Less US-EU Collaboration Could Mean More Export Control Divergence, Lawyers Say
The Trump administration’s plans to reduce export control cooperation with allies, particularly the EU, could lead to more differences between the two jurisdictions' export systems, especially for controls targeted toward China, lawyers said this week.
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Bureau of Industry and Security Undersecretary Jeffrey Kessler earlier this year said he planned to pull back from traditional export control dialogues with allies, specifically mentioning the U.S.-EU Trade and Technology Council (see 2503280039). Countries have started in recent months to introduce a greater number of unilateral emerging technology controls because of issues plaguing the multilateral Wassenaar Arrangement (see 2405300063), said Tobias Ackermann, a Germany-based trade lawyer with Blomstein, and a BIS withdrawal from the TTC “enhances” that trend.
“This lack of coordination will lead to a more fragmented system of export controls,” he said during this week's Embargoed! podcast, hosted by Miller & Chevalier. “Previously, you could say that the U.S. and the EU had more or less the same rules -- the U.S. going a bit further, perhaps, in some respects. But I'm not sure whether that will hold true for the future.”
Caroline Watson, an export controls and sanctions lawyer with Miller & Chevalier, said a change “away from the traditional dialogue” between the U.S. and the EU could affect how the two regions approach controls against China. Watson noted that in recent months, BIS has introduced China-focused rules that placed license requirements on foreign-made items made with U.S. chip technology, and the agency also published the artificial intelligence diffusion rule in January, which could place new restrictions on the types of advanced semiconductors that can be sent to certain EU countries (see 2501130026).
EU lawmakers have criticized the AI diffusion rule, and the European Commission in February said BIS had so far declined to discuss possible changes (see 2502200051).
“This is an area where I think we were expecting to see a lot more collaboration with the EU, because the controls, as they're written, currently do have some significant implications for those operating in the EU,” Watson said.
She said it’s “to be determined how this plays out if the dialogue breaks down,” including whether the U.S. will ease controls “with respect to Europe that are tied to China.”