The Commerce Department should immediately expand an exemption to allow U.S. companies to participate in standards-setting bodies that have members designated on the Entity List, industry representatives said. U.S. firms said they have been forced to avoid the bodies because they fear running afoul of U.S. export laws, a practice that could result in the U.S. losing important influence over the future of emerging technology standards.
Exports to China
China criticized the U.S.’s decision last week to sanction a range of Chinese companies for their involvement in human rights violations in the Xinjiang region, saying the U.S. has “wantonly suppressed Chinese institutions and enterprises by overstretching the concept of national security.” The sanctions announced last week included export restrictions (see 2112160017) and an investment ban (see 2112160062) on various technology firms. “The attempt of the U.S. to use Xinjiang to contain China will never succeed,” a Chinese foreign ministry spokesperson said Dec. 17, according to a transcript of a regular news conference. “We urge the U.S. side to immediately correct its mistake.”
The Bureau of Industry and Security added 37 entities to the Entity List, including 34 Chinese research institutes and technology companies, for supporting China’s military modernization efforts or Iran’s weapons program. Other entities added to the list, located in Georgia, Malaysia and Turkey, supplied U.S.-origin items to Iranian defense industries, BIS said.
The Office of Foreign Assets Control imposed investment restrictions on SenseTime Group Ltd., a major Chinese technology company, and sanctioned 15 people and 10 other companies for human rights abuses, the agency said Dec. 10. SenseTime, which had prepared to price shares Dec. 10 in its initial public offering in Hong Kong, will now be subject to a U.S. investment ban and added to OFAC’s list of companies with ties to China’s military (see 2106030067).
The U.S this week imposed an arms embargo and new, broad export restrictions on Cambodia in response to government corruption and human rights abuses. The restrictions, released Dec. 8 by the Commerce and the State departments and effective Dec. 9, will apply more stringent controls on a range of dual-use and military-related exports to the country (see 2112020015).
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While the U.S. and the European Union should continue to collaborate on export controls and investment screening efforts, cooperation on financial sanctions may be more difficult and may not be feasible in some cases, panelists said. Any trade or investment restrictions that rely on financial market leverage will be more difficult for the EU to implement, they said.
The Bureau of Industry and Security should clarify that certain hospitals affiliated with entries on the Entity Listed are not subject to Entity list restrictions, said Tory Tibor, global head of trade compliance for medical device company Olympus. Tibor said the clarification would help address confusion among third parties, including forwarders, about what types of entities are captured by Entity List controls.
Trade was barely touched on during the virtual meeting of President Joe Biden and Chinese President Xi Jinping, said Anna Ashton, vice president of government affairs for the U.S.-China Business Council. Ashton, who was speaking on a Nov. 23 Twitter panel hosted by Neysun Mahboubi, a research scholar at the University of Pennsylvania's Center for the Study of Contemporary China, said that follows a pattern in the administration. She said that "they are unabashedly reframing the relationship… as a competitive one," which makes her wonder where the commercial relationship fits in. The recent panel was reacting to the earlier video call (see 2111160004).
The Bureau of Industry and Security added 27 entities to the Entity List for illegally selling technology to China, North Korea and other sanctioned countries, for supporting China’s military modernization efforts or for contributing to Pakistan’s nuclear and missile programs, the agency said Nov. 24. The Entity List additions include a range of laboratories and companies operating in the semiconductor, microelectronics and machinery sectors in China, Japan, Pakistan and Singapore, including several major Chinese chip companies.