The Trump administration is prioritizing efforts surrounding its export controls, investment screening and diplomacy to restrict China from acquiring sensitive dual-use technologies, a senior State Department official said. The official, speaking to reporters March 12, said China has ramped up technology theft and said companies and research institutions should be cautious of any attempts by Chinese companies to divert their products for military end-use, which are often masked in “incentives and inducements.”
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
The Census Bureau is reaching out to companies that conduct value-added for re-exports in an effort to learn more about the process, Kiesha Downs, chief of the Census Bureau Foreign Trade Division’s regulations branch, said during a March 10 Regulations and Procedures Technical Advisory Committee meeting. Census has reached out to two companies so far, Downs said, but encourages other re-exporters to contact the agency.
The timeline for the release of CBP’s electronic export manifest system remains unclear despite hopes on the part of some officials that the system would be launched last year (see 1910180061). “I believe it’ll be a little bit down the road,” Kiesha Downs, chief of the Census Bureau Foreign Trade Division’s regulations branch, said during a March 10 Regulations and Procedures Technical Advisory Committee meeting. “Everybody knows how long it takes to go through the regulatory process.”
The Commerce Department is drafting a rule to remove certain filing requirements for exporters shipping goods to Puerto Rico, said Kiesha Downs, chief of the Foreign Trade Division’s regulations branch. Puerto Rico has lobbied Commerce to remove the requirements for “years,” saying it overly burdens parties with unnecessary electronic export information filings in the Automated Export System, Downs said. “We do understand the burden it may be causing,” Downs said during a March 10 Regulations and Procedures Technical Advisory Committee meeting. “Sometimes Puerto Rico feels like they are being treated differently.”
The Commerce Department is still considering placing export controls on Gate-All-Around Field Effect Transistor (GAAFET) technology, despite withdrawing the rule from the Office of Management and Budget last month (see 2002130033), said Hillary Hess, the Bureau of Industry and Security’s director of regulatory policy. The rule was expected to be one of six controls issued by Commerce early this year (see 1912160032) as part of the agency’s effort to control emerging technologies.
The Commerce Department extended the validity for its temporary general license for Huawei and 115 of its non-U.S. affiliates until May 15, the agency said in a notice. The extension replaces the previous license renewal for Huawei issued in February, which was set to expire April 1 (see 2002130059).
Officials from the Commerce Department's Census Bureau and Bureau of Industry and Security met March 9 to align their long-awaited proposed rules on routed export transactions (see 1907100053), which will feature “intense changes” and be accompanied by a series of training sessions and webinars, said Kiesha Downs, chief of the Census Bureau Foreign Trade Division’s regulations branch. Officials, including BIS Acting Undersecretary Cordell Hull, met to try to “flesh out” some remaining issues before publishing the proposals, which must be issued simultaneously because of the significant overlap within the rule between BIS and Census, Downs said.
Export controls over technology and software used for the 3D printing of firearms will not transition from the State Department to the Commerce Department after a Washington court granted a request to block the Trump administration from completing the transfer. The court, whose March 6 order temporarily blocked portions of a January final rule to transfer the controls, suggested the administration likely violated notice-and-comment standards and pointed to the “grave reality” the transfer might have on the proliferation of 3D printed guns. The decision stemmed from a January request (see 2001240047 and 2002070043) filed by 20 states and Washington, D.C., to urge the court to vacate the final transfer rules, which were scheduled to take effect March 9 (see 2001170030).
If President Donald Trump is not re-elected, the next administration will remain focused on China, export controls and Entity List actions but will likely approach China with a more clear, predictable strategy, two former top Commerce Department officials said. “You would see a more well-defined, carefully thought-through approach to issues like Huawei,” Peter Lichtenbaum, who served as Commerce’s assistant secretary for export administration during the Bush administration, said during a March 6 International Trade Update panel at the Georgetown University law school. “Not because it's a Democratic [administration], but because it's a more regular-order administration and less policy made by tweet.”
The coronavirus outbreak is expected to decrease global exports by $50 billion as the spread of the virus continues to disrupt global supply chains, according to a March 4 report by the United Nations Conference on Trade and Development. The slowdown is directly tied to China’s manufacturing Purchasing Managers Index, which fell by 22 points in February, implying a 2% reduction in exports on an annual basis, the report said. The fact that China is a “central manufacturing hub” will have significant “repercussions” for countries reliant on trade with the country, the report said. “Any slowdown in manufacturing in one part of the world will have a ripple effect in economic activity across the globe because of regional and global value chains,” UNCTAD Secretary-General Mukhisa Kituyi said in a statement.