The U.S. needs to boost its manufacturing capabilities, invest in innovation and improve its ability to export goods around the world, the President-elect Joe Biden’s two top Commerce Department nominees said. The nominees, Gina Raimondo as Commerce secretary and Don Graves as Commerce deputy secretary, were announced Jan. 8 by Biden, who urged the Senate to swiftly confirm their nominations.
Export Compliance Daily is providing readers with the top stories for Dec. 21-24 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.
Sen. Marco Rubio, R-Fla., is concerned that Huawei is evading U.S. export restrictions on semiconductors and ordering them from U.S. companies with the intent to ship them in case those companies are granted export licenses, he said in a Dec. 17 letter to Commerce Secretary Wilbur Ross. Rubio asked Ross to provide information on how many individual export licenses Commerce has approved for U.S. semiconductor manufacturers to Huawei and whether it would be legal for U.S. companies to “stockpile” items for eventual export to Huawei pending a licensing decision, or to “receive compensation from Huawei for doing so.” Rubio also asked whether the administration plans to remove Huawei from the Entity List. A Commerce spokesperson pointed to Ross's statement last week, in which he said the U.S. will continue to use Entity List restrictions to prevent China's military from acquiring sensitive semiconductor equipment.
China criticized the U.S. move to add Chinese companies to its Entity List last week (see 2012180039), saying it unfairly suppresses Chinese industry and is an abuse of export controls. A Chinese Foreign Ministry spokesperson urged the U.S. to reverse the measures. “China firmly opposes this and will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies,” the spokesperson said Dec. 19, according to an unofficial translation of a release of a press conference transcript.
A Russian citizen and two Bulgarians were charged with violating U.S. export controls after they used a Bulgarian company to illegally ship controlled items to Russia, the Department of Justice said Dec. 18. Russian national Ilias Sabirov and Bulgarian nationals Dimitar Dimitrov and Milan Dimitrov used Bulgarian company Multi Technology Integration Group EEOD (MTIG) to export the items, which included various electronic components. All three men were added to the Entity List last week (see 2012180039).
The Bureau of Industry and Security published a set of frequently asked questions to provide industry guidance on its summer update to the foreign direct product rule, which increased restrictions on certain foreign-made items (see 2009170026). The guidance, issued this week, features FAQs that cover how the restrictions apply to companies and products, and how they impact prior exports, manufacturing plants, supply chains, prior licenses and more. BIS also outlined how the restrictions may apply to various scenarios faced by industry, including licensing responsibilities and due diligence requirements.
The Bureau of Industry and Security added 77 entities and people to the Entity List, including China’s top chipmaker, to further prevent China and other countries from acquiring sensitive U.S. technologies, the agency said Dec. 18. Along with China’s Semiconductor Manufacturing International Corporation, the Entity List additions include China-based DJI, one of the world’s largest drone makers, and companies in Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia and the United Arab Emirates.
As the U.S. increasingly relies on sanctions, export controls and trade restrictions as foreign policy tools, it should expect China to follow its example, former U.S. government officials said. While other countries are beginning to mimic U.S. trade strategies, the policies are most notably taking hold in China, the officials said, which recently rolled out an export control regime (see 2010190033), has increased threats of sanctions for foreign interference in Hong Kong and Taiwan (see 2012100022 and 2010260017) and issued regulations for its unreliable entity list (see 2009210017).
The Bureau of Industry and Security will add China’s Semiconductor Manufacturing International Company and more than 60 companies to the Entity List for actions “deemed contrary” to U.S. national security. BIS said SMIC, China’s top chipmaker, has concerning ties to China’s government and risks transferring imported U.S. technology to the country’s military. Other companies will be added to the Entity List for human rights abuses, for supporting China’s militarization of the South China Sea, for diverting U.S. products to China’s military and for the theft of U.S. trade secrets. BIS did not immediately say when the restrictions will take effect.
The Commerce Department published its fall 2020 regulatory agenda for the Bureau of Industry and Security, including new mentions of rules to amend Hong Kong under the Export Administration Regulations, releases of controlled technologies to standards setting bodies and a range of new technology controls.