When it runs out of its current equipment, the Russian military will face challenges sourcing critical technologies to upgrade and maintain its military goods, due to U.S. export controls (see 2202240069), the Atlantic Council said in a March 18 post on its website. But much of that could depend on how successfully the U.S. and its allies can enforce the restrictions, the Atlantic Council said, and whether Chinese companies comply with the restrictions or decide to supply chips to Russia and expose themselves to secondary sanctions or similar U.S. export controls (see 2203140009).
The Bureau of Industry and Security on March 17 issued three frequently asked questions to address matters surrounding the savings clauses in export control rules for Russia and Belarus (see 2202240069 and 2203020072). The FAQs clarify which activities and transactions are captured by the clauses, provide details around the effective dates of the clauses, and clarify whether the clauses would cover an order when the ultimate consignee is a warehouse or distributor.
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).
Following the U.K.'s imposition of massive sanctions on Russia following its invasion of Ukraine, the U.K.'s Export Control Joint Unit published a General License allowing the provision of technical assistance, financial services and funds, and brokering services for certain vessels. The ECJU authorized these activities where a restricted vessel is moving from a third country to Russia or the U.K., or to a third country from Russia or transiting Russian waters.
The U.K. amended the General License applying to transactions involving sanctioned Russian bank Sberbank. The license, "Correspondent Banking Relationships & Processing Sterling Payments," was altered to allow British credit or financial institutions to continue a banking relationship with Sberbank or a U.K. or non-U.K. credit or financial institution owned or controlled by Sberbank. The license expires March 31.
The EU last week issued a set of frequently asked questions to describe and clarify its new Russia export restrictions and sanctions. The 31-page document outlines items that are captured by the new restrictions, what exemptions are available, when the restrictions do and don’t apply, exporter compliance obligations and more.
The Russia and Belarus Financial Sanctions Act, clarifying that foreign subsidiaries of U.S. financial institutions must comply with American sanctions against Russia and Belarus, passed out of the House Financial Services Committee March 17 on a voice vote. The Nowhere to Hide Oligarchs' Assets Act, which gives the Financial Crimes Enforcement Network more access to records so that they can "detect Russian oligarchs who are participating in money laundering techniques to hide their money, avoid scrutiny, and evade our sanctions," passed out of the same committee on a 26-23 party-line vote.
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.