A U.S. appeals court on July 8 affirmed a 2020 District of Columbia court ruling dismissing FedEx’s lawsuit against the Bureau of Industry and Security, saying the shipping company failed to show BIS acted outside its authority. The court also rejected FedEx’s claims that the agency was using the Export Administration Regulations to apply overly burdensome liability standards on carriers and penalize them even when carriers do not have knowledge of violations.
The Census Bureau soon will launch a fatal alert for filers in the Automated Export System if they are exporting a controlled item without a license, the agency said in a July 7 email to industry. Beginning July 13, the new feature won't allow export filings to proceed if they incorrectly list License Requirement NLR (No License Required) for shipments that require a license under the Export Administration Regulations.
It’s unclear whether the Bureau of Industry and Security's decision to stop differentiating between emerging and foundational technologies under the Export Control Reform Act (see 2205200017) will have any real impact on export controls, law firms said. Torres Trade Law said this month that “only time will tell” if the change allows BIS to impose the controls more quickly, but companies should closely monitor the pace of upcoming restrictions, especially if they’re dealing in “cutting-edge technologies.”
The Bureau of Industry and Security on July 7 sent an interim final rule for interagency review that will clarify how export controls are applied in the context of international standards-setting bodies. The rule will specifically authorize certain items and “releases of technology” to entities on the Entity List “for standards setting or development in standards organizations,” BIS said.
Although Chinese companies with little international exposure may decide to violate export restrictions against Russia, most of the larger companies likely won’t take the risk, experts said. So far, most Chinese companies are complying with the sanctions and only continuing to buy Russian oil and gas, the experts said, despite strong opposition to Western sanctions by the Chinese government.
The U.S. should closely monitor Chinese attempts to steal sensitive information and technology from universities, but not in a way that will sacrifice open academic exchanges, said Christine Fox, a former Defense Department official, speaking during a July 7 Brookings Institution event. She said the threat of trade theft from China is real, but the number of foreign Chinese students and researchers who try to steal technology is just a small percentage of the total.
The Bureau of Industry and Security's recent shift in enforcement policies and strategy could “significantly” increase risks for companies, law firms said, especially those based in the U.S. The changes could cause businesses to invest more in compliance, they said, and could lead to a more aggressive BIS enforcement posture.
The Bureau of Industry and Security posted the presentation materials from panels during its annual update conference last week. The panels included update sessions on export enforcement (see 2207010010, 2207010025 and 2206300069), recently implemented export controls (see 2207010015), the foreign direct product rule (see 2206300005) and the Directorate of Defense Trade Controls’ regulations (see 2206300029).
The Bureau of Industry and Security this month updated its “Don’t Let This Happen To You” guidance, which includes summaries and case examples of past export control investigations. The 65-page document also includes an overview of the BIS Office of Export Enforcement, the agency’s various authorities and a section on BIS enforcement priorities, which specifically names China, Russia, Iran and North Korea.
The Bureau of Industry and Security is still reviewing export controls on facial recognition software, surveillance-related products and other goods controlled for crime-control reasons, but it may move forward on the rule soon, a Commerce Department official said.