One of the largest impacts felt from the drastic change in mandate and reach of the Committee on Foreign Investment in the U.S. in the last few years is how lawyers, business people and investors are viewing the committee. Speaking at a Capitol Forum webinar on Feb. 4, three CFIUS industry experts highlighted how far more resources are being exerted on CFIUS compliance measures than at any time since its inception. This is largely due to the Foreign Investment Risk Review Modernization Act of 2018, which greatly overhauled CFIUS's responsibilities, including introducing certain mandatory filings for certain foreign transactions (see 1910310053).
Commerce secretary nominee Gina Raimondo was asked several times in written questions from senators after her hearing about how she would balance the need to prevent cutting edge technologies from being shared with adversaries but also allow U.S. semiconductor manufacturers to compete with foreign companies that don't have the same restrictions on selling chips.
A Chinese consumer electronics company asked a federal U.S. court to block the Treasury and Defense departments from imposing restrictions on the company after it said it was falsely labeled as having ties to the Chinese military. In a Jan. 29 lawsuit, Beijing-based Xiaomi Corp. said its designation as a Chinese military company by both agencies had no “factual basis,” adding that it could face “irreparable harm” from the designation.
Electronics industry association SEMI called for industry input on a review of Trump administration export control policies, in a Jan. 25 letter to secretary of commerce nominee Gina Raimondo. The trade group said the prior administration made drastic changes to export control regulations without allowing enough industry input, and said the new administration should formally hear industry concerns.
Gina Raimondo, President Joe Biden’s nominee for commerce secretary, declined to say whether she plans to keep Huawei and other Chinese technology companies on the Entity List but made clear that Commerce will aggressively tackle illegal Chinese trade practices and human rights abuses. Speaking before the Senate Commerce Committee Jan. 26, Raimondo told lawmakers that the agency won’t make decisions on Chinese trade restrictions until completing a sweeping review of the measures and assessing their impact on U.S. national security (see 2101250049). “The President has been clear that we need to step back and review broadly our trade policies as it relates to China,” Raimondo said.
The Defense Department on Jan. 14 released another list of Chinese companies with ties to the country’s military. The latest tranche includes nine companies, including businesses operating in the semiconductor, technology and aviation sectors. The companies will be subject to certain investment bans under an executive order President Donald Trump issued in November (see 2011130026). The latest list follows the release of several similar lists last year (see 2008300001, 2006250024 and 2012040008).
Huawei is increasing its investments in local chip companies to stabilize its supply chain amid a host of U.S. export restrictions on the company, the Nikkei Asia newspaper reported Jan. 13. Since being cut off from certain imports from many global semiconductor suppliers, the company has invested in 20 semiconductor-related companies during the past year and a half, the report said, and is building a “small-scale chip production line for research purposes” in Shenzhen, China. Ten of Huawei’s recent investments came after the U.S. amended its foreign direct product rule in May to further restrict Huawei’s ability to source foreign-made products containing a certain amount of U.S.-origin goods (see 2008170029), the report said. Nikkei also said Huawei is receiving government support to find new “targets for investments,” with one being China-based SiEn Integrated Circuits Co., Ltd. The investment would help Huawei with a range of chip services, the report said, including design, production, packaging and testing. Huawei didn’t comment.
Japan is seeking “participants” for a project to pursue research and development for 5G infrastructure and advanced semiconductor manufacturing technology, the country’s Ministry of Economy, Trade and Industry said Jan. 8. The project is being run by Japan’s New Energy and Industrial Technology Development Organization, which is hoping to “strengthen” Japan’s semiconductor manufacturing abilities, the ministry said, according to an unofficial translation. The agency is carrying out an “open call for development” of those technologies and will select certain businesses to participate in the project. The recruitment period, which began Jan. 8, ends Feb. 8.
The Treasury and State departments issued guidance on President Donald Trump’s November decision to ban investment in Chinese firms with ties to the country’s military. Treasury issued a list of Chinese military companies and published five new frequently asked questions to offer compliance on the ban, which takes effect Jan. 11, 2021 (see 2011130026).
The Bureau of Industry and Security this month released the full set of comments it received on its pre-rule for foundational technologies (see 2008260045 and 2010070012), including hundreds of pages of feedback from U.S. and global semiconductor companies urging the agency to refrain from imposing narrow, unilateral export controls. BIS also received comments from some of the world’s largest technology companies, including Google and Microsoft, both of which told BIS that its controls could create unmanageable problems for compliance programs.