January 18, 2021

Volume XI, Number 18

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January 15, 2021

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Transatlantic Trade: US and Europe – Week of November 9, 2020

United States (US) President Donald Trump continues to contest the 3 November election results that predict Joe Biden as President-Elect; he has filed legal challenges in several states, including where some recounts are happening.  Some European leaders have already welcomed the presumed results, while others are awaiting the formal certification of the US presidential election.

COVID infections continue to spike in Europe and across the US.  The European Union (EU) saw some advancement this past week on its pandemic recovery instruments, which would allow relief money to flow to Member States with some conditions.  US lawmakers indicated a willingness this past week to advance another COVID economic relief package during the Lame Duck session of Congress, something they were unable to address ahead of the US General Election.

This past week, Russia reportedly brokered a peace accord between Armenia and Azerbaijan, apparently without involvement from the other OSCE Minsk Group Co-Chairs.  In sum, the deal allows for Russian troops to deploy to Azerbaijan’s disputed territory – Nagorno-Karabakh – to reportedly serve as peacekeepers.  Meanwhile, talks between the United Kingdom (UK) and EU over trade terms continues, with the EU running up against a clock by which it must approve any final deal before the end of the year in order to avert Britain’s hard exit from the customs union.

On 12 November, US Senate Foreign Relations Committee (SFRC) Chairman Jim Risch (R-Idaho) announced he would convene a virtual conversation with UK Parliament Member Tom Tugendhat, Chair of the Foreign Affairs Committee of the Parliament, and European Parliament Member David McAllister, Chair of the European Parliament’s Committee on Foreign Affairs, on 18 November at 11:00 a.m. EST / 5:00 p.m. CET.  Chairman Risch is set to unveil a new report from the SFRC majority that outlines an agenda for transatlantic cooperation for addressing challenges posed by the People’s Republic of China (“PRC” or “China”).

Given the US election uncertainty, the World Trade Organization (WTO) postponed its meeting last week to approve its next Director-General (DG).  The WTO is reportedly awaiting presumed President-Elect Biden’s support for one of the two DG candidates.  While most of the WTO member states are backing Nigeria’s Ngozi Okonjo-Iweala for the top position, the Trump Administration expressed support for South Korea’s Yoo Myung-hee ahead of the US General Election.


US Elections Update

This past week saw some more election results on Congressional races that continue to indicate the next President will likely face a divided US Congress.  Republicans currently retain a slight majority in the Senate, with Georgia’s two Senate seats up for a run-off election that is set for 5 January and will decide the upper chamber’s control.  Republicans also narrowed Democrat’s majority in the House of Representatives, with the caveat that some race results are still not final – Republicans are leading in 11 of the 14 undecided House races.  It therefore looks like Speaker of the House Nancy Pelosi (D-California), if re-elected to the position in the 117th Congress, will preside over one of the smallest majorities in that chamber in decades.  Some House Democrats are calling for a Democratic leadership change in the lower chamber, after Republicans eroded their majority.  The next Congress will be seated in early January.

Since President Trump has not conceded, the transition process has yet to commence formally in Washington.  The Electoral College will convene, vote and certify the election on 14 December.  Meanwhile, since the media predicted his victory, presumed President-Elect Joe Biden is moving forward with assembling his team.  On Wednesday, 11 November, he announced Ron Klain would serve as his White House Chief of Staff; expressed intent to establish the most diverse Cabinet in American history.

European Council President Charles Michel congratulated presumed President-Elect Biden and Vice President-Elect Kamala Harris in a statement, noting,

We follow the process of certification of results and are confident that the US electoral system will soon announce the final outcome.”

He has also indicated his intention to invite Biden to participate in discussions on transatlantic relations and developments on five main issues:  (1) COVID-19, (2) common values and multilateralism, (3) climate change, (4) trade, and (5) security and geopolitical common interests.  This approach symbolizes the EU’s interest in looking to rebuild the political and economic relations with the United States.  President of the European Parliament David Sassoli also extended congratulatory remarks to presumptive President-Elect Biden.

