China is unlikely to violate U.S. sanctions against Russia because it fears the consequences of U.S. secondary sanctions too much, said Kevin Rudd, president of the Asia Society and former Australian prime minister. China also will likely avoid providing military support to Russia, Rudd said, which could invite similar U.S. sanctions that could hurt its major state-run and private technology companies.
Sen. Todd Young, R-Ind., and Rep. Doris Matsui, D-Calif., on March 21 expressed optimism that Congress can begin conference negotiations on its China package before the end of the work period, as planned by Senate leadership (see 2203170075).
The U.S. should tighten export controls against the Beijing Genomics Institute and its subsidiaries to prevent it from importing U.S. genomic and semiconductor technologies, the House’s Republican-led China Task Force said in a letter to National Security Adviser Jake Sullivan. Although the Commerce Department’s Entity List has two of BGI’s subsidiaries, the lawmakers said several more should be added to restrict the company’s “access to technology, data, and money.”
The Commerce Department should tighten export restrictions on China’s top chipmaker to prevent it from importing sensitive semiconductor equipment and exploiting a U.S. export control loophole, Sen. Marco Rubio, R-Fla., and Rep. Michael McCaul, R-Texas said. The lawmakers, who voiced similar concerns to Commerce last year (see 2103190005), said in a March 17 letter to Commerce that its export control licensing policies for Semiconductor Manufacturing International Corporation are “ineffective” and are denying less than 1% of export applications to sell technology to the company.
The Senate will need to amend the House China package with upper chamber language and send it back to the lower chamber in order to begin conferencing the two measures, Senate Majority Leader Chuck Schumer, D-N.Y., said March 17. Calling it a procedural step, he noted a “small band of Republicans” is standing in the way of “quick action.”
Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky., are negotiating to begin conference on the China package this work period, a Senate aide said by email. The work period is scheduled to end April 8.
Ahead of a meeting with Chinese officials, U.S. national security adviser Jake Sullivan publicly warned China that it will face severe penalties if it helps Russia evade Western sanctions. The Biden administration is “watching closely” to see whether Beijing provides Moscow with “material support or economic support,” Sullivan told CNN March 13, which could give Russia an economic lifeline as it faces crippling financial restrictions from Europe, the U.S. and many of its trading partners.
Even before new sanctions and export controls targeting Russia take full effect, many companies are deciding that compliance and due diligence costs are not worth the potential profits of continued business dealings in Russia and Belarus, former U.S. export control and sanctions officials said, speaking at a Washington International Trade Association panel on March 10.
Rina Pal-Goetzen, a former Commerce Department official, joined the Semiconductor Industry Association as director of global policy, SIA announced March 7. Pal-Goetzen will work with policymakers in the U.S. and abroad, as well as industry, to “advance the association’s international trade policy agenda,” SIA said. Pal-Goetzen previously worked on trade policy at Commerce and served as general counsel for 3D printed microTEC, a California-based 3D printing company.
The Commerce Department could impose strict export controls, including through the Entity List, on Chinese companies that violate U.S. export restrictions against Russia, agency officials said this week.