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 for the title or by clicking on the hyperlinked reference number.
Exports to China
China this week banned certain Chinese companies from purchasing products from U.S. semiconductor company Micron, saying they are a national security risk and shouldn’t be used in “critical information infrastructure” projects. The country’s cyberspace regulator said its infrastructure operators “should stop purchasing Micron products” after a Chinese government review found they have “relatively serious potential network security issues, which pose a major security risk” to China, according to an unofficial translation of a May 21 notice. “The purpose of this network security review of Micron's products is to prevent product network security issues from endangering the security of the country's key information infrastructure, which is a necessary measure to maintain national security.”
Members of Congress need to be mindful of what their proposals to regulate outbound investment might mean for U.S. businesses, one of the experts on a Washington International Trade Association webinar cautioned.
The leaders of the House Foreign Affairs Subcommittee on the Indo-Pacific are trying to pass legislation to give the president the ability to respond to economic coercion of allies, but Chair Young Kim, R-Calif., asked witnesses at a subcommittee hearing she convened to advise what else could be done to stand up to China's economic aggression.
China denounced recent U.S. enforcement actions by the Disruptive Technology Strike Force against various Chinese and Russian individuals for allegedly violating sanctions by conspiring to export technology, trade secrets and aircraft parts 2305160047). A spokesperson for the Ministry of Foreign Affairs said May 17 the U.S. "has kept stretching the national security concept to abuse export control regimes and its leading technological advantage," according to a transcript in English of the regular press conference the spokesperson holds with media in Beijing. The spokesperson urged the U.S. to stop suppressing China in the field of technology and using judicial power to target Chinese researchers, adding "China will do what is necessary to firmly safeguard the lawful rights and interests of Chinese citizens."
The U.S. should avoid placing export controls on cloud computing services to try to prevent Chinese companies from using a loophole that allows them to access controlled semiconductors, researchers said. Georgetown’s Center for Security and Emerging Technology and the Center for a New American Security explored this strategy in a new report released this week but said export controls don't “appear feasible and may have adverse consequences.”
A series of export control indictments announced this week, including several for illegal shipments to China and Russia, only scratched the surface of prosecutions expected to be brought as part of the new Disruptive Technology Strike Force, said Matthew Axelrod, the Bureau of Industry and Security's top export enforcement official. “It’s just the beginning,” Axelrod said during a May 17 law conference hosted by the American Bar Association, Mayer Brown and American University. “I think you can expect to continue to see actions come out from the strike force as this work continues.”
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 for the title or by clicking on the hyperlinked reference number.
DOJ this week unsealed indictments of six people for trying to illegally ship sensitive items from the U.S., including shipments of dual-use technologies and aircraft parts to Russia, isostatic graphite to Iran and trade secrets to China. The charges are the first enforcement actions brought by the Disruptive Technology Strike Force, a group launched by DOJ and the Commerce Department in February to investigate and prosecute criminal export violations (see 2302160019).
The U.S. should deploy “targeted and responsible” trade measures to restrict Chinese access to sensitive technologies, not ones that cut off a broad range of transactions between American and Chinese firms, U.S. Chamber of Commerce CEO Suzanne Clark said during an industry conference this week.