Some companies are concerned about the possibility of the Commerce Department issuing major export control actions during the COVID-19 pandemic, which they say will compound economic hardships caused by the mitigation response to the highly contagious disease. In interviews, industry officials said they are unsure about their ability to manage sweeping regulatory changes even as they acknowledge that a moratorium on export control actions is unlikely.
The Commerce Department Bureau of Industry and Security is still planning to hold its annual conference in Washington, D.C., this summer, and officially opened registration for the event on April 30. BIS said it is “closely monitoring” COVID-19 updates and will notify industry of any changes to the June 29-July 1 conference. The conference's agenda includes sessions on license exceptions, semiconductors, end-use checks, updates on export controls, export enforcement and more.
The COVID-19 pandemic is causing “significant disruption” for the Wassenaar Arrangement, leading to the cancelation of at least one meeting and creating uncertainty about whether the group can remotely vote on new export controls, two Commerce Department officials said. Wassenaar was forced to cancel its April Experts Group meeting -- which normally addresses issues related to its lists of controlled items -- and is unsure if global travel restrictions will force cancellations of future meetings in June and its annual plenary session in December.
The Commerce Department has drafted a regulation that will address the ability of U.S. companies to participate in 5G standards setting bodies involving Huawei, a top Commerce official said. The rule is still being discussed within Commerce and has not yet been cleared for interagency review, Matt Borman, Commerce’s deputy assistant secretary for export administration, said during an April 29 Information Systems Technical Advisory Committee meeting.
The Commerce Department Bureau of Industry and Security is working on guidance to help industry comply with the expanded licensing requirements for exports to China announced earlier this week (see 2004270027). The guidance will address new restrictions on exports intended for military users and uses, said Matt Borman, Commerce deputy assistant secretary for export administration. The rule expands the definition for military end-use and will cover military end-users in China, placing more of a compliance burden on industry.
The Commerce Department eliminated its license exception for civil end-users (CIV) in an effort to cut exports to countries pursuing civil-military fusion (see 1904260018), the agency said in a notice. The change, which was expected for nearly a year (see 1907180037), will remove authorizations to export certain controlled items to most civil end-users for civil end-uses in Country Group D:1. The change takes effect June 29.
The Commerce Department is considering restricting the number of destination countries that are authorized to receive certain U.S. re-exports that are controlled for national security reasons, the agency said in a notice. The proposed rule would amend the license exception for Additional Permissive Reexports (APR) by removing nations in Country Group D:1, including China, from being eligible to receive those re-exports, Commerce said. The rule would remove APR license eligibility from more than 20 countries. Comments are due June 29.
The Commerce Department’s unclear rollout of an export control on geospatial imagery software is causing industry confusion and could lead to broad, unintended impacts on exports of certain artificial intelligence, industry representatives said in interviews. If unchanged, the rule could severely impact a range of companies in the geospatial field, they said, creating the type of broad consequences Commerce officials hoped to avoid (see 1911070014).
Senate Armed Services Committee Chairman Jim Inhofe of Oklahoma and five other Senate Republicans urged the departments of Commerce, Defense, Energy and State Tuesday to “issue regulations as soon as possible confirming that U.S. participation in 5G standards-setting is not restricted by export control regulations” in order to ensure U.S. technology “continues to form the core of 5G foundational technology.” U.S. tech leaders “have been constrained from full participation in 5G standards-setting bodies” since Commerce's Bureau of Industry and Security’s addition of Chinese equipment maker Huawei to its entity list, the senators wrote Energy Secretary Dan Brouillette, Defense Secretary Mark Esper, Secretary of State Mike Pompeo and Commerce Secretary Wilbur Ross. “We are deeply concerned about the risks to the U.S. global leadership position” in 5G “as a result of this reduced participation, and the economic and national security implications of any diminished U.S. role in 5G.” When U.S. export controls “restrict U.S. companies from participating in standards-setting bodies,” Huawei “is well positioned to fill any gaps,” the senators said. The other GOP senators signing the letter were: John Cornyn of Texas, Tom Cotton of Arkansas, Mike Crapo of Idaho, Marco Rubio of Florida and Todd Young of Indiana.
U.S. restrictions on exports of personal protective equipment are not expected to have a significant impact on U.S. industry, particularly because most U.S. companies produce those goods overseas, trade observers said. Companies have been more heavily impacted by recently announced Chinese restrictions on medical exports, which have caused customs delays and a backlog of shipments, the U.S.-China Business Council said.