Following a year of hearings and demands for reams of disclosure from government and industry, the House Select Committee on China released its work product for 2023. The 53 page report enumerated recommendations to address Beijing's human rights violations and military modernization, focusing on halting the genocide of the Uyghur population and curtailing profits from forced Uyghur labor. Additionally, it aims to build a more credible deterrent in the Taiwan Strait.
"Don't try to bullshit a bullshitter," admonished Chairman Brian Mast (R-FL), as Assistant Commerce Secretary for Export Administration Thea Kendler responded to his subcommittee's questions on decision making in the Bureau of Industry and Security. Observers who thought Oversight and Accountability Subcommittee of the House Committee on Foreign Affairs hearing "Reviewing the Bureau of Industry and Security, Part II: U.S. Export Controls in an Era of Strategic Competition," with Ms. Kendler and Assistant Secretary for Export Enforcement Matt Axelrod would inform the conversation on enforcement priorities and resources may have been disappointed December 12, as the committee's questioning centered on a deal removing China's Ministry of Public Security’s Institute of Forensic Science (IFS) from the entity list.
A report by the House Foreign Affairs Committee highlights shortcomings in the U.S. export control system and calls for reforms, legislative and administrative. Drawing extensively on the work of former Defense Department Export Control Official Stephen Coonen, the report offers a preview of the reception BIS officials can expect in next week's hearing. "Both the Trump and Biden administrations, principally from the White House, have rightly begun exerting more control over the Commerce Department’s Bureau of Industry and Security (BIS). However, no administration will be able to fully leverage the power of export controls to protect U.S. national security without Congressional action. Now, Congress must solidify the efforts of successive administrations so our future will be better secured," the authors assert. Central to the committee's findings is the concern that BIS, under the Commerce Department, has been too lenient in granting licenses for dual-use technology transfers to China, failing to adequately consider the likelihood of military or surveillance use.
A bipartisan group of 32 senators – including the Senate Finance Committee leaders – is calling on President Biden to reversing a decision to drop long-standing US positions at the World Trade Organization on digital trade. The US Trade Representative’s Office recently pulled back from supporting provisions on the free flow of data across borders and prohibiting forced localization of data as part of ongoing e- commerce negotiations at the WTO. “Retreating from our longstanding principles without offering a viable alternative does not help US workers, it does not help US consumers, it does not help US businesses, and it does not help US allies; it only helps our adversaries,” the senators wrote in a letter to President Biden.
n a speect to the 40th International Conference on the Foreign Corrupt Practices Act, the Justice Department's FCPA Chief announced an anti-bribery initiative to drive cross-border collaboration in fighting foreign bribery. Acting Assistant Attorney General Nicole Argentieri's comments included the announcement of the International Corporate Anti-Bribery initiative, or ICAB, which will be driven by three experienced prosecutors, who will build on existing bilateral and multilateral partnerships, as well as form new partnerships.
Defense Chiefs of the AUKUS military-industrial alliance met at the Defense Innovation Unit Headquarters at Moffett Field in California to discuss progress for the partnership, especially Pillar II, the broad based defense industrial collaboration. The three nations are also establishing an AUKUS Industry Forum with trilateral government and industry representatives to help inform policy, technical and commercial frameworks to facilitate the development and delivery of advanced capabilities. The initial meeting of that forum will occur in the first half of 2024. In a Joint Statement, the Secretaries and Deputy Prime Minister reaffirmed the three nations' commitment to maximize the strategic and technological advantage of AUKUS . They agreed that advancing AUKUS requires continued commitment to streamlining defense trade controls and information-sharing while minimizing policy and financial barriers across public and private sectors.
Commerce Secretary Gina Raimondo announced plans to create an Export Control Advisory Panel “to help us get our export controls to be more effective by having a continuous engagement with industry.” The announcement was included in her remarks to the Fall meeting of the President’s Export Council (PEC) November 29th which included a recap of AI initiatives and the announcement of a mission to the ASEAN region in March.
Doing it's best to avoid the news cycle with a release the Friday after Thanksgiving, the USTR released a final repudiation of US objections to Canada's dairy tariff-rate quota (TRQ) calculations by the treaty's dispute settlement panel. In the report, the panel found that Canada’s measures are not inconsistent with the USMCA provisions cited by the United States. "I am very disappointed by the findings in the USMCA panel report released today on Canada’s dairy TRQ allocation measures,” Ambassador Katherine Tai said. The USMCA panel issued its final report on November 10, 2023, and pursuant to Article 31.17.6 of the USMCA, the parties made the panel report public on November 24, 2023.
