The U.S.-EU Trade and Technology Council hopes to make progress around the idea of a new multilateral export control regime by the TTC’s next ministerial meeting this fall, Commerce Secretary Gina Raimondo said. She said the group is thinking about which U.S. and EU technologies are “especially significant” and warrant multilateral controls, such as semiconductor equipment.
Exports to China
Commerce Secretary Gina Raimondo said she supports including an outbound investment screening provision in the final version of Congress’ China competition bill (see 2202030062), and said more guardrails are needed to stop China from finding technology transfer loopholes. While Raimondo didn’t explicitly endorse the bipartisan National Critical Capabilities Defense Act, which would create a committee to review outbound investments, she said the U.S. could use more regulatory power.
The U.S. should take steps to address a range of loopholes in its export control regimes, including its inability to conduct end-use checks in China and unregulated technology transfers resulting from outbound investments, said Nazak Nikakhtar, former acting head of the Bureau of Industry and Security. “We have a lot of gaping holes in our export control system,” Nikakhtar told the Senate Intelligence Committee May 11. “I think we really need to tighten those up.”
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The U.S.-China competition will be the “geopolitical challenge for this generation,” Cordell Hull, principal at WestExec Advisors, told an online symposium May 5 on Indo-Pacific geopolitics hosted jointly by the Asia programs of the Foreign Policy Research Institute (FPRI) and the Wilson Center. “I certainly hope it can be managed,” and that it “doesn’t lead us into places where neither country really wants to go,” he said.
A bill that would require the State Department to report to Congress on whether China is helping Russians "evade or circumvent United States sanctions or multilateral sanctions and export controls," or whether China is inhibiting onsite export control end-use checks within its borders, passed the House of Representatives on a 394-3 vote on April 27. The Assessing Xi’s Interference and Subversion Act was sponsored by Rep. Andy Barr, R-Ky. , who said after its passage, "We need a full report on the extent of the collaboration between Russia and China to inform the public and enable lawmakers to begin positioning the U.S. to overcome this geopolitical challenge.” If the bill becomes law, the first report would be due in 30 days, and then reports would be due every 90 days after that.
PHILADELPHIA -- The U.S. government is working through a range of challenges when delivering export control guidance to university researchers, government officials said, including to some colleges that opt out of certain projects rather than risk violating controls. The government is also still running into challenging questions about whether its controls should apply to fundamental research, one official said.
Aviastar, the Russian cargo airline made subject to a temporary denial order last week (see 2204210043), continued to illegally fly multiple U.S.-origin aircraft after the U.S. in March announced restrictions on those flights (see 2203020072), including to China, the Bureau of Industry and Security said in its April 21 order. Flights included trips from the Russian cities of Novosibirsk and Abakan to the Chinese cities of Hangzhou, Shenzhen and Zhengzhou. All the trips, which took place April 5 to April 12, required approved license applications.
Although EU export controls and sanctions on Russia don’t necessarily apply to Chinese-based subsidiaries of EU companies, European businesses should keep in mind that they can’t use their Chinese business to circumvent the restrictions, law firm CMS said in an April 21alert. Chinese subsidies are “incorporated under Chinese law” and “not, in principle, bound by the measures,” but their EU parent companies can’t use them to evade any “obligations that apply to the EU parent company,” the firm said. This includes “delegating to them decisions which run counter to the sanctions, or by approving such decisions by the Chinese subsidiary.”
The Biden administration should “employ all tools necessary” to stop Chinese-owned Nexperia’s acquisition of Newport Wafer Fab (NWF), a U.K.-based chip facility, the Republican-led China Task Force said in a letter to the White House released April 21. If the acquisition is completed, the U.S. should remove the U.K. from the Committee on Foreign Investment in the U.S. white list and impose strict export controls on shipments to NWF, the House members said.