The U.S. this week unsealed two indictments charging multiple people in schemes to deliver export-controlled dual-use goods to Russia. In both cases, DOJ charged Russian nationals and others with using Brooklyn-based companies to buy goods on behalf of sanctioned end-users or others connected to Russia's military.
Exports to China
The Treasury Department should “urgently” implement the administration's executive order on outbound investments (see 2308090066), including by adopting a broad definition of the three technology sectors covered under the order, said Reps. Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., the chairs of the House Select Committee on China. The lawmakers also called for the U.S. to do more to convince allies to put in place their own outbound investment screening tools and to pursue additional restrictions on outbound passive investments, including in index funds.
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Trade ministers from Japan, the U.S., the EU, the U.K., France, Canada, Germany and Italy said they will work to reach an agreement on World Trade Organization reform "with the view to having a fully and well-functioning dispute settlement system accessible to all members by 2024." The binding appellate level of dispute settlement at the WTO has been defunct since late 2019, because the U.S. blocked all appointments to the appellate body.
The State and Commerce departments are frequently seeing illegal exports of controlled items, including technical data, by companies that aren’t classifying their products correctly and may not realize they need a license.
The U.S. should convince Japan, the Netherlands and other allies to restrict exports of lower-level chipmaking equipment to China to prevent Beijing from becoming the global leader in the "foundational" semiconductors those tools can produce, the Silverado Policy Accelerator think tank said in a new report last week. The report warned that current restrictions on advanced equipment risks pushing China to instead dominate the foundational chip sector, which will increase the likelihood that those semiconductors will be incorporated in U.S. defense technologies and could help Chinese companies “climb the value chain in leading-edge nodes, whether through legitimate or illegitimate means.”
A World Trade Organization panel will review U.S. antidumping duties on oil country tubular goods from Argentina after Argentina's request for a dispute panel was granted by the Dispute Settlement Body, the WTO announced. Argentina's request was the second in its case arguing that the duties violate WTO rules and that the U.S. illegally cumulated imports in assessing injury caused by the subject imports.
The reporting requirements being considered by the Treasury Department as part of its upcoming outbound investment rules (see 2308090066 and 2310050035) are "quite broad,” Akin Gump lawyer Laura Black said, adding that they will require companies to report on how certain investments fit into their business plans in the U.S. as well as the contractual and government relationships held by their Chinese clients. Black, speaking during an Oct. 25 webinar hosted by the Massachusetts Export Center, said those requirements could increase compliance costs for U.S. companies and create challenges for their Chinese partners, who are subject to strict disclosure laws by the Chinese government.
The House Select Committee on China's leaders said a recent announcement that China would restrict exports of graphite, which is used in electric vehicle batteries, shows how urgent it is to pass legislation to respond to China's actions.
Is it EU "institutional rigidity," as a former assistant U.S. trade representative for Europe, Dan Mullaney, says, or unrealistic asks from the U.S. government delaying a deal on trade in steel and aluminum that could end tariff rate quotas on European exports?