Companies should continue to see more Chinese additions to the U.S. Entity List this year, although Russia sanctions likely will continue to dominate the government’s time and resources, trade lawyers said this week.
The Bureau of Industry and Security added a Chinese electronics company and a Canada-headquartered technology software company to the Entity List for trying to illegally acquire U.S. items or for being involved in other activities that are “contrary” to U.S. national security and foreign policy, the agency said Feb. 26. It also removed one United Arab Emirates-based entity from the Entity List.
The U.S. announced a new set of sweeping Russia-related export controls and sanctions last week to mark the two-year anniversary of Moscow’s invasion of Ukraine and to respond to Russian opposition figure Alexei Navalny's death in prison. The measures include nearly 100 additions to the Commerce Department’s Entity List, more than 500 sanctions designations by the Treasury and State departments and new government guidance, including a new business advisory to warn companies about Russia-related compliance risks.
The Bureau of Industry and Security this week eliminated some license requirements for exports of certain cameras, systems and related components, which the agency said will help U.S. exporters better compete with foreign firms and reduce licensing burdens. The final rule, released Feb. 22, also introduces a new control for certain high-speed cameras that BIS said pose proliferation risks.
Businesses are relieved by the quasi-truce between China and the U.S., consultants and lawyers said on a trade panel last week, but those in the tech sectors expect more restrictions are coming in the near future.
Industry lawyers and advisers see the Bureau of Industry and Security's revamped voluntary disclosure policies as a positive set of moves that could reduce compliance burdens on exporters and encourage more companies to come forward with tips about their competitors. But at least one former government official said corporations should remain skeptical about the changes until BIS offers more clarity about how it will implement them in practice.
U.S. enforcement officials last week continued to warn about upcoming export control penalties, saying they hope those cases encourage companies to devote more resources to their compliance programs.
Technology companies, trade groups, think tanks and researchers urged the government to be cautious as it evaluates its semiconductor-related export controls and prepares new ones, warning that misguided restrictions could cede American technology leadership to China, hurt the competitiveness of U.S. companies and raise the complexity of an already fraught compliance landscape.
The U.S. charged four Chinese nationals this week for their parts in a yearslong conspiracy to violate export controls by smuggling electronic parts through China and to Iran.
Rep. Ann Wagner, R-Mo., announced Jan. 31 that she has introduced a bill to revamp U.S. export control processes to make it harder for China and other “foreign adversaries” to obtain sensitive technology.