Overview

On 24 August 2026, the United States took coordinated action across its Syria and Iran sanctions programmes. Secretary of State Marco Rubio rescinded Syria’s State Sponsor of Terrorism (SST) designation after the 45-day Congressional notification period, and Hay’at Tahrir al-Sham (HTS) was delisted as a Specially Designated Global Terrorist (SDGT) organisation and removed from the Specially Designated Nationals and Blocked Persons (SDN) List. In Iran, the Treasury Department launched “Operation Economic Outcast”, made five sectoral determinations under E.O. 13902, designated nearly 60 entities, individuals and vessels across multiple jurisdictions, and suspended Iran General Licences F and G. It issued General Licences AA and BB, published an alert on Strait of Hormuz passage risks, and designated Singapore-based Wellbred Capital and affiliated entities linked to Mohammad Hossein Shamkhani.

Continue Reading U.S. sanctions update – Syria SST rescission, Operation Economic Outcast, and Iran sanctions developments

The Council adopted its 21st package of restrictive measures against Russia on 23 July 2026. The instruments entered into force on 24 July 2026 (the day following publication in the Official Journal). The principal instruments are Regulation (EU) 2026/1848; Regulation (EU) 2026/1844; and Implementing Regulation (EU) 2026/1843 (amending and implementing Regulation (EU) No 269/2014).

Continue Reading EU’s 21st Sanctions Package: Banks, Barrels, and a Bigger Blacklist

On July 7, 2026, OFAC revoked Iran General License X (GL X) and replaced it with General License X1 (GL X1). The waiver, which had been due to run until August 21, lasted barely two weeks. GL X1 is not a continuation; it is a narrow wind-down authorization that expires on July 17, 2026.

What changed

Three tankers were attacked in the Strait of Hormuz on July 7 and  Washington pulled GL X immediately, a warning of the consequences for Iran’s alleged actions in the strait. Oil prices jumped, and one struck vessel, an LNG carrier, was reportedly at risk of explosion.

GL X had temporarily authorized transactions relating to the production, sale, delivery, and offloading of Iranian-origin crude oil, petrochemicals, and petroleum products. See our previous post on GL X here. The critical point now is that GL X is no longer available, and OFAC can revoke any general license at any time. Parties should structure transactions accordingly.

Continue Reading OFAC Revokes Iran General License X: Only a Short Wind-Down Remains

Background

In our publication of 9 April 2026, we analysed the key implications of the proposed EU steel tariff-rate quota (TRQ) regime at a time when interinstitutional (trilogue) negotiations between the European Parliament, the Council, and the Commission were still ongoing.

On 24 June 2026, Regulation (EU) 2026/1384 of the European Parliament and of the Council, addressing the negative trade-related effects of global overcapacity on the Union steel market, was published in the Official Journal of the European Union. This Regulation replaces the existing EU steel safeguard measures, which are due to expire on 30 June 2026. The new regime enters into force on 25 June 2026 and applies from 1 July 2026.

However, a key issue remains unresolved. The quarterly administration and country-specific distribution of tariff quotas, including allocations to Free Trade Agreement (FTA) partners, have not yet been determined. It has been reported that the quarterly and country-level quota allocations will only be published on 30 June, just one day before they take effect. The uncertainty for importers is considerable: while steel prices are expected to rise, the precise impact will only become clear when the quotas – and how they are divided between different products and supplier countries – are published.

In this publication, we summarise the key features of the final EU steel measures, set out the staggered application dates, explain the tariff quota allocation framework (noting that the country-specific and quarterly allocation regime is yet to be confirmed), detail the melt-and-pour traceability requirements, and identify the key future deadlines and practical steps stakeholders should take now.

Key features of the published Regulation

The following is a summary of the substantive outcomes of the legislative process:

