Allies Should Share More Export Control Info, BIS Official Says
The U.S. and its allies should be sharing more export control information to better align their licensing decisions, said Thea Kendler, the Bureau of Industry and Security's assistant secretary for export administration. Although the U.S. is already sharing some of that information through the U.S.-EU Trade and Technology Council to keep Russia from acquiring sensitive technologies and other items for its military, Kendler said more can be done.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
“We already need to share information so that we aren't undercutting each other's licensing decisions, but that seems like the bare minimum to me,” Kendler said last week during the BIS annual update conference. “I'd like to be able to share more.”
She said certain “guardrails” on what data the countries can share is important, specifically surrounding license applications that involve confidential business information. “But in order to reach better alignment on technology trends, on end-users of concern,” Kendler said, “we do need to be sharing that information, and that's a fundamental part of what we'd like to be doing.”
During the conference, trade officials from the EU, the U.K. and Japan agreed cooperation needs to grow, even beyond the Russia-Ukraine war. “We need to continue this effort going forward,” said Denis Redonnet, the European Commission’s chief trade enforcement officer. “We're here for the long haul.”
As the cooperation grows, he said, the countries will face “fewer problems” associated with the rapidly implemented controls, such as overcompliance and other “unintended effects.” He also hopes enforcement cooperation will improve.
“We're going to be faced with sanctions circumvention, [which] requires much more work on enforcement,” Redonnet said during the conference. “That is going to be probably the biggest challenge.”
BIS officials have stopped short of saying the cooperation will lead to a new multilateral export control regime to replace the Wassenaar Arrangement and other export control forums (see 2206290032), with Kendler saying the idea is “premature to delve into.” But officials, including Ros Lynch, the U.K.'s international trade deputy director, agreed more export control cooperation -- not less -- is likely.
“Whether or not this is some kind of new structure going forward … I do expect now that we have got this relationship working, and we've achieved so much, it would seem sensible that we continue,” Lynch said.
The officials, speaking on a conference panel alongside Jun Kazeki, a Japanese trade official, also stressed the importance of recruiting more countries to join their export control efforts, especially those that have so far not placed trade restrictions on Russia. Kendler said BIS has been doing “quite a bit of outreach” to countries that haven’t adopted similar controls, and has tried to incentivize them to join by offering them a spot on a BIS list of nations excluded from certain license requirements under the agency’s two recently issued foreign direct product rules (see 2202240069). The list so far has more than 30 countries, including South Korea (see 2203040075), Australia, the U.K., Japan, the Netherlands, Canada and Germany.
“We would like to see us, together, broaden our coalition, so it's not just the same,“ Lynch said. “It would be good if we can adjust what we're doing so we can bring others with us, particularly those that have been neutral so far.”
Kendler said she recognizes that her counterparts in other countries may not have the same export control authorities to implement similar restrictions against Russia. But she said those countries can limit exports to Russia’s military in other ways.
“I think many aligned decisions can be made simply through licensing policy, through licensing adjudication, through customs actions,” Kendler said. “And so I ask … consider using the tools you have to do your best to keep things out of Russian hands.” Even if those countries restrict only items that are multilaterally controlled, “that’s an enormous start,” Kendler said.
She also said companies operating in neutral countries can play a “very strong” role. “You have opportunities to get in front of the right people to talk about the value of blocking exports to Russia and Belarus and their militaries,” she said.