U.S. Trade Representative Katherine Tai met with Korean Trade Minister Yeo Han-koo Sept. 13, and in a summary of that meeting, she said she emphasized the importance of advancing workers' rights through the U.S.-Korea Free Trade Agreement, as well as using KORUS to resolve bilateral issues.
Export Compliance Daily is providing readers with the top stories for Sept. 7-10 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
The European Commission released a fact sheet Sept. 9 titled, “Emerging Technologies Developments in the Context of Dual-Use Export Controls.” The publication is a compilation of fact sheets that cover topics addressed in the five workshops for member states held 2019-20 on emerging technologies, such as quantum computing, additive manufacturing, artificial intelligence, brain-computer interfaces, special materials, advanced semiconductors and hypersonics. After the workshops, each relevant emerging technology had a fact sheet developed for it.
The Chinese Foreign Affairs Ministry took a hard line on a letter that 13 House Energy and Commerce Committee Republicans sent Transportation Secretary Pete Buttigieg last week seeking information on reports that U.S. officials approved licensing applications for Huawei to buy U.S. semiconductors for China’s next-generation autonomous vehicles. The GOP members asked Buttigieg to respond by Sept. 23 to a dozen questions about the reports, including whether he’s concerned that Huawei is looking for a U.S. “foothold” to steal information on Americans and gather intelligence on the U.S. “transportation infrastructure.”
The top Republican on the House Foreign Affairs Committee said the acting head of the Bureau of Industry and Security misrepresented facts in front of a congressional commission last week (see 2109080062), saying he wasn't straightforward about the agency’s “delayed and incomplete” provision of export licensing decisions to Congress. Although BIS Acting Undersecretary Jeremy Pelter told the commission that BIS has complied with all laws regarding the disclosure of licensing information to Congress, Rep. Michael McCaul said the agency hasn’t been transparent.
In a strategic meeting called a high-level economic dialogue, Mexico and the U.S. talked about ways to facilitate the movement of goods at the border and ways to use Mexico in a North American-centric semiconductor supply chain, officials said after the Sept. 9 meeting. Mexico could become a place for packaging and testing chips, Mexico's Economy Secretary Tatiana Clouthier said at a press conference at the Mexican Embassy.
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.
China’s Semiconductor Manufacturing International Corp., which was placed on the Commerce Department’s Entity List last year, plans to build a nearly $9 billion chip production facility in Shanghai to help bolster China’s semiconductor ambitions, the Wall Street Journal reported Sept. 3. The facility will be built through a joint venture between SMIC and the Shanghai government, and will specialize in “mature technologies of 28-nanometer process nodes and higher and churn out 100,000 12-inch wafers a month when complete,” the report said, citing a SMIC regulatory filing. SMIC, which is also on an unclassified Defense Department list of Chinese military companies (see 2106280023), has come under intense scrutiny from some lawmakers, who view it as a threat to U.S. semiconductor leadership (see 2103190005).
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 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.