The Bureau of Industry and Security is working to convince more countries to place export controls on advanced semiconductors and chipmaking equipment destined to China, but the agency couldn’t afford to delay its most recent chip controls as other nations mulled them over, said Thea Kendler, BIS assistant secretary for export administration. While the agency prefers to implement its chip controls and other restrictions alongside allies, “we will not hesitate to act unilaterally to protect U.S. national security,” Kendler said.
As the Bureau of Industry and Security adds new export controls on emerging technologies, it should also remove outdated restrictions on items that may no longer warrant licensing requirements, such as life jackets and fire extinguishers, the Center for Strategic and International Studies said in a report. The think tank also urged BIS to shrink the Entity List to only entities that pose the most serious national security threats and consider giving preferential licensing treatment to a broader set of countries, including Vietnam and Moldova.
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Congress should order a review of U.S. semiconductor export controls against China and ask the administration to create a public database of entities connected to China’s military, which would help U.S. companies with their compliance practices, a congressional commission said this week. The bipartisan commission also said Congress should explore the idea of a single export licensing system to streamline export requirements overseen by both the Commerce and State departments.
Australia last week unveiled proposed reforms to its export control requirements and penalties as it works to harmonize its defense trade regulations with the U.S. The proposals, which include a one-week public comment period, would establish an “export license-free environment” for certain defense and technology trade with the U.S. and the U.K. and criminalize certain violations of Australian export control requirements. The proposals specifically include a new “national exemption” from certain export permit requirements for parties from the U.S. and the U.K., Australia said.
A U.S. semiconductor company and a Canadian electronics component manufacturer are locked in a legal battle that could have implications for the export compliance responsibilities of sellers and buyers, particularly within the chip industry.
The U.S. should have placed export controls on a broader range of semiconductors, including legacy chips, as part of its efforts over the last year to restrict sales of advanced semiconductors to China, said Nazak Nikakhtar, a former acting Bureau of Industry and Security undersecretary. She said a lack of legacy chip controls is allowing China to dominate that sector of the industry and grab market share away from companies in the U.S. and its allies, including South Korea and Taiwan.
The U.S., Canada and other nations can make sanctions screening efforts by banks and other financial institutions more efficient by addressing certain privacy laws, said Stephen Alsace, global head of economic sanctions for the Royal Bank of Canada. If all financial institutions were able to share more information about certain transactions, it could reduce redundancies during the sanctions compliance process and allow payments to be screened and processed faster, Alsace said.
The U.K. added 29 entries to the Russia sanctions regime Nov. 8, targeting Russian gold refiners and producers as well as international networks supporting the country's gold, oil, finance and defense sectors. The country's National Crime Agency also issued a new alert to make financial institutions aware of how Russia is using gold to evade sanctions.
The Canadian government should release more sanctions guidance to lower the business uncertainty that has spiked since Russia’s invasion of Ukraine last year and the implementation of Canada’s new deemed ownership rules in June, lawyers said at a conference this week. A Canadian official said the government is working on guidance but stressed that the wide scope of the country’s sanctions laws, particularly against Russia, is unlikely to change.