A multinational semiconductor company may have violated U.S. export controls when it transacted with two Chinese technology companies on the Entity List, according to its October Securities and Exchange Commission filing. Arteris, which is headquartered in California, said it maintained a business “relationship” with HiSilicon Technologies Co. and Chongxin Bada Technology Development Co., Ltd., which may have resulted in “inadvertent” violations of the Export Administration Regulations. The Bureau of Industry and Security added HiSilicon to the Entity List in 2019 as an affiliate of Huawei (see 1905160072) and added Bada in 2020 (see 2008260038).
U.S. intervention in the transaction between South Korea’s Magnachip Semiconductor Corp. and Beijing’s Wise Road Capital could set a new precedent for investment reviews and lead to more extraterritorial screening by U.S. trading partners in Europe and elsewhere, lawyers said.
The U.S. and more than 30 other countries are meeting virtually this week to discuss how to better counter and disrupt ransomware attacks, including through sanctions, the White House said Oct. 13. The meetings come less than a month after the U.S. sanctioned SUEX, a large virtual currency exchange, for helping to facilitate transactions related to illegal ransomware attacks (see 2109210031). The White House said the Treasury Department “will continue to disrupt and hold accountable these ransomware actors and their money laundering networks,” and the meetings this week could be a forum for discussing multilateral actions.
The Bureau of Industry and Security fined a U.S.-based telecommunications company $1.87 million for illegally exporting goods to Vietnam, BIS said in an Oct. 12 order. California-based VTA Telecom, a subsidiary of a Vietnamese state-owned telecom company, included false statements in its export applications to hide the true end-uses for the exports, BIS said.
The U.S.’s new export restrictions over certain biological equipment software could have a major impact on life science companies, universities and research organizations, and could present significant foreign investment screening hurdles, law firms said. While the restrictions were issued multilaterally and will only seek to stop certain software exports that can be exploited for biological weapons purposes, firms warned that the new restrictions could still be difficult to manage.
The Bureau of Industry and Security should work to raise export enforcement awareness and prioritize deterrence through large penalties, said Matthew Axelrod, President Joe Biden’s nominee to oversee BIS enforcement work. Speaking during his nomination hearing last week, Axelrod highlighted BIS’s yearslong lack of Senate-confirmed leadership in the Office of Export Enforcement and said his background as a federal prosecutor makes him the right fit for the role.
The U.S. needs to strike a better balance between protecting sensitive U.S. technology from the Chinese government and fostering open academic environments for research and innovation, lawmakers said. But reaching that balance will be challenging, they said, and U.S. universities are struggling to comply with the complex array of export control regulations and disclosure requirements associated with Chinese tech acquisition and influence attempts.
The Bureau of Industry and Security is considering requesting public comments on new export controls for certain brain-computer interface (BCI) technology. The agency sent the pre-rule for interagency review Oct. 5 and said it hopes to determine whether BCI represents an emerging technology important to U.S. national security and whether “effective controls can be implemented.”
Although U.S. traders would widely welcome the U.S. rejoining the Trans-Pacific Partnership, industry officials are disappointed with the country’s lack of urgency on the trade pact and don't expect the Biden administration to prioritize the deal before its term ends. While they said mini trade deals, such as the 2020 agreement with Japan (see 1912050058), can serve as “short-term” bandages, they aren’t nearly enough to make up for the benefits U.S. traders would have received under TPP.
The export control jurisdiction for exports of deuterium for non-nuclear end-uses will transfer from the Nuclear Regulatory Commission to the Bureau of Industry and Security, BIS said in notice. While those exports will be controlled under the Export Administration Regulations, BIS stressed that deuterium exports intended for nuclear end-uses will still be subject to the NRC’s export licensing jurisdiction. BIS has been considering the change, which will take effect Dec. 6, since at least June (see 2109240011).