Congress should create a new, “permanent” committee in the executive branch tasked with planning sanctions against China under “a range of possible scenarios,” including if it invades Taiwan, a congressional commission said this week. The bipartisan commission also said the Commerce Department should provide Congress with regular enforcement and licensing reports on certain China-related export control decisions and said the administration should create a new list of Chinese firms that should be subject to strict export licensing requirements.
U.S. and foreign companies “seem to be equally confused” by the Bureau of Industry and Security's new China chip export restrictions (see 2210070049), said Alison Stafford-Powell, a trade compliance lawyer with Baker McKenzie, speaking Nov. 15 during a virtual event hosted by the law firm. She called the new BIS rule “incredibly complex" and said industry needs more guidance from the agency.
The Bureau of Industry and Security's new administrative enforcement policies, including higher penalties for more serious violations, hasn’t led to a significant rise or fall in voluntary self-disclosures so far, said Matthew Axelrod, the agency’s top export enforcement official. Axelrod, speaking during a Nov. 14 event hosted by the Society for International Affairs, said BIS received 150 new VSDs since the policy change in June (see 2206300069), which he said was about the same number it received during the same time period each of the last two years.
The EU’s foreign direct investment screening mechanism has several glaring “shortcomings” that hinder the bloc’s ability to monitor harmful FDI and can lead to delays in regulatory decisions on investments, the Organisation for Economic Co-operation and Development said in a recent report. Although the OECD said “most actors” involved in the EU’s investment screening efforts approve of the new mechanism, its effectiveness is limited by member states that haven’t yet implemented FDI screening and don’t properly share information about ongoing screening efforts.
The Treasury Department wants to modernize its licensing approach to more easily allow humanitarian groups to send aid to sanctioned jurisdictions, said Alex Parets, counselor to Treasury’s undersecretary for terrorism and financial intelligence. Parets, speaking during a Nov. 14 event hosted by the Center for Strategic and International Studies, said the administration is prioritizing work to improve its exemption process for humanitarian organizations and banks working with them.
The State Department plans to soon issue new export compliance guidance and has made progress updating its Part 130 process, senior agency official Mike Miller said. Miller, speaking during the Defense Trade Advisory Group plenary last week, also said the Directorate of Defense Trade Controls is working more closely with the Commerce Department on end-use checks, and said the agency has seen an uptick in violations involving illegal exports of technical data.
The Commerce Department again renewed a temporary export denial order for Mahan Airways because the airline continues to violate the order and the Export Administration Regulations, according to a notice issued this week. Mahan Airways has been on the banned list since 2008, and Commerce said the Iranian airline has continued to fly into Moscow in violation of U.S. export controls against Russia. The latest renewal is for 180 days from Nov. 8.
The U.S. and South Korea launched a new working group this week to better harmonize the countries’ export control decisions and ensure a “level-playing field” for businesses. BIS said it hopes the working group will help both sides identify “specific actions” to “advance export controls cooperation.” The announcement comes about a month after the U.S. issued a range of new semiconductor-related restrictions on exports to China -- controls that the U.S. hopes to convince allies, including South Korea, to also impose (see 2210270047 and 2210070049).
The new U.S. chip controls against China (see 2210070049 and 2211010042) mark a “major escalation” in the U.S.-China technology war and will likely have a significant effect on China’s technology capabilities, Bank of America said this week. The bank also warned that the controls, which are “more comprehensive and stricter than what we have seen in the past,” could ultimately open the “door to more sweeping restrictions in other domains like leading edge manufacturing.”
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