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The Internal Revenue Service issued its much anticipated notice of proposed rulemaking outlining the requirements for electric vehicle eligibility for the Section 30D New Clean Vehicle Credit of the Inflation Reduction Act of 2022. A total credit of $7,500 is available provided that; 40% of the critical minerals used to manufacture the vehicle's battery must be extracted or processed in the U.S. or any country the U.S. has a free trade agreement with (which increases to 80% by 2026); and 50% of the battery components must be manufactured or assembled in North America (which increases to 100% by 2028). There are also maximum vehicle value limitations and phased in prohibitions for components and minerals coming from a "foreign entity of concern" (to be defined at a later date). Check out the full Federal Register notice at the link below:
The recent June 12, 2024, Federal Register notice added three entities to the UFLPA Entity List showing increasing focus on three additional commodities. The entities which were added are suspected of working with the Xinjiang Uyghur Autonomous Region to recruit, transport, transfer, harbor or receive forced labor or Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of the Xinjiang Uyghur Autonomous Region.
The areas of increased focus include shoe and shoe materials, frozen seafood, vegetables, quick frozen convenience food and other aquatic food, and electrolytic aluminum, graphite carbon, and prebaked anodes.
To read more, check out the full register notice linked below.
On June 24, 2024, the Assistant Secretary of Commerce, Matthew S. Axelrod signed a settlement agreement with an exporter for violations of EAR. The violations occurred because of forty-two different shipments over the course of 4 years which were classified under ECCNs 1C353. These instances were subject to export licenses, but no licenses were obtained prior to exportation.
The exporter has a compliance team and upon recognition of the issue, submitted a voluntary self-disclosure. To read more details, check out the link below.
On June 3, 2024, the BIS imposed a civil penalty of $44,750 for violations of the antiboycott provisions of the Export Administration Regulations (EAR). In the press release, Assistant Secretary for Export Enforcement, Matthew S. Axelrod said “Our antiboycott rules against furnishing prohibited information and failing to report boycott-related requests apply with the same force even when another U.S. company is the one making the information requests.” He goes on to say “U.S. companies are reminded to be vigilant in examining all transaction documents, regardless of the source, to ensure terms and conditions comply with our antiboycott rules.”
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