The Commerce Department’s increased restrictions on shipments to military end-users is causing widespread confusion and could cripple exporters struggling to survive during the global COVID-19 pandemic (see 2005010037), industry groups said. The Bureau of Industry and Security's April 28 final rule (see 2004270027), set to take effect June 29, is too complex and was released with “poor” timing and without industry input, the National Customs Brokers & Forwarders Association of America said.
The Commerce Department announced a new rule that it said will help U.S. companies participate in international standard-setting bodies where Huawei is a member. Under the rule, companies will no longer need an export license to disclose technology to Huawei if that disclosure is for the “purpose of standards development in a standards-development body,” Commerce said in a June 15 press release. In addition, companies may only disclose technology to Huawei if that technology would not have required an export license before Huawei’s placement on the agency’s Entity List last year.
The Commerce Department's Bureau of Industry and Security will officially add 33 companies and government agencies to the Entity List on June 5 for their roles in aiding proliferation activities and human rights abuses in China’s Xinjiang province, BIS said in two Federal Register notices. The notices formalize the additions, which were announced in May (see 2005220058).
The Commerce Department's Bureau of Industry and Security corrected the formatting for an April final rule that expanded licensing requirements for certain military-related exports to China, Russia and Venezuela, according to a notice. The corrected format “publishes the full text of each revised Export Control Classification Number on the Commerce Control List,” the notice said. BIS issued the correction because the agency “felt it was easier for compliance purposes,” said Hillary Hess, BIS’s regulatory policy director, speaking during a June 2 Regulations and Procedures Technical Advisory Committee meeting. “It does not change the substance of the rule at all.”
The Treasury Department issued a proposed rule to modify mandatory declaration requirements for certain transactions involving critical technologies. Under the rule, transactions would require a declaration if the critical technology would normally be subject to a U.S. export license. This would be a change from certain declaration requirements for the Committee on Foreign Investment in the U.S. outlined under a 2018 pilot program, which based those decisions on whether the transactions met criteria established by the North American Industry Classification System.
The Office of Information and Regulatory Affairs began an interagency review for a final rule from the Commerce Department that will implement certain export control decisions from the 2020 Australia Group meeting. The rule, received by OIRA May 5, will add certain “rigid-walled, single-use cultivation chambers and precursor chemicals” to the Commerce Control List. The rule would also amend the Export Administration Regulations by revising biological and chemical controls on the CCL.
The Commerce Department amended its direct product rule, increasing restrictions on foreign-made chips exported to, and made by, Huawei and its affiliates, the agency said in a May 15 interim final rule. Commerce also said it does not expect to issue another temporary general license extension for the Chinese technology company after its latest 90-day renewal expires Aug. 13.
The COVID-19 pandemic is causing “significant disruption” for the Wassenaar Arrangement, leading to the cancelation of at least one meeting and creating uncertainty about whether the group can remotely vote on new export controls, two Commerce Department officials said. Wassenaar was forced to cancel its April Experts Group meeting -- which normally addresses issues related to its lists of controlled items -- and is unsure if global travel restrictions will force cancellations of future meetings in June and its annual plenary session in December.
The Commerce Department amended the Export Administration Regulations to expand licensing requirements for exports, re-exports and transfers of items intended for military uses in China, Russia and Venezuela, according to a notice. The rule expands the licensing requirements for exports to China to include military end-users as well as military end-uses, broadens the list of items subject to the licensing requirement and review policy, and expands the definition for military end-use. The rule also “creates a new reason for control” and review policy for certain exports to the three countries, and added new Electronic Export Information filing requirements.
The Commerce Department eliminated its license exception for civil end-users (CIV) in an effort to cut exports to countries pursuing civil-military fusion (see 1904260018), the agency said in a notice. The change, which was expected for nearly a year (see 1907180037), will remove authorizations to export certain controlled items to most civil end-users for civil end-uses in Country Group D:1. The change takes effect June 29.