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.
The Bureau of Industry and Security last week issued a correction to its June 14 final rule that added 43 entities to the Entity List, including various Chinese companies that support the country’s military (see 2306120030). BIS said it mistakenly included an entity in its “preamble justification” for the additions “but inadvertently did not instruct, nor provide regulatory text for, the addition of the entity to the Entity List.”
Lawmakers in the Senate and House this week reintroduced a bill that could require the Commerce Department to block exports of sensitive personal data to certain high-risk countries (see 2306010042). The Protecting Americans’ Data from Foreign Surveillance Act, originally introduced during the last Congress, would also look to restrict personal data exports by firms, such as TikTok, “directly to restricted foreign governments, to parent companies in restricted foreign countries” and to parties designated on Commerce’s Entity List. Export penalties would apply to “senior executives who knew or should have known that employees below them were directed to illegally export Americans’ personal data.”
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.
China “firmly” opposed the U.S. additions of Chinese entities to its Entity List this week, a Foreign Ministry spokesperson said, calling on the Biden administration to “immediately stop using military and human rights-related issues as pretexts to politicize, instrumentalize and weaponize trade and tech issues.” The U.S. should “stop abusing export control tools such as entity lists to keep Chinese companies down,” the spokesperson said during a regular press conference June 13. The export controls targeted companies in China and elsewhere for supporting China’s military or the government’s human rights abuses in Xinjiang (see 2306120030).
The Treasury Department should sanction Russian state-owned nuclear company Rosatom, a “major source of funds” for Moscow and “one of the only largely unsanctioned Russian energy companies,” said Gregory Meeks, the House Foreign Affairs Committee’s top Democrat. Meeks, speaking during a June 13 House Financial Services Committee hearing, pointed to his bill introduced last month that would require the administration to designate Rosatom (see 2305120015).
The Bureau of Industry and Security added 43 entities to the Entity List this week, including companies conducting various activities that either support China’s military or allow the government to “carry out human rights abuses.” Other entities were added for supporting Pakistan’s ballistic missile program or other weapons capabilities.
The Bureau of Industry and Security added 43 entities in China, Kenya, Laos, Malaysia, Pakistan, Singapore, South Africa, Thailand, the United Arab Emirates and the U.K. to the Entity List for either supporting China’s military, supporting the government's human rights abuses or supporting Pakistan’s weapons capabilities. The additions, outlined in a final rule effective June 12, impose license requirements for all items subject to the Export Administration Regulations. The agency also removed one entity from the list.
The Bureau of Industry and Security last week suspended export privileges of Aratos Group, a collection of defense and technology companies in the Netherlands and Greece, and its owner for procuring goods for Russian intelligence services in violation of U.S. export controls. BIS also renewed a temporary denial order against three people and two companies also involved in a Russian sanctions evasion scheme.
The Commerce Department should use the Entity List and potentially its anti-boycott regulations to respond to Beijning’s restrictions on U.S. chip company Micron (see 2305220053 and 2305240002), Reps. Michael McCaul, R-Texas, and Mike Gallagher, R-Wis., said in a June 1 letter to Commerce Secretary Gina Raimondo. The lawmakers said it’s time for the U.S. and its partners to “firmly push back” on China’s “economic coercion, adding that it "can no longer sit on the sidelines as the [People’s Republic of China] selectively targets U.S. and allied entities with the goal of intimidating our businesses and harming our economic security.”