The Bureau of Industry and Security fined U.S.-based Seagate Technology $300 million for allegedly violating U.S. export controls against Huawei, the “largest standalone administrative penalty in BIS history,” the agency said. The agency fined the company and its branch in Singapore for selling millions of export-controlled hard disk drives to Huawei in violation of BIS’ foreign direct product rule. As part of a settlement agreement, Seagate agreed to a “mandatory multi-year audit requirement,” BIS said, and could face a five-year export denial order if it violates the terms of the agreement. The settlement comes about 18 months after Senate Republicans urged BIS to penalize Seagate for “likely” violating U.S. export controls against Huawei. Seagate said it received a proposed charging letter from BIS in August.
The Bureau of Industry and Security issued a new set of policy "clarifications" this week that it hopes will increase the number of voluntary self-disclosures (VSDs) it receives for serious export violations. One clarification says the agency could increase penalties on companies that fail to disclose a “significant” potential violation, while another clarification could reward companies that tip off BIS about their competitors’ wrongdoings.
The Bureau of Industry and Security recently suspended the export privileges of four people, including two for making false statements to the government and two others for illegally exporting guns or ammunition to Mexico.
The Bureau of Industry and Security last week completed its interagency review of new proposed export controls on automated peptide synthesizers. The rule, sent for review at the Office of Information and Regulatory Affairs March 29 (see 2303300003) and completed April 12, could propose new restrictions on certain instruments for the automated synthesis of peptides that could be used to produce biological weapons (see 2209120021).
The U.S. needs to pour more funding and resources into the Bureau of Industry and Security to allow it to better address China-related national security risks, said Gregory Allen, a technology policy expert with the Center for Strategic and International Studies and a former Defense Department official. Although BIS is charged with implementing some of the U.S.’s most sensitive trade restrictions, its export control functions have “had a flat budget for the better part of a decade,” Allen said during a U.S.-China Economic and Security Review Commission hearing last week. “It has been profoundly neglected” and subject to an “appalling mismanagement of resources.”
The Bureau of Industry and Security should reform its Entity List process and its licensing procedures to more effectively prevent China from acquiring sensitive U.S. technologies, said Cordell Hull, former acting BIS undersecretary. Hull also suggested that BIS increase its penalties for export violations, and said he isn’t convinced creating a new multilateral export control regime is the best way to counter China.
The Bureau of Industry and Security is looking for new candidates to serve on each of its six technical advisory committees, the agency said this week. The TAC members -- selected from industry, academia and government -- will help advise the Commerce Department on export controls and may serve terms of not more than four consecutive years. Applicants should send a resume and other required information to Yvette.Springer@bis.doc.gov by June 13.
The U.S. this week announced new Russia-related trade restrictions, adding 28 entities to the Commerce Department’s Entity List and more than 100 entries to the Treasury Department’s Specially Designated Nationals List. The measures target people and companies either operating in Russia, aiding the country’s war against Ukraine or helping Moscow evade sanctions.
The Bureau of Industry and Security this week renewed the temporary denial order for Russian airline Ural Airlines, whose export privileges were suspended for 180 days in October after BIS said it violated U.S. export controls by flying multiple aircraft to Russia without required licenses (see 2210170009). BIS said Ural continues to fly planes in violation of the Export Administration Regulations, including flights within Russia and to and from Kyrgyzstan and Tajikistan. The agency renewed the order for another 180 days from April 10.
The White House this week announced a new “whole-of-government approach” to tackle illegal fentanyl trafficking, including plans to impose more sanctions against drug traffickers and prevent them from accessing American raw materials and technology.