DOJ is seeking to expand an authority that allows it to use seized Russian assets to assist with Ukraine’s reconstruction efforts. Attorney General Merrick Garland, speaking before the House Judiciary Committee Sept. 20, said in written remarks prepared for the hearing that DOJ can use the authority, included as part of the FY 2023 government spending package, to transfer certain forfeited property to the State Department “to remediate the harms of Russia’s invasion of Ukraine.” But the administration can’t use that authority for forfeited Russian assets connected to Moscow’s 2014 annexation of Crimea or related to assets forfeited for violations of certain export controls.
The Bureau of Industry and Security needs more resources to investigate export control violations, Commerce Secretary Gina Raimondo said this week. She also said a potential government shutdown would be “crushing” for the agency’s enforcement efforts and work on semiconductor export regulations.
The top two lawmakers on the House Select Committee on China criticized Beijing’s decision last month to suspend imports of Japanese seafood, saying the trade restrictions are “unacceptable and must be reversed.” China suspended the imports in response to Japan's release of nuclear-contaminated water into the ocean stemming from the 2011 Fukushima nuclear power plant incident following a tsunami (see 2308220022).
The Commercial Customs Operations Advisory Committee issued a September update on the status of its Export Modernization Working Group's actions ahead of the Sept. 20 COAC meeting.
Republicans are asking the Biden administration to strengthen export controls against Huawei and Semiconductor Manufacturing International Company after Huawei this month unveiled a new smartphone that may have been made through means that violated U.S. export restrictions (see 2309120005). They said both technology companies should be subject to “full blocking sanctions” and their executives should face criminal investigations, adding that the Commerce Department should revoke all of their existing license applications, add all their subsidiaries to the Entity List and take other measures to cut off a broad range of shipments to both firms.
The Committee on Foreign Investment in the U.S. already has issued two civil monetary penalties this year and plans to impose more before 2024, said Paul Rosen, the head of the Treasury Department’s Office of Investment and Security. Rosen also said CFIUS is increasing its on-site visits to monitor compliance with mitigation agreements and is preparing to formally “refine” regulations surrounding the committee's enforcement powers, case review functions and efforts to track own non-notified transactions.
Treasury Secretary Janet Yellen said the Committee on Foreign Investment in the U.S. is doubling down on enforcement, warning industry lawyers about potential subpoenas or penalties for violating the committee's rules or mitigation agreements. Yellen’s comments came one day after Paul Rosen, who heads CFIUS, said the committee recently hired additional enforcement officials and may add more.
The U.S. should push World Trade Organization members to "revisit what constitutes good and bad subsidies," which may help encourage transparency and improve "enforcement through incentives for compliance and penalties for noncompliance," the Council on Foreign Relations said in a new report.
The Bureau of Industry and Security should explore several changes to the Export Administration Regulations to better prevent exported technologies from being used for human rights violations, including by maintaining a regularly updated list of EAR99 items that are likely to be misused by authoritarian regimes, said Annie Boyajian, vice president for policy and advocacy for Freedom House. Boyajian also suggested BIS engage more with civil society groups, including by creating a formal mechanism that would allow those groups to inform the agency about new ways technologies are being misused.
The upcoming U.S. outbound investment restrictions (see 2308090066 and 2308100045) should be overseen by the Office of Foreign Assets Control, not the agency that heads the Committee on Foreign Investment in the U.S., Republicans said this week. Several lawmakers, including Patrick McHenry, the top Republican on the House Financial Services Committee, said the new outbound investment restrictions are similar to a sanctions program as opposed to the case-by-case review process overseen by CFIUS for inbound investments, and said OFAC is better suited to prevent China from benefiting from sensitive American investments.