European Commission President Ursula von der Leyen congratulated Biden, while stressing intent to “intensify cooperation with the new Administration and the new Congress to address pressing challenges we face and notably: fighting the COVID-19 pandemic and its economic and social consequences, tackling climate change together, promoting a digital transformation that benefits people, strengthening our common security, as well as reforming the rules-based multilateral system.”  In a separate speech to EU Ambassadors on 10 November, President von der Leyen noted that the forthcoming change of the US Administration and Congress would have an impact on Europe and “on the next chapter of the transatlantic alliance.”  She added,

[I]n a changing global landscape, it is time for a new transatlantic agenda fit for today’s world. And I believe it is Europe who should take the initiative, with an offer to work together with the new administration on areas that can strengthen our bilateral and multilateral partnerships. This should cover everything from security to sustainability, from tech regulation to trade, from levelling the global economic playing field to strengthening global institutions.”

Other European Leaders were also quick to express their congratulations to presumptive President-Elect Biden, such as Irish Prime Minster Micheál Martin, Scotland’s first Minster Nicola Sturgeon and Germany’s Foreign Affairs Minister Heiko Maas, who hailed the “prospect of a new transatlantic beginning”.  UK Prime Minister Boris Johnson, German Chancellor Angela Merkel and French President Emmanuel Macron have already held phone calls with President-Elect Biden.  President Macron underlinedWe’ll have a lot to do together to promote shared priorities – climate, global health, international security – and effective multilateral action”, while Prime Minister Johnson stressedstrengthening the partnership between our countries and to working with him on our shared priorities – from tackling climate change, to promoting democracy and building back better from the pandemic.  Chancellor Merkel agreed with Biden that transatlantic cooperation is “of great importance in view of the multitude of global challenges”.

On 11 November, former Italian Prime Minister Enrico Letta spoke about the importance of rebuilding trade and diplomatic relations between the EU and the US in the context of the COVID-19 crisis and the need to coordinate efforts among the governments. EU High Representative Josep Borrell echoed Letta’s views, noting the deterioration of diplomatic relations between the trading partners during the Trump Administration.  For Borrell, a Biden Administration would be a new starting point for rebuilding transatlantic ties.

President Trump and First Lady Melania Trump commemorated Veterans Day on Wednesday, with a visit to Arlington National Cemetery – one of the President’s first official events since Election Day.  President Trump fired Secretary of Defense Mark Esper via Twitter on Monday, 9 November, noting Christopher Miller, currently Director of the National Counterterrorism Center, would serve as Acting Secretary of Defense, effective that day.  The next day, Acting Under Secretary of Defense for Policy Dr. James Anderson, Under Secretary of Defense for Intelligence and Security Joseph Kernan and Chief of Staff to the Secretary of Defense Jen Stewart submitted letters of resignation.  In a Memorandum to Department of Defense employees, Miller noted as a priority,

Ending wars requires compromise and partnership. We met the challenge; We gave it our all. Now it’s time to come home.”

US Secretary of State Mike Pompeo departed Washington at the end of the week, for a trip that includes stops in France, Turkey, Georgia, Israel, the United Arab Emirates, Qatar, and Saudi Arabia, from 13-23 November.  In Paris, the Secretary will meet with French President Emmanuel Macron, Foreign Minister Jean-Yves Le Drian, and other senior officials “to build on our transatlantic work on economic and security matters, and on counterterrorism and global threats.”  He will travel next to Istanbul, Turkey, to meet with His All Holiness the Ecumenical Patriarch of Constantinople, Bartholomew I, “to discuss religious issues in Turkey and the region and to promote our strong stance on religious freedom around the world.”  The stop in Tbilisi will reinforce U.S. support for Georgia’s sovereignty and territorial integrity and urge progress in democratic reforms.


COVID-19 Updates | EU, UK and US

As noted in our previous report, Pfizer/BioNTech released its Phase 3 clinical interim trial data on Monday, 9 November, noting its vaccine candidate (BNT162b2) has a 90 percent efficacy rate.  Deliveries of the vaccine are anticipated to start by the end of this year, subject to clinical success and regulatory authorization.

On 11 November, the European Commission approved a contract with Pfizer/BioNTech to purchase 200 million doses of its vaccine on behalf of all EU Member States, with an option to request up to 100 million additional doses, once the vaccine is proven to be safe and effective against COVID-19.  Pfizer/BioNTech initiated a rolling submission to the European Medicines Agency (EMA) in October, and continue to provide the EMA with results from their Phase 3 study.  The vaccine supply for the EU will be produced by BioNTech’s manufacturing sites in Germany and Pfizer’s manufacturing site in Belgium.  This is the fourth contract the European Commission has successfully approved, following ones secured with AstraZenecaSanofi-GSK and Janssen Pharmaceutica NV; the Commission has also concluded exploratory talks with CureVac and Moderna.