  • The out-of-quota duty has been raised from 25% to 50% ad valorem and the total annual tariff quota volume is set at 18,345,922 tonnes, roughly half of current levels, broken down per product category and administered on a quarterly basis. With this structural tightening, importers should expect significantly more shipments to fall outside quota limits, triggering the higher duty rate.
  • Melt-and-pour has been adopted as a transparency and traceability requirement only and does not serve as a basis for quota allocation at this stage. From 1 October 2026, importers must provide evidence (e.g., a mill test certificate) of the country where the steel was originally melted and poured. However, as early as 1 October 2027, the Commission will take melt-and-pour data into account for the country distribution of tariff quotas. By 30 June 2028, the Commission must assess whether melt-and-pour should become the full basis for quota allocation.
  • Carryover of unused quotas is allowed during the first yearly period (1 July 2026–30 June 2027). After the first year, the Commission will decide, by implementing act, whether carryover continues, taking into account import pressure, average quota utilisation (especially where above 80%), and supply availability.
  • The Commission must take into account the Union interest, including availability of supply and price increases affecting downstream industries, when adjusting quotas via delegated acts within defined floor and ceiling limits.
  • Product scope reviews are staggered: by 31 December 2026, the Commission must assess whether to extend the product scope to cover specific CN codes not currently listed; by 30 June 2027, it must assess whether the scope should also cover products made of, or containing, a significant amount of steel (including downstream iron and steel products). Both of these assessments are directed at potentially expanding the product scope. From 30 June 2029 and every two years thereafter, the Commission must conduct further assessments of the product scope, which may result in either an expansion or a reduction, taking into account the wider situation of Union competitiveness and of the Union steel industry (including upstream and downstream actors and SMEs), as well as the Union’s common security and defence policy.
  • Imports from Iceland, Liechtenstein, and Norway) are excluded from the tariff quota regime, while imports from Russia and Belarus are excluded from quota calculation as they remain subject to EU import bans.

Entry into force and staggered application dates

The Regulation enters into force on the day following its publication in the Official Journal, that is, 25 June 2026. Different provisions apply from different dates. The staggered application timeline is as follows:

25 June 2026 (entry into force)

  • The Commission’s power to adopt implementing acts determining the type of evidence importers must provide to prove the country of melt-and-pour applies immediately.
  • The elements the Commission must take into account when laying down the country distribution of tariff quotas are established.
  • The Commission is empowered to adopt implementing acts on country distribution and, where appropriate, to apply bilateral safeguard measures.

1 July 2026 (general application)

  • Tariff quotas are opened and the 50% out-of-quota duty applies.
  • First yearly period: 1 July 2026–30 June 2027.

1 October 2026

  • Importers must provide evidence of the country of melt-and-pour.

1 October 2027

  • The Commission takes melt-and-pour data into account for the country distribution of tariff quotas.

Tariff quota allocation: Global and yearly

The quotas set out in Annex II to the Regulation are yearly and global, broken down per product category. No quarterly breakdown or country-specific allocation appears in the Annex itself, and no specific FTA partner quotas are provided at this stage.

Until the Commission adopts implementing acts establishing the country distribution and quarterly breakdown, quotas will be administered as published, on a yearly and global basis. Given that quarterly administration is expressly provided for in Article 3(2), the Commission is expected to publish the implementing act before 1 July 2026.

We understand that the EU is offering FTA partners more time beyond 1 July to formalise bilateral arrangements (for which parliamentary approval is required). The Commission has reportedly devised a three-column system:

  • Column 1: grants all World Trade Organisation members 30% of historical import volumes.
  • Columns 2 and 3: individual and competitive pool quotas available to FTA partners if they waive their FTA rights or pledge not to challenge the EU’s measures.

However, it remains unclear how this system will operate during the interim period, pending formal agreement with FTA partners.

Melt-and-pour traceability requirements

A separate implementing act will follow, setting out the specific documentary evidence importers must provide to demonstrate the country of melt-and-pour. Key points:

  • A public consultation is currently running, with a deadline of 2 July 2026. Stakeholders can participate via the following link: EC consultation on melt-and-pour evidence.
  • The first implementing act on the type of evidence required must be adopted by 31 August 2026.
  • The obligation for importers to provide this evidence applies from 1 October 2026.

Key future dates

The Regulation establishes the following key milestones:

  • 1 July 2026: stakeholder consultation on product scope.
  • 31 August 2026: first implementing act on melt-and-pour evidence.
  • 31 December 2026: assessment of amendments to product scope (specific CN codes).
  • 30 June 2027: assessment of a broader product scope (downstream iron and steel products).
  • 30 June 2028: assessment of melt-and-pour as a basis for quota allocation; first implementation report.
  • From 30 June 2029, and every two years: further product scope assessments.
  • From 30 June 2029, and every three years: effectiveness evaluation.

What to do next

With the Regulation now published, stakeholders – particularly importers – should:

  • Verify product classification. Ensure correct CN code classification of your goods to determine whether they fall within scope, support any post-clearance claims, or establish that your product may be excluded from the regime.
  • Assess origin correctly. Determine the non-preferential origin of your steel products, taking into account whether any processing operations in intermediary countries qualify as a sufficient change of origin. This is critical for understanding which country-specific quota your imports will draw from.
  • Map melt-and-pour origins. Identify the country of melt-and-pour across your product portfolio and ensure suppliers can provide the required evidence (e.g., mill test certificates) from 1 October 2026.
  • Participate in the public consultation on melt-and-pour evidence. The deadline is 2 July 2026; this is an opportunity to shape the implementing act on what evidence importers must provide.
  • Build in-quota vs. out-of-quota cost models. With the duty gap now at 50%, the financial impact of falling outside quota is substantial.
  • Stay tuned for the quarterly allocation implementing regulation, which is expected to be adopted imminently and will determine how quotas are distributed by country and by quarter in practice.

