The House voted 222-210 last week to pass its China competition bill, which includes a variety of provisions that could expand U.S. export controls, sanctions and investment screening authorities. Although the America Competes Act faced objections from Republicans who argued it wasn’t tough enough on China and didn’t include strong enough export control measures (see 2202020039), several provisions could lead to more China sanctions and further restrict exports of critical American technologies.
Exports to China
Two senators this week asked the Commerce Department to say whether it opposes stronger export controls against SMIC, China’s top chipmaker, as has been reported in the media, and to explain why.
The House will consider multiple sanctions and export control amendments submitted as part of its China competition bill (see 2201310064), including one that could adjust the Commerce Department's export control authority, several that could require more scrutiny on Chinese foreign investments and at least two that could lead to new China sanctions.
The State Department this week fined a U.S. electro-optics equipment manufacturer $840,000 after it illegally exported or tried to export defense items to several countries, including China and Lebanon. Torrey Pines Logic didn’t secure required export licenses before shipping its products, illegally participated in defense export activities while it was ineligible and didn’t maintain adequate export transaction records, the Directorate of Defense Trade Controls said in a charging letter released Jan. 31. TPL ultimately agreed to a series of remedial measures to improve its export compliance program, including hiring a DDTC-approved compliance officer.
Lawmakers submitted a host of amendments to the House’s recently released China competition bill, including measures that would introduce new export controls and sanctions authorities and requirements. One submission, a 115-page amendment from Rep. Michael McCaul, R-Texas, would create more congressional oversight of the Commerce Department’s emerging and foundational technology control effort and calls for expanded export restrictions against Chinese military companies.
The U.S. should build a “consortium” of like-minded countries to collaborate more closely on semiconductor export controls to counter China and its coercion of Taiwan, the Center for a New American Security said in a Jan. 27 report. The consortium would also coordinate other “punitive actions,” such as investment screening, to counter “Chinese economic and political aggression.”
As the U.S. and the European Union both prepare their own set of Russian sanctions and export controls, a senior U.S. official said the measures may not be identical but will align very closely to avoid hurting the competitiveness of U.S. firms. Peter Harrell, a National Security Council official, also said the trade restrictions won’t amount to an embargo against “everyday” Russian consumers, and will likely include exemptions and a wind-down period.
Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
The U.S. should try to use existing tools to better screen outbound investments rather than create a new investment regime, which could burden American companies and damage U.S. competitiveness, two former U.S. officials and an international investment expert said. But one member of a bipartisan congressional commission said a new outbound investment regime is necessary to better protect U.S. critical technologies and national security.