The EU has so far been unable to place any meaningful export controls or sanctions against China despite urging from the U.S., leading to competitive disadvantages for American companies, Ivan Kanapathy, a China studies expert, said during a U.S. government commission hearing last week. Other experts at the hearing said much of Europe remains strongly opposed to any economic restrictions that would hurt their businesses and were skeptical that the bloc can stand up an EU-wide outbound investment screening mechanism.
Although the Bureau of Industry and Security last month said it doesn’t have a draft rule in place to increase export licensing requirements for Huawei, exporters would be wise to still expect a tightening of restrictions against the Chinese telecommunications company, industry officials said this week. They also didn’t rule out BIS soon increasing export controls against China in other ways, including by potentially adding more items to the scope of its military end-use and end-user (MEU) rule requirements.
An Iranian car manufacturer is asking a federal court to order the Treasury Department to remove it from a U.S. sanctions list, saying Treasury has “no real intention of rescinding” its designation no matter what evidence it is shown. Bahman Group, which was first sanctioned in 2018, said Treasury continues to “manufacture a pretext” to maintain sanctions against the company despite being provided proof that it’s no longer engaging in sanctionable activities.
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A ramping up of U.S. export enforcement efforts is causing companies to revisit their compliance practices, particularly as the Bureau of Industry and Security conducts more outreach to exporters, said Alan Enslen, a trade lawyer with Womble Bond. He said companies are more frequently auditing their export compliance programs amid a number of signs that the Biden administration is increasing scrutiny on potential export violations, including a multi-agency memo issued in March that Enslen said was a “shot across the bow” for U.S. exporters.
The Bureau of Industry and Security added 43 entities to the Entity List this week, including companies conducting various activities that either support China’s military or allow the government to “carry out human rights abuses.” Other entities were added for supporting Pakistan’s ballistic missile program or other weapons capabilities.
The Federal Maritime Commission this week released a revised version of its proposed rule on unreasonable carrier conduct to amend and add to a rulemaking that was widely criticized by shippers and lawmakers last year (see 2301250032, 2211090026 and 2210280051). The new supplemental proposed rule offers new definitions, clarifications, edits and additions that the FMC hopes will allow it to better implement a congressional mandate to address ocean carriers that refuse vessel space to shippers.
The Bureau of Industry and Security last week suspended export privileges of Aratos Group, a collection of defense and technology companies in the Netherlands and Greece, and its owner for procuring goods for Russian intelligence services in violation of U.S. export controls. BIS also renewed a temporary denial order against three people and two companies also involved in a Russian sanctions evasion scheme.
A new joint document issued by several Cabinet agencies last week provides guidance on Iran’s drone procurement activities and highlights due diligence policies, compliance structures and internal controls companies should be using to prevent illegal exports. The departments of the Treasury, Commerce, Justice and State said it’s “critical that private industry be aware of its legal obligations vis-à-vis entities and items involved in such procurement efforts,” adding that violators could be subject to fines, criminal penalties and suspensions of export privileges.
The U.K. plans to update its export control regime to better restrict sensitive technology transfers and streamline flows of defense goods to close allies, the country said in a joint declaration with the U.S. released last week. The U.K. also said it’s planning to study how it can “respond effectively” to risks posed by outbound investments as the U.S. prepares to launch its own outbound screening mechanism (see 2305310075).