The Bureau of Industry and Security fined a California-based satellite communications company $122,000 for illegally exporting controlled goods to Russia, the United Arab Emirates and Brazil. BIS said the company, Comtech Xicom Technology, exported more than $150,000 worth of “traveling wave tubes” (TWT) without licenses, a March 18 order said.
A bipartisan group of senators called on the Biden administration to issue more sanctions to penalize China for interfering in Hong Kong’s autonomy. In a resolution introduced March 19, the senators, led by Marco Rubio R-Fla., Ben Cardin, D-Md., Jim Risch, R-Idaho, and Ed Markey, D-Mass., said the administration should consider more sanctions under the Hong Kong Human Rights and Democracy Act and the Hong Kong Autonomy Act (see 2011120005) to “impose costs” on Chinese officials
The Commerce Department should expand export restrictions on China’s top chipmaker to prevent it from accessing a broader range of semiconductor manufacturing equipment, two U.S. lawmakers said. In a March 18 letter to Commerce Secretary Gina Raimondo, Sen. Marco Rubio, R-Fla., and Rep. Michael McCaul, R-Texas, asked the agency to apply the foreign direct product rule to China’s Semiconductor Manufacturing International Corporation, which would restrict the company’s ability to import certain foreign-made semiconductor equipment that is built with or that incorporates U.S. technology. The move would subject SMIC to similar restrictions imposed by the Bureau of Industry and Security on other Chinese companies on the Entity List, including Huawei (see 2012210044).
A Boston software company may have violated sanctions against U.S.-embargoed countries, it said in its March 16 Securities and Exchange Commission filing. SEMrush Holdings said it recently submitted an initial voluntary disclosure to the Office of Foreign Assets Control after identifying “customer accounts” that may involve transactions with people in Cuba, Iran, North Korea, Syria and the Crimea region of Ukraine. The company said it plans to provide OFAC with a final report on its disclosures and has not yet received a “determination” from the agency. SEMrush said it may face penalties. A company spokesperson didn't comment.
The Bureau of Industry and Security is planning to issue another set of emerging technology controls this year and hopes to propose them for multilateral control in 2022, said Matt Borman, BIS’s acting assistant secretary for export administration. Borman also said he hopes BIS can fall into a more predictable “sequence” for its emerging and foundational technology control effort and move past last year’s disruptions to multilateral regimes caused by the pandemic.
European Commission President Ursula von der Leyen called for “reciprocity” and “proportionality” in the European Union's COVID-19 vaccine export regime, at a March 17 press conference. To incentivize greater openness in other countries' vaccine exports, von der Leyen placed a special emphasis on reciprocity, detailing how the EU is prioritizing exporting vaccines to countries that create their own vaccines. “We think this is an invitation to be open,” she said. “So that we also see exports from those countries coming back to the European Union.”
The U.S. continues to oppose Nord Stream 2 and threatened more sanctions against entities involved in the completion of the European gas pipeline, which is nearing completion despite U.S. pressure. Sanctions against the pipeline have “significant” bipartisan support from Congress, Secretary of State Antony Blinken said March 18, adding that the agency is “tracking efforts” to complete the project and is monitoring companies who may be involved. “The Department reiterates its warning that any entity involved in the Nord Stream 2 pipeline risks U.S. sanctions and should immediately abandon work on the pipeline,” Blinken said. The secretary's comments came a month after a bipartisan group lawmakers asked the State Department for an update on the agency’s implementation of sanctions against the pipeline (see 2102170013).
Companies will continue to see a rise in global scrutiny of foreign direct investments as European countries try to match the U.S.’s investment screening regime, which has set the standard for investment reviews, trade lawyers said. Several countries, including the United Kingdom and Germany, are quickly bolstering their regimes while the U.S. is continuing to expand its jurisdiction to keep China and sanctioned countries from acquiring critical technologies, the lawyers said.
Disappointed with the pace of the United Kingdom government's response on forced labor issues in China's Xinjiang region, parliamentarians on the Business, Energy and Industrial Strategy Committee issued a report on the situation, including policy recommendations on how to further crack down on modern slavery in Xinjiang. The BEIS Committee, responsible for oversight of the BEIS Department, issued sweeping recommendations for the government agency for its role in upholding human rights commitments in relation to business ties with China. The March 17 report declared that the BEIS Department “has shown little sign that it is taking a proactive or meaningful lead on investigating UK business links to forced labour and other human rights abuses in China or elsewhere.”
Germany announced the extension of general permits for exports in a March 17 notice, according to an unofficial translation. General Licenses No. 12 to No. 14 and General Licenses No. 16 to No. 28 are extended to March 31, 2022. General License No. 15 was already deemed valid until the same date. The update also detailed information on General License No. 28 -- Franco-German cooperation on export controls in the arms sector derived from the Franco-German Treaty of Aachen of 2019. The agreement gives privileges to de minimis arms exports. Also, in relation to arms exports from Germany to France, registration for the General Approval must be completed before use of the permit, a preliminary procedure must be made in certain cases and the General License user must request a “declaration of integration” from a French regulator. The general license provision entered into force April 1, 2020.