Companies should expect the Treasury Department to aggressively penalize violators of its upcoming outbound investment prohibitions relatively soon after those rules are finalized, lawyers with Kirkland & Ellis said this week. They also said American chip companies and other technology firms are considering inserting new outbound investment-related warranties in their contracts and may start pulling out of existing investment deals that could soon be captured by the new prohibitions.
The Bureau of Industry and Security has completed hiring leaders as part of a restructuring of its export administration offices, the agency announced July 30. The latest hire, Julia Khersonsky, a former State Department foreign affairs officer, joined the Bureau of Industry and Security this month as the agency’s first deputy assistant secretary for strategic trade, where she will oversee the offices of National Security and Technology Transfer Controls, Nonproliferation and Treaty Compliance, and Exporter Services. BIS earlier this year appointed longtime BIS officials Matt Borman to be the agency’s new principal deputy assistant secretary and Eric Longnecker to be its new deputy assistant secretary for technology security (see 2405070005). BIS announced its internal restructuring plans at its annual conference in March.
Senate Minority Whip John Thune, R-S.D., urged Senate Majority Leader Chuck Schumer, D-N.Y., last week to schedule Senate floor consideration of the FY 2025 National Defense Authorization Act (NDAA) “in the very near future.”
The Office of Foreign Assets Control this week sanctioned five people and seven entities across mainland China, Hong Kong and Iran for helping to provide key parts to Iran’s missile and drone programs. OFAC said they procure accelerometers, gyroscopes and other components that “serve as key inputs” for Iranian weapons programs, which that country uses to produce drones for Russia and its “proxies” in the Middle East.
The U.S. should start designating Chinese banks under a December executive order that authorizes secondary sanctions on foreign financial institutions that help facilitate Russia-related transactions, a group advocating for democracy in Hong Kong said in a new report this month.
The Pentagon should drop its outdated approach to technology security and export controls and allow American defense companies to work more efficiently with U.S. allies, a Defense Department advisory committee said in a new report this month. The committee said the agency needs major revisions to the way it treats restrictions under the International Traffic in Arms Regulations, warning that DOD is “failing to address shortcomings in international engagement amid a rapidly evolving global security landscape.”
The Federal Communications Commission is launching a voluntary labeling program for wireless consumer “Internet of Things” products that have been certified and tested to meet FCC IoT cybersecurity standards, the commission said in a final rule released July 29.
A new report accompanying the Senate Appropriations Committee’s FY 2025 Commerce-Justice-Science Appropriations Bill calls for the Bureau of Industry and Security to conduct several export control reviews, including one that identifies regulatory “gaps” that have allowed controlled U.S. technology, especially semiconductor technology, to flow to China without a license (see 2407260054).
Sen. John Kennedy, R-La., said last week he remains concerned by recent news reports showing China has found ways around U.S. export controls on advanced computing chips.
Proposed U.S. export controls issued by the Bureau of Industry and Security last week are meant to “prevent hack-for-hire business models from circumventing our human rights-based export controls,” including U.S. restrictions on “cyber-intrusion tools,” said Thea Kendler, the agency’s assistant secretary for export administrations. In a news release announcing the proposed rules, Kendler said the restrictions could improve “controls on activities supporting foreign police and security services, including those known to violate human rights.”