Although the U.S. continues to impose new sanctions and export controls against Russia, the Commerce Department’s $300 million penalty assigned to Seagate Technologies last month signals that the U.S. is increasingly prioritizing enforcement, particularly against China, law firms said this month. They also said the fine shows that Commerce is looking to strictly enforce its foreign direct product rule restrictions, even for violations of the rule that may not be obvious.
U.S. export controls and investment restrictions can successfully maintain America’s lead over China in sensitive technologies, including semiconductors, said Michele Flournoy, a former Defense Department official. But she also warned against policies that could push the U.S. toward decoupling from Beijing, saying the government needs to do a better job working with industry to craft the restrictions.
The Census Bureau this week previewed its new response code to prepare Automated Export System users ahead of a potential electronic export filing requirement for certain U.S. Munitions List items.
Placing export controls now on quantum information science technologies likely would “cause more harm than good,” Sam Howell, a research assistant with the Center for a New American Security, said in a May 1 article for the Lawfare blog. Although the U.S. could take several paths in imposing quantum technology restrictions -- including specific end-user controls or broader restrictions targeting “entire integrated quantum systems” -- she said each carries “significant pitfalls and are unlikely to be effective in protecting the U.S.’s strategic edge at this stage of development.”
The Census Bureau this week proposed that exporters submit a new data element in the Automated Export System when shipping items classified under U.S. Munitions List Category XXI. Census said the proposed change, previewed by an agency official last month (see 2304260047), could help the Commerce Department “collect additional data” on Category XXI exports, which includes articles, technical data and defense services “not otherwise enumerated” under other USML categories.
Sen. Roger Wicker, R-Miss., said companies should make sure they comply with national security-related trade restrictions following the Bureau of Industry and Security's record $300 million fine against Seagate Technology for violating export controls against Huawei (see 2304190071). “Our national security interests are being threatened by Communist China, and companies need to take this situation seriously by following the law,” said Wicker, who led Senate Republicans two years ago in producing a report that urged BIS to penalize Seagate for violating the controls (see 2110260040).
The Bureau of Industry and Security this week proposed new export controls on automated peptide synthesizers that may be used to produce biological weapons (see 2304170010). Although several U.S. companies and a Chinese academy last year warned BIS against imposing new license requirements, the agency said the synthesizers qualify as emerging or foundational technologies and may need to be restricted.
The Bureau of Industry and Security is looking for new candidates to serve on each of its six technical advisory committees, the agency said this week. The TAC members -- selected from industry, academia and government -- will help advise the Commerce Department on export controls and may serve terms of not more than four consecutive years. Applicants should send a resume and other required information to Yvette.Springer@bis.doc.gov by June 13.
The Commerce Department’s Bureau of Economic Analysis is conducting a mandatory five-year benchmark survey of U.S. foreign direct investment, Thompson Hine said in an April client alert. U.S. companies must participate in the survey if at least 10% of their voting shares are directly or indirectly owned by a foreign person or company. Responses must be filed to BEA by May 31. The law firm warned that “completing the survey form can be time-intensive” depending on the “level of complexity of foreign ownership and the business’s corporate structure.” BEA will “generally approve reasonable requests for an extension of the filing deadline if requested before May 31.”
The U.S. this week announced new Russia-related trade restrictions, adding 28 entities to the Commerce Department’s Entity List and more than 100 entries to the Treasury Department’s Specially Designated Nationals List. The measures target people and companies either operating in Russia, aiding the country’s war against Ukraine or helping Moscow evade sanctions.