Lawmakers this week previewed two bills that could expand U.S. export controls, including one that could require the U.S. to impose new license requirements on certain data exports and another that would require the administration to create a tool to counter economic coercion.
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 doesn't have a draft rule in place to increase export licensing requirements for Huawei despite rumors this year that new restrictions for the Chinese technology company were imminent, said Thea Kendler, BIS assistant secretary for export administration. Kendler also said the agency has seen a sharp decline in China-related license applications, is spending more time reviewing those applications and is prioritizing reviews of artificial intelligence items, quantum computing technology and biotechnology for new export controls.
The U.S. is considering an outbound investment regime that could restrict capital flows in the advanced semiconductor, artificial intelligence and quantum computing sectors, a senior Treasury Department official said this week, the administration’s first public confirmation of a potential scope for upcoming restrictions that have been under construction for months. Paul Rosen, the head of the Committee on Foreign Investment in the U.S., said the government is still working on the mechanism and declined to provide a release date, but stressed those three sectors are a priority.
The State Department this week announced the debarment of U.S.-based telecommunications company VTA Telecom to settle allegations it violated the International Traffic in Arms Regulations. The agency’s Directorate of Defense Trade Controls imposed the three-year debarment, which prohibits VTA from participating in any activities subject to the ITAR, after it said VTA illegally exported defense goods to Vietnam and gave false statements on export documents.
New guidance from the Committee on Foreign Investment in the U.S. could significantly curtail the use of “springing rights” deals, leading to “substantial challenges” and delays of certain investments, law firms said this month. Other new CFIUS guidance puts companies “on notice” that the committee will demand information on limited partners involved in a transaction, despite any previously made confidentiality agreements.
The Bureau of Industry and Security recently published its response to an advisory opinion request on whether certain information shared with the International Civil Aviation Organization during aircraft standards development activities would be subject to the Export Administration Regulations. The requester, whose name was redacted, believes that the information contains “non-proprietary system descriptions” and therefore isn’t subject to the EAR.
The Bureau of Industry and Security has had “more than enough time” to issue a final version of its October China chip export controls, which need to be “strengthened” and “vigorously enforced” to maintain American semiconductor leadership, Sen. Marco Rubio, R-Fla., said in a May 30 letter to Commerce Secretary Gina Raimondo. Rubio asked the agency when it plans to issue the final rule, what changes will be made, whether BIS had “delayed” finalizing the rule and more.
The U.S. should convince the U.N. to harmonize its sanctions lists with U.S. trade blacklists, a House Financial Services subcommittee heard during a hearing last week. Aligning the lists could require the World Bank and other international organizations to adhere to U.S. sanctions, one witness said, and help the U.S. extend the reach of its restrictions against China.
Several companies this month disclosed potential export control or sanctions violations or updated the status of their current disclosures, including an information technology services company, an investment firm and a digital asset services company. The potential violations involve a business trying to exit the Russian market, a company potentially illegally sending export-controlled data and a firm waiting years for a response to two sanctions disclosures.
The Commerce Department should amend several portions of its proposed guardrails on recipients of Chips Act funding, including measures that could prevent the U.S. chip industry from participating in international standards bodies or inhibit “routine” business activities, trade groups and technology companies said in comments released this week. Some said Commerce should also limit which companies qualify as “foreign entities of concern” and revise the rule’s proposed definition for “legacy semiconductor” to more closely align with export controls.