A new rule that would impose a three-day deadline for certain responses to the Committee on Foreign Investment in the U.S. was unanimously criticized by several law firms, an industry group and the Chinese government, which said such a time frame doesn’t take into account the complex, time-consuming discussions companies must have when dealing with CFIUS. Some commenters also asked the committee to nix a proposed change that would raise the maximum penalty for violations from $250,000 per violation to $5 million, saying most violations are accidental, and the increase could rattle the “confidence” of foreign investors.
Exports to China
Chinese and Japanese officials this week held the second meeting of the China-Japan Export Control Dialogue Mechanism, where they discussed “issues of concern in the field of export control,” according to unofficial translations from China’s Commerce Ministry and Japan's Ministry of Economy, Trade and Industry. Officials at the Shanghai meeting also held a question-and-answer session with Japanese and Chinese companies. The two nations “agreed to continue to maintain close communication, deepen the understanding of each other's export control systems, improve the transparency of export control measures, and ensure that normal trade is not hindered,” China said.
China has lifted trade restrictions on five Australian meat processing facilities, Australia’s Foreign Affairs Ministry said May 30. Those restrictions were among several “trade impediments” China has imposed against Australia in recent years (see 2404030026 and 2005130013), the ministry said, adding that Beijing has now lifted import restrictions on eight beef processing facilities, while two facilities still face suspensions. “We continue to press China to remove the remaining trade impediments, including for Australia's rock lobster industry,” Australia said.
China will place export controls starting June 1 on various military and dual-use equipment, software and technology, including items used in the aerospace and shipbuilding industries, along with “ultra-high molecular weight polyethylene fibers,” the country’s commerce Ministry said May 30, according to an unofficial translation.
The Federal Maritime Commission is hoping to release a rule this fall that would create a registry for national shipping exchanges, FMC Chair Daniel Maffei said during a May 29 event hosted by the Consumer Technology Association. The Ocean Shipping Reform Act of 2022 gave the FMC until June 2025 to craft the rule, and lawmakers have called on the FMC to provide a counterbalance to China's Shanghai Shipping Exchange, which they said is poised to become a monopoly without more competition (see 2402020060).
The U.S. and other countries imposing sanctions and export controls on Russia need a more “aggressive” plan to cripple Moscow’s war effort, a group of researchers and economists said, including through tighter financial restrictions, new bans on Russian commodities and broader export controls. They also said American lawyers should have to follow strict due diligence and reporting rules when taking on clients with ties to Russia, and said the price cap on Russian oil should be lowered.
Several provisions relating to sanctions and export controls are included in the Senate version of the FY 2025 Intelligence Authorization Act, the Senate Select Committee on Intelligence said in a bill summary released last week.
The EU and Australia will implement recent World Trade Organization panel rulings that found the nations lost in their respective disputes, the countries said during the May 24 meeting of the Dispute Settlement Body. The EU dispute involved the bloc's measures on palm oil and biofuels from Malaysia, while Australia's dispute focused on Australian antidumping and countervailing duties on Chinese imports.
The U.S. government should explore the possibility of prohibiting inbound Chinese foreign direct investment in a few sensitive high-sectors to ease the workload burden on the Committee on Foreign Investment in the U.S., a congressionally mandated commission heard last week.
The U.S. government should combine its various export control and sanctions lists into two distinct lists, which could allow the government to better implement trade restrictions and improve industry compliance, a congressional commission heard this week. The commission also discussed whether U.S. export control agencies should have to release more information about their licensing decisions, with one witness saying more transparency would increase business certainty, while another said it would discourage candor between the government and exporters.