Increasing export control coordination between the U.S. and its trading partners is likely to result in an uptick in enforcement actions and lead to a range of compliance risks for multinational companies, law firms said this month. While much of the coordination so far has centered around Russia-related restrictions, the firms said they expect the efforts to also result in more export penalties for controls imposed against other countries.
The Bureau of Industry and Society last week issued guidance for license applicants seeking to export medical-related items to Russia, Belarus or certain occupied regions of Ukraine, outlining best practices for submitting applications and what information should be included. BIS urged exporters to “provide all the necessary information when the application is first submitted” so the agency can “promptly analyze the proposed scope of the transactions” before submitting it for interagency review, and the agency detailed what types of applications may lead to delays.
Sanctions compliance officers working in the maritime shipping industry should pay particularly close attention to registered ship owners operating single-ship fleets, which could signal a ship attempting to evade sanctions, said Byron McKinney of S&P Global Market Intelligence. McKinney said he’s seen a spike in single-ship fleets -- which are used in some cases to obscure the true ownership of a vessel -- since the Treasury Department published its maritime sanctions advisory in 2020.
The House Select Committee on China's chairman and ranking member acknowledged that momentum for legislation on TikTok has dissipated, but Chairman Mike Gallagher, R-Wis., said that behind the scenes he and others are working on "compromise language that will avoid some of the pitfalls of the Senate's approach, which a lot of people on my side felt was too broad ... which still does what we want it to do, which is ban [TikTok] or force a sale."
The U.S. this week sanctioned more than 100 people, entities and ships supporting Russia’s war efforts against Ukraine, including one of its top metals producers and leading construction companies, Kyrgyz Republic firms sending Moscow dual-use technologies, and other businesses helping the government evade international sanctions. The new designations are meant to further restrict Russia’s ability to import military goods and technology, slash revenue from its mining sector, undermine its energy capabilities and “degrade Russia’s access to the international financial system,” the Treasury Department said.
A former senior export control official with the Commerce Department told the House Select Committee on China that he thinks the Entity List is ineffective against China, because countries can change their names, establish partnerships, change locations, and because the Entity List is a "meat cleaver" approach, given that listed parties are subject to very strict licensing requirements.
Republicans on the House Select Committee on China urged U.S. officials this week to cut off a broader range of exports to China, arguing that trade with China is helping to fund Beijing’s efforts to undermine American national security. Committee chair Mike Galagher, R-Wis., specifically asked witnesses from the Commerce, State and Defense Departments to enact a technology export ban on Huawei that the administration has reportedly been considering for the last year (see 2301310009).
The House Select Committee on China this week sent letters to four U.S. venture capital firms about their investments in Chinese artificial intelligence and semiconductor companies, saying those investments may be helping Beijing “perpetrate human rights abuses and enhance its military capabilities.” The letters, sent to GGV Capital, GSR Ventures, Qualcomm Ventures and Walden International, also seek information about any of their potential investments in China’s quantum industry, how the companies decide which Chinese firms to invest in, how they respond if a company they invest in is added to the Commerce Department’s Entity List and more.
The rejection of a settlement led to a short-lived resumption of a strike by the International Longshore and Warehouse Union Canada at Canadian West Coast ports, but the strike is again on hold after the Canada Industrial Relations Board ruled the strike illegal and ILWU Canada issued a 72-hour notice that the strike will begin again July 22.
A State Department official this week denied allegations that the agency has held back sanctions and export controls in an effort to limit damage to the U.S.-China relationship, saying the Biden administration continues to enforce a range of human rights-related trade restrictions against Beijing. But the official also said the administration hasn’t yet imposed mandatory sanctions under the Uyghur Human Rights Policy Act of 2020 and was accused by at least one lawmaker of failing to comply with a congressional subpoena that sought information on sanctions against China.