The U.S., the EU and others can take steps to improve how they administer export controls, deliver guidance to industry and more efficiently target dangerous end users, experts said this week. One expert specifically called on the U.S. to revise the Entity List, which should better isolate the worst export control offenders.
Exports to China
China "firmly opposes" the U.S. move to add six Chinese entities to the Entity List over their ties to China's "High Altitude Balloons" intelligence and reconnaissance activities, China's Ministry of Commerce said, according to an unofficial translation. Responding to a reporter's question on the inclusion of the entities, the ministry said it hopes the U.S. "will stop its unreasonable suppression of Chinese companies and will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies."
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The Commerce Department is trying to find a way to screen outbound investments in a way that protects domestic commercial interests but limits collateral damage to businesses with interests outside the U.S., said Marisa Lago, the agency’s undersecretary for international trade. Lago’s comments came one day after Samm Sacks, an expert on U.S.-China technology policy issues, said the Biden administration hasn’t yet released an executive order to create an outbound investment screening regime because of discussions surrounding implementation challenges.
The U.S. is making “good progress” on aligning export controls over sensitive technologies with allies, Deputy Secretary of State Wendy Sherman said this week, adding that almost all the administration's recent discussions with trading partners have involved China technology issues. She also said the agency is working to counter a growing oil partnership between China and Iran, but said preventing China’s purchases has proven challenging.
The Biden administration’s implementation of its new China chip export controls (see 2210070049) has been “mixed,” and it remains unclear how far allies will go to impose similar restrictions, said Clete Willems, who was a National Security Council official during the Trump administration. Willems, in written testimony this week to the House Financial Services Committee, said he doesn’t understand why the administration didn’t initially coordinate the October export control rule with allies, a shortcoming that could be hurting U.S. companies now.
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Although former national security officials agreed that the U.S. should consider outbound investment review restrictions, they panned a congressional proposal that would have granted a new interagency committee “sweeping” power to restrict capital flows to China. Speaking during a House Financial Services Committee hearing this week, some of the former officials said Congress should rethink the proposal and also urged the Biden administration against issuing a unilateral executive order to establish an outbound investment review regime.
Russian customs data shows the country’s sanctioned defense companies are buying navigation equipment, jamming technology, jet-fighter parts and more from China, The Wall Street Journal reported Feb. 4. Russia has imported tens of thousands of shipments of dual-use goods since its invasion of Ukraine last year, most of them from China, the report said. Although the U.S. and other Western nations have imposed strict export controls on technology to stop sensitive items from being sent to Russia, Moscow is able to sustain its military needs through countries that haven’t joined the U.S.-led sanctions effort, the report said, including Turkey and the United Arab Emirates. But Chinese companies are the “dominant exporters” of dual-use items to Russia, the report said.
In West Virginia, where the first House Ways and Means Committee hearing of the new Congress was held since the Republicans won the majority, the members asked questions of business owners, and were hosted by a mid-sized business that sells hardwood lumber to furniture makers, cabinetmakers and flooring manufacturers.