The Bureau of Industry and Security has been receiving “a lot” of questions about what is considered a “major component” under the agency’s foreign direct product rule, a Commerce Department official said. Some exporters have asked BIS to issue a list of examples of major components for the purposes of the FDP rule, the official said, which restricts certain foreign-produced items when they are produced by a plant or by a “major component” of a plant that is a direct product of certain U.S. technology or software.
The Bureau of Industry and Security doesn’t have export control officers in Russia but has other means to monitor violations and to assess license applications, said Matthew Axelrod, the agency’s top export enforcement official. Although BIS can’t conduct end-use checks in the country, it can still turn to “open source reporting” and other intelligence when considering a license, Axelrod said. “We have a lot of different tools at our disposal to help inform the licensing process,” he said during a June 29 news conference.
Export controls may not stop all illegal shipments, but that doesn’t mean the U.S. and others should not work to improve cooperation and coordination, experts agreed during a June 27 Brookings Institution panel.
The U.K.'s Export Control Joint Unit on June 23 introduced new export restrictions against Russia. The restrictions prohibit the "export, supply and delivery, making available and transfer" of goods and technology used for internal repression, relating to biological and chemical weapons and maritime, as well as additional oil refining and critical industry. Further restrictions include bans on the export of jet fuel and fuel additives, sterling or EU-denominated banknotes and prohibitions on the import, acquisition or supply and delivery of revenue-generating goods that originate in or are consigned from Russia.
Companies with Chinese business ties should consider how they would be affected if the U.S. began imposing Russia-style export controls against China, said Crowell & Moring trade lawyer Jeff Snyder. Speaking during a June 21 webinar hosted by the firm, Snyder said his practice has begun conducting exercises to imagine how potential China-related controls would affect a business’ operations, which can help companies assess their risk exposure and make preemptive plans so they aren’t caught off-guard by trade disruptions.
Commerce Secretary Gina Raimondo discussed increasing export control collaboration with South Korea in an introductory meeting this week with South Korean Minister of Foreign Affairs Park Jin. Raimondo “expressed her interest in continued coordination” with South Korea on the export restrictions, Commerce said, which have been imposed on many areas of Russia’s economy, including its military, technology and luxury goods sectors. Commerce in March added South Korea to the list of countries that have imposed similar export controls against Russia and are excluded from certain license requirements under the U.S.’s Russia-related foreign direct product rules (see 2203040075).
The State Department’s Directorate of Defense Trade Controls will release its updated Licensing 2.0 application to the Defense Export Control and Compliance System on June 24, the agency said this week. The updates will “provide greater flexibility and security for users and system administrators,” DDTC said, calling it a “significant step in DDTC’s effort to continuously modernize the DECCS application suite.” To make the change, DECCS Registration and Licensing will go offline at 2 p.m. EDT June 24 and resume June 27 at 8 a.m. EDT.
The Bureau of Industry and Security last week updated its list of restricted Russian and Belarusian aircraft. The updated list includes new entries for two Utair planes and one Azur Air aircraft.
Braumiller Law Group released a June 12 “primer” on deemed export control compliance, outlining who may be subject to the controls and what is considered a release of technology, source code and technical data. The post also details several examples of deemed export enforcement actions, saying penalties can be mitigated through voluntary self-disclosures and “proactive compliance measures.”
After receiving criticism this week for its lack of progress in a possible investigation of illegal exports to Huawei, a Bureau of Industry and Security spokesperson said the agency is “committed to fully investigating any allegation” of violations of the foreign direct product rule, including illegal shipments to the Chinese technology giant. The agency has come under criticism for not yet penalizing Seagate Technologies for potentially illegally exporting goods to Huawei (see 2206070011).