Reed Smith’s international trade team continues to monitor developments closely. Please do not hesitate to reach out to our team for tailored advice on how these measures affect your operations.

On 21 June 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License X (“GL X”), authorising certain transactions relating to the production, sale, delivery and offloading of Iranian-origin crude oil, petrochemical products and petroleum products. This represents a remarkable — if temporary — departure from the comprehensive United States sanctions framework that has constrained Iranian energy trade for decades. Clients need to be aware that there are still significant Iranian sanctions restrictions in place by the European Union and the United Kingdom, that may still prevent parties from taking advantage of GL X. This alert summarises the key features of GL X and the practical considerations for clients.

Overview of the General Licence

Scope and authorised activities. GL X authorises all transactions ordinarily incident and necessary to the production, sale, delivery or offloading of Iranian-origin crude oil, petrochemical products and petroleum products, including transactions involving vessels blocked under the relevant authorities. Covered ancillary activities expressly include safe docking and anchoring; crew health and safety; emergency repairs; environmental mitigation; vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification and salvage.

Importation into the United States. Notably, GL X extends to the importation into the United States of Iranian-origin petroleum products where such importation is ordinarily incident and necessary to the authorised sale, delivery or offloading.

Payments. Payments owed to Iran, the Government of Iran or any blocked person for the purchase of authorised products may be made in U.S. dollar-denominated funds.

Key exclusions and limitations. GL X does not authorise transactions involving persons located in, or organised under the laws of, North Korea, Cuba, the Covered Regions of Ukraine (as defined by Executive Order (“EO”) 14065), or the Crimea Region of Ukraine (as defined by EO 13685). It does not authorise any transactions prohibited by Executive Orders or regulations not expressly referenced in the licence. Clients should note that this is not a wholesale lifting of Iran sanctions; it is a targeted, time-limited authorisation confined to the petroleum sector.

Who may rely on it. GL X is issued under multiple sanctions programmes (including 31 CFR parts 560, 544, 561, 562, 587, 589 and 594, and Executive Orders 13846, 13876, 13902 and 13949). Any U.S. person, and any non-U.S. person complying with the terms and conditions of GL X, may rely on the licence to the extent the transaction falls within its terms.

Non-US clients should independently assess:

  • the feasibility of banking, insurance and logistics arrangements; and any applicable EU, UK or other local sanctions regimes which may not provide equivalent relief;
  • contractual restrictions (including sanctions-related representations and warranties).

Duration and expiry

GL X expires at 12:01 a.m. Eastern Daylight Time on 21 August 2026. There is no automatic renewal, and the license can be withdrawn at any time before then. Clients engaged in transactions authorised by the licence must plan for wind-down well in advance of this deadline. Any transaction not completed by that time will no longer benefit from the authorisation and could give rise to sanctions liability.

We recommend that clients monitor OFAC guidance closely for any extension, amendment or revocation and ensure that contractual arrangements incorporate appropriate conditionality linked to the licence’s validity.

Conclusion — a remarkable turnaround

The issuance of GL X is extraordinary by any measure. For the first time in over a decade, OFAC has authorised — albeit temporarily — the broad production, sale and delivery of Iranian-origin petroleum products, including their importation into the United States and payment in U.S. dollars. This marks a significant, if carefully circumscribed, easing of the maximum-pressure posture that has defined U.S. Iran sanctions policy in recent years.

Clients should approach this development with both commercial interest and caution. The licence is temporary, narrowly drawn and subject to exclusions. The broader sanctions architecture remains in place. Parties contemplating reliance on GL X should conduct thorough due diligence, take specialist legal advice and ensure robust compliance frameworks are in place to manage the residual risks that attend any dealings with Iranian-origin products, particularly if they have an EU or UK nexus.

The Reed Smith sanctions team is available to assist clients in assessing the implications of GL X for their operations and to advise on structuring compliant transactions within its scope.

