A revision to U.S. export regulations included in the fiscal year 2023 defense spending bill could lead to new end-use screening obligations for U.S. people and companies operating abroad, Akin Gump said in a Jan. 5 client alert. Although it remains unclear how and when the Bureau of Industry and Security will implement the change, the law firm said it could lead to new restrictions on activities that support foreign military, security or intelligence services even if the activity doesn’t involve technology subject to the Export Administration Regulations.
The Commerce Department published its fall 2022 regulatory agenda for the Bureau of Industry and Security, including one new rule that will finalize new chip export controls against China and others that could revise chemical weapons reporting requirements, the Export Administration Regulations and the Entity List.
Taiwan this week expanded its export controls against Russia and Belarus to cover a range of new items that may be used for Russia’s war in Ukraine, including “high-tech” military items. The island added 52 new items to the export control list, saying they are “primarily related” to “nuclear energy substances,” chemicals, machine tools and other “miscellaneous goods and materials.” The changes took effect Jan. 4.
New Manufacturing USA Institutes can help the semiconductor industry reduce costs and accelerate innovation, particularly in emerging technology areas that could soon be subject to export controls, chip companies and industry representatives said in comments to the National Institute of Standards and Technology. They also said the Commerce Department should bar foreign entities from working with Manufacturing USA Institutes if they are subject to U.S. export restrictions or have operations in certain countries, including China.
The U.S. needs to “act quickly” to build a multilateral consensus on China export controls or risk other countries simply filling the vacuum left by the U.S. in China’s semiconductor market, two export control and national security policy experts said in a Dec. 30 piece for Foreign Affairs. Although U.S. officials have said they are confident an agreement with allies will soon be completed, the authors said it remains unclear whether the deal will create a “genuine, multilaterally controlled chokepoint” for advanced chip technologies.
Companies should closely review the State Department's recently released compliance program guidelines to make sure their own programs are up to date, Hogan Lovells said in a December alert. The firm also said the guidelines, which outlined key elements of an effective compliance program (see 2212060015), give the defense industry, universities and others involved in activities controlled by the International Traffic in Arms Regulations “insight into the regulator’s compliance expectations.” Because the guidelines are similar to those issued by the Bureau of Industry and Security and the Office of Foreign Assets Control, “organizations should expand their policies and procedures to confirm that these elements are captured if they engage in ITAR regulated activities,” the law firm said.
A bill that could move U.S. export control authority from the Commerce Department to the Defense Department reflects a lack of understanding of the export control licensing process and raises a number of questions about the future of U.S. export control regulations, Braumiller Consulting Group said in a recent post. Congress may want to devote more effort to holding Commerce and the Bureau of Industry and Security “accountable” under the Export Control Reform Act “rather than attempting to fix something that is working fine,” said the post, written by Craig McClure, a senior trade adviser with the firm.
The Bureau of Industry and Security is seeking public comments on the impact of the Chemical Weapons Convention on commercial activities during 2022, BIS said in a notice. The agency is specifically looking for feedback on how activities involving Schedule 1 chemicals were affected to determine whether CWC decisions "harmed" the “legitimate commercial activities and interests of chemical, biotechnology, and pharmaceutical firms” this year. Comments are due Jan. 23.
The Bureau of Industry and Security on Dec. 20 completed an interagency review that could implement certain export control decisions agreed to at the multilateral Australia Group and place new controls on certain marine toxins, plant pathogens and biological equipment (see 2212090004). BIS sent the rule to the Office of Information and Regulatory Affairs Dec. 7 after previously sending it to OIRA Sept. 9, where it was completed with some changes (see 2209120002). The rule, if published, could finalize May-proposed controls on four dual-use biological toxins that BIS said can be weaponized to kill people or animals.
Several U.S. technology companies recently disclosed their ongoing efforts to comply with new export restrictions against China (see 2210070049), with some determining the regulations will have little effect and others saying the uncertainty is leading to business interruptions.