The U.S. unsealed an indictment this week against a Russian citizen and Hong Kong resident who helped illegally procure U.S. dual-use microelectronics with military applications for Russian end users. Maxim Marchenko used a network of shell companies to source the items from the U.S., DOJ said, giving false information to American distributors to assure them the products weren’t destined for Russia. Marchenko was charged with conspiring to defraud the U.S. along with money laundering, wire fraud and smuggling offenses.
Exports to China
China will appeal a World Trade Organization panel ruling rejecting its claim that the retaliatory tariffs placed on the U.S. in response to Section 232 duties were justified, the country's Ministry of Commerce said Sept. 19, according to an unofficial translation. Beijing will appeal "into the void" seeing as the Appellate Body currently doesn't function, barring future enforcement action against China in the dispute.
A new Defense Department policy memo and guidance on foreign influence within American research institutions could exacerbate already complex export control due diligence challenges at universities, said Jackson Wood, director for industry strategy at Descartes. It also could lead to larger compliance risks for universities pursuing DOD-funded research, said Kit Conklin of compliance risk advisory firm Kharon.
On a panel on critical minerals ally-shoring, panelists representing the perspective of Latin America, the U.S., the EU and, to some degree, China, agreed that the current race to lock down supplies of the raw materials needed for advanced batteries, wind turbines and computer chips is one where every man is out for himself, and resource-rich countries in the Global South are exploited.
The top two lawmakers on the House Select Committee on China criticized Beijing’s decision last month to suspend imports of Japanese seafood, saying the trade restrictions are “unacceptable and must be reversed.” China suspended the imports in response to Japan's release of nuclear-contaminated water into the ocean stemming from the 2011 Fukushima nuclear power plant incident following a tsunami (see 2308220022).
China’s commerce ministry is paying “close attention” to a decision by Mexico in August to raise tariffs on imports of steel and other items from non-free trade agreement countries, a ministry spokesperson said last week. “Although this measure does not target specific countries,” China is monitoring its impact, the spokesperson said, according to an unofficial translation. “Judging from historical experience, raising tariffs will increase the production costs of downstream industries and reduce consumer welfare," the spokesperson said, adding that China hopes Mexico "will adhere to the principles of free trade and use such measures with caution.”
Republicans are asking the Biden administration to strengthen export controls against Huawei and Semiconductor Manufacturing International Company after Huawei this month unveiled a new smartphone that may have been made through means that violated U.S. export restrictions (see 2309120005). They said both technology companies should be subject to “full blocking sanctions” and their executives should face criminal investigations, adding that the Commerce Department should revoke all of their existing license applications, add all their subsidiaries to the Entity List and take other measures to cut off a broad range of shipments to both firms.
A think tank with roots in libertarianism that now supports a carbon tax warned that members of Congress who want to pass a carbon border adjustment tax without a domestic carbon tax face more than just litigation at the World Trade Organization.
Treasury Secretary Janet Yellen said the Committee on Foreign Investment in the U.S. is doubling down on enforcement, warning industry lawyers about potential subpoenas or penalties for violating the committee's rules or mitigation agreements. Yellen’s comments came one day after Paul Rosen, who heads CFIUS, said the committee recently hired additional enforcement officials and may add more.
It's not realistic to believe Canada, Mexico and the U.S. would be ready to admit more members to the USMCA before their presidential contests in 2024 or Canada's parliamentary elections in 2025, panelists said at a program hosted by the Council of the Americas. But Juan Carlos Baker, Mexico's former chief negotiator for the NAFTA successor, said the six-year review in 2026 would be a perfect time to make accession a possibility.