International Trade & Compliance Alert | September.20.2020
Late last night, a Magistrate Judge for the U.S. District Court for the Northern District of California issued an order granting a motion for a nationwide preliminary injunction forbidding implementation of sanctions against Tencent Holdings Ltd. and its mobile application WeChat as described in our prior alert found here. Based on this preliminary injunction, the prohibitions regarding WeChat will not go into effect at 11:59pm EDT this evening. The judge’s ruling is predicated on her belief that the plaintiffs have shown serious questions going to the merits of the plaintiff’s First Amendment claim, that the balance of hardships tips in the plaintiffs' favor, and that the plaintiffs have established the other elements for preliminary-injunctive relief. The government is expected to challenge the order.
Separately, the Department of Commerce has delayed implementation of the first phase of the TikTok sanctions (prohibiting U.S. online mobile application stores from selling the TikTok application) until no earlier than September 27, 2020 at 11:59 p.m. EDT. As the U.S. government has reportedly, in principle, approved arrangements to mitigate national security concerns regarding TikTok operations in the United States, it seem likely that the TikTok sanctions will never become effective.