The U.S. announced a set of new export controls and sanctions against Russia last week, including new restrictions on luxury goods and full blocking sanctions on Russian government officials and bank executives. The measures, outlined in a March 11 executive order, also include new banking and financing-related restrictions meant to further cut Russia’s economy off from the global financial system and target Russian oligarchs.
Even before new sanctions and export controls targeting Russia take full effect, many companies are deciding that compliance and due diligence costs are not worth the potential profits of continued business dealings in Russia and Belarus, former U.S. export control and sanctions officials said, speaking at a Washington International Trade Association panel on March 10.
The Bureau of Industry and Security is preparing to issue new export control decisions involving emerging technologies agreed to at the 2021 Wassenaar Arrangement plenary. The interim final rule, sent for interagency review March 8, will harmonize the Commerce Control List with a portion of Wassenaar’s 2021 decisions for certain “recently developed or developing technologies,” BIS said. BIS will implement the remaining Wassenaar 2021 control decisions in a separate rule.
The Commerce Department could impose strict export controls, including through the Entity List, on Chinese companies that violate U.S. export restrictions against Russia, agency officials said this week.
The U.S.’s new Russia export controls could lead to a short-term spike in license applications, but volumes will likely taper off later this year as businesses divest from Russia, said Nazak Nikakhtar, a former senior U.S. export control official.
As global trade restrictions against Russia continue to increase, some companies are grappling with whether to fully exit the Russian market or rely on sanctions screening and temporary carve-outs to keep their operations afloat, lawyers and experts said in interviews this month. But the risks for a majority of businesses are quickly becoming too high, especially as sanctions are expected to grow more punishing.
The U.S. last week imposed new export controls on Russia’s oil refinery sector and added 91 entities to the Entity List for supporting Russian security efforts, building on a string of trade restrictions (see 2202240069 and 2203020072) meant to cut Russia off from importing goods to support and fund its military.
China Tech Threat, a consultant-owned organization that advocates for stronger export controls, urged the Senate to speed up the confirmation process for Alan Estevez to lead the Bureau of Industry and Security. The group said Estevez will bring “extensive national security background to the role at a critical time as China’s ambitions to dominate emerging technology markets pose a serious threat to U.S. economic and national security interests.” The vacancy for BIS undersecretary leaves a “glaring hole in our export control regime,” the organization said, noting that it has been more than five years since the agency last had a confirmed undersecretary.
The U.S. announced a host of new sanctions and export controls, including two new additions to the Entity List, to further penalize Russia and Belarus for the invasion of Ukraine. The measures place new restrictions on technology and software exports to Belarus, export controls on shipments of oil and gas extraction equipment to Russia, blocking sanctions on 22 Russian defense entities and a prohibition on Russian cargo planes flying to and from the U.S.
U.S. export controls on quantum computing and communication technologies would slow scientific progress and fail to target the most “defense-relevant applications,” the nonprofit Rand Corp. said in a recent report. The think tank said the U.S. should “not impose export controls on quantum computers or quantum communications systems at this time” or risk stifling American quantum innovation.