The State Department declined to say whether the U.S. will impose financial sanctions against the Chinese companies accused by the Commerce Department last week of helping Russia evade export controls. Rep. Michael McCaul, R-Texas, last week called on the agency to impose the sanctions (see 2206300007) and go beyond Commerce’s move of adding them to the Entity List (see 2206280056).
The Office of Foreign Assets Control last week issued a reminder to industry to file annual reports on blocked property by Sept. 30. The notice applies to blocked property held as of June 30. OFAC provided filing forms and guidance on filing the reports.
The State Department’s Directorate of Defense Trade Controls released its annual report to Congress on certain controlled defense exports. The report, released June 30, details the aggregate value and quantity of defense items and services authorized to each foreign country and international organization during FY 2021.
The Bureau of Industry and Security is still reviewing export controls on facial recognition software, surveillance-related products and other goods controlled for crime-control reasons, but it may move forward on the rule soon, a Commerce Department official said.
The Bureau of Industry and Security has received very few license applications and questions related to its cybersecurity export control rule since it took effect in March (see 2110200036 and 2201110025) but is open to issuing more guidance to industry if needed (see 2205050023), a Commerce Department official said during the BIS annual update conference last week.
The Bureau of Industry and Security plans to add more attorneys to its chief counsel's office to keep pace with its Russia-related export controls, a Commerce Department official said during the BIS annual update conference last week. The counsel has about 15 lawyers but expects to add more “in the coming months,” said the official, speaking on background as part of a conference policy for career staff. “It really has been unprecedented times over the past six months,” the official said, adding that the counsel’s office wants “to make sure that we can match” the rest of the agency “as the amount and intensity of work continues.”
The Bureau of Industry and Security is using recently received funding to expand its U.S. field offices and send more officers overseas, said Matthew Axelrod, the agency’s top enforcement official. Axelrod said BIS soon will launch a field office in Phoenix and has sent export control officers to the U.S. Embassy in Helsinki and the American Institute of Taiwan in Taipei. BIS also recently sent its first intelligence analyst abroad to work with the Canadian Border Services Agency.
The U.S. needs to build a new multilateral export control forum to “institutionalize” the licensing and enforcement coordination of the last several months, said Don Graves, the Commerce Department’s deputy secretary. Although Bureau of Industry and Security officials said they are unsure whether the cooperation will lead to a new, formal export control regime (see 2206290032), Graves was critical of the existing ones, saying the U.S. needs a more modern approach to respond to Russia and other global crises in the future.
The U.S. and its allies should be sharing more export control information to better align their licensing decisions, said Thea Kendler, the Bureau of Industry and Security's assistant secretary for export administration. Although the U.S. is already sharing some of that information through the U.S.-EU Trade and Technology Council to keep Russia from acquiring sensitive technologies and other items for its military, Kendler said more can be done.
The U.K. Parliament's Foreign Affairs Committee released a report June 30 critical of Britain's role in the global financial system as a "hub for illicit finance," particularly in light of the war in Ukraine. Russian assets are continuously laundered through the U.K. to finance President Vladimir Putin's war, the committee said. London's standing as a magnet for global finance presents a grave national security risk, the committee said. The report assesses "consequences of the complacency of successive Governments towards illicit finance and the adequacy of the current Government's response."