The Bureau of Industry and Security this week sent a final rule for interagency review that would expand export controls on certain biological equipment software. The rule, received by the Office of Information and Regulatory Affairs Sept. 13, would amend the Commerce Control List by adding a new Export Control Classification Number to control software “for the operation of automated nucleic acid assemblers and synthesizers” that are “capable of designing and building functional genetic elements from digital sequence data.”
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
Despite recent steps by the White House and the Federal Maritime Commission to address supply chain issues hampering agricultural exporters, the problems are worsening, trade groups said this week. Carriers are increasingly declining or canceling export bookings, ship delays are backlogging orders by months and agricultural exporters are seeing steep drops in revenue due to continually rising container costs, 76 trade associations said.
The Office of Foreign Assets Control fined a Texas hardware and software company more than $180,000 for illegally exporting goods, technology and services that were intended to be used in Iran, OFAC said Sept. 9. The company, NewTek, which develops and supplies live production and 3D animation hardware and software systems, voluntarily self-disclosed its 52 violations of the Iranian Transactions and Sanctions Regulations. OFAC said the company didn’t have an export control or sanctions compliance program.
U.S. penalties for illegal exports to China have risen dramatically this year compared with last, with about $6 million in fines handed out already, said Jeremy Pelter, the acting undersecretary for the Bureau of Industry and Security. Pelter told a bipartisan congressional commission this week that the agency during the 2021 fiscal year has issued about $1.86 million in criminal fines and more than $4 million in civil fines, skyrocketing past 2020’s penalties, which totaled about $60,000.
The Commerce Department's Bureau of Industry and Security is willing to consider ways to accelerate its emerging and foundational technology control effort but won't abandon its multilateral efforts just to publish controls more quickly, a top official told a bipartisan congressional commission on China Wednesday. Acting BIS Undersecretary Jeremy Pelter acknowledged criticism that the agency is moving too slowly on the congressionally mandated export control effort but defended the work BIS has done so far and said the agency doesn’t plan to change course.
The Commerce Department’s delay in issuing emerging and foundational technology controls may not be hampering U.S. foreign investment reviews as much as some lawmakers have suggested, trade lawyers said. Although the Committee on Foreign Investment in the U.S. doesn’t yet have a clear set of Commerce-defined critical technologies to target, that has not slowed down CFIUS from catching non-notified deals in critical technology sectors, the lawyers said in interviews, especially those involving semiconductors (see 2109010051).
The Treasury Department needs to provide significant assurances to banks and non-governmental organizations that they will not be sanctioned for transactions related to humanitarian relief in Afghanistan (see 2108260055), a former sanctions official and an export control official said. Without those assurances, large banks will be unwilling to risk approving transactions to the country because they fear violating U.S. sanctions and potentially large enforcement penalties.
The proposed merger between Magnachip Semiconductor and Wise Road Capital (see 2106150039) was likely never going to avoid U.S. scrutiny, a trade lawyer said, and it is puzzling why the two companies didn’t voluntarily submit a declaration to the Committee on Foreign Investment in the U.S. Scott Flicker, who advises clients on CFIUS matters for Paul Hastings, said the decision was either a mistake or a calculated decision by the two companies’ lawyers.
Several countries this month broadly expanded sanctions against Belarus for corruption and human rights violations, which could affect business and trade activities for companies operating in the region, law firms said. The restrictions -- imposed by the U.S., the United Kingdom, the European Union, Canada and Switzerland -- “significantly escalated” sanctions against Belarus and the Alexander Lukashenko regime, Baker McKenzie said Aug. 27.
The Commerce Department hasn’t been able to move forward on its routed export rule because it is awaiting confirmation of political appointees in the Bureau of Industry and Security, according to a document recently posted by CBP. The rule, which has seen several delays, involves “critical issues that need attention” from BIS appointees, the document said. President Joe Biden recently nominated Alan Estevez to lead BIS (see 2107130004) and Thea Kendler to be assistant secretary for export administration (see 2107280063), but neither has had a confirmation hearing scheduled.