European Council President Michel proposed an “international pandemic treaty” at the Paris Peace Forum on 12 November to ensure stronger international cooperation on future pandemics.  He suggested such an agreement would be a useful tool for preventing future global disease outbreaks.  It will take time to negotiate such an accord, potentially under the aegis of the World Health Organization or the United Nations.  Meanwhile, since some European countries (Germany, France, the Netherlands, Spain, Italy, the UK, etc.) and the United States are already members[1] of the Global Health Security Agenda (GHSA), the GHSA’s mission could possibly be expanded to have a more active role in addressing pandemics, especially since this global initiative also involves the private sector, including the pharmaceutical industry.

In the context of EU Economic Recovery, the Budget and Economic and Monetary Affairs Committees of the European Parliament approved their Report on the Recovery and Resilience Facility Regulation on 9 November.  This is a key instrument for initiating the funding €672.5 billion (US$793.7 billion) for loans and grants that would support investments and reforms to Member States stemming from the NextGenerationEU Instrument investments.  Next steps, this will now move to inter-institutional negotiations with the Council and the European Commission.  One contentious issue that could delay the negotiations is related to the recovery cash before capitals complete their reforms tied to their national recovery plans; the Parliament seeks to give countries access to 20 percent while the Council limits that to 10 percent.

Meanwhile, on 10 November inter-institutional negotiations relating to the 2021-2027 EU budget, the Multiannual Financial Framework (MFF) concluded successfully with a remarkable €1.8 trillion (US$2.1 trillion) budget and recovery package that links EU funding with the respect for the Rule of Law, a contentious aspect of the negotiations.  The deal would facilitate the entry into effect of the budget in 2021 as well as the ratification process for the €750 billion (US$ 885.5 billion) recovery fund.  The deal still requires a final endorsement by both co-legislators, the Council and the European Parliament.  The Hungarian Prime Minister has threatened to veto the deal, due to EU funding being tied to Rule of Law requirements.

The European Commission welcomed the deal which contributes more than 50 percent of the budget to “support modernisation through policies that include research and innovation, via Horizon Europe; fair climate and digital transitions, via the Just Transition Fund and the Digital Europe Programme; preparedness, recovery and resilience, via the Recovery and Resilience Facility, rescEU and a new health programme, EU4Health”.  About 30 percent of the EU budget would be allocated to funds fighting climate change, the largest European budget to this cause.  The financing of the EU budget would be done through the NextGenerationEU Instrument which will be repaid through new own resources previously outlined and agreed by Member States.  Notably these include non-recyclable plastic, a carbon border adjustment mechanism, a digital levy as well as a revision of the EU Emissions Trading System, the Financial Transaction Tax and links to a common corporate tax base.  All of these, with the exception of the non-recyclable plastic would take effect from 2021 onwards.

Recognizing the issue of asymptomatic COVID-19 transmissions, the UK Government is reportedly preparing a population-wide testing scheme.  The Government is apparently testing its strategy in Liverpool, England, a plan that allows all individuals to get tested for the virus, whether they show symptoms or not.  While the EU broached a potential “international pandemic treaty,” Prime Minister Johnson hosted Bill Gates and the heads of ten leading life science and pharmaceutical companies on 10 November for a virtual discussion on how government, industry and civil society can work together on combatting COVID-19 and future pandemics.

The United States reported more than 153,400 new COVID-19 cases on Thursday, 12 November, and reached over 11 million cases this past weekend.  Last Friday, President Trump and Vice President Mike Pence received a briefing at the White House on Operation Warp Speed’s efforts.  Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, said on Friday “a number of factors” are driving the increased number of cases in America, including people growing tired of following public health measures.  He further called for more testing to identify asymptomatic individuals that could be further spreading the virus.

On Monday, 16 November, Moderna shared interim Phase 3 clinical data on its vaccine candidate (mRNA-1273), noting it was 94.5 percent effective.  Moderna received funding for its clinical research from the Trump Administration’s Operation Warp Speed and partnered with the National Institutes of Health (NIH) and the Biomedical Advanced Research and Development Authority (BARDA) on its clinical trial.  Both Pfizer/BioNTech and Moderna’s vaccine candidates are seeking emergency use authorization (EUA) from the U.S. Food and Drug Administration, which could be granted as soon as December.

