The Commerce Department published its spring 2023 regulatory agenda for the Bureau of Industry and Security and the Census Bureau, including new rules that will add more entities to the Entity List and finalize new export filing requirements.
The Bureau of Industry and Security last week fined two defense companies close to $100,000 combined to resolve their violations of the agency’s antiboycott regulations. The agency fined Arizona-based defense weapons systems manufacturer Profense $48,500 and Washington-based defense contractor B.E. Meyers & Co. $44,750 after they complied with requests from freight forwarders to certify that their goods weren’t Israeli origin.
The U.S. may need to address export control loopholes to better prevent China and others from acquiring sensitive technologies, Sen. Mark Warner, D-Va., said, but he also cautioned the U.S. against imposing controls that are too broad and said they need to be coordinated with allies.
The State Department’s recently published spring 2023 regulatory agenda continues to mention rules that will update export controls for items on the U.S. Munitions List and make other changes to the International Traffic in Arms Regulations.
Canada launched investigations of Nike Canada and Dynasty Gold this week after receiving complaints that both companies’ supply chains have ties to forced labor in China. A Canadian agency said it’s probing allegations that Nike has “supply relationships” with Chinese companies that use Uyghur forced labor and that Dynasty Gold, a mining company, benefited from Uyghur forced labor at a Chinese mine in which it had a majority stake.
The Committee on Foreign Investment in the U.S. is expected to increase the number of penalties it issues for violations of mitigation agreements, StoneTurn consultant Scott Boylan said. Orion Berg, a lawyer with White & Case, said there will be a similar uptick in activity from European countries, adding that he expects all EU member states to have an active foreign direct investment screening regime within two years.
Freight forwarders are urging shippers to enroll in a government-run cargo screening program before the end of October, when their air freight will no longer benefit from an exemption for cargo deemed ”impracticable to screen.” So far, “very few” shippers are enrolled in the program, said Brandon Fried of the Airforwarders Association, sparking fear of export delays or potential compliance violations by shippers unaware of the impending change.
The U.S. is currently drafting a list of technologies that will be covered by its new defense trade authorization, which will be used to expedite defense technology transfers under the Australia-U.K.-U.S. partnership. Although the new mechanism won’t require any new authorities from Congress, it’s designed to eventually be supplanted by broader revisions to U.S. defense trade regulations, the Directorate of Defense Trade Controls said this week.
A new U.K. law that could prevent lawyers from providing certain legal services in the context of Russia sanctions is causing uncertainty within the legal industry, law firms said. Baker McKenzie said the legal community is working with U.K. authorities to “clarify the scope of the new sanctions measures,” but “in lieu of any imminent published guidance, businesses should assess” their in-house legal teams, particularly if they’re providing legal advisory services from the U.K.
The Bureau of Industry and Security could use its existing “catch-all controls” to tighten restrictions around exports of sensitive artificial intelligence models, eliminating the need to develop new regulations to address emerging AI export risks, researchers with Georgetown University's Center for Security and Emerging Technology said this week. The researchers said the catch-all controls -- which allow BIS to restrict exports if there is “knowledge” the item will be used in certain dangerous ways -- may be “sufficient” to “address the use of AI in more traditional national security realms.”