The Bureau of Industry and Security is rolling back a Biden-era interim final rule that increased restrictions on firearms exports, the agency said in a final rule effective Sept. 30. BIS said it decided that the rule should be “rescinded in its entirety” after hearing from U.S. firearms manufacturers that the controls “would cost them hundreds of millions of dollars per year in lost sales.”
A new interim final rule released by the Bureau of Industry and Security this week introduces a 50% ownership threshold rule for the Entity List and Military End-User List, a change that’s expected to drastically increase the number of companies subject to stringent export licensing restrictions. BIS also is adopting the rule, which it calls the “Affiliates rule,” for export transactions involving certain parties sanctioned by the Office of Foreign Assets Control, which BIS said will “align more closely” OFAC’s 50% rule with the new restrictions under the Export Administration Regulations.
The Bureau of Industry and Security officially released a new regulation to introduce a 50% ownership threshold rule for parties on the Entity List and Military End-User List. The interim final rule, released and effective Sept. 29, will impose the same export license requirements as the parent company for any affiliate owned 50% or more by a party on the Entity List or Military End User List, similar to how sanctions are applied under the Office of Foreign Asset Control's 50% rule. The rule includes a 60-day temporary general license that “permits certain export, reexport, and transfer (in-country) transactions involving non-listed 50-percent or more owned foreign affiliates of parties on the Entity List or Military End-User List.” BIS is accepting public comments on the changes by Oct. 30.
The Bureau of Industry and Security has drafted and is preparing to soon publish an interim final rule that will introduce a 50% rule for parties on the Entity List and Military End-User List, according to a copy of the rule seen by Export Compliance Daily. The rule would impose the same export license requirements as the parent company for any affiliate owned 50% or more by an entity on those two lists, and it includes a 60-day temporary general license to authorize certain transactions with some non-listed entities before the new restrictions apply.
U.S. export controls on chips are working and should be maintained, not swapped in a trade deal as part of a “grand bargain” between the Trump administration and Beijing (see 2507150013 and 2508010002), said Rush Doshi, former National Security Council official during the Biden administration.
The Bureau of Industry and Security is working to issue a final rule for a set of regulations that in January placed new export controls on certain lab equipment that can be misused by "countries of concern" for military purposes (see 2501150020). The rulemaking, sent for interagency review Sept. 23, will finalize those revisions to "address the accelerating development and deployment of advanced biotechnology tools contrary to U.S. national security and foreign policy interests," BIS said.
Taiwan is probing the business credentials of a Taiwanese company added to the Bureau of Industry and Security's Entity List earlier this month (see 2509120077), Taiwan's International Trade Administration said, according to an unofficial translation. The company, Shanghai Fudan Microelectronics, is a "representative office of a Hong Kong company in Taiwan," and an "investigation revealed that the representative office does not possess import and export qualifications," Taiwan said. "The Ministry of Economic Affairs will further verify whether the representative office's actual operations are consistent with its original application."
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Ross Kennedy, the founder of an advisory firm who joined the Bureau of Industry and Security in March (see 2504030073), has been named the acting assistant secretary of export enforcement, according to the agency's website and Kennedy's LinkedIn page. The agency is awaiting Senate confirmation for its permanent enforcement chief (see 2507230053). Kennedy, who previously was a BIS senior adviser, replaces John Sonderman, who is listed as the principal deputy assistant secretary for export enforcement.
Chinese semiconductor company Yangtze Memory Technologies Corp. accused the Bureau of Industry and Security of illegally withholding documents related to its placement on the Entity List, adding that the government acted on "inaccurate" information from YMTC competitors when it imposed stringent export license requirements on the company in 2022. The firm also questioned whether the End-User Review Committee, the interagency group that makes decisions on adding or removing companies from the Entity List, followed proper protocol when it voted to put YMTC on the list.