A new rule issued by the State Department last week will finalize an exemption for defense trade between the U.S., Australia and the U.K., potentially removing export control barriers for a range of items that had previously faced strict license requirements under the International Traffic in Arms Regulations. Australia and the U.K. said the exemption and other AUKUS changes are expected to lift restrictions on billions of dollars worth of exports each year and eliminate hundreds of export licenses once the “license free” trade begins next month.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
The Bureau of Industry and Security this week fined a Pennsylvania electronics business and its Hong Kong affiliate $5.8 million after the company voluntarily disclosed and admitted to illegally shipping controlled technology to China, including to military research institutes on the Entity List. The company, TE Connectivity Corporation, had “knowledge or reason to know” that the shipments violated U.S. export controls, BIS said, adding that its employees in China hid the true end-users and bypassed the company’s denied-party screening process.
The Committee on Foreign Investment in the U.S. has levied nearly $70 million in penalties so far this year, including a $60 million fine against T-Mobile after the telecommunications company violated its national security agreement. The announcement, the first time CFIUS has named a company it has penalized, comes after the committee last year issued a record-setting four penalties (see 2407230017) and in April proposed expanding its enforcement powers (see 2404110037), underscoring its recent focus on punishing violators and increasing penalties.
The State Department this week published a final version of a rule to expand its regulatory definition of activities that don’t need a license because they don’t qualify as exports, reexports, retransfers or temporary imports. The rule, effective Sept. 16, is largely consistent with the proposed version, though the agency made changes to narrow its scope and make sure certain temporary imports will still require a license.
A new compliance note released by the Bureau of Industry and Security this week reveals the types of export violations that universities are most commonly disclosing to BIS, what led to those violations and the steps the academic institutions took to improve their compliance programs. The agency also issued a set of resources it said universities should use for compliance, including lists of risky parties maintained by both the government and outside organizations.
Canada is considering new measures to strengthen its export controls, tariffs and other trade-related enforcement powers as it analyzes whether it has tools powerful enough to protect against threats to its economic and national security.
Silvaco Group, a California-based company that provides software solutions for semiconductor design, received a cautionary letter from the Office of Foreign Assets Control after disclosing possible sanctions violations involving Russia.
The U.S., the U.K. and Canada last week issued new, coordinated sanctions against Belarus, targeting people, companies and entities that are helping Russia evade sanctions and export controls, funding Belarusian oligarchs tied to President Alexander Lukashenko or taking other steps to aid the Russian or Belarusian governments. The sanctions, which were announced days after a similar set of designations imposed by the EU (see 2408050008), were meant to mark the four-year anniversary of the “fraudulent” 2020 presidential election that helped Lukashenko keep power, the countries said in a joint statement.
EU countries need to do more to track China’s progress in semiconductors, electric vehicles, solar panels and other technologies, European researchers said last week, warning that Beijing is increasingly turning to export controls to test where it can best “exploit dependencies” by other major economies that are imposing their own technology trade restrictions against China. They added that China’s export licensing decisions have so far been “highly opaque” and sometimes appear biased, generating fear among western countries that the controls are solely being used as a trade retaliation tool.
Although U.S. officials say export controls on advanced semiconductors and related equipment are designed to slow Chinese technological innovation, those controls have so far hurt American toolmakers the most, a technology policy expert said.