China is creating a list to penalize foreign entities that damage the interests of Chinese companies, a sweeping but vague move widely viewed as a direct response to U.S.’s recent blacklisting of Huawei Technologies.

The temporary general license issued by the U.S. after it added Huawei Technologies to its Entity List has offered “almost no relief” for the U.S. semiconductor industry, which has been hurt severely by the move, said John Neuffer, president and CEO of the Semiconductor Industry Association. Speaking on U.S.-China trade issues at a Washington International Trade Association discussion on May 29, Neuffer underscored the importance of the Chinese market to U.S. semiconductor exporters and called on the Trump administration to more tactfully negotiate with China. “We would like the U.S. government to better balance its national security concerns with its economic security concerns,” Neuffer said.

The Trump administration warned Europe that anyone associated with the creation of the Instrument for Supporting Trade Exchanges, or INSTEX, could face U.S. sanctions, according to a May 29 report from Bloomberg. The report cites a May 7 letter from Treasury Department official Sigal Mandelker to INSTEX President Per Fischer. “I urge you to carefully consider the potential sanctions exposure of Instex,” Mandelker, the undersecretary for terrorism and financial intelligence, wrote in the letter, according to Bloomberg. “Engaging in activities that run afoul of U.S. sanctions can result in severe consequences, including a loss of access to the U.S. financial system.”

China is finding ways other than tariff increases to retaliate against U.S. exporters, further damaging the U.S.’s struggling agricultural export sector, panelists said during a Washington International Trade Association discussion on U.S.-China trade. The expected retaliation from China -- along with stalled trade negotiations and the increased difficulty of accessing China’s markets -- could lead to crippling, long-term consequences for some U.S. exporters, the panelists said.

The Mexican Secretariat of Finance and Public Credit is proposing a new draft customs law that would streamline current requirements and take measures against corruption in the Mexican General Administration of Customs, according to a May 28 report in the Mexican newspaper El Economista.

The Treasury’s Office of Foreign Assets Control issued a “finding of violation” against U.S.-based State Street Bank and Trust Co. (SSBT) after it violated U.S.-imposed sanctions on Iran, OFAC said in a May 28 notice. The bank was not fined, OFAC said, partly because the bank’s managers were likely unaware of the violations and because the bank cooperated with OFAC and improved its compliance program.

Export Compliance Daily is providing readers with some of the top stories for May 20-24 in case they were missed.

The Commerce Department plans to roll back regulations that make it easier for U.S. exporters to sell goods that have both civilian and military purposes, making it more difficult for China to acquire U.S. technology, according to a May 23 report by Politico. As part of its plans, Commerce is considering ending a general policy of approving export licenses for products bound for civilian use, instead switching to reviews on a “case-by-case basis,” the report said. Commerce’s plans include “four regulatory actions” that target China under the Export Control Reform Act, including options that would revoke two license exceptions relating to shipping restricted technology to China and an option that would expand a ban on U.S. defense-related exports to China, the report said.

The Department of State published its spring 2019 regulatory agenda. The agenda includes a new mention of a proposal to amend the International Traffic in Arms Regulations to include definitions for "activities that are not exports, re-exports, or retransfers." The activities include "launching items into space; providing technical data to U.S. persons within the United States or within a single country abroad; and moving a defense article between the states, possessions, and territories of" the U.S., State said. The proposal also "removes from ITAR licensing requirements the electronic transmission and storage of unclassified technical data via foreign communications infrastructure when the data is secured sufficiently to prevent access by foreign persons." Under the proposal, State would also amend the ITAR to create definitions for “access information” and revise definitions of release to include “the improper provision of access information to foreign persons.” State is aiming to issue the proposal in September, it said.

The agenda also includes a rule that would revise Categories I, II and III of the U.S. Munitions List to include items that gives the U.S. a “critical military or intelligence advantage or otherwise warrant control at the highest level.” The rule states that exports of “commercially available firearms and ammunition,” removed from Category I and III, will continue to be controlled under the Bureau of Industry and Security’s Commerce Control List. State said the transition from the Munitions List to the CCL “will result in a net reduction in regulatory burden for the affected manufacturing and export community.” State aims to issue the rule in May 2019, it said.

The House Foreign Affairs Committee advanced three bipartisan measures calling for sanctions against countries it said are involved in corruption, human rights abuses and trade that harms U.S. national security. The measures, advanced on May 22, called for sanctions on countries in the Northern Triangle, Georgia and Turkey.