The Commerce Department is “nowhere near” publishing an export control rule on foundational technologies and is likely not close to releasing its advance notice of proposed rulemaking, Squire Patton Boggs trade lawyer George Grammas said. Commerce management has had a draft of the ANPRM since at least mid-2019, Grammas said. “It doesn't seem to be going anywhere fast,” he said, speaking during a Feb. 20 webinar hosted by Content Enablers. “We don’t seem to be anywhere near seeing a rule on foundational technologies in the near term.”
The Bureau of Industry and Security revised the country groups for Russia and Yemen under the Export Administration Regulations (see 2001090040), BIS said in a notice. The changes increase license restrictions for both countries and are part of a larger effort within BIS that involves a “comprehensive review” of all country groups to better align with the administration's foreign policy concerns. All shipments now requiring a license as a result of this rule that were on dock for loading or aboard a carrier to a port as of Feb. 24 may proceed to their destinations under the previous eligibility, BIS said. Shipments that have not been exported, re-exported or transferred by March 25 will require a license.
United Kingdom companies are facing challenges navigating sanctions conflicts between the U.S. and the United Kingdom, which is leading to confusion over which items they can legally export, according to Roger Arthey, chair of the Institute of Export & International Trade’s Export Control Profession and the former head of export control compliance for Rolls-Royce. Those challenges were complicated by the U.S.’s withdrawal from the Joint Comprehensive Plan of Action in 2018 and the introduction of the European Union Blocking Regulation, which blocks EU businesses from complying with certain U.S. sanctions (see 1906240014).
President Donald Trump said he does not want to make it more difficult to export U.S. goods, adding that he has “instructed” his administration to make it easier for countries to do business with the U.S. “The United States cannot, & will not, become such a difficult place to deal with in terms of foreign countries buying our product, including for the always used National Security excuse, that our companies will be forced to leave in order to remain competitive,” Trump said in a series of Feb. 18 tweets. He added that the U.S. wants to sell to “China and other countries” and “We don’t want to make it impossible to do business with us. That will only mean that orders will go to someplace else.”
Discussions within the Commerce Department to expand U.S. export control jurisdiction over foreign exports to Huawei and beyond would have a chilling effect on the U.S. semiconductor industry, said John Neuffer, president of the Semiconductor Industry Association. Neuffer said current U.S. export restrictions on Huawei are already hurting the industry’s ability to sell to China -- which represents about 35% of U.S. semiconductor sales -- and more restrictions would further alienate Chinese customers who are weary of being added to Commerce’s Entity List. “Some of them are afraid they’re next,” Neuffer said during a Feb. 18 panel hosted by the Information Technology and Innovation Foundation.
The Commerce Department Bureau of Industry and Security asked for an 8% boost in funding for the 2021 fiscal year to increase export control compliance and enforcement, bolster initiatives to counter China, and to better identify emerging and foundational technologies. BIS’s request for a $10 million budget increase, submitted to Congress last week, comes as the agency plans to roll out a series of export controls on sensitive technologies (see 1912160032), which will increase its involvement in the Trump administration's effort to sustain the U.S.'s technological advantage over China. BIS specifically asked for just over $1 million and five new positions to help it control emerging and foundational technologies and enforce those controls.
Huawei and four of its subsidiaries -- including two U.S. companies -- were charged with racketeering and conspiracy to steal trade secrets as part of a decadeslong scheme to steal U.S. technology, the Justice Department said Feb. 13. The indictment charges Huawei, Huawei Device Co., Huawei Device USA Inc., Futurewei Technologies Inc. and Skycom Tech Co., and Wanzhou Meng, Huawei’s chief financial officer, with attempts to steal intellectual property, including from six U.S. companies. The stolen property includes trade secret information, source codes, antenna technology and robot testing technology, the Justice Department said, all obtained after Huawei told and incentivized employees to steal confidential information from other companies.
The Commerce Department renewed the temporary general license for Huawei and 114 of its non-U.S. affiliates until April 1, Commerce said in a notice. The 45-day extension is the third extension granted to Commerce since it was placed on the Entity List in May (see 1905160072). The previous extension was set to expire on Feb. 16. License applications will continue to be reviewed under a presumption of denial. The notice is scheduled to be published in the Federal Register on Feb. 18.
The coronavirus outbreak could impact China’s purchase commitments involving U.S. agricultural products under the phase one trade deal, White House national security adviser Robert O’Brien said. The virus could have its biggest impact on the first year of the deal, O’Brien said, which was expected to include $40 billion in U.S. agricultural exports to China (see 2001150073). The virus may also impact what the U.S. Department of Agriculture secretary said would be a “record year” for U.S. agricultural exports (see 2001210031).
As the final regulations for the Foreign Investment Risk Review Modernization Act take effect this week, FIRRMA’s definition for critical technologies remains unclear due to a lack of proposed rules by the Commerce Department on emerging and foundational technologies, trade lawyers said.