The Commerce and Treasury departments earlier this month co-hosted a virtual “exchange” with small to mid-sized financial institutions, law enforcement and government agencies to discuss Russian attempts to evade export controls, the agencies announced Nov. 21. The exchange included officials from the Bureau of Industry and Security, the Office of Foreign Assets Control and the Financial Crimes Enforcement Network, and “exemplified the ongoing U.S. Government effort to further constrain and prevent Russia from accessing the international financial system and conduct economic activity to fund its invasion of Ukraine,” Treasury said. The effort came about a week after BIS and FinCEN issued another set of export control evasion red flags for financial services firms along with a new key term that banks and others can include in their suspicious activity reports (see 2311060055).
The Bureau of Industry and Security recently made available its process by which companies may begin submitting notifications for certain exports of “gray-zone” semiconductors that fall just below the new chip control parameters announced last month (see 2310170055). As part of the updated restrictions, BIS is requiring a notification under new License Exception Notified Advanced Computing (NAC), which will authorize certain exports of certain chips to China, Macau and destinations subject to a U.S. arms embargo.
Chinese e-commerce company Alibaba is nixing plans to spin off its cloud computing division due to “uncertainties” caused by recently updated U.S. chip export controls on China. Alibaba was planning to publicly list its Cloud Intelligence Group, a cloud computing services business, but said last week it fears “these new restrictions may materially and adversely affect” the cloud computing division’s “ability to offer products and services and to perform under existing contracts.”
The State Department’s Directorate of Defense Trade Controls sent a proposed rule for interagency review that could amend certain language in the International Traffic in Arms Regulations. The rule, sent for review Nov. 5, would specifically make revisions to definitions and export controls related to defense services.
The Bureau of Industry and Security sent a proposed rule for interagency review that could lead to changes to its end-use and end-user-based export controls. The rule, sent to the Office of Information and Regulatory Affairs Nov. 3, could specifically amend the BIS U.S. persons controls involving military and military intelligence end uses and end users.
The Bureau of Industry and Security last week completed rounds of interagency review for two rules, including one that could make changes to a license exception in the Export Administration Regulations.
CBP officers seized a shipment of China-bound deuterium cylinders that was exported without a license, the agency said in a statement on Oct. 31. The shipment, which was seized on Oct. 18 in Norfolk, Virginia, was worth a little more than $175,000, CBP said.
The Bureau of Industry and Security is inching closer toward potentially publishing a final rule that could revise export licensing requirements for certain cameras, systems or related components. The rule, sent for interagency review Oct. 31, will “better align controls with technological and commercial developments,” BIS said. The rule has been on the BIS regulatory agenda for several years (see 2307170038, 2206270007 and 2112210044).
The Bureau of Industry and Security recently published a set of frequently asked questions to provide guidance for exports to Israel. BIS said it’s able to expedite certain Israel-related export applications in light of the ongoing war in the region. It said the Palestinian territories of Gaza and the West Bank aren't recognized as separate destinations from Israel under the Export Administration Regulations, so items that require a license for Israel also need a license for those Palestinian territories.
The U.S. should convince Japan, the Netherlands and other allies to restrict exports of lower-level chipmaking equipment to China to prevent Beijing from becoming the global leader in the "foundational" semiconductors those tools can produce, the Silverado Policy Accelerator think tank said in a new report last week. The report warned that current restrictions on advanced equipment risks pushing China to instead dominate the foundational chip sector, which will increase the likelihood that those semiconductors will be incorporated in U.S. defense technologies and could help Chinese companies “climb the value chain in leading-edge nodes, whether through legitimate or illegitimate means.”