The Bureau of Industry and Security has had “more than enough time” to issue a final version of its October China chip export controls, which need to be “strengthened” and “vigorously enforced” to maintain American semiconductor leadership, Sen. Marco Rubio, R-Fla., said in a May 30 letter to Commerce Secretary Gina Raimondo. Rubio asked the agency when it plans to issue the final rule, what changes will be made, whether BIS had “delayed” finalizing the rule and more.
Several companies this month disclosed potential export control or sanctions violations or updated the status of their current disclosures, including an information technology services company, an investment firm and a digital asset services company. The potential violations involve a business trying to exit the Russian market, a company potentially illegally sending export-controlled data and a firm waiting years for a response to two sanctions disclosures.
The Commerce Department should amend several portions of its proposed guardrails on recipients of Chips Act funding, including measures that could prevent the U.S. chip industry from participating in international standards bodies or inhibit “routine” business activities, trade groups and technology companies said in comments released this week. Some said Commerce should also limit which companies qualify as “foreign entities of concern” and revise the rule’s proposed definition for “legacy semiconductor” to more closely align with export controls.
Ross Roggio of Stroudsburg, Pennsylvania, was convicted for a host of crimes including illegally shipping export-controlled firearms parts to Iraq and operating an illegal weapons manufacturing plant in Kurdistan, DOJ announced. Roggio was also convicted of torture and for arranging for Kurdish soldiers to abduct an Estonian citizen and detain him at a Kurdish military compound, where Roggio tortured the man. The victim worked at a weapons factory Roggio was developing in Iraq to manufacture M4 rifles and Glock pistols.
The Bureau of Industry and Security this week suspended the export privileges of one person for illegally exporting technology to Hong Kong, eight people for illegally exporting guns and ammunition to Mexico and two people for illegally sending firearms to the Dominican Republic.
The U.S. announced a host of new Russia-related sanctions and export controls last week, including more than 300 sanctions designations by the Treasury and State departments and an expansion of Commerce Department export controls on items destined to Russia and entities supporting the country’s military. The measures, some of which were coordinated with allies as part of the Group of 7 summit in Japan, aim to “further undermine Russia’s capacity to wage its illegal aggression” in Ukraine, the G-7 countries said in a May 19 joint statement.
The Bureau of Industry and Security fined a United Arab Emirates company $283,500 for failing to report boycott requests in violation of BIS’ antiboycott regulations. Dubai-based Regal Beloit FZE, a subsidiary of U.S. manufacturer Regal Beloit America, didn’t report 84 requests from a Saudi Arabian customer to stop importing Israeli goods “in fulfillment” of the customer’s purchase order, BIS said.
The Bureau of Industry and Security announced a host of new Russia-related export controls, including measures that expand its Russian and Belarusian Industry Sector Sanctions, broaden its foreign direct product rule restrictions and add 71 new entities to the Entity List. Some of the changes, outlined in a 106-page final rule effective May 19, “better align” U.S. export controls with allies, place new export license requirements on additional “industrial items” and chemicals destined to Russia, and impose controls on certain electrical parts destined to Iran for use in unmanned drones. The Entity List changes, also effective May 19, add entities in Armenia, Kyrgyzstan and Russia for either supporting Russia’s military sector, diverting U.S.-controlled items to Russia or preventing a U.S. end-use check.
The U.S. should avoid placing export controls on cloud computing services to try to prevent Chinese companies from using a loophole that allows them to access controlled semiconductors, researchers said. Georgetown’s Center for Security and Emerging Technology and the Center for a New American Security explored this strategy in a new report released this week but said export controls don't “appear feasible and may have adverse consequences.”
A series of export control indictments announced this week, including several for illegal shipments to China and Russia, only scratched the surface of prosecutions expected to be brought as part of the new Disruptive Technology Strike Force, said Matthew Axelrod, the Bureau of Industry and Security's top export enforcement official. “It’s just the beginning,” Axelrod said during a May 17 law conference hosted by the American Bar Association, Mayer Brown and American University. “I think you can expect to continue to see actions come out from the strike force as this work continues.”