Senators said this week they are close to finalizing negotiations on a bill that would impose new sanctions on Russia both before and after it potentially invades Ukraine. Sen. Bob Menendez of New Jersey, the Democratic chair of the chamber’s Foreign Relations Committee, said Feb. 1 that he plans to meet soon with Sen. Jim Risch of Idaho, the committee’s top Republican, to finalize the bill.
The State Department this week fined a U.S. electro-optics equipment manufacturer $840,000 after it illegally exported or tried to export defense items to several countries, including China and Lebanon. Torrey Pines Logic didn’t secure required export licenses before shipping its products, illegally participated in defense export activities while it was ineligible and didn’t maintain adequate export transaction records, the Directorate of Defense Trade Controls said in a charging letter released Jan. 31. TPL ultimately agreed to a series of remedial measures to improve its export compliance program, including hiring a DDTC-approved compliance officer.
The State Department this week proposed several changes to its defense export regulations, including one that would clarify definitions for “export” and “reexport,” another that would change language in its Canadian exemption and a third that would revise its exemption for certain transfers to dual or third-country nationals. The agency also proposed corrections that would fix administrative errors in the regulations. Comments on the proposed changes, which were released Feb. 1, are due April 4.
Lawmakers submitted a host of amendments to the House’s recently released China competition bill, including measures that would introduce new export controls and sanctions authorities and requirements. One submission, a 115-page amendment from Rep. Michael McCaul, R-Texas, would create more congressional oversight of the Commerce Department’s emerging and foundational technology control effort and calls for expanded export restrictions against Chinese military companies.
The Bureau of Industry and Security is hoping to expand the number of officers it sends overseas and increase collaboration with other investigative agencies, partly to help with a larger workload and a rise in new export control evasion trends. Agents said BIS has seen a steady increase in work since the enactment of the Export Control Reform Act of 2018, which has been made more complex by the rise in cryptocurrency schemes, increasingly sophisticated uses of front companies and ransomware attacks.
The Los Angeles and Long Beach ports again postponed a new surcharge meant to incentivize the movement of dwelling containers (see 2110280031), the two ports announced Jan. 28. The ports originally planned to begin imposing the fee Nov. 15, but have postponed it each week since. The latest extension delays the effective date until Feb. 4.
In her first public remarks since joining the Bureau of Industry and Security, Thea Kendler said BIS has been constantly looking for new emerging technologies that should be subject to controls and is close to publishing its first foundational technology rule. Kendler, who was confirmed last month as assistant secretary for export administration, also said she plans to prioritize multilateral export controls that protect American technology from China’s military and wants to work closely with industry so those controls don’t harm U.S. competitiveness.
As the U.S. and the European Union both prepare their own set of Russian sanctions and export controls, a senior U.S. official said the measures may not be identical but will align very closely to avoid hurting the competitiveness of U.S. firms. Peter Harrell, a National Security Council official, also said the trade restrictions won’t amount to an embargo against “everyday” Russian consumers, and will likely include exemptions and a wind-down period.
The House’s America Competes Act of 2022 would revise and introduce a range of new export control and sanctions provisions, including new restrictions on exports of electronic waste-related goods, more designations targeting China for human rights abuses and a repeal of the sunset of the Magnitsky human rights sanctions regime. The bill, unveiled this week as the response to the Senate’s U.S. Innovation and Competition Act, would also require the Biden administration to conduct “periodic” reviews over its export controls for surveillance equipment, urges the administration to reexamine U.S. export policies for countries that supply weapons to terrorist organizations and calls for better harmonization of U.S. export control and sanctions policies with allies.
The Biden administration this week previewed its plan to impose a “massive” set of export controls and sanctions on the Russian economy if the country further invades Ukraine, including measures to cut off Russian companies from both U.S. and foreign-produced technology inputs. The export restrictions could include an expansion of the Commerce Department’s foreign direct product rule, officials said, and would specifically target several of Russia’s “key” technology sectors, including its defense, aerospace, quantum computing and artificial intelligence industries.