Meanwhile, AstraZeneca and Johnson & Johnson’s Phase 3 clinical trials continue in the United States; interim data is expected from these trials early next year.  Dr. Moncef Slaoui, Operation Warp Speed’s chief advisor, shared with the media that barring any major scientific or manufacturing delays, most Americans could have access to a COVID-19 vaccine by Spring 2021, and possibly be immunized by June.

Ahead of the upcoming Thanksgiving Holiday later this month, California, Washington and Oregon issued a joint travel advisory on Friday discouraging nonessential travel and urging visitors and residents returning from other states to quarantine for 14 days. Other states or local jurisdictions are expected to issue similar travel advisories.  California is re-emerging as a hotspot, with the state seeing one of the steepest rises in confirmed cases and reporting over one million coronavirus cases since the start of the pandemic.  The Centers for Disease Control and Prevention discourages holiday travel amid the pandemic.

With US lawmakers returning to Washington, the “Lame Duck” session has commenced, a legislative period that is typically packed legislatively and full of surprises.  With respect to another COVID-19 relief package, there appears to be support in both chambers amid both parties to move forward with something in the Lame Duck session.  Whether it will be a narrow package, at a lower price point – as Republicans favor – or if it will be a more comprehensive package at a higher price point – as Democrats favor – remains a question.  Democrats, led by Speaker Pelosi, are seeking a $2 trillion package that provides assistance to state and local governments, among other things.  Republicans have been clear they are not willing to come up to that price point and are pushing for the inclusion of liability protections. Many believe that a smaller package will coalesce and advance, allowing a new Congress in January to address a larger relief package.  Another question hanging over any legislative effort in the last few months of this year is whether President Trump will sign any new bills into law, including another COVID package.


UK-EU Talks

European Commission President von der Leyen and UK Prime Minister Johnson spoke by phone on Saturday, 7 November, and agreed their teams would “redouble efforts to reach a deal”.  Talks resumed on 12 November.  Three outstanding issues need to be overcome to secure a deal according to EU Chief Negotiator Michel Barnier:  (1) governance, (2) fair competition, and (3) reciprocal access to markets and fisheries.  It appears that negotiations will continue this coming week due to progress achieved in London this past week, which will delay yet again the previously established mid-November deadline.  The extension of the talks is making it increasingly challenging for the EU timeline needed for ratification, whereas the ratification process of a potential deal in the UK is much quicker.

UK Cabinet Office Minister Michael Gove stated during a House of Commons debriefing that in the latest negotiations “the UK has already shown a great degree of flexibility in these negotiations, but it is important also that the European Union shows flexibility too.”  EU27 Heads of State will be holding a video conference on 19 November; the Brexit talks will be one agenda item.  Should an agreement fail to be concluded by that date, the European Commission is expected to issue contingency legislation to mitigate fall-out from a possible no-deal scenario.

Meanwhile, in London, the House of Lords approved amendments to the proposed Internal Market Bill that removed the controversial clauses that would undermine the Withdrawal Agreement by giving the Government the power to override aspects of the Northern Ireland Protocol.  The votes in the House of Lords were motivated by the principle that a sovereign state should uphold the rule of law and honor its treaty obligations.  The Government said that it would use its majority in the House of Commons to reinstate the deleted clauses.  Separately, the Irish Foreign Minister warned that the powers the Government proposed to take would render it impossible to reach a Brexit Free Trade Agreement.

10 Downing Street was riven with internal disputes, which became public during the week, culminating on Friday 13 November in the immediate departure of two key Prime Ministerial aides including the architect of the 2016 vote to leave the EU and of the Conservative Party’s large majority in the December 2019 election.  The Government insisted that these events did not mark a change to the approach to negotiation with the EU.  Negotiations resume in Brussels on Monday 16 November.


US-EU Developments

On 9 November, US Trade Representative Robert Lighthizer responded to the European Union announcement earlier that day it was imposing tariffs on certain products from the United States.  In a brief statement, he said,

The United States is disappointed by the action taken by the EU today.  The alleged subsidy to Boeing was repealed seven months ago.  The EU has long proclaimed its commitment to following WTO rules, but today’s announcement shows they do so only when convenient to them.”

