The Bureau of Industry and Security is working on a new final rule that could expand its nuclear nonproliferation export controls. BIS sent the rule for interagency review June 5, according to the Office of Information and Regulatory Affairs.
The State Department’s Directorate of Defense Trade Controls this week updated its guidance on authorization requests for U.S. persons providing defense services abroad. The document, which was last updated in January (see 2301060022), clarifies how to “identify” U.S. Munitions List defense service categories and commodity categories in the submission letter, states that “support documents” should be submitted as PDFs, notes applicants must address periods of U.S. residency even if they never lived in the U.S., and more.
Companies should be constantly assessing their export control compliance procedures because of the unprecedented pace of regulatory changes, which makes it “easier to be caught,” said Tamer Soliman, a Mayer Brown trade lawyer, speaking during a law conference hosted by the law firm last week. He said the government is “scrutinizing more and more transactions,” particularly as it tries to target Russian sanctions evasion attempts.
Following a recent DOJ settlement with General Motors, U.S. employers should make sure they’re not inadvertently considering export control compliance concerns in a way that discriminates against certain people during their hiring process, Barnes & Thornburg said in a May client alert. The firm said U.S. companies should “carefully review their written policies and procedures” to make sure they “adequately address compliance” with the Immigration and Nationality Act “when assessing whether employees require access to export-controlled information.” Human resource managers “should be particularly sensitive to these issues when hiring and onboarding new employees.”
Although Taiwan Semiconductor Manufacturing Company last year secured a one-year authorization to continue certain China-related activities despite the Commerce Department’s October chip controls, the company has “no assurance that we will be able to continue securing such general authorization on a timely basis or at all,” it said in an April Securities and Exchange Commission filing. The Bureau of Industry and Security recently said it’s working with some companies to allow them to continue certain activities authorized by the waivers after they expire (see 2302240008).
U.S. export controls imposed against China’s semiconductor industry in October (see 2211010042) are so far having “only minimal effects” on the country’s artificial intelligence sector, Reuters reported May 3. Although the rules restricted shipments of certain chips “that have become the global technology industry's standard for developing chatbots” and other AI systems, including chips supplied by Nvidia, the U.S. technology company has created “variants of its chips for the Chinese market that are slowed down” to comply with the new license requirements, the report said.
Placing export controls now on quantum information science technologies likely would “cause more harm than good,” Sam Howell, a research assistant with the Center for a New American Security, said in a May 1 article for the Lawfare blog. Although the U.S. could take several paths in imposing quantum technology restrictions -- including specific end-user controls or broader restrictions targeting “entire integrated quantum systems” -- she said each carries “significant pitfalls and are unlikely to be effective in protecting the U.S.’s strategic edge at this stage of development.”
U.S. hardware supplier MaxLinear said it submitted a “comprehensive” voluntary self-disclosure to the Bureau of Industry and Security in March detailing its potential illegal exports to a Chinese foundry on the Entity List. The company, which submitted an initial notification to BIS last year (see 2211070014), has since hired outside counsel who recently completed a “privileged investigation” of the potential violation, according to its April filing with the SEC. The company also “took immediate action to remediate, including by preventing recurrence.”
U.S. semiconductor company KLA “received clarification” from the U.S. government on matters surrounding chip export controls on China and can “now resume some shipments that we had previously excluded,” the company said as part of its latest earnings report released last week.
The U.S. should work with China in select artificial intelligence areas instead of imposing sweeping export controls that create financial incentives for companies to “design-out” U.S. technology, Paul Scharre, vice president and director of studies at the Center for a New American Security, said in an April 18 opinion article for Time Magazine. While current U.S. restrictions on semiconductors exports to China are “narrowly targeted,” he said they will “de facto grow over time as chips advance and the threshold for export controls remains the same.”