The U.S. is planning more export restrictions on semiconductor manufacturing items destined to China and could publish them as early as next month, Bloomberg reported March 10. The new restrictions could “double the number of machines” that require export licenses, the report said, placing new controls on Applied Materials and other chip equipment makers. The Biden administration plans to coordinate the new restrictions with the Netherlands and Japan, but “doesn’t plan to water down its plans if those other nations adopt weaker guidelines,” the report said.
U.S. export controls against China could cause the country to dominate the global industry for “lower-capability” chip technologies, the Office of the Director of National Intelligence said in its annual threat assessment released last week. The DNI also warned that China, which is quickly building new chip factories, remains the “top threat to U.S. technological competitiveness.”
The U.S. and the EU plan to increase cooperation to better protect the “leakage” of sensitive technologies, including through export controls, foreign direct investment reviews and outbound investment screening, President Joe Biden and European Commission President Ursula von der Leyen said last week. In a joint statement after a March 10 meeting at the White House, the two leaders committed to increasing cooperative efforts to prevent “sensitive emerging technologies” and other dual-use items from going to “destinations of concern that operate civil-military fusion strategies.”
The Bureau of Industry and Security plans to expand its university outreach program to include more schools that may be working on export-controlled technologies, said Matt Axelrod, the agency’s top export enforcement official. Axelrod, speaking during an academic security seminar last week, also outlined the BIS compliance expectations for researchers, warning that not all fundamental research is exempt from export licensing requirements.
The U.K.'s Office of Financial Sanctions Implementation updated its guidance on its maritime services prohibition and oil price cap on refined Russian oil products to show the price cap and the wind-down period for oil products loaded before Feb. 5, according to the EUSanctions blog. The guidance also includes a new "origin of goods" section on whether oil products have been substantially processed and details a new example concerning the transport of co-mingled refined oil products.
The EU General Court on March 8 annulled the listing of Nizar Assaad under the Syria sanctions regime, finding the European Council erred in establishing that he is still a businessperson in Syria, has any ties to the ruling Assad or Makhlouf families or is associated with the Syrian regime. The court also said the council violated the principle of legal certainty by retroactively imposing the sanctions in 2011 after confirming that Assaad was not the listed party for the previous 10 years.
The Biden administration's FY 2024 budget request includes funding to support a new outbound investment review “program” and more money for U.S. agencies to carry out export control and sanctions authorities.
The U.S. District Court for the Eastern District of New York greenlighted the seizure of a $25 million Boeing 737-7JU aircraft owned by sanctioned Russian firm Rosneft Oil Co. DOJ said the court found probable cause to seize the aircraft due to Export Control Reform Act and Russian sanctions violations. U.S. sanctions on Russia specifically prohibit a plane made in the U.S. from entering Russia without a license. Since February 2022, the plane left and reentered Russia "at least seven times, in violation of federal law," and is currently thought to be in Russia, DOJ said March 8. The seizure warrant stemmed from the work of Task Force KleptoCapture, the interagency task force charged with enforcing U.S. sanctions on Russia.
Based on 2022 U.S. sanctions enforcement trends, companies should make sure to scale their sanctions compliance programs along with their business expansions, continually conduct audits and make sure employees are properly trained on sanctions compliance, Morrison & Foerster said in a March 6 client alert. The alert explores some of the lessons companies can learn from the Treasury Department’s penalties last year, including that “insufficient oversight” during a merger process can lead to sanctions risks, and all companies -- large or small -- will be held to Treasury’s sanctions compliance standards.
The Office of Foreign Assets Control this week announced a host of new Iran-related sanctions, including new designations against a “shadow banking” network aiding Iranian entities and new sanctions against a network of Chinese companies with ties to the country's unmanned drone industry. The designations target 39 entities illegally allowing Iranian companies to access the international financial system and a network of five companies supporting Iran’s unmanned aerial vehicle procurement efforts.