Export Compliance Daily is providing readers with the top stories from last week, in case you missed them. You can find any article by searching for the title or clicking on the hyperlinked reference number.
U.S. and allied export controls have failed to stop China from buying “vast quantities of highly sophisticated” semiconductor manufacturing equipment (SME) it could use to advance its chipmaking capabilities and bolster its military and surveillance apparatus, the House Select Committee on China said in a new report Oct. 7.
The Bureau of Industry and Security is adding 26 entities to the Entity List for illegally supplying aircraft parts, drone components, electronic items and other products to Iran, and the agency is adding three addresses to the list for links to an Iranian procurement network. Nineteen of the new entries are based in China, nine are in Turkey and one is in the United Arab Emirates, BIS said in a final rule released and effective Oct. 8. They will be subject to license requirements for all items subject to the Export Administration Regulations, and licenses will be reviewed under a presumption of denial.
Export controls are likely to continue to be on the negotiating table during upcoming U.S.-China trade talks, panelists said this week.
Exporters shouldn't expect a grace period from enforcement under the Bureau of Industry and Security's new 50% rule, but the agency likely is first looking for intentional violators as opposed to exporters who made good-faith efforts to comply, industry lawyers and advisers said in interviews.
Although the Bureau of Industry and Security in FAQs this week suggested its new 50% rule applies only to ownership and not the control that a parent company may have over an affiliate, that doesn’t mean U.S. exporters should ignore an Entity Listed company’s controlling influence over an unlisted company, said Mike Huneke, a trade lawyer with Morgan Lewis.
Senate Banking Committee member Mark Warner, D-Va., urged the Bureau of Industry and Security on Sept. 30 to consider placing export controls on open-source technologies that could benefit China.
House Foreign Affairs Europe Subcommittee Chairman Keith Self, R-Texas, unveiled a bill Sept. 30 to codify a new interim final rule that will place subsidiaries on the Bureau of Industry and Security’s Entity List or Military End-User List if they are owned 50% or more by companies on those lists.
A Bureau of Industry and Security interim final rule that introduced a 50% ownership threshold rule for the Entity List and Military End-User List was released and effective Sept. 29 (see 2509290017).
The 60-day temporary general license in the Bureau of Industry and Security's new 50% rule (see 2509290017) is “very limited” and could push exporters to apply for licenses “on an expedited basis to avoid noncompliance,” Morgan Lewis said in a client alert.