A recent joint alert by the Commerce and Treasury departments has been a boon to industry and the government, and has given export control officers more leads to track down potential Russia violations, said Matthew Axelrod, Commerce’s top export enforcement official. Axelrod said the alert has been so successful that the two agencies are hoping to publish another one next year.
The State Department is proposing to expand the definition of activities that are not exports, reexports, retransfers or temporary imports by adding two new entries, the agency said in a notice released Dec. 15. One new entry would be the “taking of defense articles outside a previously approved country by the armed forces of a foreign government” or U.N. personnel on a “deployment or training exercise,” the State Department said. The second entry would be a foreign defense item that enters the U.S. but is subsequently exported under a license, provided it has not been “modified, enhanced, upgraded, or otherwise altered or improved or had a U.S.-origin defense article integrated into it.”
The Bureau of Industry and Security added a host of Chinese and Russian entities to the Entity List, including top Chinese chipmaker Yangtze Memory Technologies Co. and leading Chinese artificial intelligence firms, the agency said in a pair of notices released Dec. 15. The new restrictions on the Chinese firms are aimed at “severely restricting” China’s ability to leverage AI, advanced computing and other commercial technologies for its military or human rights abuses, BIS Undersecretary Alan Estevez said. The agency added the Russian entities to the list after it was unable to complete end-use checks. The changes took effect Dec. 16.
The Bureau of Industry and Security isn’t preparing any “imminent” emerging technology export controls on artificial intelligence items, Hillary Hess, the agency’s regulatory policy director, said during a technical advisory committee meeting this week. She also denied an industry rumor the U.S. is preparing to issue a set of sweeping, advanced AI controls, similar to the semiconductor restrictions against China that were released in October.
The Bureau of Industry and Security should have given its technical advisory committees more time to review its new chip controls before they were published in October (see 2210070049), which would have helped BIS mitigate unintended consequences for a dense and complex set of restrictions, a chip industry official and an advisory committee member said this week. The semiconductor industry also wished BIS had first proposed some of the restrictions for public comment before making them final, the official said, or delayed the effective date to give companies more time to decipher the rules, especially surrounding the new U.S.-persons restrictions.
The Bureau of Industry and Security issued a 180-day temporary denial order this week against three people and two companies for illegally sending controlled exports to Russia as part of a Moscow-led sanctions evasion scheme. Along with the denial order, DOJ indicted the three people, along with others, on charges related to the illegal exports, including money laundering, wire fraud, bank fraud and conspiring to defraud the U.S.
The U.S. and the EU didn’t appear to make much progress on export controls, investment screening and other pivotal areas of cooperation at the latest Trade and Technology Council meeting this month, experts with the Center for Strategic and International Studies said during a Dec. 12 event. The two sides still look to be closely aligned on Russia controls and sanctions, the speakers said, but until the TTC announces more concrete measures, it remains unclear how similarly they view restrictions on China.
As the EU and the U.S. look to impose new export controls on emerging technologies, they should also pursue efforts to remove outdated emerging tech export restrictions that are no longer effective, said Magnus Nordeus, of Digital Europe, a trade policy group, speaking during the EU’s annual export control forum last week. Nordeus said the two sides should “add an ongoing de-control review” to make sure trade policies aren’t unnecessarily placing U.S. and EU industry at a disadvantage compared with foreign companies.
The U.S. should prepare a range of economic and financial restrictions against China to deter it from invading Taiwan, including new sanctions against Chinese banks and outbound investment restrictions on Chinese technology sectors, said Sen. Dan Sullivan, R-Alaska. Sullivan said the sanctions should “go far beyond what has been imposed on Russia” and make clear to Beijing that “no corner of its economy will be left untouched by sanctions.”
Major ocean carrier MSC violated U.S. shipping regulations because of its unreasonable demurrage practices, U.S. metal trader CCMA said. In a complaint to the Federal Maritime Commission released this week, CCMA said it was assessed more than $114,000 in unfair demurrage fees by MSC, which levied the charges despite the containers being subject to a government hold and unavailable for pickup. The FMC should order MSC to pay CCMA reparations for its “unlawful conduct,” the complaint said.