The EU tariffs went into effect on 10 November.

Meanwhile, the European Parliament adopted a trade deal on 11 November that would remove tariffs on US lobster in exchange of the removal of certain duties on imports from EU products such as ceramics or prepared meals.  For the EU, this is a step forward in the relations encouraging the US to lift its aluminum tariffs imposed on some EU member states.

On 10 November, European Union Competition Commissioner Margrethe Vestager resorted to enforcement actions against the American tech giant Amazon, following accusations of anticompetitive behavior of using internal data from customers to favor its own retailers in the platform, at the expense of other competitors.  This investigation began with an analysis of millions of transactions and products listed on Amazon’s marketplace.  Findings concluded that Amazon’s algorithm collected data from third parties for price fixing, contacting suppliers and assessing market demand; thus taking advantage of competitors and consequently resulting in an anti-competitive environment.

A second phase of the investigation will supervise Amazon’s algorithm criteria to select products that appear on the buyers interface to find out if any favorable treatment is received by Amazon products.  These actions follow the stream of a strong European action against anti-competitive behavior allegedly carried out by various giant US tech companies. Previous examples include Apple being investigated by Vestager during June and July 2020 for limiting innovation in the mobile market; Facebook was investigated for data protection infringement in 2019; Google was also investigated for alleged anti-competitive activity.

Meanwhile, the US Department of Agriculture’s (USDA) Economic Research Service released a report on the European Commission’s proposed “Farm to Fork” initiative, which is part of the Commission’s Green New Deal.  USDA notes that the initiative’s strategies for European agriculture – through targeted reductions in the use of land, fertilizers, antimicrobials and pesticides – will likely affect international markets for agricultural commodities and, consequently, the broader food and agriculture system.  The report reflected such agricultural policy shifts in the EU over the next ten years could lead to a reduction in EU agricultural production, reducing its competitiveness in domestic and export market.  This includes increased food prices, by 17 percent, and reduced gross farm income, by 16 percent, by 2030 in the EU.  If the EU policies are adopted beyond the EU, USDA concluded the impacts would expand with consequences for worldwide welfare and food insecurity, particularly in those less developed countries that are food insecure.

European Commission Deputy Director General for Food Policy Claire Bury rejected the USDA report’s conclusions on Friday, 13 November.  She noted,

We think it doesn’t take account of everything that’s in the farm support strategy.”  

Bury added, “Specifically, it doesn’t take account of any research and innovation in new technologies” that would maintain or increase agricultural output.  She confirmed the EU is preparing its own study of the impact of the “Farm to Fork” initiative on agricultural production.

The US Government participated virtually in the EU-US Strategic Dialogue on Humanitarian Affairs that was hosted by Directorate General for European Civil Protection and Humanitarian Aid Operations (DG-ECHO), from 9-10 November.  The United States and the European Union are the two top donors to humanitarian crisis response globally and the Dialogue provides a forum to explore common approaches to address key global humanitarian emergencies, including COVID-19.


Other Notable EU Developments

On 9 November, the European Parliament and the Council reached an agreement on the proposal for the modernization of EU export control regulations on sensitive dual-use goods and technologies.  The goal of the agreement is to coordinate the efforts between the European Commission and Member States on addressing potential human rights violation risks associated with exported dual-use technologies.

Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis stated that technologies “can have a far-reaching impact and pose a risk to national and international security, while cyber-technologies can lead to human rights violations. We will now have robust export controls to mitigate against abuses of dual-use tech and exporters will have to follow due diligence obligations”.

Under new regulations, due diligence and compliance duties would be introduced for private operators as gatekeepers, as they are considered to be responsible for monitoring the risk that dual-use goods may pose for international security.  It also strengthens the EU’s capacity to collaborate with third parties to incentive a global approach.

On 12 November, the European Commission released the EU trade agreement annual report where it analyzed the benefit of the global trade network.  The document reported an overall growth of trade by 2.5-3.4 percent.  For example, the EU-Japan Economic Partnership Agreement increased bilateral trade by 6 percent in the past two years.  EU Trade Commissioner Dombrovskis, considers that the right steps are being taken as the EU’s plans to facilitate trade agreements in of favor SMEs and large companies in the EU.

