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
Chinese companies should “strengthen” their due diligence procedures to make sure they’re not doing business with U.S. defense companies Lockheed Martin and Raytheon, which were placed on China’s so-called Unreliable Entity List in February (see 2302160064), China’s Ministry of Commerce said this week. Both firms are blocked from “engaging in import and export activities related to China,” which will “prevent Chinese products from being used in their military business,” a ministry spokesperson said April 18, according to an unofficial translation.
China condemned the recent U.S. inclusion of 12 Chinese companies on the Entity List for their aid to Russia's war against Ukraine. All 12 companies were accused of backing Russia's military or defense industrial base (see 2304120039). A spokesperson for China's Ministry of Commerce said the U.S. has no basis in international law to carry out the sanctions, and the move is a "typical unilateral sanction" that damages the legitimate rights of Chinese companies, according to an unofficial translation. The spokesperson called for the immediate cessation of the sanctions, adding that China will safeguard the interests of its companies.
Rep. Mark Green, R-Tenn., reintroduced a bill last week that could lead to new export controls and sanctions against China. The China Technology Transfer Control Act, first introduced during the last Congress, calls on the president to impose restrictions on “any covered national interest technology or intellectual property” exported from the U.S. to China or by a U.S. person to China. It also would require the Commerce and State departments to submit a report to Congress within 90 days of the bill’s enactment “assessing” whether any covered technologies should be controlled under the International Traffic in Arms Regulations or Export Administration Regulations.
The Bureau of Industry and Security recently suspended the export privileges of four people, including two for making false statements to the government and two others for illegally exporting guns or ammunition to Mexico.
China has become a “world leader” in space and missile technologies despite “far-reaching” U.S. export controls, said Kevin Pollpeter, a senior research scientist at the Center for Naval Analysis. Pollpeter, speaking during a U.S.-China Economic and Security Review Commission hearing last week, said China’s space and missile programs are “not only closing the gap with the United States, but are also increasingly innovative.” He noted that the director of national intelligence recently warned that China could reach “world-class status” in most space technology areas by 2030.
Japan and China agreed to enter into arbitration under the World Trade Organization's Multi-Party Interim Appeal Arbitration Agreement, an alternative to the Appellate Body, related to a spat over China's antidumping duties on stainless steel products from Japan. Submitting a notice of agreed procedures for arbitration, Japan and China said they will take to arbitration, given that there are less than three AB members.
China is preparing an export ban on technology needed to process and magnetize rare earth metals, The Telegraph reported. These metals are used in advanced technology, including in high-performance magnets for electric vehicles and wind turbine motors. The news comes after China's Ministry of Commerce floated alterations to its list of goods subject to export restrictions in 2022, according to an unofficial translation.
The European Commission on April 14 renewed the antidumping duties on stainless steel tube and pipe butt-welding fittings from China and Taiwan for another five years, following an expiry review investigation. The proceeding showed that allowing the duties to lapse would harm the EU pipe fittings industry, the commission said. The duties range from 5.1% to 12.1% for Taiwan, and from 30.7% to 64.9% for China.
The U.S. needs to pour more funding and resources into the Bureau of Industry and Security to allow it to better address China-related national security risks, said Gregory Allen, a technology policy expert with the Center for Strategic and International Studies and a former Defense Department official. Although BIS is charged with implementing some of the U.S.’s most sensitive trade restrictions, its export control functions have “had a flat budget for the better part of a decade,” Allen said during a U.S.-China Economic and Security Review Commission hearing last week. “It has been profoundly neglected” and subject to an “appalling mismanagement of resources.”