the article, “this creates a challenge because many of them are in countries not otherwise subject to U.S. sanctions.”

Continue Reading U.S. Sanctions Risk to International Supply Chains

In case you missed it, we ended 2019 with a webinar on current topics in U.S. economic sanctions.  Below are key points from the webinar:

  1. Types of sanctions vary. Broad country-based sanctions prohibit transactions between a U.S. individual or company and a party or company located in certain countries (current examples include Cuba, Iran, North Korea and Syria). These types of sanctions involve U.S. individuals wherever they are located, any company based or headquartered in the United States, subsidiaries of non-U.S. companies, and any person in the United States regardless of nationality. Continue Reading 5 Key Takeaways from Our Sanctions Update Webinar

A recent dispute between a government contractor and the Army in the Court of Federal Claims has raised the issue of whether procedures for validating restrictions on technical data apply to military contractors’ vendor lists. In Raytheon Co. v. United States, Raytheon had a contract with the Army to provide engineering support for the Patriot weapon system. The contract required Raytheon to supply the Army with vendor lists. The company, however, attached legends to those lists which purported to limit the Army’s ability to disclose the lists’ contents. The Army objected to these markings, and a contracting officer eventually ordered Raytheon to replace the offending legends with a standardized legend granting the Army “government purpose rights,” in their vendor lists.

Continue Reading Are Vendor Lists Technically Technical Data?

The Department of Defense (DoD) has now finalized its new cybersecurity standards, which we discussed last year.  The new cybersecurity standards, which are intended to protect controlled unclassified information, will be implemented by the Cyber Maturity Model Certification program (CMMC), which was finalized last week after multiple draft iterations.  CMMC Version 1.0 is available here.

CMMC Will Require Third-Party Certification of Cybersecurity Maturity Level

Among other changes from the prior cybersecurity compliance regime, this new approach will require that to be eligible for DoD awards, contractors must be certified by a third-party commercial certification organization to have achieved one of five cybersecurity maturity levels, with higher levels representing more advanced cybersecurity. Later this year, DoD solicitations will contain the applicable CMMC requirement, and contractors failing to meet this standard will be unable to bid. The requirements will apply to all parties within the supply chain (although subcontractors may not have to meet as high a CMMC standard as the prime contractor, depending on their scope of work).

Continue Reading DoD Finalizes Cybersecurity Maturity Model Certification

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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