Key takeaways:

  • Subject to limited exceptions, the proposed rule would require existing or prospective DoD contractors and subcontractors, at any tier, on contracts exceeding $5 million to disclose foreign ownership, control, and influence (FOCI) and beneficial ownership information – extending obligations that historically applied only to classified work.
  • Covered contractors determined to be under FOCI must implement risk mitigation strategies within 90 calendar days of contract award, modification, option exercise, or identification of a FOCI-related risk during performance.
  • Contracts for commercial products and services would be exempt unless a designated senior DoD official determines the contract involves a national security risk due to sensitive data, systems, or processes.

On May 7, 2026, the Department of Defense/War (DoD) published a proposed rule that would significantly expand the scope of FOCI requirements beyond classified contracts. The proposed rule would amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the disclosure and risk mitigation requirements of Section 847 of the FY 2020 National Defense Authorization Act (NDAA) and Section 819 of the FY 2021 NDAA, as well as elements of DoD Instruction 5205.87. Comments are due by July 6, 2026.

The proposed rule would apply to “covered contractors and subcontractors,” defined as existing or prospective DoD contractors or subcontractors, at any tier, performing under a contract valued in excess of $5 million. DoD estimates the $5 million threshold will capture approximately 37,740 entities, roughly 57% of which are small businesses. Historically, FOCI disclosure and mitigation obligations have applied primarily to contractors performing classified work under the National Industrial Security Program (NISP). The proposed rule would extend similar requirements to certain contractors holding unclassified contracts – a significant expansion that DoD states is necessary because “foreign adversaries have exploited this gap to gain access to sensitive, unclassified information, intellectual property, and critical technologies.”

The proposed rule would operate through two new contract instruments: a solicitation provision (DFARS 252.240-70XX) and a contract clause (DFARS 252.240-70YY). Under the solicitation provision, offerors would represent at the time of offer submission that they have submitted a current Standard Form (SF) 328, Certificate Pertaining to Foreign Interests, in the National Industrial Security System (NISS), along with contact information for each beneficial foreign owner. Offerors that are aware of FOCI would also be required to agree to accept risk mitigation strategies as a condition of award. Importantly, contracting officers generally would be prohibited from awarding, modifying, or exercising an option on a covered contract unless the contractor has an “eligible” status in NISS or an exception applies.

The contract clause would impose ongoing obligations during performance, including the following:

  • Contractors must disclose their beneficial ownership and FOCI status by maintaining a current SF 328 in NISS.
  • Contractors must implement risk mitigation strategies within 90 calendar days of contract award, modification, option exercise, or the identification of FOCI-related risks during performance.
  • All subcontractors awarded contracts exceeding $5 million must maintain an “eligible” status in NISS prior to award and for the duration of performance.
  • Contractors would be required to update their SF 328 and, where the change could result in FOCI concerns, notify the Defense Counterintelligence and Security Agency (DCSA) within three business days. The notification would include information regarding the foreign owner or beneficial owner, the relevant ownership interests, and any available information concerning mitigation measures.

In addition, within 10 business days of being notified by DCSA that a FOCI or beneficial ownership issue poses a risk or potential risk to national security, a contractor would be required to initiate a plan of action, provide any requested information, describe mitigation efforts already undertaken, and confirm in NISS its intent to comply with DCSA’s recommended mitigation measures.

Importantly, the proposed rule would not apply to contracts for commercial products and commercial services, including commercially available off-the-shelf (COTS) items, unless a designated senior DoD official determines that the contract involves a risk or potential risk to national security because of sensitive data, systems, or processes. This case-by-case determination leaves open questions regarding the extent to which the rule ultimately may be applied to commercial contracting activities.

Defense contractors and subcontractors with contracts exceeding $5 million should begin assessing their potential FOCI exposure, ensuring they are registered in NISS, and preparing a current SF 328 submission with supporting documentation well in advance of a final rule. Prime contractors should also evaluate whether their subcontractors above the $5 million threshold are prepared to comply with the flow-down requirements. For many contractors that have not previously operated within the NISP framework, compliance may require establishing new processes to collect ownership information, monitor changes in foreign ownership and control, maintain NISS registrations, and respond to DCSA inquiries and mitigation requirements.

Comments on the proposed rule may be submitted via the Federal eRulemaking Portal at regulations.gov under DFARS Case 2021-D011, or by email to osd.dfars@mail.mil, on or before July 6, 2026.

