President Donald Trump’s executive order ending preferential treatment for Hong Kong details a range of sanctions authorities and export bans but includes a carve-out for certain defense exports authorized before the order was issued. The State Department’s Directorate of Defense Trade Controls issued a July 15 guidance to clarify the new restrictions and answer industry questions.
The Commerce Department’s long-awaited proposed regulations on routed export transactions may not be issued until next year, a Census Bureau official said. Both Census and the Bureau of Industry and Security have been working closely on the rule but have struggled to pinpoint a release date. “I thought it would happen this year, but I'm going to go with probably 2021,” Kiesha Downs, chief of Census’ Foreign Trade Division’s regulations branch, said during a July 15 webinar hosted by Census. “It's just a matter of ironing out a couple more things.”
The Commerce Department published its spring 2020 regulatory agenda for the Bureau of Industry and Security. The agenda includes a new mention of a rule to control “software” for the operation of “automated nucleic acid assemblers and synthesizers” capable of designing and building “functional genetic elements from digital sequence data.” BIS said the software can be used in the production of pathogens and toxins, with the potential for those to make their way into biological weapons if export controls on the software are lacking. The notice of proposed rulemaking, part of BIS’ effort to control emerging and foundational technologies (see 2005190052), will request industry comments about how the controls might affect “legitimate commercial or scientific applications.” BIS said it aims to issue the proposed rule this month.
The Bureau of Industry and Security clarified the agency’s suspension of license exceptions for exports to Hong Kong, saying it will no longer allow exceptions for items subject to the Export Administration Regulations “that provide differential treatment than those available” to China. In a guidance issued after its June 29 suspension announcement (see 2006290063), BIS said U.S. exporters cannot use license exceptions for any shipments to Hong Kong “except for transactions that would otherwise be eligible for a license exception” for mainland China.
The Office of Information and Regulatory Affairs began an interagency review for a final Bureau of Industry and Security rule that will revise country groups for Ukraine under the Export Administration Regulations. OIRA received the rule June 25.
The Bureau of Industry and Security stressed the importance of increased due diligence measures in a guidance (see 2004280052) on its new export licensing restrictions for military-related exports, saying industry must be careful to avoid shipping goods to entities with any nexus to the Chinese military. The newly issued guidance touches on due diligence best practices and addresses shipments to distributors and universities but does little to address the “unmanageable” compliance burdens industry said the rule will cause (see 2006150031, 2006180035 and 2005050035). BIS also did not grant a request by at least 20 industry groups to delay the rule’s effective date (see 2006150031). The rule took effect June 29.
The Bureau of Industry and Security postponed the effective date for certain filing requirements outlined in an April rule on military-related exports (see 2004270027). The agency said this week it will not require Electronic Export Information filings for some exports captured under the rule until Sept. 27 -- a three-month extension from the original June 29 effective date. Other EEI filing requirements described under the rule take effect June 29.
The Commerce Department will officially amend the Export Administration Regulations June 18 to allow U.S. companies to more easily participate in standards setting bodies in which Huawei is a member, the agency said in a notice. Commerce, which previously announced details of the measure (see 2006150062), is seeking comments on the revision, which will allow the release of certain technology to Huawei and its affiliates on the Entity List if that release is in the context of a standards-setting body and not for commercial purposes. Comments are due Aug. 17.
The Commerce Department's Bureau of Industry and Security announced a new set of export controls on certain cultivation chambers and chemicals (see 2005150048). The controls, agreed to by the Australia Group during a February meeting, restrict the sales of certain “rigid-walled, single-use” cultivation chambers and precursor chemicals, along with the “Middle East respiratory syndrome-related coronavirus,” or MERS. The final rule, which takes effect June 17, falls under BIS's effort to restrict sales of emerging technologies (see 2005190052), as mandated by the 2018 Export Control Reform Act, the agency said.
The Commerce Department announced a new rule that it said will help U.S. companies participate in international standard-setting bodies where Huawei is a member. Under the rule, companies will no longer need an export license to disclose technology to Huawei if that disclosure is for the “purpose of standards development in a standards-development body,” Commerce said in a June 15 press release. In addition, companies may only disclose technology to Huawei if that technology would not have required an export license before Huawei’s placement on the agency’s Entity List last year.