The Biden administration plans to revisit its phase one trade deal with China and will continue closely scrutinizing Chinese investments that seek to acquire sensitive U.S. technologies, senior officials said this week. The officials, speaking about the U.S.’s monthslong review of its China trade relationship, said China hasn’t met its phase one purchase commitments and stressed that all of its trade tools “are on the table” as they look to enforce the deal.
The Bureau of Industry and Security fined a Texas semiconductor component manufacturer nearly $500,000 for illegally exporting controlled wafers to Russia via Bulgaria (see 2012210013), the agency said in a Sept. 28 order. The company, Silicon Space Technology Corporation, which began doing business as Vorago Technologies in 2015, worked with a Russian engineering firm to export “rad-hard 16MB Static Random-Access Memory (SRAM) wafers,” which were controlled under the Export Administration Regulations for spacecraft and related components.
The U.S. plans to prioritize discussions on export controls and investment screening tools during the first meeting of the U.S.-European Union Trade and Technology Council this week (see 2109130025), senior administration officials said. The two sides plan to release a set of shared trade and technology commitments after the Sept. 29 meeting in Pittsburgh, which should hint at closer collaboration on various trade restrictions, one official said, particularly involving semiconductors.
Rep. Michael McCaul, R-Texas, recently offered several amendments to the 2022 National Defense Authorization Act, including provisions relating to export control statistics, the Entity List and sanctions.
Several U.S. national security agencies are split on whether to add Chinese smartphone maker Honor Device to the Entity List, The Washington Post reported Sept. 19. While the Commerce and State departments said Honor shouldn't be added to the list, the Defense and Energy departments last week supported adding the company. Federal Communications Commissioner Brendan Carr said Honor should be blacklisted because Huawei, which formerly owned Honor as its smartphone company, is using it to evade U.S. export restrictions. “This isn't a close call,” Carr said in a Sept. 20 tweet. The issue has been “appealed to the political-appointee level” at each of the agencies, the report said, and could be escalated to the Cabinet level and eventually President Joe Biden in the case of a deadlock.
Two nominees to lead the Bureau of Industry and Security said they will prioritize stopping illegal technology exports to China and are willing to bypass multilateral controls on certain sensitive technologies if unilateral restrictions are warranted. But Alan Estevez, President Joe Biden’s nominee for BIS undersecretary, and Thea Kendler, the nominee for assistant secretary for export administration, also stressed that export control cooperation with allies is crucial and committed to working to convince trade partners to adopt more controls.
An investment and research firm expects the Bureau of Industry and Security to issue several proposed rules for export controls related to semiconductors this fall and said BIS is considering other restrictions on certain Chinese technology companies. In a Sept. 17 report, the Cowen Washington Research Group said BIS is “likely” to soon issue several notices of proposed rulemaking to request industry comment on new controls for semiconductor capital equipment, mostly so the U.S. is prepared with new proposals for the next Wassenaar Arrangement cycle.
The Bureau of Industry and Security should establish a blanket exemption for U.S. people and companies to participate in standards-setting bodies that have members designated on the Entity List, industry officials said. Although BIS has been working on a final rule (see 2012150037) that would clarify how export restrictions apply to the release of controlled technology at standards-setting organizations, officials from the telecommunications industry and other technology sectors are unsure how the rule’s final language will read and are concerned some of the agency’s restrictions, which they view as unnecessary, may continue.
Export Compliance Daily is providing readers with the top stories for Sept. 7-10 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
Hong Kong-based apparel company, Changji Esquel Textile (CJE), should not be granted a preliminary injunction against its placement on the Commerce Department's Entity List, the U.S. argued in the U.S. District Court for the District of Columbia. Resuming litigation after talks between Commerce and CJE broke down (see 2108300058), the Department of Justice said CJE is unlikely to succeed in its case and that the company has not established certain and imminent irreparable harm (Changji Esquel Textile Co. Ltd., et al. v. Gina M. Raimondo, et al., D.D.C. #21-1798).