Citing a Financial Times report that Chinese artificial intelligence developers are evading controls on advanced semiconductors by using cloud services, members of the House introduced a bill to stop those practices, called Closing Loopholes for the Overseas Use and Development of Artificial Intelligence (CLOUD AI). The bill was introduced last month, and its text published this week.
The State Department this week announced penalties on one person and four entities and their subsidiaries for illegal transfers under the Iran, North Korea and Syria Nonproliferation Act. The agency in a notice said the parties transferred items subject to multilateral control lists that contribute to weapons proliferation or missile production. The State Department barred them from making certain purchases of items controlled on the U.S. Munitions List and by the Arms Export Control Act and will suspend any current export licenses used by the entities. The agency also will bar them from receiving new export licenses for any goods subject to the Export Administration Regulations. The restrictions will remain in place for two years from the July 19 effective date.
The U.S. Court of Appeals for the 9th Circuit, in a July opinion, reversed a California district court's decision acquitting Yi-Chi Shih, an employee at China-based firm Chengdu RML, of conspiracy to violate export control laws via his export of semiconductors to China. Judges Andrew Hurwitz and Ryan Nelson said "a rational factfinder could find that the exported [monolithic microwave integrated circuits] were not exempt from the [Export Administration Regulations] as fundamental research."
The Bureau of Industry and Security this week renewed its temporary denial order for a Venezuela-based cargo airline after saying it continues to try to violate U.S. export restrictions and the terms of the TDO. BIS said Empresa de Transporte Aereocargo del Sur, also known as Aerocargo del Sur Transportation or Emtrasur, has demonstrated "continued disregard" for U.S. export controls.
Sen. Marco Rubio, R-Fla, introduced a bill this week that could lead to new export controls on certain U.S. “genetic technology” destined to China. The Stopping Genetic Monitoring by China Act would add various types of “genetic sampling and testing kits, analytical technology, and software” to the Bureau of Industry and Security’s Commerce Control List, including:
The Bureau of Industry and Society last week issued guidance for license applicants seeking to export medical-related items to Russia, Belarus or certain occupied regions of Ukraine, outlining best practices for submitting applications and what information should be included. BIS urged exporters to “provide all the necessary information when the application is first submitted” so the agency can “promptly analyze the proposed scope of the transactions” before submitting it for interagency review, and the agency detailed what types of applications may lead to delays.
The Bureau of Industry and Security sent a final rule for interagency review that would implement export control changes and updates agreed to during the 2022 Wassenaar Arrangement. The rule was sent for review July 18 and would amend the Export Administration Regulations and Commerce Control List.
The Bureau of Industry and Security this week added four European spyware and surveillance technology companies to the Entity List for their role in “threatening” cyber activities. BIS accused all four of “trafficking in cyber exploits used to gain access to information systems, threatening the privacy and security of individuals and organizations worldwide.”
The Commerce Department published its spring 2023 regulatory agenda for the Bureau of Industry and Security and the Census Bureau, including new rules that will add more entities to the Entity List and finalize new export filing requirements.
The Bureau of Industry and Security added four spyware companies in Greece, Hungary, Ireland and North Macedonia to the Entity List for their role in cyber activities that threaten the “privacy and security of individuals and organizations worldwide.” The additions, outlined in a final rule effective June 18, impose license requirements for all items subject to the Export Administration Regulations. BIS will review license applications under a presumption of denial.