The Biden administration wants to improve the effectiveness of multilateral export controls and is building toward the creation of an outbound investment screening regime, the White House said in its national security strategy published this week. Along with a range of domestic and foreign policy issues, the long-awaited strategy outlines the administration’s approach to trade and emerging technologies and its efforts to outcompete in its rivalry with China and continue to sanction Russia.
Some exporters are still facing penalties for minor errors made in Automated Export System filings despite efforts by CBP and the Census Bureau to rein in those fines. Omari Wooden, Census’ assistant division chief for trade outreach and regulations, said those penalties, often referred to as “parking ticket violations,” have been an “ongoing issue” with CBP.
The Bureau of Industry and Security added 31 Chinese entities to its Unverified List last week, including Yangtze Memory Technologies Co., a semiconductor firm that U.S. lawmakers for months have urged BIS to add to the more restrictive Entity List. The final rule, which took effect Oct. 7, also removed nine other entities from the UVL and included new guidance on what types of criteria and activities may lead to the transfer of UVL entries to the Entity List.
The Bureau of Industry and Security last week announced a broad set of new export controls it said will restrict China’s ability to acquire advanced computing chips and manufacture advanced semiconductors. The controls, outlined in an interim final rule that will take effect in phases, will impose new restrictions on a range of advanced computing semiconductor chips and semiconductor manufacturing items, impose controls on transactions for supercomputer end-uses and certain integrated circuit end-uses, and introduce new restrictions on transactions involving certain entities on the Entity List.
The Defense Department on Oct. 5 released another list of Chinese companies with ties to the country’s military. The latest tranche includes 13 companies, including businesses operating in the country's technology sectors. The list includes at least two companies that are also on the Commerce Department's Entity List: Shenzhen DJI Innovation Technology Co. (DJI) and CloudWalk Technology Co.
A June joint alert by the Treasury and Commerce departments could signal new government expectations for banking industry sanctions compliance, experts with FTI Consulting said. The alert, which put companies and entities “on notice” about the types of red flags they should be monitoring for potential Russia sanctions and export control evasion tactics (see 2206280056, and 2207130014), may also force some financial institutions to reinforce their compliance and due-diligence processes, they said.
The Bureau of Industry and Security revised how it assesses penalties in settlements involving anti-boycott violations, according to a final rule, which, effective Oct. 7, amends a supplement to the Export Administration Regulations to clarify and change the agency’s guidance on anti-boycott charging practices to allow it to better address more serious violations.
The U.S. should harmonize the sanctions lists kept by the Commerce and Treasury departments to ensure trade and financial restrictions are imposed across the same set of companies, said Keith Krach, a former senior State Department official. Krach said all companies subject to export restrictions on the Entity List also should face strict financial sanctions on Treasury’s Specially Designated Nationals List to cut off any U.S. support for sanctioned companies, particularly those in China.
Michigan-based Thermotron Industries violated U.S. export controls when it shipped a controlled environmental test chamber to South Korea without a license, the Bureau of Industry and Security said in an enforcement order released this week. BIS said Thermotron, an environmental test equipment manufacturer, exported the test chamber in 2012 despite it being subject to missile technology controls and subject to a license requirement under Export Control Classification Number 9B106.
Flexport violated the Shipping Act when it failed to include required information on more than $100,000 worth of detention and demurrage charge invoices, Indiana-based Philip Reinisch Co. said in a recent complaint to the Federal Maritime Commission. Philip Reinisch said the FMC should order Flexport to refund more than $55,000 in paid invoices, award it damages for the “wrongful withholding” of containers and nullify nearly $50,000 in outstanding charges.