A former senior Pentagon official last week said he’s hopeful the Australia-U.K.-U.S. (AUKUS) partnership will lead to more defense industry collaboration, but he also suggested the three countries need to be careful about loosening trade restrictions too much.
DOJ’s recent decision not to prosecute a biochemical company that was part of an illegal export scheme involving China (see 2406040069 and 2405220037) underscores the importance of companies being “particularly aggressive” about deciding whether to submit an early voluntary disclosure to the U.S. government, McGuire Woods said in a client alert. The firm noted that DOJ decided not to prosecute the company, MilliporeSigma, “because of its prompt disclosure soon after it detected suspicious activity” -- the company disclosed the issue one week after hiring an outside lawyer. “Companies that wait too long to disclose or affirmatively choose not to file voluntary self-disclosures are at greater risk of being prosecuted or forfeiting valuable cooperation credit,” the firm said.
U.S. export controls on quantum technologies would be premature, because quantum is “in its infancy” and researchers are still studying its potential, said Sam Howell, an adjunct associate fellow with the Center for a New American Security’s Technology and National Security Program. “A lot of uncertainty” is around quantum, and so the impact of export controls on the technology's future is also unclear, she said.
Although the U.S. and the EU have been collaborating more closely on technology export controls and supply chain due diligence laws, there are still “massive questions” about whether those controls will extend to more mature-node semiconductors and how new EU supply chain laws are going to affect companies doing business in Europe, said U.S.-EU trade and security consultant Frances Burwell.
The State Department has sent a rule for interagency review that could finalize an expansion to its definition of activities that don’t count as exports, reexports, retransfers or temporary imports. The agency in 2022 proposed the changes (see 2212150028), which would allow companies to avoid submitting license applications for when a foreign government’s armed forces or U.N. personnel takes a defense article out of a previously approved country, or under certain scenarios for when a foreign defense item enters the U.S. but is subsequently exported (see 2212150028 and 2302270026). The State Department sent the final rule to the Office of Information and Regulatory Affairs June 6.
The State Department issued a notice this week describing the new export restrictions and other sanctions it imposed against Russia in May after determining the country used chemical weapons in violation of international law (see 2405010072). The agency certified to Congress under the Chemical and Biological Weapons Control and Warfare Elimination Act that Russia has used the weapons, and the agency’s certification places restrictions on U.S. Munitions List exports to Russia, arms sales, exports of “national security-sensitive” goods and technology, and more, according to a Federal Register notice released June 6. The notice also outlines several exemptions to the restrictions, including for certain exports necessary for “safety of flight,” certain deemed exports to Russian nationals and exports involving government space cooperation. The agency said the measures will “be implemented by the responsible departments and agencies” and will remain in effect for at least one year.
The Bureau of Industry and Security is drafting a proposed rule that could place new reporting requirements on exports of certain artificial intelligence technology. The rule, sent for interagency review June 5, could propose requirements on items “for the development of advanced artificial intelligence models and computing clusters.” The agency didn’t release more information.
Despite increasing export control cooperation between the U.S. and the EU, there’s still “considerable differences” in the two sides’ dual-use export control systems, including across control lists, enforcement issues and reexport control rules, researchers said. A recent report by Istituto Affari Internazionali, an Italian think tank, examines the differences between the two systems and ways they can work closer together, including through a proposal by the European Commission for a new forum for “political coordination” of export controls (see 2405160081).
A June 3 blog post by Defense Trade Solutions, a consultant used by the U.S. defense industry, outlines the licensing and recordkeeping requirements, along with a set of best practices, for brokers involved in exporting defense articles and services.
The State Department’s Directorate of Defense Trade Controls released its annual report to Congress on certain defense exports controlled on the U.S. Munitions List. The report, released June 3, details the aggregate value and quantity of defense items and services authorized to each foreign country and international organization during FY 2023.