The Bureau of Industry and Security recently revoked export privileges for seven people after they illegally exported or tried to export controlled items, including military equipment, firearms and ammunition.
Exports to China
Germany released its first national security strategy this week, emphasizing the importance of export controls and sanctions to protect against human rights abuses. The 76-page document, which dives into a range of security issues, mentions that Germany wants Europe to achieve better “harmonization of arms export controls” and that it supports the “flexible use of EU sanctions.”
The World Trade Organization is steadily headed towards irrelevancy to global trade and is facing a "long, slow sunset," said Peter Harrell, former senior director for international economics and competitiveness at the White House, during remarks at the Georgetown International Trade Update on June 13.
The Treasury Department should sanction Russian state-owned nuclear company Rosatom, a “major source of funds” for Moscow and “one of the only largely unsanctioned Russian energy companies,” said Gregory Meeks, the House Foreign Affairs Committee’s top Democrat. Meeks, speaking during a June 13 House Financial Services Committee hearing, pointed to his bill introduced last month that would require the administration to designate Rosatom (see 2305120015).
China’s Ministry of Commerce criticized recent U.S. sanctions targeting companies in China and Hong Kong for helping Iran procure missile parts and technology (see 2306060043), saying the allegations lack “factual basis and due process.” The U.S. should stop its “unreasonable suppression of Chinese companies and individuals,” a ministry spokesperson said June 12, according to an unofficial translation. “China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies and individuals.”
China “firmly” opposed the U.S. additions of Chinese entities to its Entity List this week, a Foreign Ministry spokesperson said, calling on the Biden administration to “immediately stop using military and human rights-related issues as pretexts to politicize, instrumentalize and weaponize trade and tech issues.” The U.S. should “stop abusing export control tools such as entity lists to keep Chinese companies down,” the spokesperson said during a regular press conference June 13. The export controls targeted companies in China and elsewhere for supporting China’s military or the government’s human rights abuses in Xinjiang (see 2306120030).
A ramping up of U.S. export enforcement efforts is causing companies to revisit their compliance practices, particularly as the Bureau of Industry and Security conducts more outreach to exporters, said Alan Enslen, a trade lawyer with Womble Bond. He said companies are more frequently auditing their export compliance programs amid a number of signs that the Biden administration is increasing scrutiny on potential export violations, including a multi-agency memo issued in March that Enslen said was a “shot across the bow” for U.S. exporters.
A bill that approves the Taiwan trade initiative, but says it cannot take effect until the administration submits an economic analysis of its effects and answers questions from Congress on implementation, passed out of the House Ways and Means Committee on a 42-0 vote.
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Recent U.S. sanctions against an Iranian procurement network and drug traffickers in Mexico signal a trend within the Biden administration toward using sanctions to target “transnational organized crime,” Herbert Smith said in a June client alert. The firm suggested that companies should make sure their anti-money laundering and “know your customer” procedures are incorporated as “an integral part of sanctions compliance” due to the U.S.'s “increasing sanctions focus on transnational crime and money laundering.”