Senate Majority Leader Mitch McConnell, R-Ky., filed cloture Dec. 12 on the FY 2020 National Defense Authorization Act. S. 1790 includes language targeting Huawei and ZTE. McConnell’s cloture motion sets up a likely Senate vote this week. The House approved the measure Wednesday on a 377-48 vote. The House and Senate Armed Services committees released the conference text earlier in the week after months of work to blend the Senate- and House-passed (HR. 2500) measures. The conference version includes a modified text of House-side anti-Huawei language originally sought by Rep. Mike Gallagher, R-Wis., that would modify conditions for the Commerce Department to lift the Bureau of Industry and Security’s addition of Huawei to its entity list. It would require Huawei to prove it “sufficiently resolved or settled” supply chain security issues that led to its inclusion on the BIS entity list. The Commerce Department has since approved Huawei-related export licenses for U.S. companies to have their products included in the Chinese telecom equipment maker's products. The conference NDAA also includes Gallagher’s proposal to direct the president to report to Congress on ZTE's compliance with a 2018 agreement that lifted Commerce's ban on U.S. companies selling telecom software and equipment to ZTE.
BOSTON -- If the Commerce Department follows through on plans to expand the limits of the Export Administration Regulations to further control foreign shipments to Huawei, it will have a “dramatic” impact on international supply chains, said Kevin Wolf, a trade lawyer with Akin Gump and Commerce’s former assistant secretary for export administration. The measures, which Commerce confirmed it was considering earlier this month (see 1912100033), include expanding the Direct Product Rule and broadening the de minimis rule to make more foreign-made goods subject to the EAR.
U.S. companies are encountering issues when trying to return faulty products to parties on the Entity List, members said during a Dec. 10 Regulations and Procedures Technical Advisory Committee meeting. The problem occurs after companies legally import goods -- which later turn out to be defective -- from an Entity List party, the members said. The goods are not able to be easily exported for return, they said.
Export Compliance Daily is providing readers with some of the top stories for Dec. 2-6 in case you missed them.
The Commerce Department is considering a host of expanded restrictions on foreign shipments to Huawei containing U.S. technology, said Rich Ashooh, Commerce’s assistant secretary for export administration. The agency is discussing expanding the Direct Product Rule -- which subjects certain foreign-made products containing U.S. technology to U.S. regulations -- and a broadened de minimis rule, Ashooh said during a Dec. 10 Regulations and Procedures Technical Advisory Committee meeting. Ashooh’s comments confirmed details in a Nov. 29 Reuters report that said the U.S. was discussing ways to restrict more foreign exports to Huawei (see 1912040014).
The Commerce Department Bureau of Industry and Security is seeking comments on procedures under which parties can request to be removed from Commerce’s Entity List and Unverified List, according to a Dec. 10 notice in the Federal Register. The information collection also includes procedures for requesting a “modification” to an entry on either list, BIS said. Comments are due Feb. 10, 2020.
An Iranian businessman was sentenced to 46 months in prison for illegally exporting carbon fiber from the U.S. to Iran, the Justice Department said Nov. 14. Behzad Pourghannad worked with two others between 2008 and 2013 to export the carbon fiber to Iran from third countries using falsified documents and front companies, the agency said.
The Commerce Department Bureau of Industry and Security made three technical corrections to its November notice that added 22 entities to its Entity List (see 1911120025). The corrections add dates and change the wording of entries for Pakistan and the United Arab Emirates.
Huawei is urging suppliers to move operations offshore to avoid U.S. sanctions and export controls, which would violate U.S. law, according to a Dec. 3 Reuters report. The Chinese technology giant has been “openly advocating” for companies to escape the jurisdiction of U.S. controls so sales can continue, Commerce Secretary Wilbur Ross told Reuters. “Anybody who does move the product out specifically to avoid the sanction ... that’s a violation of U.S. law,” Ross said. “So here you have Huawei encouraging American suppliers to violate the law.”
The Department of Commerce published its fall 2019 regulatory agenda for the Bureau of Industry and Security. The agenda includes a new mention of its intent to potentially control certain additive manufacturing equipment, or 3D printing, used in “energetic materials” as part of BIS’s effort to restrict sales of emerging technologies (see 1911210051). The notice of proposed rulemaking aims to gather feedback from industries while “discussions are ongoing” at the Wassenaar Arrangement. BIS said it aims to issue the proposed rule in November.