The Commerce Department has not been able to officially designate 33 entities for weapons proliferation and human rights abuses due to publication delays at the Federal Register, a Commerce official said. The designations, which were announced May 22, will add companies and government agencies to Commerce’s Entity List for involvement in China’s detention and abuses of its Uighur population (see 2005220058).
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
Commerce Department officials will hold discussions with the Office of the General Counsel June 3 to try to make progress on the agency’s long-awaited proposed rules on routed export transactions, said Kiesha Downs, chief of the Census Bureau Foreign Trade Division’s regulations branch. The discussions will include OGC’s Office of the Chief Counsel and officials from both Census and the Bureau of Industry and Security as the two agencies try to build on a meeting in March (see 2003100046).
China reportedly ordered its state-controlled companies to stop buying certain U.S. agricultural products after the U.S. certified last week that Hong Kong no longer qualifies for special trade treatment. The decision also came after President Donald Trump said the U.S. will sanction Chinese officials, increase export controls on dual-use technologies, and end the special customs territory in response to Beijing’s so-called national security law (see 2005290047), which the State Department said threatens Hong Kong’s autonomy (see 2005270026).
The Committee on Foreign Investment in the U.S. is increasing scrutiny on transactions involving basic medical supplies and sensitive technologies, trade lawyers said. Companies may also be seeing more CFIUS-related delays and a heavier involvement by political appointees in the CFIUS process as the Trump administration seeks to place more pressure on China, the lawyers said.
The U.S. will officially strip Hong Kong of its special trade treatment, which will include changes to U.S. export controls and sanctions against Chinese officials, President Donald Trump said May 29. Trump said the export controls will impact dual-use technologies and sanctions will target both Hong Kong and mainland China officials.
Wassenaar Arrangement members have begun virtual negotiations on export controls, in observance of mitigation measures recommended during the COVID-19 pandemic, said Heidi Grant, the director of the Defense Department’s Defense Technology Security Administration. The virtual negotiations, which Grant believes have never been done before, started after the pandemic forced the group to cancel in-person meetings for the 2020 cycle, including an April Experts Group meeting (see 2004290044). Grant said the group has submitted 90 export control proposals for negotiations this year, although it remains unclear whether members will be able to vote remotely.
The U.S. government decision to increase license requirements for certain foreign exports to Huawei may damage U.S. companies more than Huawei and China, experts said. The same may be true for sanctions being prepared against China for interference with Hong Kong’s autonomy (see 2005220011), the experts said, which may present a large challenge for U.S. businesses. “If the administration follows through on the kinds of threats that they’re talking about … it will have a hugely negative impact on U.S. companies operating there, it will have a hugely negative impact on the people of Hong Kong, and it will have a minuscule effect on China,” said Nicholas Lardy, a Chinese economy expert at the Peterson Institute for International Economics.
Two senators plan to introduce a bill they say will expand U.S. sanctions against Chinese efforts to meddle in Hong Kong’s autonomy. The bill would impose sanctions on Chinese policymakers and entities and would introduce secondary sanctions against certain banks, said Sens. Pat Toomey, R-Pa., and Chris Van Hollen, D-Md.
A new law being considered by China’s National People's Congress could trigger U.S. export controls and cause the U.S. to revoke Hong Kong’s special customs status, said Jude Blanchette, a China expert at the Center for Strategic and International Studies. The new national security law, which is expected to be proposed during China’s current NPC session, would criminalize “treason, sedition and secession,” Blanchette said, and will likely cause the U.S. to enact measures under the Hong Kong Human Rights and Democracy Act, which passed in November 2019 (see 1911290012).
The Trump administration is still considering sanctioning India over purchases of Russian missile defense systems, a top State Department official said. Alice Wells, principal deputy assistant secretary of state for South and Central Asia, said there remains widespread support both within the administration and in Congress for sanctioning buyers of Russian military goods, adding that India needs to choose either U.S. or Russian military equipment, but cannot have both.