The Commerce Department is close to publishing a rule that will expand its authority to block shipments of foreign made goods to Huawei, according to a Jan. 14 Reuters report. The rule would lower the U.S.-origin threshold on exports to Huawei to 10 percent, Reuters said, and expand the purview to include “non-technical goods like consumer electronics” and “non-sensitive chips.” Commerce sent the rule to the Office of Management and Budget after an interagency meeting last week, the report said. A top Commerce official recently confirmed the agency was considering a range of expanded restrictions of foreign exports to Huawei, including changes to the Direct Product Rule and a broadened de minimis level (see 1912100033).
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.
China agreed to purchase a range of U.S. goods as part of the phase one deal signed Jan. 15, totaling about $200 billion worth of U.S. goods and services over the next two years. The deal covers a long list of agricultural products -- including pork, beef, processed meats, dairy and seafood -- along with increased Chinese imports of U.S. rice, energy products and $120 billion in purchases of U.S. manufactured goods this year.
Final FIRRMA Regulations Address Commenter Concerns, Omit Clearer Definition for Critical Technology
The Treasury Department’s final regulations for the Foreign Investment Risk Review Modernization Act made several changes to the proposed rules based on public comments and provided more clarity about FIRRMA’s “excepted foreign states” concept. But Treasury did not provide a more specific definition for “critical technologies” despite several requests from industry.
The U.S., the European Union and Japan should do more to align their export control regimes and cooperate on new export control measures to defend against Chinese mercantilist trade practices, the Information Technology & Innovation Foundation said in a Jan. 13 report. The three parties should schedule “formal meetings” to discuss export controls, saying previous discussions have been too “limited in scope. They should be broader given the changing nature of China’s pursuit of advanced technology.”
The Treasury Department released final regulations for the Foreign Investment Risk Review Modernization Act of 2018 on Jan. 13, along with a fact sheet and a set of frequently asked questions. The regulations, which will take effect Feb. 13, grant expanded authorities to the Committee on Foreign Investment in the U.S. Treasury said the final regulations made several changes to the agency’s proposed regulations, released in September (see 1909180018), including defining additional terms and introducing an interim rule for a new definition of “principal place of business.”
President Donald Trump issued an executive order expanding U.S. sanctions authority against Iran and the Treasury Department announced a series of new Iran sanctions, including measures against senior Iranian officials, metal companies and a vessel. The executive order grants the U.S. the authority to impose a series of new primary and secondary sanctions against people and companies involved with Iran’s construction, mining, manufacturing and textiles sectors, Treasury Secretary Steven Mnuchin said during a Jan. 10 press conference. While the executive order only mentioned those four sectors, additional Iranian sectors may be sanctioned, Mnuchin said.
China’s Commerce Ministry criticized the U.S. Commerce Department's decision to place export controls on geospatial imagery software (see 2001030024) and said the U.S. export control system will harm U.S. companies. U.S. export controls, which are scheduled to be imposed on a range of emerging technologies (see 1912160032), will also cause global market uncertainty, China said.
The Trump administration should sanction Chinese officials and companies responsible for human rights violations against the country's Uighur population, the Congressional-Executive Commission on China said in a Jan. 8 report. The U.S. should also place export controls on a wide range of emerging technologies, add more Chinese agencies to the Commerce Department’s Entity List and make these issues key components of trade negotiations with China, the report said.
The Directorate of Defense Trade Controls issued a series of frequently asked questions on Jan. 6 as part of guidance related to U.S. people exporting defense services abroad. The guidance clarifies questions related to registration and authorization requirements and details the process for obtaining authorization.
The Trump administration successfully persuaded the Dutch government to not renew an export license for a Dutch chip manufacturer, which was poised to sell the technology to China, according to a Jan. 6 Reuters report. The administration “mounted an extensive campaign” to block the sale, which included lobbying from Secretary of State Mike Pompeo and White House officials, who shared “classified intelligence” with the Netherlands’ prime minister, Reuters said. The campaign began in 2018 after the Netherlands granted an export license to ASML, a semiconductor equipment company, to sell “its most advanced machine” to a Chinese customer.