House Foreign Affairs Committee Republicans are asking the Bureau of Industry and Security for information on its export enforcement and compliance efforts involving China, including steps to crack down on Chinese transfers of controlled U.S. technology to State Sponsors of Terrorism (SSTs). In a letter sent to BIS last week, Rep. Michael McCaul of Texas, chair of the committee, said he is concerned China’s “economic and trade ties” with terrorism sponsors is “undermining U.S. national security and foreign policy interests.” He and Rep. Michael Lawler, R-N.Y., asked BIS to provide information on recent Chinese export violations, licensing procedures, end-use checks and more by March 2.
Exports to China
As U.S. government regulators continue to face pressure from Congress to more quickly place export restrictions on emerging technologies, the Commerce Department and industry officials are grappling with the potential ethical consequences of controls on a technology that could have groundbreaking medical benefits.
The U.S., the EU and others can take steps to improve how they administer export controls, deliver guidance to industry and more efficiently target dangerous end users, experts said this week. One expert specifically called on the U.S. to revise the Entity List, which should better isolate the worst export control offenders.
The Bureau of Industry and Security suspended the export privileges of three people this week, including one person who tried to ship controlled items to an entity on the Entity List.
The Commerce Department is trying to find a way to screen outbound investments in a way that protects domestic commercial interests but limits collateral damage to businesses with interests outside the U.S., said Marisa Lago, the agency’s undersecretary for international trade. Lago’s comments came one day after Samm Sacks, an expert on U.S.-China technology policy issues, said the Biden administration hasn’t yet released an executive order to create an outbound investment screening regime because of discussions surrounding implementation challenges.
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China "firmly opposes" the U.S. move to add six Chinese entities to the Entity List over their ties to China's "High Altitude Balloons" intelligence and reconnaissance activities, China's Ministry of Commerce said, according to an unofficial translation. Responding to a reporter's question on the inclusion of the entities, the ministry said it hopes the U.S. "will stop its unreasonable suppression of Chinese companies and will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies."
The U.S. is making “good progress” on aligning export controls over sensitive technologies with allies, Deputy Secretary of State Wendy Sherman said this week, adding that almost all the administration's recent discussions with trading partners have involved China technology issues. She also said the agency is working to counter a growing oil partnership between China and Iran, but said preventing China’s purchases has proven challenging.
The Biden administration’s implementation of its new China chip export controls (see 2210070049) has been “mixed,” and it remains unclear how far allies will go to impose similar restrictions, said Clete Willems, who was a National Security Council official during the Trump administration. Willems, in written testimony this week to the House Financial Services Committee, said he doesn’t understand why the administration didn’t initially coordinate the October export control rule with allies, a shortcoming that could be hurting U.S. companies now.
Although former national security officials agreed that the U.S. should consider outbound investment review restrictions, they panned a congressional proposal that would have granted a new interagency committee “sweeping” power to restrict capital flows to China. Speaking during a House Financial Services Committee hearing this week, some of the former officials said Congress should rethink the proposal and also urged the Biden administration against issuing a unilateral executive order to establish an outbound investment review regime.