The Bureau of Industry and Security will now be able to renew its temporary denial orders for one year instead of the previous maximum of 180 days, the agency said in a final rule. BIS said it can now request extended renewals of TDOs if it demonstrates the parties subject to the orders -- which generally suspend them from participating in transactions subject to the Export Administration Regulations -- have “engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR.”
The State Department fined a U.S.-based specialty chemicals supplier $850,000 for allegedly violating defense export regulations and failing to voluntarily disclose those violations, the agency announced in an order and settlement agreement this week. The Directorate of Defense Trade Controls said Island Pyrochemical Industries Corp. illegally acted as a broker between Brazilian and Chinese companies for shipments of chemicals used in explosives and made false statements on a license application to DDTC.
The U.S. and China launched a new commercial trade working group and a new pathway to exchange information on export control enforcement, two initiatives to allow the countries to better communicate around sensitive trade issues, the Commerce Department announced during meetings between Washington and Beijing officials this week. The export enforcement information sharing initiative, which will meet for the first time this week, is aimed at reducing “misunderstanding” surrounding U.S. policies toward China, Commerce said, including export restrictions on critical and sensitive technologies.
The Committee on Foreign Investment in the U.S. may continue to see a drop in short-form declarations, particularly if more declarations continue to result in full filings, said Laura Fraedrich, a lawyer with Lowenstein Sandler. She said the decrease in declarations submitted to CFIUS last year -- the first drop since the concept was introduced in 2018 -- highlights the challenges investors face in assessing how best to approach CFIUS.
U.S. national security agencies recently warned the American space industry about increasing risks of theft from foreign intelligence services, saying companies need to be vigilant to protect their technology, data and intellectual property. A joint alert issued this month by the FBI, the National Counterintelligence and Security Center and the Air Force includes a list of red flags that may signal IP theft from foreign intelligence bodies and explains how the space industry can mitigate those risks.
American chipmaker Nvidia continued to raise alarms this week about the potential of additional export restrictions on the U.S. semiconductor industry, saying new rules will hurt its long-term sales to China.
The Biden administration’s road to implement regulations for its outbound investment executive order will be “incredibly complex,” particularly if agencies disagree on how narrow or broad to scope the restrictions,Thomas Feddo, a former Treasury Department official, said during a webinar this week. Lawyers on the webinar said investors are “very concerned” about the rules having a potential “chilling” effect on a broad range of investments, especially if the government fails to adequately define a range of key terms in the executive order.
The Treasury Department is putting eight more military bases under the jurisdiction of the Committee on Foreign Investment in the U.S. after proposing the additions in May (see 2305040052). The expansion, effective Sept. 22, includes the Grand Forks Air Force Base in North Dakota that was the subject of a controversial CFIUS decision last year (see 2212150035, 2212290023 and 2208310066) as well as bases in Texas, California, South Dakota, Iowa and Arizona. CFIUS will be able to intervene in certain land purchases by foreign buyers if they are near any of those sensitive military bases.
British semiconductor company Arm, in its initial U.S. public offering this week, said it’s facing uncertainty from U.S. and U.K. export controls and doesn’t expect to receive an export license to ship certain high performance processor cores to China. The company also said it’s expecting to see slower growth in its China sales revenue due to several factors, including various government-imposed “trade and national security policies.”
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