China will soon impose export controls on certain unmanned aerial vehicles and related equipment in what is said is an effort to safeguard its national security. The restrictions, effective Spet. 1, will cover certain UAVs and their engines, infrared imaging equipment, radars, lasers, radio communication equipment, jamming equipment and more, China’s Ministry of Commerce announced July 31, according to an unofficial translation. It added that “all other civilian drones that are not included in the control are prohibited from being exported for military purposes.”
The Bureau of Industry and Security chose not to penalize U.S. hardware supplier MaxLinear after it voluntarily disclosed potential export control violations, the company said in a recent SEC filing. MaxLinear said it received a warning letter from BIS June 8 and was informed by BIS that the agency “closed out its review of our voluntary self-disclosure without monetary or other penalties.” MaxLinear disclosed the potential violation last year when it said it may have breached U.S. export licensing requirements by selling to a Chinese foundry on the Entity List (see 2211070014 and 2305020008).
Fried Frank law firm last week released its 2023 International Traffic in Arms Regulations Enforcement Digest, providing a “legal and compliance practitioner's reference guide” on ITAR enforcement. The document includes an overview of recent and past ITAR penalties, including actions taken this year against American 3D printing company 3D Systems (see 2302270078) and U.S.-based telecommunications company VTA Telecom (see 2305310040). The document also includes a table of various enforcement actions, dating to 2001, grouped with the penalty issued in the case, the U.S. Munitions List Categories involved, the countries involved and the number of violations.
The Bureau of Industry and Security is drafting a final rule to expand its nuclear nonproliferation controls on China and Macau. The agency sent the rule for interagency review July 24.
The U.S. “should move more quickly” to establish a new multilateral export control forum to restrict high tech exports to China now that the Wassenaar Arrangement has become less effective, said William Reinsch, a former Commerce Department official and current Scholl Chair in International Business at the Center for Strategic and International Studies. Reinsch said “multilateralism is the only viable approach to high-tech export controls,” adding that “existing structures are not adequate to the task” and must be replaced by other means for the U.S. and its trading partners to coordinate.
The Bureau of Industry and Security's recently issued guidance for medical-related export license applications (see 2307210019) is a “welcome development” and should be reviewed by exporters submitting applications for medical items to Russia, Belarus and certain regions of Ukraine, Baker McKenzie said July 19. But the firm also said exporters may not always be able to meet all the criteria outlined in the guidance, which offers best practices for the type of information applications should include, such as end-use or end-user statements, a narrow transaction scope and specific descriptions of the items.
The Bureau of Industry and Security sent a final rule for interagency review that would implement export control changes and updates agreed to during the 2022 Wassenaar Arrangement. The rule was sent for review July 18 and would amend the Export Administration Regulations and Commerce Control List.
The Biden administration should wait to place new export controls on the semiconductor industry until it adequately assesses the impact of its existing restrictions, the Semiconductor Industry Association said this week. The U.S. chip industry should be able to continue accessing the China market, SIA said, warning that “repeated steps” to “impose overly broad, ambiguous, and at times unilateral restrictions risk diminishing the U.S. semiconductor industry’s competitiveness, disrupting supply chains, causing significant market uncertainty, and prompting continued escalatory retaliation by China.”
Japan and South Korea signed a “memorandum of cooperation” on export controls last week to better collaborate around the trade measures, according to an unofficial translation of a July 11 news release from Japan’s trade ministry. As part of the memorandum, both sides agreed to hold export control policy dialogues on a “regular basis,” look to “enhance their export control systems and operations while referring to the other's export control systems,” and “take appropriate measures, including reviewing their respective export control systems and operations.”
The U.S. “firmly” opposes export controls by China on certain metals used to produce semiconductors, a Commerce Department spokesperson said July 6. “These actions underscore the need to diversify supply chains,” the person said in an email. “The United States will engage with our allies and partners to address this and to build resilience in critical supply chains.”