The Committee on Foreign Investment in the U.S. plans to refer a heavily scrutinized transaction to President Joe Biden after it couldn’t identify measures to mitigate the deal’s national security risks. The proposed acquisition of South Korea-based Magnachip Semiconductor Corp. by Beijing-based Wise Road Capital (see 2106150039) could damage U.S. national security, CFIUS told both companies Aug. 27, according to Magnachip’s Aug. 30 Securities and Exchange Commission filing. Although Magnachip and Wise Road had proposed mitigation measures to CFIUS, the committee said it couldn’t agree to any measures that “would adequately mitigate the identified risks.”

After several Republican lawmakers criticized the Biden administration for reportedly approving hundreds of millions of dollars worth of license applications for auto chips exports to Huawei (see 2108260014), the Commerce Department stressed that the Chinese technology company remains subject to strict licensing policies. A Commerce spokesperson said the administration hasn’t changed any of the regulatory restrictions imposed against Huawei or the policies “for implementing those restrictions” introduced under the Trump administration. “The policy has not been eased or amended,” the person said last week. The spokesperson also said all license applications are reviewed by the Defense, Energy and State departments.

Several Republican lawmakers criticized the Biden administration this week for reportedly (see 2108250018) granting export licenses for companies to ship hundreds of millions of dollars worth of auto chips to Huawei. The licenses reportedly were approved within the past several months and authorized only exports of auto chips, which are viewed as less sensitive than other types of semiconductor-related items.

The U.S. in recent months has approved license applications for exports of auto chips to Huawei worth hundreds of millions of dollars, Reuters reported Aug. 25. The approved applications have involved licenses to sell chips for various “vehicle components,” including video screens and sensors. License applications for exports of auto chips have faced lower thresholds for approval because they are “generally not considered sophisticated,” the report said. Huawei told Reuters it is “positioning” itself “as a new component provider for intelligent connected vehicles.” Huawei is subject to strict export license requirements (see 2104130041 and 2008170029).

Export Compliance Daily is providing readers with the top stories for Aug. 16-20 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.

The Bureau of Industry and Security fined a U.S. semiconductor manufacturer $469,060 for working with others to export chip-making equipment to Chinese companies on the U.S. Entity List, BIS said in an Aug. 16 order. The company, California-based Dynatex International, violated the Export Administration Regulations because it didn’t obtain the required BIS license before shipping the equipment. Although BIS said Dynatex knew it was shipping items to blacklisted companies, the agency substantially reduced the fine as part of a settlement agreement.

Taiwan is preparing for Beijing foreign policy to grow more aggressive in the coming months and is expecting a strong retaliatory response if it signs a free trade deal with the U.S., a senior Taiwan official said. But the official stressed that the country wants to complete a trade and investment agreement with the U.S. and other democracies, which could strengthen its position as a leading global provider of semiconductors.

Several companies recently disclosed their filings with the Committee on Foreign Investment in the U.S. or updated the status of their ongoing CFIUS reviews. Transactions involve Chinese technology companies, an agricultural technology business and a workplace learning technology provider.

South Korea recently unveiled plans to secure its rare metals supply chain and increase competitiveness, including through more industry support, the country’s Ministry of Trade, Industry and Energy said this month. The plan, which will cover a range of metals used to make semiconductor chips and batteries, includes tax breaks and other incentives for its rare metals sectors to reduce reliance on foreign suppliers. The measures are designed to “establish a secure supply chain to cope with potential supply uncertainties,” Argus said in an Aug. 5 blog post. The U.S. has taken similar measures to support its semiconductor industry (see 2107280051 and 2107220006).

Export Compliance Daily is providing readers with the top stories for Aug. 2-6 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.