Two U.S. semiconductor companies said they still see opportunities to sell into the Chinese market despite sweeping export controls announced by the U.S. in October (see 2210070049) and potentially more restrictions coming soon.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
The Committee on Foreign Investment in the U.S. continued to see an increase in notices last year and initiated the most investigations since 2017, CFIUS said in its annual report to Congress released this week. The committee received 286 notices during calendar year 2022, a slight increase from the 272 it received in 2021, and began 162 investigations into transactions, 32 more than in 2021 and close to double the amount from 2020.
The most recent tri-seal compliance note from the Commerce, Treasury and Justice departments is another sign that the U.S. is increasing its focus on export and sanctions enforcement and of the government’s effort to push companies to voluntarily disclose potential violations, law firms said last week. The firms urged businesses to review each agency's disclosure policy, saying the note could mean increased risks for companies that choose not to disclose.
The Senate last week passed its version of the FY 2024 National Defense Authorization Act with several trade-related amendments, including one that could establish a notification regime for, but not restrict, certain outbound investments (see 2307260029).
DOJ has been looking closely at companies’ approaches to communications platforms since revising its corporate compliance program criteria earlier this year, Caitrin McKiernan, a Steptoe lawyer, said during a webinar hosted by the firm last week. She said she’s working with multiple clients in assessing their compliance programs to make sure they meet the new standards set by DOJ in March, which could affect whether the agency offers to resolve an investigation without criminal charges (see 2303030056).
Despite some opposition from Democrats, the House Foreign Affairs Committee this week advanced multiple bills designed to ease technology sharing restrictions within the Australia-U.K.-U.S. (AUKUS) partnership. Two bills would create new license exceptions for certain defense exports to Australia and the U.K., and another would authorize the sale of Virginia Class submarines to Australia to help the Biden administration implement AUKUS, a deal that commits the U.S. to delivering the submarines within the next decade (see 2303130035).
The Bureau of Industry and Security shouldn’t renew the one-year authorizations it gave to certain foreign chip companies as part of its Oct. 7 China chip controls unless the agency makes “significant” changes to the restrictions when it finalizes the controls in the coming months, said Derek Scissors, a China policy expert with the American Enterprise Institute. Scissors said extending the licenses beyond their October expiration would “undermine” the Biden administration’s goal of denying China advanced semiconductor technology and unfairly advantage foreign companies over U.S. firms.
The Senate this week voted to attach amendments to its version of the FY 2024 National Defense Authorization Act, including one that could establish a notification regime for certain outbound investments and another that could ban China, Russia, North Korea and Iran from investing in American farmland and agricultural businesses.
The Bureau of Industry and Security this week signed an “agreement” with the Office of Foreign Assets Control to improve coordination among the two agencies’ export control and sanctions enforcement teams, said Matthew Axelrod, the top BIS export enforcement official. The agreement will help in “formalizing our close coordination and partnership,” Axelrod said during a July 26 Society for International Affairs conference, according to a copy of his speech emailed by BIS.
Commerce Secretary Gina Raimondo this week declined to say when she expects the Bureau of Industry and Security to finalize its Oct. 7 China chip controls (see 2210070049, saying it’s more important to her that the agency takes its time and gets the updated restrictions “right.” She also said she doesn’t see Chips Act funding and restrictions on American chips sales to China as contradictory and denied reports that the administration has delayed new export controls against China in an effort to limit damage to its relationship with Beijing.