Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching for the title or by clicking on the hyperlinked reference number.
Exports to China
Concern is “growing” within the U.S., Australia and the U.K. that “indiscriminate and extraterritorial application” of the International Traffic in Arms Regulations will hurt the Australia-U.K.-U.S. (AUKUS) partnership and “slow-roll cooperation on existing technology transfer,” the Sydney-based U.S. Studies Centre said in a report released this month. The report warned that “another failure” to reform the ITAR could “carry significant consequences for the three countries’ shared defence technology advantages vis-a-vis China and, therefore, their ability to deter regional conflict.”
China's General Administration of Customs and Macau Customs inked a mutual recognition agreement, which comes into effect June 1, China's customs agency announced, according to an unofficial translation. Under the accord, customs agencies of mainland China and Macau will recognize each party's authorized economic operator (AEO) system and allow designated AEOs to clear customs with ease. Both parties will also provide a host of customs clearance facilitation services for the AEO enterprises, the customs administration said.
The U.S. ended the Group of 7 summit in Japan with an agreement by member countries to explore new restrictions on outbound investments into China and a strategy to de-risk with regard to certain aspects of the country’s economy, a result President Joe Biden said “showcased the unity of purpose” of the G-7 leaders toward Beijing. The countries also emphasized the importance of multilateral export controls, agreeing to increase cooperation on restrictions over dual-use technologies.
China this week banned certain Chinese companies from purchasing products from U.S. semiconductor company Micron, saying they are a national security risk and shouldn’t be used in “critical information infrastructure” projects. The country’s cyberspace regulator said its infrastructure operators “should stop purchasing Micron products” after a Chinese government review found they have “relatively serious potential network security issues, which pose a major security risk” to China, according to an unofficial translation of a May 21 notice. “The purpose of this network security review of Micron's products is to prevent product network security issues from endangering the security of the country's key information infrastructure, which is a necessary measure to maintain national security.”
A limited trade deal announced between the U.S. and Taiwan (see 2305190074) angered the Chinese government. When asked about the deal at a regular press conference in Beijing, a Foreign Ministry spokesperson said that signing a deal with Taiwan "implies sovereignty." He added: "The U.S. move gravely violates the one-China principle and the three China-US joint communiqués, and contravenes the U.S.’s own commitment of maintaining only unofficial relations with Taiwan. China deplores and strongly opposes this move."
The leaders of the House Foreign Affairs Subcommittee on the Indo-Pacific are trying to pass legislation to give the president the ability to respond to economic coercion of allies, but Chair Young Kim, R-Calif., asked witnesses at a subcommittee hearing she convened to advise what else could be done to stand up to China's economic aggression.
The Treasury Department ‘understands” the challenges faced by banks, law firms, companies and others in trying to comply with multiple Russian sanctions regimes across the U.S., the EU and elsewhere, and is working to better align those restrictions to alleviate some headaches, said Brian Nelson, Treasury’s undersecretary for terrorism and financial intelligence. Nelson, speaking during a law conference in Washington last week, said the agency is “working hard” to harmonize “our actions, our targets, the guidance that we're providing so that they are consistent across our jurisdictions.”
Members of Congress need to be mindful of what their proposals to regulate outbound investment might mean for U.S. businesses, one of the experts on a Washington International Trade Association webinar cautioned.
A bipartisan bill reintroduced in the House this week could require new sanctions against members of the Central Committee of the Chinese Communist Party and could declare the CCP and President Xi Jinping have “committed numerous human rights violations, including genocide.” The lawmakers didn't immediately release the bill's text, but under a version of the Stop CCP Act introduced in the last Congress, the U.S. president would be required to sanction any former or current member of China’s National Communist Party Congress along with their adult family members.