The U.S. needs to better protect agricultural technology from Chinese theft and push Beijing to reduce tariffs on U.S. crops, American farmers told lawmakers last week. Speaking during a panel in Iowa organized by the House Select Committee on China, at least one farmer said U.S. trade policy should focus more on securing free trade deals, which would help exporters become less reliant on China.
The Biden administration’s upcoming outbound investment screening rules should restrict both private and public investments, starting with “five to six priority sectors” but eventually expanding to more, said Rep. Mike Gallagher of Wisconsin, the top Republican on the House Select Committee on China. Gallagher said the rules should stop Americans from investing in Chinese entities connected to the country’s military, human rights abuses or “technological rise,” should require Chinese companies to meet the same due diligence standards as U.S. firms, and shouldn't be adjudicated through a case-by-case process, which would cause uncertainty for American investors.
The U.S. last week said it isn’t renewing a June general license that authorized certain transactions with two Myanmar banks. The State Department on Aug. 4 said it plans to let the license -- which covered U.S.-sanctioned Myanma Investment and Commercial Bank, Myanma Foreign Trade Bank and their subsidiaries -- expire Aug. 5 at 12:01 am. “We will pursue enforcement actions as appropriate,” the agency said.
While most shippers applauded the Federal Maritime Commission’s revised proposed rule on unreasonable carrier conduct, carriers urged the commission to again amend the wording, saying it unfairly favors exporters and stretches beyond the authority granted to the FMC by the Ocean Shipping Reform Act of 2022. Several major carriers said the commission should narrow the rule’s proposed definition for “unreasonableness,” allow carriers to rely on “legitimate business factors” as a reason for why they may refuse cargo space, remove the rule's documented export policy requirement and revise other proposals they say disadvantage carriers.
Two U.S. semiconductor companies said they still see opportunities to sell into the Chinese market despite sweeping export controls announced by the U.S. in October (see 2210070049) and potentially more restrictions coming soon.
The House Select Committee on China is investigating U.S. investment firms BlackRock and index provider MSCI for their “decisions” that led to Americans investing savings into “dozens of blacklisted Chinese companies,” including entities that contribute to China’s human rights abuses, the committee said this week. In letters to the two firms, committee leaders said their investment-related decisions have resulted in Americans “unwittingly funding” Chinese entities building weapons for the country's military and contributing to the government's goal for “technological supremacy.”
Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching for the title or by clicking on the hyperlinked reference number.
The Committee on Foreign Investment in the U.S. continued to see an increase in notices last year and initiated the most investigations since 2017, CFIUS said in its annual report to Congress released this week. The committee received 286 notices during calendar year 2022, a slight increase from the 272 it received in 2021, and began 162 investigations into transactions, 32 more than in 2021 and close to double the amount from 2020.
The most recent tri-seal compliance note from the Commerce, Treasury and Justice departments is another sign that the U.S. is increasing its focus on export and sanctions enforcement and of the government’s effort to push companies to voluntarily disclose potential violations, law firms said last week. The firms urged businesses to review each agency's disclosure policy, saying the note could mean increased risks for companies that choose not to disclose.
The Senate last week passed its version of the FY 2024 National Defense Authorization Act with several trade-related amendments, including one that could establish a notification regime for, but not restrict, certain outbound investments (see 2307260029).