The new U.S. chip controls against China (see 2210070049 and 2211010042) mark a “major escalation” in the U.S.-China technology war and will likely have a significant effect on China’s technology capabilities, Bank of America said this week. The bank also warned that the controls, which are “more comprehensive and stricter than what we have seen in the past,” could ultimately open the “door to more sweeping restrictions in other domains like leading edge manufacturing.”
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.
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.
The Bureau of Industry and Security should avoid placing export controls on automated peptide synthesizers, U.S. companies said, arguing that the restrictions would hurt U.S. technological leadership and wouldn't do much to limit the proliferation of biological weapons. A Chinese national academy also opposed the controls, saying they could stifle global research and innovation.
The U.S. should make use of more inland ports to help alleviate congestion along the coasts, port authorities told the Department of Transportation in recent comments. More inland terminals could help containers move more quickly and efficiently, they said, and could help reduce costs by limiting the number of containers forced to sit in marine terminals.
As U.S. chip and technology companies continue to grapple with the U.S’s latest export restrictions on China (see 2211010042), a number of firms fear the controls will hurt their sales and exacerbate uncertainty in the semiconductor sector and the industry’s supply chains. In filings with the Securities & Exchange Commission this month, at least one firm projected revenue losses while others said they are still assessing the impact of the complex controls and whether they can secure export licenses.
A United Arab Emirates company violated U.S. export controls by shipping or trying to ship more than $50,000 worth of U.S.-origin telecommunications items to Syria and Iran, the Bureau of Industry and Security said in a charging letter released last week. The company, WEBS Electronics Trading Company, and its owner, Mohammad Alhamra, also lied to a BIS agent when it said it didn’t export to Syria.
The semiconductor industry was disappointed the new U.S. export control rules involving China weren’t imposed multilaterally and were frustrated by the Commerce Department’s lack of engagement before the rules were announced, a chip industry executive said. Semiconductor companies also have received mixed messages from Commerce about how long it could take to convince allies to impose similar controls, a China technology expert said, and fear that China could retaliate before allies are brought on board.
New guidance from the Committee on Foreign Investment in the U.S. signals that the committee is preparing to increase its enforcement efforts, law firms said this week. Companies should expect more scrutiny from the committee, firms said, adding that completing and documenting due-diligence before finalizing an investment transaction is growing increasingly important.
The top Republican on the House Foreign Affairs Committee is asking the Commerce Department to provide its licensing data and communications with chip companies, along with a broad swathe of related information, to make sure the agency is implementing its new China controls “fairly across all market players.”
The Bureau of Industry and Security will likely add more entities involved in China’s supercomputing and semiconductor manufacturing industry to the Entity List, said Thea Kendler, BIS’s assistant secretary for export administration. “We view advanced chip manufacturing and supercomputer activities in China as a national security concern,” Kendler said during a Nov. 2 Information Systems Technical Advisory Committee meeting. “So I expect that there will be Entity List additions.”