The EU-Canada Agreement (CETA) is also an important milestone for the EU’s trade objectives, as trade between the partners increased 24.5 percent compared to its pre-CETA trading relationship.  This also provided an important boost for industrial products and development.

The COVID-19 pandemic has demonstrated the need for a coordinated EU approach on health matters and a need to address the gaps when it comes to the EU’s competence, especially since Member States still hold most of the power when responding to health-related issues.  The European Commission presented a package on 11 November  that would establish  a European Health Union.  This would include: a Communication on Building a European Health Union, preparedness and resilience; a Proposal for a Regulation on serious cross-border threats to health; a Proposal to extend the mandate of the European Medicines Agency; and a Proposal to extend the mandate of the European Centre for Disease Prevention and Control.

The Communication proposes the creation of an EU Health Emergency Preparedness and Response Authority that would facilitate responses to future health crises.  However, in order to establish a European Health Union, the Communication outlines seven principal components needed: an EU-level coordinated response, medical countermeasures, preparedness and response planning and reporting, epidemiological surveillance, laboratory findings, testing and contact tracing, an early warning and response system, and international cooperation.

The proposal for a Regulation on serious cross-border threats to health proposes a number of improvements to the current legislative framework, including the development of EU health crisis and pandemic preparedness plan, as well as recommendations for the adoption of plans at national levels.


Other Notable UK Trade Developments

On 10 November, Britain’s Department for International Trade affirmed that post-Brexit the UK Generalised Scheme of Preferences (GSP) “will cover all the same countries that are currently eligible for trade preferences under the EU’s GSP, allowing businesses to trade as they do now without disruption.”  International Trade Secretary Liz Truss stated,

The scheme will also help British businesses to continue trading seamlessly after we leave the EU, as well as giving British consumers continued access to some of their favourite products at affordable prices.” 

Foreign Secretary Dominic Raab added,

Global Britain is a partner of choice for developing countries. As today’s announcement demonstrates, we take a liberal approach to trade, recognising that many developing countries want to trade their way to greater prosperity.” 

The Department of International Trade provided a readout of the second round of formal trade talks between the UK and New Zealand for a possible free trade agreement on 10 November.  Over the course of the two rounds of negotiations, both sides have shared 35 draft texts and 25 position papers.  The UK and New Zealand are also “exploring opportunities for the recognition of professional qualifications, as well as exploring innovative provisions to promote sustainable finance and diversity in the financial services sector.”  Positive discussions were reported in the areas of Rules of Origin and Customs, with agreement on simple, modern customs procedures that consider current and future supply chains.  The third negotiating round is expected to take place in January 2021.


Anti-Terrorism Efforts in Europe

In view of the recent terrorist attack in Vienna, the German Presidency appears to be, according to media reports, advancing the plans to adopt draft conclusions that would ban end-to-end encryption for messenger services, which would allow investigating authorities to have direct access to previously encrypted communications from such providers.  These draft conclusions are expected to be adopted by EU Ambassadors on 25 November, ahead of formal adoption at the Interior and Justice Ministers meeting, which is planned for 3-4 December.  If the Conclusions are adopted, a legislative procedure is expected.  France, Germany and Austria are leading the efforts to create such a regulatory framework, following the adoption of the Conclusions.  However, necessary safeguards need to be established to ensure citizens’ privacy is respected.  The recent attacks in Europe also prompted the need to establish a regulatory framework that would target radicalism and hate speech online.

US Secretary of State Mike Pompeo called Austrian Foreign Minister Alexander Schallenberg on 11 November about the 2 November terrorist attacks in Vienna.  According to a US Department of State readout, Secretary Pompeo “condemned the heinous attack in the strongest possible terms and offered further U.S. support for the investigation.”


Disputes Updates | Nagorno-Karabakh, Eastern Mediterranean, Belarus

On 9 November, Armenia and Azerbaijan agreed to sign a deal brokered by Russia that would terminate the fighting in the disputed territory of Nagorno-Karabakh.  As part of the accord, the parties are reportedly soliciting “United Nations structures” to help with the humanitarian aspects of the conflict.  After the agreement was reached, protests erupted in the Armenian capital, Yerevan.  Meanwhile, Russian troops have deployed to Nagorno-Karabakh.

