China’s Shenzhen region recently strengthened its import controls for frozen meat and aquatic products to better prevent the spread of the novel coronavirus that causes COVID-19, the Hong Kong Trade Development Council reported Aug. 28. All covered imports must first go through a recently created “supervision warehouse” in Shenzhen, where the goods' packaging will be disinfected and samples will undergo nucleic acid tests before they can be stored, sold and processed, HKTDC said. The goods cannot leave the warehouse before obtaining a warehouse exit certificate.

China revised its list of technologies subject to export controls, including some dual-use items, the country’s Commerce Ministry and Ministry of Science and Technology said Aug. 28, according to unofficial translations. The list has 53 revisions, China’s Commerce Ministry said, including the addition of export restrictions on 23 “new technology items.” The Ministry of Science and Technology provided a Chinese-language notice outlining the changes.

The Export-Import Bank of the U.S. did not finance any dual-use exports during the 2019 fiscal year and financed only one such export the previous year, the Government Accountability Office reported Aug. 27. The GAO noted that the Ex-Im Bank successfully monitored the end use of the lone dual-use export during the 2018 fiscal year, which included two satellites for the Mexican government. The bank “received all documents” from Mexico on time and determined the Mexican government was “in compliance with the bank’s dual-use policy.”

The Defense Department on Aug. 28 released another list of Chinese companies with ties to the country’s military, potentially requiring increased due diligence measures for U.S. companies doing business with them. The list includes companies on the Commerce Department’s Entity List and others not yet subject to U.S. restrictions. The entities may also fall under the scope of an April Commerce rule that increased licensing requirements for exports to military end-users or for end-uses in China (see 2004270027). The Defense Department issued a similar list in June (see 2006250024).

A researcher at a California university is being investigated for trying to transfer sensitive U.S. software or technical data to a Chinese company on the U.S. Entity List, the Justice Department said Aug. 28. Guan Lei, a Chinese national and researcher at the University of California, Los Angeles, was arrested for allegedly destroying evidence on a hard drive that may have implicated him in the illegal software transfer, the agency said. The Justice Department said it is investigating whether Guan, of Alhambra, California, tried to send the software to China’s National University of Defense Technology.

A U.S. website infrastructure company said the Commerce Department determined not to penalize it after the company submitted a voluntary disclosure about potential export control and filing violations. Cloudflare, based in California, submitted disclosures last year (see 1909120065) to the Bureau of Industry and Security and the Census Bureau for making “incorrect” electronic export information statements and for allowing the export or “download of certain software prior to making required filings.” The company, in an Aug. 10 Securities and Exchange Commission filing, said its disclosures were “completed with no penalties” by Census in November and BIS in June.

A gaming software company said it may have violated U.S. sanctions and export reporting requirements, according to its regulatory filing with the Securities and Exchange Commission. Unity Software, based in California, told the SEC it voluntarily disclosed possible export and sanctions violations to the Bureau of Industry and Security and the Office of Foreign Assets Control in August. The SEC filing, dated Aug. 24, is a registration statement ahead of the company's eventual initial public offering.

Although foreign investors and U.S. exporters should be closely monitoring the Commerce Department’s effort to restrict foundational technologies, traders should not expect controls anytime soon, Sidley Austin said in an Aug. 27 post. The rulemaking process will likely take longer than Commerce’s emerging technology effort, the law firm said, which began with a 2018 pre-rule and has been criticized by industry for moving too slowly (see 1911070014).

U.S. Trade Representative Robert Lighthizer and Japan's Foreign Minister Toshimitsu Mogi talked about the necessity of dispute settlement reform at the World Trade Organization, Japan said in an Aug. 26 press release, according to an unofficial translation. The release emphasized that the U.S. initiated the call, and said the need for reform is becoming more urgent.

During the monthly Dispute Settlement Body meeting at the World Trade Organization, the European Union said it adopted “additional and extraordinary” compliance measures by withdrawing all the remaining subsidies for Airbus on Aug. 21, and they said that was “substantially in excess” of what's required by the WTO rules. They said they did this in order to convince the U.S. to withdraw its tariffs on European goods, and with the intention that they would not impose tariffs over Boeing subsidies, after a negotiated settlement. “It is not in the interests of anyone that the European Union and the United States now proceed to, or continue, mutually assured retaliation, and certainly not in the current economic climate,” they said.