The Bureau of Industry and Security added 38 Huawei affiliates to the Entity List and refined a May amendment to its foreign direct product rule, further restricting Huawei’s access to U.S. technology. BIS said the direct product rule will now also apply to transactions where U.S. software or technology is “the basis” for a foreign-made item produced or purchased by Huawei, or when a Huawei entity is “a party to such a transaction.” Secretary of State Michael Pompeo said Huawei "has continuously tried to evade" the previous changes to the foreign direct product rule.
A California man pleaded guilty Aug. 10 to illegally exporting cesium atomic clocks to Hong Kong, the Department of Justice said. Alex Yun Cheong Yue, who was arrested in June 2019 (see 1906270067), shipped the clocks without the required license from the Bureau of Industry and Security. He faces a maximum 20-year prison sentence and a $1 million fine. Wai Kay Victor Zee and his company, Premium Tech Systems, Ltd., were also charged in the case. Zee remains at large in Hong Kong.
The Office of Foreign Assets Control issued guidance on its Sudan program and Darfur sanctions and removed and revised Sudan-related FAQs. The guidance, issued Aug. 11, clarifies that U.S. people and companies are no longer subject to OFAC’s Sudanese Sanctions Regulations but may be designated under the agency’s Darfur sanctions or captured by Commerce Department export controls.
The Office of Information and Regulatory Affairs began an interagency review of a Bureau of Industry and Security pre-rule to pinpoint potential controls for foundational technologies. OIRA received the rule Aug. 3. A BIS official said in May the agency was finalizing an internal review of the rule (see 2005190052), which has been expected since Congress passed the Export Control Reform Act of 2018 mandating BIS reviews of controls for both emerging and foundational technologies.
The Bureau of Industry and Security will hold a virtual export control policy conference Sept. 2, covering updates on export control regulations, license exceptions, semiconductor controls and the Entity List. The conference will include a question-and-answer session with BIS officials and “other agency experts,” and will feature updates from the State Department’s Directorate of Defense Trade Controls, sanctions policy and the Committee on Foreign Investment in the U.S. BIS canceled its in-person annual conference earlier this year due to the COVID-19 pandemic (see 2005210051).
The Bureau of Industry and Security on June 30 formally issued a notice with details (see 2007130018) of its June decision to suspend Hong Kong export licenses (see 2006300050 and 2006290063), outlining which licenses are impacted and reiterating the agency’s savings clauses for affected exports. BIS also said it is reviewing the Export Administration Regulations along with other agencies to “assess whether additional amendments are warranted.”
The aerospace industry applauded the U.S. decision to loosen export restrictions on unmanned aircrafts, saying the change may allow U.S. companies to better innovate and compete in emerging markets for new aircraft technologies. The decision, announced by the State Department July 24, will no longer subject exports of certain unmanned aerial systems to a “strong presumption of denial,” but will instead impose a case-by-case review policy on a “subset” of unmanned aircrafts that fly at speeds below 800 kph.
The Office of Information and Regulatory Affairs concluded interagency reviews of two final rules from the Bureau of Industry and Security. On July 16, OIRA completed review of a rule to suspend license exceptions for Hong Kong. BIS announced the license suspensions last month along with a guidance and savings clause (see 2006300050). OIRA received the rule July 10. On July 17, OIRA completed review of a rule to implement export control changes agreed to during the 2018 Wassenaar Arrangement. The rule will also make revisions related to national security controls. OIRA received the rule May 20.
The Bureau of Industry and Security has begun a broad review of new export controls on surveillance technologies going to China, which may also include additions to the agency’s Entity List, Acting Commerce Undersecretary for Industry and Security Cordell Hull said. Hull called the review “comprehensive” and “in-depth,” saying it could lead to controls over advanced surveillance tools, artificial intelligence software and biometric technologies.
The Office of Information and Regulatory Affairs began an interagency review for a proposed Bureau of Industry and Security rule to control “software” for the operation of “automated nucleic acid assemblers and synthesizers.” BIS will request comments on the proposed export controls. OIRA received the rule July 20.