The upcoming U.S. outbound investment review tool probably won’t be used to unwind past deals, and will likely only target investments in specific, sensitive technology areas, said Laura Black, a former Treasury Department official. But she said companies still should prepare for a new outbound investment executive order and be ready for other jurisdictions to implement their own outbound investment controls, including in the EU.
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.
Despite requests from industry, the Bureau of Industry and Security may push back on publishing a comprehensive list of advanced Chinese semiconductor fabrication facilities that are subject to the October chip controls, said Kevin Wolf, an Akin Gump lawyer and former BIS official. But the agency could meet industry halfway and publish a list similar to its military end-user list (see 2012220027), which could be a regularly updated, noncomprehensive set of facilities subject to the agency’s China chip controls.
The Bureau of Industry and Security has drafted new guidance for its October rule that expanded certain China-related chip controls (see 2210070049) and hopes to release it soon, said Thea Kendler, the agency’s assistant secretary for export administration. Kendler, speaking during a virtual conference hosted by the Massachusetts Export Center last week, also touched on the rule’s expiring temporary general license and urged industry to submit feedback on the new restrictions before the deadline this week.
The U.S. should impose sanctions against China for allowing its companies to continue to supply semiconductors and other dual-use technologies to Russia, said Sen. Bob Menendez, chair of the Senate Foreign Relations Committee. Although the U.S. has penalized specific Chinese companies for supplying Russia -- including new sanctions this week -- Menendez said he wants to see a more “robust” set of measures.
The Federal Maritime Commission will amend its proposed rule on unreasonable carrier conduct (see 2209130040), after industry, lawmakers and at least one federal agency said the rule was too broad, missed congressional intent and didn’t go far enough to address carriers that refuse to carry exports in favor of imports. The commission plans to issue a “supplemental notice of proposed rulemaking” to incorporate changes to the rule, FMC Chair Daniel Maffei said during a Jan. 25 commission meeting, adding that he hopes to publish the updates “as quickly as possible.”
ASML, the Netherlands’ flagship semiconductor company, said it saw higher-than-expected fourth quarter revenue and expects a 25% increase in net sales this year despite challenges caused by existing and potential future export controls against China. The company also declined to predict whether the Netherlands will join the U.S. in imposing similar chip export restrictions but warned that broad controls could severely damage the semiconductor industry.
The U.S. should double down on its resources, oversight and enforcement to prevent Russia from acquiring semiconductors and other dual-use goods used to power its war against Ukraine, the Silverado Policy Accelerator said in a report this week. If the broad Western export controls against Russia aren’t followed up with strict enforcement, the think tank said, Moscow will continue to find ways to import chips, including from China.
The U.S. should take more steps to counter corruption and sanctions evasion efforts by Russian kleptocrats, including through a new multilateral anti-corruption council, Sen. Sheldon Whitehouse, D-R.I., said this week. While he applauded recent funding passed by Congress to provide more resources for government enforcement efforts, he said lawmakers have more work to do to close sanctions loopholes.
The State Department last year limited its new open general license pilot program to defense reexports and retransfers because of a database issue with CBP, and may eventually look to expand the authorization to include regular exports, said Dilan Wickrema, an official with the Directorate of Defense Trade Controls. “Frankly, the reason why we haven't been able to include exports into an OGL yet is because we would have to amend CBPs database to allow and accept some kind of code indicating that an OGL was used,” Wickrema said.
Compliance with a new country of origin (COO) reporting requirement in the Automated Export System would be difficult for smaller and occasional exporters, many of which would likely have to develop new processes to report that information, the National Customs Brokers & Forwarders Association of America told the Census Bureau. The NCBFAA urged Census to research whether it can collect that COO information from other sources before it decides to move forward with the proposal.