Countries need to revise their foreign direct investment screening environments, which are contributing to a global drop in FDI, said Simon Evenett, a trade and economics professor at the University of St. Gallen. Evenett, who co-wrote a recent report arguing for a policy reset around FDI (see 2106030034), said a rise in screening tools is chilling investments and creating uncertainty over a range of industries.
As President Joe Biden searches for a leader for the Bureau of Industry and Security, the agency should prioritize candidates who are familiar with export control regulations and who can effectively manage the agency’s licensing process, two technology experts said. But others said Biden should choose a candidate with strong knowledge of the challenges imposed by China to help lead U.S. technology policy through an era of intense competition.
The Commerce Department is unsure whether the multilateral Wassenaar Arrangement will be able to meet in person this year after the regime’s 2020 plenary was canceled, potentially creating more uncertainty surrounding the group’s next batch of multilateral export control proposals. The agency also still has not made a decision on eliminating electronic export filing requirements for shipments to Puerto Rico, but has made some progress on its long-awaited routed export rule, a Commerce official said.
Secretary of State Antony Blinken defended the State Department’s decision to waive sanctions against the company behind Nord Stream 2 (see 2105200055), telling a House committee that the sanctions would’ve done little to stop the nearly completed pipeline from being finished and would've only damaged U.S. relations with Germany. But Blinken also said the agency may be willing to rescind the waiver and impose the sanctions.
The Bureau of Industry and Security issued a final rule to reflect the United Arab Emirates formally ending its participation in the Arab League Boycott of Israel. Under the rule, effective June 8, certain “requests for information, action or agreement from the UAE” will not be “presumed to be boycott-related” -- and therefore not restricted or reportable under the Export Administration Regulations -- if they were made before Aug. 16, 2020, BIS said.
Companies are increasingly straying from foreign direct investment, partly due to challenges faced by the ongoing COVID-19 pandemic and a rise in global investment screening, researchers said in a June 3 report. FDI requirements and thresholds have specifically become more “far-reaching” over the past five years, the report said, and businesses continue to face mounting regulatory risks, which has chilled investment in a range of sectors. “Once a hallmark of globalisation” the report said, “FDI has been in trouble for some time.”
President Joe Biden issued a new executive order expanding a Trump-era policy that banned investments in Chinese military companies (see 2105190009). The order, issued June 3, includes an initial list of 59 entities and expands the scope of the restrictions to cover companies operating in China’s surveillance technology sector, which the White House said produces technologies to commit human rights violations against Muslim minorities.
A congressional commission said the Commerce Department has “failed” to carry out its export control responsibilities over emerging and foundational technologies, which is hindering the work of other government bodies and allowing some sensitive dual-use technologies to be freely exported from the U.S. The commission said Commerce’s Bureau of Industry and Security, which is in charge of the export control effort, has taken “limited action to strengthen or introduce new controls” since its 2018 congressional mandate and should look to other agencies to help with the process.
Trade and business relations between the European Union and China will likely grow more challenging in the wake of the EU’s decision to pause ratification of the Comprehensive Agreement on Investment (see 2105240023), a European policy expert said. Even so, China will likely push the EU to move forward on the deal, another expert said, as it doesn’t want a series of escalating sanctions by the two sides to continue.
The U.S. and Iran will likely come to an agreement on the Iran nuclear deal as early as this summer, which could lift a range of economic sanctions on Iran, two foreign policy experts said. Although talks between the two sides have progressed over the past several weeks, the experts say it remains unclear how the sanctions will be lifted and whether a more comprehensive, revised deal will follow.