Republicans last week urged the Biden administration against meeting with Beijing to discuss semiconductor export controls, saying the U.S. should not negotiate its policies with China and should instead enact tougher restrictions. They specifically asked Commerce Secretary Gina Raimondo, who is considering a trip to China, to pledge that the U.S. plans to increase its export restrictions against the country.
The Bureau of Industry and Security has seen a recent spike in completed end-use checks in China after years of dormancy, which has allowed the agency to verify controlled items went to their intended destination, said Matthew Axelrod, top export enforcement official at BIS. Axelrod, speaking during a Senate Banking Committee hearing this week, said the agency has completed more than 90 checks in the last seven months, a stark turnaround from a government in China that hadn’t “scheduled a single end-use check for us in over two years.”
Public U.S. companies should update their China-related risk disclosures to factor in a range of potential trade restrictions on the horizon, including possible U.S. sanctions against Beijing for aiding Russia and new outbound investment restrictions, said Carl Valenstein, a trade lawyer with Morgan Lewis.
The Bureau of Industry and Security this week extended its public comment periods for two recent information collections. BIS initially requested comments on each in November and is now extending the comment periods for 30 days. One information collection involves the procedure for entities on the Unverified List or Entity List to request removal or “modification” of their placement on either list (see 2211230010), and the other is related to voluntary disclosures for violations of the Export Administration Regulations (see 2211170010).
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The Bureau of Industry and Security this week added 32 parties to its Unverified List after it was unable to verify their “legitimacy and reliability” for receiving export-controlled items. The additions include 14 entries in China, five in the United Arab Emirates, four in Turkey, two in Germany and one each in Bulgaria, Canada, Indonesia, Israel, Malaysia, Saudi Arabia and Singapore.
The Biden administration should be doing more to harmonize its export controls and sanctions lists to more effectively penalize foreign companies that should be subject to strict trade restrictions, lawmakers said this week. Several Republicans suggested they plan to pursue legislation to mandate that the Bureau of Industry and Security’s Entity List be aligned with sanctions lists maintained by the Treasury Department, and at least one lawmaker said BIS should already have taken steps to formally do so.
The Commerce Department published its fall 2022 regulatory agenda for the Bureau of Industry and Security, including one new rule that will finalize new chip export controls against China and others that could revise chemical weapons reporting requirements, the Export Administration Regulations and the Entity List.
China “welcomes” the Commerce Department’s decision last week to remove 25 Chinese companies from the Unverified List but criticized the agency’s decision to add other firms to the Entity List, calling the move “economic bullying.” In a Dec. 16 statement, China’s Ministry of Commerce said the U.S. “has ignored the fact that Chinese and American companies conduct normal commercial transactions and trade exchanges, ignored the strong voices of Chinese and American industries, generalized the concept of national security” and “abused export control and other measures,” according to an unofficial translation of the statement.
The Bureau of Industry and Security added a host of Chinese and Russian entities to the Entity List, including top Chinese chipmaker Yangtze Memory Technologies Co. and leading Chinese artificial intelligence firms, the agency said in a pair of notices released Dec. 15. The new restrictions on the Chinese firms are aimed at “severely restricting” China’s ability to leverage AI, advanced computing and other commercial technologies for its military or human rights abuses, BIS Undersecretary Alan Estevez said. The agency added the Russian entities to the list after it was unable to complete end-use checks. The changes took effect Dec. 16.