Key takeaways

  • Ban on the import of CN 2710 products derived from Russian crude and refined in third countries – subject to diesel and jet fuel exceptions.
  • Prohibition on the maritime transportation of Russian LNG – subject to carve-outs for: (i) pre-existing long-term LNG contracts until 1 January 2027; and (ii) Sakhalin and Yamal 2 projects.
  • Expansion of specified “shadow-fleet” vessel restrictions, with wide-ranging measures prohibiting provision of all principal services to specified ships. These will not automatically apply to pre-existing specified ships.
  • The LNG and refined product restrictions follow announcements in late 2025 by the UK government of an intention to introduce such measures. These largely align with existing EU measures under Council Regulation (EU) 833/2014.
Continue Reading UK imposes new Russia sanctions – mirroring of EU position on the maritime transport of LNG and refined petroleum products derived from Russian crude

On 19 May 2026, the Department for Business and Trade (DBT) issued General Trade Licence GBSAN0004 (the Licence), authorising the import into the United Kingdom of certain processed oil products derived from Russian crude oil. The Licence, which comes into force on 20 May 2026, marks a notable relaxation of the UK’s otherwise comprehensive sanctions regime targeting Russian energy products. This article summarises the scope, conditions, and practical implications of the Licence for general counsel, compliance teams, and commercial clients engaged in the oil and refined products trade.

Background

The UK’s Russia sanctions regime – established under the Russia (Sanctions) (EU Exit) Regulations 2019 (the Russia Regulations) – includes a broad prohibition on the import and acquisition of Russian oil and oil products, as well as related services. Chapter 4IB of the Russia Regulations specifically addresses “relevant processed oil products”, prohibiting the import of oil products that have been processed in a third country from Russian-origin crude oil. Regulations 46Z9F, 46Z9G, 46Z9H, and 46Z9I impose prohibitions on the import, acquisition, supply, and delivery of such products, as well as on related financial and ancillary services.

The Licence was issued against a backdrop of intensifying pressure on global fuel markets. It followed the United States’ decision on 18 May 2026 to extend its own sanctions waiver on Russian oil, reportedly driven by the need to stabilise fuel costs amid the U.S.–Israeli conflict with Iran. The UK government stated that it remains “committed to strengthening our sanctions on Russia to degrade its ability to wage war in Ukraine, whilst protecting critical supply chains and maintaining market stability”.

Scope of the Licence

The Licence is granted by the Secretary of State under regulation 65 of the Russia Regulations and disapplies the prohibitions in regulations 46Z9F to 46Z9I in respect of qualifying products. Its scope is, however, deliberately narrow: it applies only to products classified under commodity code 2710 that have been processed in a “third country” from crude oil originating in Russia (commodity code 2709). A “third country” is defined as any country other than the United Kingdom, the Isle of Man, or Russia.

The products authorised under the Licence are limited to the following:

  • Diesel, falling within commodity codes 2710 19 42 or 2710 19 44; and
  • Jet fuel, falling within commodity code 2710 19 21.

No other refined or processed oil products are covered. Alongside the import of these goods, the Licence permits the provision of certain services and actions related to their importation. Importantly, the Licence does not authorise any act that the person carrying it out knows, or has reasonable grounds for suspecting, will result in a breach of any other part of the Russia Regulations.

Duration, revocation, and record-keeping

The Licence comes into force on 20 May 2026 and is of indefinite duration, subject to periodic review by the Secretary of State. It may be varied, revoked, or suspended at any time, although DBT has stated it will endeavour to provide four months’ notice of any decision to revoke. This notice period is a welcome feature for market participants seeking supply chain certainty, although it falls short of a binding commitment.

The provisions of regulation 76 of the Russia Regulations – which impose record-keeping obligations in connection with general trade licences – apply to any act carried out under the authority of the Licence. Entities relying on the Licence should therefore ensure that adequate records are maintained documenting their reliance on it, the products imported, and the relevant commodity codes.

Windsor Framework considerations

The Licence is expressly subject to any obligations arising under the Windsor Framework, as applied through section 7A of the European Union (Withdrawal) Act 2018, in respect of Northern Ireland. This is a significant caveat. Where products are destined for or transiting through Northern Ireland, businesses should assess whether EU sanctions restrictions – which may differ from those applicable in Great Britain – impose additional or overriding requirements.

Wider context

The issuance of the Licence forms part of a broader pattern of calibrated sanctions adjustments by the UK government. In addition to the Licence, on 19 May 2026, the UK issued a separate general licence permitting the maritime transport of Russian liquefied natural gas (LNG) from the Sakhalin-2 and Yamal LNG terminals, valid until 1 January 2027.

No doubt, political positions are being put aside as the wider impact of the U.S.–Israel conflict with Iran, and the resulting disruption to the Strait of Hormuz and movement of oil and gas, starts to bite on the UK economy.

