After the European Union announced May 17 that it will not double retaliatory tariffs on U.S. exports on June 1, exporters expressed relief. More significantly, the joint statement between the EU and Office of the U.S Trade Representative said the two sides are aiming for a united approach to global overcapacity distortions that would allow the 25% and 10% tariffs under Section 232 to be removed at the end of the year. Domestic metal producers welcomed that news, but the union that represents steelworkers reacted with some alarm.

The Bureau of Industry and Security issued more than $100,000 in combined penalties against two companies for illegally exporting thousands of dollars worth of goods to Iran, Russia and Ukraine. BIS imposed a $60,000 fine and temporarily denied the export privileges for Kleiss & Co., a Netherlands-based company that BIS said illegally shipped “extruded butyl sealants” from the U.S. to Iran. The agency also fined Texas-based TeleDynamics $55,000 for illegally exporting rifle scopes from the U.S. to Russia and Ukraine.

The U.S. issued guidance last week to address industry uncertainty and a rising number of questions about export licensing jurisdiction for goods sent under its Foreign Military Sales Program. The guidance -- which includes frequently asked questions developed by Homeland Security, CBP and the Commerce, State and Defense departments -- was issued because the agencies “continue to receive questions” about exports that were moved from the U.S. Munitions List to the Commerce Control List but are exported under FMS authority. They said exporters are “having difficulty” understanding how Commerce’s Export Administration Regulations, the State Department’s International Traffic in Arms Regulations and the FMS Program “relate to each other” for goods that have recently transitioned from the ITAR to the EAR.

The State Department’s recent $13 million penalty against Honeywell International highlighted the importance of company employees closely following internal compliance procedures and treading carefully when dealing with China, law firms said. It also showed that the State Department is committed to targeting weaker compliance programs but will impose lenient penalties if violations are self-disclosed, the firms said. Honeywell signed a settlement agreement with the agency earlier this month after it illegally sent drawings of export-controlled parts for military-related items to potential customers in several countries, including China (see 2105040018).

The Senate likely will vote on the Endless Frontier Act next week and should pass the bill before the end of the moth, Majority Leader Chuck Schumer, D-N.Y., said May 13. The bill, which would provide more federal funding and incentives for semiconductor research, has “strong” bipartisan support, Schumer said, and will help maintain U.S. technological leadership over trade competitors, including China. “The Endless Frontier Act would right the ship by making one of the largest investments in American innovation in generations,” Schumer told the Senate.

The Department of Defense has agreed to a final order dropping the designation of Chinese consumer electronics giant Xiaomi Corporation as a Communist Chinese Military Company (CCMC), according to a May 11 joint status report filed in the U.S. District Court for the District of Columbia. Xiaomi supports the order, the report said, leaving the parties to negotiate over specifics before a final proposed order is to be submitted on or before May 20.

U.S. Trade Representative Katherine Tai generally avoided being pinned down on timing as she was asked about rekindling trade negotiations with the United Kingdom and Kenya, the pause on tariffs on European imports, and a solution for steel overcapacity that could make way for the lifting of Section 232 tariffs.

A group of Republican senators urged U.S. businesses to continue to stay out of the Iranian market even if the U.S. reenters the Iranian nuclear deal, saying any sanctions relief will be short-lived. The lawmakers said that relief will be “severely limited” if Republicans win back majorities in the House and Senate and if the U.S. elects a Republican president in 2024. They also criticized the Biden administration’s plan to reenter the deal, calling the Joint Comprehensive Plan of Action a “deeply flawed” agreement.

Export Compliance Daily is providing readers with the top stories for May 3-7 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.

A U.S. district court judge dismissed a case involving the seizure of a multimillion-dollar jet after Texas officials failed to prove the jet violated export regulations or was involved in a money-laundering scheme. Texas police seized the British Aerospace BAE 125 Series jet last year on tax evasion and money-laundering charges and suggested the owners violated the Export Administration Regulations, but a judge said police had no evidence or probable cause.