The U.S. will suspend certain export license exceptions for shipments to Hong Kong and ban exports of U.S.-origin defense goods to the region, the Trump administration said June 29. The administration also plans to further restrict sales of dual-use technologies to Hong Kong to bring those measures in line with restrictions imposed on exports to mainland China. The administration said it is imposing the restrictions because of China’s infringement in Hong Kong’s autonomy (see 2005290047).
toSearch Primer
Term list: Separate terms with spaces, not commas or semicolons.
Multi-word term: Place inside quotes to ensure an exact match (e.g. "China import").
Acronyms: Use all capital letters to ensure the search is not looking for that letter sequence instead.
Required term: If a term must be included in any resulting articles, prefix it with a plus sign (e.g., +CBP).
Excluded term: If a term should be excluded from any articles being found, prefix it with a minus sign (e.g., -ruling).
Singular form: Always use the singular form when doing multi-word terms (e.g. "russian export control" instead of "russian export controls").
Shortest word form: When you have different word forms in a quoted (multi-word) term, you want to only include the shortest version if it is the last part of the expression (e.g., "entity list" instead of "entity listing" or "entity listed").
The Office of Foreign Assets Control likely did not understand the industry burdens imposed by the update to its reporting, procedures and penalties regulations (see 1906200036) and will probably narrow their scope, said Jason Rhoades, a KPMG sanctions lawyer and former OFAC compliance officer. The regulations, which were updated last year, expanded the scope of transactions that must be reported to OFAC, including for non-financial institutions. The update was met with widespread criticism from industry, which called them confusing, unclear and overly burdensome (see 1907290015 and 1907230054). OFAC issued a set of frequently asked questions in February to try to clarify the new requirements (see 2002200057).
The Bureau of Industry and Security postponed the effective date for certain filing requirements outlined in an April rule on military-related exports (see 2004270027). The agency said this week it will not require Electronic Export Information filings for some exports captured under the rule until Sept. 27 -- a three-month extension from the original June 29 effective date. Other EEI filing requirements described under the rule take effect June 29.
U.S. and Chinese trade tensions could last for years and require a more clear, consistent approach from the U.S., experts told the U.S.-China Economic and Security Review Commission June 24. The U.S. should not address competition challenges through decoupling, they said, but should instead invest more heavily in technology research, pursue more involvement at international standards bodies and work with trade partners to counter China’s rise.
The Committee on Foreign Investment in the U.S. is closely monitoring Chinese investors who are trying to take advantage of struggling U.S. companies, trade lawyers said. CFIUS is also focusing on the semiconductor sector, where Chinese entities are hoping to evade recent U.S. rules that impose more strict license restrictions on sales of semiconductors and other technology to China and Huawei (see 2005150058), the lawyers said.
Less than a week after signing a bill that will sanction Chinese officials for human rights abuses, President Donald Trump said he had held off on the sanctions so as not to interfere with the U.S.-China trade deal, a June 21 Axios report said. The report comes amid a series of U.S. and China steps that have further deteriorated the trade relationship, including threats of U.S. sanctions and moves by China to reduce agricultural purchases.
The European Union has not yet decided whether to reciprocate the United Kingdom’s six-month grace period on import entry requirements after Brexit (see 2006120031), said João Vale de Almeida, the EU’s ambassador to the U.K. While de Almeida said the EU wants to be “forceful and systematic” in protecting its market, it is first focused on reaching a withdrawal agreement and will decide on customs issues later.
U.S. universities may be forced to turn down research activities -- including COVID-19 research -- due to the Bureau of Industry and Security's increased restrictions on shipments to military end-users (see 2004270027), the Association of University Export Control Officers said in comments to the agency. The restrictions are so broad that they could severely restrict academic activities that benefit the U.S. despite those activities having “no military or defense application,” the AUECO said.
The Bureau of Industry and Security's increased restrictions on shipments to military end-users (see 2004270027) presents “significant questions” for industry, which may struggle to comply with the new due diligence expectations, said Ajay Kuntamukkala, an export controls lawyer with Hogan Lovells and a former BIS official. Kuntamukkala said the rule will “significantly impact business transactions” with Chinese entities.
Amid rising U.S.-China technology competition, Congress will continue to push for increased restrictions on inbound Chinese investment, said Rep. Darin LaHood, R-Ill. LaHood also said the Trump administration -- which has experienced success using tariffs and export controls to gain ground in trade negotiations -- will likely continue to leverage those measures, particularly against China.