Practical recommendations

For general counsel and compliance officers, the following steps are recommended. First, businesses engaged in the import of diesel or jet fuel should review their supply chains to determine whether any products may qualify as “relevant processed oil products” under the Licence and, if so, confirm that the applicable commodity codes are met. Second, entities relying on the Licence should implement robust record-keeping procedures compliant with Regulation 76 of the Russia Regulations. Third, given the indefinite but revocable nature of the Licence, businesses should monitor the government’s periodic reviews closely and maintain contingency plans for the possibility of revocation on four months’ notice. Fourth, any supply chains involving Northern Ireland must be assessed against the additional requirements that may apply under the Windsor Framework. Finally, enquiries regarding the Licence should be directed to the Import Controls and Trade Sanctions team at DBT.

Divergence and compliance complexity

The Licence represents a further divergence between the U.S., EU, and UK sanctions regimes on Russian oil and related services, which were implemented on a coordinated basis in 2022 and 2023. This increasing divergence adds complexity for compliance teams operating across these markets, who will now need to maintain a detailed understanding of, and ensure adherence to, three distinct and evolving sanctions frameworks – each with its own scope, exceptions, and licensing requirements.

How we can help

The Reed Smith team remains on hand to assist clients in navigating the evolving sanctions landscape, including advising on the application of the Licence, supply chain compliance, and the interplay between UK, EU, and U.S. restrictions. Please do not hesitate to reach out to any member of the team if you have any queries.

On April 30, 2026, the U.S. House of Representatives passed the Farm, Food, and National Security Act of 2026 (H.R. 7567). The legislation extends agricultural programs through 2031 and contains significant national security elements, beyond the headline coverage of food stamp cuts and pesticide liability changes. Notably, the bill does not impose a sweeping ban on Chinese ownership of U.S. farmland or adopt most recommendations from the National Farm Security Action Plan. It does, however, introduce several provisions that will affect foreign investment, food supply chain security, and biosecurity.

Key Takeaways

  • Expanded CFIUS review over transactions involving agricultural land, agriculture biotechnology, and the agriculture industry, with the Secretary of Agriculture elevated to a permanent committee member for such transactions.
  • A new CFIUS notification pathway linked to AFIDA reporting, which could subject land acquisitions by persons of designated adversary nations to foreign investment scrutiny.
  • New restrictions on USDA financial assistance for solar projects on covered farmland and projects using components produced, manufactured, or assembled in or by foreign countries or entities of concern.
  • Strengthened AFIDA compliance and monitoring, including a revised and expanded public database of foreign-owned agricultural land.
  • “Buy American” provisions barring certain purchases of poultry and seafood from China and Russia in federally supported programs.

CFIUS membership and review. The bill would formally add the Secretary of Agriculture to the Committee on Foreign Investment in the United States (CFIUS) for transactions involving agricultural land, agriculture biotechnology, and “the agricultural industry, including agricultural transportation, storage, and processing.” While United States Department of Agriculture (USDA) is already a CFIUS member on a case-by-case basis for agriculture-related transactions, and USDA and Treasury have already entered into a memorandum of understanding for sharing AFIDA data on transactions involving countries of concern, the bill would elevate that membership to permanent status and create a distinct “reportable agricultural land transaction” notification pathway that triggers a mandatory CFIUS determination of whether to initiate a review.

  • Reportable transactions. Under the bill, “reportable agricultural land transaction” is defined as a transaction that meets three conjunctive requirements:
    • The Secretary of Agriculture has reason to believe it is a covered transaction based on intelligence community information;
    • The transaction involves the acquisition of an interest in agricultural land by a foreign person of China, North Korea, Russia, or Iran; and
    • A person is required to submit a report under the Agricultural Foreign Investment Disclosure Act (AFIDA) with respect to the transaction.
  • Mandatory review determination. Once notified by USDA, CFIUS must first determine whether the transaction is a “covered transaction” and if so, whether to initiate a review or take another action authorized under the statute.
  • Broad definition of agricultural land. Under AFIDA, “agricultural land” includes any land totaling 10 acres or more in the aggregate put to agricultural use at any time during the past five years, and leasehold interests of 10 years or more trigger reporting. For parties that acquire or lease former agricultural land for solar arrays, battery storage, or other infrastructure, this definition could bring routine transactions under CFIUS scrutiny.

Restrictions on USDA-supported solar development. The bill restricts funding for ground-mounted solar on agricultural land. The key limitations include:

  • Covered farmland prohibition. Section 9012 would prohibit financial assistance for projects converting “covered farmland” (defined to include both farmland (as defined in the Farmland Protection Policy Act), encompassing prime farmland, unique farmland, and farmland of statewide or local importance and nonindustrial private forest land) for solar energy production. Limited exceptions apply for:
    • projects converting less than 5 acres; or
    • projects converting less than 50 acres where the majority of the energy produced is for on-farm use and the project has received local government approval.
  • Foreign entity of concern supply chain restrictions. The bill bars funding for solar projects with components produced, manufactured, or assembled in a foreign country of concern, or by an entity domiciled or controlled by such a country or by a foreign entity of concern (FEOC).

