Tag: supply chain

Understanding the Potential Anthropic Ban: Key Considerations for Federal Contractors

Robyn N. Burrows and Merle M. DeLancey, Jr. ●

On February 27, 2026, President Trump posted on Truth Social directing all federal agencies to “immediately cease” use of Anthropic’s artificial intelligence (“AI”) technology. Simultaneously, Defense Secretary Pete Hegseth announced on X he was designating the company a “supply chain risk to national security” and prohibiting federal contractors from doing any business with Anthropic. This unprecedented action against a domestic company has significant supply chain implications for government contractors. Below, we summarize what led to this development, the legal authorities pertaining to supply chain bans, and practical guidance for contractors navigating this evolving situation.

1. Background: From Contract Dispute to Presidential Directive

The conflict between Anthropic and the federal government emerged from a contract dispute over the company’s AI usage restrictions. Anthropic, which holds a $200 million Pentagon contract and was the first frontier AI company to deploy its models on classified government networks, maintained two “red lines” in its contract negotiations: it refused to allow its AI model, Claude, to be used for mass domestic surveillance of Americans or in fully autonomous weapons systems.

The Pentagon demanded that Anthropic agree to “all lawful use” of its technology without Anthropic’s proposed restrictions. Anthropic’s refusal led President Trump and Secretary Hegseth to announce their decisions against Anthropic on social media. Secretary Hegseth stated that Anthropic would be “immediately” designated a supply chain risk, prohibiting any federal contractor working with the military from “any commercial activity with Anthropic.”

Anthropic has announced it will challenge the supply chain risk designation in court, calling it “legally unsound.”

Continue reading “Understanding the Potential Anthropic Ban: Key Considerations for Federal Contractors”

Four Tools of Modern Economic Statecraft

The Impact of Modern Economic Statecraft on Cross-Border Trade and Investment: Sanctions, Export Controls, Investment Screening, and Supply Chain Rules

 ● PLI Chronicle: Insights and Perspectives for the Legal Community, March 10, 2023 ●

Anthony Rapa ●

Geopolitical risk is top of mind for companies these days, and it seems that every week brings a new proposed sanction, trade control, or investment restriction. Increasingly, companies and investors are discovering that their cross-border movement of goods, technology, and capital implicates regulatory restrictions of some kind and is subject to governmental scrutiny.

In modern parlance, such measures fall under the rubric of “economic statecraft.” The pace of change is dizzying, and the stakes are high, with each new economic statecraft tool holding the power to cut off business with targeted markets, trigger regulatory scrutiny of transactions, and impact business planning.

Economic statecraft is not new. The earliest recorded example dates back to the 5th century BC, when the Athenian Empire banned the people of Megara, a town allied with Sparta, from trading in harbors and marketplaces controlled by the empire. Another notable example is Napoleon’s Continental System, in which the French emperor sought to prohibit trade between the European continent and Great Britain. A further historical instance, with modern-day implications, is the U.S. embargo of Cuba, which dates back to the early 1960s.

While economic statecraft is not new, what is new is the power of the U.S. government and, increasingly, other governments, to respond swiftly to geopolitical events with economic countermeasures. In the modern landscape, such measures are often multilateral and reinforced through governmental bodies and market gatekeepers such as financial institutions.

Given the prevalence of economic statecraft tools and the geopolitical trends prompting their promulgation, it is important for economic operators engaged in cross-border trade and investment, and those advising them, to understand the nature and scope of the tools at governments’ disposal.

Read more on our website.

Complying with the Uyghur Forced Labor Prevention Act’s Strict Supply Chain Rules

Anthony Rapa, Matthew J. Thomas, and Patrick F. Collins ●


The Uyghur Forced Labor Prevention Act (“UFLPA” or “Act”), which took effect last month, ushers in a new era of supply chain diligence for importers. The Act creates a rebuttable presumption that any goods produced in whole or in part in the Xinjiang Uyghur Autonomous Region (“XUAR”) of the People’s Republic of China (“PRC”), or by entities identified by the U.S. government on the UFLPA Entity List (“Entity List”), are presumed to be made with forced labor and thus are prohibited from entry into the United States under Section 307 of the Tariff Act of 1930 (19 U.S.C. § 1307). Notably, the presumption applies to downstream products that incorporate restricted goods, regardless of where the downstream products are made.

