A California-based semiconductor and telecommunications technology company recently received a warning letter from the Bureau of Industry and Security after it voluntarily disclosed possible export violations. The company, Credo, said it “inadvertently provided three evaluation boards of nominal value” to two customers without required export licenses. Credo submitted a final voluntary self-disclosure to BIS in June and received a warning letter in September with no penalties, according to a January Securities & Exchange Commission filing. Credo didn’t say where the customers were located but said it sells its products in Asia, including in markets where “multiple” companies have been added to the Commerce Department’s Entity List or the military end-user list. The company said it’s “in the process” of improving its export compliance policies and procedures but believes it “remedied the deficiencies that resulted in the apparent violations through additional training, system enhancements and enhanced export controls.”
The U.S. this week imposed new sanctions against Russia for its “destabilizing” activities in Ukraine and privately previewed a harsher set of potential trade restrictions, including major new export controls on chip equipment. Although it remains unclear if those specific export restrictions would be coordinated with allies, the U.S., Germany and the U.K. all said Jan. 20 that they are ready to impose “massive consequences and severe economic costs” on Russia if it continues down a path to war.
The U.S. and the European Union should use the Trade and Technology Council to address a host of export control harmonization issues to help ease export compliance challenges for American and European companies, the Information Technology Industry Council said. ITI -- which represents many of the world’s largest technology companies, including Apple, Amazon, Google and Intel -- said an increasing number of export regulations and restrictions are placing too heavy a burden on industry and could impede global innovation.
Sen. Marco Rubio, R-Fla., is requesting an explanation from the General Services Administration after it reportedly provided a portal for U.S. agencies to buy technology produced by a Chinese company on the Entity List. In a letter to GSA, Rubio pointed to reports that the Drug Enforcement Agency, the Defense Department’s Defense Finance and Accounting Service and the Department of the Army all used the GSA Advantage portal to buy hard drives and video surveillance equipment manufactured by Lorex, a subsidiary of Dahua Technology. Dahua Technology was added to the Commerce Department’s Entity List in 2019 for providing the Chinese government with surveillance equipment to monitor the country’s Uyghur population.
The SEC should ban sanctioned Chinese companies from being included in indices, exchange-traded funds (ETFs) and other index funds in U.S. capital markets, the Coalition for a Prosperous America said. The nonprofit group said index providers fail to “consider material risks posed by U.S. national security threats” when they evaluate companies, including whether they are listed under a U.S. sanctions regime or designated on the Commerce Department’s Entity List. “These gaps in oversight and due diligence are afflicting index funds held by scores of millions of unwitting American retail investors -- often through their pension funds -- and elevating the material risks in a manner inconsistent with their proper fiduciary duty," CPA wrote to the SEC in a letter released Jan. 5.
Rockley Photonics, a California photonics-based health monitoring and communications solutions company, won’t follow through with a sale to Hengtong, a Chinese power and fiber optic cable manufacturer, following Hengtong's addition to the U.S. Entity List this month. Rockley suggested the sale, which it described as a “data-communications-related technical sale,” could be subject to the Export Administration Regulations and require a Bureau of Industry and Security license.
A group of Senate Republicans are calling for the Commerce Department to add more Chinese companies to the Entity List for aiding the government’s human rights abuses against Muslim minorities. The lawmakers specifically asked the agency to blacklist Vistek Co., Beijing IrisKing Co., IriStar Technology Co., Watrix.ai and Beijing ViSystem Corp. because they supply products and services that help the Chinese government use surveillance technologies against minority groups. “While the U.S. government has made strides towards restricting business with some [People's Republic of China] entities,” the senators said in a Dec. 15 letter to Commerce Secretary Gina Raimondo, “efforts are still inadequate with respect to PRC research institutions and their affiliates in light of their contributions to the mass weaponization of surveillance functions.” A Commerce spokesperson said the agency plans to respond to the senators. The letter was signed by Sens. Marsha Blackburn of Tennessee, Rick Scott of Florida, Tom Cotton of Arkansas, Roger Wicker of Mississippi, Marco Rubio of Florida, Thom Tillis of North Carolina, John Cornyn of Texas, Bill Hagerty of Tennessee, Todd Young of Indiana, Mike Braun of Indiana and Ted Cruz of Texas.
The Commerce Department published its fall 2021 regulatory agenda for the Bureau of Industry and Security, including a new mention of an export control rule for crime-control items and a rule that would reorganize provisions of the foreign direct product rule in federal regulations.
The Commerce Department should immediately expand an exemption to allow U.S. companies to participate in standards-setting bodies that have members designated on the Entity List, industry representatives said. U.S. firms said they have been forced to avoid the bodies because they fear running afoul of U.S. export laws, a practice that could result in the U.S. losing important influence over the future of emerging technology standards.
The Office of Foreign Assets Control added eight Chinese technology firms to its investment blacklist, including drone maker DJI, for helping the Chinese government track and detain Muslim minorities in Xinjiang. The move, announced Dec. 16, also banned investments in Cloudwalk Technology Co., Dawning Information Industry Co., Leon Technology Company, Megvii Technology, Netposa Technologies, Xiamen Meiya Pico Information Co. and Yitu, all of which are already on the Commerce Department’s Entity List.