The Commerce Department Bureau of Industry and Security postponed its April export control seminar in Pennsylvania due to the COVID-19 pandemic, BIS said in a recent notice. The seminar, originally planned for April 15-16, will be rescheduled, BIS said.
The Trump administration should be doing more to restrict sales of emerging technologies to China, lawmakers said in interviews earlier this month. Senators commended the administration for increasing foreign direct investment restrictions (see 2002260042) and going further than previous administrations in confronting China’s unfair trade practices, but said they will continue pushing for tighter restrictions.
Senior administration officials agreed to new measures to further restrict foreign exports of chips to Huawei (see 2003050041), according to a March 26 Reuters report. The measures would alter the Foreign Direct Product Rule to restrict foreign sales that contain U.S. chip making equipment, Reuters said, although it remains unclear if President Donald Trump will sign off on the change. Trump has said that he wants to ease restrictions on exports and sell more to China (see 2002180057). The change, which has been discussed within the administration for months (see 1912100033, 1912130052 and 2002050047) has been met with criticism from the semiconductor industry (see 2002180060). The White House and the Commerce Department Bureau of Industry and Security did not comment.
Countries will more strictly review transactions involving foreign direct investment as the COVID-19 pandemic continues, especially the U.S., which could increase scrutiny and export controls in the biotechnology sector, trade lawyers said. The Committee on Foreign Investment in the U.S. may increase reviews of transactions involving health care technology to keep critical virus-fighting resources in the U.S., said Aimen Mir, a trade lawyer with Freshfields Bruckhaus Deringer. Mir, who also formerly served as the Treasury Department’s deputy assistant secretary for investment security, said the pandemic will also cause CFIUS and other agencies to increasingly look to prevent transfers of pathogen-related technologies and to maintain technology leadership in the biotechnology sector.
Companies will likely be faced with a reshuffled supply chain after the novel coronavirus COVID-19 pandemic subsides, placing greater importance on maintaining sound trade compliance programs even as business uncertainty increases, said Kerry Contini, an export control and sanctions lawyer with Baker McKenzie. As supply chain actors struggle to stay in business and as new parties enter and leave the supply chain, companies may face a host of new suppliers or customers, Contini said, a transition that will likely affect global industries on a large scale.
The Commerce Department Bureau of Industry and Security is operating normally and will continue to process export license applications amid the global response to curbing the COVID-19 pandemic, a BIS spokesperson said. “Operations are not impacted,” the spokesperson said. In notices to industry, the Census Bureau said it will continue responding to industry but requested electronic submissions for disclosures (see 2003180029), while the Directorate of Defense Trade Controls said some licensing processing may face delays (see 2003190017).
European governments are skeptical about the use of U.S. export controls to restrict transfers of sensitive technologies even as the U.S. ramps up attempts to convince them to adopt similar measures, according to a March 18 report from the Mercator Institute for China Studies. As the U.S. has taken an increasingly aggressive approach to restricting emerging technology sales to China, Europe increasingly sees export controls as a “blunt instrument” for tackling technology risks, the report said, viewing them instead as a U.S.-driven effort to contain China's rise.
The head of the Commerce Department Bureau of Industry and Security revoked a shipping company’s export privileges for 15 years for export violations but ordered a review of the assessed fine, saying it was too high, according to a March 11 order. The company and its chairman -- Singapore-based Nordic Maritime Pte. Ltd and Morten Innhaug, respectively -- were originally fined more than $30 million by an administrative law judge, who also revoked the company’s export privileges until the fine was paid, according to the order. But Cordell Hull, BIS’s acting undersecretary, said the fine was too high, ordering the judge to review its decision to impose the penalty.
The Department of Commerce denied Zimo Sheng’s export privileges after Sheng was convicted of violating the Arms Export Control Act, Commerce said in a March 16 order. Sheng attempted to illegally export to China the “upper assembly” for a Glock 48 pistol, which is listed on the U.S. Munitions List. Sheng was convicted Dec. 13, 2018, and sentenced to 40 months in prison and a $200 fine. After the sentencing, Commerce said Sheng left the U.S. and his “current whereabouts are unknown” to the Bureau of Industry and Security. Commerce revoked Sheng’s export privileges for 10 years from his date of conviction.
The Commerce Department Bureau of Industry and Security added 24 entities to its Entity List and revised five existing entries, the agency said in a notice. The new entries include companies in China, Iran, Pakistan, Russia and the United Arab Emirates; and the revised entries are for entities in France, Iran, Lebanon, Singapore and the United Kingdom. The changes take effect March 16. All shipments now requiring a license as a result of this rule that were on dock for loading or aboard a carrier to a port as of that date may proceed to their destinations under the previous eligibility, BIS said.