The United States has not yet responded with any official statements from Washington on the brokered accord.  However, the US Government is reportedly reviewing the terms of the accord, since it is one of the three OSCE Minsk Group Co-Chairs for the conflict.  Reuters reported on Friday that Russian Foreign Minister Sergei Lavrov suggested the Russian troops would serve as peacekeepers, noting:

The U.N. is very interested in coordinating their actions with our peacekeepers, with our border guards and with those who will solve humanitarian problems.” 

Hundreds of Russian peacekeepers have reportedly arrived in the region, with reports further indicating Russian border guards have been placed at five posts in Nagorno-Karabakh, two of which border Iran.  Nagorno-Karabakh is internationally recognized as Azerbaijan; Russia’s military deployment to the territory means that Azerbaijan now joins several other former Soviet republics[2] with an active Russian military presence.

On 10 November, French President Emmanuel Macron expressed support for a “lasting political solution to the conflict that allows for the Armenian population of Nagorno-Karabakh to remain in good condition and the return of tens of thousands of people who have fled their homes”.  France, the other OSCE Minsk Group Co-Chair for the conflict, will reportedly oversee implementation and fulfillment of the agreement.  This suggests close diplomatic relations between France and Russia, not just the Nagorno-Karabakh conflict but also on addressing other concerns, such as international terrorism and the COVID-19 pandemic.  Meanwhile, French relations remain tense with Turkey, over the recent terroist attacks in France and given Turkey’s position of backing the Azeri Government.

Also on 10 November, French Foreign Affairs Minister Jean-Yves Le Drian condemned the Turkish government actions against the EU Member States and in the Mediterranean.  According to media reports, EU sanctions related to the East Mediterranean conflict could be forthcoming. Sanctions are under consideration and the Brussels December meetings will discuss such action.

After welcoming the release of an American citizen from Belarus at the end of October, the US Government issued a statement on 12 November calling for the release of all political prisoners in that country.  The State Department reflected,

More than 100 political prisoners are currently being detained for exercising their human rights and fundamental freedoms by peacefully participating in protests, calling for free and fair elections, and advocating for a national dialogue to end the ongoing crisis.”

Apart from the release of these prisoners, State also urged Belarusian authorities to engage in meaningful dialogue with the Coordination Council and Belarusian civil society.

On 11 November, the State Department condemned the harassment and expulsion of two UK diplomats from Belarus on 9 November.  State reflected,

This arbitrary and unjustified act by Belarusian authorities is only the latest attempt to hide the daily harassment and repression everyday Belarusians, including activists and members of the media, continue to face in their fight for democracy.”


Sanctions Updates | EU and US

On 12 November, the European Council informed Member States of the preparation of a report regarding the coordinated package of measures adopted in July with respect to the Hong Kong Special Administrative Region (“Hong Kong”) of the People’s Republic of China.  The EU is monitoring the situation in Hong Kong in order to ensure the preservation of democracy and Hong Kong’s autonomy under the “One Country, Two Systems” principle.

The Standing Committee of China’s National People’s Congress adopted a decision on 11 November on the qualification of members of Hong Kong’s Legislative Council, which includes a patriotism requirement that the EU notes could disqualify members without due process.  The EU further noted 15 members of the Legislative Council resigned in protest.  In a statement issued on 12 November, the EU High Representative called for the immediate revocation of this decision by Beijing and Hong Kong authorities and for the reinstatement of the 15 Legislative Council members.

US Secretary Pompeo issued a statement on 12 November related to the disqualification of “pan-democratic” lawmakers in Hong Kong.  He noted the US Government “strongly” condemned “the ‘patriotism’ resolution passed by the National People’s Congress Standing Committee,” observing the “resolution tramples on the rights of the people of Hong Kong to choose their elected representatives as guaranteed by the Basic Law and further exposes Beijing’s blatant disregard for its international commitments under the Sino-British Joint Declaration.”

On 9 November, the United States designated four PRC and Hong Kong officials in connection with implementing the National Security Law and threatening the peace, security, and autonomy of Hong Kong, pursuant to Executive Order 13936.  Seeking to pressure those believed to be undermining Hong Kong’s autonomy, the State Department noted these individuals would be barred from travelling to the United States and their assets within the jurisdiction of the United States or in the possession or control of US persons would be blocked.  The United States continues to call on Beijing to abide by international commitments it made in the Sino-British Joint Declaration, a United Nations-registered treaty.

