A bill that could move U.S. export control authority from the Commerce Department to the Defense Department reflects a lack of understanding of the export control licensing process and raises a number of questions about the future of U.S. export control regulations, Braumiller Consulting Group said in a recent post. Congress may want to devote more effort to holding Commerce and the Bureau of Industry and Security “accountable” under the Export Control Reform Act “rather than attempting to fix something that is working fine,” said the post, written by Craig McClure, a senior trade adviser with the firm.
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.
Several U.S. technology companies recently disclosed their ongoing efforts to comply with new export restrictions against China (see 2210070049), with some determining the regulations will have little effect and others saying the uncertainty is leading to business interruptions.
A small change to U.S. export regulations included in the fiscal year 2023 defense spending bill could go a long way to restricting shipments of sensitive U.S. technology, including hacking tools, lawmakers said this week. The provision, which passed as part of the National Defense Authorization Act last week, “represents the largest expansion of presidential export control authority in several years,” Rep. Tom Malinowski’s office said Dec. 21, adding that it allows the president to treat exports of hacking technology and expertise “just as we treat the export of sensitive military technology, to make sure it doesn’t fall into dangerous hands.”
The Bureau of Industry and Security this week announced new, stricter license requirements for exports to the Wagner Group, a Russian private military company, by designating it as a Russian military end-user, BIS said in a final rule effective Dec. 21. The new designation imposes a license review policy of denial for all items subject to the Export Administration Regulations, except for certain food and medicine, which will be reviewed on a case-by-case basis.
The Senate this week unveiled its fiscal year 2023 government spending package, which includes additional funding for key export control, sanctions and trade priorities. The package also includes another round of emergency defense aid for Ukraine.
The Bureau of Industry and Security granted an export license for U.S. chip company Nexcel Electronic Technology (NETI) after the company told BIS that new restrictions on China would force NETI to shut down and fire all its employees. NETI, which provides certain semiconductor services to Chinese companies, was granted a four-year license to continue its operations, the company’s lawyer and trade consultant told Export Compliance Daily.
The Los Angeles and Long Beach ports will end a program that could have eventually imposed surcharges on dwelling containers, the ports announced Dec. 16. The fee program was meant to incentivize the movement of dwelling containers (see 2110280031), but the ports never implemented it and instead postponed it weekly (see 2207220051) and later monthly (see 2211180061) since it was first announced in October 2021 (see 2207290053).
A recent joint alert by the Commerce and Treasury departments has been a boon to industry and the government, and has given export control officers more leads to track down potential Russia violations, said Matthew Axelrod, Commerce’s top export enforcement official. Axelrod said the alert has been so successful that the two agencies are hoping to publish another one next year.
The Bureau of Industry and Security added a host of Chinese and Russian entities to the Entity List, including top Chinese chipmaker Yangtze Memory Technologies Co. and leading Chinese artificial intelligence firms, the agency said in a pair of notices released Dec. 15. The new restrictions on the Chinese firms are aimed at “severely restricting” China’s ability to leverage AI, advanced computing and other commercial technologies for its military or human rights abuses, BIS Undersecretary Alan Estevez said. The agency added the Russian entities to the list after it was unable to complete end-use checks. The changes took effect Dec. 16.
The State Department is proposing to expand the definition of activities that are not exports, reexports, retransfers or temporary imports by adding two new entries, the agency said in a notice released Dec. 15. One new entry would be the “taking of defense articles outside a previously approved country by the armed forces of a foreign government” or U.N. personnel on a “deployment or training exercise,” the State Department said. The second entry would be a foreign defense item that enters the U.S. but is subsequently exported under a license, provided it has not been “modified, enhanced, upgraded, or otherwise altered or improved or had a U.S.-origin defense article integrated into it.”