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
Huawei’s 7 nanometer chip smartphone breakthrough earlier this year (see 2309120005, 2309150020 and 2309190052) signals that although China hasn’t yet reached the “global state of the art for semiconductor manufacturing,” the “gap between the peak technological level of China and that of the rest of the world has shrunk” despite U.S. export controls, said Gregory Allen of the Center for Strategic and International Studies.
If the Treasury Department doesn't clarify the due-diligence steps that will be required of dealmakers under the agency’s upcoming outbound investment prohibitions, the Biden administration risks chilling a broad range of U.S ventures in China and incentivizing foreign companies to seek funds elsewhere, law firms and industry associations said in comments to the agency.
The Bureau of Industry and Security added 49 entities, mostly from China, to the Entity List for shipping microelectronics to Russian consignees connected to the country’s defense sector. The entities are semiconductor companies, technology businesses, logistics companies and others, and also include companies based in Estonia, Finland, Germany, India, Turkey, the United Arab Emirates and the U.K.
U.S. sanctions and export controls have so far “not been sufficient to deter” China’s Semiconductor Manufacturing International Corp., China analysts James Mulvenon and Joseph McReynolds said in a report released this month on Mulvenon’s website. The report said Applied Materials, Lam Research, Tokyo Electron, KLA and other chip companies are “effectively selling a wide range of relevant tools” used for 28 nanometer use to China, but SMIC likely is using them for 7 nm production.
The EU's decision to open a countervailing duty investigation on electric vehicle batteries from China lacks sufficient evidence and violates World Trade Organization commitments, China's Ministry of Commerce said Oct. 4, according to an unofficial translation. The ministry characterized the move as "naked protectionism."
The Bureau of Industry and Security added 49 entities from China, Estonia, Finland, Germany, India, Turkey, the United Arab Emirates and the U.K. to its Entity List for providing support to Russia’s military or to its defense industrial base. The entities, outlined in a final rule effective Oct. 6, are subject to license requirements for all items subject to the Export Administration Regulations, and licenses will be reviewed under a policy of denial.
U.S. allies in Europe and Asia would support new efforts to coordinate on export controls for advanced technologies, including semiconductors, panelists said during an event this week hosted by the Center for Strategic and International Studies. But they also said those same countries don’t believe the world needs a new dual-use multilateral export control regime to replace the Wassenaar Arrangement, even though Russia remains a member and can block proposals.
LONDON -- A looming Bureau of Industry and Security rule that would expand the agency’s restrictions on U.S. persons' activities is “going to be a compliance challenge that I don't think we're ready for,” said Robert Monjay, a former BIS analyst and export control executive with Intel.
The European Commission on Oct. 4 officially launched a countervailing duty investigation on electric vehicle batteries from China. The investigation, previewed in September by Commission President Ursula von der Leyen (see 2309140009), will focus on whether the battery value chains in China benefit from "illegal subsidization," and, if so, whether these subsidies cause or threaten economic injury to EU manufacturers, the commission said. If both are true, the commission said, it will determine if it is in the bloc's interest to remedy the subsidies via duties. The commission said that, per World Trade Organization rules, it carried out pre-initiation consultations with the Chinese government. The commission said the investigation will take a maximum of 13 months, and anti-subsidy duties may be taken nine months after initiation.