The Netherlands last week published new export controls over certain advanced semiconductor manufacturing equipment in a step aimed at bringing Dutch policies more closely in line with strict U.S. export licensing requirements against China. The measures, previewed by the government in March (see 2303090032), take effect Sept. 1 and will require exporters to apply for and receive an authorization before shipping a “number of very specific technologies for the development and manufacture of advanced semiconductors.”
The Biden administration is still considering a range of “very technical questions” on its upcoming outbound investment restrictions, which is partly why the rules haven’t yet been released, said Mike Pyle, deputy national security adviser for international economics. He said officials are still working through how to define the types of technologies that would be captured by the program and the types of investments that would be screened, and are still speaking with industry about how to best scope the restrictions.
New potential U.S. export controls on a broader set of artificial intelligence-related chips could have massive impacts on the chip industry and American chipmaker Nvidia, said Colette Kress, Nvidia’s chief financial officer. Kress, speaking about reports that the Biden administration could tighten existing chip export restrictions as it prepares to finalize its China chip export control rule from October, said new license requirements could deal permanent damage to American chip industry sales in China.
Proposed U.S. guardrails around the Chips Act aren’t likely to stop semiconductor companies from applying for funding, Michael Schmidt, the Commerce Department official in charge of the program, said this week. While Semiconductor Industry Association CEO John Neuffer agreed, he also urged the government to coordinate any chip-related restrictions with trading partners or risk U.S. companies losing Chinese market share, calling the idea of decoupling a “protectionist fairy tale.”
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The U.S. should launch a new office within the Bureau of Industry and Security to measure the intended and unintended impacts of export controls on global supply chains before they are implemented, technology policy experts said in a new Atlantic Council report this week. This could help the U.S. better calibrate its trade restrictions so they don’t alienate allies and hurt American competitiveness, the report said, and could ultimately better convince trade partners to join in on the controls.
Chip company ASML Netherlands may refuse job applicants who may not be able to comply with U.S. export regulations, an independent Netherlands human rights monitor ruled this month, saying the refusal doesn't violate Dutch anti-discrimination laws. The monitor said ASML is justified in not hiring applicants from certain countries to positions where they could access U.S.-controlled dual-use technologies, according to an unofficial translation of the judgment, otherwise ASML could face “major risks of sanctions” from the U.S.
The EU is preparing to revamp its dual-use export control regime to better target emerging technologies, said Jean-Charles van Eeckhaute, a senior European Commission official. Van Eeckhaute said the commission already has begun work on a new list of dual-use technologies -- which the bloc hopes to finalize by September -- that may warrant new restrictions.
The EU levied its 11th sanctions package against Russia June 23, imposing a host of new export restrictions, individual designations and "new tools to counter circumvention and information warfare," the European Council announced. The new designations target 71 people and 33 entities involved in military activities, political decision-making, the spread of disinformation, the forced adoption of Ukrainian children to Russia and Russian information technology companies offering technology to Russian intelligence agencies.
Many companies are grappling with how best to comply with the Commerce Department’s foreign direct product rule, “one of the key areas” still “unaddressed” by the agency’s regulations and guidance, said Kim Strosnider, a trade lawyer with Covington. She said Commerce’s compliance expectations for the FDP rule are rising despite due diligence challenges faced by industry, pointing to the agency’s record $300 million penalty against Seagate Technology in April (see 2305080029 and 2304190071).