KPMG recently surveyed a range of companies about their export control and sanctions compliance programs to determine how they organize those programs, which regulations and regions are their focus, and how they manage compliance risks. The survey, released last month, shows that compliance officials often manage multiple export regimes and nearly 90% of the respondents have a person or team “specially dedicated” to export compliance. About 25% don’t have or don’t know if they have a formal compliance program. In addition, about 99% said U.S. regulations affect their compliance, while 72% said they are affected by European Union laws and 46% by Chinese regulations. The survey also includes company responses to questions about risk assessments, training, screening activities and export licensing responsibilities.
The Financial Crimes Enforcement Network issued its first set of national anti-money laundering and anti-terrorism financing priorities, identifying corruption, cyber crime, drug trafficking and other activities that pose the biggest threats to the U.S. The priorities, issued June 30 and required by the Anti-Money Laundering Act of 2020, will be followed by a set of regulations and revisions to the Bank Secrecy Act, several U.S. agencies said in a joint statement.
Large ocean carriers are continuing to use their influence to cause “record high freight rates” for American shipping companies, the Florida Customs Brokers & Forwarders Association said in a letter to the Federal Maritime Commission this month. The association also said that carriers are “frequently” gathering customer information “through their [ocean transportation intermediary] client and then engage in direct competition,” which violates the Shipping Act. “The negative economic impact is real for both OTIs and shippers alike,” the FCBFA said.
The Defense Department June 28 published an unclassified list of entities that qualify as Chinese military companies. DOD is required to publish a list annually through 2030 under the 2021 National Defense Authorization Act. President Joe Biden recently expanded a Trump-era policy that banned investments in Chinese military companies (see 2106030067). The State Department listed the following entities:
While some countries have loosened their more strict foreign investment review tools as they emerge from the COVID-19 pandemic, the majority of screening regimes are here to stay, Baker McKenzie and the International Forum of Sovereign Wealth Funds said in a June report. The report, which outlines strategies for navigating the new foreign investment landscape, calls the increasing scrutiny of foreign direct investment (FDI) a “global phenomenon.”
The State Department approved three sales to the Philippines worth more than $2.5 billion, the Defense Security Cooperation Agency said June 24. The first sale, worth $2.43 billion, includes “F-16 Block 70/72 Aircraft” and related equipment. The principal contractor will be Lockheed Martin. The second sale, worth $120 million, includes “AGM-84L-1 Harpoon Air Launched Block II Missiles” and related equipment. Boeing will be the prime contractor. The third sale, worth $42.4 million, includes “AIM-9X Sidewinder Block II Tactical Missiles” and related equipment. The prime contractor will be Raytheon Missile Systems Company.
The State Department’s Directorate of Defense Trade Controls will perform scheduled maintenance on its Defense Export Control and Compliance System 10 a.m. to 2 p.m. EDT June 26, the agency said in a June 24 notice. Applications will be available during this time, but users “may experience disruptions,” DDTC said. The agency said users should access the system at a later time if “functionality” is affected.
The Bureau of Industry and Security is seeking comments on an information collection related to certain “rarely used” short supply activities, the agency said in a notice. The first activity allows U.S. agricultural exporters to register for exemptions from “short supply limitations on export,” and the second activity includes a petition to impose monitoring or controls on recyclable metallic materials. Under the EAR, BIS said U.S.-origin agricultural goods purchased “by or for use in a foreign country and stored” in the U.S. to be later exported may voluntarily be registered with BIS “for exemption from any quantitative limitations on export that may subsequently be imposed under the EAR for reasons of short supply.” BIS previously requested comments Jan. 15 and is extending the comment period for an additional 30 days. Comments are now due by July 26.
The Export-Import Bank will release its annual report to Congress on global official export credit agencies this month, it said June 21. Ex-Im’s advisory committee met last week to discuss the report and some challenges facing U.S. exporters in “global export competition.” It also discussed and “expressed strong support” for the bank’s China and transformational exports program, which authorizes Ex-Im support to help traders better compete with China (see 2104250003).
CBP extended its travel restrictions on the northern and southern borders through July 21, it said in two notices released June 21. The travel bans do not apply to cargo, and exempt crossing the border from Canada or Mexico to work in the U.S. (see 2103180039).