The U.S. needs to work closer with allies on export controls and foreign investment screening to counter China, a Republican House member and two former Trump administration officials said. They said the U.S.’s current unilateral approach to trade restrictions is not working and could cede U.S. technology leadership to China.
The Office of Information and Regulatory Affairs began a review of a final rule from the Bureau of Industry and Security that would clarify the scope of certain export restrictions to reflect decisions made at the June 2019 Australia Group plenary meeting. The rule would amend the scope of Export Control Classification Number 1C991, which covers vaccines, immunotoxins, medical products, and diagnostic and food testing kits. OIRA received the rule Nov. 16.
The U.S. and other governments need to substantially increase outreach with industry before continuing to pursue export controls over emerging technologies, experts said. Although the U.S. and other governments do some outreach work, future controls will be ineffective and difficult to comply with without more industry input, they said. “It’s [like] trying to change a tire while we’re driving down the road,” said Scott Jones, a senior adviser at the Strategic Trade Research Institute, speaking during a Nov. 17 webinar hosted by STRI. “Going forward, it fundamentally has to be much more collaborative.’
The Bureau of Industry and Security amended and clarified provisions in the Export Administration Regulations to promote compliance and better enforce the Export Control Reform Act. BIS also amended other EAR provisions related to licenses, denial orders and civil penalty payments. The changes, outlined in a final rule issued Nov. 17, take effect Nov. 18.
Corey Stewart, a trade lawyer and supporter of President Donald Trump who lost a 2018 Senate race in Virginia, was named to a “newly created” senior position in the Commerce Department to oversee export regulations, Reuters said in a Nov. 16 report. Stewart will hold the post of principal deputy assistant secretary for export administration, Reuters said, which is above the post of Matthew Borman, the deputy assistant secretary for export administration. Stewart is being brought in to help “push through hardline policies on China” before the Joe Biden administration takes over, the report said. Stewart is expected to serve in the role until the end of the Trump administration on Jan. 20, 2021. The Commerce Department and its Bureau of Industry and Security did not immediately comment. The announcement came about four months after Rich Ashooh, former Commerce assistant secretary for export administration, resigned in July (see 2007020027).
The Bureau of Industry and Security withdrew a proposed rule from the Office of Information and Regulatory Affairs related to its strategic trade authorization (STA) license exception. The rule, which was received by OIRA Aug. 27 (see 2008280022) and withdrawn Nov. 12, would have clarified the “availability” and expanded restrictions on availability of the license exception under the Export Administration Regulations. A BIS spokesperson said the agency is still considering proposing the rule. “The rule was withdrawn for further informal interagency consultation,” the spokesperson said.
More than 20 industry groups urged the Bureau of Industry and Security to be cautious as it considers controls over foundational technologies (see 2008260045), saying the wrong approach could stifle innovation, damage U.S. competitiveness and lead to costly shifts in global supply chains. The groups said any new controls should only be imposed after a calculated process with significant input from industry, and should include license exceptions and exclusions.
The Bureau of Industry and Security extended the comment period (see 2008140002) for an information collection related to submitting declarations to the International Atomic Energy Agency for nuclear materials, a notice released Nov. 9 said. The IAEA requires information on nuclear-related products that may be used for “peaceful” nuclear purposes but also can be part of a nuclear weapons program, the notice said. The declarations provide the IAEA with information about the U.S. “commercial nuclear fuel cycle,” including nuclear equipment manufacturing and trade in nuclear-related goods. Comments are due Dec. 10.
The Bureau of Industry and Security extended the comment period for an information collection related to foreign importer certificates, end-user certificates, delivery verification certificates and firearms entry clearance requirements, a notice released Nov. 9 said. BIS said it wants more feedback on its collection for import and end-user certificates -- which are “obtained by the foreign importer and transmitted to the U.S. exporter” -- and delivery verification for BIS-controlled items. The agency is also seeking feedback on its information collection for firearms clearance requirements, which have changed due to the recent transfer of certain firearms controls from the State Department. “The Department of Commerce controls the [Commerce Control List] and must now take over this collection of information,” BIS said. The “entry clearance requirements for temporary imports will specify the [Export Administration Regulations] procedures for temporary imports and subsequent exports.” Comments are due Dec. 10.
The Office of Information and Regulatory Affairs began a review of a final rule from the Bureau of Industry and Security to remove Hong Kong as a “separate destination” under the Export Administration Regulations. OIRA received the rule Nov. 6. BIS announced in June that it suspended license applications for shipments to Hong Kong (see 2006300050) to further align Hong Kong export regulations with mainland China.