Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
The Bureau of Industry and Security is hoping to expand the number of officers it sends overseas and increase collaboration with other investigative agencies, partly to help with a larger workload and a rise in new export control evasion trends. Agents said BIS has seen a steady increase in work since the enactment of the Export Control Reform Act of 2018, which has been made more complex by the rise in cryptocurrency schemes, increasingly sophisticated uses of front companies and ransomware attacks.
In her first public remarks since joining the Bureau of Industry and Security, Thea Kendler said BIS has been constantly looking for new emerging technologies that should be subject to controls and is close to publishing its first foundational technology rule. Kendler, who was confirmed last month as assistant secretary for export administration, also said she plans to prioritize multilateral export controls that protect American technology from China’s military and wants to work closely with industry so those controls don’t harm U.S. competitiveness.
Out of all the government’s export control regulations, two aerospace industry officials said they are spending the most time trying to comply with the Bureau of Industry and Security’s military end-user and end-use rule.
After a thermal imaging industry official this week said the Commerce Department hasn’t significantly updated its export controls surrounding infrared technologies since 2005 (see 2201260047), an agency spokesperson pointed to two recent regulatory actions that they said have updated controls.
The Bureau of Industry and Security should update its export controls surrounding infrared technologies to allow U.S. companies to better compete with foreign firms, said Mike Muench, CEO of Seek Thermal, a thermal imaging company. Muench, speaking during a Jan. 25 meeting of the Commerce Department’s Sensors and Instrumentation Technical Advisory Committee, said BIS hasn’t “significantly” updated its infrared technology controls since 2005, when the infrared sector was dramatically different. “That was several generations ago, relatively speaking, in the technology space,” Muench said. “We really believe it's time for us to address some of these changes to allow U.S. firms to be more competitive.”
A California-based semiconductor and telecommunications technology company recently received a warning letter from the Bureau of Industry and Security after it voluntarily disclosed possible export violations. The company, Credo, said it “inadvertently provided three evaluation boards of nominal value” to two customers without required export licenses. Credo submitted a final voluntary self-disclosure to BIS in June and received a warning letter in September with no penalties, according to a January Securities & Exchange Commission filing. Credo didn’t say where the customers were located but said it sells its products in Asia, including in markets where “multiple” companies have been added to the Commerce Department’s Entity List or the military end-user list. The company said it’s “in the process” of improving its export compliance policies and procedures but believes it “remedied the deficiencies that resulted in the apparent violations through additional training, system enhancements and enhanced export controls.”
The Commerce Department should publish a list of controlled emerging and foundational technologies 90 days after the Senate confirmation of its Bureau of Industry and Security leader, China Tech Threat's Future of BIS said. Strand Consult operates China Tech Threat, which advocates for stronger export controls on China. Despite congressional pressure (see 2111170064), BIS has repeatedly said it doesn’t plan to publish an exhaustive list of controlled emerging and foundational technologies but rather will issue controls on a continuous basis. A BIS spokesperson didn’t comment.
The U.S. and the European Union should better align their export license exceptions, export controls and policies to avoid “unnecessary friction on trade” between the two sides, particularly surrounding chip equipment, the Semiconductor Industry Association said. The group said American semiconductor companies depend on overseas markets in Europe, and regulatory harmonization could help to “level playing fields with respect to export controls, particularly their scope, application, and enforcement.”
The Bureau of Industry and Security revoked export privileges for an Idaho resident after the person tried to illegally export firearms from the U.S., BIS said Jan. 20. Khaldoun Hejazi was convicted March 2, 2020, of exporting defense articles on the U.S. Munitions List, which violated the Arms Export Controls Act. Hejazi was sentenced to 30 months in prison and three years of supervised release, fined $30,000 and assessed $100. BIS denied Hejazi’s export privileges for five years from the date of conviction.