A U.S. aerospace company said it may have violated U.S. export controls when it shared a photograph of one of its controlled components. The company, Astra, which offers satellite space launch services, submitted an initial voluntary disclosure to the “appropriate regulatory authority” but hasn’t yet heard back, it said in a July SEC filing.
The Bureau of Industry and Security named Greg Capella as its new deputy undersecretary, an agency spokesperson said this week. Capella, who officially started July 18, previously served as acting director of the Commerce Department’s National Technical Information Service. Capella replaced Jeremy Pelter, who is now acting chief financial officer and assistant secretary of commerce for administration.
Although the U.S. should be concerned about university espionage and research theft, it shouldn’t place restrictions on fundamental research, said Arati Prabhakar, President Joe Biden’s nominee for director of the Office of Science and Technology Policy, speaking during a Senate Commerce, Science and Transportation hearing this week. She said the U.S. has some “real issues” involving research security, which “have to be wrestled with” but not in a way that stifles innovation and hurts American competitiveness.
The departments of Commerce and Defense are establishing a new forum to better study potential controls for emerging technologies, Bureau of Industry and Security Undersecretary Alan Estevez said, speaking during a July 19 House Foreign Affairs Committee hearing. He said he has asked DOD to help him stand up a “critical technologies review board” to coordinate over a range of evolving technologies, including semiconductors, biotechnology and quantum computing. “This board will help BIS to understand the technologies DOD is investing in for military use,” he said, “and to help us impose appropriate controls for those technologies.” BIS recently announced it would stop categorizing technologies as either emerging or foundational before a control is imposed, which it hopes will help the interagency process move faster (see 2206270007).
The Bureau of Industry and Security is conducting a review of the types of semiconductors and chipmaking equipment that can be exported to China to determine whether it needs to tighten those restrictions, BIS Undersecretary Alan Estevez said, speaking during a Senate Banking Committee hearing last week. He said the agency is considering tightening the “cut-off point” of semiconductors that are subject to strict export licensing requirements.
A potential provision in the bipartisan China package (see 2207120049) that would create an outbound investment screening mechanism received more opposition (see 2206280051 and 2201140038) this week, including from lawmakers on the Senate Banking Committee and former U.S. investment screening officials. While opponents of the provision say some form of outbound screening may eventually be necessary to further restrict sensitive technology transfers to China, they also said the current wording is too broad and leaves too many questions unanswered.
Customers and borrowers of financial institutions may start to receive more requests from banks about their export control compliance practices due to a recently issued joint alert by the Treasury and Commerce departments, Crowell & Moring said July 13. The alert also has other implications for customers of certain financial institutions, the firm said, and could hurt their ability to receive lenient penalties from a voluntary disclosure.
A U.S. appeals court on July 8 affirmed a 2020 District of Columbia court ruling dismissing FedEx’s lawsuit against the Bureau of Industry and Security, saying the shipping company failed to show BIS acted outside its authority. The court also rejected FedEx’s claims that the agency was using the Export Administration Regulations to apply overly burdensome liability standards on carriers and penalize them even when carriers do not have knowledge of violations.
The Bureau of Industry and Security on July 7 sent an interim final rule for interagency review that will clarify how export controls are applied in the context of international standards-setting bodies. The rule will specifically authorize certain items and “releases of technology” to entities on the Entity List “for standards setting or development in standards organizations,” BIS said.
Although Chinese companies with little international exposure may decide to violate export restrictions against Russia, most of the larger companies likely won’t take the risk, experts said. So far, most Chinese companies are complying with the sanctions and only continuing to buy Russian oil and gas, the experts said, despite strong opposition to Western sanctions by the Chinese government.