The EU last week issued new guidance on a requirement created in 2024 that calls on EU parent companies to make “best efforts” to ensure that their third-country subsidiaries aren’t enabling sanctions evasion (see 2411220014 and 2406240024). Although this “legal obligation applies only in the context of sanctions on Russia and Belarus,” the European Commission said it’s encouraging all EU parent companies “to seek to ensure that all entities they own or control do not undermine EU sanctions anywhere in the world.”
The Trump administration is likely still working out how to implement its supposed revenue-sharing chip export deal with Nvidia, including whether the agreement is allowed under U.S. law, a former U.S. diplomat said.
The EU will buy at least $40 billion worth of advanced American AI chips, will strengthen cooperation on export controls and investment screening, and will eliminate tariffs on U.S. industrial and other goods, the two sides said as part of a trade framework announced this week. The EU also committed to "substantially” increase purchases of U.S. defense equipment and said it will work to limit adverse effects of new supply chain due diligence rules and carbon border taxes on U.S. exporters.
The U.S., the EU and others should pursue tougher enforcement on Chinese companies that continue to supply Russia’s military industrial complex and continue to buy Russian oil, panelists said during an event this week hosted by the Peterson Institute for International Economics. One said the EU should consider automatically sanctioning any Chinese company whose products are found more than once in drones, missiles or other military items used by Russia.
The U.S. should rent out AI chips to China instead of selling them, a strategy that would allow American firms to continue profiting while giving the U.S. the ability to cut off access at any time, researchers said.
The more than $140 million U.S. penalty levied on California chip firm Cadence in July (see 2507290026) is the latest signal that companies should prepare for increasingly "aggressive" export control enforcement, especially for violators of technology controls against China, law firms said. One firm said it shows that the government expects companies to provide access to business information located in China -- even if that may violate China’s anti-foreign sanctions laws -- while another firm said it highlights the challenges companies face when determining whether a customer is a front company for a party on the Entity List.
The U.S. is holding off on imposing new sanctions against Russia because it believes those measures will undercut any chance of a peace deal between Russia and Ukraine “for the foreseeable future,” Secretary of State Marco Rubio said this week, despite calls from the EU and others to continue strengthening sanctions against Moscow.
The U.K., France and Germany will support snapback sanctions against Iran if the country doesn’t agree to safeguards around its nuclear program by the end of this month, the three European nations said last week.
Applied Materials, the largest American semiconductor equipment supplier, is expecting a drop in its China sales due to uncertainty around U.S. export controls and its high volume of pending license applications, executives said last week.
The export licensing pauses and delays since the Trump administration took over in January are in conflict with the president’s stated goal of boosting American exports and opening new markets for U.S. companies, said Ron Kirk, a former U.S. trade representative.