The Treasury Department issued a proposed rule to modify mandatory declaration requirements for certain transactions involving critical technologies. Under the rule, transactions would require a declaration if the critical technology would normally be subject to a U.S. export license. This would be a change from certain declaration requirements for the Committee on Foreign Investment in the U.S. outlined under a 2018 pilot program, which based those decisions on whether the transactions met criteria established by the North American Industry Classification System.
The Office of Information and Regulatory Affairs began an interagency review for a final rule from the Commerce Department that will implement certain export control decisions from the 2020 Australia Group meeting. The rule, received by OIRA May 5, will add certain “rigid-walled, single-use cultivation chambers and precursor chemicals” to the Commerce Control List. The rule would also amend the Export Administration Regulations by revising biological and chemical controls on the CCL.
The Commerce Department amended its direct product rule, increasing restrictions on foreign-made chips exported to, and made by, Huawei and its affiliates, the agency said in a May 15 interim final rule. Commerce also said it does not expect to issue another temporary general license extension for the Chinese technology company after its latest 90-day renewal expires Aug. 13.
The Commerce Department’s new export restrictions on military end-users may significantly raise due diligence requirements for industry, leading to licensing delays and a burdensome vetting process for technology companies, law firms said. If Commerce's Bureau of Industry and Security does not clarify the scope of the rule to limit its impact, the rules are likely to damage the semiconductor, telecommunications and aircraft sectors, the law firms said. “This could have a detrimental impact on a broad swath of U.S. industry,” Baker McKenzie said in an April 30 blog post. “A universe of transactions triggering license requirements could significantly increase.”
The COVID-19 pandemic is causing “significant disruption” for the Wassenaar Arrangement, leading to the cancelation of at least one meeting and creating uncertainty about whether the group can remotely vote on new export controls, two Commerce Department officials said. Wassenaar was forced to cancel its April Experts Group meeting -- which normally addresses issues related to its lists of controlled items -- and is unsure if global travel restrictions will force cancellations of future meetings in June and its annual plenary session in December.
The Commerce Department amended the Export Administration Regulations to expand licensing requirements for exports, re-exports and transfers of items intended for military uses in China, Russia and Venezuela, according to a notice. The rule expands the licensing requirements for exports to China to include military end-users as well as military end-uses, broadens the list of items subject to the licensing requirement and review policy, and expands the definition for military end-use. The rule also “creates a new reason for control” and review policy for certain exports to the three countries, and added new Electronic Export Information filing requirements.
The Commerce Department eliminated its license exception for civil end-users (CIV) in an effort to cut exports to countries pursuing civil-military fusion (see 1904260018), the agency said in a notice. The change, which was expected for nearly a year (see 1907180037), will remove authorizations to export certain controlled items to most civil end-users for civil end-uses in Country Group D:1. The change takes effect June 29.
The State Department Directorate of Defense Trade Controls has seen a decline in voluntary self-disclosures since 2013, according to an April 20 post on the EU Sanctions blog, which cited a report by the Global Investigations Review. DDTC processed just over 2,000 disclosures in 2013 but only 650 in 2019, the blog said. Since 2014, the number of self-disclosures fell by about 140 disclosures per year, the blog post said, but has remained “consistent” over the last two years. The decrease stems from the removal of certain dual-use items from the U.S. Munitions List to the Commerce Control List, the blog said.
The Commerce Department Bureau of Industry and Security this week postponed several upcoming export compliance seminars due to the COVID-19 pandemic response and announced an online-only export control conference for May. The online conference, which will run May 19-22, will cover a range of export compliance topics, BIS said, including the scope of the Export Administration Regulations, classifying items for export, using license exceptions, the de minimis and direct product rules, export enforcement and more. The conference will be hosted by “BIS specialists” during a daily three-hour session from 9 a.m. to noon. The conference will also include a question-and-answer session. Note that the conference is on Pacific Daylight Time.
The Commerce Department is seeking comments on an information collection related to the five-year record retention requirement for export transactions and boycott actions, the agency said in a notice. The retention requirement applies to all parties involved in the export, re-export, transshipment or diversion of items subject to the Export Administration Regulations and involved in a reportable boycott request. Comments are due June 5.