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North Rhine-Westphalia

Insights Call on US Sanctions against China


Topic: What impact will the US sanctions against China have on European businesses? Can Europe stay neutral?


On October 15, 2020, AmCham Germany's Cologne Chapter organized an Insights Call together with Amerikahaus NRW e.V. and Andersen Tax & Legal with two experienced US international trade lawyers based in Washington, DC, and a German businessperson who has been living in China for 13 years. The two US experts were Barbara Linney, a partner at the firm Baker & Hostetler, and Brian Egan, a partner of Steptoe & Johnson. Mike Hofmann, the business expert, has spent the last 13 years in China. For the last three years, he has worked as Managing Director at Melchers China in Beijing (an international trading company based in Germany) and Chairman of Koehler Pharmaceuticals Beijing, a German-Chinese joint venture. Dr. Hermann Knott, member of the German and New York Bar, is a partner of Andersen, tax and legal advisors.

In the first part of the program, Barbara Linney and Brian Egan explained the various kinds of sanctions currently administered by the different US authorities involved. The various instruments relevant are sanctions in a stricter sense, export and import controls as well as the reviews made by CFIUS, the Committee reviewing foreign direct investments into the US. The impact of these measures on German business enterprises became clear: They run the risk of being subjected to restrictions under US sanctions with respect to their China-related business activities, in particular related to the US. This is parallel to the effects of US sanctions against Russia and Iran. 

In this context, specific cases related to the bans against Huawei and the use of apps originating in China were addressed. The bans on Huawei will certainly also be applied to foreign suppliers, and German companies need to be aware of this situation. As far as Chinese apps are concerned, it has largely remained a domestic issue in the US and has not spilled over to foreign countries. 

Mike Hofmann presented a thorough overview coupled with first-hand experience on the reaction of German companies doing business in China. Among German businesses, there is considerable sensitivity to issues discussed in this program. The number of German businesses affected by US sanctions against China has risen significantly. 

All participants agreed that the situation needs to be closely monitored in order to adapt business decisions to changes as they occur. 

We would like to express our gratitude to all participants for their excellent contributions on these complex issues. 

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