As the Trump administration pushes for export controls on certain firearms to be transferred from the State Department to the Commerce Department, top Commerce officials said the move should not be a cause for concern and said they are welcoming feedback from the public and members of Congress.
After more than 25 industry associations urged the Commerce Department to grant more time for comments on its next advance notice of proposed rulemaking for foundational technologies, top Commerce officials said it will consider the request but suggested that U.S. industries have had ample time to prepare comments.
Commerce’s Bureau of Industry and Security and the Census Bureau plan to issue a proposed rule for routed export transactions during the summer or fall of 2019, said Sharron Cook, a senior export policy analyst with BIS, at BIS’s annual export controls conference on July 10. The long-awaited proposed rule is expected to update parties’ responsibilities under the Export Administration Regulations in a routed export transaction.
An Office of Foreign Assets Control official said the agency within the Treasury is trying to “expedite” responses on license applications but does not have the resources to lift certain compliance burdens that have caused headaches for U.S. companies, such as regulations that require businesses to determine which companies are owned 50 percent or more by a sanctioned party. “That’s something were trying to work on,” said Susan Demske, OFAC’s assistant director for regulatory affairs.
The Commerce Department is reviewing export license applications to sell to Huawei in order to “mitigate as much of the negative impacts of the entity listing as possible” and hopes to have decisions “soon,” said Nazak Nikakhtar, Commerce undersecretary for the industry and security.
Instex, the European payment system designed to allow countries to trade with Iran despite U.S. sanctions, is mostly symbolic, several trade lawyers said. The system is a potentially useful tool to appease Iran’s demands for greater cooperation with Europe, lawyers said, but likely an insignificant mechanism in brokering major trade.
If the Iran nuclear deal collapses and Europe imposes a set of automatic snapback sanctions, the U.S. would likely follow with its own set of additional Iran sanctions, including greater enforcement on non-U.S. entities and sanctions on Iran’s trading partners, said Inessa Owens, a trade lawyer with Baker McKenzie.
The Commerce Department will continue its presumption of denial policy for license applications for exports to Huawei, a Commerce spokesperson said July 3, adding that the China tech company remains on Commerce’s Entity List. Commerce will review export license applications for “their national security impacts” and plans to review licenses “under the highest national security scrutiny,” the spokesperson said.
The Commerce Department will approve more temporary licenses to U.S. exporters selling “general merchandise” to Huawei, U.S. National Economic Council Director Larry Kudlow said on CBS and Fox News on June 30, potentially providing relief to both U.S. firms and China’s telecommunications tech giant. Although specific details have not yet been released, Commerce plans to grant export licenses for products that China can easily get from other countries, including “various chips and software,” Kudlow said.
More than 25 industry associations are asking the Commerce Department to allow more time for public comments on Commerce’s next advance notice of proposed rulemaking for foundational technologies, which is expected in the coming weeks. The associations asked for a 90-day comment and review period in a June 27 letter to Commerce Secretary Wilbur Ross.