The 13 countries negotiating the US-led Indo-Pacific Economic Framework trade pillar said at the close of their Summit that progress is being made, even though they were not able to not able to close out the trade deal. The acknowledgment from trade ministers came as President Biden announced that talks are completed on the other three pillars – supply chains, clean energy and anti-corruption. The Administration had hoped the trade pillar would be done as well in time for the Asia Pacific Economic Cooperation meets taking place this week in San Francisco. President Biden spent his time in San Francisco stressing US longstanding commitment to a region often overshadowed by China.“We aren’t going anywhere. For decades, America’s enduring commitment to the region has been a springboard that’s enabled growth – transformative growth, ensured the open flow of commerce, and lifted millions of people out of poverty,” he said.
Congress should consider creating a single export licensing system to strengthen export controls on China, the US-China Economic and Security Review Commission said in its annual report to Congress released last week. In its report, the commission urged Congress to consider a number of steps to make it more difficult for China to evade US controls. First, the report recommends that Congress hold hearings to evaluate the potential for establishing a single export licensing system.
Assistant Secretary of Commerce for Export Administration Thea Kendler held a briefing November 6 to discuss the rules issued October 17th. She explained the new parameters, associated license requirements, the new notified advanced computing license exception, and some of the measures put into place to address possible circumvention of the controls.
The Bureau of Industry and Security (BIS) is rescheduling the Update Conference on Export Controls and Policy from November 28–30, 2023 to March 27-29, 2024.
Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions on a sweeping roster of individuals and entities from People’s Republic of China (PRC), Türkiye, and the United Arab Emirates (the UAE) abetting Russia’s war against Ukraine by providing Russia with technology and equipment from third countries. The U.S. Department of State is also issuing nearly 100 sanctions today targeting Russia’s future energy production and revenue, metals and mining sector, defense procurement, and those involved in supporting the Russian government’s war effort and other malign activities.
Four individuals were arrested, and an indictment and criminal complaint were unsealed this week regarding two separate conspiracies to unlawfully export controlled, dual-use technologies to Russia. October 31, a criminal complaint was unsealed, and a Brooklyn, New York, resident and two Canadian nationals were arrested in connection with a global procurement scheme in which the defendants used two corporate entities registered in Brooklyn to unlawfully source and purchase dual-use electronics on behalf of end-users in Russia, including companies affiliated with the Russian military. Separately, a Brooklyn resident was arrested, and a four-count indictment was unsealed alleging an illegal exports scheme to procure dual-use electronic components for entities in Russia involved in the development and manufacture of drones for the Russian war effort in Ukraine.
The U.S. Department of Commerce is pausing for approximately 90 days the issuance of new export licenses involving certain firearms, related components, and ammunition under its jurisdiction and the provision of new export assistance activities for such products to all non-governmental end users worldwide, apart from those in certain destinations.
US and European Union negotiators were unable to reach agreement on a global steel arrangement in time for Friday’s leaders summit, but they agreed to continue negotiations and hold off on tariff hikes in the meantime. Negotiators had hoped to have a deal in hand for leaders to endorse at the White House summit, but officials said more work is needed before both sides can support agreements on steel and aluminum and energy subsidies. President Biden’s meeting with European Council President Charles Michel and European Commission chief Ursula von der Leyen ended up being primarily focused on international issues, including the war between Israel and Hamas and ensuring continued support for Ukraine in its fight against Russia's invasion.
On November 6, 2023, Assistant Secretary for Export Administration Thea D. Rozman Kendler will conduct a public briefing on the two interim final rules and one final rule: “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” and “Export Controls on Semiconductor Manufacturing Items,” which were both filed for public inspection at the Federal Register on October 18, 2023. BIS published an associated final rule, “Entity List Additions,” in the Federal Register on October 19, 2023.
There is a wide disparity among countries when it comes to access to COVID-19 testing and medicines, largely based on income, the International Trade Commission found in its highly-anticipated report released yesterday. Other key factors affecting demand and availability including access to intellectual property, prices and affordability, regulatory approvals, healthcare infrastructure and the healthcare priorities of governments, according to the report.
On Tuesday 17 October, the Commerce Department tightened controls over exports of AI-specific semiconductors. This move makes it more challenging for U.S. firms like Nvidia and Intel to market their current products in China or to launch new products as workarounds. Addressing oversights: This step is designed to mend potential oversights in the export regulations declared last year. Those regulations had been met with notable resistance from the international semiconductor sector and increased strains with Beijing.
At the recent Defense Trade Advisory Group Meeting, Timothy A. Betts, the Acting Deputy Assistant Secretary, presented an overview of the significant developments and accomplishments of the Directorate of Defense Trade Controls (DDTC), as well as the announcement of his replacement by Compliance Director Jae Shin.
