The U.S. District Court for the Southern District of New York should toss the U.S. claim that FTX crypto-exchange founder Sam Bankman-Fried violated the Foreign Corrupt Practices Act's anti-bribery provision since the government failed to allege an essential element of the FCPA, Bankman-Fried said in a motion to dismiss. The U.S. said payments were made to unfreeze assets belonging to cryptocurrency firm Alameda Research but didn't say payments were made to "secure or retain a contract with a foreign government agency, gain an unfair advantage, or achieve an objective of the sort addressed in the FCPA’s text or legislative history or in relevant caselaw" (U.S. v. Samuel Bankman-Fried, S.D.N.Y. # 22-00673).
Exports to China
The Commerce Department again renewed a temporary export denial order for Mahan Airways because the airline continues to violate the order and the Export Administration Regulations. Mahan Airways has been on the banned list since 2008, and Commerce in its May 5 notice said the Iranian airline has continued to fly to and from Iran from Russia and China in violation of U.S. export controls. It also said the airline in April reportedly began direct flights from Iran to Minsk, Belarus, and also has helped repair planes belonging to Russia's Aeroflot, which is also subject to a temporary denial order (see 2303300013). The latest renewal for Mahan is for 180 days from May 5.
The EU is considering new sanctions on Chinese companies for supporting Russia’s military, the Financial Times reported May 7. The sanctions, which are expected to be discussed by EU member states this week, could target seven Chinese companies for selling equipment to Moscow that could be used in weapons, the report said. The list of companies reportedly includes two companies from mainland China, 3HC Semiconductors and King-Pai Technology, and five based in Hong Kong: Sinno Electronics, Sigma Technology, Asia Pacific Links, Tordan Industry and Alpha Trading Investments. Some of the companies are already subject to U.S. restrictions, including 3HC, which was added to the Commerce Department's Entity List in April for supplying Russia's military (see 2304120039). All EU member states would have to agree to the new measures before they take effect.
China recently issued a new set of “industry standards,” including “risk classification” requirements, for certain imported and exported industrial products, according to an unofficial translation of a notice from the country’s General Administration of Customs. The notice, which also “abolished” five existing industry standards, covers requirements for certain imported technology, chemicals, raw materials and more.
Although the U.S. continues to impose new sanctions and export controls against Russia, the Commerce Department’s $300 million penalty assigned to Seagate Technologies last month signals that the U.S. is increasingly prioritizing enforcement, particularly against China, law firms said this month. They also said the fine shows that Commerce is looking to strictly enforce its foreign direct product rule restrictions, even for violations of the rule that may not be obvious.
Although Taiwan Semiconductor Manufacturing Company last year secured a one-year authorization to continue certain China-related activities despite the Commerce Department’s October chip controls, the company has “no assurance that we will be able to continue securing such general authorization on a timely basis or at all,” it said in an April Securities and Exchange Commission filing. The Bureau of Industry and Security recently said it’s working with some companies to allow them to continue certain activities authorized by the waivers after they expire (see 2302240008).
A bill introduced in the Senate last week could create new export authorizations -- including a new open general license for certain defense exports and a new license exception for dual-use goods -- to expedite shipments to Australia, Canada and the U.K. The legislation, introduced by Sens. Jim Risch, R-Idaho, and Bill Hagerty, R-Tenn., also would allow the State Department to hire more export license review officers, create a “fast-track” foreign military sales process, reduce barriers to information sharing within the Australia-U.K.-U.S. partnership and more.
India recently imposed antidumping duties on luxury vinyl tile imports from China, Taiwan and Vietnam, the Hong Kong Trade Development Council reported May 5. The duties, announced last month, affect certain vinyl tiles with a minimum tile thickness of 2.5 mm and a maximum tile thickness of 8 mm, and a protective layer thickness between 0.15 mm to 0.7 mm.
U.S. export controls and investment restrictions can successfully maintain America’s lead over China in sensitive technologies, including semiconductors, said Michele Flournoy, a former Defense Department official. But she also warned against policies that could push the U.S. toward decoupling from Beijing, saying the government needs to do a better job working with industry to craft the restrictions.
Some supply chain agreements in the Indo-Pacific Economic Framework may be announced in May, according to officials at the Asia Society Policy Institute, and the institute held a webinar May 3 and released a paper with recommendations of how to shape the supply chain pillar ahead of those announcements.