Two nominees to lead the Bureau of Industry and Security said they will prioritize stopping illegal technology exports to China and are willing to bypass multilateral controls on certain sensitive technologies if unilateral restrictions are warranted. But Alan Estevez, President Joe Biden’s nominee for BIS undersecretary, and Thea Kendler, the nominee for assistant secretary for export administration, also stressed that export control cooperation with allies is crucial and committed to working to convince trade partners to adopt more controls.

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Customs brokers in Washington to lobby for the Customs Business Fairness Act renewal should also talk about the importance of the Ocean Shipping Reform Act of 2021, National Customs Brokers & Forwarders Association of America transportation committee members told the annual government affairs conference attendees, as a way to fight excessive detention and demurrage fees.

The Office of Foreign Assets Control’s August penalty against a Romanian bank and its U.S. parent company underscored the various sanctions risks during acquisitions and the many compliance issues foreign subsidiaries can cause for their owners, law firms said. The settlement agreement particularly served as a reminder to non-U.S. companies that OFAC’s sanctions jurisdiction can extend far beyond the U.S., and there are “no shorthand compliance measures that can guarantee protection,” Arnold & Porter said in a September alert.

Foreign direct investment between the U.S. and China involving technologies dropped 96% from 2016 to 2020, while overall investment dropped by about 75%, Bain & Company said in a Sept. 20 report. The consulting firm pointed to various potential reasons for the steep decline, including the spike in investment and export scrutiny by the U.S., which has strengthened its foreign investment screening tools and export controls in recent years to specifically target China (see 2001140060 and 2103030057).

An investment and research firm expects the Bureau of Industry and Security to issue several proposed rules for export controls related to semiconductors this fall and said BIS is considering other restrictions on certain Chinese technology companies. In a Sept. 17 report, the Cowen Washington Research Group said BIS is “likely” to soon issue several notices of proposed rulemaking to request industry comment on new controls for semiconductor capital equipment, mostly so the U.S. is prepared with new proposals for the next Wassenaar Arrangement cycle.

President Joe Biden issued an executive order last week authorizing a range of sanctions and export restrictions against human rights abusers and other people committing violence, blocking humanitarian aid or threatening peace in Ethiopia. The new sanctions regime can target the Ethiopian and Eritrean government and several military groups in the region, including the Ethiopian National Defense Forces, the Eritrean Defense Forces, the Tigray People’s Liberation Front and Amhara regional forces, and others supporting those groups and people. In addition to asset freezes, the order authorizes the Treasury Department to work with other agencies to deny export licenses for certain goods and technology to people or entities sanctioned under this regime.

The Committee on Foreign Investment in the U.S. granted a request from Magnachip Semiconductor Corp. and Wise Road Capital to withdraw and resubmit their initial CFIUS filing, Magnachip said in a Sept. 14 filing with the Securities and Exchange Commission. This will allow the two companies more time for “further discussion” with CFIUS about potential pathways to mitigate the national security risks CFIUS had identified in the merger. CFIUS’s new review period for the merger began Sept. 14 and will conclude no later than Oct. 28, the committee told Magnachip in a Sept. 13 letter. CFIUS may extend the review period if warranted.

The Biden administration is likely to increase export controls and sanctions enforcement in the next few years, Gibson Dunn lawyers said during a webinar this week. They also said the administration is likely to pursue enforcement in creative ways, including sometimes through disclosures with the Committee on Foreign Investment in the U.S.

The Bureau of Industry and Security should establish a blanket exemption for U.S. people and companies to participate in standards-setting bodies that have members designated on the Entity List, industry officials said. Although BIS has been working on a final rule (see 2012150037) that would clarify how export restrictions apply to the release of controlled technology at standards-setting organizations, officials from the telecommunications industry and other technology sectors are unsure how the rule’s final language will read and are concerned some of the agency’s restrictions, which they view as unnecessary, may continue.