The U.S. needs to pour more funding and resources into the Bureau of Industry and Security to allow it to better address China-related national security risks, said Gregory Allen, a technology policy expert with the Center for Strategic and International Studies and a former Defense Department official. Although BIS is charged with implementing some of the U.S.’s most sensitive trade restrictions, its export control functions have “had a flat budget for the better part of a decade,” Allen said during a U.S.-China Economic and Security Review Commission hearing last week. “It has been profoundly neglected” and subject to an “appalling mismanagement of resources.”
The Bureau of Industry and Security should reform its Entity List process and its licensing procedures to more effectively prevent China from acquiring sensitive U.S. technologies, said Cordell Hull, former acting BIS undersecretary. Hull also suggested that BIS increase its penalties for export violations, and said he isn’t convinced creating a new multilateral export control regime is the best way to counter China.
The U.S. should create an outbound investment screening regime that focuses on capturing “smart money” investments in critical technology industries in China, said Emily Kilcrease, a senior fellow with the Center for a New American Security and former National Security Council official. Smart money investments would include those that are “accompanied by managerial expertise or other intangible benefits” that could advance China’s “indigenous technology capabilities,” she said.
Public U.S. companies should update their China-related risk disclosures to factor in a range of potential trade restrictions on the horizon, including possible U.S. sanctions against Beijing for aiding Russia and new outbound investment restrictions, said Carl Valenstein, a trade lawyer with Morgan Lewis.
The EPA should exempt certain export activities from new proposed reporting requirements under a significant new use rule for per- and poly-fluoroalkyl substances (PFAS), U.S. trade groups told the agency in recent comments. If EPA doesn’t exempt those activities, the proposed rule could disrupt chemical supply chains and other sectors that use PFAS, including the energy, instrument and machinery manufacturing industries, the groups said.
The U.S. this week announced new Russia-related trade restrictions, adding 28 entities to the Commerce Department’s Entity List and more than 100 entries to the Treasury Department’s Specially Designated Nationals List. The measures target people and companies either operating in Russia, aiding the country’s war against Ukraine or helping Moscow evade sanctions.
The White House this week announced a new “whole-of-government approach” to tackle illegal fentanyl trafficking, including plans to impose more sanctions against drug traffickers and prevent them from accessing American raw materials and technology.
The State Department’s Directorate of Defense Trade Controls will soon expand the types of defense articles and services that can be exported to Australia, the U.K. and Canada, including items and activities involving torpedoes, submarine combat control systems, acoustic countermeasure devices and night vision items. The measures were outlined in a final rule, released April 11 and effective May 12, that will also make “clarifying amendments and conforming updates” to the International Traffic in Arms Regulations.
The Treasury Department may be prioritizing enforcement of existing Russia sanctions rather than searching for new measures to impose, said Jay Shambaugh, Treasury’s undersecretary for international affairs. Shambaugh, speaking during an April 10 event hosted by the Brookings Institution, also said industry should expect the Biden administration to continue imposing national security-related trade restrictions on China.
The Commerce Department’s proposed guardrails for recipients of Chips Act funding could lead to compliance risks for semiconductor companies, especially as the agency bolsters its enforcement arm, law firms said. They also said companies should carefully review how the proposals intersect with chip export restrictions.