U.S. Customs and Border Protection (“CBP”) is now authorized to detain and exclude and/or seize goods that it suspects were produced in the XUAR or by entities on the Entity List.

Importers whose supply chains have links to the XUAR and China should be aware of the implications of UFLPA enforcement, including with respect to due diligence considerations, supply chain tracing and management, and the evidence required to overcome the UFLPA’s rebuttable presumption. There is no grace period for enforcement.

UFLPA OVERVIEW

President Biden signed the UFLPA into law on December 23, 2021. Effective on June 21, 2022, the UFLPA established a rebuttable presumption that the importation of any “goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part” in the XUAR, or produced by entities designated by the Forced Labor Enforcement Task Force (“FLETF”) as involved in specified XUAR-related activity, is prohibited by Section 307 of the Tariff Act of 1930, which prohibits the importation of items made from forced labor. The presumption applies unless CBP determines that the importer completely and substantively responded to all CBP inquiries, fully complied with FLETF’s guidance, and established by clear and convincing evidence that the goods were not produced using forced labor.

To read the full client alert, please visit our website. 

A DoD New Year’s Resolution: No More Chinese (and Possibly Russian) Products and Services in Support of Key Missions

Justin A. Chiarodo and Robyn N. Burrows

A very Happy New Year to our GovCon Navigator readers! Further expanding recent supply chain restrictions across federal procurement, the Department of Defense (“DoD”) issued an interim rule prohibiting DoD from procuring equipment or services from certain Chinese entities (and possibly Russian) if used to carry out DoD nuclear deterrence or homeland defense missions. The rule builds on the Section 889 supply chain restrictions we previously covered in a prior blog post.

What should contractors do now given the interim rule is already in effect? Contractors should first evaluate their existing contract portfolios for covered missions and take immediate steps to eliminate all covered products from their supply chain (and find alternate sources of supply). If the rule might impact contract performance, you should be prepared to address this with the appropriate counterparty. And given the requirement for compliance certifications that mirror Section 889, contractors should also harmonize monitoring and compliance with their existing supply chain compliance programs. Among other things, this should address the requirement to obtain compliance certifications from downstream subcontractors and suppliers.

Read on for the specifics.

Continue reading “A DoD New Year’s Resolution: No More Chinese (and Possibly Russian) Products and Services in Support of Key Missions”

5 Tips for Complying with New Section 889 Supply Chain Regulations

Justin A. Chiarodo and Robyn N. Burrows

As part of a recent wave of supply chain requirements, Section 889 of the 2019 National Defense Authorization Act (“NDAA”) imposed major new limitations on the use of certain Chinese telecommunications products and services in federal procurement, and recent implementing regulations mandate a range of compliance actions relating to the ban. This blog post provides practical guidance on the new rules and five compliance tips.

Ban against Procuring “Covered Telecommunications Equipment or Services”

The Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”) recently released an interim rule implementing the first part of Section 889. This ban, which became effective August 13, 2019, sweeps broadly by prohibiting agencies from procuring the following “covered telecommunications equipment or services”:

    1. Telecommunications equipment produced by Huawei and ZTE Corporation;
    2. Video surveillance and telecommunications equipment used for public safety, surveillance of “critical infrastructure,” or national security purposes and produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company;
    3. Telecommunications or video surveillance services provided by such entities for any purpose; or
    4. Telecommunications or video surveillance equipment produced or provided by an entity that the Secretary of Defense determines is owned or controlled by, or otherwise connected to, the government of the People’s Republic of China.

The ban includes all affiliates and subsidiaries of the listed companies. Continue reading “5 Tips for Complying with New Section 889 Supply Chain Regulations”