The Directorate of Defense Trade Controls will see a return to “normal order” under the Biden administration, with a stronger emphasis on export control cooperation with allies and collaboration at multilateral control regimes, said Mike Miller, a senior State Department official. Miller said the agency is “busy” implementing President Joe Biden’s foreign policy objectives and has seen “robust management” from administration officials.
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.
The Federal Emergency Management Agency is no longer restricting exports of four categories of personal protective equipment and other items used to combat the COVID-19 pandemic, the agency announced May 19. FEMA said its restrictions -- originally announced in April 2020 (see 2004080018) and extended in December (see 2012300017) -- no longer apply to industrial N95 respirators, certain surgical masks, certain piston syringes and certain hypodermic single lumen needles. Other export restrictions still apply, the agency said, including for surgical, single-use N95 respirators, and certain nitrile gloves and surgical gowns.
The State Department is preparing to amend the U.S. Munitions List to update export controls surrounding weapons, spacecraft and military electronics, according to a senior State Department official. The agency also plans to issue another extension to allow employees involved in International Traffic in Arms Regulations-related activity to work remotely and is inching closer to publishing its first ITAR reorganization rule, said Mike Miller, the State Department’s deputy assistant secretary for defense trade in the Bureau of Political-Military Affairs.
The Biden administration plans to use its two-week postponement of the ban on investments in Chinese military companies (see 2105180049) to further clarify the Trump-era policy (see 2011130026) and draft guidance, according to a senior administration official. Although President Joe Biden plans to maintain the ban, officials are reviewing and reworking President Donald Trump’s November executive order that outlined the ban, which the official said was drafted and implemented in a “careless manner.”
President Joe Biden’s nominee to be the State Department’s assistant secretary for Western hemisphere affairs vowed to aggressively sanction human rights violators and said more can be done to stop sanctions evasion tactics. The nominee, Brian Nichols, also told the Senate Foreign Relations Committee May 19 that the agency should coordinate closely with the Treasury Department and voiced support for some of the agency’s Cuba restrictions.
China’s latest export control compliance guidelines closely mirror U.S. guidance and provide significant new insight into how the country will interpret its export control law (ECL) (see 2011030033 and 2010190033), law firms said. Companies operating in China may find that their U.S. compliance programs translate well to China’s rules, the firms said, which now include guidance for risk assessments, reporting procedures and audits.
The Bureau of Industry and Security issued more than $100,000 in combined penalties against two companies for illegally exporting thousands of dollars worth of goods to Iran, Russia and Ukraine. BIS imposed a $60,000 fine and temporarily denied the export privileges for Kleiss & Co., a Netherlands-based company that BIS said illegally shipped “extruded butyl sealants” from the U.S. to Iran. The agency also fined Texas-based TeleDynamics $55,000 for illegally exporting rifle scopes from the U.S. to Russia and Ukraine.
The U.S. issued guidance last week to address industry uncertainty and a rising number of questions about export licensing jurisdiction for goods sent under its Foreign Military Sales Program. The guidance -- which includes frequently asked questions developed by Homeland Security, CBP and the Commerce, State and Defense departments -- was issued because the agencies “continue to receive questions” about exports that were moved from the U.S. Munitions List to the Commerce Control List but are exported under FMS authority. They said exporters are “having difficulty” understanding how Commerce’s Export Administration Regulations, the State Department’s International Traffic in Arms Regulations and the FMS Program “relate to each other” for goods that have recently transitioned from the ITAR to the EAR.
The Senate likely will vote on the Endless Frontier Act next week and should pass the bill before the end of the moth, Majority Leader Chuck Schumer, D-N.Y., said May 13. The bill, which would provide more federal funding and incentives for semiconductor research, has “strong” bipartisan support, Schumer said, and will help maintain U.S. technological leadership over trade competitors, including China. “The Endless Frontier Act would right the ship by making one of the largest investments in American innovation in generations,” Schumer told the Senate.
The State Department’s recent $13 million penalty against Honeywell International highlighted the importance of company employees closely following internal compliance procedures and treading carefully when dealing with China, law firms said. It also showed that the State Department is committed to targeting weaker compliance programs but will impose lenient penalties if violations are self-disclosed, the firms said. Honeywell signed a settlement agreement with the agency earlier this month after it illegally sent drawings of export-controlled parts for military-related items to potential customers in several countries, including China (see 2105040018).