Companies should expect the Treasury Department to aggressively penalize violators of its upcoming outbound investment prohibitions relatively soon after those rules are finalized, lawyers with Kirkland & Ellis said this week. They also said American chip companies and other technology firms are considering inserting new outbound investment-related warranties in their contracts and may start pulling out of existing investment deals that could soon be captured by the new prohibitions.
The U.S. should start designating Chinese banks under a December executive order that authorizes secondary sanctions on foreign financial institutions that help facilitate Russia-related transactions, a group advocating for democracy in Hong Kong said in a new report this month.
A new report accompanying the Senate Appropriations Committee’s FY 2025 Commerce-Justice-Science Appropriations Bill calls for the Bureau of Industry and Security to conduct several export control reviews, including one that identifies regulatory “gaps” that have allowed controlled U.S. technology, especially semiconductor technology, to flow to China without a license (see 2407260054).
Sen. John Kennedy, R-La., said last week he remains concerned by recent news reports showing China has found ways around U.S. export controls on advanced computing chips.
A majority of companies and business groups that answered survey questions from the European Commission this year said they were in favor of new EU measures to monitor outbound investments in a narrow set of advanced technologies. But they also cautioned the bloc against placing too heavy a compliance obligation on European companies, with some arguing the reporting should be voluntary.
The Senate Appropriations Committee unveiled and approved an FY 2025 Commerce-Justice-Science Appropriations Bill July 25 that would provide $206 million for the Bureau of Industry and Security, $17 million below the Biden administration’s request but $15 million above the FY 2024 enacted level and $19.3 million above what the House Appropriations Committee has proposed (see 2403110065 and 2406250035).
Sen. Chris Van Hollen, D-Md., questioned a senior Bureau of Industry and Security official this week about whether the agency would consider using its foreign direct product rule to impose more license restrictions on foreign exports of advanced chipmaking equipment to China.
The Biden administration is making progress in its effort to persuade American allies to adopt outbound investment restrictions similar to the ones the U.S. is pursuing, a Treasury Department official said July 25.
Stopping U.S. firms from participating in RISC-V, an open-source semiconductor architecture that policymakers fear China will use to evade export controls, would only hurt American innovation and competitiveness, the Information Technology and Innovation Foundation said this month.
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