Together, these provisions narrow the pipeline of USDA-supported solar development and impose new supply chain compliance requirements.

Strengthened AFIDA compliance and monitoring. The bill strengthens AFIDA compliance through several new mechanisms:

  • New database. USDA would create a centralized database of foreign-owned agricultural land.
  • Chief of Operations for Investigative Actions. A new position to oversee monitoring and enforcement.
  • Expanded annual reporting. Reports would expand to cover threats including “the use of agricultural land for industrial espionage or intellectual property transfer by covered foreign persons.”
  • Competitive grant program. An expanded grant program to protect U.S. food and agriculture from chemical, biological, cybersecurity, or bioterrorism threats, with the goal of enabling timely responses to both emerging and existing threats.

Buy American and food import restrictions. Among several “buy American” provisions, the bill would prohibit certain foreign food imports in federally supported programs. For instance, raw or processed poultry products or seafood from China and Russia would be banned from purchase by school food authorities.

Biosecurity and external threats. Additional provisions address biosecurity and external biological threats, including import controls on live animals, foreign animal disease preparation requirements, and measures targeting invasive species and bioterror threats.

What this means for stakeholders. The bill faces an uncertain path in the Senate. Companies and foreign investors acquiring agricultural land should be evaluating their exposure now. The combination of expanded CFIUS jurisdiction, new AFIDA-linked CFIUS notification pathways, and restrictions on USDA solar funding represents a meaningful shift that will require careful transaction planning and supply chain diligence.

Should you have any questions about how these provisions may affect your transactions or projects, Reed Smith’s International Trade & National Security team is tracking implementation of the Farm, Food, and National Security Act of 2026 and is available to assist.

On 4 May 2026, the European Commission published what is expected to be the final simplification package for the EU Deforestation Regulation (EUDR), before it starts to apply on 30 December 2026 for most companies. The EUDR requires that seven key commodities (cattle, wood, cocoa, soy, palm oil, coffee, and rubber) and their derived products are deforestation-free, legally produced, and covered by a due diligence statement before being placed on the EU market or exported. Amongst other things, the Commission proposes to amend the product scope of the EUDR and provides further guidance on topics such as obligations of downstream operators and a simplified regime for micro and small primary operators (i.e., small-scale farmers, growers, or harvesters in low-risk countries who directly place their own produce on the EU market). Importantly, the package includes detailed clarifications on how the EUDR applies to online sales and online marketplaces, a topic of growing practical importance for platform operators. We summarise the key takeaways below.

Key features of the EUDR simplification package

The package includes the following key elements:

  • Clarifications on downstream obligations, e-commerce platforms, geolocation alternatives, and size thresholds and procedures for micro and small primary operators. 
  • Proposals on horizontal exemptions (e.g., samples, packaging used solely to carry/protect goods, used/second-hand goods, and waste streams), targeted removals (e.g., leather/cattle skins and hides, and retreaded tyres), targeted additions (e.g., soluble coffee, certain palm oil derivatives, including soap, and frozen cattle tongues), and “ex” prefixes to ensure only products made from relevant commodities are in scope. Stakeholders may provide feedback on the draft Commission proposal on product scope until 1 June 2026.
  • The EUDR Information System is slated for a staged relaunch from June 2026, with new features to register revised roles, enable one-off simplified declarations for micro and small primary operators, expand the application programming interface (API), and add voluntary grouping, while also integrating data flows from national databases to ease burdens downstream. 
  • Two trade facilitation repositories will be launched before the end of 2026 and are designed to reduce the burden on operators by providing a single reference point for the legal requirements of producing countries and the scope of recognised certification schemes, thereby streamlining the legality assessments carried out as part of the due diligence process.

Why should e-commerce businesses care about the EUDR?

The EUDR applies to any business that places relevant commodities or derived products on the EU market, regardless of how the sale is made. If you sell in-scope goods to customers in the EU, whether through your own website, a third-party platform, or a physical store, you are potentially within scope. In practice, this means that the operator that first places them on the EU market must be able to trace them back to the plot of land where they were produced, confirm they are deforestation-free and legally produced, and submit a due diligence statement (DDS) through the EU’s dedicated information system. Operators typically rely on information, documents, and data collected from their suppliers along the supply chain to satisfy these requirements. Large and medium-sized companies must comply by 30 December 2026; micro and small enterprises have until 30 June 2027 (except those in the timber sector, which face the earlier deadline). Downstream actors – including many online retailers – may discharge their obligations by collecting and retaining the DDS reference number obtained from their upstream supplier.

