The Treasury Department issued a proposed rule to modify mandatory declaration requirements for certain transactions involving critical technologies. Under the rule, transactions would require a declaration if the critical technology would normally be subject to a U.S. export license. This would be a change from certain declaration requirements for the Committee on Foreign Investment in the U.S. outlined under a 2018 pilot program, which based those decisions on whether the transactions met criteria established by the North American Industry Classification System.
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.
Three senators are concerned the U.S.’s deal with the Taiwan Semiconductor Manufacturing Company (see 2005150033) may disadvantage U.S. chip companies through unfair subsidies and could allow China access to sensitive technologies. In a May 19 letter to the Commerce and Defense departments, Senate Minority Leader Chuck Schumer, D-N.Y., and Sens. Patrick Leahy, D-Vt., and Jack Reed, D-R.I., urged the administration to stop all negotiations with TSMC regarding plans to build a U.S.-based chip factory. The senators said they have “serious questions” about how the deal, announced last week, aligns with the U.S’s strategy of diversifying its semiconductor supply chain away from China.
The Commerce Department’s Bureau of Industry and Security is preparing to issue several additional export controls over emerging technologies and is finalizing a long-awaited advance notice of proposed rulemaking for foundational technologies, BIS officials said. The emerging technology controls will be released “within the next few weeks,” an official said, while the foundational technology ANPRM will soon be sent for interagency review and for feedback by technical advisory committee members before being publicly released.
China said it will take countermeasures to respond to increased U.S. export restrictions against Huawei, calling the changes an “abuse of export controls” and a violation of international trade laws. The restrictions, which place a license requirement on shipments to Huawei for foreign-made chips containing U.S. content, are a “serious threat” to China’s chip industry and supply chains, China’s Commerce Ministry said May 17, according to an unofficial translation. The ministry did not specify what the countermeasures will entail, but state media said China is considering placing U.S. companies on its so-called unreliable entity list and stopping purchases of aircraft from Boeing (see 2005150058).
The Commerce Department amended its direct product rule, increasing restrictions on foreign-made chips exported to, and made by, Huawei and its affiliates, the agency said in a May 15 interim final rule. Commerce also said it does not expect to issue another temporary general license extension for the Chinese technology company after its latest 90-day renewal expires Aug. 13.
The Treasury Department, the State Department and the Coast Guard issued a May 14 guidance on illegal shipping and sanctions evasion practices by Iran, North Korea and Syria. The guidance aims to help traders in the maritime industry -- including the energy and metal sectors -- avoid doing business with customers trying to avoid U.S. sanctions. The 35-page guidance updates previous shipping advisories, including a guidance on illegal North Korean ship-to-ship transfers (see 1903210052).
World Trade Organization members should do more to prevent export restrictions on medical goods and keep medical and food supply chains open, said Zhang Xiangchen, China’s ambassador to the WTO. Zhang also called on more cooperation between WTO members to combat the pandemic, which he said hasn’t materialized and has helped cripple the WTO. “The reason behind the poor performance [of the WTO] is not only due to the nature and the scale of the crisis,” Zhang said during a May 12 webinar hosted by the Asia Society, “but also the lack of leadership and the diminishing trust among members.”
China is unlikely to meet its purchase commitments under the phase one deal, due to the COVID-19 pandemic, which could lead to China invoking a force majeure clause and further postponing the prospects of a phase two agreement, China trade experts said. “Given the COVID-19 crisis, the target set in the phase one deal will be very hard to achieve,” Xu Gao, chief economist at Bank of China International, said during a May 13 webinar hosted by the National Committee on U.S.-China Relations.
Amid rising U.S.-China trade tensions, China released a second round of U.S. goods exempt from retaliatory tariffs, according to an unofficial translation of a May 12 Finance Ministry notice. The announcement came one day after a Chinese state news agency said the country is considering invalidating the phase one deal, citing Chinese officials’ frustration with President Donald Trump’s attempt to blame China for the COVID-19 pandemic.
The Directorate of Defense Trade Controls issued a series of frequently asked questions on May 11 to clarify an International Traffic in Arms Regulations exemption that authorizes exports and other activities made by or for a U.S. government agency.