National Security Adviser Jake Sullivan said the length of time the White House has been considering a set of outbound investment regulations without releasing a plan isn't "because we're lazy, or we're not doing the work," but because it's difficult to find a solution "that is sustainable and effective."
Exports to China
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The Biden administration could first release its outbound investment screening regime as a trial period and then expand the restrictions to cover broader investments after the initial year, said Anna Ashton, director of China corporate affairs at the Eurasia Group. Ashton, speaking during an April 21 event hosted by the University of Virginia's Miller Center, also said current U.S. chips subsidies will fall far short of making up for lost U.S semiconductor exports to China, while other experts said they fear U.S. chip export controls (see 2210070049) will continue to cause foreign companies to “design-out” American technology and software.
The U.S. should work with China in select artificial intelligence areas instead of imposing sweeping export controls that create financial incentives for companies to “design-out” U.S. technology, Paul Scharre, vice president and director of studies at the Center for a New American Security, said in an April 18 opinion article for Time Magazine. While current U.S. restrictions on semiconductors exports to China are “narrowly targeted,” he said they will “de facto grow over time as chips advance and the threshold for export controls remains the same.”
The U.S. is still “considering” a new outbound investment screening regime, Treasury Secretary Janet Yellen said this week, stressing that any restrictions would be “narrowly scoped and targeted to clear objectives.”
The Bureau of Industry and Security on April 19 fined Seagate Technology $300 million for violating U.S. export controls against Huawei in what it said is the “largest standalone administrative penalty in BIS history.” The agency said the California-based company and its branch in Singapore sold more than 7 million export-controlled hard disk drives to Huawei in violation of the BIS foreign direct product rule.
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.
Rep. Mark Green, R-Tenn., reintroduced a bill last week that could lead to new export controls and sanctions against China. The China Technology Transfer Control Act, first introduced during the last Congress, calls on the president to impose restrictions on “any covered national interest technology or intellectual property” exported from the U.S. to China or by a U.S. person to China. It also would require the Commerce and State departments to submit a report to Congress within 90 days of the bill’s enactment “assessing” whether any covered technologies should be controlled under the International Traffic in Arms Regulations or Export Administration Regulations.
China has become a “world leader” in space and missile technologies despite “far-reaching” U.S. export controls, said Kevin Pollpeter, a senior research scientist at the Center for Naval Analysis. Pollpeter, speaking during a U.S.-China Economic and Security Review Commission hearing last week, said China’s space and missile programs are “not only closing the gap with the United States, but are also increasingly innovative.” He noted that the director of national intelligence recently warned that China could reach “world-class status” in most space technology areas by 2030.
The Bureau of Industry and Security should reform its Entity List process and its licensing procedures to more effectively prevent China from acquiring sensitive U.S. technologies, said Cordell Hull, former acting BIS undersecretary. Hull also suggested that BIS increase its penalties for export violations, and said he isn’t convinced creating a new multilateral export control regime is the best way to counter China.