1. Online and distance sales are in scope

The Commission has confirmed that the EUDR applies to all relevant products supplied “in the course of a commercial activity”, which includes online and distance sales – whether on a business-to-business (B2B) or business-to-consumer (B2C) basis. The same logic applies at the border: the EUDR captures all releases for free circulation of relevant products entering the EU market, with a single exception for products that are not supplied commercially and are solely intended for private use or consumption within the customs territory of the Union (i.e., consumer-to-consumer transactions).

2. Online marketplaces: not captured by default, but fulfilment activities may change the picture  

The Commission has now clarified how the EUDR applies to companies supplying relevant products to EU customers via online sales and, importantly, where online marketplaces stand.

Online distributors and retailers that supply relevant products to EU clients (whether businesses or consumers) may be classified as operators, downstream operators, or traders under the EUDR, depending on their specific role in the supply chain.

Online marketplaces that allow consumers to conclude distance contracts are not, by default, subject to obligations under the EUDR. Where a marketplace provider merely facilitates a sales agreement between two other parties without intervening in the actual supply of the product, it is treated as an intermediary service provider with no EUDR obligations.

The picture changes, however, where a provider performs multiple functions, for example, selling relevant products in its own right or offering delivery-related services alongside hosting third-party sellers. In those circumstances, the determination of whether the provider qualifies as an operator, downstream operator, or trader (or remains a mere intermediary) must be made on a case-by-case basis, turning on the provider’s concrete role in the supply chain for each individual transaction.

The Commission clarifies that fulfilment service providers are typically regarded as actually “supplying” a product to the customer. In practice, this means that platforms operating “marketplace plus fulfilment” models (handling storage, packaging, and delivery logistics on behalf of third-party sellers) may well cross the line from intermediary to operator or trader under the EUDR. Businesses with this operating model should carefully assess their exposure.

Depending on the circumstances, the responsible party may be any one of the following: the person offering the product for sale (e.g., the manufacturer, distributor, or retailer); the online marketplace itself, in respect of services that extend beyond pure intermediation; or a separate fulfilment service provider, where one is present in the supply chain.

3. EU consumers are never operators, even if named as “importer”

The Commission has clarified that an EU consumer (a natural person acting for purposes outside their trade, business, craft, or profession) is never an operator under the EUDR when purchasing a relevant product from an online seller supplying products in the EU. This holds true even where the consumer is named as the “importer” on the customs declaration.

The operator, regardless of whether it is established in the EU, will instead be the person commercially supplying the product, either as manufacturer, seller, online retailer, or fulfilment service provider actually delivering the goods to the EU consumer.

4. Key action points for e-commerce businesses

The new guidance has immediate practical relevance for online marketplaces and digital retailers operating in or supplying into the EU. Businesses should consider the following:

  • Assess your role in the supply chain. Classification under the EUDR is not static; it must be determined on a transaction-by-transaction basis. Whether a business acts as an operator, downstream operator, trader, or mere intermediary depends on the concrete functions it performs in relation to each individual sale.
  • Understand the fulfilment trigger. Providing fulfilment services (including storage, packaging, and dispatch) may cause a platform to be treated as actually “supplying” the product, bringing EUDR obligations with it. Businesses operating marketplace-plus-fulfilment models should treat this as a priority compliance risk.
  • Non-EU sellers are not exempt. Companies established outside the EU that import relevant products in execution of online sales contracts, in the course of a commercial activity, are treated as operators under the EUDR regardless of where they are based. Moreover, under Article 7 of the EUDR, the first person established within the EU who makes such products available on the market is also deemed an operator, even if the initial placing was performed by a non-EU entity. This dual-operator mechanism will be highly relevant for EU-based platform operators facilitating cross-border sales by non-EU sellers.
  • Comply by the applicable deadline. Large and medium-sized companies must be fully compliant by 30 December 2026. Micro and small enterprises have until 30 June 2027, except those in the timber sector, which face the earlier deadline.
  • No further delays are expected. The Commission has confirmed it will not reopen the EUDR legal text. Application dates remain firm, and businesses should use the remaining implementation period to put their compliance systems in place.

Our Trade & Customs team, with a particular focus in digital trade and e-commerce regulation, is happy to assist you in assessing your exposure under the EUDR and developing a compliance strategy tailored to your platform’s operating model. Please do not hesitate to reach out.