On 12 November, the European Council extended the sanction program against Venezuela until 14 November 2021.  This decision comes in response to the ongoing crisis in Venezuela, where actions undermining democracy and human rights are persistent.  The objective of the sanctions is to stabilize and implement democratic principles in the country.  EU sanctions include asset freezes and travel bans for 36 individuals, and also consist on an embargo of arms and double-use materials that could be used in internal repression.  The EU is seeking to pressure the Venezuelan regime on its human rights record and toward respecting democratic procedures.

The US Department of the Treasury continues to focus on Iran.  On 10 November, the Office of Foreign Assets Control (OFAC) designated a network of six companies and four individuals that facilitated the procurement of sensitive goods, including US-origin electronic components, for Iran Communication Industries (ICI).  ICI is an Iranian military firm that was previously designated by the United States in 2008 (and by the European Union in 2010) for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics, which manages and coordinates Iran’s ballistic missile program.

On 9 November, OFAC designated Syrian military officials, members of the Syrian Parliament, Government of Syria entities, and Syrian and Lebanese persons attempting to revive Syria’s deteriorating petroleum industry.  The action was the Treasury Department’s fifth round of Syria-related actions since certain provisions of the Caesar Syria Civilian Protection Act of 2019 came into full effect.

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[1] A list of GHSA members is accessible here:  https://ghsagenda.org/ghsa-members/.

[2] Other former Soviet satellite republics with Russian military bases include:  Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan and Ukraine (Crimea).  Russia also maintains a military presence in territory internationally recognized as Georgia, South Ossetia and Abkhazia.


Frank SamolisMatthew Kirk and Wolfgang Maschek contributed insights to this report.

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© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 321
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About this Author

Stacy Swanson, Public Policy Specialist, Squire Patton Boggs Law Firm
Public Policy Specialist

Stacy Swanson helps sovereign governments successfully navigate Washington and understand United States Government policy. She regularly provides clients with strategies which effectively leverage existing relationships to advocate policy objectives before the legislative and executive branches of the U.S. government. 

202-457-5627
Christina Economides Public Policy Attorney Squire Patton Boggs Brussels, Belgium
Public Policy Advisor

Christina Economides is an advisor in the firm’s Public Policy Practice in Brussels in coordination with the Public Policy International Group. She is also a member of the firm’s Healthcare Industry Group leadership team.

Christina advises clients on technology, digital economy, taxation, financial services, and health regulatory and policy matters. Prior to joining the firm, Christina worked for a Brussels-based EU public affairs consultancy, focused on financial services, ICT/data protection and competition matters, and was inter alia running the Secretariat of the...

322 627-11-05
Associate

Carolina Gamba is an associate of the International Trade Practice in our Madrid and Brussels offices. She has been active in the fields of international trade, sanctions, project finance and investment protection.

She complemented her legal studies at the University of Navarra, with a course in international law and international relations at the Complutense University of Madrid, and completed her Master studies specializing in international law, foreign trade and international relations at ISDE in Madrid.

Carolina has professional experience working in the department of...

34 91-520-0776
Frank Samolis, Squire Patton Boggs Law Firm, International Trade Attorney
Partner

Frank Samolis is co-chair of our International Trade Practice. He advises clients on international trade matters, including trade law, trade policy and legislation, and international trade negotiations. He is also chair of our India Practice Group and the leader of our Colombia Desk, Latin America Task Force.

Frank handles matters before the Office of the US Trade Representative, other Executive Branch Trade agencies, the US International Trade Commission, US Court of International Trade, US Customs Service and the US Congress. Frank has represented foreign sovereigns or foreign...

202-457-5244
Matthew Kirk International Affairs Adviser Squire Patton Boggs London, UK
International Affairs Adviser

Matthew Kirk is an international affairs advisor in our Public Policy International Practice. He provides strategic advice concerning business, politics and international law from the firm’s London office. He also advises clients on regulatory risk, market entry, cyber risk and reputation risk.

A career diplomat, he served as the UK’s Ambassador to Finland from 2002 to 2006. Most recently, he served as external affairs director at Vodafone.

Ambassador Kirk is a highly experienced international risk strategist and negotiator of complex multinational issues. Additionally, he...

44 207-655-1389
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