The Commerce Department Bureau of Industry and Security's Office of Antiboycott Compliance settled with a U.S.-based company for $54,000 after the company committed 27 violations of the Export Administration Regulations, enforcement records show. An order signed by Commerce May 20 says Zurn Industries, LLC completed transactions from the U.S. to Qatar and the United Arab Emirates related to actions that “would have the effect of furthering or supporting a restrictive trade practice or unsanctioned foreign boycott.” Zurn did not report “receipts of these requests” to Commerce, as required by law, the records said. Zurn must pay the fine to Commerce within 30 days of the order or face additional charges, and may have export licenses or privileges revoked. If Zurn does not pay the fine, its “export privileges” will be denied for one year.
The temporary general license issued by the U.S. after it added Huawei Technologies to its Entity List has offered “almost no relief” for the U.S. semiconductor industry, which has been hurt severely by the move, said John Neuffer, president and CEO of the Semiconductor Industry Association. Speaking on U.S.-China trade issues at a Washington International Trade Association discussion on May 29, Neuffer underscored the importance of the Chinese market to U.S. semiconductor exporters and called on the Trump administration to more tactfully negotiate with China. “We would like the U.S. government to better balance its national security concerns with its economic security concerns,” Neuffer said.
The Commerce Department plans to roll back regulations that make it easier for U.S. exporters to sell goods that have both civilian and military purposes, making it more difficult for China to acquire U.S. technology, according to a May 23 report by Politico. As part of its plans, Commerce is considering ending a general policy of approving export licenses for products bound for civilian use, instead switching to reviews on a “case-by-case basis,” the report said. Commerce’s plans include “four regulatory actions” that target China under the Export Control Reform Act, including options that would revoke two license exceptions relating to shipping restricted technology to China and an option that would expand a ban on U.S. defense-related exports to China, the report said.
The Department of State published its spring 2019 regulatory agenda. The agenda includes a new mention of a proposal to amend the International Traffic in Arms Regulations to include definitions for "activities that are not exports, re-exports, or retransfers." The activities include "launching items into space; providing technical data to U.S. persons within the United States or within a single country abroad; and moving a defense article between the states, possessions, and territories of" the U.S., State said. The proposal also "removes from ITAR licensing requirements the electronic transmission and storage of unclassified technical data via foreign communications infrastructure when the data is secured sufficiently to prevent access by foreign persons." Under the proposal, State would also amend the ITAR to create definitions for “access information” and revise definitions of release to include “the improper provision of access information to foreign persons.” State is aiming to issue the proposal in September, it said.
The agenda also includes a rule that would revise Categories I, II and III of the U.S. Munitions List to include items that gives the U.S. a “critical military or intelligence advantage or otherwise warrant control at the highest level.” The rule states that exports of “commercially available firearms and ammunition,” removed from Category I and III, will continue to be controlled under the Bureau of Industry and Security’s Commerce Control List. State said the transition from the Munitions List to the CCL “will result in a net reduction in regulatory burden for the affected manufacturing and export community.” State aims to issue the rule in May 2019, it said.
The Department of Commerce published its spring 2019 regulatory agenda for the Bureau of Industry and Security. The agenda continues to mention an upcoming a long-awaited proposed rulemaking involving parties’ responsibilities under the Export Administration Regulations in a routed export transaction, saying the proposal will be published in May 2019. Sharron Cook, a senior policy export analyst for BIS, said in April the rule change will help solve some of the bigger frustrations with the current regulations faced by export forwarders (see 1904170064). BIS is aiming to issue the proposal in May, it said.
Foreign manufacturers need to be aware that their products may be covered by the Commerce Department's Bureau of Industry and Security's listing of telecommunications equipment manufacturer Huawei on the Entity List, even if they aren't manufactured in the U.S., according to an alert by law firm Sheppard Mullin. U.S. export controls on Huawei and its affiliates may apply to a substantial scope of foreign goods that contain more than 25 percent U.S.-origin content. Under the BIS de minimis rule, products are subject to the Export Administration Regulations -- and consequently new license requirements for Huawei -- if more than one-fourth of the product is composed of U.S.-origin content that is also controlled under the EAR, except for “EAR99 items” or products that do not require a license, the alert said.
The Commerce Department's Bureau of Industry and Security said the Regulations and Procedures Technical Advisory Committee (RPTAC) scheduled a partially open meeting June 4 in Washington. The public session will include an export enforcement update, regulations update, working group reports, an Automated Export System (AES) update, and presentations of papers or comments by the public. The open session will be accessible via teleconference to 25 participants on a first-come, first-served basis. To join via teleconference, submit inquiries by May 29 to Yvette Springer at Yvette.Springer@bis.doc.gov. A limited number of seats will also be available for the public session.
The Commerce Department’s Bureau of Industry and Security is adding five new national security-related technologies to the Export Administration Regulations’ Commerce Control List, according to a notice in the Federal Register. The additions stem from changes made to the Wassenaar Arrangement’s List of Dual-Use Goods and Technologies agreed to during the 2018 Plenary meeting, the notice said. The changes add “recently developed or developing technologies” that are “essential” to U.S. national security: “discrete microwave transistors,” “continuity of operation software,” “post-quantum cryptography,” “underwater transducers designed to operate as hydrophones” and “air-launch platforms.” The notice is scheduled for publication and the changes take effect on May 23.
The Commerce Department’s Bureau of Industry and Security is amending the Export Administration Regulations (EAR) to remove Venezuela from Country Group B and add it to Country Groups D:1-4, which “lists countries of national security concern” and adds new licensing requirements while restricting the use of certain license exceptions for exports. The changes take effect May 24.
The Trump administration's decision to examine emerging technologies as candidates for export controls could cost U.S. businesses tens of billions of dollars and threaten thousands of jobs, the Information Technology and Innovation Foundation said in a new report. If substantial export controls are enacted, the report warns, firms “could lose $14.1 [billion] to $56.3 billion in export sales over five years, with missed export opportunities threatening from 18,000 to 74,000 jobs.”