China’s recent restrictions on Micron products are having broader than expected consequences for U.S. exporters, a trade industry conference heard last week, and may portend how future Chinese retaliatory actions will affect U.S. companies.
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.
CBP is inching closer to mandating electronic export manifest, with rail EEM the farthest along but air EEM still needing work, said David Garcia, program manager of the agency’s outbound enforcement and policy branch. Garcia said the agency is aiming to publish them in the Federal Register “within the next year or two.”
The Bureau of Industry and Security is considering tweaking regulatory language that calls on exporters to conduct a five-year review of activities that preceded their voluntary self-disclosures. The change could make it so the language only applies to more serious disclosures, said the top BIS export enforcement official, Maththew Axelrod, and would represent another step in the agency’s effort to draw more BIS and industry resources toward addressing significant violations as opposed to minor or technical ones.
A Latvia-based bank reached a $3.4 million settlement with the Office of Foreign Assets Control to resolve allegations it violated U.S. sanctions relating to Crimea, OFAC said June 20. Swedbank Latvia AS, a subsidiary of Sweden-based Swedbank AB, allowed a customer to use its e-banking platform from an internet protocol address in Crimea to send payments to persons in Crimea through U.S. correspondent banks, OFAC said, which resulted in 386 violations of U.S. sanctions.
Export compliance professionals stressed the importance of restricted party screening, telling this week's American Association of Exporters and Importers’ annual conference the screening process has become even more pivotal as the pace of new U.S. sanctions and export controls increases. Karen Wyman, who heads the trade compliance division at thermal imaging company Teledyne FLIR, said part of that effort is ensuring screening lists are constantly up to date.
The EU this week released an economic security strategy, detailing plans to improve export controls over sensitive technologies and study whether it needs better guardrails around inbound investments and new restrictions around outbound investments. The strategy could lead to new proposals surrounding export controls and investment restrictions by the end of the year.
The Department of Defense recently released a new set of recommendations designed to speed up military goods exports under its Foreign Military Sales program, an initiative long requested by defense companies. DOD said the recommendations highlight “key FMS pressure points” and are aimed at “breaking historical inefficiencies in the United States' transfer of defense articles and services to foreign allies and partners.”
The Bureau of Industry and Security is working “day-in and day-out” on a final rule that will make tweaks to its China-related chip export controls released in October (see 2210070049), said BIS Senior Export Policy Analyst Sharron Cook. But a public release of the rule isn’t imminent -- the agency hasn’t yet sent the changes to be reviewed by other agencies, said Hillary Hess, regulatory policy director at BIS.
The EU has so far been unable to place any meaningful export controls or sanctions against China despite urging from the U.S., leading to competitive disadvantages for American companies, Ivan Kanapathy, a China studies expert, said during a U.S. government commission hearing last week. Other experts at the hearing said much of Europe remains strongly opposed to any economic restrictions that would hurt their businesses and were skeptical that the bloc can stand up an EU-wide outbound investment screening mechanism.
Although the Bureau of Industry and Security last month said it doesn’t have a draft rule in place to increase export licensing requirements for Huawei, exporters would be wise to still expect a tightening of restrictions against the Chinese telecommunications company, industry officials said this week. They also didn’t rule out BIS soon increasing export controls against China in other ways, including by potentially adding more items to the scope of its military end-use and end-user (MEU) rule requirements.