The Bureau of Industry and Security will on June 24 add five Chinese companies to the Entity List for their involvement in the government’s human rights abuses against Muslim minority groups in the Xinjiang region. For each of the entities, BIS will impose a license requirement for all items subject to the Export Administration Regulations. Items classified under several Export Control Classification Numbers will be subject to a case-by-case review policy, but all other exports will be subject to a presumption of denial. No license exceptions will be available.
Exporters looking to comply with U.S. Entity List restrictions should pay close attention to foreign companies affected by a CBP withhold release order, which could later lead to U.S. export restrictions, said Sylvia Costelloe, a trade lawyer with Arent Fox. Costelloe said at least two companies were subject to a WRO and later added to the Entity List, including China-based Hetian Haolin Hair Accessories (see 2005010040 and 2007200026). “What this indicates here in this space is that there might actually be some cooperation or some collaboration between CBP and Commerce,” Costelloe said during a June 16 Arent Fox webinar. While she said CBP doesn’t sit on the End-User Review Committee, which decides which entities to add and remove from the Entity List, Commerce still “might be looking to CBP when deciding whether or not to add certain entities to the Entity List.” Commerce didn’t immediately comment.
Promega Corp., a U.S. biotechnology company, said it doesn't sell to China’s Xinjiang region. following a report last week that said the company’s products are being used by Xinjiang police (see 2106150055). “Promega does not conduct business in Xinjiang, and we have no customers or distributors there,” a company spokesperson said in a June 16 email. Promega said it “takes seriously its obligation to comply with all applicable U.S. government export controls and sanctions requirements,” including the Entity List, and has “robust procedures and controls that ensure compliance with such requirements.”
Republican lawmakers again threatened to remove export control responsibilities from the Commerce Department if it doesn’t move faster to issue restrictions over emerging and foundational technologies, doubling down on criticism levied at agency officials for months. The latest threat, sent in a June 15 letter to Commerce Secretary Gina Raimondo and signed by 10 Republican senators, highlights the tension between an agency that wants to avoid rushing into overbroad controls that could harm U.S. companies and lawmakers who say Commerce is neglecting a congressional mandate to restrict sensitive exports to China.
The Bureau of Industry and Security removed a company from the Entity List after receiving a removal request, the agency said in a notice released June 15. BIS removed Satori Corp., listed under the destinations of France and the United Arab Emirates, after the interagency End-User Review Committee received “information” that warranted its removal. The change is effective June 16. Satori was initially added to the Entity list in December (see 2012180039).
Following reports that China is continuing to buy U.S.-made DNA equipment despite U.S. export restrictions, Rep. Michael McCaul, R-Texas, said the Bureau of Industry and Security needs to strengthen its controls.
Sen. Marco Rubio, R-Fla., introduced a bill to prevent the Federal Retirement Thrift Investment Board from potentially investing federal civil servants’ retirement savings in companies on the Entity List. The Thrift Savings Plan Fiduciary Security Act would modify the FRTIB's duties by “incorporating a duty to not harm U.S. national security,” Rubio said June 10. Under the legislation, the board would not be allowed to invest in companies on the Commerce Department’s Entity List or companies designated by the Treasury Department as Chinese military companies. “The Board and their friends on Wall Street will get away with using American servicemembers’ own savings to fund threats to U.S. national security if the fiduciary duties binding these money managers only focus on short-term financial value,” Rubio said. “My legislation would update the Board’s fiduciary duty to more accurately reflect the interests of the TSP’s beneficiaries, rather than the financial interests of Wall Street.”
The Commerce Department published its spring 2021 regulatory agenda for the Bureau of Industry and Security, including two new mentions of emerging technology rules and new export controls on certain camera systems.
A law designed to counteract foreign sanctions has been submitted to China's legislature for a second reading, China's state-run news agency Xinhua reported June 7. The draft was submitted to China's top legislative body, the Standing Committee of the 13th National People's Congress. The law would strengthen China's “legal toolkit with focus on moves against sanctions and interference and countering long-arm jurisdiction to cope with challenges and risks,” the report said. It said the law responds to an uptick in Western sanctions used as “part of their pretexts to spread rumors on and smear, contain and suppress China.” China recently issued regulations for its unreliable entity list (see 2009210017) and an export control regime (see 2010190033). Former U.S. officials say more trade restrictions laws are likely on the way (see 2012170041)
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