Republican lawmakers urged the Commerce Department to be more transparent when imposing export restrictions on critical U.S. industries, saying they are concerned that Commerce did not consult with industry before imposing significant export regulations last week. In a May 6 letter, six senators asked President Donald Trump to more closely follow congressional intent as described in the 2018 Export Control Reform Act, which lists a preference for a public comment period and multilateral export controls over unilateral decisions.

If countries place trade restrictions on food supplies similar to those on medical goods, the global supply chain could see significant agricultural shortages within months, trade experts said during a Washington International Trade Association webinar. But even without export controls on food, restrictions on movement and other COVID-19-related controls are already beginning to impact the flow of food goods, the experts said.

The U.S. should be mindful of not harming the U.S. technology industry as it seeks to impose export restrictions on semiconductor shipments to China, said James Andrew Lewis, director of the technology policy program at the Center for Strategic and International Studies. Those restrictions could cut the U.S. off from consumers, leading foreign companies to design U.S. components out of their products and build alternate supply sources, Lewis said in a May 5 CSIS post.

The Treasury Department fined a Kansas animal nutrition company more than $250,000 for illegally exporting agricultural goods to Cuba, which violated U.S. sanctions, according to a May 6 notice. The company, BIOMIN America, completed 30 illegal sales to Cuba between 2012 and 2017 and did not have a sanctions compliance program, the Treasury's Office of Foreign Assets Control said. If BIOMIN had consulted with OFAC before the sales took place, the company may have received a license, the agency said.

The Commerce Department’s new export restrictions on military end-users may significantly raise due diligence requirements for industry, leading to licensing delays and a burdensome vetting process for technology companies, law firms said. If Commerce's Bureau of Industry and Security does not clarify the scope of the rule to limit its impact, the rules are likely to damage the semiconductor, telecommunications and aircraft sectors, the law firms said. “This could have a detrimental impact on a broad swath of U.S. industry,” Baker McKenzie said in an April 30 blog post. “A universe of transactions triggering license requirements could significantly increase.”

Export Compliance Daily is providing readers with some of the top stories for April 27 - May 1 in case you missed them.

The U.S. and United Kingdom will begin virtually negotiating a trade deal this week, U.K. Trade Secretary Elizabeth Truss said. The talks, which have been expected for months (see 2002190021, 2003020061 and 2001280042), will start through video conferences, the Office of the U.S. Trade Representative told Politico May 3, and will be held remotely until international travel resumes. In a May 3 tweet, Truss said the U.K. will “be working to bring benefits to all parts of [the U.K.] and boost our economies during #coronavirus recovery.” The USTR did not comment.

Some companies are concerned about the possibility of the Commerce Department issuing major export control actions during the COVID-19 pandemic, which they say will compound economic hardships caused by the mitigation response to the highly contagious disease. In interviews, industry officials said they are unsure about their ability to manage sweeping regulatory changes even as they acknowledge that a moratorium on export control actions is unlikely.

American Express violated U.S. sanctions when it processed about $35,000 worth of transactions for a designated person in 2015, the Treasury’s Office of Foreign Assets Control said April 30. OFAC issued a “finding of violation” for American Express Travel Related Services Company but did not impose a fine.

Export license applications may be delayed during the COVID-19 pandemic as the Commerce Department prioritizes COVID-19-related applications, a top Commerce official said. Not all government agencies have remote access to Commerce’s unclassified system for license applications, which is also causing longer processing times, said Matt Borman, Commerce’s deputy assistant secretary for export administration.