The Commerce Department should add more Chinese companies to the Entity List, better restrict China’s government organizations and target the country with unilateral controls when appropriate, China Tech Threat said this week. The organization, which is run by Strand Consult and advocates for stronger export controls on China, said Commerce should add China semiconductor companies Yangtze Memory Technologies and Changxin Memory Technologies to the Entity List and tailor export controls to better target Chinese “pseudo-government organizations.” Commerce should also “prioritize” unilateral controls on American semiconductor manufacturing equipment by employing a “control-now-cooperate-later” approach, China Tech Threat said.
Although many companies could be affected by a potential expansion of the U.S. foreign direct product rule if Russia invades Ukraine, the U.S., the United Kingdom and Canada can also deploy other export restrictions that could have significant compliance implications, Baker McKenzie lawyers said. Those controls could range from more strict licensing policies to a complete trade embargo on certain Russian annexed territories.
Important questions still surround the implementation of a potential multilateral sanctions package against Russia, economic and security experts said, including U.S. efforts to enforce an expansion of the foreign-direct product rule. Although details may not yet be clear, a former State Department official warned that new U.S. sanctions against Russia could soon turn strict enough to mirror trade restrictions against Iran.
The Bureau of Industry and Security added seven entities to the Entity List for nuclear and nonproliferation reasons, including one company in China, five in Pakistan and one in the United Arab Emirates, BIS said. The additions take effect Feb. 14.
BIS is preparing to “soon” issue another set of export controls that will cover both emerging and foundational technologies, said Matt Borman, the Bureau of Industry and Security’s deputy assistant secretary of export administration. The controls, briefly mentioned by a senior BIS official last month (see 2201280045), would represent the first set of formal export restrictions over foundational technologies since Congress passed the Export Control Reform Act in 2018.
The Bureau of Industry and Security will add seven entities to the Entity List for nuclear and nonproliferation reasons. The entities are for one company in China, five in Pakistan and one in the United Arab Emirates. The Chinese company will be subject to a license review policy of presumption of denial for all items subject to the Export Administration Regulations, and the other entities will be subject to certain nuclear end-user licensing restrictions. No license exceptions will be available for the entities. BIS will also make some corrections and clarifications to existing entries on the Entity List. The additions take effect upon publication in the Federal Register, scheduled for Feb. 14.
The White House this week released an updated list of critical and emerging technology categories that are important to national security, including a new subset of “novel, advanced technologies” for each category. The updated list, first issued in 2020 as part of a national strategy to better coordinate agency efforts amid technology competition with China (see 2010150038), will help guide “new and existing efforts to promote U.S. technological leadership,” the White House said. The list could intersect with work being done by the Bureau of Industry and Security, which is crafting export controls over various emerging and foundational technologies as part of the Export Control Reform Act (see 2201280045). Similarly, the Committee on Foreign Investment in the U.S. may be more inclined to scrutinize transactions involving sensitive and emerging technologies (see 2112140011).
Although the Commerce and State departments have been able to conduct some export end-use checks during the COVID-19 pandemic, officials said both agencies continue to face challenges scheduling on-site inspections.
Sahar Hafeez has left the Bureau of Industry and Security to begin a new role this week as National Security Council director of international economics. As a senior adviser in the office of the BIS undersecretary, she contributed to the agency’s work on semiconductor supply chain issues (see 2107280051) and other areas.
China objected to the U.S. decision to add 33 Chinese entities to its Unverified List, it said in a Feb. 7 news release. The Bureau of Industry and Security made the additions, which included universities and companies operating in China's technology and electronics sectors, due to its inability to verify the reliability of the entities through end-use checks (see 2202070012). According to an unofficial translation, China's Ministry of Commerce said that the U.S. should immediately correct its perceived wrongdoing and return to mutual beneficial cooperation. MofCom characterized this action, along with the U.S. past export control moves, as tools of "political suppression and economic bullying." A BIS spokesperson dubbed its end-use checks a "core principle" of the agency's export control system.